Arbitration Decision On USPS Subcontracting Postal Equipment Installation

8/6/2019 Arbitration Decision On USPS Subcontracting Postal Equipment Installation

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PANELIn the

betweenUNITED SERVICE

andAMERICAN POSTAL WORKERSUNION, AFL-CIO

LEROY R. BARTMAN,APPEARANCES:

For the U, S, Postal Service:For the Union:Place of Hearing:

Date of Hearing:Briefs Received:Date of Award:Relevant Contract Provision:Contract Year:Type of Grievance:

()()()()()

USPS Case No: - ! - ! , = - ' - - - ! - ! . . ! . - : : " - = = ~ ~ _ APWU Case

D" Arbitrator

GEORGE R. ADKISSONTHOMAS C, HENRY, JR.555 S, Third St, Memphis TN 38101NOVEMBER 17, 2010DECEMBER 20, 2010DECEMBER 30, 2010ARTICLE 322006 - 2010CONTRACT

AWARD SUMMARY

The grievance is sustained, The bargaining unit will be made whole for the lost opportunityto install the LCTS,


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HEARINGThe parties were all present and ably prepared to present proofs, the record, and all

witnesses in the referenced matter. were given a broad opportunity to raise objections and toexamine and cross-examine witnesses. The parties mutually agreed to provide the Arbitrator withclosing postmarked no laterthan December 17,2010. The briefs, timely postmarked, werereceived by the Arbitrator of record on December 20, 2010 and the hearing was declared closed as ofthat date.

ISSUEDid the Postal Service violate the National Agreement, Article 32.1.A when in February 2003 it

purchased Low Cost Tray Sorters that were installed by the manufacturer? If the answer is yes, whatshall the remedy be?

RELEVANT AND FACTUAL BACKGROUNDOn or about the timeframe of January - February, 2003, Management at the Memphis TN

Postal Facility purchased a low cost Tray Sorting System (LCTS). As part of that purchase they hadthe manufacturer of the tray system install it.

The Union timely filed a grievance on or about February 3, 2003 concerning the subcontracting of the installation of the LCTX. The stated purpose of the grievance is as follows:

The Union files grievances on subcontracting because career postal service positions are notbeing maintained. The employer is having work done by career employees farmed out to non-unionworkers in many cases. The bargaining unit is harmed because we could perform the work inquestion. The Union contends the work by the contractor should be done by career postal workers.The Union also contends the ASM Chapter 5 does not give Management a blanket right tosubcontract.

The Union had requested Management on February 1, 2003 for information and documentsrelative to processing the above grievance. The documents requested were not provided at the Step1 level and the grievance was appealed to Step 2 on or about February 18, 2003 where it was denied.On or about June 24, 2003 a Step 3 appeal was fled by the Union.

A pre-arbitration review dated May 3-6, 2005 resulted in the parties agreeing on Mary 5, 2005to put the instant matter on hold pending a National Level disputeQOOC-4Q-C 04008803. The partiesmutually agreed on July 8, 2010 to release the grievance to continue forward in thegrievance/arbitration process.

The parties at the hearing mutually agreed that the instant matter is properly before theundersigned Arbitrator of record.

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RELEVANT CONTRACT AND OTHER LANGUAGEARTICLE 3. Management RightsThe Employer shall have the exclusive right, subject to the provisions of this Agreement andconsistent with applicable laws and regulations:A To direct employees of the Employer in the performance of official duties;B. To hire, promote, transfer, assign, and retain employees in positions with the Postal Service and

to suspend, demote, discharge, or take other disciplinary action against such employees;C. To maintain the efficiency of the operations entrusted to it;D. To determine the methods, means, and personnel by which such operations are to beconducted;To prescribe a uniform dress to be worn by letter carriers and other designated employees; andTo take whatever actions may be necessary to carry out its mission in emergency situations; Le.unforeseen circumstances or a combination of circumstances which calls for immediate action ina situation which is not expected to be of a recurring nature.ARTICLE 32. SubcontractingA. The Employer will give due consideration to public interest, cost, efficiency, availability ofequipment, and qualification of employees when evaluating the need to subcontract.Administrative Support Manual 535.111 Postal EquipmentMaintenance of postal equipment should be performed by Postal Service personnel, wheneverpossible. Exceptions are;a. Where capable personnel are not available;b. When maintenance can be performed by contract and it is economically advantageous;c. When a piece of equipment is a prototype or experimental model or unusually complex, so that acommercial firm is the only practical source of required maintenance expertise.535.112 Facility and Plant EquipmentContract service is encouraged for Postal Service-operated facility and plant equipment maintenance,when economically advantageous.

