[ v45 p674 ]
45:0674(60)AR
The decision of the Authority follows:
45 FLRA No. 60
Before Chairman McKee and Members Talkin and Armendariz.
I. Statement of the Case
This matter is before the Authority on exceptions to an award of Arbitrator John Kagel filed by the Agency under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The Union filed an opposition to the Agency's exceptions.
The Arbitrator determined that the Agency violated law and regulation when it reduced the commission rate paid to automotive mechanics and awarded the grievants backpay. We conclude that we are not deprived of jurisdiction over this matter by section 7121(f) of the Statute. We further conclude that the Agency fails to establish that the award is deficient. Accordingly, we will deny the exceptions.
II. Background and Arbitrator's Award
The grievants in this case are two mechanics who perform automotive services for customers of the Agency at McClellan Air Force Base. They are compensated under a commission pay plan (CPP). According to the manual of the Agency, a CPP is used to compensate designated employees at a prescribed percentage of the sales volume generated by each employee instead of at a fixed hourly rate.
On April 13, 1989, the Agency notified the Union that it was going to reduce the commission rate paid to the grievants from 52 percent to 40 percent. After discussions with the Union, the Agency implemented the reduction on July 8, 1989. The Union filed a grievance disputing the reduction. The grievance was not resolved and was submitted to arbitration on the stipulated issue of whether the commission rate paid to the grievants was adjusted in accordance with applicable laws, rules, and regulations.
As recognized by the Arbitrator, the grievants are prevailing rate employees subject to 5 U.S.C. § 5343, pursuant to which their pay is "fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates." The Arbitrator also noted that Federal Personnel Manual (FPM) Supplement 532-2 sets forth procedures and instructions for the administration and operation of the prevailing rate wage system as it applies to nonappropriated fund employees such as the grievants. Before the Arbitrator, the Agency contended that its adjustment of the grievants' commission rate was authorized by FPM Supplement 532-2, Appendix V. The Agency explained that before adjusting the rate, it conducted a survey of local establishments. The Agency maintained that the results of that survey, together with the locality wage survey conducted by the Department of Defense (DoD) Nonappropriated Fund Wage Fixing Authority in the Sacramento County wage area in April 1988, showed conclusively that prevailing rates of employees performing comparable work in the local community were substantially lower than the commission earnings of automotive workers assigned to the Agency's service station at McClellan Air Force Base.
The Union contended that the Agency's survey was improper because there was no documentation to substantiate the conclusion of the Agency's survey. Submitting wage information of its own, the Union also contended that the Agency had failed to properly take into account local wages.
The Arbitrator found that special schedules such as the CPP for automotive mechanics require a survey of local establishments and that, under 5 U.S.C. § 5343(c), that survey must include enough representative establishments to yield a prevailing rate. In the Arbitrator's judgment, the Agency's local survey "utterly failed to establish with any degree of certainty comparable local community rates for the type of work performed by the Mechanics at McClellan." Award at 10.
The Arbitrator found that there was "no evidence provided as to what efforts were made to obtain the local information that was submitted[;] . . . nothing to show what [was] the basis for selection of the concerns which were solicited for information[;] . . . [and] no evidence that any follow-up information was sought . . . where information was incomplete or withheld." Id. In the Arbitrator's view, "there was no evidence to support that that survey was done in any systemized or rigorous way." Id. The Arbitrator stated that the best evidence of the lack of a proper survey was the testimony of the Agency representative who made the rate determination and who testified that he had disregarded the local survey because the information "was not very conclusive with respect to the local companies . . . ." Id. (quoting testimony). Thus, the Arbitrator found that the Agency had disregarded its own local survey and, instead, used information from "what it was told were proper rates from an apparently outdated wage grade survey from the Department of Defense. The sources of that survey's wages are unknown, as is the locality or localities from which such wages were gleaned." Id. at 11. The Arbitrator also noted that the DoD survey was not introduced into evidence.
