FLRA DECISIONS

60 FLRA No. 88

BACKPAY NOT AN AUTOMATIC REMEDY FOR AN OVERTIME VIOLATION

National Treasury Employees Union, Chapter 98 and U.S. Department of the Treasury, Internal Revenue Service, Memphis Accounting Management Center, Memphis, Tennessee, 0-AR-3815, 11/30/04, 60 FLRA No. 88.

Holding

FLRA turned down the union's exceptions to an award in which the arbitrator, although finding that the agency violated the agreement in denying some employees the opportunity to work overtime, did not order a monetary remedy. FLRA said it "has never required an arbitrator to award backpay under the Back Pay Act to remedy an agreement violation . . . ."

Summary

The union grievance, involving a claim that employees who were denied the opportunity to work overtime were entitled to backpay, was referred to arbitration. The arbitrator found that the agency had violated a contract provision requiring, among other things, that overtime be distributed equitably. But he also found that the union failed to sustain its burden of establishing that backpay was the required remedy. He instead ordered the agency to cease and desist from violating the agreement and to make overtime available consistent with the agreement and his award.

In ordering such a remedy, the arbitrator said he was persuaded by the reasoning of the Court of Appeals, Indep. Employees' Union of Hillshire Farm Co., Inc. v. Hillshire Farm Co., Inc., 826 F.2d 530 (7th Cir. 1987). The arbitrator in that private sector case preferred make-up work to backpay as a remedy "because it placed employees in roughly the same position he or she would have been in but for the violation and the remedy avoided a 'punitive penalty' of forcing the employer to pay for work not actually performed."

The union filed exceptions, claiming that the award was contrary to the Back Pay Act and FLRA precedent.

The Authority rejected the claim that the award violated the Back Pay Act. It noted that the Act required that (1) the employee be affected by an unjustified or unwarranted personnel action (UUPA) and (2) the action results in the withdrawal or reduction of the grievant's pay, allowances or differentials. Although the arbitrator found that there had been a contract violation, which satisfied the UUPA requirement, he made no finding that the agreement violation resulted in a loss of pay to the employees.

In rejecting the union claim that the award was inconsistent with FLRA precedent, the Authority said the following:

We note that the Authority has never required an arbitrator to award backpay under the Back Pay Act to remedy an agreement violation, particularly where, as here, no finding of a loss of pay was made. In fact, the Authority has specifically held that "nothing in the Back Pay Act . . . requires a monetary award for every unjustified or unwarranted personnel action." [Footnote 2 of 57 FLRA No. 150 cited.] In this regard, the Authority has also upheld awards of future overtime in lieu of backpay. [47 FLRA No. 4 and 39 FLRA No. 37 cited.

FLRA also indicated that the Federal Circuit has determined that an arbitrator may set aside a removal or period of suspension and yet not award backpay where the employee is found to bear some responsibility for the disciplinary action and loss of pay. See AFGE, Local 2718, Nat'l Immigration & Naturalization Serv. Council, et al. v. Dep't of Justice, Immigration Serv., 768 F.2d 3438 (Fed. Cir. 1985). However, where the employee is found to bear no responsibility, the employee would then be entitled to backpay for that period. See Ollett v. Dep't of the Air Force, 253 F.3d 692 (Fed. Cir. 2001).

But FLRA noted that the parties did not bring up the Federal Circuit's handling of backpay where an arbitrator sets aside all or part of a disciplinary action. Moreover, it was unclear how the Federal Circuit's holdings would apply to the case at bar, which involved an alleged lost opportunity to work overtime rather than a disciplinary action. "Thus, we leave for another day, in a case where the issue is presented and addressed, the question whether the Authority should reconsider its precedent on this point."

In her dissenting opinion, Chairman Cabaniss said that regardless of the possible impact of the Federal Circuit decisions discussed in the majority opinion, it was her view that the grievants would be entitled to lost overtime pay if that loss was caused by the agency's unjustified or unwarranted personnel action. Because the arbitrator made no findings regarding the causal relationship, she would remand this case so the arbitrator could make such findings.

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