Federal Mediation and Conciliation Service

Transcription

1 Federal Mediation and Conciliation Service American Federation of Government Employees, Local 3911, AFL-CIO And FMCS Case No Arbitrator David J. Weisenfeld United States Environmental Protection Agency, Region 2 CERTIFICATE OF SERVICE I, Conrad J. Franz, state that I have on this date, June 13, 2014, served a copy of the enclosed post hearing brief in the matter of FMCS Case # by first class certified mail addressed to: Ms. Amanda Stulman, Assistant Regional Counsel Office of the Regional Counsel U.S. Environmental Protection Agency, Region Broadway, 16 th Floor New York, New York Stulman.Amanda@epa.gov Dated: June 13, 2014 Conrad J. Franz

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3 Federal Mediation and Conciliation Service American Federation of Government Employees, Local 3911, AFL-CIO And FMCS Case No Arbitrator: David J. Weisenfeld United States Environmental Protection Agency, Region 2 BRIEF FILED BY THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 3911, AFL-CIO Filed By: Conrad J. Franz, Steward American Federation of Government Employees, Local 3911, AFL-CIO 290 Broadway, 23 rd Floor New York, NY Franz.Conrad@EPA.GOV

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5 Table of Contents I. THE ISSUES TO BE DECIDED II. ADMISSIBILITY OF UNION EXHIBITS A. The Agency Contention B. The Contract Provision at Issue C. The Agency s Complaint Has Been Remedied as Provided by the Contract D. The Agency s Hands Are Unclean With Respect to Providing Evidence to the Union E. Each Disputed Union Exhibit was Introduced After Testimony on the Matter... 5 F. Summary Argument as to Why the Union Exhibits Should be Accepted into Evidence III. FACTUAL BACKGROUND A. Undisputed Facts Established Prior to the Hearing B. Relevant Facts Developed During the Course of the Hearing Testimony of Donna Vizian Testimony of Anthony Falconeri Testimony of Conrad Franz Testimony of David Bloom Testimony of Mitchell Berkenkemper Testimony of Maryann Froehlich Testimony of Carol Terris Testimony of Michael Negrelli IV. PERTINATE CONTRACT PROVISONS V. UNION ARGUMENT FOR EACH ISSUE A. Issue 1: Was the Agency s May 11, 2013 grievance response untimely? Testimony Related to the Timeliness Issue Documents Relevant to the Timeliness Issue Contract Language Specific to the Timeliness Issue The Agency Response Was Untimely The contract does not bar consideration of this issue Inarbitrability of Untimely Agency Grievance Replies has been Upheld by the FLRA The Remedy Sought by the Union for the Agency s Untimely Grievance Reply B. Issue 2a: Was the Union s April 11, 2013 grievance untimely? Testimony Relevant to the Issue of Grievance Timeliness Documents Relevant to the Issue of Grievance Timeliness Contract Language Applicable to the Issue The Agency s Claim of Union Untimeliness Must be Denied as Untimely The Agency s Timeliness Argument, Even if Timely, Lacks Merit The Union s Grievance was Timely Filed a. The Grievance Was Timely Under the Reasonable Awareness Standard b. The Grievance Was Timely Under the Date Certain Standard c. The Reasonable Awareness Standard and National Level Discussions Remedy Sought Regarding the Question of the Timeliness of the Union s Grievance C. Issue 2b: Was the Union s grievance filed by an inappropriate representative? The Agency s appropriate representative issue is barred as untimely Testimony Demonstrates this was a Local Grievance Filed by a Local Representative

6 3. The Documentation Demonstrates this is a Local Grievance Testimony Explaining Why a Local Grievance Was Filed with a National Representative Union Interpretation of the Contract Language Relevant to the Issue a. Interpretation Based Solely Upon the Language in the Disputed Article b. Interpretation Based Upon the Contract as a Whole The Supplemental Agreements Article 40 Is Inapplicable To This Issue The Statute Requires Unions Be Able to File Party Grievances No Evidence Was Entered Rebutting Mr. Franz s Authority to File the Grievance The Agency Position on Appropriate Filing is Inconsistent Prior Agency Statements The Agency Actions At Hearing Are Inconsistent With Their Own Arbitrability Issue Rebuttal of the Common Sense Rationale for the Agency s Position The Union Determines Its Own Representatives Remedy Sought with respect to the Issue of Mr. Franz s Authority D. Issue 2c: Is the subject of grievance, i.e., the management budget right, grievable? Testimony Relevant to the Issue of the Arbitrability of Management Rights The Scope of Statutorily Permissible Bargaining Does Not Determine Arbitrability U.S.C Does Not Provide a Basis for Finding the Grievance Inarbitrable a. Article 4 Parallels or Paraphrases 5 USC 7106(a) (1) b. Prohibiting Grievances over Management Rights would Produce Absurd Results E. Issue 2d: Did the Union s failure to timely demand to bargain furloughs render the grievance inarbitrable? Testimony Relevant to the Lack of Bargaining Contract Language Applicable to this Arbitrability Issue The Agency s Failure to Bargain Arbitrability Claim Must be Denied as Untimely The Agency s Arbitrability Issue is not a Bona Fide Arbitrability Question At All There is no Known Precedent for this being a Bona Fide Arbitrability Question The Agency Untimely Proposal Response Issue is a Red Herring The Grievance is Arbitrable Despite the Council s Alleged Bargaining Waiver F. Issue 2e: Does the remedy requested by the Union in its April 11, 2013 grievance render the grievance inarbitrable? Testimony Relating to Budgetary Rights Abrogation The Contract Requires that the Grieving Party Identify a Potential Remedy Joint Exhibit 7 Demonstrates the Agency s Argument Has No Merit The Arbitrator is Free to Fashion His Own Remedy There is No Contractual or Statutory Support for the Agency s Arbitrability Argument A Management Rights Claim Concerning a Requested Remedy Is Premature The Remedy Originally Sought Would Not Abrogate Management s Statutory Budget Rights The Authority Previously Addressed Budget Rights and Transit Subsidies The Authority Has Determined that Transit Subsidies Constitute Pay G. Issue 3: Did the Agency's decision to maintain the transit subsidy, despite budgetary issues relating to the sequester and the need to furlough staff, breach the master Collective Bargaining Agreement. If so, what shall be the remedy? Testimony Related to Furlough and Transit Subsidy Decisions The Applicable Contract Provision Article 8, Section 1 Is Clear and Unambiguous