The Arbitrator ruled that the information used by the Agency "was not shown to have the appropriate relationship to the jobs that the [Agency's] mechanics were performing for it as required by law and regulation." Id. Specifically, the Arbitrator determined that the adjustment of the grievants' commission rate was not based on a "survey of local establishments" as required by FPM Supplement 532-2, Appendix V and that, therefore, the Agency's adjustment was "necessarily void and of no effect." Id. As a remedy, the Arbitrator ordered the Agency "to restore to the Grievants the former percentage commission rates that they would had [sic] received had they not been unilaterally effected by the improper acts of the [Agency]." Id. at 12. In awarding the grievants backpay, the Arbitrator rejected the position of the Agency that civilian employees of the Agency are not entitled to the benefits of the Back Pay Act. In support of its position, the Agency had relied on the decision in U.S. v. Hopkins, 427 U.S. 123 (1976) (Hopkins), holding that civilian employees of the Agency are not covered by the Back Pay Act. The Arbitrator distinguished Hopkins on the basis that it did not involve the issue of the available remedies for a "material violation of regulations[.]" Id.
III. Preliminary Matter
As a preliminary matter, the Union contends that the Agency's exceptions should be dismissed for lack of jurisdiction. The Union states that under section 7122(a) of the Statute, the Authority has no jurisdiction over exceptions to an award that relates to a matter described in section 7121(f) of the Statute. The Union notes that among the matters described in section 7121(f) are matters covered by 5 U.S.C. § 7512, which include reductions-in-pay, and matters similar to those covered by section 7512 that arise in another personnel system, such as the system for nonappropriated fund instrumentalities like the Agency in this case. The Union claims that the Agency's reduction in the grievants' commission rate constituted a reduction-in-pay similar to those covered by section 7512. The Union asserts that because this case relates to a reduction-in-pay, the award relates to a matter described in section 7121(f) and that, consequently, the Agency's exceptions must be dismissed.
We reject the Union's contention that the award relates to a matter described in section 7121(f) of the Statute. We are not persuaded that the reduction in the grievants' commission rate is similar to a reduction-in-pay covered by 5 U.S.C. § 7512.
As recognized by the Arbitrator, the grievants are prevailing rate employees whose pay is "fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates." 5 U.S.C. § 5343(a). Various procedures and provisions are incorporated into the prevailing rate wage system by law. In addition, by regulations, the Office of Personnel Management (OPM) has prescribed practices and procedures for implementing and administering the prevailing rate system. We are not convinced that when a prevailing rate determination is made in accordance with the prescribed practices and procedures of the prevailing rate system, a resulting reduction of the pay of a prevailing rate employee is an adverse action. In claiming that such an action constitutes an adverse action similar to a reduction-in-pay within the meaning of section 7512, the Union provides no evidence, rulings, or citations of authorities that would support its position. Nor have we found support for the Union's position. The only references to adverse actions in OPM prevailing rate wage system regulations relate to a job-grading action that results in a change to a lower grade and to an initial application of job-grading standards that results in a lower grade or rank for an employee who has moved between wage areas. FPM Supplement 532-1, subchapters S7-3, S10-11. Accordingly, we will not dismiss the Agency's exceptions.
IV. First Exception
A. Position of the Parties
The Agency contends that the award is contrary to the Prevailing Rate Systems Act of 1972 and FPM Supplement 532-2. The Agency argues that after receiving recommendations of the Federal Prevailing Rate Advisory Committee (FPRAC), OPM has authorized agencies to adjust the commission rates of automotive mechanics as business circumstances dictate as long as the rates stay within the range of 40-65 percent established in FPM Supplement 532-2, Appendix V. The Agency asserts that it made its determination of the appropriate commission rate consistent with the guidance issued by OPM and consistent with the agreement of management and labor on the FPRAC.
The Union contends that the Arbitrator correctly ruled that the Agency did not adjust the grievants' commission rate in accordance with applicable regulations.
B. Analysis and Conclusions
We conclude that the Agency fails to establish that the award is contrary to law or regulation.
