American Federation of Government Employees and Department of Veterans Affairs, Medical Center, Asheville, North Carolina, 0-AR-3711, November 28, 2003, 59 FLRA No. 74.

FLRA turned down union exceptions to an award in which the arbitrator found that performance awards for nonuse of sick leave, being selected as a preceptor, longevity, and obtaining a higher degree were contrary to law and regulation. FLRA agreed that such awards are contrary to law because they aren't performance based. "The law and regulations governing awards only authorize awards for an employee's superior performance or activity, and the Union does not cite to any other authority that would permit an agency to make an expenditure for awards such as those created [by a committee of agency and union representatives]. . . . In addition, the OPM regulations limit the Agency's discretion in giving awards for performance based activities and the Agency may not take action inconsistent with the regulations."

The union had filed a grievance when the agency refused to implement an awards program created by a committee of agency and union representatives. The negotiated program, called Issue 93, provided for "special contribution" awards based on preceptorship work, longevity in the VA system, perfect quarterly attendance, and obtaining a higher degree in nursing. When the Director of Human Resources learned of Issue 93 he contacted VA headquarters for an opinion on the legality of the program. While waiting for a response he informed the official in charge of Issue 93 that a VA Directive specifically precluded awards for good attendance, with the result that some attendance awards weren't approved. As part of VA headquarters review, OPM notified VA that there was no legal basis for Issue 93 because 5 CFR 451.101 only permits awards for "exemplary performance." The activity met with the union and advised it that management believed the program was illegal based on the OPM opinion. The union thereupon filed a grievance on behalf of employees who did not receive their awards and the matter was referred to arbitration.

The arbitrator denied the grievance, based on his determination that the four types of awards created by Issue 93 were contrary to law and regulation. Regarding nonuse of sick leave, he concluded that a healthy person is expected to come to work, thus not using sick leave doesn't constitute a "superior accomplishment" and is not a "personal effort." Nor did he find that the mere assignment to act as a preceptor constituted a superior accomplishment. Neither the longevity award nor the award granting step increases for obtaining a higher degree , he continued, were connected to performance.

FLRA agreed with the arbitrator's determinations and turned down the union's exceptions to the award.

The law and regulations governing awards only authorize awards for an employee's superior performance or activity, and the Union does not cite to any other authority that would permit an agency to make an expenditure for awards such as those created in Issue 93. . . . In addition, the OPM regulations limit the agency's discretion to giving awards for performance based activities and the Agency may not take action inconsistent with the regulations. See cf. AFGE, 56 FLRA at 898 (holding that proposals granting pay retention to employees to whom OPM did not, in 5 C.F.R. 536, grant pay retention were not within the duty to bargain because "OPM regulations do not authorize pay retention for employees affected by [the proposals]."); Patent Office Prof'l Ass'n, 53 FLRA 625, 649 (1997) (stating, "[t]he Authority has found proposals to be inconsistent with a regulation where the regulation states an express standard governing the exercise of an agency's authority, and the proposal either expanded or contracted that regulatory standard."). [Emphases added.]