7 4. Avoidance of Surplus Words / Every word has Meaning Custom and Past Practice of the Parties and Government Sector The Continuance of the Transit Subsidy during a Furlough Was Unfair VI. THE REMEDY BEING REQUESTED A. The Remedy Sought by the Union B. The Remedy Sought is Consistent with the Appropriation Law C. Article 8, Section 1 Permits a Back Pay Remedy Listing of Hearing Exhibits Attachments... 75

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9 Federal Mediation and Conciliation Service ) American Federation of Government Employees, ) AFL-CIO, Local 3911, Union ) ) FMCS Case No And ) Arbitrator: David J. Weisenfeld ) United States Environmental Protection Agency, ) Region 2, Agency ) ) I. THE ISSUES TO BE DECIDED. At the hearing, three issues were established, as follows: 1. Was the Agency s May 11, 2013 grievance response untimely? If so, what shall be the remedy? 2. Is the grievance arbitrable? a. Timeliness of the grievance b. Not filed by appropriate authorized representative c. Subject of grievance (management right) d. Union failed to timely submit bargaining proposal on issue e. Requested remedy. 3. Did the Agency's decision to maintain the transit subsidy, despite budgetary issues relating to the sequester and the need to furlough staff, breach the master Collective Bargaining Agreement. If so, what shall be the remedy? II. ADMISSIBILITY OF UNION EXHIBITS. A. The Agency Contention. The Agency contends that the Union did not provide the Agency with the Exhibits that the Union intended to enter into evidence at the hearing. As a remedy, the Agency seeks to have eleven of the Union s fourteen exhibits excluded from the record. B. The Contract Provision at Issue. Article 39, Section 6 states that: No later than five (5) work days prior to the arbitration, the Parties will make available

10 all evidence and proposed witnesses then within its knowledge to the other party. On the last work day prior to the arbitration the parties will meet to exchange all evidence and proposed witnesses which they intend to enter into the proceeding. If evidence or information becomes available to a Party prior to the start of the proceeding which has not been made available to the other Party and it is intended to enter that evidence or information in the arbitration, the other Party will be provided that evidence or information immediately. If the information or evidence is substantial, at its discretion, the other Party may obtain a postponement of the arbitration for one (1) work day, or until the arbitrator s next available date, whichever is less. C. The Agency s Complaint Has Been Remedied as Provided by the Contract. As the plain language Article 39, Section 6 makes clear, the remedy for a Party failing to provide evidence that it intends to enter into evidence is for the complaining Party to obtain a postponement of one work day or the arbitrator s next available hearing date. The last Union exhibit to which the Agency objected on the basis of the Union s claimed failure to provide the exhibit in advance was marked on March 19, The Parties reconvened for a third day of hearing on April 23, 2014, i.e., more than 30 days after the last of the offending exhibits were presented by the Union. On April 23, the Agency did not find it necessary to revisit any of the disputed exhibits or elicit testimony regarding any of the disputed exhibits. Therefore, the Agency was apparently unharmed by the Union s offering evidence for the first time at the hearing and the Agency has already received the remedy provided by the Contract for the Union s claimed offensive behavior. Therefore, there is no reason to exclude any of the Union s exhibits on the basis of Article 39, Section 6. D. The Agency s Hands Are Unclean With Respect to Providing Evidence to the Union. Prior to the first day of hearing, the Parties engaged in a teleconference with the arbitrator to discuss witnesses the Agency was willing and unwilling to provide, and the information that the Union had sought from the Agency and the Agency had refused to provide. The Agency convinced the arbitrator that the Agency should not be compelled to produce the evidence the Union requested from the Agency (See Union Exhibit 8) as it was subject to an outstanding unfair labor practice charge. The Union had requested the information in July of 2013, and the Agency responded in August 2013 (Union Exhibit 9) that the Union did not require the requested information. There is no dispute that the Agency continues to maintain that position. Despite arguing that the Union had no need for the information requested, the Agency entered into evidence and/or elicited testimony that that was responsive to the Union s request. In its July 2013 information request, the Union requested Copies of all documents (Agencywide) created on or after October 1, 2012 that referred to the continuance/discontinuance of the transit subsidy program at any particular funding level in the face of anticipated or actual budgetary shortfalls in FY The Agency responded on August 29, 2013 stating: The 2

