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 Number 127 January 1999 This report covers selected decisions and other actions of the Federal Labor Relations Authority (Authority or FLRA) under the Federal Service Labor-Management Relations Statute (FSLMRS), the Merit Systems Protection Board (Board or MSPB), the courts, and other authorities whose actions affect Federal employee and labor-management relations. Selection is based generally on whether a case creates or modifies precedent or provides insights that are of interest to a wider spectrum of agency management than only the parties to the cases themselves. FLRA DECISIONS MAINTENANCE OF STATUS QUO ... NEW FRAMEWORK FOR § 7116 (a)(6) VIOLATIONS. In a split decision, Member Wasserman dissenting, the Authority held that implementation of a change in conditions of employment while a request for Impasses Panel assistance is pending is a violation of § 7116(a)(5). However, such implementation is not also a violation of § 7116(a)(6) unless the General Counsel can "establish that the implementation failed to cooperate with an impasse procedure or decision." Immigration and Naturalization Service, Washington, D.C. and National Border Patrol, American Federation of Government Employees, AFL-CIO, SF-CA-30165, January 12, 1999, 55 FLRA No. 19. REASONABLE FEES FOR LIMITED SUCCESS. Relying on a Supreme Court decision and MSPB precedent, the Authority sustained an attorney fees award in which the arbitrator, after sustaining a grievance relating to administrative leave "to the extent of one-forth of the amount claimed," awarded one-forth of the fees incurred. National Association of Government Employees, Local R4-6 and Department of the Army, Fort Eustis, Virginia, 0-AR-3000, November 30, 1998, 54 FLRA No. 137. CONTRACTING OUT ...AGREEMENT TO BARGAIN OVER § 7106(b)(1) MATTERS. FLRA set aside an award in which the arbitrator held that the agency's refusal to bargain on the union's contracting-out proposal was a violation of a memorandum of understanding in which the agency had agreed to bargain on § 7106(b)(1) matters. Contracting out, said the Authority, isn't a § 7106(b)(1) matter because it deals with who will do the work, not with the way in which it will be done. General Services Administration and American Federation of Government Employees, Council of GSA Locals, Council 236, 0-AR-3010, November 30, 1998, 54 FLRA No. 136. TWO-PRONG TEST REGARDING AWARDS AFFECTING MANAGEMENT'S RIGHTS. The Authority, applying its two-prong test for awards affecting management's rights, turned down the agency's exceptions to an award in which the arbitrator, after finding the agency violated a § 7106(b) agreement provision requiring it to give serious consideration to "grade-stagnated" candidates for promotion, ordered that the grievant (who was found to be more qualified than one of the three employees who were selected) be retroactively promoted to a GS-13 position. Social Security Administration, Woodlawn, Maryland and American Federation of Government Employees, Local 1923, 0-AR-3072, November 30, 1998, 54 FLRA No. 135. GOOD FAITH BARGAINING ... AUTHORITY TO ACT ON BEHALF OF THE UNION. The Authority rejected the agency's contention that it had no duty to respond to a steward's bargaining request regarding proposed changes in conditions of employment. It found that the union had met its burden to indicate who had authority to act on behalf of the union. Moreover, if management questioned the steward's authority, it should have inquired rather than not reply to the bargaining request.
COMPENSATORY DAMAGES. A compensatory damages award may include reimbursement for medical expenses even where the appellant's health insurer has paid for the expenses. John H. Reid v. U.S. Postal Service, NY-0752-92-0562-P-2, December 10, 1998. JURISDICTION A lateral transfer between agencies can be appealable if it is involuntary. Patricia A. Colburn v. Department of Justice, DE-0752-98-0086-I-1, November 13, 1998. LEAVE Where an employee performs minimal work of very short duration outside the agency while on sick leave, the use of sick leave may still be appropriate. Donald P. House v. United States Postal Service, AT0752970454-I-1, October 27, 1998. CHARGES ... PENALTIES. The Board holds that an agency is not required to prove both parts of a two-part adverse action charge specification when the specification is based on two separate acts of misconduct. Picariello v. Postal Service, BN0752970055-I-1, October 21, 1998. ADVERSE ACTIONS ... CHARGES. The Board determined that certain terms used in the agency's proposal and decision notices were descriptive in nature and thus not "terms of art" that the agency had to prove in order to support its adverse action charges. Acree v. Treasury, DC0752920298-B-1, September 30, 1998. CHARGES ... REASONABLE ACCOMMODATION. A conclusory statement from a physician is not sufficient to prove physical inability to perform unless it is accompanied by evidence of performance or conduct deficiencies or the agency can demonstrate that a risk of injury to the employee or others exists because of the medical condition. Michael J. Schrodt v. U.S. Postal Service, CH-0752-96-0703-I-1, September 30, 1998. DISCOVERY ... CONSEQUENTIAL DAMAGES. The Merit Systems Protection Board has expanded the available methods of discovery to include authority for its judges to order an appellant to a physical and/or mental examination, provided the medical condition alleged by the appellant is in controversy and good cause for the examination can be shown, as required by Rule 35 of the Federal Rules of Civil Procedure. Dwight F. Hasler v. Department of Air Force, AT-0752-95-1201-P-1, August 28, 1998. JURISDICTION ... MIXED CASES. The Board will grant a hearing on claims of discrimination regardless of whether the claims are non-frivolous. Bennett v. National Gallery of Art, CB-7121-97-0040-V-1, July 28, 1998, and Currier v. United States Postal Service, DC-0351-95-0631-B-1, July 29, 1998. FLRA DECISIONS 55 FLRA No. 19 Immigration and Naturalization Service, Washington, D.C. and National Border Patrol, American Federation of Government Employees, AFL-CIO, SF-CA-30165, January 12, 1999, 55 FLRA No. 19. Holding In a split decision, Member Wasserman dissenting, the Authority held that implementation of a change in conditions of employment while a request for Impasses Panel assistance is pending is a violation of § 7116(a)(5). However, such implementation is not also a violation of § 7116(a)(6) unless the General Counsel can "establish that the implementation failed to cooperate with an impasse procedure or decision." Moreover, "an agency's obligation to bargain in good faith [under § 7116(a)(5)] includes the obligation to maintain the status quo until completion of bargaining."