BOARD OF DIRECTORS OF
OFFICE OF COMPLIANCE
John Adams Building, Room LA 200
110 Second Street, S.E.
Washington, D.C. 20540-1999
________________________
United States Capitol
Police Board,
Employing Office
and Arbitrator Roger P. Kaplan
Case No. 01-ARB-01(CP)1
Fraternal Order of Police,
U.S. Capitol Police Labor
Committee.
Union
_______________________
Before the Board of Directors: Susan S. Robfogel,
Chair; Barbara L. Camens; Alan V. Friedman; Roberta L. Holzwarth;
Barbara Childs Wallace, Members.
DECISION OF THE BOARD OF DIRECTORS
I. Statement of the Case
This matter is before the Board on exceptions
to an award of Arbitrator Roger P. Kaplan filed by the employing
office under 5 U.S.C. §7122, as applied by section 220(a) of
the Congressional Accountability Act ("CAA")(2 U.S.C. §1351(a)),
and Part 2425 of the Regulations of the Office of Compliance.
The Arbitrator sustained a grievance, which,
in the absence of the parties' stipulation of issues, the Arbitrator
characterized as whether the employing office is liable for liquidated
damages, fees, costs, interest and attorney fees for its failure
to pay bargaining unit employees' Fair Labor Standards Act claims.
For the following reasons, we deny the employing
office's exceptions.
II. Background and Arbitrator's Award
In 1996, with the implementation of the CAA,
the employing office's bargaining unit employees obtained coverage
under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §206(a)(1)
and (d), 207,212(c), minimum wage and overtime pay provisions.
In 1998, Congress also availed those employees of Sunday premium,
night differential, and hazardous duty pay. Apparently late in 1998,
the employing office determined and acknowledged that it had erred
in not utilizing Sunday premium, night differential and hazardous
duty pay in establishing its employees' correct hourly base pay
for computing their FLSA overtime entitlements. The employing office
subsequently issued an employee bulletin, dated May 11, 1999, announcing
its obligation to provide its employees with prospective and retroactive
overtime pay once its payroll system necessarily was modified in
collaboration with the National Finance Center. (2)
On February 18, 2000, an employee filed a
grievance complaining of the payment delay, requesting prompt
payment for overtime owed the employees, and seeking a payment time
frame schedule and bi-weekly update situation reports. The employing
office responded at the third grievance stage (1) that it could
not begin paying the overtime until its payroll system modifications
are made and integrated with the National Finance Center; (2) that
it would pay employees overtime back pay retroactive to November
8, 1998; (3) that it expected the payments to be made not later
than June 2000; and (4) that it would provide employees with monthly
updates until the payments were implemented. Based upon these representations
the employee did not pursue his grievance further.
On July 5, 2000, the employing office issued
an employee bulletin presenting workload and program explanations,
attributable to both itself and the National Finance Center, why
the promised employee compensation had not yet been effected. Whereupon,
on July 7, 2000, the union filed a Step 4 grievance asserting that
the employing office had breached its commitment in its resolution
of the aforementioned grievance and also had failed to implement
changes with the National Finance Center in a timely manner. The
union sought as a remedy the full payment of the overtime wages,
plus an equal amount in the form of liquidated damages,
and attorney fees and costs. Subsequently, the employing office
made the retroactive overtime payments and pay adjustments, but
not including liquidated damages, on or about March 6, 2001.
The Arbitrator decided the question in favor
of the union whether the employing office is liable for liquidated
damages, fees, costs, interest and attorney fees for its failure
to pay bargaining unit employees' Fair Labor Standards Act claims.
The Arbitrator rejected the employing office's
interrelated threshold arguments that he lacked jurisdiction over
the grievance because: (1) of sovereign immunity; and (2) that
Part A of the Congressional Accountability Act
("CAA") mandated that all covered employee Fair Labor Standards
Act ("FLSA") claims be processed exclusively through the administrative
process administered by the Office of Compliance. The Arbitrator
relied upon Board precedent upholding an Arbitrator's authority
to award Back Pay Act remedies under the CAA. AFSCME Council
26 and Office of the Architect of the Capitol, Case No. 00-LMR-03
(2001) ("AFSCME Council 26"). The Arbitrator also made an alternative
finding that any failure to have strictly observed the counseling
and mediation procedures under Part A of the CAA constituted harmless
error because essentially equivalent settlement discussions
were undertaken in the grievance process. (3)
On the merits, the Arbitrator found that liquidated
damages are the norm for FLSA violations. The Arbitrator further
held that the employing office did not meet its burden of sustaining
the prescribed statutory grounds for defending against an FLSA liquidated
damages claim; i.e., good faith, and a reasonably held belief that
it had acted lawfully. "Instead, the Department blamed external
factors such as the necessity to recalculate basic pay rates of
all covered employees, the unique method by which the [employing
office's] employees are paid and the inadequate [employing office]
information technology." [Award at page 12 ].The Arbitrator
made subsidiary findings that the employing office (1) failed to
demonstrate it had acted to ascertain the FLSA requirements, (2)
left the burden of processing the FLSA payments exclusively to an
already over-extended employee, and (3) failed to provide its employees
with current information regarding the time frames for rendering
the payments.
The Arbitrator sustained the grievance and ruled
that the employing office "is liable for liquidated damages for
failure to pay Fair Labor Standards Act claims."
III. Positions of the Parties
A. Employing Office's Exceptions
The employing office argues that the Arbitrator's
award is deficient essentially on the following three grounds: (1)
the matter was not arbitrable and the Arbitrator lacked jurisdiction
under the CAA to decide FLSA claims; (2) the Arbitrator's liquidated
damages award is contrary to the FLSA and the Arbitrator's award
is based on critical mistakes of fact; and (3) the employing office
was denied a fair hearing.
First, the employing office contends that only
the Office of Compliance ("OOC") and the courts, pursuant to section
404 of the CAA, are empowered to entertain FLSA claims of covered
employees. The employing office acknowledges the arbitrability of
FLSA claims in the Executive Branch under the 1978 Federal Service
Labor Management Relations Statute ("FSLMRS"), 5 U.S.C., Chapter
71. However, the employing office argues that the 1995-enacted
CAA, while it incorporated the FSLMRS, it nevertheless narrowed
the Legislative Branch scope of arbitration because of the CAA's
special enforcement scheme. The employing office submits that for
the Board to find otherwise "would essentially undermine the Board's
own authority and, in effect, be tantamount to an abdication of
the OOC's statutory oversight responsibility under the CAA . . .
[and would] create an additional right and remedial process not
contemplated by Congress under the CAA". Consequently, the employing
office represents that the Arbitrator's consideration of this matter
is barred by the doctrine of sovereign immunity because Congress
only waived its sovereign immunity for those statutes enumerated
in Part A of the CAA in connection with dispute processing by the
OOC and the courts pursuant to Title IV of the CAA.
Second, the employing office argues that the
Arbitrator's findings that the employing office failed to pursue
diligently the FLSA overtime payments were contrary to or unsupported
by the record. It submits that the Arbitrator's findings do not
support his legal conclusions and the employing office characterizes
the following as critical mistakes of fact: (1) the employing office
failed to show that it acted to ascertain the requirements of the
FLSA; (2) the employing office did not provide adequate personnel
resources to expedite the payments; (3) The union's July 7, 2000
grievance was entitled "breach of Settlement Agreement" and not
a protest over the "failure of prompt payment of overtime". The
employing office faults the Arbitrator for not giving it sufficient
credit for moving things along with the NFC; failing to accord due
weight to the uniqueness and complicated nature of the employing
office's pay system; and in not recognizing that the employing office
did not have a right of control over the NFC.
Third, the employing office appears to argue
that because the union abandoned its overtime non-payment
claim at the hearing, the employing office was somehow prejudiced
by its failure to present any evidence on the question of its delayed
payment constituting an FLSA violation.
B. Union's Opposition
The union claims that the employing office's
non-arbitrability position seeks to gut the labor-management provisions
applied to the Legislative Branch by the CAA. The union points to
court precedent encouraging and approving Federal Sector arbitration
of FLSA claims. The union also relies upon its collective bargaining
agreement ("CBA", Article 2, Sec. 02.01) with the employing office
that subjects the CBA's administration to existing and future
laws, and defines grievance to encompass "[any] claimed violation,
misinterpretation, or misapplication of any law, rule or regulation
affecting conditions of employment" (CBA, Article 32, Sec. 32.021.a.(2)).
The union also counters the employing office's sovereign immunity
argument on the basis of the Board's AFSCME Council 26 decision,
supra, and the United States Supreme Court's decision in
C&L Enterprises, Inc. v. Potawatomi Indian Tribe, 532
U.S. 411, 121 S. Ct. 1589, 149 L.Ed. 2d 623 (2001).
Regarding the Arbitrator's award of liquidated
damages, the union contends that the employing office failed to
put on any evidence addressing whether its 28 month delay in paying
the employees' correct overtime entitlements constituted an FLSA
violation. The union supports the Arbitrator's finding that the
employing office took no steps to ascertain its liability for that
delay in payment and that it devoted woefully insufficient resources
to ensuring prompt payment. The union relies on decisions by the
Federal Labor Relations Authority and the courts rendering liquidated
damages as the norm in such situations as this; i.e., delays in
payment, failure to examine FLSA liability, and the existence of
payroll system complications and other impediments to prompt payment.
The union contends that the employing office
was not denied a fair hearing. The union asserts that its grievance
was twofold: i.e., (1) the employing office's failure to abide by
its resolution of the original grievance requiring prompt overtime
payment and interim employee updates; and (2) employee entitlement
to liquidated damages for the employing office's 2 ½ year delay
in paying the overtime compensation. (4) The union submits
that the employing office freely admitted at the hearing its lag
in tendering the overtime payments, which the union treats as the
employing office acknowledging its FLSA violation. Accordingly,
the union argues that its recognition that the employing office
finally had paid its employees the underlying overtime compensation
indebtedness did not dispose of or moot the union's claim for liquidated
damages.
IV. Analysis and Conclusion
A. Arbitrability and Sovereign Immunity
The employing office's defenses of non-arbitrability
and sovereign immunity are inextricably intertwined. If the employing
office is correct that FLSA claims may only be raised under the
OOC's administrative dispute procedure it necessarily would follow
that Congress, in enacting the CAA, did not waive its sovereign
immunity to permit arbitrators to entertain such claims under a
CBA's negotiated grievance procedures. (5) We find, however,
for the reasons stated below, that Congress did allow for negotiated
grievance procedure arbitration of FLSA claims.
Section 220(a) of the CAA extends to employing
offices, employees, and collective bargaining representatives the
rights, protections, and responsibilities established under various
portions of the [Executive Branch] Federal Service Labor Management
Relations Statute ("FSLMRS") including 5 U.S.C. §§7121-22,
relating to grievance arbitration. FSLMRS section 7103(a)(9)
(6) defines the term "grievance", in pertinent part:
"grievance" means any complaint -
(A) by any employee concerning any matter
relating to the employment of the employee;
(B) by any labor organization concerning any
matter relating to the employment of any employee; or
(C) by any employee, labor organization or
agency concerning-
(i) the effect or interpretation, or a claim
of breach, of a collective bargaining agreement; or
(ii) any claimed violation, misinterpretation,
or misapplication of any law, rule, or regulation affecting conditions
of employment.
[emphasis supplied]. (7)
The employing office urges the Board to find
that the arbitrator lacks authority to entertain grievances arising
from the FLSA because Title IV of the CAA creates an administrative
and judicial dispute-resolution procedure for claims under the various
employment and workplace statutes identified in Title II, Part A,
Sections 201 - 206 of the CAA. (8) That procedure provides,
under the administration of the Office of Compliance, for mandatory
counseling and mediation before a covered employee may elect to
either pursue an administrative hearing before a Board-appointed
hearing officer or to file a civil action in an appropriate United
States District Court. Under this regime, the Board of Directors
decides appeals from hearing officer decisions, and the Board's
decisions are subject to judicial review by the United States Court
of Appeals for the Federal Circuit.
The employing office vigorously argues for the
primacy of this dispute-resolution procedure based upon the following
language in Section 401 of the CAA:
In the case of an employee of the office of
the Architect of the Capitol or of the Capitol Police, the Executive
Director, after receiving a request for counseling under section
402, may recommend that the employee use the grievance procedures
of the Architect of the Capitol or the Capitol Police for resolution
of the employee's grievance for a specific period of time, which
shall not count against the time available for counseling or mediation.
We do not view this provision to provide, as
the employing office would have us do, that the statutory rights
applied through sections 201-206 of the CAA may not be enforced
through negotiated grievance procedures established pursuant to
section 220(a) of the Act. In enacting the CAA, Congress applied
the FSLMRS provisions permitting employees and unions to grieve
and arbitrate "[c]laimed violation, misinterpretation, or misapplication
of any law, rule, or regulation affecting conditions of employment".
Congress allowed for the arbitration of claims arising under laws
specified in sections 201-206 of the CAA by providing at the very
introduction of its Title IV Administrative and Judicial Dispute-Resolution
Procedures the following statement:
Except as otherwise provided, the procedure
for consideration of alleged violations of part A of title II consists
of - [ counseling, mediation, etc.].
[Section 401, CAA].
It is plain that the CAA provides for arbitration
of grievances seeking to enforce laws affecting conditions of employment.
Among the laws having the most prominent effect on working conditions
are those applied through sections 201-206 of the CAA. Any interpretation
of the CAA that excludes categorically those laws from the scope
of arbitrability largely would render nugatory and make a mockery
of the labor-management relations program applied to the Legislative
Branch by section 220 of the CAA. We found in AFSCME Council
26, supra, that the Back Pay Act (5 U.S.C. §5596)
was incorporated by reference through the CAA and, therefore, the
doctrine of sovereign immunity did not bar its application by an
arbitrator. We now find that sovereign immunity does not obtain
herein because the CAA incorporated the scope of grievance/arbitration
from Chapter 71 of the FSLMRS.
In the absence of elucidating legislative history
expressing Congress' intent, we can only speculate on the significance
of section 401 of the CAA affording the Executive Director discretion
to recommend that covered employees first utilize the grievance
procedures of the Capitol Police and the Office of the Architect
of the Capitol. The most obvious explanation might be to encourage
the internal resolution of a grievance before bringing it to the
Office of Compliance, an independent agency of the Congress. However,
that provision does persuade us to conclude that covered employees,
or their representatives, are not free to initiate such statutorily-based
claims under employing office grievance procedures, including negotiated
grievance procedures. Consistent with this view, the OOC's Procedural
Rules, adopted in June 1997, recognize and allow for situations
where covered employees of the Capitol Police or Office of the Architect
of the Capitol grieve to a final internal decision allegations that
could be raised under Part A of Title II of the CAA. [OOC Procedural
Rules, §2.03(m)(3)].
Finally, we do not agree with the employing
office's caution that to permit the arbitration of this FLSA claim
"would essentially undermine the Board's own authority and, in effect,
be tantamount to an abdication of the OOC's statutory oversight
responsibility under the CAA". First, we find, for the reasons stated
above, that the CAA delineated between the roles of the OOC and
arbitrators in claims arising under Part A of Title II of the CAA.
Second, the Board of Directors, through exceptions to arbitrators'
awards, retains its authority to review an arbitrator's interpretation
and application of each such statute. In this regard, the Board
reviews questions of law raised by an arbitration award and the
exceptions thereto de novo. National Treasury Employees,
Local 1437 and U.S. Department of the Army, Army Research, Development
and Engineering Center, 53 FLRA 1703, 1710 (1998). In applying
the standard of de novo review, the Board assesses whether
the arbitrator's legal conclusions are consistent with law, based
on the underlying factual findings. American Federation of Government
Employees, National Border Patrol Council and U.S. Department
of Justice, U.S. Immigration and Naturalization Service, United
States Border Patrol, 54 FLRA 905, 910 n.6 (1998).
The Board shall proceed to apply these standards, infra.
B. Arbitrator's Award of Liquidated
Damages
Section 203 of the CAA makes applicable to the
Legislative Branch the rights and protections of the Fair Labor
Standards Act of 1938, including the remedy of liquidated damages,
as would be appropriate if awarded under section 216(b) of the FLSA
(29 U.S.C. §216(b)). Liquidated damages, under section
216(b), are an equal amount to unpaid wages. An employer may avoid
liquidated damages by establishing that it acted in good faith and
on the basis of a reasonable belief that it was not violating the
[FLSA]. [29 U.S.C. § 260].
The arbitrator had a clear legal and factual
basis to premise his award of liquidated damages upon the employing
office's underlying violation of the FLSA for its admitted approximately
28-month delayed payment of overtime wages to bargaining unit employees.
(9) The FLSA has been interpreted to have a prompt payment
requirement. Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697,
89 L.Ed. 1296, 65 S.Ct. 895 (1945); Wendy Elwell v. University
Hospitals Home Care Services, 2002 U.S. App. LEXIS 423 (6th
Cir. 2002); John F. Rogers, et al., v. The City of Troy, New
York, et al., 148 F.3d 52 (2nd Cir. 1998); Calderon
v. Witvoet, 999 F.2d 1101 (7th Cir. 1993); William
Biggs, et al, v. Pete Wilson, Governor, et al., 1 F.3d 1537
(9th Cir. 1993), cert. den. 510 U.S. 1081(1994);
(10) and, United States v. Klinghoffer Bros.
Realty Corp., 285 F.2d 487 (2d Cir. 1960). In addition, the
arbitrator properly could consider the employing office's adjustment
of the underlying grievance, acknowledging its indebtedness for
unpaid overtime wages, as constituting additional evidence of the
employing office's FLSA violation. U.S. Department of the Navy,
Naval Explosive Ordinance Disposal Technology Division India Head,
Maryland and AFGE Local 1923, 2000 FLRA LEXIS 58, 56 FLRA No.
39 (2000).
A judge or other fact finder enforcing the FLSA
has the discretion not to award liquidated damages to a prevailing
plaintiff if the employer shows to the satisfaction of the adjudicator
that the act or omission giving rise to such action was in good
faith and that the employer had reasonable grounds for believing
that its act or omission was not a violation of the Fair Labor Standards
Act of 1938. [29 U.S.C. §260]. The burden
on the employer is substantial and requires proof that the employer's
failure to obey the statute was both in good faith and predicated
upon such reasonable grounds that it would be unfair to impose upon
it more than a compensatory verdict. In the absence of such proof,
however, a court has no power or discretion to reduce an employer's
liability for the equivalent of double unpaid wages. Wendy Elwell
v. University Hospitals Home Care Services, supra; Uphoff
v. Elegant Bath, Ltd., 176 F.3d 399 (7th Cir. 1999);
Herman v. Palo Group Foster Home, 183 F.3d 468 (6th
Cir. 1999); Kinney v. District of Columbia, 994 F.2d 6 (D.C.
Cir. 1993); Walton v. United Consumers Club, Inc. 786 F.2d
303 (7th Cir. 1986) . Liquidated damages under
the FLSA are compensation and not a penalty or punishment. McClanahan
v. Mathews, 440 F.2d 320 (6th Cir. 1971).
The arbitrator concluded that liquidated damages
were warranted because he was unsatisfied that the employing office's
explanations met its legal burden imposed by 29 U.S.C.
§260. After hearing testimony on
this point the arbitrator concluded that the employing office devoted
insufficient human resources and efforts towards achieving prompt
payment of unpaid overtime wages. Nor was the arbitrator persuaded
by the employing office's evidence regarding the role and responsibility
of the National Finance Center, the effects of Y2K activity
and the purported workload hardships facing the employing office.
In its exceptions, the employing office essentially characterizes
the arbitrator's findings to which it excepts as nonfacts.
We disagree.
To establish that an award is based on a nonfact,
the appealing party must demonstrate that a central fact underlying
the award is clearly erroneous, but for which a different result
would have been reached by the arbitrator. Social Security Administration,
Baltimore, Maryland and American Federation of Government Employees,
Local 1923, 2001 FLRA LEXIS 119; 57 FLRA No. 94 (2001); United States
Dep't of the Air Force, Lowry Air Force Base, Denver, Colorado,
48 FLRA 589 (1993); Gen. Serv. Admin., Region 2, 46 FLRA
1039 (1992). An award will not be found deficient based on an arbitrator's
determination on any factual matters that the parties disputed below.
Mailhandlers v. Postal Service, 751 F.2d 834, 843 (6th
Cir. 1985); and, Department of Air Force, supra, 48 FLRA
at 594. In addition, an arbitrator's legal conclusions cannot be
challenged on the grounds of nonfact. e.g., NFFE, Local 561,
52 FLRA 207, 210-11(1996); United States Dep't of the Navy,
Philadelphia Naval Shipyard, 39 FLRA 590, 605 (1991).
While the employing office may dispute the arbitrator's
interpretation and weighing of the evidence, his finding that the
employing office did not act as effectively and expeditiously as
it should have in making the payments cannot be viewed as constituting
a nonfact. On the other hand, the employing office does not contend
that it had reasonable grounds for believing that its 28-month delay
in making the correct FLSA overtime payments was not a violation
of the FLSA. Further, the employing office has at no time contended
that it sought legal advice from any source concerning those FLSA
obligations.
Accordingly, the arbitrator certainly had a
factual basis to conclude that the employing office did not meet
its burden to establish bargaining unit employees' non-entitlement
to liquidated damages under 29 U.S.C. §260.
C. The Employing Office Was Not Denied
a Fair Hearing
The union acknowledged at the arbitration hearing
that the employing office finally had paid its overtime wage indebtedness
to the bargaining union employees. Therefore, only the issue of
liquidated damages remained for the arbitrator's determination.
However, the union never withdrew its allegation that the indebtedness
constituted an FLSA violation for failure to make prompt payment
of overtime wages, which contention underpinned the union's claim
for liquidated damages. The employing office does not contend that
it was denied the opportunity to present evidence regarding that
underlying FLSA violation and it, in fact, did present testimony
concerning its erroneous FLSA base pay computation and its efforts
to make its employees whole.
Accordingly, we deny the employing office's
exception that it was denied a fair hearing.
V. Decision
The employing office's exceptions are denied.
It is so ordered.
Issued: Washington, D.C. February 25, 2002
|
|
|