National Federation of Federal Employees, Local 1461 and Department of the Navy, U.S. Naval Observatory (Authority decision, April 30, 1987)

Final FLRA decision. The Authority upholds disapproval of two local agreement provisions restricting performance appraisal design and dismisses the union’s petition. An aggrieved person may seek judicial review of a final Authority order by petitioning an appropriate United States court of appeals within 60 days after issuance under 5 U.S.C. § 7123(a). Filing a petition does not stay the order unless the court orders a stay under § 7123(c).

Plain-English summary

The union challenged Navy disapproval of provisions concerning the number of critical job elements and the criteria for overall performance ratings at the Naval Observatory. The Authority held that limiting critical elements would restrict management’s right to identify what work is critical. It also held that setting rating criteria would intrude on management’s rights to direct employees and assign work. It dismissed review of both provisions.

Decision snapshot

• Authority: Management appraisal rights under 5 U.S.C. § 7106(a)(2)(A) and (B); agreement review under § 7114(c).
• Outcome: Petition dismissed as to both provisions.
• Key point: A labor agreement could not constrain management’s choice of critical elements or overall rating criteria.

Full text (FLRA public release)

[ v26 p808 ]

26:0808(96)NG

The decision of the Authority follows:

26 FLRA No. 96

NATIONAL FEDERATION OF FEDERAL
EMPLOYEES, LOCAL 1461
Union

and

DEPARTMENT OF THE NAVY
U.S. NAVAL OBSERVATORY
Agency

Case No. 0-NG-1075

DECISION AND ORDER ON NEGOTIABILITY ISSUES

I. Statement of the Case

This case is before the Authority because of a negotiability appeal filed under section 7105(a)(2)(D) and (E) of the Federal Service Labor-Management Relations Statute (the Statute) and concerns the negotiability of two provisions of a negotiated agreement disapproved by the Agency head under section 7114(c) of the Statute.

II. Provision 1

Article 29 -- Basic Performance Appraisal System

Section 29.4 -- Identification of Critical Elements and Performance Standards

b. Each job must have at least one critical element. The number of critical elements should be kept to a minimum, normally not more than three to five. (Only the underscored portion is in dispute.)

A. Positions of the Parties

The Agency contends that the disputed language conflicts with its rights under section 7106(a)(2)(A) and (B) to direct employees and assign work. It also argues that "the work 'normally' would establish a contractual limitation . . . in all but extraordinary circumstances." Statement of Position at 3.

The Union states that the disputed language "provides a non-absolute guideline for ordinary practice in identifying numbers of critical elements." Petition for Review at 1. It further states that the Agency has "greatly exaggerated the restrictiveness of this provision by ignoring the word 'should' and reading into the word 'normally' a rigid restrictiveness." Reply Brief at 3.

B. Analysis and Conclusion

We find that provision 1 violates management's right under section 7106(a)(2)(A) and (B) to identify critical elements by imposing a substantive limitation on the Agency's discretion in the exercise of that right.

It is well established that identification of critical elements constitutes an exercise of management's right to direct employees and to assign work under section 7106(a)(2)(A) and (B). National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA 769, 775 (1980), affirmed sub nom. NTEU v. FLRA, 691 F2d. 553 (D.C. Cir 1982). Identification of critical elements includes designating which components of a job are of such importance that failure to achieve a certain level of performance requires remedial action. Bureau of Public Debt, 3 FLRA at 774. Identification also includes determining the number of critical elements. See International Federation of Professional and Technical Engineers, Local 25 and Department of the Navy, Mare Island Naval Shipyard, 13 FLRA 433, 436 (1983); National Federation of Federal Employees, Local 1028 and Department of the Army, Corps of Engineers, Norfolk District, Norfolk, Virginia, 7 FLRA 119, 120-21 (1981).

The Union states that the disputed language "provides a non-absolute guideline for ordinary practice in identifying numbers of critical elements." Petition for Review at 1. It also contends that the Agency has "greatly exaggerated the restrictiveness of this provision by ignoring the word 'should' and reading into the word 'normally' a rigid restrictiveness." Reply Brief at 3. In our view, this qualifying language does not diminish the effect of the provision: a substantive limitation on management's right to identify the number of critical elements for a particular job. Provision 1 would have the same effect as the proposals in Mare Island Shipyard and Corps of Engineers, Norfolk District. It would directly affect management's identification of critical elements by limiting the number of critical elements which could be established for a position covered by a performance appraisal system. At the least, it would subject management's decision to establish six or more critical elements to arbitral review and therefore to the possibility of arbitrators substituting their judgment for that of management. See American Federation of Government Employees, AFL-CIO, Local 1968 and Department of Transportation, Saint Lawrence Seaway Development Corporation, Massena, New York, 5 FLRA 70, 79-80 (1981), affirmed sub nom. AFGE, Local 1968 v. FLRA, 691 F2d. 565 (D.C. Cir.1982), cert. denied, 461 U.S. 926 (1983).