[Bold added.] "[T]he impasse process is, in effect, subsumed within the collective bargaining process as a whole, such that a failure to maintain the status quo during the impasse process violates section 7116(a)(5)." Summary The agency implemented its new Air Operation Manual when, after notifying the union of the proposed change and after negotiating on ground rules for over four months, it notified the union that it was going to implement the change if the union continued to delay. The next day the union asked for assistance from both the Federal Mediation and Conciliation Service (FMCS) and the Federal Service Impasses Panel (FSIP or Panel). About two weeks later the agency implemented the change, while the union's request for assistance was still pending before the FSIP. An unfair labor practice (ULP) complaint followed and the Administrative Law Judge (ALJ), rejecting the agency's claim that the union's request for Panel assistance was invalid because filed before the parties reached a bargaining impasse, held that the agency violated § 7116(a)(6) when it implemented the change while the matter was pending before the Panel. (He also determined that the agency failed to establish that implementation of the change was consistent with the necessary functioning of the agency.) Finding that its case law precedent on violations of § 7116(a)(6) were inconsistent, the FLRA established a new framework for determining what constitutes a violation of § 7116(a)(6). It concluded that implementing changes in conditions of employment while a request for Panel assistance was pending, without more, would not be a violation of § 7116(a)(6). It would, however, be a violation of § 7116(a)(5). In FLRA's words: [W]e conclude that the General Counsel must establish more than the facts that implementation occurred at a time when a request for assistance was pending before the Panel: the General Counsel must establish that the implementation failed to cooperate with an impasse procedure or decision. Because it was impossible to apply the revised framework to the record (the ALJ found a derivative rather than an independent violation of § 7116(a)(5)), FLRA remanded the case to the ALJ to collect evidence on, among other things, whether the Panel directed the parties to maintain the status quo pending its deliberations. Comments This decision isn't easy reading. Its numerous and lengthy footnotes, many of which are more interesting than the text of the decision, nonetheless distract one from the flow of the argument. The dissent, citing non-Federal public sector cases to support its position, is an additional complicating factor. There are a lot of distinctions and lots of connections to be made, and plenty of opportunities to go awry. The bottom line is simple, but getting there is not. What precipitated the Authority's reexamination of its precedent on the conditions under which it is a ULP to not maintain the status quo is the ALJ's finding that this case involved a direct violation of § 7116(a)(6)--hereafter (a)(6), and, "in effect," only a derivative violation of § 7116(a)(5)-- hereafter (a)(5). That is, he found that the case didn't involve an allegation of bad faith bargaining (an (a)(5) violation), but rather an allegation that the implementation of the proposed change while the matter was before the Panel was an (a)(6) violation. Had he found independent violations of both (a)(5) and (a)(6), the Authority probably would have affirmed that part of the decision finding an (a)(5) violation and found it unnecessary to pass on the (a)(6) violation. But no independent (a)(5) violation was found. (We assume the ALJ will find such a violation on remand.) The matter was further complicated by the Respondent's strong argument that an (a)(6) violation presupposes that the parties have reached an impasse, which had not been reached in this case. What is important to remember is that, apart from certain exceptions noted below, it is a violation of (a)(5) to implement changes in conditions of employment prior to the completion of bargaining. Because "the impasse resolution procedures of the Panel comprise one aspect of the collective bargaining process" referred to in (a)(5), "an agency's refusal to cooperate in impasse proceedings is also considered a violation of the general duty to bargain stated in section 7116(a)(5)." 55 FLRA No. 19, footnote 6. We here summarize some scenarios with respect to implementing changes in COE that probably would not be violations of (a)(5):
Whatever the reasons, the agency acts at its peril when unilaterally implementing changes in conditions of employment. The agency may think the change is de minimis, but FLRA may hold otherwise. The agency may think the change is "covered by" the contract; FLRA may disagree. The agency may think the union waived its right to bargain on the change; but it may have guessed wrong. Unilateral actions are risky business. 54 FLRA No. 137 National Association of Government Employees, Local R4-6 and Department of the Army, Fort Eustis, Virginia, 0-AR-3000, November 30, 1998, 54 FLRA No. 137. Relying on a Supreme Court decision and MSPB precedent, the Authority sustained an attorney fees award in which the arbitrator, after sustaining a grievance relating to administrative leave "to the extent of one-forth of the amount claimed," awarded one-forth of the fees incurred. Summary In his initial award the arbitrator, although sustaining the union's grievance concerning entitlement to administrative leave, held that the grievants were not entitled to attorney fees because an award of leave didn't constitute an award of back pay. Exceptions were filed and FLRA, after finding that the attorney fees portion of the award was contrary to the Back Pay Act, remanded the award to the parties for consideration of the attorney fees issue. On remand, the arbitrator said the grievants were entitled to attorney fees--but not to all of the amount claimed. He reasoned that since he sustained the grievance "to the extent of one-fourth of the amount claimed"--i.e., 2 hours of administrative leave rather than the 8 hours sought--the union was entitled to only one-fourth of the attorney fees requested. In conditioning of amount of attorney fees on the degree of success, the arbitrator cited a Supreme Court decision in which the Court said that "the degree of the plaintiff's success in relation to the other goals of the lawsuit is a factor critical to the determination of the size of a reasonable fee." Texas State Teachers v. Grievant Independent School District, 489 U.S. 782, 790 (1989). The Authority turned down the union's claim that the amount of the award wasn't reasonable. It noted, among other things, that the Supreme Court in Farrar v. Hobby, 506 U.S. 103, 114 (1992) held that the extent to which a plaintiff prevailed in the underlying litigation is the most critical factor to consider in determining reasonable attorney fees. It also noted that MSPB, in determining the "reasonableness" of attorney fees, has held that it is necessary to consider whether a fee award should be reduced because the relief ordered was significantly less than what was sought. Stein v. United States Postal Service, 65 MSPR 685, 690 (1994). In this case [said the Authority], the Arbitrator found that although the grievants did not recover the full amount of leave sought in the grievance, the grievants had prevailed within the meaning of section 7701(g)(1). The Arbitrator did not, as asserted by the Union . . . reduce the fees based on a finding that the grievants did not prevail. Instead, he found that the degree of the grievants' success affected what a "reasonable" fee award would be . . . . This is consistent with the Court's holding in Farrar, 506 U.S. 103, decisions of MSPB, such as Stein, 65 MSPR at 690, applying that holding to fees awarded under 5 U.S.C. § 7701(g), and the Authority's decision in Dependents Schools, 54 FLRA at 791 - 93 following that precedent. 