Professional Documents
Culture Documents
NTEU Chapter 276 and FDIC 7-22-05, 10-10-05
NTEU Chapter 276 and FDIC 7-22-05, 10-10-05
NTEU Chapter 276 and FDIC 7-22-05, 10-10-05
and
FDIC And NTEU For The Years 2003-2005 (JX 2) provides in pertinent
part:
2
3. If the data for one or more groups included in the fields
identified in #2, above, indicates a rate of distribution that is
less than 80% of the distribution rate for the group with the
highest rate in that field, the FDIC and NTEU will conduct a
joint review of the approved awards to determine if these results
can be justified by a legitimate business reason or explained by
the size(s) of the group(s) being compared. However, this joint
review process does not waive the right of the Union or any
employee to seek remedial relief in any appropriate legal forum.
2420.1, FDIC Rewards and Recognition Program (JX 24), to describe the
CSA program. TR 21. The criteria for the CSA were set forth in Section 11-
4:
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important contributions to the Corporation and/or its organizational
components.
The parties apparently had high expectations for the new program,
and Answers” (JX 20), Q30. Unfortunately, what was perceived as a major
the reasons for the program’s hotly contested results is that receipt of a CSA
1
“A total of 160 CSA grievances were invoked for arbitration by NTEU. Although some of these have
been withdrawn, the aggregate number of cases nation-wide is significant.” Agency Brief @ 24, fn 30.
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II. THE FDIC’S ORGANIZATIONAL STRUCTURE
deposit insurance for virtually all United States banks and savings and loan
associations, serves as the primary regulator of state chartered banks that are
not members of the Federal Reserve System, and arranges the resolution of
failed banks and savings and loans whose deposits are insured by the FDIC.
divisions and offices, such as the Division of Insurance and Research and the
The DSC is divided into 8 regions nationally. The region with which
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(“Regional Director”). The Region in turn is divided into 7 territories, each
(JX 7), and DSC: Atlanta Risk Management Territory Map (JX 8).
to as “IT examiners”.
The procedures for the CSA program are set forth in Chapter 11 (JX
4) of Circular 2420.1 (JX 24). Those at issue are found in Section 11-5.A-D:
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calendar days after the end of the consideration cycle. Employees may
provide input to the appropriate supervisors for other employees to be
considered for a Corporate Success Award.
…
In order to ensure a fair and equitable distribution of the CSA’s within
the division, DSC will implement the following procedures for
nominating employees.
2
Here “supervisor” means “field supervisor”. TR 70, 71. That meaning is used throughout this opinion.
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all nominated employees within their span of control.
….
November 28, 2003 (JX 16), the Chairman “determined for 2004 that 33 1/3
FDIC’s objectives are spelled out on the last page of JX 20, under “Strategic
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Objectives” and “Corporate Initiatives”. TR 36, 66-67, 254.
It is important to note that the Union has been kept well informed of
program developments (see, for example, JX 11; TR 63) and has raised no
objection to the procedures specified in the DSC Director’s memo (JX 13).
For these reasons, the arbitrator considers the documents controlling the
CSA program to be the Compensation Agreement (JX 2), the MOU (JX 3),
Chapter 11 (JX 4) of Circular 2420.1, the DSC Director’s memo (JX 13),
the Chairman’s memo (JX 16), and the FDIC’s objectives and initiatives (JX
20).
4 are grade 14, including Grievant, and the other 3 are grade 13. Grievant’s
field supervisor nominated her (UX 2) and another grade 14 examiner in the
Charlotte office (JX 22D). The supervisor indicated that these two nominees
Of the 7 field examiners, one grade 13 and three grade 14s received
that the grade-13 winner (JX 22B) and 2 of the grade-14 winners (JXs
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22A&C) satisfied 3 of the 4 criteria. Neither Atlanta IT specialist received a
CSA. TR 255.
When Grievant learned that she had not been selected for a CSA, she
filed a grievance on March 15, 2004 (JX 6A), in which she stated in ¶ 6:
Per the MOU, ¶ 4, the first step in the grievance procedure was
waived, and parties began at step two. The Agency’s step-two decision was
delivered on March 29, 2004 (JX 6B), by the acting deputy regional director,
(JX 6C). Again she was rebuffed, this time by the associate director, who, in
a memorandum dated May 17, 2004 (JX 6D), stated in pertinent part:
10
At Step Three you provided more detail about your contributions and
accomplishments, which I appreciate having received. As you know,
the CSA is a comparative process. However, during the Step Three
meeting, you declined to compare yourself to another award recipient,
stating that you should receive a CSA based on your performance
during 2003. To the extent that you refer to your 2002-2003
performance, the CSA was based upon a contribution of calendar year
2003 only.