11 Union has failed to articulate a particularized need. Yet, the Agency entered Agency Exhibit 4 which stated in item 14: Eligible EPA employees will continue to receive the transit subsidy The current monthly transit subsidy will be maintained for the balance of FY Similarly, the Agency entered Agency Exhibit 9 which would have been responsive to the Union s request above. Agency Exhibit 9 included four letters, two to the Senate and two to the House, outlining the fact that the Agency would 1) not exceed one furlough day per pay period 2) apply carryover judiciously 3) apply an 11% reduction to all grants programs. and 4) defer certain central costs such as an increment in transit subsidy During the hearing, Mr. Bloom provided testimony indicating documents were created that referred to funding levels for transit subsidy that would have been responsive to the Union s request but that the Agency had alleged the Union had no need. Mr. Bloom testified as follows: Q. In the course of your doing this analysis, did you assess the cost of the transit subsidy program? A. When the legislation was passed to increase the transit subsidy, we did look at the overall cost to the Agency of increasing transit subsidy. Q. Did you develop a specific briefing document on that issue? A. I don't recall a specific briefing document. We did analysis to understand that there is an additional cost. And then brought it to the CFO to determine whether or not we would make any changes in the transit subsidy benefit to employees. TR: 170:3-18. The Union also asked for cost data in its information request as outlined below and the Agency refused to provide responsive documents to the following items: 4a. Summarized payroll expenditures for EPA Headquarters along with payroll expenditures for each Region for FY b. Summarized Transit Subsidy expenditures for EPA Headquarters personnel along with Transit Subsidy expenditures for each Region in FY EPA s payroll expenditures for the first half of FY 2013 in each of the following appropriations: 7. EPA s Transit Subsidy expenditures for the first half FY 2013 in each of the following appropriations: Despite refusing to provide the information requested above, Ms. Stulman elicited testimony on behalf of the Agency addressing both payroll and transit subsidy costs. Two examples include: 3

12 Example 1: Q. You had mentioned earlier the STAG account. Does the STAG account have any transit funds in it? A. No. Q. Does the B and F account have any transit funds in it? A. No, it does not. Q. Do B and F and STAG contain any payroll funds? A. No. (TR: 214:18-215:4). Example 2: Q. And we had talked about payroll being located in many of these funds, you noted a few where there is no payroll at all. Does one of these funds dominate in terms of the number of EPA employees who are paid out of it? A. Yes. Q. Which fund? A. The EPM fund. Q. Do you know approximately in mid fiscal year 2013, how many employees were paid out of EPM? A. It's over 60 percent. Q. And about halfway through fiscal year 2013, do you know how much money was in the EPM transit subsidy account? A. My estimate is since we're halfway through, it was probably approximately $4 million. Q. What is the fund that has the next largest group of employees, would you say? A. Superfund, SF, excuse me, SF, to be consistent with this chart. Q. And talking in the same time frame, what would be your estimate for how much money was in the transit subsidy account for the SF employees? A. Over a million. (TR: 216:23-218:3). Since the Union had no payroll or cost data, and the Agency refused to provide the information, the Union was compelled to learn the following for the first time at the hearing: Q. Do you know the cost of the subsidy to the region? A. About a million. (TR: 75:20-22). Q. What funding line does [transit subsidy] come in under? A. It comes into payroll. Q. Payroll? A. Yes. Q. Could it be used for salary? A. With headquarter's approval. (TR: 77:24-78:6). 4

13 Q. In Region 2, is all of the transit subsidy and all of the payroll in the same program area? A. No. (TR: 93:18-21). Q. What is the cost of the transit subsidy to EPA on a yearly basis? A. Transit subsidy overall costs have been coming down. In '13, the budgeted amount was a little over $13 million. I'm sorry, a little over $11 million, excuse me. TR: 175:7-12. Q. $11 million would be equivalent to how many hours of furlough? A. We had estimated that a daily cost of a furlough was, I believe it was 8.7 million for eight hours. So I would assume, I haven't done the math, but maybe 12 hours, thereabouts. 11 hours, 12 hours. TR: 175:24-176:6. In summary, it would be inequitable to hold the Union accountable for failing to provide documents to the Agency one and five days prior to the hearing, when the Union requested and was denied documents that were either entered into evidence by the Agency or the Agency elicited testimony which would have been contained within the documents the Agency refused to provide to the Union. E. Each Disputed Union Exhibit was Introduced After Testimony on the Matter. Union 1: No objection was raised regarding this document. TR: 87: Union 2: This exhibit contained a number of reprogramming s done by the Agency in BOC 10. This exhibit was not entered on direct or cross examination, but rather near the end of the Union s redirect. From this it should be inferred that the Exhibit was not originally intended to be entered into evidence, but Ms. Vizian s testimony on reprogramming and payroll BOC 10 by Agency Counsel (TR: 91:17-94:4) and Ms. Vizian s answers on redirect prompted the Union to enter this exhibit at TR: 106:22. Union 3: No objection was raised regarding this document. TR: 127:19-129:9. Union 4: This exhibit was Mr. Falconeri s response to a Grievance of the Parties in which Mr. Falconeri wrote: The issue of pay is not controlled at the local level. * * * To the extent that the Union s Grievance challenges the sufficiency or adequacy of this information, the Union s concerns are best directed to the Agency s Headquarters component. This document was entered after Mr. Falconeri obfuscated in his testimony in regard to the question of who would be the proper Agency representative for a Region 2 steward to file a grievance when no one at the Regional level had the authority to resolve the grievance. TR: 137:18-140:15. Union 5: This exhibit was Mr. Falconeri s response to an individual grievance, in which Mr. Falconeri wrote: Any Step 2 grievance should be filed with John Reeder of the Office of the Administrator Like Union 4, this document was entered after Mr. Falconeri obfuscated in his 5