54 FLRA No. 136 General Services Administration and American Federation of Government Employees, Council of GSA Locals, Council 236, 0-AR-3010, November 30, 1998, 54 FLRA No. 136. FLRA set aside an award in which the arbitrator held that the agency's refusal to bargain on the union's contracting-out proposal was a violation of a memorandum of understanding in which the agency had agreed to bargain on § 7106(b)(1) matters. "Contracting out," said the Authority, "isn't a § 7106(b)(1) matter because it deals with who will do the work, not with the way in which it will be done." Summary In 1993 the parties agreed to a Memorandum of Understanding (MOU) that provided that "the agency will commit to negotiate over the subjects set forth in 5 U.S.C. [§] 7106(b)(1)." In 1977 the union proposed that before the agency decides to contract out any work in organizational subdivisions for which the union held exclusive recognition, the agency would offer the union an opportunity to bargain over the matter in accordance with section 7106(b)(1). When the agency said the proposal was nonnegotiable, the union grieved and subsequently invoked arbitration. The arbitrator, relying on EO 12871, OPM guidance, and the MOU, found that the agency had breached the agreement. The Authority disagreed. At first FLRA described the test it uses to determine whether a proposal deals with methods and means within the meaningof § 7106(b)(1). First, the proposal has to satisfy the Authority's definitions of "method" ("the way in which an agency performs its work") and "means" ("any instrumentality, including an agent, tool, device, measure, plan, or policy used by an agency for the accomplishment or furtherance of the performance of its work[.]" See 52 FLRA 813, 818). If so, then it must be shown that there's a "direct and integral relationship" between the particular methods and means at issue and the accomplishment of the agency's mission. And, finally, it must be shown that "the proposal would directly interfere with the mission-related purpose for which the [agency's] method or means was adopted." Here, the arbitrator's determintion that the union's proposal dealt with methods and means failed the first prong of FLRA's test. [P]roposals concerning contracting out do not relate to the way in which an agency performs its work or the tools or devices that may be used in accomplishing it. Rather, such proposals relate to an agency's decision-making process concerning by whom the work is best performed--either in-house by agency employees or by employees of an outside organization. [FLRA's footnote 6, entered here, reads as follows: "This view is supported by the legislative history of the Statute which indicates that the term "methods' was intended to mean how' the work is performed; the term 'means' was intended to mean 'with what'; and the term "personnel" was intended to mean 'by whom' agency operations would be conducted."] Comments In footnote 5, the Authority notes that the legislative history of § 7106(b)(1) indicates that an agency's general policy was not intended to be encompassed by the expression "methods and means." FLRA specifically referred to that portion of the legislative history which states that "[i]t is not intended that agencies will discuss general policy questions determining how an agency does its work." Because of its importance, we here copy your information that portion of the legislative history dealing with bargaining on (b)(1) matters:
See Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978, H.R. Comm. Print No. 96-7, 96th Cong., 1st Sess., pages 821 - 822 (pages 153 - 154 of the Conference Report). 54 FLRA No. 135 Social Security Administration, Woodlawn, Maryland and American Federation of Government Employees, Local 1923, 0-AR-3072, November 30, 1998, 54 FLRA No. 135. Holding The Authority, applying its two-prong test for awards affecting management's rights, turned down the agency's exceptions to an award in which the arbitrator, after finding the agency violated a § 7106(b) agreement provision requiring it to give serious consideration to "grade-stagnated" candidates for promotion, ordered that the grievant (who was found to be more qualified than one of the three employees who were selected) be retroactively promoted to a GS-13 position. Social Security Administration, Woodlawn, Maryland and American Federation of Government Employees, Local 1923, 0-AR-3072, November 30, 1998, 54 FLRA No. 135. Summary The grievant, who had been a GS-12 Senior Analyst for approximately 27 years, bid on three announced GS-13 Program Analyst positions. Although she was on the best qualified list, she wasn't one of the selectees. She grieved, contending that her non-selection violated a contract provision requiring selecting officials to give "serious consideration" to grade-stagnated candidates. The arbitrator, although finding that the disputed contract language did not guarantee that grade-stagnated candidates would be selected, found that the contract provision mandated selection when the grade-stagnated candidate is among the candidates on the best-qualified list and is clearly equally or better qualified than the other candidates. After making a detailed comparison of the grievant's qualifications and the qualifications of the selectees (using the weights and factors that had been used to rate applicants for the best-qualified list), the arbitrator concluded that the evidence revealed the grievant to be "clearly" and "substantially" more qualified than one of the selectees. The arbitrator also found that the selecting official did not seriously consider the grievant for one of the PA positions. He accordingly found that the agency violated the contract provision and, after concluding that the grievant would have been selected over one of the selectees on the basis of her grade-stagnation, ordered that the grievant be retroactively placed in a GS-343-13 Program Analyst position with back pay. Although the agency did not dispute that the contract provision was violated, it challenged the arbitrator's remedy, claiming, among other things, that it interfered with management's right to select. The Authority employed the two prong test it uses to determine whether awards affecting management rights are nonetheless enforceable. In FLRA's words, that test is as follows: Upon finding that the award affects a management right under section 7106(a), the Authority applies a two-prong test. Under prong I . . . the Authority examines whether the award provides a remedy for a violation of either applicable law, within the meaning of section 7106(a)(2) of the Statute, or a contract provision that was negotiated pursuant to section 7106(b) of the Statute. If the award provides such a remedy, the Authority will find that the award satisfies prong I of the framework and will then address prong II. Under prong II of BEP [Bureau of Engraving and Printing, 53 FLRA No. 21], the Authority considers whether the arbitrator's remedy reflects a reconstruction