We addressed a similar issue in U.S. Department of Defense, Army and Air Force Exchange Service, George Air Force Base, California and National Federation of Federal Employees, Local 977, 40 FLRA 79 (1991) (AAFES), involving the same Agency. In AAFES, the arbitrator determined that the Agency violated law, regulation, and the parties' collective bargaining agreement when it reduced the commission rate paid to automotive mechanics at George AFB. The arbitrator ordered that if the Agency could not justify the adjustment in commission rates, the parties were to establish the proper rate, and the mechanics would be reimbursed for commissions improperly denied them. The Agency filed exceptions to the award, and we rejected the Agency's argument that it was privileged to change unilaterally the commission rates for automotive mechanics. 40 FLRA at 81.
We recognized in AAFES that the mechanics are subject to the provisions of the Prevailing Rate Systems Act of 1972, Pub. L. No. 92-932, 86 Stat. 564 (1972) (codified as amended at 5 U.S.C. §§ 5341-5349) (the Act) and that OPM has issued regulations prescribing practices and procedures for implementing and administering the prevailing rate wage system. We noted that FPM Supplement 532-2, Appendix V sets forth a range of allowable commission rates for automotive mechanics of 40-65 percent. We also noted that Appendix V further provides that OPM is to undertake a study to determine the most appropriate treatment for special schedule employees, such as automotive mechanics, but that a change in pay practices could be made when the appropriate agency wage-fixing authority determines, after appropriate consultation with labor organizations, that an earlier change in pay practices is required. Id. at 82.
In denying the Agency's exception, we concluded that the Agency had failed to establish that it had the right to adjust unilaterally the commission rates payable to automotive mechanics. In particular, we rejected the Agency's allegation that it had authority to adjust unilaterally commission rates within the range set by Appendix V as the result of an agreement reached by the FPRAC. After examining the transcript of the FPRAC meeting, which transcript the Agency has submitted in support of its exception in this case, we concluded that there was no indication of such an agreement.
In this case, to the extent the Agency is asserting that under the Prevailing Rate Systems Act and FPM Supplement 532-2, it has the right to adjust unilaterally commission rates within the range set by Appendix V, we conclude on the basis of our decision in AAFES that the Agency provides no basis for finding the award contrary to the Prevailing Rate Systems Act or FPM Supplement 532-2. To the extent the Agency is asserting that the award is deficient because the Agency adjusted the commission rate in accordance with the Act and the Supplement, we likewise conclude that the Agency fails to establish that the award is deficient. The Arbitrator specifically determined that the information used by the Agency as the basis for its adjustment of the grievants' commission rate "was not shown to have the appropriate relationship to the jobs that the [Agency's] mechanics were performing for it as required by law and regulation." Award at 11. In its exception, the Agency fails to establish otherwise. Instead, the Agency is merely disagreeing with the Arbitrator's findings of fact and his reasoning and conclusions and attempting to relitigate before the Authority the issue of the propriety of its adjustment. As such, the Agency's exception provides no basis for finding the award deficient. See, for example, National Association of Government Employees, Local R5-66 and U.S. Department of Veterans Affairs Medical Center, Memphis, Tennessee, 40 FLRA 504, 509 (1991). Accordingly, we will deny this exception.
V. Second Exception
A. Position of the Parties
1. The Agency
The Agency contends that the award is deficient because it is based on nonfacts. The Agency maintains that the Arbitrator "concluded that Appendix V. only requires a survey of local establishments[,]" and that such conclusion is erroneous. Exceptions at 5 (emphasis in original). The Agency asserts that FPM Supplement 532-2, Appendix V allows the Agency to consider its own operating results in adjusting commission rates and that, consequently, the award is based on a nonfact because the Arbitrator failed to give effect to such consideration. The Agency also asserts that the award is based on a nonfact because the Arbitrator considered the Union's wage information in sustaining the grievance, while disregarding testimony concerning the DoD wage survey. The Agency argues that the Union's information is inapplicable because it did not involve comparable work and involved appropriated fund employees rather than nonappropriated fund employees.
2. The Union
The Union contends that the Agency fails to establish that the award is based on nonfacts. The Union argues that the award is not deficient by failing to give consideration to the Agency's operating results because the Agency never submitted into evidence any documentation of how operating results justified the reduction in the grievants' commission rate. The Union similarly argues that the award is also not deficient by failing to consider the DoD wage survey because the Agency did not submit into evidence the survey and the testimony concerning the survey was properly given little weight.