14 testimony in regard to the question of who would be the proper Agency representative for a Region 2 steward to file a grievance when no one at the Regional level had the authority to resolve the grievance. TR: 137:18-140:15. Union 6: This exhibit was obtained from the Agency s intranet page and was available to all employees. It was composed of a number of questions and answers attributed to Robert Perciasepe, one of which was whether furlough hours could be reduced by eliminating transit subsidy. Prior to introducing this document, the Union attempted to obtain testimony addressing this specific question, but was unsuccessful, e.g., TR: 171:8-21; 172:15-173:25; 176:7-16; 179:20-180:5; 181:20-182:4. After five repeated attempts to obtain the information contained in Union 6 through testimony failed, the Union was compelled to introduce Union 6 beginning at TR: 196:4. Union 7: This exhibit was obtained from the internet, and it was a newspaper article dated January 11, 1994 which described EPA Region 3 s (Philadelphia, PA) transit subsidy program and it was entered into evidence at TR: 316:5. This exhibit was entered into evidence to rebut Mr. Falconeri s prior testimony that differing Regions could not fund transit subsidy at differing levels. (TR: 307:9-16 and TR: 313:3-8). This exhibit was also entered into evidence rebut Mr. Falconeri s prior testimony that: (1) transit subsidy was always a national program, (2) that Joint Exhibit 7 (1994 Transit Subsidy Agreement) covered Region 2 employees, (3) because Mr. Falconeri could not explain who the Parties to the Joint Exhibit 7 were and (4) because of Mr. Falconeri s inability to link the operational terms of the Joint Exhibit 7 to Region 2. (TR: 309:9-311:13; 313:18-314:22 Union 8: This exhibit was the Union s information request for this arbitration and was entered at TR: 327:17. This exhibit was entered in conjunction with Union 9 to rebut Mr. Falconeri s testimony that he always believed the Union s grievance was a national issue, not a local issue. (TR: 325:18 326:19). Union 9: This exhibit was the Agency s reply to the information request for this arbitration and it was entered at TR: 328:16. This exhibit was entered in conjunction with Union 8 to rebut Mr. Falconeri s testimony that he always believed the Union s grievance was a national issue, not a local issue. (TR: 325:18 326:19). Union 10: No objection was raised to this exhibit. TR: 359:25-360:12. Union 11: This exhibit was entered through Mr. Franz on the second day of hearing at TR 368:19-369:6. It was a series of s exchanged between Mr. Franz and Mr. Berkenkemper on August 6, 2013, in which Mr. Berkenkemper questioned Mr. Franz s authority to file a ULP for what was an alleged Agency-wide violation. This exhibit was entered in response to Mr. Falconeri s earlier testimony regarding a series of s (Union Exhibit 10) exchanged between Mr. Franz and Mr. Berkenkemper on June 28, 2013, in which Mr. Berkenkemper did not question Mr. Franz s authority to file the grievance at issue here. TR: 360:4-362:13. 6

15 Union 12: This exhibit was entered through Mr. Berkenkemper on the second day of hearing. It was a copy of a web-page from the Agency s intranet and entitled EPA Administrative Furlough Timeline. This document was entered to refresh Mr. Berkenkemper s memory as to when the furlough decisions were issued to employees. See TR: 519:14-520:12. Union 13 and 14: Near the close of the first day of hearing, the arbitrator stated that he wanted the Agency to provide a full set of all exchanges back and forth on [the maintenance of transit subsidy] issue. (TR: 271:3-16). And later the arbitrator stated: if the Agency wants to use [Agency 4 and 5] then they're going to have to produce any related documents, meaning anything else, any other documents relating to those discussions between 238 and the Agency on this topic rather than a pull of the one document plus the cover notice. * * * We re going to need the context of all of the documents between the council and the Agency TR: 287: On the second day of the hearing, the Agency introduced what Mr. Berkenkemper testified was the full set of exchanges back and forth on maintaining the transit subsidy. With respect to the Agency submissions, Mr. Berkenkemper testified six times that the Agency did not engage in any formal bargaining or exchange of formal proposals other than those documents the Agency introduced. Mr. Berkenkemper did this the first time at TR 468:23-469:3; a second time at TR: 471:2-9; a third time at TR: 471:22-472:7; a fourth time at TR: 490:8-9; and a fifth time at TR: 491:5-10, and a sixth time at TR: 491:25-492:4. It was not until after the sixth time that the Union introduced Union 13 and 14 to show that Mr. Berkenkemper was not a credible witness, and that the Union did not agree to an Agency proposal to maintain the transit subsidy at the current level. In sum, the disputed Union exhibits were entered to either rebut or clarify the testimony of management witnesses, i.e., Ms. Vizian, Mr. Falconeri, Mr. Bloom, and/or Mr. Berkenkemper and therefore, should be admitted into evidence. F. Summary Argument as to Why the Union Exhibits Should be Accepted into Evidence. The Union s disputed exhibits should be accepted into evidence for any or all the following reasons: The remedy provided by the contract for the alleged Union behavior has already been granted, i.e., at least a one day recess for the Agency to examine the documents. The Agency refused to provide information requested by the Union months before the hearing and the Agency entered some of the unsupplied information through Agency documents or testimony. The Agency has unclean hands. The Union s exhibits were submitted to rebut or clarify the testimony of hostile management witnesses. 7

16 III. FACTUAL BACKGROUND. A. Undisputed Facts Established Prior to the Hearing. On February 12, 2013, Ms. Donna Vizian sent an to all employees in EPA s Region 2 that stated in pertinent part (Jt. Exhibit 6): As you know, the Agency continues to operate under a Continuing Resolution that funds operations through March 27, 2013 at the FY 2012 levels. At this point, the Agency s full-year resource levels are still not known. * * * In addition, the Agency has decided to maintain the current maximum level of reimbursement for transit subsidy at $125 instead of increasing the maximum benefit to $245 as authorized under the American Taxpayer Relief Act. This decision will be reevaluated when they Agency has some clarity to the FY2013 budget. It is important to note that these actions have been implemented on a temporary basis until there is greater certainty in the FY2013 budget situation. We will continue to keep you apprised of major impacts to the region as the budget for this fiscal year evolves and more information becomes available. (Emphasis added). Neither Ms. Vizian nor her Deputy nor her Regional Comptroller apprised EPA s Region 2 employees of any budgetary issues subsequent to Ms. Vizian s February 12, (Jt. Exhibit 5) and prior to the Union s Grievance of the Parties on April 11, 2013 (Jt. Exhibit 2). On March 26, 2013, the President signed H.R. 933 which was entitled the Consolidated and Further Continuing Appropriations Act, Section 1405 of the Bill specifically outlined for the first time the amounts Congress had appropriated for EPA in FY 2013 in the Science and Technology, Environmental Programs and Management, Hazardous Substance Superfund, and State and Tribal Assistance Grants appropriations. With the passage of H.R. 933, EPA learned precisely what funds would be available for funding its programs, including of course, amounts available employee payroll, contracts, grants, and other necessary expenses. (Jt. Exhibit 2). On Monday April 1, 2013, the Agency began issuing furlough decision letters to employees. Beginning on Sunday, April 21, 2013, employees began taking Phase I furlough hours. The Phase I period lasted from April 21, 2013 through June 15, 2013, and required employees to take 32 furlough hours during that period. (Union Exhibit 12). On Thursday, April 11, 2013, Mr. Franz submitted, on behalf of the Union, the Union s Grievance of the Parties alleging that continuing to provide transit subsidies to employees in face of a purported necessity to furlough employees resulted in unfair and inequitable treatment to 8