of what management would have done if management had not violated the law or contractual provision at issue. If the arbitrator's remedy reflects such a reconstruction, the Authority will find that the award satisfies prong II. Finding that the award at issue, in ordering that the grievant be put into a GS-13 Program Analyst position, "affected" management's § 7106(a)(2)(C) right to "select," the Authority applied its two-prong test to determine whether the award was "contrary to" the right to select. Although it did not explicitly find that the contract provision enforced by the arbitrator was a § 7106(b) matter, it noted that there was no contention that the provision was unenforceable and consequently concluded that the award satisfied the requirements of the first prong--i.e., it provided a remedy for a violation of a § 7106(b) contractual provision. Turning to the second, "reconstruction," prong, the Authority noted that the arbitrator had determined that the grievant was more qualified than the selectee for at least one of the Program Analyst positions and the grievant would have been selected had she been given the consideration she was entitled to under the terms of the agreement. In FLRA's view, this satisfied the second prong. Hence the remedy didn't violate the right to select. FLRA went on to dismiss the remaining exceptions. Comments At the heart of the agency's exceptions was its challenge to the arbitrator's interpretation of the contractual provision relied upon by the grievant. In its view, the "serious consideration" provision was a "procedural" violation which, under the terms of another contract provision, should have been remedied by giving the grievant "priority consideration." FLRA disagreed. The arbitrator had found that nonselection of the grievant violated the grievant's substantive, not procedural, contractual rights. "Essence" challenges to awards rarely succeed. Arbitrator interpretations of contract provisions don't have to be the "best" or the "most reasonable" interpretations. On the contrary, interpretations of the agreement will pass the "essence" exception if they aren't "implausible, irrational or in manifest disregard of the parties' agreement. 54 FLRA No. 134 Air Force Materiel Command, Warner Robins Air Logistics Center, Robins Air Force Base, Georgia and American Federation of Government Employees, Local 987, AT-CA-70064, November 30, 1998, 54 FLRA No. 134 Holding The Authority rejected the agency's contention that it had no duty to respond to a steward's bargaining request regarding proposed changes in conditions of employment. It found that the union had met its burden to indicate who had authority to act on behalf of the union. Moreover, if management questioned the steward's authority, it should have inquired rather than not reply to the bargaining request. In a separate concurring opinion, Chair Segal suggested that the duty to bargain in good faith includes a duty to communicate. Summary The Air Force Materiel Command is made up of directorates, one of which is sometimes referred to as the "LU" directorate. The "LU" directorate, in turn, is made up of several divisions. One of those divisions is identified by the symbol "LUJ." On September 4, 1996, the Colonel in charge of the "LU" directorate issued an e-mail message in which he instructed employees to clean up their work areas and discard excessive supplies and furniture, including filing cabients and their contents. The steward at the LU directorate level saw nothing in the message that required any bargaining and therefore didn't request bargaining. On September 27, 1996, the Colonel sent another e-mail message in which he stated, among other things, that he wanted to get rid of 50% of existing file cabients. The steward at the LUJ division responded by asking that management not to remove any more file cabinets without bargaining with the union. The activity didn't respond to the LUJ steward's bargaining request. A ULP complaint followed. As part of its defense, the activity argued that it didn't have to respond the the LUJ steward's bargaining request because the LU steward didn't give the LUJ steward authority to request bargaining at the LU level. FLRA reiterated that "an agency is entitled to a clear notification of any delegation of authority an exclusive representative may make. . . . [T]he burden is on the exclusive representative to clearly inform an agency of any relevant delegation, i.e., what organization or individuals are authorized to act as its agent or representative and the scope of their authority." In the case at bar, FLRA found that the union met its burden of notifying the agency regarding its designation of representatives. Both the LU and LUJ stewards were known to management. Moreover, there was no contention that the parties negotiated any system limiting the designation of stewards or the tasks that a particular steward could perform. FLRA therefore concluded that the LUJ steward was authorized to act on behalf of the union. In the process, FLRA took the respondent to task for not responding to the LUJ steward's bargaining request. If the Respondent had any questions as to the Union's designation of authority to bargain, then it should have inquired. The Respondent neither inquired nor gave any indication that it questioned the LUJ steward's authorization. Absent a specific designation from the Union to that effect, the Respondent could not insist that only the LU steward was authorized to submit the bargaining request. Thus the respondent violated § 7116(a)(1) and (5) when it "impermissibly refused to recognize the Union's request to bargain submitted by the LUJ steward." In a separate concurring opinion, Chairperson Segal said, among other things, the following: The obligation of an agency to bargain in good faith with a union requires that the agency must be willing to openly communicate with the union. Where the union has requested negotiations and the agency does not believe there is a duty to bargain, the agency should communicate to the union why the agency is refusing to honor the request to bargain. Such a response is necessary for both parties to determine whether, and when, negotiations should actually take place. . . .An agency that ignores a request to bargain acts at its peril[.] [Emphasis added.] Comments We here focus on Chairperson Segal's remark that good faith bargaining under § 7116(a)(5) includes a willingness to "openly communicate." In the case at bar the failure to communicate involved not responding to a union official's request for bargaining. But one wonders to what extent a failure to communicate--by union as well as by management--lies at the heart of the issues litigated before FLRA and the courts. Does an obligation to communicate include, among other things, a duty to explain the intent of a proposal (e.g., the problem it is intended to solve, at least in part), to describe how the proposal would work in practice, and to respond to criticisms of the proposal? Does it require that reasons and supporting case law be given for rejecting proposals? In regulations that are scheduled to go into effect on April 1, 1999, that deal with negotiability disputes, the Authority has created a framework designed to