You did not provide any information at Step Three about how your
contributions were in the top one-third of eligible employees in your
pool. While your contributions to the FDIC were commendable, you
were not considered to be one of the top contributors among the other
DSC employees during the calendar year 2003.
grievance procedure on June 9, 2004 (JX 6E). The final Agency rebuff was
delivered that same day, by the director of the transformation office (JX 6F),
who reiterated:
By letter dated July 7, 2004 (JX 6G), the Union demanded arbitration
in this and 3 other cases. This arbitrator was selected from a list prepared by
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the Federal Mediation and Conciliation Service. A hearing was scheduled
request of the parties, briefs were not filed until July 8, 2005.
V. PRE-HEARING DISCOVERY
February 23, 2005, requesting that the Agency be required to turn over, in
advance of the hearing, “copies of all nomination forms for all Corporate
responded in letter format on February 28, 2005, and the Union replied
briefly in a letter dated March 1, 2005. The Union’s discovery motion was
from other arbitrations, the parties asked the arbitrator to halt work on the
hearing on March 9, 2005, they still had not resolved their disagreement
over Grievant’s own nomination form (UX 2), so that the arbitrator had to
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at the hearing.
confidential, at least not those of the CSA winners. Indeed, the associate
to-day operations of the CSA program (TR 35), reminded FDIC supervisors,
in a memorandum dated January 15, 2004 (JX 17), that they “should provide
reiterated that instruction in another memo dated February 17, 2004 (JX 19),
and a question and answer to that effect was posted on the Agency web site
(JX 20, Q20). Thus, the Union was not seeking anything confidential, at
of 5 USC § 7114(b)(4):
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or training provided for management officials or supervisors,
relating to collective bargaining … .
Elkouri & Elkouri, How Arbitration Works (ABA/BNA 6th ed 2003) @ 352.
In point of fact, at least 3 unfair labor practice (“ULP”) cases were pending
which the Union was seeking to compel the FDIC to turn over discovery
material.
the FDIC itself seems to have anticipated such a tactic, because in a memo
dated February 17, 2004 (JX 19), the head of day-to-day CSA program
14
In the case before this arbitrator, it appears that the Agency, in Article
48, Section 4.C of the collective bargaining agreement (JX 1), may have
disclose under the statute standing alone. Thus, the result in arbitration under
the collective bargaining agreement may be very different from the results in
the various ULP proceedings before the FLRA, and, in fact, the ULP results
This arbitrator also rejected the notion that the Federal Arbitration Act
(“FAA”), in 9 USC § 7, might support discovery, as the FAA does not apply
the arbitrator rejected the related notion that a state arbitration statute could
govern relations between the federal government and its employees. Const,
collective bargaining agreement (JX 1), as did the arbitrators in the better
The arbitrator shall have the obligation of assuring that all necessary
facts and considerations are brought before him or her by the
representatives of the Parties. Article 48, Section 4.C.
This way the arbitrator’s ruling falls within the pale of the Steelworkers
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American Mfg Co, 363 US 564 (1960); Steelworkers v Warrior & Gulf
Navigation Co, 363 US 574 (1960); Steelworkers v Enterprise Wheel & Car
Finally, the arbitrator notes that the FLRA seems to have answered the
case of grievances (JXs 12 & 19), and Grievant’s nomination form is clearly
arbitrator ordered it produced at the hearing, and the Agency did so. UX 2;
TR 314.
The parties were unable to agree upon the issue presented. The Union
states it thusly:
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office and territory would be represented, TR 91 … . Union Brief @
5-6.
should apply to this arbitration (Union Brief @ 8-9) and requests that
States, 202 Ct Cl 571 (1973). Agency Brief @ 9. Indeed, it states the issue as
follows:
Did the FDIC abuse its discretion when it did not give a Corporate
Success Award to Grievant in 2004 based on her contributions for
2003, in violation of Chapter 11 of Circular 2420.1, or Section 1 of
the Memorandum of Understanding? If so, what is the appropriate
remedy? Agency Brief @ 2.
