Let’s assume that a union filed a timely institutional grievance on May 1, 2014 claiming that its members had been denied full travel mileage reimbursement as required by the agreement and agency regs.  Moreover, it claims that this has been going on for at least six years and asks that the agency or arbitrator award six years of retroactive travel allowances as a remedy.  Must the arbitrator award six years of reimbursement if she finds the agency violated contract and regulation?

If you think she must so long as it is determined the grievance is timely, you are making a big mistake.  The timeliness of a grievance, even one alleging a continuing violation, has nothing to do with whether an arbitrator must grant a remedy for all six years.

If you think she must because the Back Pay Act specifically mentions six years as the period back pay claims can cover, you are wrong. FLRA has made it clear that the Back Pay Act neither requires nor prohibits an award of six years of back pay. “In addition, the Authority has determined that Back Pay Act recovery periods are within the discretion of arbitrators, as long as awards do not exceed the maximum recovery authorized by law.”  (See PASS,  66 FLRA 441 (2012)) 

Oddly, case law from FLRA and the courts leave it totally up to the arbitrator’s discretion whether to limit back pay to merely the 30-day period before the grievance was filed (or whatever the grievance filing deadline rule is) or to clobber a party with a six year repayment obligation.  “The Union’s contention that the award of backpay from the date that the grievance was filed is contrary to the Back Pay Act is without merit. The Arbitrator has the discretion, under the Back Pay Act.”  (See AFGE, 65 FLRA 267 (2010))  Neither FLRA nor the courts provide arbitrators or parties any guidance on how to choose between the two polar opposite or even how to settle on something in between.  So, the size of the back pay award is as close as parties get to labor-management Russian roulette.

However, giving arbitrators total discretion to decide does not have to be that way because FLRA recognizes the right of parties to negotiate over the length of back pay awards. The Authority has held that, at least where there is no indication that parties have agreed contractually to backpay periods different from those in § 255(a), the statutory periods control.” See NTEU, 53 FLRA 1469 (1998).  Agencies are free to negotiate clauses such as this:

A negotiated grievance must be filed within 30 calendar days of an alleged violation of contract, regulation, law or other obligation. Absent a requirement of law or government-wide regulation any retroactive back pay entitlement will be limited to the 30th day before the grievance was filed.

That would prohibit arbitrators from gazing into the teas leave, the stars, or their future income potential to determine how far into the past they will award back pay. If they violate the time limit on back pay their award would likely be overturned as failing to draw its essence from the agreement and/or exceeding his authoroity.

As for why virtually no federal sector labor-management contracts include such as clause our initial suspicion is to blame agency negotiator competence. There have been more than enough multi-million dollar back pay awards in the federal sector over the last 36 years—that could have been limited to one-tenth of the amount—had agency negotiators been thinking deeply about their duties. Another possible source of blame is OPM, which has a labor-management office that could have alerted agency negotiators throughout government to the need for such clauses, but has not to our knowledge.

Making this across-the-board agency oversight even worse is that agencies have very strong arguments in term negotiations for why the limit should be imposed by FSIP if the union will not agree.  If a back pay order is limited to 30 days before the grievance was filed—and perhaps another 60 days after it was filed until the agency stopped the improper action, that could limit agency back pay to a 90 day period.  Ninety days is 1/24th of a six year period.  In other words, a back pay award that might be $100 million dollars because it was made retroactive to six years before the grievance was filed, could have been limited to $4.1 million if the limit on remedies was written into the contract. How is that for a costly LR oversight for which someone in LR should be held accountable?

If  agency negotiators failed to include such a limitation in their recent term agreement, they can always ask for the concession whenever the union comes to the midterm table looking for something.

Beyond the shock value of the numbers alone, agencies could argue that paying astronomical amounts will disrupt current operations, impose a massive and costly administrative burden as it goes back years to reconstruct records, greatly increase a union’s potential attorney fee award as it monitors and enforces the reconstruction of records, result in awards to people who long ago left the agency or even the world of the living, create potential tax burdens on employees, etc.

For those readers on the union side of the table who are thinking we just created a big problem for them and their members, take another minute to think it through.  One of the most difficult problems union negotiators often face is that the agency comes into term bargaining not asking for anything, thereby making it almost impossible to swap a contract improvement for employees for a concession that helps management.  A clause limiting agency back pay exposure should be something agencies want dearly, which puts the union in a position to ask for something just as valuable to it.

In fact, if agencies do not propose such a clause at the outset of negotiations, the union could offer it near the end of bargaining as a sweetener for a big package of concessions it wants.  It need not even offer a complete concession limiting back pay the grievance filing deadline.  It could strike a deal in between 30 days and six years, allow exceptions to the 30-day limit for ULPs and discrimination grievances extending liability to 180 days before either of those grievances was filed, put a dollar cap on an award, e.g., $10 million dollars or $100,000 per unit employee, etc. The parties could even limit the remedy period to 30 days unless some subjective test is met, e.g., “unless the union demonstrates just and sufficient cause to extend the remedy period beyond that time.”

Another reason a union might want to strike a reasonable compromise in the term contract on the remedy period is that if there is nothing in that contract the agency can argue at the beginning of each case that the issue should include consideration of whether the union’s delay in filing a grievance undermines its right to claim back pay for the period before it filed.  Generally, arbitrators are aware that our legal system recognizes that as a legitimate grounds for limiting award. If the arbitrator agrees with the agency, guess who employees are going to blame for costing them large amounts of back pay if the grievance is won.

(Even if agencies foolishly fail to demand the issue statement include consideration of how the union contributed to the potential liability by filing so late the agency can still raise the argument in its post-hearing brief without alerting the union that it is coming. That also is not a good position for the union to be in.)  Of course, if agency LR representatives fail to address the remedy period even in their post-hearing brief, they lose the right to challenge a huge back pay award before FLRA or the courts.

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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