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WASHINGTON, D.C. 20415-2000


DATE::  December 4, 1997


The full text of case decisions cited in these pages are not available from this agency. You must contact the Federal Labor Relations Authority directly to obtain the full text of case decisions.

On November 24, 1997, the Office of Personnel Management published final regulations, (62 FR 62495) amending Parts 351, 430, and 531 of title 5, Code of Federal Regulations. These amendments revised the Office of Personnel Management's regulations governing reduction in force and performance management.


Under the final regulations, agencies now have flexibilities in several critical areas.

Effective Date

The regulations are effective December 24, 1997. Thus, as of that date, agencies are no longer automatically subject to the current sections 351.504 (Credit for Performance) and 351.803(a) (Notice of Eligibility for Reemployment and Other Placement Assistance). Agencies have the discretion to implement sections 351.504 (Credit for Performance) and 351.803(a) (Notice of Eligibility for Reemployment and Other Placement Assistance) anytime between December 24, 1997 and October 1, 1998. An agency effecting a reduction in force between December 24, 1997 and October 1, 1998, may use either the revised sections 351.504 and 351.803(a) or the current section as contained in title 5, Code of Federal Regulations, Part 351 (January 1, 1997).

Amount of Service Credit for Particular Summary Performance Rating

Under the revised regulations, agencies will have the discretion to determine the amount of additional service credit for each summary rating level at or above "Fully Successful" where ratings of record given under different summary level patterns are being assigned additional retention credit in the same competitive area. The amount of additional credit may not be less than 12 years and no more than 20 years. For example, management could decide to award 18 years additional service credit for "Fully Successful" in a pass/fail system; 16 years additional service for "Fully Successful" in a 4 or 5 level system; or 20 years for a level 4 or 5 in a 5 level system. Agencies are required to be uniform and consistent within the competitive area when awarding the extra service credit for performance. That means, for example, that everyone who received a level 4 rating of record in a 4 level system would get the same amount of additional service credit.

There is no such flexibility if everyone in the competitive area received ratings of record under a single pattern of summary levels (e.g., all ratings of record being credited for the reduction in force were given under a 4 level system, or under a 5 level system, etc.). In this case, the agency must use the 12-16-20 limits for additional service credit as set forth in the regulations.

Modal Ratings

For employees who have no rating of record during the 4-year period prior to a reduction in force, the use of the "presumed Fully Successful" rating is being replaced by the use of modal rating. If an employee in the competitive area does not have any of the necessary three ratings of record for the previous four years, then the agency would be required to use the modal rating as a basis for awarding extra service credit to that employee. The modal rating depends on the rating pattern for the employee's position and is the most frequently assigned rating for the last appraisal period. The basis for determining the modal rating can be (1) competitive area wide; (2) a larger subdivision of the agency; or (3) agency-wide. The determination is left to the agency. Regardless of how the modal rating is determined for each particular rating pattern, it must be applied uniformly and consistently within the reduction in force competitive area. In other words, all employees without ratings in a competitive area who are in positions normally rated under a particular pattern would be assigned the same modal rating value.

Labor-Management Implications

Possible Conflict Between Existing Agreement and a New Governmentwide Regulation

Agencies need to be mindful of possible issues involving section 7116(a)(7) of title 5, United States Code and the implementation of these regulations. Under section 7116(a)(7), it is an unfair labor practice for an agency to "enforce any rule or regulation (other than a rule or regulation implementing section 2302 of title 5, United States Code), which is in conflict with any applicable collective bargaining agreement if the agreement was in effect before the date the rule or regulation was prescribed." Agencies should carefully review their collective bargaining agreements for possible conflicts with the new regulations. If there is a conflict and the agreement does not permit management to reopen the agreement, then the implementation of the revised regulations may have to be delayed until the expiration of the current agreement.

If agencies do identify conflicts between the new regulations and provisions of existing agreements, agencies should make every attempt to reopen the agreements and bring them into conformance with the new Governmentwide regulations. If management is unable to reopen the agreement, then it should give the exclusive representative(s) ample advance notice that effective on the expiration of the current agreement, the agency will implement the new regulations. Agencies wishing to implement these regulations need to be sure not to let the current agreement automatically renew without implementing the new regulations.

