B-181069, NOV 20, 1974, 54 COMP GEN 403

B-181069, NOV 20, 1974, 54 COMP GEN 403

ARBITRATION - AWARD - GRANT OF RETROACTIVE PROMOTION - IMPLEMENTATION BY AGENCY - BACK PAY ACT ARBITRATION AWARD PROVIDING RETROACTIVE EFFECTIVE DATES OF PROMOTIONS AND COMPENSATION FOR THREE OFFICE OF ECONOMIC OPPORTUNITY EMPLOYEES MAY BE IMPLEMENTED UNDER BACK PAY ACT, 5 U.S.C. 5596, SINCE ARBITRATOR FOUND THAT BARGAINING AGREEMENT HAD BEEN BREACHED WHICH INCORPORATED BY REFERENCE AGENCY REGULATION REQUIRING PROMOTION REQUESTS TO BE PROCESSED IN 8 DAYS.

IN THE MATTER OF IMPLEMENTATION OF ARBITRATION AWARD, NOVEMBER 20, 1974:

THIS MATTER INVOLVES A REQUEST FOR A DECISION FROM THE OFFICE OF ECONOMIC OPPORTUNITY (OEO) AS TO WHETHER THAT AGENCY HAS AUTHORITY TO IMPLEMENT A LABOR RELATIONS ARBITRATION AWARD GRANTING RETROACTIVE PROMOTIONS AND BACK PAY TO CERTAIN OEO EMPLOYEES. THE ARBITRATION AWARD STEMMED FROM A GRIEVANCE FILED BY THE NATIONAL COUNCIL OF OEO LOCALS ON SEPTEMBER 24, 1973, ALLEGING CERTAIN VIOLATIONS OF THE NATIONAL AGREEMENT BETWEEN THE OFFICE OF ECONOMIC OPPORTUNITY AND AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES (AFGE) (AFL-CIO) FOR NATIONAL COUNCIL OF OEO LOCALS, DATED MARCH 31, 1972. THE GRIEVANCE WITH WHICH WE ARE SPECIFICALLY CONCERNED ALLEGED THAT THE AGENCY HAD DELAYED PROMOTIONS TO CERTAIN EMPLOYEES IN THE OFFICE OF ECONOMIC DEVELOPMENT OF THE OEO IN VIOLATION OF THE TIME FRAME ESTABLISHED BY OEO STAFF MANUAL 250-2 WHICH WAS INCORPORATED BY REFERENCE INTO THE AGREEMENT BY ARTICLE 2, SECTION 2 OF THE AGREEMENT.

DURING THE LATER PART OF SEPTEMBER 1973, THE OEO INITIATED STANDARD FORMS 52, REQUEST FOR PERSONNEL ACTION, TO PROMOTE THE PERSONNEL INVOLVED. CLASSIFICATION SURVEY WAS CONDUCTED FROM SEPTEMBER 28, 1973 TO NOVEMBER 5, 1973. AT THE END OF THE SURVEY, 7 OF THE 8 PROMOTION REQUESTS THAT HAD BEEN SUBMITTED BY THE OFFICE OF ECONOMIC DEVELOPMENT WERE GRANTED.

THE ARBITRATION HEARING OF THE GRIEVANCE WAS HELD ON DECEMBER 10, 1973, IN WASHINGTON, D.C., AT WHICH REPRESENTATIVES OF THE AGENCY AND THE UNION APPEARED AND PRESENTED THEIR CASES. THE ARBITRATOR FOUND THE AGREEMENT HAD BEEN VIOLATED AND STATED THE RATIONALE FOR HIS FINDINGS AS FOLLOWS:

A PRINCIPAL AREA OF DISAGREEMENT BETWEEN THE PARTIES CONCERNS THE TIME FRAME WITHIN WHICH PROMOTIONS MUST BE EFFECTED. OEO STAFF MANUAL 250-2 SETS FORTH TIME FRAMES FOR PERSONNEL ACTIONS AND STATES:

TIME FRAMES

TO EXPEDITE THE PROCESSING OF STANDARD FORM 52 THROUGH THE VARIOUS STEPS, THE FOLLOWING TIME FRAMES HAVE BEEN ESTABLISHED. THEY ARE APPLICABLE ONLY IF THE REQUEST FOLLOWS A ROUTINE SCHEDULE. THIS MEANS THAT ALL NECESSARY FORMS, DOCUMENTS AND ADDITIONAL MEMORANDA ARE PROPERLY SIGNED AND RECEIVED IN PERSONNEL WITH THE REQUEST THAT NO CHANGES BE MADE BY THE REQUESTING OFFICE.

SPECIFIC TIMES ARE ALLOTTED TO ALL ACTIONS. EIGHT DAYS IS THE TIME ALLOTTED FOR THE ACTION WITH WHICH WE ARE CONCERNED HERE. THE AGREEMENT PROVIDES THAT REGULATIONS OF THE EMPLOYER "WILL GOVERN THE PROCEDURE IN MATTERS RELATING TO EMPLOYMENT, ALONG WITH APPLICABLE LAW AND THE AGREEMENT." THE STAFF MANUAL IS A REGULATION WITHIN THE MEANING OF THE AGREEMENT. A MANAGEMENT WITNESS TESTIFIED THAT THE HANDBOOK WAS "JUST A GUIDE FOR THE ADMINISTRATIVE OFFICER, NOTHING WE EVER LIVED BY." IT IS A WELL ESTABLISHED PRINCIPLE IN LAW THAT THE GOVERNMENT IS BOUND TO FOLLOW THE REGULATIONS IT ISSUES. THE SITUATION HERE IS NOT IDENTICAL, BUT IT IS ANALOGOUS. UNTIL THE POLICIES SET FORTH IN THE HANDBOOK ARE CHANGED, IN THE AGREED UPON MANNER IT IS INCUMBENT UPON THE EMPLOYER TO FOLLOW THEM. THIS IS GIVEN CONTRACTUAL RECOGNITION IN ARTICLE 2, SECTION 2. THE AGREEMENT PROVIDES FLEXIBILITY FOR THE EMPLOYER IN THE MATTER OF THE ESTABLISHMENT AND CHANGE OF POLICIES AND PRACTICES. IT DOES NOT CONTEMPLATE THE ESTABLISHMENT AND SUBSEQUENT DISREGARD OF POLICY. THIS IS WHAT WE HAVE HERE AND IN CONSEQUENCE THE AGREEMENT HAS BEEN VIOLATED.

THE PARTIES HAVE LEFT A MATTER WHICH MAY BE OF SOME CONSEQUENCE UNBRIEFED BY THEIR AFTER-HEARING DECISION TO DISPENSE WITH BRIEFS.

THE GRIEVANCE ASKS THAT THE PROMOTIONS BE MADE "EFFECTIVE NO LATER THAN THE BEGINNING OF THE NEXT PAY PERIOD." THIS SHOWS RECOGNITION THAT EFFECTIVE DATES SHOULD COINCIDE WITH THE START OF A PAY PERIOD AND NOT SPLIT A PAY PERIOD. THE LITERAL ADHERENCE TO THE PROCESSING PERIOD REFERRED TO IN THE STAFF MANUAL MIGHT CONTRAVENE THIS PRINCIPLE. INTERPRETATION RECOGNIZING THIS PRACTICE MEANS THAT THE EIGHT DAY PERIOD REFERRED TO IN THE STAFF MANUAL MAY BE ADJUSTED TO MAKE PROMOTIONS EFFECTIVE AT THE BEGINNING OF THE PAY PERIOD FOLLOWING THE EXPIRATION OF THE PROCESSING PERIOD.

BASED ON THE ABOVE-QUOTED FINDINGS AND CONCLUSIONS THE ARBITRATOR MADE THE FOLLOWING AWARD ON JANUARY 31, 1974:

AWARD

MANAGEMENT IS REQUIRED TO PROCESS PROMOTIONS WITHIN THE TIME FRAMES ESTABLISHED BY OEO STAFF MANUAL 250-2, AS DISCUSSED ABOVE.