POSITION OF PARTIESUNION:

The Union contends that the Postal Service Article(s) 31 and 32 of the National Agreement,Management failed to provide requested information to the Union with regards to the matter.

Management asserted that the contract to install the LeTS was a national contract ThePostal Service National Headquarters in a Step 4 decision has stated that the LeTS was not anational contract

The local maintenance bargaining unit members do have the necessary skills to work with thevendor that installed the units. In this case, the manufacturer utilized an outside vendor to install theequipment The bargaining unit maintenance staff were capable and able to perform the neededassistance to the manufacturer in the installation as did the outside vendor.

The Union requests that the grievance be sustained and that the bargaining be made wholefor the lost opportunity to install the LeTS.

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POSTAL SERVICE:Management denies that it has violated the Natbnal Agreement Article 32. In this case the

specifications for the purchase of the LCTS required that the manufacturer supply and install thesorters. The sorters were purchased and installed in approximately 170 different locations. It is thecontention of Management that the Memphis facility did not have the authority, or means, to purchasethe equipment for all of these 170 locations.

parties have agreed in the Step 4 settlement that after reviewing this matter, no nationalinterpretive issue is fairly represented in this case. Subcontracting implies that there already exists acontract to do certain work and that work is given to another party. In this case the Postal Service didnot own this equipment.

For these reasons the Postal Service reqJests the Arbitrator deny the grievance.DISCUSSION AND OPINION

The matter before the Arbitrator is one that has been heard by this Arbitrator and others manytimes. It is a question of having an outside contractor, not a part of the bargaining unit, peformingrecognized CBA Union employees job classification work.

After a thorough review of the record, all evidence and the testimony of witnesses, theArbitrator has reached the conclusion that the grievance be sustained for the reasons that follow.

Mr. Ventrini, Maintenance Support Manager for approximately twelve (12) years, in a letterdated June 18, 2003 sent to Mr. Lee Price, President of the local Union, stated his Step 2 decision inthe following pertinent and relevant statement:

"This letter is to acknowledge a Step 2 Meeting with your representative, Mr. EdwardRingold, concerning the above captioned grievance. Both parties made a fullexchange of relevant facts and contractual provisions. Management provided allrequested documentation/information in its entirety at the Step 2 Meeting.Issue: Was the installation of the Low Cost Tray Sorting System in violation of theASM and the CBA?Requested Remedy: 'pay cost of contract minus material'Facts: A Low Cost Tray Sorting System was purcha5:ld by the USPS.Union Position: '. . . This contract was not in accordance with the ELM nor ASM . . . 'USPS Position: Management properly applied pertinent regulations in the issue athand.The Union specifically alleged violations of Articles 3,5,8, 17, 19,30,31,32,38,ASM, LMOU.No violation of the cited Articles, manuals or references occurred. Remember that the

