Tom Skelly, Advocate Jason Treier, Advocate Syracuse, NY May 30, 2014 June 28, 2014 Articles 19, 32, Contract AWARD SUMMARY:

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1 , j. REGULAR ARBITRATION PANEL In the Matter of the Arbitration between UNITED STATES POSTAL SERVICE and AMERICAN POSTAL WORKERS UNION, AFL-CIO GRIEVANT: Class Action POST OFFICE: Syracuse P & DC USPS CASE NO: B06T-IB-C APWU CASE NO: BEFORE: Amy Lynne Itzla, Arbitrator APPEARANCES: For the U.S. Postal Service: For the Union: Place of Hearing: Date of Hearing: Date of Award: Relevant Contract Provisions: Contract Years: Type of Grievance: Tom Skelly, Advocate Jason Treier, Advocate Syracuse, NY May 30, 2014 June 28, 2014 Articles 19, 32, Contract AWARD SUMMARY: The grievance is sustained. On the substantial and credible evidence of this case as a whole, the Arbitrator finds that: 1 The Service violated the National Agreement when it failed to notify the Union, at the local level, when the decision was made to subcontract repairs around a drain cover at the Teall Post Office; and 2 The Service violated the National Agreement and the ASM when it made the decision to subcontract repairs around a drain cover at the Teall Post Office. The Service shall: 1 Comply with the notice requirement of Article 32, Section I.C, of the National Agreement; and 2 Provide monetary relief to the affected bargaining unit members in the amount it would have cost for the bargaining unit members to perform the work. The Union established that the work would have been performed within a regular eight-hour day by one employee. Therefore, the Service shall make payment equivalent to eight hours of regular pay at the then-current rate. The Service shall work with the Union to determine the manner in which that payment is to be distributed.

2 The United States Postal Service ("the Service" and the American Postal Workers Union, AFL-CIO ("the Union" are parties to a collective bargaining agreement ("the Agreement". The Agreement provides for the arbitration of unresolved grievances. In accordance, therewith, this Arbitrator was designated to hear and decide this matter. The parties have stipulated that the parties' Agreement is applicable to this grievance and arbitration. The parties appeared before the undersigned for an arbitration hearing on May 30, The parties had a full and fair opportunity to present evidence and argument, to engage in the examination and cross-examination of sworn witnesses, and to otherwise support their respective positions. ISSUE arbitration: At the hearing on May 30, 2014, the parties agreed to submit the following issues for 1. Did the Postal Service violate the National Agreement (Article 32.1.C when the Postal Service failed to notify the Local Union when the decision was made to subcontract repairs around a drain cover at the Teall Post office and, of so, what shall the remedy be? 2. Did the Postal Service violate the National Agreement (Article 32.1.A and the Administrative Support Manual (Section when the Postal Service made the decision to subcontract repairs around a drain cover at the Teall Post office and, of so, what shall the remedy be? RELEVANT CONTRACT PROVISIONS Collective Bargaining Agreement Article 32 Subcontracting: Section 1. General Principles A. The Employer will give due consideration to public interest, cost, efficiency, availability of equipment, and qualification of employees when evaluating the need to subcontract ~ -----

3 B. (l'his provision is not at issue in this case. C. When a decision has been made at the Field level to subcontract bargaining unit work, the Union at the Local level will be given notification. Administrative Support Manual (Incorporated by Article 19, Handbooks and Manuals, of the National Agreement 535 Maintenance Service Contracts Facility and Plant Equipment Contract service is encouraged for Postal Service-operated facility and plant equipment maintenance, when economically advantageous. BACKGROUND The Union's grievance, filed on April 22, 2009, alleges that the Service violated the Agreement by subcontracting the maintenance work for repairing the area around a drain cover in the parking lot area of the Teall Post Office. The grievance alleges that, prior to subcontracting the work, a work order for the repair, dated March 11, 2009, was properly issued by management to a bargaining unit maintenance worker,. The work order (Work Order #429 indicated a "due date" of April 15,2009. The assignment contained in the work order, under "Comments," read as follows: SAFETY ISSUE INSPECT AND REPAIR AS NEEDED. BLACKTOP AROUND CONFINED SPACE LOCATED IN DRIVEWAY TO PARKING LOT TEALL PLC The Service acknowledges that the work order was issued to the maintenance employee and he was assigned to "inspect and repair as needed." 3