B. Analysis and Conclusions
We conclude that the Agency fails to establish that the award is deficient because it is based on nonfacts.
We will find an award deficient under the Statute because it is based on a nonfact when the central fact underlying the award is clearly erroneous, but for which a different result would have been reached. For example, U.S. Department of Health and Human Services, Social Security Administration, Baltimore, Maryland and American Federation of Government Employees, Local 1923, 39 FLRA 430, 435, (1991). We reject the Agency's contention that the award is based on a nonfact because the Arbitrator considered wage information submitted by the Union that was inapplicable. The Arbitrator sustained the grievance because the information used by the Agency as the basis for its adjustment of the grievants' commission rate did not satisfy the requirements of law and regulation. The Agency fails to establish that the information submitted by the Union was a consideration in the Arbitrator's decision to sustain the grievance. Moreover, even if it were a consideration, the Agency has failed to establish that the consideration of the information was the central fact underlying the Arbitrator's award such that but for the Arbitrator's consideration, the result would have been different. Therefore, this contention provides no basis for finding the award deficient. See U.S. Department of the Air Force, Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio and American Federation of Government Employees, Council 214 and Local 916, 43 FLRA 765, 775-76 (1991).
We also reject the Agency's contentions that the award is based on a nonfact because the Arbitrator failed to consider the Agency's operating results and the DoD wage survey as justification for the adjustment of commission rates. When the Authority recognized that Federal courts in private-sector labor relations cases will find an award deficient when the award is based on a nonfact, the Authority noted the holding of the U.S. Court of Appeals for the First Circuit in Electronics Corporation of America v. Electrical Workers, Local 272, 492 F.2d 1255, 1257 (1st Cir. 1974):
[W]here the "fact" underlying an arbitrator's decision is concededly a non-fact and where the parties cannot fairly be charged with the misapprehension, the award cannot stand.
United States Army Missile Materiel Readiness Command (USAMIRCOM) and American Federation of Government Employees, Local 1858, AFL-CIO, 2 FLRA 433, 438 (1980) (emphasis in original). The Authority held that in order for an award to be found deficient, it must be established that "the parties [were not] responsible for the arbitrator's misapprehension . . . ." Id.
In this case, the Agency is disputing the Arbitrator's failure to consider matters that the Agency did not submit to the Arbitrator. The Arbitrator specifically noted that the Agency did not submit into evidence the DoD wage survey, and it is not apparent that the Agency submitted into evidence any documentation of how operating results justified the reduction in the grievants' commission rate. Consequently, we conclude that to the extent there was any failure on the part of the Arbitrator to fully consider these disputed matters, the Agency was, in part, responsible, and, therefore, no basis is provided for finding the award deficient because it is based on a nonfact. See U.S. Department of Housing and Urban Development and American Federation of Government Employees, Local 1568, 33 FLRA 308, 314 (1988) (because the agency was partly responsible for the disputed finding of the arbitrator, the agency failed to establish that the award was deficient because it was based on a nonfact). Moreover, in our view, the Agency's exception constitutes disagreement with the Arbitrator's evaluation of the evidence and testimony, and such disagreement provides no basis for finding an award deficient. See U.S. Department of the Treasury, Customs Service, South Central Region, New Orleans, Louisiana and National Treasury Employees Union, Chapter 168, 43 FLRA 337, 343 (1991).
Accordingly, we will deny this exception.
VI. Third Exception
A. Positions of the Parties(*)
1. The Agency
The Agency contends that the Arbitrator's award of backpay is contrary to law. The Agency argues on the basis of the decisions in Hopkins, 427 U.S. 123 (1976), and AAFES v. Sheehan, 456 U.S. 728 (1982) (Sheehan), that employees of the Agency are not subject to the Back Pay Act, 5 U.S.C. § 5596, and that Congress intended to prohibit backpay claims by Agency employees.
