National Treasury Employees Union and Internal Revenue Service (Authority decision, October 14, 1983)

Final FLRA decision. This is a final order of the Federal Labor Relations Authority. Under 5 U.S.C. § 7123(a), an aggrieved person may generally seek judicial review in an appropriate United States court of appeals within 60 days after issuance. A review petition does not itself stay the order.

Plain-English summary

NTEU proposed rating formulas and achievement thresholds for IRS performance appraisals. The Authority found that both proposals would prescribe the standards for determining levels of performance in critical job elements. Setting those standards was part of management’s rights to direct employees and assign work. It held both proposals outside the duty to bargain and dismissed the petition.

Decision snapshot

• Authority: 5 U.S.C. § 7106(a)(2)(A).
• Outcome: Petition dismissed on the merits as to both proposals.
• Key point: The union could not require bargaining over management’s performance thresholds for appraisal ratings.

Full text (FLRA public release)

[ v13 p329 ]

13:0329(50)NG

The decision of the Authority follows:

13 FLRA No. 50

NATIONAL TREASURY EMPLOYEES UNION
Union

and

INTERNAL REVENUE SERVICE
Agency

Case No. O-NG-508

DECISION AND ORDER ON NEGOTIABILITY ISSUES /1/

The petition for review in this case comes before the Authority pursuant to section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute), and raises issues concerning the negotiability of two Union proposals. The text of the proposals is set forth in the Appendix. Upon careful consideration of the entire record, including the parties' contentions, the Authority makes the following determinations.

The record indicates that the employees covered by Union Proposal 1 and Section 4B(2)(C) of Union Proposal 2 are subject to a performance appraisal system established by management wherein each critical element involves various sub-elements, or "aspects" in the language of the proposals, for which there are standards of acceptable performance. In appraising these employees, the results of the performance evaluations achieved for each aspect of an element are combined and a standard applied to those results which determines the level of performance for the entire element. In essence, Union Proposal 1 and Section 4B(2)(C) of Union Proposal 2 would establish the content of the standard for determining a given level of performance in a critical element in order for that employee to achieve a certain rating on that element.

As to the employees referred to in Section 4B(2)(A) and (B) of Union Proposal 2, according to the record, these are employees who perform routine tasks which are capable of quantifiable measurement. The record indicates that these employees are evaluated under a performance appraisal system which is formulated similarly to that applied to employees covered by Proposal 1 and Section 4B(2)(C) of Proposal 2. That is, under this system, various aspects of a given critical element of such an employee's work, referred to as "program/function," are appraised according to fixed standards for acceptable performance which are established by management. Subsequently, the results achieved by application of the fixed standards to the specific "program/functions" of a given critical element would be combined according to the formula set forth in Section 4B(2)(B) of Union Proposal 2 in order to determine the level of performance for that element as established in Section 4B(2)(A). Thus, the provisions of Union Proposal 2 relating to these employees would establish the content of the standard for determining a given level of performance in a critical element in order for an employee to warrant a specific rating in that element.

In thus prescribing the content of the standards for determining the attainment of a particular level of performance, Union Proposals 1 and 2 herein are substantively identical to Union Proposal 2 at issue in National Treasury Employees Union and U.S. Nuclear Regulatory Commission, 13 FLRA No. 49 (1983). In that case, the Authority held that the proposal at issue, which established performance standards for various levels of achievement, directly interfered with management's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute. /2/ In this regard, the Authority determined, relying on its decision in National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA 769 (1980), affirmed sub nom. National Treasury Employees Union v. Federal Labor Relations Authority, 691 F.2d 553 (D.C. Cir. 1982), that the rights to assign work and direct employees extend to the establishment of job requirements for various levels of achievement, which management will use to encourage and reward successful performance as well as to discourage performance which is unacceptable. Thus, as the Authority stated, an integral part of the exercise of those management rights is "prescribing the standards for each performance level within (an) agency's performance appraisal system." Therefore, for the reasons more fully set forth in U.S. Nuclear Regulatory Commission, Union Proposals 1 and 2 herein directly interfere with management's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute and, thus, are outside the duty to bargain.

