The FLRA has said that it “specifically distinguished between contractual back pay recovery periods and contractual time periods for filing grievances.” Consequently, we practitioners had better know the difference, particularly when we sit down to write a labor agreement.  Here are a few comments that we think will help them the most.

#1    A “recovery period” specifies the time limit on how far back before the date a grievance is filed an arbitrator can order back pay, e.g., can s/he go back six days, six weeks, six months or six years.  A “contractual filing period” refers to the number of days or weeks after an employee becomes aware of a possible contract or other infraction that s/he has to file a timely grievance.  For example, the following contract clause sets the contractual filing period, but says nothing about the recovery period: “A grievance must be filed within 30 calendar days of the date of the alleged infraction of law, regulation or this practice or within 30 calendar days of when the employee reasonably should have been aware of the alleged infraction.”

#2    If the parties do not specifically put a limit on the recovery period many arbitrators are willing to order back pay starting as far back as six years before the grievance was filed.  The Authority has held that arbitrators have the power to do this pursuant to the Back Pay Act’s specific reference to six years. (See AFGE, Local 1156 and Laborers’ International Union, Local 1170 and U.S. Department of the Navy, PA, 57 FLRA 602, (2001))  However, after reading over a bundle of arbitration decisions granting back pay for years before the grievance, we fail to find any criteria or logic arbitrators are using to jump from limiting back pay to 15, 30, or whatever number of days noted in the contractual filing period before the grievance was filed to six years before.  That seems odd.  Shouldn’t an arbitrator have to establish a foundation for his/her decision? Perhaps parties should bargain criteria a grievance claim must meet in order to go back a full six years.

#3    Federal law allows the agency to propose a cap on a recovery period that is shorter than six years prior to the grievance being filed.  It is a mandatory subject of bargaining and given some of the cases of back pay being awarded far into the past costing the agency millions, agencies would have a decent argument for a cap. See Dept. of Transportation, FAA, Okla. and NATCA, 60 FLRA 565 (2005), AFGE, Local 1156 and LIUNA and Dept. of the Navy, PA, 57 FLRA 602 (2001) and AFGE 2109, 43 FLRA No. 19 (1991) for decisions providing FLRA’s approval of arbitrators and hence the parties setting recovery period limits.

#4    When a contract does not put a hard cap on a recovery period, that effectively guts the contract grievance filing period. For example, an employee could sense that her rights to a certain kind of compensation under the law, regulations or contract might have been violated, but do nothing about it for years.  For example, perhaps the agency has underpaid an employee a childcare or public transit subsidy. Then, when s/he gets around to it if the allegedly improper practice has continued she could file a grievance within 30 days of the latest incident and ask for back pay for the last six years.

Usually, the employee can be totally insulated from an argument that she waited too late to claim back pay before filing the grievance or even file the grievance if the union files an institutional grievance on behalf of all impacted employees.  It is harder, indeed almost impossible, for the agency to prove the union knew about an alleged infraction of employee rights more than 30 days before it filed the grievance.

#5    Frankly, unions have very little with which to argue that they should be able to claim back pay as far back as six years prior to filing the grievance. Even for cases of outright wage theft when an employer refuses to pay an employee for overtime worked the Fair Labor Standards Act (FLSA) limits back pay to no more than three years prior to the grievance or other claim being filed.  (It is a two-year limit unless the employee can prove the employer deliberately underpaid the employee.)  So, why should the employee be given six years back pay when a stipend is underpaid or a detailed overtime distribution formula is misapplied or someone’s shift was regularly and improperly changed requiring her to come to work two hours early one day every other week for the last six years?

Several arbitrators have eloquently explained why grievants are not entitled to back pay prior to the latest incident that led to a grievance or even the grievance filing date itself, e.g. “[b]y negotiating and agreeing to a time limitation of thirty days within which to invoke the grievance procedure, the Union has waived any claim in a contractual arbitration proceeding to the benefit of any longer limitations period to which it might otherwise be entitled . . .  The (Agency’s) Motion to Dismiss the instant grievance as non-arbitrable will be denied, but any award can be retroactive only to October 1, 1986 (thirty days prior to the filing of the grievance).” (NAGE, Local R-478 and Dep’t of Veterans Affairs (July 29, 1999))

#6    Various other laws likely cap the recovery period that the parties need to consider when bargaining their own general contract cap on back pay liability.  For example, labor law allows an employee or union to file a ULP charge up to 180 days after becoming aware of the alleged ULP.  But, to our knowledge, FLRA has yet to decide whether that requires that any grievance ULP must allow for at least up to six months of back pay or even if it must award at least six months back pay when make whole relief is appropriate.  Similarly, regulation requires that EEO charges be filed within 45 calendar days of an alleged violation.  Yet, neither EEOC nor FLRA has decided whether a grievance procedure must allow for at least up to 45 days of back pay prior to the filing of a discrimination grievance–or cap back pay liability at 45 days before the charge was filed.