stimulate better communication--at least at the initial stage of FLRA negotiability proceedings. The new regulation, which can be downloaded from FLRA's web page--www.flra/gov--requires both the exclusive representative and the agency to do some explaining before FLRA will issue a decision. The exclusive representative will be required to explain the meaning of its proposal, describe how it is expected to work in practice, and cite any law, regulation, or other authority (presumably FLRA decisions) supporting its claim that the proposal in negotiable. The agency must state any disagreement with the facts, arguments or meanings set forth in the union's claim, and cite appropriate authorities supporting its arguments. It will no longer be sufficient to assert that a proposal is negotiable or nonnegotiable: one is expected to give reasons. At any rate, one wonders if Chairperson Segal's remark on good faith bargaining is part of the same effort and whether the "good faith" requirement of § 7116(a)(5) will blossom into something more specific in future decisions. MSPB DECISIONS COMPENSATORY DAMAGES John H. Reid v. U.S. Postal Service,NY-0752-92-0562-P-2, December 10, 1998. Holding A compensatory damages award may include reimbursement for medical expenses even where the appellant's health insurer has paid for the expenses. Summary The Merit Systems Protection Board reopened this case on its own motion to modify the compensatory damages awarded by the administrative judge in the initial decision. The judge had excluded a claim of $240 in medical expenses because they had been paid for by the appellant's health insurance carrier. The Board modified the award, granting the additional $240 and concurred in the analysis by the Equal Employment Opportunity Commission allowing compensatory damages for these types of expenses. The Board noted that the Commission's position had been articulated in two decisions, Johnson v. Interior EEOC No. 01961812 (June 18, 1998) and Wallis v. U.S. Postal Service, EEOC No. 01950510 (November 13, 1995). Within the Wallis decision, the Board found a well-reasoned analysis of the "collateral source" rule. This rule provides that an award for damages cannot be reduced on the basis that the appellant received a benefit (such as the payment of medical bills) from a source collateral to the agency (the health insurance company). The Wallis decision includes a review of Federal appeal court decisions which found that the money paid for medical expenses was the health insurer's and it was not reasonable to find that the agency had made contributions toward the appellant's insurance premium in an effort to address a legal liability otherwise due to the appellant. Therefore, compensatory damages awards may include reimbursement for medical expenses, regardless of whether these expenses were paid for by a health insurer. Comment Agencies preparing for compensatory damages hearings should pay careful attention to this decision as it may have a significant impact on the amount of damages arising from medical treatment. JURISDICTION Patricia A. Colbourn v. Department of Justice, DE-0752-98-0086-I-1, November 13, 1998. Holding A lateral transfer between agencies can be appealable if it is involuntary. Summary The appellant claimed that her transfer to another agency at the same grade and pay was really a constructive removal. She alleged that the transfer was coerced by the agency's creation of a hostile environment, and by retaliation against her for filing an EEO complaint. The administrative judge (AJ) dismissed the appeal for lack of jurisdiction. The appellant had cited Yaksich v. Department of the Air Force, 71 M.S.P.R. 355 (1996), but the AJ noted this prior case did not state that the personnel action was a lateral transfer, and reasoned that lateral transfers are not adverse actions within the Board's jurisdiction. The Board, upon review, disagreed and remanded the appeal. "In reaching this conclusion, we noted that a coerced inter-agency transfer, even a lateral transfer, is analogous to a coerced resignation and is, therefore, within the Board's jurisdiction." Comment The Board cites two relevant cases in support of its position, but the two cases appear to be at odds with one another. In Koop v. Federal Emergency Management Agency, 16 M.S.P.R. 605 (1983), the Board found the appellant's transfer to avoid his RIF separation was not truly involuntary. "[W]hile appellant may have believed that he had no alternative but to transfer, he did have a choice and he chose to transfer rather than challenge the validity of the RIF action. Merely because appellant was faced with a situation arguably limited to two unpleasant alternatives, the voluntariness of his action is not obviated." In Yaksich, however (cited above), the Board did not find the appellant was compelled to "stay and fight" in order to challenge the validity of the removal proposed against her, which she alleged was the product of discrimination. Neither of those decisions specifies whether the appellant's grade and pay were maintained upon transfer, and this is the new issue at the heart of the current case. The Board finds a lateral transfer akin to a resignation, but there is enough ambiguity in the status of employees moving among executive agencies to make that an arguable finding. Furthermore, it is not clear whether the employer in the Board's view is the agency, or whether it could be a lower, component level. Unfortunately, only further litigation is likely to resolve these outstanding jurisdictional issues. LEAVE Donald P. House v. United States Postal Service, AT0752970454-I-1, October 27,1998. Holding Where an employee performs minimal work of very short duration outside the agency while on sick leave, the use of sick leave may still be appropriate. Summary The appellant, a Postal supervisor, was demoted from his position based on a charge of improper conduct with two specifications: (1) falsification of time and attendance records, and (2) working multiple shifts at a tavern, while requesting sick leave from his Postal Service job. The administrative judge upheld the agency's action, finding that the agency had proven both specifications by preponderant evidence. On review, however, the Board disagreed that the second specification had been proven, finding that the administrative judge did not properly consider all of the evidence. Specifically, the Board disagreed with the administrative judge's finding that it was inherently inconsistent for the appellant to claim sick leave at the Postal Service for a period when he was performing any job duties at the tavern. Rather, the Board found that the appellant was indeed sick for the period in question, but that due to circumstances beyond his control, it was necessary for the appellant to perform minimal duties at the tavern for a very limited period of time. This was in part due to the fact that the substitute employees, who the appellant procured to fill-in for him at the tavern, could not perform all of the necessary duties. As part of its review, the Board distinguished the case at hand from another case, Beverly v. U.S. Postal Service, 907 F.2d 136 (Fed. Cir. 1990). In Beverly, the court found that the appellant claimed sick leave