BEWARE AN ARBITRATOR’S BACK PAY “COMPROMISE”

In late August a case came rolling out of FLRA that has the potential to confuse lots of practitioners. The arbitrator found that the agency had not properly compensated an employee for 12 years of stand-by/call-in work he had performed. However, the arbitrator then wrote that he had “no way of placing a monetary value” on the work performed. Consequently, he threw out a figure of $24,000 in back pay as a compromise between the parties. See (AFGE, 68 FLRA 852 (2015)) If practitioners on either side of the table are thinking of asking an arbitrator to do the same in some future case, we recommend that you not.  Although FLRA upheld this award, it appears that this back pay compromise is a fluke.

The agency filed exceptions to the arbitrator’s decision alleging that it did not draw its essence from the agreement and that it was based on a non-fact, namely that the arbitrator did not set forth a factual basis for the back pay award. FLRA rejected both and upheld the award.  However, we have a very strong suspicion that had the agency challenged the decision on the grounds that it failed to comply with law, particularly the Back Pay Act, it would have won at least a remand.  The core requirement of the BPA is that the arbitrator be able to identify the causal connection between the violation and the denial of compensation. For example, where an arbitrator awarded backpay to all eligible employees on an overtime roster despite his finding that “there [was] no certain way to know which employees would have received the [overtime] payments,” the Authority set aside the award for failing to meet the Act’s second requirement.

Nevertheless, the Authority has found that if an award sufficiently identifies the “specific circumstances” under which employees are entitled to backpay, there is no additional requirement that the Arbitrator identify specific employees entitled to the remedy. In particular, the Authority has found that awards were not contrary to the Act where: (1) an arbitrator sufficiently identified the “category of employees entitled to backpay” — namely, those employees who were deprived of overtime opportunities because of an agency’s actions; and (2) in the absence of overtime records, other, accessible information established which employees would have been available for the overtime at issue. (See AFGE, 68 FLRA 718 (2015)  In that case the arbitrator failed to award back pay but, ordered an audit of all the employee’s payroll records to identify who was entitled to compensation and how much.  When AFGE filed exceptions it convinced the Authority to order back pay for those identified via the audit as being entitled to it.

The message to practitioners is that where the back pay entitlement cannot be determined based on the record before the arbitrator, ask him/her to order an audit of the records so that s/he or the parties can determine WHO is entitled to back pay and HOW MUCH money they must receive. We even have our doubts that the parties can agree on a compromise figure picked from thin air without some basis in fact.  While neither party can file exceptions with FLRA to a settlement, an agency Inspector General might have substantial problems with doling out appropriated funds without any regard for the requirements of the BPA. Moreover, a dissatisfied employee with records of her own that show she should have received more money might file a ULP asking the FLRA GC to intervene.

About AdminUN

FEDSMILL staff has over 40 years of federal sector labor relations experience on the union as well as management side of the table and even some time as a neutral.

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