Source: https://www.flra.gov/decisions/v45/45-060.html
Timestamp: 2017-01-16 21:54:43
Document Index: 402898345

Matched Legal Cases: ['art 2425', '§ 5343', '§ 5343', '§ 7512', '§ 7512', '§ 5343', '§ 5341', '§ 5596', '§\n5341', '§ 1346', '§ 5341', '§ 5341', '§ 1491', '§ 1346', '§ 1346']

45:0674(60)AR - - DOD, Army and Air Force Exchange Service and AFGE - - 1992 FLRAdec AR - - v45 p674 | FLRA
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[ v45 p674 ] 45:0674(60)AR
45 FLRA No. 60
0-AR-2083
of Arbitrator John Kagel filed by the Agency under section 7122(a)
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
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
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.
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.
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.
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
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
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
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
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
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,
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).
A. Positions of the Parties(*)
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
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.
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.
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)
(a) The district courts shall have original
jurisdiction, concurrent with the Court of Claims,
(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
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
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
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
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
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.
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.