when she had not been sick at all, but instead attended a football game, and found that the agency had proven its charges of absence without leave (AWOL) and a fraudulent claim of sick leave. In this case, however, the appellant was sick and performed minimal duties at his part-time job only because the substitutes he found to work for him could not perform those duties. Under these circumstances, it ruled that the agency has proven neither AWOL nor fraud. The second specification dealt with a different date, involved a single instance and less than one hour of work time, and was sustained by the full Board. The Board mitigated the penalty of demotion to a 30-day suspension. Comment The holding in House does not provide carte blanche authority for an employee to call in sick, while working another job. Keep in mind that the circumstances in this case were unusual, and that the employee was indeed sick. As the Board stated: "That a sick employee is capable of driving one mile to perform a few minutes of work at a time does not necessarily mean that he is able to drive 22 miles and work an eight-hour shift". CHARGES ... PENALTIES Thomas P. Picarello v. United States Postal Service, BN0752970055-I-1, October 21, 1998. Holdings
Summary The agency removed the appellant on a charge of violating the agency's standards of conduct. The charge was supported by four specifications: (1) physically and verbally assaulting his supervisor, (2) using profane language toward a supervisor, (3) failing to follow instructions, and (4) verbally berating three co-workers. An administrative judge of the Merit Systems Protection Board (MSPB) determined that the agency only proved the second and third specifications, but sustained the charge of violating the standards of conduct. Because, in her view, the most important specifications had not been proven, the judge mitigated the removal to a 30-day suspension. Both the appellant (arguing that the suspension was too severe of a penalty) and the agency (arguing that the judge erred in not upholding the first specification) filed petitions for review of this decision by the full Board in Washington, D.C. With regard to the Specification 1 above, the Board noted that its judge ruled that the agency was required to prove both parts of the specification, that is, physical assault and verbal assault, in order for the total specification to be upheld (the judge found the verbal part unproven and thus dismissed the specification). The Board noted that, under its precedent in Acox v. U.S. Postal Service, 76 M.S.P.R. 111, if an agency's charge is based on a single act, the agency must prove all of the elements of the charge that it brings based on that act. With this in mind, the Board looked at the misconduct in this case, upholding the judge's finding that the appellant had not verbally assaulted the supervisor but finding that, by a separate act of misconduct, the appellant had assaulted his supervisor when he grabbed him by his shirt and tie and applied pressure to his throat. Since there were two acts of misconduct, the Board concluded that the agency was not required to prove both the physical assault and the verbal assault in order for the specification to be sustained. Thus, the Board sustained the specification and the overall charge. The Board reviewed the agency's penalty of removal, noting that under its precedent decision in Payne v. U.S. Postal Service, 72 M.S.P.R. 646 (1996), when all of the agency's charges are sustained, but not all of the underlying specifications, the agency's penalty determination is entitled to deference and is reviewed only to determine whether it is within the parameters of reasonableness. The Board commented that it must take into consideration the failure of the agency to sustain all of its supporting specifications. The Board considered the fact that the appellant was dealing with his wife's miscarriage and his father's terminal illness at the time of his misconduct. The Board, however, also considered the sustained acts of misconduct (refusal to carry out instructions and physically assaulting a supervisor) to be very serious. In this regard, the Board found that "management's questions about the cause of [the appellant's] injury and its request that he agree to a limited-duty job offer do not constitute provocation." The Board concluded that the appropriate penalty is removal. ADVERSE ACTIONS ... CHARGES John L. Acree v. Department of Treasury, DC0752920298-B-1, September 30, 1998. Holding In this case, the Board determined that certain terms used in the agency's proposal and decision notices were descriptive in nature and thus not "terms of art" that the agency had to prove in order to support its adverse action charges. Summary In 1992, the Office of the Comptroller of the Currency removed the appellant from his computer specialist position for, among other things, "improper personal conduct, specifically trading in national bank stock options based on non-public information [he] obtained from [his] employment." This was important because the appellant provided computer support for the agency's Multinational Banking Department where employees were specifically prohibited from purchasing stock or stock options in national banks. Because the agency, in its adverse action proposal and decision letters at various times referred to the non-public information above as being material and sensitive, the appellant argued before the Merit Systems Protection Board that the terms "material" and "sensitive" were thus "terms of art" the agency had to prove. The Board acknowledged that the agency had, in fact used the terms "material" and "sensitive" at various times, but concluded that the agency's use of them was descriptive and did not need to be proven. Here, it noted that the agency never used the terms as part of the charge itself and did not charge the appellant with misusing "sensitive" or "material" information. Further, the Board noted that the agency specifically used those terms only as part of its discussion of the appropriate penalty for the misconduct or in response to the appellant's reply to the proposed removal notice. The Board also looked at the common meanings of the terms "sensitive" and "material" provided by Webster's Encyclopedic Unabridged Dictionary of the English Language, looked at how the agency used them, and concluded that the terms should be given their common meaning rather than be construed technically. The Board also found support for this position by the Supreme Court. The Board stated that the Court "implied" that the agency had only to prove misuse of non-public information (without being described as material) since the Court used the terms "non-public information" and "material non-public information" interchangeably in one of its 1997 decisions. In conclusion, the Board sustained the agency's charge and upheld the removal. Comments While the Board seems to have taken an unnecessary and extended route to an appropriate conclusion in this case, the lesson remains that it is what the agency actually charges that ultimately controls the real focus of the Board's inquiry. The appellant has sought review by the Federal Circuit and so there may be another chapter to this episode