FAILURE OF MANAGEMENT TO FOLLOW THE MANUAL MAY RESULT IN AN AWARD ESTABLISHING A DATE CONSISTENT WITH THE TIME FRAMES IN THE STAFF MANUAL, AS DISCUSSED ABOVE, WHICH RESULT IN BOTH RETROACTIVE PAY AND A RETROACTIVE EFFECTIVE DATE FOR PROMOTION.

THELMA WOODLAND'S PROMOTION IS TO BE MADE EFFECTIVE OCTOBER 14, 1973.

NARVA ROSS' PROMOTION IS TO BE MADE EFFECTIVE OCTOBER 7, 1973.

CRAIG HATHAWAY'S PROMOTION IS TO BE MADE EFFECTIVE OCTOBER 7, 1973.

OEO DOES NOT AGREE WITH THE ARBITRATOR'S FINDINGS AND CONCLUSIONS AND DOES NOT BELIEVE THERE IS LEGAL AUTHORITY UNDER WHICH THE AWARD MAY BE IMPLEMENTED. IN SUPPORT OF THIS THESIS, OEO ARGUES AS FOLLOWS:

IT WAS, AND IS, THIS AGENCY POSITION THAT ANYTIME AN AUDIT IS DEEMED NECESSARY IN ORDER TO JUSTIFY OR SUPPORT A PARTICULAR PROMOTION IT CONSTITUTES A DEVIATION FROM THE NORM. IT SHOULD BE NOTED THAT THE ARBITRATOR DID NOT DIRECTLY CONTEND THAT THE PROMOTION DELAY WAS EITHER THE RESULT OF AN UNJUSTIFIED AND/OR UNWARRANTED PERSONNEL ACTION, OR ADMINISTRATIVE ERROR, NOR DID HE RULE THAT "THEY WERE" DELAYED AS THE RESULT OF ANY DISCRIMINATION. IT IS THIS AGENCY'S CONTENTION THAT THE PROMOTIONS FOLLOWED THE CLASSIFICATION STUDY IN A TIMELY MANNER AND THAT A PROMOTION RETROACTIVE TO A TIME PROCEEDING THE CLASSIFICATION WOULD NOT BE IN KEEPING WITH THE REQUIREMENTS OF 5 CFR 550.803.

THE ARBITRATOR'S AUTHORITY TO INTERPRET THE AGENCY'S REGULATION STEMS FROM THE FACT THAT IT WAS INCORPORATED BY REFERENCE INTO THE COLLECTIVE BARGAINING AGREEMENT. ARTICLE 2, SECTION 2 REQUIRES THE PARTIES TO ABIDE BY "ALL FEDERAL LAWS, APPLICABLE STATE LAWS, REGULATIONS OF THE EMPLOYER, AND THIS AGREEMENT IN MATTERS RELATING TO THE EMPLOYMENT OF EMPLOYEES COVERED BY THIS AGREEMENT." ARTICLE 3, SECTION 9, SPECIFICALLY REFERS TO THE OEO HANDBOOK IN A LIST OF OEO DIRECTIVES WHICH OEO EMPLOYEES MUST FOLLOW ONCE A GENERAL DISTRIBUTION IS MADE. ARTICLE 3, SECTIONS 6 AND 7 REQUIRE PRIOR CONSULTATION IN MOST INSTANCES BEFORE SUCH DIRECTIVES MAY BE CHANGED. WE THEREFORE BELIEVE THAT THE ARBITRATOR'S AUTHORITY TO INTERPRET THE PROVISIONS OF A COLLECTIVE BARGAINING AGREEMENT UNDER SECTION 13 OF EXECUTIVE ORDER 11491, 3 CFR 254 (1974) EXTENDS TO THE INTERPRETATION OF THE AGENCY'S OWN REGULATIONS OR DIRECTIVES WHEN THEY HAVE BEEN MADE A PART OF THE COLLECTIVE BARGAINING AGREEMENT BY REFERENCE.

THIS DOES NOT MEAN THAT THE ARBITRATOR'S INTERPRETATION OF SUCH DIRECTIVES NECESSARILY TAKES PRECEDENCE OVER THE AGENCY'S OWN INTERPRETATION. WE BELIEVE THERE IS CONSIDERABLE MERIT IN OEO'S CONTENTION THAT THE ARBITRATOR ERRED IN CONCLUDING THAT THE PROMOTION ACTIONS IN QUESTION WERE "ROUTINE" WITHIN THE MEANING OF OEO STAFF MANUAL 250-2, SUPRA, AND HAD TO BE COMPLETED WITHIN AN 8 DAY PERIOD. ADMINISTRATIVE AGENCY'S INTERPRETATION AND APPLICATION OF ITS OWN REGULATIONS WILL GENERALLY BE ACCORDED GREAT DEFERENCE AND WILL BE DEEMED CONTROLLING AS LONG AS IT IS ONE OF SEVERAL REASONABLE INTERPRETATIONS, THOUGH IT MAY NOT APPEAR QUITE AS REASONABLE AS SOME OTHERS. ROY BRYANT CATTLE CO. V. UNITED STATES, 463 F.2D 418 (5TH CIR. 1972). HOWEVER, OEO DID NOT APPEAL A CONTRARY INTERPRETATION BY THE ARBITRATOR IN A TIMELY FASHION. SECTION 4(C)(3) OF EXECUTIVE ORDER NO. 11491, SUPRA, PLACES REVIEW OF ARBITRATION AWARDS WITHIN THE JURISDICTION OF THE FEDERAL LABOR RELATIONS COUNCIL (FLRC) AND SECTION 13(B) PROVIDES THAT EITHER PARTY MAY FILE EXCEPTIONS TO AN ARBITRATOR'S AWARD UNDER REGULATIONS PRESCRIBED BY THE COUNCIL. THESE PROCEDURES WERE DULY PROMULGATED IN 5 C.F.R. SUBPART D OF PART 2411 (1974), PRESCRIBING A 20 DAY TIME LIMIT FROM THE DATE OF THE AWARD TO APPEAL, BUT THE OEO DID NOT AVAIL ITSELF OF THE OPPORTUNITY TO CHALLENGE THE ARBITRATOR'S FINDINGS AND INTERPRETATION. THE PURPOSE OF STATUTES AND REGULATIONS LIMITING THE PERIOD FOR APPEAL IS TO SET A DEFINITE POINT OF TIME WHEN LITIGATION OR ARBITRATION SHALL BE AT AN END UNLESS WITHIN THAT TIME THE PRESCRIBED APPLICATION HAS BEEN MADE, AND, IF IT HAS NOT, TO ADVISE ALL INTERESTED PARTIES THAT THE ACTION IS FINAL. MATTON STEAMBOAT CO. V. MURPHY, 319 U.S. 412 (1943). SINCE OEO DID NOT FILE AN EXCEPTION TO THE AWARD WITHIN THE PERIOD OF LIMITATIONS, WE MUST NOW PRESUME ITS ACQUIESCENCE WITH THE FACTS AND THE INTERPRETATION OF THE APPLICABLE REGULATION. THE ONLY QUESTION BEFORE US NOW IS WHETHER OEO MAY LEGALLY IMPLEMENT THE AWARD.

IT IS FUNDAMENTAL THAT THE SALARY OF A GOVERNMENT JOB IS INCIDENT TO AND ATTACHES TO THE JOB. IT IS THUS A PART OF THE JOB AND GOES WITH IT. BECAUSE OF THIS PRINCIPLE, THE SALARY IS PAYABLE ONLY TO THE PERSON APPOINTED TO THE JOB, AND A GOVERNMENT EMPLOYEE IS ENTITLED ONLY TO THE SALARY OF THE POSITION TO WHICH HE HAS BEEN APPOINTED. SEE BORAK V. UNITED STATES, 78 F. SUPP, 123 (CT. CL. 1948), CERT. DENIED, 335 U.S. 821; PRICE V. UNITED STATES, 80 F. SUPP. 542 (CT. CL. 1948); GANSE V. UNITED STATES, 376 F.2D 900 (CT. CL. 1967); UNITED STATES V. MCLEAN, 95 U.S. 750 (1877); AMUNDSON V. UNITED STATES, 120 F. SUPP. 201 (CT. CL. 1954); DVORKIN V. UNITED STATES, 101 CT. CL. 296, CERT. DENIED, 323 U.S. 730 (1944). SIMILARLY, WHERE AN EMPLOYEE HAS RECEIVED THE SALARY OF THE OFFICE TO WHICH HE WAS APPOINTED, HE HAS RECEIVED HIS FULL ENTITLEMENT. PRICE V. UNITED STATES, SUPRA; GANSE V. UNITED STATES, SUPRA. AS A GENERAL RULE, AN ADMINISTRATIVE CHANGE IN SALARY MAY NOT BE MADE RETROACTIVELY EFFECTIVE IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY TO DO SO. 26 COMP. GEN. 706 (1947), 39 ID. 583 (1960), 40 ID. 207 (1960). WE HAVE, HOWEVER, PERMITTED RETROACTIVE ADJUSTMENT OF SALARY RATES IN CERTAIN CASES WHEN ERRORS IN COMPUTATION OCCURRED AS A RESULT OF A FAILURE TO CARRY OUT NONDISCRETIONARY ADMINISTRATIVE REGULATIONS OR POLICIES. 34 COMP. GEN. 380 (1955) AND 39 ID. 550 (1960). IN ADDITION, WE HAVE PERMITTED RETROACTIVE PAY ADJUSTMENTS IN CASES WHERE EMPLOYEES HAVE BEEN DEPRIVED OF A RIGHT GRANTED BY STATUTE OR REGULATION. 21 COMP. GEN. 369, 376 (1941); 37 ID. 300 (1957); 37 ID. 774 (1958); 54 COMP. GEN. 69 (1974).

NORMALLY, EMPLOYEES HAVE NO VESTED RIGHT TO BE PROMOTED AT ANY SPECIFIC TIME. B-168715, JANUARY 22, 1970. HOWEVER, AN AGENCY MAY THROUGH THE PROMULGATION OF REGULATIONS OR THE NEGOTIATION OF A COLLECTIVE BARGAINING AGREEMENT, VEST IN SPECIFIED EMPLOYEES THE RIGHT TO BE PROMOTED ON AN ASCERTAINABLE DATE AS PROVIDED BY THE REGULATIONS OR AGREEMENT. IN THE INSTANT CASE, THE OEO HAD PROMULGATED REGULATIONS PROVIDING THAT THE PROCESSING OF ROUTINE PROMOTION ACTIONS WOULD BE COMPLETED IN 8 DAYS AND, AS POINTED OUT, SUPRA, THIS REGULATION HAD BEEN INCORPORATED BY REFERENCE INTO THE COLLECTIVE BARGAINING AGREEMENT SO THAT THE OEO'S FAILURE TO ADHERE TO THE REQUIREMENTS OF THE REGULATION RESULTED IN A BREACH OF THE AGREEMENT.

IN OUR DECISION OF JUNE 25, 1974, 53 COMP. GEN. 1054, WE STATED THAT WHERE AN ARBITRATOR HAS MADE A FINDING THAT AN AGENCY HAS VIOLATED A COLLECTIVE BARGAINING AGREEMENT TO THE DETRIMENT OF AN EMPLOYEE, THE AGENCY HEAD MAY ACCEPT THAT FINDING AND AWARD THE EMPLOYEE BACK PAY FOR THE PERIOD OF THE ERRONEOUS PERSONNEL ACTION, SO LONG AS THE CIRCUMSTANCES SURROUNDING THE ERRONEOUS ACTION FALL WITHIN THE CRITERIA SET FORTH IN THE BACK PAY ACT OF 1966, CODIFIED IN 5 U.S.C. 5596 (1970), AND THE IMPLEMENTING REGULATIONS FOR THAT ACT. THE CRITERIA OF AN UNJUSTIFIED OR UNWARRANTED PERSONNEL ACTION WITHIN THE PURVIEW OF THE BACK PAY ACT IS CONTAINED IN 5 C.F.R. 550.803(D) AND (E), WHICH PROVIDE:

(D) TO BE UNJUSTIFIED OR UNWARRANTED, A PERSONNEL ACTION MUST BE DETERMINED TO BE IMPROPER OR ERRONEOUS ON THE BASIS OF EITHER SUBSTANTIVE OR PROCEDURAL DEFECTS AFTER CONSIDERATION OF THE EQUITABLE, LEGAL, AND PROCEDURAL ELEMENTS INVOLVED IN THE PERSONNEL ACTION.

(E) A PERSONNEL ACTION REFERRED TO IN SECTION 5596 OF TITLE 5, U.S.C. AND THIS SUBPART IS ANY ACTION BY AN AUTHORIZED OFFICIAL OF AN AGENCY WHICH RESULTS IN THE WITHDRAWAL OR REDUCTION OF ALL OR ANY PART OF THE PAY ALLOWANCES, OR DIFFERENTIALS OF AN EMPLOYEE AND INCLUDES, BUT IS NOT LIMITED TO, SEPARATIONS, FOR ANY REASON (INCLUDING RETIREMENT), SUSPENSIONS, FURLOUGHS WITHOUT PAY, DEMOTIONS, REDUCTIONS IN PAY, AND PERIODS OF ENFORCED PAID LEAVE WHETHER OR NOT CONNECTED WITH AN ADVERSE ACTION COVERED BY PART 752 OF THIS CHAPTER.

THE CSC HAS INTERPRETED THESE REGULATIONS SO AS TO PERMIT THE IMPLEMENTATION OF ARBITRATION AWARDS BY AGENCY HEADS. THIS INTERPRETATION IS CONTAINED IN ATTACHMENT 2 TO FPM LETTER NO. 711-71, JUNE 13, 1973, AND PROVIDES AS FOLLOWS:

THE REGULATION (5 C.F.R. 550.803) SAYS IN EFFECT THE EMPLOYEE IS ENTITLED TO BACK PAY WHEN THE ... (AGENCY HEAD) OR OTHER APPROPRIATE AUTHORITY MAKES A DECISION ON HIS OWN INITIATIVE THAT THE ADVERSE PERSONNEL ACTION WAS UNJUSTIFIED OR UNWARRANTED. THE CONTEXT OF THE REGULATION SHOWS THAT THE EXPRESSION ON HIS OWN INITIATIVE DOES NOT PREVENT HIM FROM ACTING ON THE AWARD OF AN ARBITRATOR, BUT ONLY DISTINGUISHES THIS CASE FROM THE CASE IN WHICH HE ACTS ON AN APPELLATE DECISION. IN LIGHT OF THE FOREGOING, WE CONCLUDE THAT THE OEO'S BREACH OF ITS AGREEMENT TO PROCESS PROMOTION REQUESTS WITHIN 8 DAYS WAS AN UNJUSTIFIED AND WARRANTED PERSONNEL ACTION WITHIN THE CONTEMPLATION OF THE ABOVE-QUOTED REGULATION. HENCE, THE OEO MAY IMPLEMENT THAT PORTION OF THE ARBITRATOR'S AWARD IN THIS CASE FOR OEO EMPLOYEES CRAIG HATHAWAY, NARVA ROSS AND THELMA WOODLAND UNDER THE AUTHORITY CONTAINED IN 5 U.S.C. 5596 PERTAINING TO BACK PAY.