4 DISCUSSION The Union maintains that the Service did not meet its obligations, as set forth in the Agreement, with regard to the subcontracting of the work. The Union is seeking compensation to the bargaining unit maintenance employees by whom the work would have been performed, but for the Service's contract violation. As a grievance alleging a contract violation, the Union bears the burden of proof in establishing that the work at issue was subcontracted, and that the decision-making process preceding the subcontract was not followed. Once that burden is met, the Service bears the burden to prove that it complied with the process governing the subcontracting of work. There is no dispute that Section of the Administrative Support Manual ("ASM" and Article 32, Section 1.A, places an obligation on the Service with regard to subcontracting decisions. The arbitral authority is clear in that the ASM permits subcontracting of maintenance work, "when economically advantageous." The determination of whether subcontracting is economically advantageous is a required consideration and prerequisite borne by the Service. Along with that required consideration, is the mandate of Article 32, Section l.a, of the National Agreement. The Service acknowledges that it is required to "give due consideration" to the five specific factors identified in the provision "when evaluating the need to subcontract." The provision clearly requires that an "evaluation" be conducted. The five factors to be given due consideration are: "public interest, cost, efficiency, availability of equipment, and qualification of employees." The Service does not have the discretion to disregard any of these factors, nor to add factors not contained within the clearly delineated list upon which the parties agreed. In the Service' s Step 2 decision, denying the Union's grievance at that level of the grievance process, Barry McCann, Labor Relations Specialist, states, in part, that, "[ c ]onsideration was given to the factors in Article 32, as well as the requirement in the ASM, before the project was contracted out." This established the Service's understanding of its obligations. There is no evidence in the record to demonstrate what occurred between the issuance of the work order and the decision to subcontract the work. Presumably, and conclusively in the absence of evidence to the contrary, management discovered the need for the repair and issued a work order to address the situation. The Service did not present any sufficient explanation for any change in circumstances that would have led management to change its determination that 4

5 the work should be performed in accordance with the work order. The critical question as to "what happened," between the issuance of the work order and the actions of the service in disregarding it, and, instead, subcontracting the work, has not been answered. In Mr. McCann' s Step 2 decision, he notes several of the factors considered in the decision to subcontract the work. One factor cited was that, "The drain was falling in and it was reported as a safety hazard in need of immediate repair." The work order issued to the maintenance employee characterized the condition as a "safety issue." This was not a factor learned subsequent to issuing the work order. Therefore, it can not serve as a basis for the subcontracting decision. Mr. McCann also cited as a factor considered: "No employees were available." The work order was issued to an employee, obviously considered to be available. In fact, the record persuasively establishes, and the testimony of the employee,, credibly substantiates, that he was very much available. It is important to highlight that, pursuant to Article 32, Section I.A, employee availability is not one of the specifically enumerated factors for consideration by the Service. Arbitrator Richard Mittenthal, in citing a previous arbitration award, reiterated that, "To consider other factors, not found in Paragraph A, would be equally improper." [Case No. A8-NA-051 0, quoting Case No. A8-NA-0481] Mr. McCann wrote that the Article 32 process was followed, and the required factors were considered, "before the project was contracted out." [Emphasis added] The fact that Mr. McCann included that statement in his Step 2 decision does not necessarily make it true. His Step 2 decision was neither a sworn statement nor a statement of his independent personal and direct knowledge. In his sworn testimony at arbitration, Mr. McCann confirmed that he had obtained the information on which he based his Step 2 decision from others "in maintenance." He stated, "I didn't make these decisions, I was just dealing with the grievance." Mr. McCann did not identify the source of the information. When asked about the written documentation of the Service's compliance with the Article 32 process, contained in the joint grievance file, Mr. McCann stated that he "believes that Ron Williams did it." Mr. McCann's self-described "vague familiarity" with this case, since it was "a long time ago," combined with his definite assertion that he was not the decision-maker, left the Service' s position unsupported and weak. The document titled, "Article 32 Considerations," contained in the joint grievance file further damages the Service' s case., the Maintenance Craft Director and Union Shop Steward who filed and handled this grievance, provided clear and specific credible 5