The Agency acknowledges that AR 60-21/AFR 147-15 provides, in pertinent part, as follows:
1-7. Applicable laws. The following statutes, among others, are applicable to AAFES employees:
. . . .
g. 5 USC 5596 -- Back Pay Due to Unjustified Personnel Actions -- Authorizes payment of back pay, allowances, or differentials, as applicable or [sic] unwarranted personnel actions, less any amounts earned by the employee during the applicable period. Individuals separated from AAFES employment are obligated to make good-faith efforts to gain useful employment during periods of separation while contesting the separation action. This statute is administratively adopted.
However, the Agency argues that the sole source of an arbitrator's authority to award backpay is derived from the Back Pay Act, which does not apply to the Agency or its employees. The Agency asserts that only Congress can waive sovereign immunity and that, therefore, the purported administrative adoption of the Back Pay Act cannot authorize "any outside forum (including an arbitrator or the Federal Labor Relations Authority) to impose an award on AAFES." Agency's Response to March 13 Order at 2. The Agency states that the Agency itself can provide a backpay remedy to nonunit employees under the Agency grievance system "in order to give that procedure a fuller remedy." Id. at 3. However, the Agency claims that unit employees cannot be entitled to backpay under the negotiated grievance procedure because "[a]dopting the Back Pay Act internally or administratively did not confer the authority upon any other forum to impose or enforce that Act upon [the Agency], as that would be a waiver of sovereign immunity . . . . Id. at 3-4. Thus, the Agency asserts that the administrative adoption of the Back Pay Act is "meaningless, other than for in-house purposes." Id. at 3. In the Agency's view, there can be no entitlement to backpay because an entitlement can only be granted by Congress and Congress has indicated its intent to prohibit backpay claims by Agency employees.
2. The Union
The Union contends that Hopkins and Sheehan should not be construed to find that the Arbitrator could not award the grievants backpay under the Back Pay Act. The Union argues that both cases concern sovereign immunity, which does not apply to administrative proceedings such as in this case. The Union also argues that the Statute has effectively brought employees of the Agency within the coverage of the Back Pay Act and that, therefore, Hopkins and Sheehan, which were decided before the enactment of the Statute, are no longer relevant. The Union further argues that in any event, the Back Pay Act applies by operation of AR 60-21/AFR 147-15 and that, consequently, the award of backpay is not deficient.
B. Analysis and Conclusions
We conclude that the Agency fails to establish that the award of backpay by the Arbitrator is deficient. We find a waiver of sovereign immunity based on the Prevailing Rate Systems Act of 1972 (codified as amended at 5 U.S.C. §§ 5341-5349) and AR 60-21/AFR 147-15.
Congress has waived the sovereign immunity of the United States for nontort claims in 28 U.S.C. §§ 1346(a)(2) and 1491 (commonly known as the Tucker Act). U.S. v. Mitchell, 463 U.S. 206, 212 & n.10 (1983) (Mitchell). Section 1346(a)(2) provides:
(a) The district courts shall have original jurisdiction, concurrent with the Court of Claims, of:
. . . .
(2) Any other civil action or claim against the United States, not exceeding $10,000 in amount, founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort. For the purpose of this paragraph, an express or implied contract with the Army and Air Force Exchange Service, Navy Exchanges, Marine Corps Exchanges, Coast Guard Exchanges, or Exchange Councils of the National Aeronautics and Space Administration shall be considered an express or implied contract with the United States.
Section 1491 pertinently provides:
The Court of Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort. For the purpose of this paragraph, an express or implied contract with the Army and Air Force Exchange Service, Navy Exchanges, Marine Corps Exchanges, Coast Guard Exchanges, or Exchange Councils of the National Aeronautics and Space Administration shall be considered an express or implied contract with the United States.