17 employees. (Jt. Exhibit 2) On Monday, May 13, 2013, at 3:57 pm, Mr. Mitchell Berkenkemper ed Mr. Franz the Agency s response to the April 11, 2013 grievance of the Parties. Mr. Berkenkemper alleged the grievance was untimely by nearly 20 years. He also alleged the Union was untimely as the grievance was not filed within 30 days of the February 12, from Ms. Vizian. (Jt. Exhibit 3). In addition to the timeliness claim, Mr. Berkenkemper asserted the grievance was not arbitrable because an arbitrator would have no authority to compel the Agency to modify its budget allocation with respect to the transit subsidy program. (Jt. Exhibit 3). As to the merits, the Agency asserted the Union provided no evidence to support the allegation as to the unfairness and inequity of the Transit Subsidy [Program] to employees without ready access to public transportation. (Jt. Exhibit 3). B. Relevant Facts Developed During the Course of the Hearing. 1. Testimony of Donna Vizian. Donna Vizian acknowledged that the Agency s decision was to maintain the transit subsidy at $125 per month as outlined in her February (Jt. Ex. 6) was to be reevaluated by Headquarters at a later date. She testified that the anticipated reevaluation of the level of funding for the transit subsidy could have resulted in either an increase or decrease of reimbursement levels for employees. She testified that at the time she sent the , the Agency had not yet sent furlough notices to employees. TR: 74: Ms. Vizian testified that the funding for the Region s transit subsidy program comes from the Agency Headquarters. TR 76:15 76:21. She furthered testified that the funds come into payroll accounts and that the transit subsidy funds could have been used for payroll with Headquarters approval. TR 77:24 78:6. Ms. Vizian testified that she participated on conference calls with Agency Headquarters which discussed the EPA budget, and on those calls, the Region s were informed of Headquarter s decisions on transit subsidy. Ms. Vizian indicated that such decisions would have come in a memo from Mary Ann Froehlich, the Agency s Chief Financial Officer. TR 79:23 80:16: Ms. Vizian testified that a decision was made in April 2013 to maintain the transit subsidy at $125 per month, and that the Regions were informed of this in a memo. Ms. Vizian was asked to produce the memo, and she did. TR: 83:4-19. The memo Ms. Vizian provided was dated April 11, 2013 (Union Exhibit 1), the same date as the Union s grievance concerning the continuation of the transit subsidy while at the same time furloughing employees (Jt. Ex. 2). 9

18 2. Testimony of Anthony Falconeri. a. Timeliness of the Agency Grievance Response. Mr. Falconeri testified that he has experienced situations in which an Agency grievance response would have been due to the Union on a Saturday or Sunday. He could not recall ever providing the Agency s grievance response the next workday, e.g. a Monday. He testified that it was his practice to provide the Agency s response prior to the Saturday or Sunday to avoid disputes over timeliness. TR 125:10 126:8. Mr. Falconeri testified that he asked other locations if they had any documentary evidence indicating the Agency made an argument that a grievance filed on a Monday that was due on prior non-workday was therefore untimely, and he said they had no such documents. TR: 302:9-303:9. Mr. Falconeri affirmed that Saturdays and Sundays count as days when calculating timeliness, and that he could not recall accepting as timely any Union grievance past the calendar day deadline. TR 133:8-19. Mr. Falconeri also testified that he could not recall the Union ever filing a grievance on a Monday, if the due date was on a weekend. He specifically stated: we usually get them on Fridays TR: 324:9-16. b. National vs. Regional Grievance and Authority to File. Mr. Falconeri testified that his understanding was that funding decisions for the transit subsidy were made by Agency Headquarters. TR: 306:23-307:4; 307:9-17. He also testified he was unaware of when the control of the Transit Subsidy was transferred from the Regions to Agency Headquarters. TR: 321:19 322:21. He testified that the grievance in this case was a national issue and that he has always been of that opinion. He based that conclusion on the fact that the funding decisions are made nationally. TR: 325:18-326:19. He also later testified that he believed the grievance was a national grievance because it was filed with Acting Administrator Bob Perciasepe. TR: 347: Mr. Falconeri was shown an August 29, he sent to Mr. Franz (Union Exhibit 9), and he was asked to read the first paragraph in which he wrote Local 3911 does not represent employees outside Region 2. As such, it has not shown a particularized need for information from other locations. TR: 330: Mr. Falconeri was then shown the Agency s grievance response (Joint Exhibit 3) dated May 13, 2013, and he could not find any indication that the Agency claimed that the Union s grievance was a national issue rather than a local issue. TR: 333: Given that the Agency is asserting that Local 3911 Steward Franz was not a designated representative of Council 238, and thus could not file a national grievance, and that Mr. Falconeri had testified that the Union s grievance was a national grievance, Mr. Falconeri was asked if he had been designated as a national representative of the Agency for the purposes of this hearing. He stated that he was not aware of such a designation, and he stated that he was not aware of Ms. 10