6 testimony. He explained that, at the time that he appealed the grievance to Step 2, through a form dated August 13, 2009, he had not yet received the written "Article 32 Considerations." He did not receive it until after the Step 2 meeting of September 10, Since Mr. McCann' s Step 2 decision, dated September 15, 2009, states that the union was provided with the written "Article 32 Considerations," that was done between September 10, 2009, and September 15, The two-page document is undated and unsigned. There is no author attributed to the document. Aside from the top of the first page indicating "Drain Cover Teall Ave," there is nothing in the body of the document describing the considerations specifically with regard to that repair work. It is not only a completely boilerplate document, it does not make any sense in the context of a drain cover repair. The following examples, taken from the document, demonstrate that the language used is not applicable to this work: Contracting the project provides the ability to hire the contractor possessing the necessary engineering level skills in the areas of construction, design layout, installation of systems, and testing to ensure contract compliance. [E]xperience installing the same or similar systems. The work in this contract is not routine to the in-house workforce, which considerably impacts efficiency. Most importantly this outsourcing is for a major system installation contractor... Employee installation would require the USPS to accept the systems prior to installation, adding a risk of the system not working properly and not knowing if it is the contractor or USPS installation. USPS installation would also put at risk the timely implementation of the program, thus delaying savings for the USPS. The existing in-house bargaining unit maintenance employees are semiskilled work force at maintaining existing systems and building equipment. However, maintenance employees trained in maintaining this equipment are not necessarily trained in repairing and installation of this magnitude. In order to accomplish this work using postal maintenance technicians, the work would have to be accomplished through costly overtime payments. 6

7 Giving due consideration to using in-house labor would require an enormous management workload in all affected sites. [Emphasis addedj The repair work described in the work order was "blacktop around confined space." The work performed by the contractor, as confirmed by its invoice, was "repair storm drain." According to the heading on the Service' s "Article 32 Considerations," the repair was for a "drain cover." The language highlighted above could not possibly refer to this work. There were no "systems" being installed and no "programs" being implemented as part of the drain cover repair. There was no "design layout" or "testing' involved. The repair pertained to a single facility and not to "all affected sites." Finally, it would neither take an "enormous management workload" to use bargaining unit employees, nor involve "costly overtime payments." As discussed, prior to the work order being issued, someone must have determined that the single bargaining unit employee assigned to the work had the skills required and could complete the job within his regularly scheduled work hours. The testimony of and, two of the maintenance mechanics, supports the finding that maintenance employees had performed similar work in the past and had the qualifications to do the work at issue. In addition, the parties stipulated that Brian Green, another maintenance mechanic prepared to provide testimony on the day of the arbitration, would have testified similarly. The "Article 32 Considerations" includes a brief comparison of the cost of subcontracting and the cost of the work being performed by maintenance employees. It indicates that the prevailing wage rate for a "contractor with benefits," is $35.50 per hour, and the wage rate for a bargaining unit maintenance mechanic, with benefits, is $ It includes a calculation of the labor costs of three maintenance employees doing the work for a full eight-hour day, for a total of $ This figure excludes materials and other costs. The contractor's cost, including everything, was $1,200. There has been no explanation provided for why the Service' s cost analysis would have been based on three employees performing the work, instead of one employee, as assigned by the work order. Again the entire document is invalid and inapplicable to the work at issue and is given no weight in support of the Service' s assertion that the requirements of Article 32 were satisfied. In fact, the creation of this unsound document bolsters the Union' s position that there was no meaningful consideration given to the Article 32 factors or to the ASM's "economically advantageous" standard. 7

8 The timeline of events, as indicated in the joint grievance file, and supplemented by the testimony at arbitration, adds to the confusion that remains in the record. The work order was issued on March 11, As of that date, it can be concluded that management expected the work to be performed by a maintenance employee by the due date of April 15, By April 9, 2009, the Union had learned that the work had been completed by a subcontractor. This is established by the Union' s grievance, filed on April 22, The Union's first "Request for Information & Documentation Relative to Processing a Grievance," of two it submitted, was dated April 29, The form was stamped "received" by the Service's Labor Relations Office, in Syracuse, New York, on April 30, The invoice from the subcontractor to the Service is dated April 29, There is no indication on the invoice of the date on which the work was performed. Given the date of the invoice, it would follow that the work was performed prior to the creation of an invoice requesting payment for the work. The Service's "Work Order Report," documents the completion of work assigned through a work order. The Service' s "Work Order Report" for work order #429, contains the original work order issued to the maintenance employee with additional information added. The additional information under "Comments," states, "WORK DONE BY CONTRACTOR." The "Work Order Report" includes a "Completed" date, whereas the original work order reflected a "Due Date." The "Completed" date entered by management is May 19,2009. The Service's documentation is clearly flawed. The completion date of May 19,2009, can not be accurate given the Union's grievance of April 22,2009, and the contractor's invoice of April 29, There are additional fatal flaws in the evidence presented by the Service. The contractor's invoice simply describes the work as "repair storm drain," at a "rate" of $1,200, and a final "cost" of$i,200. There are no details of the work performed, the materials or equipment utilized, the labor costs, the date or dates on which the work was performed, or the hours involved. There is no way to know what the invoice represents. The only witness testimony presented by the Service was through Mr. McCann. The deficiencies in his testimony were addressed above. Although Ron Williams's name was mentioned by Mr. McCann as the individual that he believed could have been the subcontracting decision-maker, and the decision-making process was clearly the crux of this case, Mr. Williams did not testify. Mr. Williams's name had been included by the Service on the appearance sheet 8