The stipulated issue in this case was whether the commission rate paid to the grievants had been adjusted in accordance with applicable laws, rules, and regulations. The Arbitrator ruled that the adjustment was not in accordance with the requirements of the Prevailing Rate Systems Act and FPM Supplement 532-2, Appendix V. Because the claim of the grievance resolved by the Arbitrator's award is based on the Prevailing Rate Systems Act, we find that sovereign immunity has been waived. We conclude that the grievance and the award are founded on an Act of Congress, providing a substantive right to money damages enforceable against the United States, within the meaning of section 1346(a)(2) and section 1491 and that, therefore, the Claims Court would have jurisdiction over the type of claim asserted in the grievance and a U.S. district court would have concurrent jurisdiction over such a claim to the extent that individual claims did not exceed $10,000. Best v. U.S., 10 Cl. Ct. 213 (1986) (Best).
In Best, the plaintiffs were Federal employees in positions covered by the Prevailing Rate Systems Act. They filed an action claiming that they had been deprived of the compensation to which they were entitled under the Prevailing Rate Systems Act and that the Act conferred on them a substantive right to money damages enforceable against the United States. The Claims Court confirmed that it and U.S. district courts have subject matter jurisdiction over such claims based on 5 U.S.C. § 5341-5343. 10 Cl. Ct. at 215-16.
Because claims under 5 U.S.C. §§ 5341-5343 are within the subject matter jurisdiction of the Federal courts, we reject the Agency's contention that the Arbitrator's award is precluded by sovereign immunity. In rejecting the contention, we acknowledge that after Carter v. Gibbs, 909 F.2d 1452 (Fed. Cir. 1990) (Carter), which limits access to Federal courts for matters covered by the negotiated grievance procedure, a court likely would have dismissed a lawsuit asserting the claims of the grievance in this case. However, we find no basis on which to sustain the claim of sovereign immunity simply because the exclusivity of the negotiated grievance procedure precludes access to Federal courts by unit employees. In dismissing claims pursuant to Carter that otherwise would have been within the court's jurisdiction, the Claims Court has given no indication that resort to the forum recognized as the exclusive and mandated means of resolving the disputed matter would be futile because of sovereign immunity. For example, Ackerman v. U.S., 21 Cl. Ct. 484 (1990). Certainly, with respect to the negotiated grievance procedure, there is no exclusion by Congress of the Agency or its employees or the type of claims of the grievants from the coverage of the Statute. It is clear that under section 7103 of the Statute, both the Agency and its employees are covered by the Statute, and the claims of the grievants are grievable and arbitrable.
In rejecting the Agency's contention, we respectfully disagree with the view of the Claims Court that "[o]nly contract employees of the AAFES may invoke the jurisdiction of the Claims Court." Moore v. U.S., 21 Cl. Ct. 537, 541 (1990) (Moore). In Moore, the Claims Court, without discussion, ruled that the decision of the Court of Claims in Adanes v. U.S., 221 Cl. Ct. 959 (1979) (Adanes), which held that the Court of Claims only had jurisdiction over nonappropriated fund instrumentalities based on express or implied contracts, was binding precedent on the Claims Court. However, we note that Adanes was decided before Sheehan, and, in our view, Sheehan does not support the position that appointed employees of nonappropriated fund instrumentalities may not invoke the jurisdiction of the Claims Court on any grounds. In fact, we read Sheehan, which involved an appointed employee of AAFES, as supporting the position that appointed employees of the Agency may assert a claim in Claims Court to enforce a substantive right to money damages against the United States.
We note that the decision in Sheehan was not based on the appointment status of the AAFES employee, but on the "premising [of] Tucker Act jurisdiction on [AAFES personnel] regulations, which do not explicitly authorize damages awards." 456 U.S. at 741. In addition, the Court found that its decision in U.S. v. Testan, 424 U.S. 392 (1976) (Testan) was controlling. Id. In Testan, the Court ruled that the Court of Claims did not have jurisdiction under the Tucker Act because the plaintiffs had failed to establish a substantive right to money damages enforceable against the United States. Because the Court expressly held that its decision in Testan was controlling in Sheehan, without regard to the appointment status of the employee seeking the monetary damages, we view Sheehan as ruling that sovereign immunity has been waived by the Tucker Act for appointed employees of AAFES "where damages claims against the United States have been authorized explicitly." Id. at 739-40.