Even an employee who has met several criteria will receive a CSA
only upon being recognized as a top contributor in comparison with a
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specified percentage of his or her co-workers. Agency Brief @ 4;
emphasis supplied.
The Union did not demonstrate in any way that the FDIC failed to
abide by the CSA program as designed. Agency Brief @ 16;
emphasis supplied.
18
• … . Agency Brief @ 21-22; emphasis supplied.
Both parties cite the related case of FDIC and NTEU, Chapter 207,
FMCS No. 04-50042 (Vaughn Arb 2005) (“Grohal”), an opinion which this
employees who make contributions that exceed their normal duties.” Slip
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The CSA process is, as indicated, comparative; only the top one-third
of employees, compared to other employees, can receive a CSA. In
order to enable at least limited comparison, while preserving the
confidentiality of information about CSA recipients, the Parties have
developed a system under which nomination forms for other
employees, redacted of names and some identifying information, are
made available to the Union for review and for possible use by either
Party in the CSA grievance/arbitration process. The actual identity of
comparators might or might not be known to Grievant and the Union,
depending on job title and/or description of accomplishments. Id. @
15-16.
He further observed:
I note, in any event, that at the professional level, the dividing line
between what is expected in the normal course of an employee’s
duties and what is “above and beyond” is amorphous and subjective.
Id. @ 24.
Vaughn found that management had taken into consideration factors outside
20
It also appears that Managers evaluating Grievant’s nomination relied
“heavily” on Grievant’s perceived “inflexibility” in his relations with
other people and on the impact of that inflexibility on Management’s
ability to assign Grievant work. I have searched the negotiated criteria
for the place where that ascribed trait fits into the areas for which
Grievant was nominated (“business results” and “competency”), but
find none. … Moreover, the examples of alleged inflexibility relied on
by the Agency clearly related to times prior to 2003. Id. @ 24.
The Agency argues, further, that the Director’s decision fixed the
percentage (and therefore the number) of CSA recipients and the
amount of money available to pay CSA; it urges that any remedy in
favor of Grievant must be accompanied by withdrawal of an award
from another CSA recipient or a pro rata reduction in the amount of
monies awarded to each CSA recipient. I assume that this argument is
presented to discourage any award in an employee’s favor, as the
realities of the workplace would render such a result an accounting
nightmare, would create enormous hate and discontent requiring the
blacking out of the name of the Agency attorney who would succeed
with such an argument in order to reduce exposure to retaliation by
irate employees.
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Grievant’s success in his reassessment. The question to be answered is
whether Grievant should have received a CSA and what should be the
remedy with respect to him as a result of the Agency’s violation. Id.
@ 25-26.
Per the DSC Director’s memo of November 17, 2003 (JX 13),
member of the first-level review panel. Mr. Cook copied the forms and
Cook, the other members of the 5-person panel were James C. Watkins,
Kelly M. Smith, and Gail Simons-Poole, all assistant regional directors, and
JX 7; TR 77-78, 301.
The panel met for 3½ days. TR 78-79. Members read the forms for
half a day before beginning discussions. TR 101, 250. Not every nomination
was discussed, as there was unanimity about some of them. No nominee was
22
Of the 240 eligible employees, field supervisors nominated 40%, or a
total of 96. TR 101. The usual range was 35-40%. TR 68. Each field
their office or territory. TR 88, 101. Each employee was compared to his
Since panel members understood that only 1/3rd of the 240 eligible, or
80 employees, could receive awards, they set about to whittle down the list.
Members reviewed the field supervisors’ rankings, and disagreed with some
Panel members strove for consistency within the Region. TR 53, 249-
250. Each field office and territory was to be represented. TR 91. They
was no guidance as to any strict percentage for any field office. They
arrived at a “top third” and then reviewed the other forms a second time. TR
84.
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to the second-level review panel, which made 2 changes. TR 92-93. From
there the names were sent to the Regional Director, who made no changes.
Region, 7 of whom are in the field. TR 60, 240. All four of the grade 14s,
received CSAs, including one in Charlotte. TR 255, 311. The panel was
conscientiousness with which they undertook their task, it seems clear that
follows:
Q. Okay. Now, how did the number of Field Offices and territories in
the Atlanta Region factor in to the overall decision?
A. We were looking to make sure that each Field Office and territory
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would be represented.
Q. Uh-huh.
distribution of awards:
A. Yes.
Q. And what was the purpose of having that kind of data available to
you?