9 _ as a planned witness at the arbitration hearing. However, following Mr. McCann' s testimony, the Service decided not to present Mr. Williams as a witness. As for the notice requirements under Article 32, Section I.C, the Service never denied the Union's claim that notice was not provided to the Union of the decision to subcontract the work. The Service maintains that the language of the notice requirement was the subject of a National Arbitration. An award in that case was issued on August 13, 2013, by Arbitrator Shyam Das. [Case No. Q06C-4Q-C ] The Service admits that Arbitrator Das' s ruling on the parties' intended meaning of the language places an obligation on the Service to "notify the Union when a decision to subcontract bargaining unit work is made at the local level," as confirmed in the Service' s letter of September 5, However, the Service maintains that, since Arbitrator Das's award was rendered over four years after the subcontracting that occurred in this case, his ruling is inapplicable. The Service argued that, "the Service is now [following the award] required to give the Union at the Local level notification when contracting work out." [Service's Opening Statement] [Emphasis addedj This is a mischaracterization of the decision. Arbitrator Das did not decide that the Service is "now" required to give such notice. Arbitrator Das ruled that the language contained in the parties' Agreement, the same language in effect at the time this grievance arose, obligates the Service to provide such notice. On August 13, 2013, Arbitrator Das reaffirmed the Union' s understanding of the language and rejected the Service's position. He did not attribute a new meaning to the language and he did not change the language. The language and its application remained the same. The Service was required to comply with Article 32, Section I.C, at the time of the subcontracting in this case. There was no evidence presented to establish that the Service was released from a notice requirement during the pendency of the National Arbitration simply because there was a dispute over interpretation. During that period, while the issue was in dispute and awaiting arbitration, the Service chose to act in accordance with its interpretation of the requirement, and not in accordance with the Union's interpretation. By virtue of the Arbitrator sustaining the Union's grievance, the Service is liable for failing to comply with the requirement as confirmed by Arbitrator Das. Therefore, in this case, the Service violated Article 32, Section I.e. The obligations and responsibilities placed on the parties by their Agreement are as important as the benefits and rights it confers. Each party is entitled to enforcement of the provisions that weigh in its favor. Likewise, each party can expect to be bound by those with 9

10 which they are burdened. The parties have not included specific remedies for violations of the relevant provisions in the Agreement. That does not mean that violations can be committed without penalty to the breaching party and without recourse to the party aggrieved. The parties did not intend for the obligations and requirements established in their Agreement to be optional. Without a remedial consequence for a contract violation, there is no motivation to act accordingly. The parties stipulated to the submission of the specified issues to this Arbitrator. Included in those issues is the question of"[w]hat shall the remedy be?" With regard to the violation of Article 32, Section I.C, the Service is ordered to comply with the provision in the future, but there is no monetary remedy or penalty awarded. With regard to the violation of Article 32, Section I.A, the Service is ordered to pay the cost of one maintenance mechanic for an eight -hour day at the then-current rate of pay. The basis for that monetary relief is the credible evidence that one bargaining unit employee could have completed the work in an eight-hour day. The Service shall work with the Union to determine the manner in which that payment is to be distributed.!.i AWARD 1. The Service shall comply with the notice requirement of Article 32, Section I.C, of the National Agreement; and 2. The Service shall provide monetary relief to the affected bargaining unit members in the amount it would have cost for the bargaining unit members to perform the work. The Union established that the work would have been performed within a regular eight-hour day by one employee. Therefore, the Service shall make payment equivalent to eight hours of regular pay at the then-current rate. The Service shall work with the Union to determine the manner in which that payment is to be distributed. 3. The Arbitrator retains jurisdiction for the limited purpose of resolving any dispute regarding the implementation of this Award. Dated: June 28,