Depending on the particular circumstances, agencies may have to bargain over the impact and implementation of the new regulations. Where the regulations give agencies discretion and flexibility, agencies may find themselves faced with requests by the exclusive representative(s) to bargain over those flexibilities.

Agencies should be aware of a situation involving the unilateral decision to tabulate modal ratings on an agency-wide basis. Doing so would appear to be similar to establishing an agency-wide regulation. Agency-wide regulations are not automatic bars to negotiations unless the agency can show that there is a compelling need for the regulation. Given the trend by the courts and Federal Labor Relations Authority over the past decade, proving compelling need for agency-wide regulations has become extremely difficult.

Requirement for Uniform and Consistent Application of Part 351

Left unchanged by these revisions, was section 351.201(c) which states, "Each agency is responsible for assuring that the provisions in this part are uniformly and consistently applied in any one reduction in force." In addition, section 430.208(d)(5) of the revised regulations states, "Under the provisions of [section] 351.504(e) of this chapter, the number of years of additional retention service credit established for a summary level of a rating of record shall be applied in a uniform and consistent manner within a competitive area in any given reduction in force, . . ."

The impact of section 351.201(c) is still not entirely clear. In the Federal Labor Relations Authority's decision in American Federation of Government Employees Local 32 and Office of Personnel Management, 51 FLRA No. 42, the Federal Labor Relations Authority held that a union proposal attempting to define the competitive areas was outside the agency's duty to bargain. Because the competitive areas proposed by the union would have included supervisory personnel, the proposal was outside the agency's duty to bargain. In reaching their decision, the Federal Labor Relations Authority relied on Naval Aviation Depot, Cherry Point, NC v. FLRA, 952 F.2d 1434 (D.C. Cir. 1992). In Cherry Point, the court was faced with proposals that would have determined conditions of employment for supervisory personnel and employees in more than one bargaining unit. In its decision, the court used the phrases "outside the duty to bargain" and "non-negotiable." In fact the court said:

[T]he two provisions at issue in this case are non-negotiable to the extent that they purport to regulate the conditions of employment of supervisory personnel and employees in other bargaining units.

In American Federation of Government Employees Local 3302 and Social Security Administration, 52 FLRA No 65, the Federal Labor Relations Authority modified its prior holding in OPM by saying:

[T]he [Federal Labor Management Relations] Statute does not expressly prohibit bargaining over matters that directly implicate the working conditions of managers and supervisors. Thus, there is no clear statutory basis for concluding that bargaining over such matters is prohibited. . . . Therefore, we will adhere to the position expressed in Philadelphia Naval Shipyard, 3 FLRA 438 that an agency is fully empowered to bargain over, and to choose to agree to, a contract proposal that directly implicates the working conditions of its supervisors and managers.

At the very least, proposals which, by operation of section 351.201(c), would determine conditions of employment for the supervisors in the competitive area are outside the duty to bargain but are permissive subjects of bargaining (but not covered by section 7106(b)(1) of title 5, United States Code) and agencies may therefore elect to bargain or not to bargain over them. Under a more narrow interpretation of Cherry Point, such proposals are non-negotiable and bargaining over them is prohibited.

Another unresolved question concerns agency-head review under title 5, Unites States Code, section 7114(c). If the local management opted to negotiate over areas covered by the Office of Personnel Management's reduction in force regulations on the basis that such negotiations were permissive (but not "(b)(1)" matters), can those provisions be set aside by higher level management upon agency-head review. It is far from clear if the D.C. Circuit's decision in Association of Civilian Technicians, Montana Air Chapter No. 29 v. Federal Labor Relations Authority, 22 F.2d 1150 (D.C. Cir. 1994), and the Federal Labor Relations Authority's decision in Department of Veterans Affairs Medical Center Lexington, Kentucky, 51 FLRA No. 36, would apply in this situation. Those decisions dealt with "(b)(1)" permissive subjects rather than other subjects that were outside the duty to bargain but could be bargained if management elected to do so.

Any questions or comments on material on this page are to be directed to Frank Milman, U.S. Office of Personnel Management, Theodore Roosevelt Building, 1900 E Street, NW., Washington, DC 20415-2000, telephone (202) 606-2021; fax 202) 606-2613; or email flmilman@opm.gov.

Page created on 21 July 1998