The Prevailing Rate Systems Act explicitly authorizes damage claims against the United States. Best, 10 Cl. Ct. at 215-16. Accordingly, we take the position that, consistent with Sheehan and Testan, the Claims Court has jurisdiction under 28 U.S.C. § 1491 over claims of appointed Agency employees based on the Prevailing Rates Systems Act.
In addition, we separately find that, by administratively adopting the terms of the Back Pay Act, AR 60-21/AFR 147-15 constitutes a regulation of an executive department authorizing money damages that confers on all Agency employees a claim for relief that is cognizable under section 1491 and under section 1346(a)(2) to the extent that the claim does not exceed $10,000. Therefore, based on our conclusion above that 28 U.S.C. §§ 1346(a)(2) and 1491 constitute a waiver of sovereign immunity when a statute or regulation provides a substantive right to money damages, AR 60-21/AFR 147-15 provides a separate basis for the remedy ordered by the Arbitrator.
In Mitchell, 463 U.S. 206, the Court confirmed that by giving the Claims Court (at that time the Court of Claims) and the U.S. district courts jurisdiction over the specified types of claims against the United States, the Tucker Act constitutes a waiver of sovereign immunity with respect to those claims. 463 U.S. at 212. However, the Court recognized that the Tucker Act "does not create any substantive right enforceable against the United States for money damages." Id. at 216 (quoting Testan, 424 U.S. at 398). Thus, the Court advised that a substantive right must be found in another source such as "the Constitution, or any Act of Congress, or any regulation of an executive department." Id. (quoting sections 1346(a)(2) and 1491). The Court emphasized that not every claim invoking the Constitution, a Federal statute, or regulation is cognizable under the Tucker Act. The Court ruled that in resolving whether a claim is cognizable under the Act, the courts must inquire whether the source of the substantive right "can fairly be interpreted as mandating compensation by the Federal Government for the damages sustained." Id. at 217 (quoting Eastport S.S. Corp. v. U.S., 178 Ct. Cl. 599, 607 (1967) (Eastport)). The Court further advised that, as recognized in Eastport, the right to recover damages can be granted either "expressly or by implication." Id. at 217 n.16 (quoting Eastport, 178 Ct. Cl. at 605).
We have examined the administrative adoption of the Back Pay Act by AR 60-21/AFR 147-15. We conclude that the regulatory provision can fairly be interpreted as mandating backpay compensation by the Agency when an appropriate authority, such as an arbitrator, finds that an aggrieved employee has suffered a loss of pay, allowances, or differentials as the result of an unjustified or unwarranted Agency personnel action. This has been the established interpretation and application of the terms of the Back Pay Act before and since the enactment of the Statute. Accordingly, in our view, the Claims Court has jurisdiction over claims for backpay of appointed employees of the Agency founded on AR 60-21/AFR 147-15 and a U.S. district court would have concurrent jurisdiction over such a claim to the extent that individual claims do not exceed $10,000. Because claims for backpay founded on AR 60-21/AFR 147-15 are within the subject matter jurisdiction of Federal courts, we reject the Agency's contention that the Arbitrator's award is precluded by sovereign immunity.
In rejecting the Agency's contention, we find that although its position that it cannot waive sovereign immunity is correct, it is misplaced. In Mitchell, the Court specifically advised that in undertaking the inquiry of whether the substantive right could reasonably be interpreted as mandating compensation, a court need not find a separate waiver of sovereign immunity in the substantive provision because the Tucker Act, itself, provides the necessary waiver. Id. at 218. In terms of this case, Congress has waived sovereign immunity by the Tucker Act, and we have found that the Agency has conferred on employees an entitlement to backpay by AR 60-21/AFR 147-15 that is enforceable under the Tucker Act.