Accordingly, pursuant to section 2424.10 of the Authority's Rules and Regulations, IT IS ORDERED that the Union's petition for review as to Union Proposals 1 and 2 be, and it hereby is, dismissed. Issued, Washington, D.C., October 14, 1983 Barbara J. Mahone, Chairman Ronald W. Haughton, Member Henry B. Frazier III, Member FEDERAL LABOR RELATIONS AUTHORITY

APPENDIX

Union Proposal 1 /3/

Section 4 - Application of Elements/Standards

. . . .

B.(1) Employees will receive evaluations of each element/standard whenever required by the current NORD agreement, e.g., Art. 7, Art. 25. These evaluations will cover 12 month periods and may be revalidated consistent with the current agreement.

(2) On each Element/Standard employees will receive a score of one (1) through (4) which are defined as follows:

(1) Unacceptable - less than fully acceptable.

(2) Fully Acceptable - meets the applicable performance standards of the element.

(3) Exceeds Acceptable - meets the applicable performance standards of the elements and exceeds 30% more of the aspects.

(4) Far Exceeds Acceptable - meets the applicable performance standards of the elements and exceeds 60% more of the aspects.

Achievement of fully acceptable on the annual rating will meet the performance requirements for within-grade increases and probationary period certifications. (Only the underlined portion of the proposal

is in dispute.)

Union Proposal 2 /4/

Section 4 - Application of Elements/Standards

. . . .

Sec. 4B(2)(A) On each element/standard employees who receive measured evaluations will receive a score of one (1) through (5) which are defined as follows:

(1) Unacceptable - less than fully acceptable.

(2) Fully Acceptable - meets the stated, fixed performance standards of the element.

(3) Exceeds Acceptable - meets the stated, fixed performance standards of the element and exceeds them in the overall effectiveness category by 5%.

(4) Far Exceeds Acceptable - meets the stated, fixed performance standards of the element and exceeds them in the overall effectiveness category by 10%.

(5) Greatly Exceeds Acceptable - meets the stated, fixed performance standards of the element and exceeds them in the overall effectiveness category by 15%.

Sec. 4B(2)(B) The fixed standard (Overall Effectiveness Category) is the average of all program function scores adjusted for time-weight factors and other current contract considerations. The program functions score is the number of units accomplished in comparison to the stated, fixed standard as expressed in a percentage. Sec. 4B(2)(C) On each element/standard employees who receive unmeasured evaluations will receive a score of one (1) through (5) which are defined as follows:

(1) Unacceptable - less than fully acceptable.

(2) Fully Acceptable - meets the applicable performance standard of the element.

(3) Exceeds Acceptable - meets the applicable performance standard of the element and exceeds 20% of the aspects.

(4) Far Exceeds Acceptable - meets the applicable performance standard of the element and exceeds 40% of the aspects.

(5) Greatly Exceeds Acceptable - meets the applicable performance standards of the element and exceeds 60% of the aspects.

--------------- FOOTNOTES$ ---------------

/1/ In a previous action in this case, the Authority denied the Agency's motion to dismiss the Union's petition for review on procedural grounds. National Treasury Employees Union and Internal Revenue Service, 7 FLRA No. 3 (1981).

/2/ Section 7106(a)(2)(A) and (B) of the Statute provide, in relevant part, as follows:

Sec. 7106. Management rights

(a) Subject to subsection (b) of this section, nothing in this chapter shall affect the authority of any management official of any agency--

. . . .

(2) in accordance with applicable laws--

(A) to . . . direct . . . employees in the agency . . . ;

(B) to assign work(.)

/3/ According to the record in this case, Union Proposal 1 pertains to employees in the National Office, Region, and District bargaining unit.

/4/ According to the record in this case, Union Proposal 2 pertains to employees in the Service Center bargaining unit.