19 Stulman being designated a national representative either. TR: 343:3-12. He further testified that he was not aware if Council 238 had been notified that Ms. Stulman and Mr. Falconeri were the Agency s national representatives in this matter. He understood that he and Ms. Stulman were handling the grievance because it was raised by Region 2 s Local 3911 and they would handle the arbitration because they are Region 2 representatives. TR: 344:25-346:3 Mr. Falconeri testified that the grievances must be filed with the person who has the ability to make a decision or provide a remedy. TR: 348: He then testified that since Region 2 has no authority over the transit subsidy program, then the only recourse would be to file the grievance with Headquarters. TR: 348:24 349:12. He testified that he was unaware of: (1) any attempt by the Agency to contact Council 238 to raise the Agency s concern that Mr. Franz had no authority to file the grievance, (2) he was unaware of any attempt by Council 238 to withdraw the grievance, (3) he was unaware of the Agency filing a grievance with the Union alleging Mr. Franz had no authority to file the grievance. TR: 349:18-350:24. Mr. Falconeri was asked who selected the arbitrator for this grievance. He testified and he and Mr. Franz selected the arbitrator. TR: 347:3-14. He also testified about an chain regarding the selection of the arbitrator in this case (Union Exhibit 10). Mr. Falconeri testified that the identified Mr. Falconeri as the Agency s point of contact for the selection of the arbitrator, and that Council 238 was not included as a recipient of the message to Mr. Franz from Mr. Berkenkemper. TR: 362:3-21. Mr. Falconeri discussed the question of the appropriate office with which the Union should file a grievance in conjunction with his July 12, 2013 response to a Union Grievance of the Parties concerning proper payment of standby pay during the furlough. (Union Exhibit 4.) He confirmed that in the Agency s response to a Regional Grievance of the Parties, he wrote to the Union and stated the Union s concerns are best directed to the Agency s Headquarters component. He further testified that the Union would determine who would be the appropriate person to file the grievance. TR: 153:9-17. c. Budget is a Nonnegotiable Management Right. Mr. Falconeri could not explain how it was possible for Union s in Agency Headquarters to negotiate a Transit Subsidy agreement in 1994 in which specific dollar amounts were negotiated (Jt. Exhibit 7), if management s right to determine its budget was non-negotiable. TR: 322:22-323: Testimony of Conrad Franz. a. Timeliness of the Agency Grievance Response. Mr. Franz testified that he has been a Union representative for about 17 years. He testified that the Agency has never waived the timeliness requirement on any Union grievance submitted after 11

20 the submission deadline. Mr. Franz also testified that the Agency has never responded to a Union grievance on the first workday following a Saturday or Sunday filing deadline, but rather the Agency always replied prior to the Saturday or Sunday filing deadline, except in the current case. He further testified that at no time has any Agency representative suggested to him that if a grievance deadline fell on a Saturday or Sunday, that the grievance deadline shifted to the following Monday. TR: 157:2-17. Mr. Franz testified that he expected that the Agency would claim a grievance was untimely if he had filed a grievance on the first workday following a Saturday, Sunday, or holiday filing deadline. TR: 161: Mr. Franz expanded upon Mr. Falconeri s testimony regarding a grievance Mr. Franz sent by US mail rather than by hand delivery (Union Exhibit 5). Mr. Franz testified he mailed the grievance by certified mail from the James A. Farley post office on a Friday (March 21) at 6:25 pm, and the Agency received it the following Monday (March 24). TR: 162:17-163:22. b. National vs. Regional Grievance and Authority to File. Mr. Franz testified that Region 2 began paying a transit subsidy in 1992 and it was funded locally. TR: 364: He testified that Council 238 existed at least as early as 1984/1986, and that he was unaware of any transit subsidy agreement ever being negotiated by the Council anywhere in the Agency. He testified that locally there has never been a negotiated transit subsidy agreement dealing with using subways or trains, but recently an agreement was reached on a bicycle subsidy. He testified he had no idea as to when funding and oversight for the transit subsidy program was transferred from the Regional to the Agency level, nor was he aware of any notification to the Union of that occurring. He testified that the June 1994 Transit Subsidy agreement (Joint Exhibit 7) did not apply to Local TR 365:13-367:5. Mr. Franz was asked if anyone in the Agency had questioned his authority to perform an action for the Union. He testified that the first time that occurred was in July/August 2013 when he filed a ULP against the Agency for an Agency-wide violation. He testified that Mr. Berkenkemper claimed Mr. Franz had no authority to file a ULP because Mr. Franz s authority was limited to Region 2. Mr. Franz testified that he replied to Mr. Berkenkemper that anyone can file an ULP, and Mr. Franz was just as much an anyone as anyone else. (See August 6, chain marked as Union Exhibit 11). Mr. Franz testified that the FLRA did not inform him that he could not file a ULP, that he was not subsequently told by the FLRA that he could not file a ULP. TR: 367:6-369:13. Mr. Franz testified he was unaware of any contract provision placing limits as to who can file a grievance. Mr. Franz also testified that he took part in the negotiations of the current contract, and at no time during the negotiations when he was present did the Agency raise a question about the authority of filing grievances other than designated by the Union generally. TR: 369:14-370:3. 12

