Department of Defense, Defense Logistics Agency, Defense Distribution Depot, Susquehanna, New Cumberland, PA and Local 2004, American Federation of Government Employees, AFL-CIO, Case No. 02 FSIP 89, August 23, 2002

In ordering the parties to adopt the employer’s proposal under which all monetary awards are to be given at the discretion of management, FSIP said that "[p]hilosophically, the Panel believes that limitations upon the discretion to distribute performance and incentive awards should not be unilaterally imposed upon management."

The union proposed the following:

• a mandatory award of $200 to any employee with an excellent safety record for the fiscal year;
• budget permitting, a mandatory award of $200 to any employee with a "fully successful" performance rating with union officials on 100% official time receiving "an amount equal to the employees who meet the criteria for performance;"
• the employer retains discretion to issue other monetary awards, provided they are justified in writing and subject to final approval by the deputy for depot mission or the deputy for depot support; and
• award nominations and decisions to be reviewed by the union for the purpose of making recommendations and/or pointing out discrepancies or possible abuses.

The employer proposed that:

• all monetary awards be given at the discretion of management.
• all awards to be justified in writing and approved by the Commander or Deputy Commander.
• the union could review management submissions and decisions on awards and make recommendations and comment on discrepancies, possible abuses of the procedure, including issues of fairness or equitability.

Before turning to the issues presented by this case, the Panel said the following:

Philosophically, the Panel believes that limitations upon the discretion to distribute performance and incentive awards should not be unilaterally imposed upon management. While employers and unions are free to reach agreements through collective bargaining which cede some or all of management's discretion in this area, the Panel is reluctant to impose mandatory incentive awards where the parties have not done so voluntarily.

In evaluating the union proposal, the Panel noted that giving employees with a performance rating of "fully successful" a $200 cash award "would reward employee performance that may be merely satisfactory." Not only would the union proposal limit management’s ability to reward excellent performance, it would "constrain management’s ability to issue discretionary awards because budgeted award money for FY 2002 may have to be used, for the most part, to fund mandatory awards."

The employer’s proposal, by contrast, gave management discretion to provide performance-based incentives to appropriate employees. Nor was such discretion unchecked: awards had to be justified, in writing, and approved by higher-level officials. "Moreover, the Union would have a role in assessing whether awards are distributed fairly . . . because the proposal permits it to review every submission and decision, make recommendations, and identify any discrepancies or possible abuses of the awards procedure."

The Panel accordingly ordered adoption of the employer’s proposal.

The most striking feature of this decision is the Panel’s statement that it believes that "limitations upon the discretion to distribute performance and incentive awards should not be unilaterally imposed upon management." The Panel’s statement of philosophy leaves no doubt on how it will treat proposals imposing such limitations and effectively transforms such proposals into an elective subject of bargaining.

It should be noted that the union’s proposal would have applied to employees who are under a 3-level rating system. This wasn’t mentioned in FSIP's Decision and Order, perhaps because it wasn’t thought to be relevant, given the Panel's statement of philosophy.

The decision also says nothing about that portion of the union’s proposal in which union officials on 100% official time would "receive an amount equal to the employees who meet the criteria for performance[.]" We therefore remind our readers that FLRA's General Counsel has taken the position that union representatives may not be rewarded by management for their participation in protected union activities. See, in this connection, the General Counsel's 8/8/95 memo to FLRA regional directors on Duty to Bargain re Work Groups at www.flra.gov/gc/team_mem.html.) Also see Naval Underwater Systems Center, 42 FLRA 1285 at 1292, where FLRA said the following:

Based on our reading of 5 U.S.C. Chapter 43 and its implementing regulations, . . . we conclude that . . . job performance may not encompass duties and responsibilities performed on official time on behalf of a labor organization. Instead, we find it clear that such job performance is intended to encompass an employee’s performance of agency-assigned duties and responsibilities. . . . Union duties are not assigned by the Agency. See generally Bureau of Alcohol, Tobacco and Firearms v. FLRA, 464 U.S. 89, 105 (1983) ("Congress did not provide that employees engaged in collective bargaining are acting in their 'official capacity,' 'on the job,' or in a 'duty status.'"

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