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burden of proof of these contentions falls to the Union. Such proof has not beenprovided at either Step 1 or Step 2 of the grievance/arbit ration process. MemphisP&DC Management operated within the current CSA, as it should. The Union has notintroduced ANY valid supporting documentation concerning these issues in either theStep 1 or Step 2 meetings.Discussion: The Union cites references that do not pertain to the issue at hand. Thegrievance cites the ASM as an alleged violation by Management. ASM 535.11 dealswith service contracts, not modifications, upgrades, or the purchase of newequipment. ASM 532.22 deals with equipment modification. The Low Cost TraySorter System is a new system!! The ASM does not apply in the issue at hand.The Union prominently complains in their Step 2 Grievance Appeal Form that' . . .Management did not provide any info.' Sy their local request for information, the Unionitself violates the CSA.From Article 31 of the National Agreement:'Requests for information relating to purely local mattersshould be submitted by thelocal Union representative to the installation head or his designee. All other requestsfor information shall be directed by the National President of the Union to the VicePresident, Labor Relations.'The purchase and installation of the Low Cost Tray Sorting System was done at thenational level. This is not a purely local matter, but a national matter. The local Unionknew, or should have known, that the work was not 'purely local' in nature, thus it wasobligated to comply with the procedure for obtaining information under Article 31.3.Therefore, the Union's request for information in this grievance is procedurallydefective.The purchase and installation of the Low Cost Tray Sorting System was a NationalLevel decision. The purchase was not finalized until the Low Cost Tray SortingSystem was installed and operating to U.S.P.S. specifications. The subject work inthese grievances was not even technically subcontracted work & therefore notpertinent to Article 32 considerations. The work was installation of equipment that waspurchased from a vendor. The USPS does not technically own the equipment untilsuch time as the vendor completes the installation.NOTE: The Union has not claimed at either Step 1 or Step 2 that any maintenanceemployee was laid off, had hours reduced or was otherwise adversely impacted by theinstallation of the subject equipment by the vendor. Remember, a grievance must notbe a 'fishing expedition' . . . the burden of proof is on the Union.The USPS did not take responsibility for the installation of the Low Cost Tray SortingSystem. It only takes over the equipment after the installation work is performedandacceptance tests are successful ly run on it by the Service. The Contracted installationwork on the Low Cost Tray Sorting System must be shown to meet the standardsagreed to in the contract with the vendor. The installation work on the Low Cost TraySorting System was performed by the contractor as part of a national contract, and itwas the contractor who was ultimately responsible for the work under the contract.

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!.....!.!..!-===. The Union has failed to meet its burden to show a violation of the CollectiveBargaining Agreement (CBA).Decision: Considering the facts, discussion and findings above, this grievance isdenied.If I can be of further assistance in this or other matters, please feel free to contact meat your convenience.In his testimony Mr. Ventrini stated that the Service did not consider allowing bargaining unit

members (emphasis added) to install the LCTS equipment. Article 32 of the National Agreement inclear and unambiguous language states in Section 1B, "no final decision on whether or not will becontracted out will be made until the matter is discussed (emphasis added) with the Union."

Initially the Postal Service contended that the purchase and installation of the LCTS was aUSPS National Contract and as such, was not under the control of the Memphis facility. However, Mr.Rodney Lambson in a letter dated June 2, 2004, sent to Mr. Gary Kloepfer, Assistant Director "A"Maintenance Division, APWU, AFL-CIO, regarding QOOC-4Q-C 04008803 (the grievance at hand)stated in pertinent and relevant part as follows:

Recently, we met to discuss the above captioned grievanceat the fourth step of ourcontractual grievance procedure.The issue in this grievance is whether the Postal Service violated the NationalAgreement when it made the decision to subcontract the installation of the Low CostTray Sorter.After reviewing this matter the parties agreed that no national interpretive issue is fairlyrepresented in this case. The Postal Service in concluding its discussions with theUnion on the Low Cost Tray Sorter indicated that it was not a national contract, andwith this understanding the parties agreed that the installation of the Low Cost TraySorter was not a national contract. Therefore, whether there was a violation of theNational Agreement must be determined locally based on the application of theparticular fact circumstances involved.Without prejudice to the parties' position regarding subcontracting and grievance timelimits on this specific issue, we agree to remand this issue to the parties at the locallevel and/or Step 3 for processing or to be scheduled for regional arbitration ifappropriate. Any grievances filed based on this decision shall not be ruled asuntimely.Please sign and return the enclosed copy of this decision as your acknowledgement ofagreement to remand this issue and to withdraw the Union's unfair labor practicecharge regarding the information request for the Low Cost Tray Sorter from theNational Labor Relation Board.In Article 32, Section 1, General Principles (B) and (C), we find the following agreed upon

procedure to be followed when subcontracting is being considered:Class Action - 6