21 4. Testimony of David Bloom. Mr. Bloom testified that the decision to fund the transit subsidy at a particular level is made by Headquarters, not the Regions. TR: 225:2-6. He also testified that EPA had the power not to request funding for transit subsidy, and could just put the money it would have requested for transit subsidy elsewhere. TR: 232:7-19. With respect to the decision making related to the furlough, Mr. Bloom testified that he provided the data for the decision maker, but he was not the decision maker. TR: 169:22-170:2. Mr. Bloom testified that decisions of what to cut and what to keep were made by those above him, i.e., Chief Financial Officer (CFO) or Acting Administrator. TR: 250: With respect to the transit subsidy, Mr. Bloom testified that shortly after the law was passed authorizing an increase in the transit subsidy, an analysis was done to determine what the additional cost to the Agency would be to mimic the increase. The information was provided to the CFO, and it was determined that because the Agency did not yet have a final budget, and with the potential sequestration of the Agency s budget, a decision was made not to increase the transit subsidy. Mr. Bloom was then asked if eliminating the transit subsidy was ever considered, and Mr. Bloom stated he did not do such an analysis, but when he was preparing for the arbitration hearing he learned that such an analysis had been done earlier. Mr. Bloom testified that it would have been challenging to implement zeroing out the transit subsidy retroactively to the beginning of the fiscal year because it would have been difficult to get the money back. Mr. Bloom was asked if suspending the transit subsidy for just the last half of the year was an option, in lieu of zeroing out transit subsidy entirely, but he testified that suspending the transit subsidy was not analyzed. TR: 170:32-174:3 Later in the hearing, Mr. Bloom was shown Union Exhibit 6, which was a question and answer document from the Agency s intranet. He testified that he reviewed the answers to the questions in the document, and acknowledged that the answer to question 17 definitively states that the Agency could save money by eliminating the transit subsidy, but he could not explain why he had testified earlier that he was unaware of an analysis being done to cancel the transit subsidy until shortly before the hearing. TR: 197:21-199:5 Mr. Bloom testified that the issue of maintaining the transit subsidy was brought to the CFO for her to get a decision on moving forward with transit subsidy. TR 177: He further testified that Barbara Bennett, the CFO came back and informed him that the decision had been made to maintain the current transit subsidy, and he assumed it was based upon a discussion with the Acting Administrator Perciasepe. TR 181:17-182:4 Mr. Bloom testified that EPA had budgeted a little over $11,000,000 for transit subsidy Agencywide. TR 175:7-12. Mr. Bloom testified that the salary costs for eight hour day were about 8.7 million dollars Agency-wide, and the $11,000,000 spent on transit subsidy would have been the 13

22 equivalent of about 11 to 12 furlough hours Agency-wide. TR 175:23-176:6. Mr. Bloom testified that at the time of the furloughs, EPA had approximately 15,900 FTE, full time equivalent employees. TR: 216: Mr. Bloom explained that the Agency budget has 3 levels. The uppermost level is the appropriation level, the next level down is the program area, and the lowest level is the program projects level. Mr. Bloom testified that transit subsidy is within the operations and administration program project. TR 187:14-188:22. Mr. Bloom was shown Agency Exhibit 9, and he testified that transit subsidy funding was located in the facilities infrastructure and operations program project of the Operations and Administration program area of the EPM appropriation (Agency 9, Enclosure A, page 4); the S&T appropriation (Agency 9, Enclosure A, page 7) the LUST appropriation (Agency 9, Enclosure A, page 12); the Oil appropriation (Agency 9, Enclosure A, page 13); and the Superfund (SF) appropriation (Agency 9, Enclosure A, page 15). TR: 213:3-214:14. He further testified that no transit subsidy funding or payroll funding was included in the B&F and STAG appropriations. TR: 213:9-215:4. Most importantly, Mr. Bloom testified that transit subsidy is not a separate line item in the Agency s budget. TR 175: With respect to the appropriations identified above, Mr. Bloom testified that over 60% of EPA employees are paid from the EPM appropriation, and by mid-fy 2013, about $4,000,000 would have been remaining available to pay transit subsidies at that time. He testified that the next largest group of employees was paid from the Superfund appropriation, and that over a $1,000,000 would have remained in the Superfund appropriation to pay transit subsidy at mid-fy TR: 213:9-215:4 Mr. Bloom testified that suspending the transit subsidy for the remainder of the year would also have been challenging because, for the most part, the money would have to be moved from one budget line item to another budget line item, aka program project. Because the amount of funds being moved from one line item to another would have been either over 10% of the budget line item, or over $1,000,000, the movement of the funds would have required Congressional approval. TR 180:6-181:11. Mr. Bloom also testified that the same 10% / $1,000,000 notification requirement also applied to program area levels within the budget. TR: 224: Mr. Bloom testified that the Agency did in fact go to Congress requesting approval to reprogram funds to pay rent, but not to reduce furlough hours. TR: 240:15-241:2. He testified that the amount of reprogramming request was approximately $16,000,000 from a variety of sources. TR: 242:7-11. He noted that both rent funding and transit subsidy funding are in the same program area, and consequently the Agency could have reduced, but not eliminated, the $16,000,000 reprogramming request had the transit subsidy funding been applied to rent rather than continuation of the transit subsidy. TR: 241:11-243:20. Through Mr. Bloom s testimony the Agency made clear that few employee salaries are paid from the program project, i.e., Facilities Infrastructure and Operations, from which the their transit subsidy reimbursements are paid. He testified that the same was true of the program area, i.e., 14