III. Provision 2

Article 29 -- Basic Performance Appraisal System

Section 29.6 -- Overall Performance Appraisal (Summary Rating)

a. Noncritical elements may be used to increase or decrease, by no more than one performance level, overall ratings based on an analysis of critical elements, except that a marginal rating may not be decreased to unsatisfactory, nor may a satisfactory rating be decreased to marginal.

. . . .

M -- Marginal. Most of the critical elements are rated M, but none is rated U. However, where there is an even number of critical elements, and they are divided between M and S, the supervisor shall have discretion as to whether the summary rating shall be M or S. Improvement is needed.

. . . .

O -- Outstanding. All critical elements are rated S or better and at least half are rated O. Such performance usually merits a Quality Step Increase, but it is not mandatory.

A. Positions of the Parties

The Agency contends that the provision conflicts with its rights under section 7106(a)(2)(A) and (B) to direct employees and to assign work; is contrary to a Government-wide regulation, 5 C.F.R. ( 430.202(d); and is contrary to the Agency's performance appraisal program regulation, for which a compelling need exists.

The Union contends that the methods for determining an appraisal's summary rating are not covered under section 7106(a)(2)(A) and (B). It also contends that the proposed method of balancing critical and noncritical element ratings is an appropriate arrangement under section 7106(b)(3) for employees adversely affected by the way work is assigned. Finally, the Union contends that there is not a compelling need for a uniform agency-wide performance appraisal system.

B. Analysis and Conclusion

For the reasons which follow, we find that provision 2 is outside the duty to bargain. It is inconsistent with management's right under section 7106(a)(2)(A) and (B) and does not qualify for consideration under section 7106(b)(3). In view of this conclusion, we find it unnecessary to address the Agency's contentions that the proposal is contrary to Government-wide and Agency regulations.

1. Establishment of criteria for the determination of a

summary rating is within management's reserved rights.

Provision 2 has essentially the same effect as the proposal held nonnegotiable in American Federation of State, County and Municipal Employees, AFL-CIO, Council 26 and U.S. Department of Justice, 13 FLRA 578 (1984). In that case, the proposal established the number of rating levels for individual job elements and overall performance. It also concerned what quality of performance in individual job elements would be required to achieve a particular overall performance rating. The Authority held that the proposal was inconsistent with management's right to direct employees and to assign work. For the reasons set forth in U.S. Department of Justice, we find that provision 2 likewise is inconsistent with management's rights under section 7106(a)(2)(A) and (B).

2. Provision 2 is not an arrangement.

During the pendency of this case the Authority issued National Association of Government Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA No. 4 (1986), concerning section 7106(b)(3). There we stated that henceforth we will determine whether a proposal constitutes an appropriate arrangement for employees adversely affected by the exercise of a management right by determining whether the proposal "excessively interferes" with the exercise of management's rights.

The threshold question in applying the Kansas Army National Guard analysis is whether the proposal is an "arrangement" for adversely affected employees. In Patent Office Professional Association and Patent and Trademark Office, Department of Commerce, 25 FLRA No. 29, slip op. at 12-13 (1987), petition for review filed sub nom. Patent Office Professional Association v. FLRA, No. 87-1135 (D.C. Cir. Mar 26, 1987), we found that proposal 3.K., which prescribed criteria for the establishment of performance standards and rating levels, did not qualify for consideration under section 7106(b)(3). We reasoned that the establishment of performance standards did not by itself adversely affect employees. Any adverse effect would not occur until an action was taken against an employee based on the application of those job requirements to the employee. Thus, because proposal 3.K. was not an "arrangement," it did not qualify for consideration under section 7106(b)(3), and therefore, we did not determine if the proposal was an "appropriate arrangement."

Provision 2 concerns criteria for determining the summary rating of a performance appraisal. It sets forth: (1) how performance ratings in noncritical elements may be used to adjust the summary rating; and (2) what performance ratings in critical elements would be required for a "Marginal" or "Outstanding" summary rating. In our view, provision 2 is similar in effect to proposal 3.K. in Patent and Trademark. Provision 2 prescribes criteria for the determination of a summary rating whereas proposal 3.K. in Patent and Trademark prescribed criteria for the establishment of performance standards and rating levels. In our view, the establishment of criteria for the determination of a summary rating like the establishment of criteria for performance standards and rating levels does not by itself adversely affect employees. Accordingly, for the reasons set forth in Patent and Trademark, we need not determine whether provision 2 is an "appropriate arrangement" since it does not qualify for consideration under section 7106(b)(3).

IV. Order

The petition for review as to provisions 1 and 2 is dismissed.

Issued, Washington, D.C. April 30, 1987.

/s/ Jerry L. Calhoun, Chairman
/s/ Henry B. Frazier III, Member
/s/ Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY