58 FLRA No. 101

Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members

I.      Statement of the Case

      This matter is before the Authority on exceptions to an award of Arbitrator Craig E. Overton filed by the Agency under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exceptions.

      The Arbitrator found that the Agency violated regulations and a settlement agreement between the parties by failing to timely promote the grievants, and he awarded the grievants backpay and service credits.

      For the following reasons, we deny the Agency's exceptions.

II.     Background and Arbitrator's Award

      As the result of a grievance alleging that several employees were performing the work of a higher grade (GS-7), the parties reached a settlement agreement, in which the Agency agreed to, among other things, reclassify the grievants' positions to GS-7. In October 2001, one year after the effective date of the grievants' reclassification to GS-7, the Agency declined to promote the grievants to GS-8. Another grievance was filed, which was submitted to arbitration, where the Arbitrator framed the issue as follows: "What shall be the disposition of the grievance, including remedy, if any?" Award at 2. [ v58 p414 ]

      The Arbitrator found that the parties to the settlement agreement intended that the grievants would be promoted to GS-8 once they "satisfied numeric performance standards and . . . met the time in grade requirement." Id. at 3. The Arbitrator also found that the grievants satisfied both conditions in October 2001 but were not promoted to GS-8 until April 2002. As for performance standards, the Arbitrator found that the grievants received "successful" performance ratings in April 2001 and that, in view of the fact that they were again rated "successful" in April 2002, there was "insufficient substantive evidence" demonstrating that their performance declined between April and October 2001. Id. at 16. With regard to time in grade, the Arbitrator found that, as of October 2001, the grievants had spent one year in grade GS-7.

      The Arbitrator concluded that the Agency failed to timely promote the grievants "pursuant to the regulations and the settlement agreement." Id. [n1]  Accordingly, he directed the Agency to compensate the grievants for lost wages and any applicable service credits for the period from October 2001 until April 2002.

III.     Positions of the Parties

A.     Agency's Exceptions

      The Agency argues that the award fails to draw its essence from the parties' agreement. Specifically, the Agency asserts that there is no language in the settlement agreement that discusses promoting the grievants.

      The Agency also argues that the award is contrary to the Back Pay Act, 5 U.S.C. § 5596. In this regard, the Agency contends that the Arbitrator did not cite any regulations or any other "non-discretionary provision" that required the Agency to promote the grievants. Exceptions at 6. In addition, the Agency asserts that there was witness testimony that the grievants would not have been promoted in October 2001 and that an Agency regulation requires promotion only after employees have performed "to the satisfaction of the supervisor." Id. at 8. The Agency relies on: Brown v. Secretary of the Army, 918 F.2d 214 (D.C. Cir. 1990); unpublished Comptroller General decision In re F.E.C., B-229,290 (June 10, 1988); In re Agnes Mansell, 64 Comp. Gen. 844 (1985); In re Douglas C. Butler, 58 Comp. Gen. 51 (1978); SSA, Office of Hearings & Appeals, Orlando, Fla., 54 FLRA 609 (1998); and AFGE, Local 2502, 17 FLRA 382 (1985).

B.     Union's Opposition

      The Union argues that the evidence supports the Arbitrator's conclusions that: (1) the parties to the settlement agreement intended for the grievants to be promoted to GS-8 upon meeting time in grade and performance requirements; and (2) but for the Agency's violation of the agreement, the grievants would have been promoted.     

IV.     Analysis and Conclusions

A.     The award draws its essence from the parties' agreement.

      We apply the deferential "essence" standard to review the Arbitrator's interpretation of the parties' settlement agreement. See, e.g., United States Dep't of the Navy, Naval Weapons Station, Yorktown, Va., 57 FLRA 917, 920 (2002). For an award to be found deficient as failing to draw its essence from the parties' agreement, it must be established that the award: (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact and so unconnected to the wording and purposes of the agreement as to manifest an infidelity to the obligation of the arbitrator; (3) does not represent a plausible interpretation of the agreement; or (4) evidences a manifest disregard of the agreement. United States Dep't of Labor (OSHA), 34 FLRA 573, 575 (1990). Where an arbitrator interprets an agreement as imposing a particular requirement, the fact that the agreement is silent with respect to that requirement does not, by itself, demonstrate that the award fails to draw its essence from the agreement. See, e.g., United States Dep't of Def., Educ. Activity, Arlington, Va., 56 FLRA 901, 905-06 (2000); United States Dep't of the Treasury, IRS, Wash., D.C., 56 FLRA 393, 394-95 (2000); United States Dep't of the Air Force, Ogden Air Logistics Ctr., Hill Air Force Base, Utah, 35 FLRA 1267, 1271 (1990) (Hill AFB).

      The Arbitrator found that the parties intended for the settlement agreement to entitle the grievants to promotions to GS-8 after one year at GS-7, provided they satisfied performance requirements. The fact that the agreement is silent on this matter does not demonstrate that the award fails to draw its essence from the parties' agreement. See id. Further, the Agency provides no other basis for finding that the award is irrational, unfounded, implausible, or in manifest disregard of the parties' agreement. Accordingly, we deny the exception. [ v58 p415 ]

B.     The award is not contrary to the Back Pay Act, 5 U.S.C. § 5596.

      Under the Back Pay Act, 5 U.S.C. § 5596(b)(1), an award of backpay is authorized only when an arbitrator finds that: (1) the aggrieved employee was affected by an unjustified and unwarranted personnel action; and (2) the personnel action resulted in the withdrawal or reduction of the employee's pay, allowances, or differentials. United States Dep't of Def., Educ. Activity, Arlington, Va., 56 FLRA 1009, 1013 (2000) (Dep't of Def.). These requirements are satisfied where an arbitrator finds that an agency violated an agreement by failing to initiate a nondiscretionary process to timely promote a grievant. NFFE, Local 2030, 56 FLRA 667, 673 (2000).

      The Authority has found that breach of a settlement agreement provides a basis for finding an unjustified and unwarranted personnel action under the Back Pay Act. See, e.g., United States DOD, Educ. Activity, Arlington, Va., 56 FLRA 711, 719 (2000) (citing Def. Logistics Agency, Def. Distrib. Region E., New Cumberland, Pa., 50 FLRA 282, 283 (1995)). The Arbitrator found that the grievants were affected by the Agency's violation of the parties' settlement agreement. Thus, the award satisfies the first Back Pay Act requirement.

      The Arbitrator also found that the grievants received "successful" performance ratings in April 2001 and that, in view of the fact that they were again rated "successful" in April 2002, there was insufficient evidence that their performance declined between April and October 2001. The Agency's contentions to the contrary do not establish that the Arbitrator's findings are in error. Further, as discussed previously, the Arbitrator found that the parties intended the settlement agreement to entitle the grievants to a promotion upon one year in grade and successful performance ratings. The Arbitrator's finding that both of these conditions were met satisfies the second Back Pay Act requirement.

      None of the cases cited by the Agency supports a contrary conclusion. In Brown v. Secretary of the Army, 918 F.2d 214, 219-20 (D.C. Cir. 1990), the court specifically acknowledged that the Back Pay Act does not preclude payment in circumstances where, as here, an agency has entered into an agreement entitling employees to promotion under certain conditions. Similarly, in the three Comptroller General cases cited by the Agency, there was no settlement agreement - as there is here - requiring that the employees be promoted. See unpublished Comptroller General decision In re F.E.C., B-229,290 at *1 (June 10, 1988); In re Agnes Mansell, 64 Comp. Gen. 844, 846 (1985); In re Douglas C. Butler, 58 Comp. Gen. 51, 52 (1978). Finally, arbitrators in the two Authority decisions cited by the Agency did not make sufficient findings under the Back Pay Act. See SSA, Office of Hearings & Appeals, Orlando, Fla., 54 FLRA 609, 614 (1998) (arbitrator found promotion procedures improper but did not determine, "either explicitly or implicitly," what would have happened if proper procedures had been used); AFGE, Local 2502, 17 FLRA 382, 383 (1985) (arbitrator found that agency's action was arbitrary but did not find that grievant would have been promoted but for the arbitrary action). By contrast, the award in this case satisfies the Back Pay Act because the Arbitrator found that the grievants should have been, but were not, promoted in October 2001 pursuant to the settlement agreement and that, as a result, the employees were entitled to backpay.

      For the foregoing reasons, we deny the exception.

V.     Decision

      The Agency's exceptions are denied.

   The Arbitrator did not specify the regulations to which he referred.