23 Operations and Administration, program area. For example, Mr. Bloom testified that employees associated with facilities work such as property management, and overseeing the buildings themselves had both their salary and transit subsidy paid from the Facilities Infrastructure and Operations program project. TR: 223:8-19. Similarly, Mr. Bloom testified that employees whose salary and transit subsidy were both paid from the Operations and Administration were few, and included employees who engaged in contracting, grants, budgeting, planning, financial payments, property management, overseeing building management, and similar programs which support environmental programs of the Agency. However, those employees engaged in the environmental programs, e.g., scientists and engineers, had their salaries paid from a program area other than Operations and Administration, but their transit subsidy would have been paid from Operations and Administration. TR: 223:20-224:25 5. Testimony of Mitchell Berkenkemper. Mr. Berkenkemper testified that he has been the Director of Labor and Employment Relations at EPA for 3 years. He testified that he provides notice to the national unions on national issues, and that no notice was provided to AFGE Council 238 regarding increasing or decreasing the transit subsidy in He testified that he ed the Agency s proposal to furlough employees on February 26, 2013 at 3:45 pm (Agency Exhibit 13, 13A and 13B). He testified that the notice was in an attachment to the he sent, and that it was signed by Craig Hooks, Assistant Administrator of OARM, who is Mr. Berkenkemper s third line supervisor. Exhibit 13A directs Unions to submit furlough proposals to Mr. Berkenkemper and Exhibit 13B was a draft Memorandum of Agreement. TR: 453:19-458:13. Mr. Berkenkemper testified that the draft Memorandum of Agreement (MOA) (Agency Exhibit 13B) was later modified and sent as to the Unions on February 28, 2013 at 12:59 pm as shown by Agency Exhibit 14. The February 28, :59 pm MOA was revised based upon a teleconference with the Unions. Subsequently on March 13, 2013, at 9:12 am another set of MOAs was sent to all the Union s, and those are labeled as Agency Exhibits 15 15F, with 15F being specific to AFGE. TR: 458:14-463:13. Mr. Berkenkemper testified that the differences between the February 28 MOA (Agency 14) and March 13 MOA (Agency 15 15F) were changes in: furlough start date, reassessment period, and the furlough end date. Mr. Berkenkemper testified that Agency 15-15F was not a new proposal to the Unions because at this stage it was pre-decisional involvement. He testified that the parties initially met on February 20-21, then his shop crafted language for the Unions to review. The Unions later stated they wanted separate MOA s for each Union, and that is why Agency Exhibits 15-15F were sent to the Union s on March 13. Mr. Berkenkemper testified that none of this was formal bargaining and that it was not until Mr. Orzehoskie demanded formal bargaining that the bargaining process started. TR: 480:6-485:10. Mr. Orzehoskie demanded to bargain on March 13, 2013 at 2:04 pm. (Agency Exhibit 16). In light of Mr. Berkenkemper s testimony that Agency 15-15F was pre-decisional involvement 15

24 and that the formal bargaining did not start until Mr. Orzehoskie demanded to bargain, Mr. Berkenkemper was asked when the MCBA states the bargaining clock starts. Mr. Berkenkemper testified that the clock begins when management provides official notice of a management change, which includes a description of the change management wants to make, and sometimes how many days the Union has to respond. TR: 485:5-24. Mr. Berkenkemper was then directed to MCBA Article 40, Section 2, which he read as follows: In situations A and B described in Section 1 above, the Agency will notify the authorized agent of the Union in advance in writing of the proposed change [or] management decision and its impact. Mr. Berkenkemper was asked to point out in the Agency s notice to the Union (Agency Exhibit 13A) the section that provides the impact. He testified that the furloughing of the employees was the impact. TR: 486:4-488:8. Mr. Berkenkemper testified that Mr. Charles Orzehoskie, President of AFGE Council 238, sent him an dated March 13, 2013 at 2:04 pm, demanding to bargain the proposed furloughs. (Agency Exhibit 16). (The states it is in response to a proposed notice to furlough dated March 4, 2013). On March 18, 2013, at 3:30 pm Mr. Orzehoskie followed up his earlier March 13 with an stating Attached is AFGE Council s 238 s proposed changes to the MOA. (Agency Exhibit 5, pg. 2). Mr. Berkenkemper testified that Agency Exhibit 4 was the attachment to Mr. Orzehoskie s of March 18, 2013 (Agency Exhibit 5, pg. 2) and that the strike-outs and underlines on Agency Exhibit 4 were made by Mr. Orzehoskie or someone in his office. Mr. Berkenkemper testified that the underlined language was Union additions, including a proposal addressing transit subsidy. TR: 463:14-467:2. Mr. Berkenkemper testified that the Union proposed (among other things) that: Eligible EPA employees will continue to receive the transit subsidy in accordance with existing policy and procedures. The current monthly transit subsidy will be maintained the balance of FY Mr. Berkenkemper testified that the Agency did what the Union proposed. He also testified that the President of Local 3911, Edward Guster was cc ed on the . TR: 472:8-475:2 Mr. Berkenkemper testified that on March 19, 2013, he responded to Mr. Orzehoskie s March 18, and proposals (Agency Exhibits 4, and 5) by informing him that his demand to bargain was untimely and the Union had waived its right to bargain. Mr. Berkenkemper testified six times that after that point, the Agency did not engage in any formal bargaining or exchange of formal proposals, e.g., the first at TR 468:23-469:3; a second time at TR: 471:2-9; a third time at TR: 471:22-472:7; a fourth time at TR: 490:8-9; and a fifth time at TR: 491:5-10, and a sixth time at TR: 491:25-492:4. Mr. Berkenkemper was then shown an MOA signed by Craig Hooks (Union Exhibit 13) and an unsigned MOA (Union Exhibit 14). Mr. Berkenkemper testified that Union Exhibit 13 was probably authored by him or someone in his office. TR: 503:23-504:4. He testified the document was created after the Agency denied the Union s demand to bargain. TR: 506:9-12. He testified that the document was a follow-up on the Agency s offer in Agency Exhibit 5 dated March 19, to work collaboratively with AFGE. TR: 506:15-507:22. He testified that in item 12 the Agency wrote: Eligible EPA employees will continue to receive the transit subsidy in 16