#7    Allowing a six-year recovery period has disadvantages for both parties. The agency obviously suffers by having to cover the cost of at least six years of back pay versus a much shorter period.  (If the union filed a grievance on January 1, 2014 and it took two years to get a final and binding arbitration decision after FLRA exceptions the agency is on the hook for eight years of back pay and counting.)  Moreover, the longer the back pay period the more work it will be to assemble the records, and more complicated it will be to validate the correct amount of back pay.  The union often will be able to charge the agency extra attorney fee time just to monitor that process and pursue claims when there are errors.  A six-year-plus back pay period covering thousands of employees could easily generate millions in just attorney fees for the union.

But this back pay money must come from somewhere in the agency’s budget and typically that is going to mean that fewer new employees will be hired, less overtime will be funded, and promotions will be delayed.  Ironically, a back pay award stretching back six-years-plus will often send money to former employees who have left the bargaining unit at the expense of current unit employees. That does not help the union.

#8    Another good reason why unions should be interested in setting a clear recovery period limit is the potential for employees to file a duty of fair representation claim against the union.  For example, suppose a union knew about an agency’s compensation-related violation of law, regulation or contract  but did nothing about it for two years until some employees complained.  If the union then filed a grievance and ran into one of these arbitrators who believe that the contract grievance filing deadline also puts a cap on any compensation recovery period, more than a few employees might charge the union with gross negligence for waiting so long to file and in the process costing them hundreds or thousands of dollars each.  There are several cases where the FLRA has ordered the union to reimburse employee harmed by its negligence, e.g., Dept. of the Air Force, ME and AFGE, Local 2943 and Otis Clair, Jr., 43 FLRA 1087 (1992); AFGE, Local 1857 and John M. Neill, 28 FLRA 677 (1987); IAM, Local 39 and  Roy G. Evans, 24 FLRA 352 (1986)

#9    There is an interesting benchmark precedent out there that might help negotiators narrow their differences over a recovery period length, e.g., automatically six years before the grievance was filed versus no back pay prior to the date the grievance was filed.  It is the Lilly Ledbetter Fair Pay Act of 2009. It was passed to correct a Supreme Court decision that held that an employee must file an EEO charge over a continuing practice of discriminatory compensation within 180 days of the first incident of the practice. The new law permits an employee to file within 180 days of the latest instance of discriminatory compensation, e.g., last week’s paycheck. However, it limits the back pay period to no more than two years before the charge was filed.  Once the Act was passed, EEOC issued a decision limiting the back pay to no more than 45 days before the federal employee’s EEO charge.  It claimed that it had discretion not to go back a full two years, but we are unaware of subsequent decisions reiterating that concept.  The law only applies to compensation claims based on illegal discrimination allegations. All other compensation-related grievances and claims are untouched by this Act.

Consequently, if the Congress and President saw fit to limit back pay liability periods to two years before an infraction  of one’s statutory civil rights, shouldn’t that be a strong enough benchmark to similarly negotiate a two-year limit/entitlement on back pay liability.  The union might be giving up four potential years of back pay, but it could easily get in return a clear right for employees to pursue continuing violations long after they started.

#10    Of course, creative negotiators have lots of other options between their two extreme positions, e.g.,

  • limit back pay to no more than six months prior to the grievance, absent good cause demonstrated by the employee or union by the preponderance of evidence,
  • limit back pay to one date for contract violations and another for regulatory or statutory infractions,
  • limit back pay to one date for infractions the employee or union could have known about based on records they were given versus another date for infractions they had no way of knowing about,
  • limit it to one date for institutional grievances and another for individual or employee infraction grievances.

We consider this so important that any agency negotiators who do not target this liability to be contained are probably engaging in malpractice whereas union negotiators who allow it to continue clear a path for the six year period to continue unobstructed should probably get substantial bonuses every time a union makes it pay off with a long retroactive back pay period.

(Originally posted 9/13/16)


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.
This entry was posted in Arbitration, Grievance/Arbitration and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.