In rejecting the Agency's claim of sovereign immunity, we also disagree with the Agency's position that although it may be governed by the administrative adoption of the Back Pay Act in AR 60-21/AFR 147-15, that regulation has no effect on the remedies that may be granted by an arbitrator. We are guided by the approach of the Comptroller General to judging the propriety of arbitration awards of backpay. In expanding the authority of arbitrators to award backpay, the Comptroller General ruled that in cases involving the payment of money by an agency, "a binding arbitration award must be given the same weight as any other exercise of administrative discretion, i.e., the authority to implement the award should be refused only if the agency head's own decision to take the same action would be disallowed . . . ." For example, 54 Comp. Gen. 312, 316 (1974). As the Agency concedes, it has since 1973 exercised its discretion to remedy unjustified or unwarranted personnel actions with awards of backpay to affected employees. Consequently, we refuse to deny that same authority to arbitrators who are empowered to resolve grievances under the Statute. Furthermore, as the U.S. Supreme Court recognized in Fort Stewart Schools v. FLRA, 495 U.S. 641 (1990), "[i]t is a familiar rule of administrative law that an agency must abide by its own regulations." 495 U.S. at 654 (citing Vitarelli v. Seaton, 359 U.S. 535 (1959) (Vitarelli) and Service v. Dulles, 354 U.S. 363 (1957)). In our view, the Agency "must be rigorously held to the standards by which it professes its actions to be judged." Vitarelli, 359 U.S. at 546 (Frankfurter, J., concurring in part and dissenting in part). In reaching this result, we reject the Agency's position that it is authorized to award backpay to nonunit employees under the Agency grievance system, but that arbitrators are not authorized to award backpay to similarly situated unit employees under the negotiated grievance procedure. Such a position is not consistent with the balanced system of labor-management relations envisioned by the Statute.
Therefore, we conclude that, under the terms of AR 60-21/AFR 147-15, the Arbitrator was authorized to award the grievants backpay for the pay that they lost as a result of the Agency's unjustified and unwarranted personnel action of reducing their commission rate in violation of applicable laws, rules, and regulations. Unlike the claim in Sheehan, which the Court dismissed, in part, because it was "premised on the asserted violation of regulations that do not specifically authorize awards of money damages[,]" 456 U.S. at 739 (footnote omitted), the Arbitrator's award is fully consistent with the Agency's regulation specifically authorizing awards of backpay.
In sum, we find a waiver of sovereign immunity under both 28 U.S.C. §§ 1346(a)(2) and 1491 based either on the Prevailing Rate Systems Act or AR 60-21//AFR 147-15. Because we find that the award is authorized by either the Act or AR 60-21/AFR 147-15, we conclude that the Agency's contention that the award is not authorized by the Back Pay Act provides no basis for finding the award deficient. Accordingly, we will deny the exception.
VII. Decision
The Agency's exceptions are denied.
FOOTNOTES:
(If blank, the decision does not
have footnotes.)
* After reviewing the initial positions of the parties on this exception that the award of backpay was contrary to law, we determined that we needed additional information from the Agency. Specifically, in an Order dated March 13, 1992, we requested that the Agency address the issue of whether Army Regulation (AR) 60-21 and Air Force Regulation (AFR) 147-15, a joint regulation pertaining to the personnel policies of the Agency, contains a provision administratively adopting the terms of the Back Pay Act.
The Agency submitted a response and the Union filed a response to the Agency's submission. Those responses are incorporated in the statement of the positions of the parties.
In addition, we directed the Agency to include the positions of the Department of the Army and the Department of the Air Force on the interpretation and application of the provision if AR 60-21/AFR 147-15 does provide for the administrative adoption of the terms of the Back Pay Act. In its response to the March 13 Order, the Agency contended that it was unable to obtain the positions of the Army and the Air Force and requested that the record be held open until the positions could be obtained. In an Order dated April 8, 1992, we rejected the Agency's request, but we granted the Agency an additional 20 days to provide the positions. However, we stated that we would not consider any additional requests for extensions of time. In a motion dated May 8, 1992, the Agency requested that the record be reopened for the purpose of admitting a letter which pertains to the positions of the Army and the Air Force on the adoption of the terms of the Back Pay Act. The Agency explained that the age of the letter and the turnover in the Agency's General Counsel's office made the letter extremely difficult to find. The Union opposes the Agency's motion.
We will not reopen the record to accept the letter. The Agency was on notice that the positions of the Army and the Air Force were to be filed no later than May 4, 1992, and the basis for the delay does not provide good cause for reopening the record beyond the specified time.