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B. The Employerwill give advance notification to the Union at the national level whensubcontracting which will have a significant impact on bargaining unit work is beingconsidered and will meet with the Union while developing the initial ComparativeAnalysis report. The Employer will consider the Union's views on costs and otherfactors, together with proposals to avoid subcontracting and proposals to minimizethe impact of any subcontracting. A statement of the Union's views and proposals willbe included in the initial Comparative Analysis and in any Decision Analysis Reportrelating to the subcontracting under consideration. No final decision on whether or notsuch work will be contracted out will be made until the matter is discussed with theUnion.C. When a decision has been made at the Field level to subcontract bargaining unitwok, the Union at the Local level will be given notification (emphasis added).In this case Management did not adhere to the language found in Article 32 in the opinion of

the Arbitrator.Arbitrator Ruben R. Armendariz in Case No. G98T-1G-C 0028478 stated the following:"With respect to the issue of subcontracting, Article 32 is clear and unambiguous. TheArbitrator finds that in deciding issues over subcontracting, Management must givedue consideration to subcontract or not. In giving due consideration Managementmust consider public interest, cost, efficiency, availability of equipment andqualifications of employees. Not all factors are needed for consideration. ArbitratorMittenthal stated that, "To ignore these factors or to examine them in cursory fashionin making its decision would be improper." The Arbitrator finds that it was clearthatthe EI Paso Frs were qualified to perform the work that they possessed thenecessary skills, training and equipment to move and set up the OCR machine fromTulsa, OK to EI Paso TX. The Arbitrator finds that because the Postal Service failedto provide the information the Union requested that is relevant and applicableto thefactors enunciated in Article 32 leave a negative inference that the local managementexamined these factors in cursory fashion when the decision was reached tosubcontract out the work (emphasis added). Thus, the Postal Service failed its duty togive due consideration. With respect to employee availability, ArbitratorEisenmenger's opinion requested the Postal Service's argument that employees werenot available because they had other work to perform. She stated that the contractedwork could have been performed by maintenance employees on a project basis withthe proper scheduling of staff. In this regard, the subcontracted work could have beenscheduled to forego any negative impact it would have had on the EI Paso operations.The Postal Service argued that Article 3 gives Management sole rght to determinethe methods, means and personnel by which such operations are to be conducted.However, the Arbitrator finds that Article 32 and 535.11 of the ASM limitsManagement's rights as it is applied to subcontracting work. . . . . .In addition, ASM 535.111 states the following:That maintenance of Postal equipment should be performed by Postal Servicepersonnel whenever possible. That regulation protects the bargaining unit work fromindiscriminately being given to outsiders. The regulation, however, also specifies that,under certain conditions, Management has the right to contract out where capableemployees are not available and when a piece of equipment is a prototype orexperimental model or unusually complies, so that a commercial firm is the only

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practical source of required maintenance expertise. Article 32 of the NationalAgreement also addresses this principle. In order to justify contracting out ofbargaining unit work, Management must have a sound basis for its decision. It mustbe able to prove, for example, that the employees were not capable enough orqualified to perform the work. This cannot be based on just the say so ofManagement. It must be based on an analysis of the qualifications and skills of thebargaining unit employees.In this case, Mr. Ventrini and Mr. Lambson failed to carry out the intent agreed upon by the

parties in Article 32 which required the Union to be put into the loop with the required discussions andevaluation process before proceeding to any sub-contracting of bargaining unit employees. TheNational Contract, given the evidence, does not enter into or is a factor in this case.

CONCLUSIONThere is no doubt or question in this matter that Management violated Articles 32, Section 1

(A), (B) and (C) and ASM 535.111. Management admitted the purchase was not a national contracterasing their claim made in 2003. But, despite that fact, they persisted in ignoring Article 32 (B) and(e ) requirements to meet with bargaining unit members to discus and evaluate the clearly enunciatedlanguage required by the eBA, Article 32.

AWARDThe grievance is sustained. The bargaining unit will be made whole for the lost opportunity to

install the LeTS.

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Documents

Arbitration Decision On USPS Subcontracting Postal Equipment Installation