ARBITRATORS CAN’T, BUT UNION REPS CAN

FLRA just issued a decision overturning an arbitrator’s decision on how to award back pay for unpaid overtime that highlights a very powerful club unions have in these cases. After deciding the agency had failed to pay about 130 employees for the extra few minutes a day they worked beyond their eight hours, the arbitrator decided to give each employee the same amount of overtime by averaging and approximating the total extra hours worked and using the agency’s recommended locality pay chart for everyone irrespective of where they worked. That worked out to be $2,182.13 per person, to which he added a uniform amount for liquidated damages. The Agency was delighted with this averaging and approximating approach because it saved it the very expensive effort of calculating every employee’s individual back pay amount. But the union filed exceptions claiming that the arbitrator violated law by taking this “averaging and approximating” shortcut to calculating backpay. When the FLRA agreed with them, it handed the union a huge club with which to squeeze the employer into settlements on group back pay cases.  Here is how that would work.

Under the law, “Authority precedent requires an award of overtime compensation to be as precise as possible, and ‘specifically reject[s] an arbitrator’s use of an ‘average amount of time expended per day per officer’ in calculating an award of backpay under the FLSA’… The Authority has also rejected the use of averages to determine the pay rate when the rate of pay varies.”  Consequently, the FLRA remanded the case to the arbitrator to take evidence on every employee’s work hours and pay rates over a three-year period to identify individual back pay amounts as closely as possible. (See AFGE and DOJ, FBP, 73 FLRA 39 (2022)). He cannot do anything less even though it means that the agency will have to —

• produce thousands of timesheet documents,
• review them to reach its own conclusion about each amount owed,
• attempt to get the union to agree to each amount and if there is no agreement,
• give each employee time off the job to review his/her records with the union, and
• go back to the arbitrator for a determination employee-by-employee if there is no agreement on each employee’s amount.

On top of that, the union attorney working the case likely will likely hundreds of hours of additional attorney fees, which can cost the agency over $900 an hour—and easily exceed the amount owed each employee.

But, even though the arbitrator cannot use averages and approximations, the union can voluntarily agree to do so in a negotiated settlement of the case because settlements are not subject to FLRA review except in rare circumstances.  Consequently, with one signature the union can relieve the agency of the enormous burden of calculating individual back pay amounts.  That puts the union in the position of asking for a very sweet settlement for it and the employees. Frankly, it also increases the union’s chance of settling mass grievances involving back pay if it makes clear to the agency that should it win back pay it will INSIST on individual calculations no matter how much pain and suffering it costs the agency.