in the continuing Board explanation of how it will interpret agency charges. CHARGES ... REASONABLE ACCOMMODATION Michael J. Schrodt v. U.S. Postal Service, CH-0752-96-0703-I-1, September 30, 1998. Holding A conclusory statement from a physician is not sufficient to prove physical inability to perform unless it is accompanied by evidence of performance or conduct deficiencies or the agency can demonstrate that a risk of injury to the employee or others exists because of the medical condition. Summary The appellant was removed from his position for physical inability to perform the duties of the position. The evidence in support of the charge was a medical report by the agency physician issued in March 1996. The employee challenged the removal action, arguing that he was able to perform the duties of his position with reasonable accommodation. The Merit Systems Protection Board reviewed the case and reversed the removal action, finding that the agency failed to meet its burden of proof. The Board noted that where an agency charges an employee with physical inability to perform, there must be evidence of observed deficiencies in the employee's performance or conduct or a high probability of hazard that the medical condition would result in harm to the employee or to others. This standard of proof was articulated by the Board in Spencer v. Department of Navy, 73 MSPR 15 (1997). In its analysis of the evidence, the Board found the March 1996 medical statement was conclusory and contradicted other medical records. The agency physician did not examine the employee in March 1996 but stated that his medical opinion was unchanged from February 1995 when he had examined the employee and found him medically unable to perform his duties. Following the February 1995 evaluation, the agency had made informal efforts to modify the employee's job and the same agency physician had issued a medical report in November 1995 which found the employee medically fit to perform his job. The Board also noted that the physician had only been asked to evaluate the appellant's physical ability to perform the duties as outlined in his position description, not the modified duties that he was performing at the time of his removal. The Board also did not find the physician credible because he had a limited knowledge and understanding of the work site and the nature of the duties performed by the appellant. Agency witnesses also testified that the appellant had been unproductive in his assigned duties because his use of a chair had made him awkward in performing certain tasks. However, the agency had never documented any performance problems and the agency supervisor acknowledged that the appellant had never asked to be relieved of certain duties in his job. The Board noted that agency official testified that records existed of productivity for each operation in the work unit but none of these records were provided as evidence of a performance deficiency. The appellant argued that the removal action was discriminatory, based on his disability, because he was able to perform his job if the agency would allow him to continue sitting in a chair while working. While agency officials testified that the appellant was unable to perform his duties, no evidence supported that claim. Further, the medical report which formed the basis for the agency's action did not mention the use of a chair or any other form of accommodation. The agency physician testified that he had not been asked to provide recommendations for possible accommodations. The agency also raised the issue that the appellant's use of a chair while working constituted a safety risk because the floor of the workroom was often littered with strings, rubber bands, and paper that might cause the appellant to fall. The Board found this testimony insufficient since it was only a subjective assessment by a supervisor, with no supporting testimony or statements from safety experts or medical personnel. The Board found no observed deficiencies or evidence of future risk that would support the agency's charge of physical inability to perform. The removal action was reversed and the Board found that the appellant had proven his claim of disability discrimination. Comment Since the issuance of the Spencer case last year, administrative judges and the full Board have been more consistent in their analysis of cases involving a charge of medical inability to perform. Agencies must be conscious of the need to document performance or conduct deficiencies and get them on the record in an appeal. Without some record of an observed inefficiency due to an employee's medical condition, the agency must prove that a safety risk exists and that it is extremely difficult to meet the standard of proof necessary to demonstrate that a future risk of harm to self or others exists because of a medical condition. If an agency believes a potential risk exists, it is essential that expert statements from safety, medical, or other technical personnel form a part of the agency's evidence in support of the charge. DISCOVERY ... CONSEQUENTIAL DAMAGES Dwight F. Hasler v. Department of Air Force, AT-0752-95-1201-P-1, August 28, 1998. Holding The Merit Systems Protection Board has expanded the available methods of discovery to include authority for its judges to order an appellant to a physical and/or mental examination, provided the medical condition alleged by the appellant is in controversy and good cause for the examination can be shown, as required by Rule 35 of the Federal Rules of Civil Procedure. Summary A hearing was conducted to determine whether consequential damages should be awarded to an appellant whose earlier demotion had been reversed because the judge found the agency's action had been an improper response to protected whistleblowing actions by the appellant. The appellant requested damages including reimbursement for pecuniary losses, medical and legal expenses, and $500,000 for emotional distress. The agency argued that the statute providing for consequential damages did not provide for damages based on pain and suffering but also sought subpoenas for relevant medical records and filed a motion that the judge order the appellant to undergo a mental examination. (The issue of the authority of the Board to award damages for emotional distress in a consequential damages case was not directly addressed by the majority opinion but was at the heart of the dissenting opinion. The dissenting opinion is discussed at the conclusion of this Summary.) The administrative judge granted the request for subpoenas but refused the agency's request for a mental examination based on the Board's holding that such authority does not exist for Board administrative judges (Brumley v. Transportation, 46 MSPR 666 (1991)). The judge granted the agency's motion for certification of an interlocutory appeal on the question of the Board's authority to order medical examinations as a part of discovery, and the issue went before the full Board. In its final opinion and order, the Board provided its analysis of the genesis of Rule 35 and concluded that the rule had been established by the Supreme Court under its authority to create procedures that were "in the interest of speedy, fair and exact