25
Watkins expressed the concern thusly:
Q. Uh-huh.
Q. Okay.
A. And so we went back and carefully reviewed that to see if that was
appropriate. TR 308-309.
From the record, it appears that panel members thought that there was
3
Note that Mr. Watkins sometimes uses “IT specialist” to mean or to include IT examiner. TR 326.
26
permissible, and corrective action, if any is required, is to be taken at higher
The initial agreement on the CSA program (JX 2) says nothing about
the distribution of awards among Union employees; it says only that at least
1/3rd will receive them overall. The MOU (JX 3) says only that the parties
will review the distribution; the document is silent as to what action they
explained by the sizes of employee groups. Circular 2420.1 (JX 4) says only
that responsibility for assuring compliance with the percentage limit set by
assure even distribution among employee groups, then the review for which
The May 21, 2003 memo from human resources in Washington to all
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FDIC supervisors (JX 12) plainly provides:
The memo concludes by reiterating that the FDIC and NTEU will review
disparities.
The questions and answers attached to the memo continue in the same
vein:
Questions and answers posted on the FDIC web site (JX 20; TR 36-
37, 46-47, 76-77) confirm that the only adjustment is to occur at the highest
level:
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Each supervisor’s CSA nominations will be forwarded to a higher
level official for review and concurrence before the nomination is
forwarded to the appropriate Division/Office Director. Another
review will take place at the Division/Office level to make final award
selections at the percentage specified by the FDIC Chairperson.
panel’s task was to pick the top third, allowing the chips to fall where they
may. It was for the Union and Agency to review where the chips fell.
albeit it in quite different contexts; see, for example, Oolite Industries, Inc
and Central States, Southeast and Southwest Areas Pension Fund, 8 EBC
the effect of narrowing the plan’s exemption for employers in the building and
construction industry. The arbitrator held that the committee exceeded its
authority and reversed the plan’s assessment of withdrawal liability against the
withdrawing employer. Although the contexts are different, the principles are
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the same; in both Oolite and this case, the administrative committees exceeded
reasons explained above, the arbitrator finds and concludes that the first-level
(JXs 6B, D & F). The Agency would not reveal the coworkers with whom
explained that Agency reviewing officials told her that if she were successful
with her grievance, then some fellow Union employee would have to be
dropped from the list of CSA winners, a result which Grievant found
CSA as a result of Agency error, then the Agency simply is going to have to
bear the extra cost. Attempting to retract an award from a recipient surely
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would provoke all manner of litigation. Grohal, supra, @ 26.
demonstrate that she was in the top one-third of eligible employees in her
pool (JXs 6D & F), are misleading. She could be low person in her pool, so
long as she was in the top third overall. The official list of award winners is
work units (JX 5). The Agency erred in applying the rules of the CSA
program.
performance. TR 21, 25, 61, 334, 336-337, 342-343, 348-349. The attempt
failed, probably because there is no bright line. The CSA program itself
performance with any clear line of demarcation. Just as faith without works
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is dead,4 so performance without contribution probably does not meet
expectations.
In point of fact, Agency documents tend to meld the two. Indeed, the
Agency web site. JX 20, Q27; see also Q30. The operations director wrote in
14).
The first award was signed by the DSC Director himself, and bears
4
James 2: 20 & 26 (Bible, KJV).
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this citation:
The citation was composed by Mr. Watkins, one of the first-level panel
described as follows:
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B. Annual Performance Plan;
… (Emphasis supplied.)
The Agency is not at liberty to play word games with Union employees;5
members Cook and Watkins. The former testified that panel reviewed field
supervisors’ rankings of their nominees and that these rankings were most
helpful. TR 80-81. In marked contrast, Mr. Watkins testified that they were
Q. Okay. Mr. Welsh [Union counsel] spent some time talking about
the ranking issue or prioritizing as it was referred to in some instances
and I want to make sure I understood your testimony correctly, is that
the Field Supervisor’s rankings were not a consideration into whether,
as to whether to advance a nomination or decline a nomination, is that
correct?
5
“When I use a word,” Humpty Dumpty said, in a rather scornful tone, “it means just what I choose it to
mean - neither more nor less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be master - that's all.”
Through the Looking Glass by Lewis Carroll.
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A. That’s correct. We considered the merits of each nomination on
their own. TR 326-327.
It appears that Mr. Cook may have the better recollection, as Mr.
Watkins did not seem to remember that Mr. Dean was on the panel. TR 303.
In any event, the important point is that panel members may not ignore field
part of the selection process. JX 13, ¶¶ 2&3. While there may be good faith
must consider the rankings of those management officials who are closest to
the nominees and who are responsible for nominating them in the first place.
At each step of the grievance procedure (JXs 6A, C & E), Grievant
What the evidence has shown is that the first-level review panel did not
follow the rules negotiated by the parties and set down by the DSC Director.
The Union stipulated that “the issue is whether or not the grievant was
given fair and equitable treatment by the Agency and whether the program
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contrary to the rules is not fair and equitable. Grievant was treated
inconsistently and well may have been dropped from consideration in order
territories.
A showing that the Agency misapplied the CSA rules does not,
have been among the top one-third of Union contributors in the DSC for
2003. For the reasons explained below, the arbitrator respectfully declines to
make that determination and remands the case to the Agency for a new
run the federal government. FDIC management, not the arbitrator, is in the
lacks sufficient knowledge about the FDIC and its operations to make sound
6 In the absence of a specified standard of proof, arbitrators have the authority to establish whatever standard
they consider appropriate, and the FLRA will not find an award deficient because a party claims that an incorrect
standard was used. AFGE and Dept of Housing and Urban Development, 58 FLRA 207 (2002). The burden is, of
course, on the Union. Elkouri & Elkouri, supra, @ 949-952; Hill & Sinicropi, Evidence in Arbitration (BNA 2nd
ed 1987) @ 32-39.
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management function.
those of the DSC. As a result, the arbitrator certainly would not be able to do
so. Only officials such as assistant regional directors and the deputy regional
director on the first-level panel could. TR 85, 254. Therefore, that task is left
to them.
The arbitrator notes that panel members drew upon their own personal
knowledge of the nominees’ work. TR 315, 318. One of the panel members,
Mr. Watkins, oversees Grievant’s territory and is very familiar with her
the amount of space on the CSA nomination form (JX 9) for a field
62. When panel members draw upon their own personal knowledge, they are
treating employees with whom they are familiar differently than those whom
of the potential for unfairness and to make sure that their knowledge pertains
37
to the contribution period at issue. The arbitrator notes that there is no claim
women. TR 81, 302. Thus, there is no reason to believe that the panel will
not arrive at a “fair and equitable” result based upon this opinion.
whether Grievant was among the top one-third of Union contributors to the
DSC for 2003.7 If the answer is affirmative, then she is entitled to a CSA. If
Although CSA procedures call for further review, there are numerous
no longer is intact, as Angela Holguin has left the Agency. TR 54, 92.
neither the Regional Director nor the DSC Director made any changes
7
Perhaps more precisely: Of those Union employees in the DSC, who met expectations during 2003, was
Grievant among the top third of contributors? It is undisputed that Grievant met expectations. TR @ 61.
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previously, there is no reason to believe that they would do so now.
panel for evaluation in accordance with the arbitrator’s opinion. The panel
should embody its decision in writing, and members should sign the
thus far, as this is a new program, and there is no evidence of bad faith on
arise in the course of the new evaluation and to address Grievant’s request
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FEDERAL MEDIATION AND CONCILIATION SERVICE
and
FINAL AWARD
40
This is one of numerous arbitrations spawned by the FDIC’s
lengthy opinion dated July 22, 2005, 105 LRP 48317, the arbitrator issued
days before taking action. Cf. 5 USC § 7122(b) (30 days to file exceptions
September 16, 2005, the first-level review panel issued the following
decision:
On July 22, 2005 Arbitrator Cornelius issued his Opinion and Interim
Award In the Matter of the Arbitration between the National Treasury
Employees Union and the Federal Deposit Insurance Corporation,
FMCS Case No. 040727-07090-1, Grievant Gail B. Hart, instructing
FDIC management to reconsider your nomination for the Corporate
41
Success Award (CSA).
42
contributors of the Atlanta Region DSC bargaining unit employees.
Therefore, you will not receive a CSA for your contributions in 2003.
______________
1
Former ARD Smith retired from the FDIC in December, 2004.
Nevertheless, once apprised of Arbitrator Cornelius’s Opinion and
Interim Award, she agreed to participate in the reconsideration of your
CSA nomination.
Inasmuch as neither Grievant nor the Union has filed any objection to
43