A recent FLRA decision expands the remedies available to an arbitrator in fashioning an award.
In FDIC, Division of Supervision and Consumer Protection, San Francisco Region and NTEU Chapter 273, 65 FLRA 102 (2010), the FLRA changed its analysis regarding an arbitrator’s award of a remedy when it has been found that the agency has violated the law or contract. No longer is the arbitrator required to limit the remedy to what the agency would have done. That case eliminated the second prong of the BEP test. U.S. Dept. of Treasury, Bureau of Engraving and Printing, Washington, D.C., 53 FLRA 146 (1997).
The case was before the FLRA due to the FDIC’s filing exceptions to an arbitrator’s award that found the agency violated the agreement when it failed to provide an employee a corporate success award. The arbitrator found that, although the agency has discretion in selections, the agency’s deviation from the procedural guidelines for selection makes the conduct by the agency flawed. The violation of procedural guidelines deprived the employee of fair and equitable consideration for receipt of the award. He ordered the agency to grant the employee the corporate success award and make him “financially whole” because of the “Agency’s compromise of the selection process.”
The FDIC filed exceptions, one of which claimed the arbitrator’s ordering the agency to grant the award with back pay without specifically finding that the agency would have approved the award absent the contract violation was contrary to the BEP standard of review. In BEP, an arbitrator’s award was analyzed under a two part test: 1) whether an arbitrator’s award that affects a management right provides a remedy for a violation of a law or contract provision and 2) whether the arbitrator’s remedy reflects a reconstruction of what the agency would have done absent the violation. If either prong was not met, the award would be deficient.
The FLRA reexamined the “reconstruction” standard reflected in BEP’s second prong and determined that “such a standard is not required by the Statute and, indeed, unduly limits the appropriate remedial authority of arbitrators.” It is sufficient that an arbitrator’s award that affects management rights provides a remedy for a violation of an applicable law or contract provision. The FLRA determined that the restriction on the arbitrator’s remedial authority under the second prong of the BEP test is unwarranted. “This broad remedial authority exists, even if due to insufficient record evidence or other reasons, the arbitrator does not “reconstruct” what management would have done but for the legal or contract violation.” The FLRA determined that Authority decisions that impose a reconstruction requirement will no longer be followed.
This decision confirms that arbitrators have broad remedial authority. This may have a positive impact on ATC and non-ATC units alike because arbitrators are not restricted to only awarding a remedy based on what the agency would have done absent a violation. As long as the remedy is related to the negotiated provisions and addresses the harm, an arbitrator may be able to provide a meaningful remedy that was not contemplated by the agency. Therefore, including specific remedies (even non-traditional ones), in addition to “any other remedy deemed appropriate,” within a grievance may provide an arbitrator with a framework to provide relief.