determination of the truth." Sibbach v. Wilson, 61 S.Ct. 426-27 (1941). The significance of this conclusion is that the Board's previous holding in Brumleyhad been based on a presumption that the authority to order medical examinations was statutorily granted to courts and, therefore, the Board could not assume such authority. Having found that Rule 35 was established by the Supreme Court as a part of its procedures, the Board determined that it could apply Rule 35 to its proceedings since, like the Supreme Court, it has been granted authority to "prescribe such regulations as may be necessary for the performance of its functions" (5 U.S.C. § 1204 (h)). The Board, therefore, overruled its holding in Brumley and determined that its methods of discovery would be expanded to include medical examinations as long as the conditions established in Rule 35 were met. These conditions call for a mental examination of an appellant when the mental condition alleged by the appellant is in controversy and good cause for the examination can be demonstrated. Based on the Supreme Court's analysis in Schlagenhauf v. Holder, 85 S.Ct. 234 (1964), the Board established a requirement that in order for the condition to be "in controversy" the appellant would have to do more than merely assert that a mental injury had occurred. The condition would come into controversy if the appellant requested a large award for damages and stated that expert medical testimony would be provided to substantiate the claim. Since the appellant in this case had requested $500,000 damages for emotional distress and had indicated that expert medical testimony would be provided, the Board found the first condition in Rule 35 had been met. The Board then found that the "good cause" condition had been met, largely on the basis that the appellant's assertions of mental injury or disorder were enough to demonstrate a need for medical information. The Board did not answer the question of whether or not an agency must first exhaust other, less intrusive, methods of obtaining this information before the request for examination will be honored. Instead, the Board noted that in this case, it would assume that the agency would withdraw its motion for an examination if the subpoenas (which had been ordered by the administrative judge) provided sufficient medical information for the agency to respond to the employee's request for damages. If not, then the examination would be allowed under the good cause standard. The case was then remanded to the administrative judge with the instruction to order the mental examination if the agency did not withdraw its motion. In her dissenting opinion, the Vice Chair did not address the issue of whether the Board had the authority to order an appellant to submit to a medical examination as a part of discovery. Instead, she wrote that the Board did not have the authority to award damages for emotional distress under the statute that provided for consequential damages. The dissent states that the language of the law which authorized the payment of consequential damages "should be read to authorize ordering the appellant to be reimbursed for other resulting pecuniary losses." The dissenting opinion noted the rigorous debate (concerning the cost of excessive damages awards) that accompanied the passage of the Civil Rights Act of 1991. That Act provided for compensatory damages (up to $300,000) following a finding of discrimination and specifically allowed damages for emotional or mental distress. The lack of a similar discussion by Congressional committee members, and the lack of a ceiling for damages within the 1994 legislation that established consequential damages led the Vice Chair to conclude that damages for pain and suffering are not authorized by the consequential damages provisions of the law. Comment The Board's decision allowing medical examinations as a part of the discovery process is a significant and very welcome shift in the area of discovery. This will become a particularly important tool for agencies who are faced with claims of mental injury in compensatory damages cases. Agency representatives who plan to make requests for examinations during discovery are advised to read the Schlagenhauf case carefully for guidance on what it takes to meet the conditions of Rule 35. Despite the usefulness of this decision, however, OPM agrees with the arguments set out in the dissenting opinion that the Board is without authority to grant damages for pain and suffering under the provisions of the statute that authorize consequential damages. Upon remand, the parties to this case reached a settlement agreement. However, there is another case, Bohac v. Agriculture, that is on appeal to the full Board following an initial decision that denied nonpecuniary damages as a part of a consequential damages award. OPM will report the results of the case when the final opinion and order is issued. JURISDICTION ... MIXED CASES Bennett v. National Gallery of Art, CB-7121-97-0040-V-1, July 28, 1998, and Currier v. United States Postal Service, DC-0351-95-0631-B-1, July 29, 1998. Holding The Board will grant a hearing on claims of discrimination regardless of whether the claims are non-frivolous. Summary Appellant Bennett grieved his removal, which was upheld by the arbitrator. When he petitioned for MSPB review, the Board issued a "show cause" order which outlined the bases for its jurisdiction, and directed him to show why his petition should not be dismissed. In response, the appellant alleged for the first time that the removal was a result of discrimination based on national origin. Resolving conflict in its prior decisions, the Board found that 5 U.S.C. § 7702 "does not...distinguish between frivolous and non-frivolous allegations or between facts sufficient to support a prima facie case of discrimination and facts insufficient to support a prima facie case of discrimination." Lengthy review of legislative history and decisions from other forums yielding nothing to amend this insight, the majority held it "has jurisdiction to review an arbitration decision in any case in which an appellant alleges discrimination prohibited by 5 U.S.C. §2302(b)(1), irrespective of whether the appellant makes a nonfrivolous allegation of discrimination" where other jurisdictional requirements are met. The following day, the Board applied its new understanding of the statute to appellant Currier's case, which did not arise from arbitration. Remanding for more evidence about a date key to a jurisdictional finding, the Board held that if an appeal is found within its jurisdiction, the appellant has a right to a hearing on his discrimination and retaliation claims, whether or not they are deemed frivolous by the administrative judge. Comment These cases continue the current Board's commitment to parse and enforce strictly the statutory hearing rights of appellants. Cases cited in the analysis for these decisions illustrate the discretion administrative judges previously had to dismiss a discrimination claim if it was not supported by factual assertions which, if true, would establish a prima facie case of discrimination. Such discretion clearly no longer exists.
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