PANEL

In the (
)
between (
)
UNITED SERVICE ( USPS Case No: -!-!,=-'---!-!..!.-::"-==~~_
)
and ( APWU Case
)
AMERICAN POSTAL WORKERS (
UNION, AFL-CIO )

LEROY R. BARTMAN, D" Arbitrator

APPEARANCES:
For the U, S, Postal Service: GEORGE R. ADKISSON
For the Union: THOMAS C, HENRY, JR.
Place of Hearing: 555 S, Third St, Memphis TN 38101
Date of Hearing: NOVEMBER 17, 2010
Briefs Received: DECEMBER 20, 2010
Date of Award: DECEMBER 30, 2010
Relevant Contract Provision: ARTICLE 32
Contract Year: 2006 - 2010
Type of Grievance: CONTRACT

AWARD SUMMARY

The grievance is sustained, The bargaining unit will be made whole for the lost opportunity
to install the LCTS,
 HEARING
The 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 to
examine and cross-examine witnesses. The parties mutually agreed to provide the Arbitrator with
closing postmarked no laterthan December 17,2010. The briefs, timely postmarked, were
received by the Arbitrator of record on December 20, 2010 and the hearing was declared closed as of
that date.
ISSUE
Did 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, what
shall the remedy be?
RELEVANT AND FACTUAL BACKGROUND
On 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 had
the manufacturer of the tray system install it.
The Union timely filed a grievance on or about February 3, 2003 concerning the sub-
contracting 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 not
being maintained. The employer is having work done by career employees farmed out to non-union
workers in many cases. The bargaining unit is harmed because we could perform the work in
question. 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 to
subcontract.
The Union had requested Management on February 1, 2003 for information and documents
relative to processing the above grievance. The documents requested were not provided at the Step
1 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, 2005
to put the instant matter on hold pending a National Level dispute QOOC-4Q-C 04008803. The parties
mutually agreed on July 8, 2010 to release the grievance to continue forward in the
grievance/arbitration process.
The parties at the hearing mutually agreed that the instant matter is properly before the
undersigned Arbitrator of record.

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 RELEVANT CONTRACT AND OTHER LANGUAGE
ARTICLE 3. Management Rights
The Employer shall have the exclusive right, subject to the provisions of this Agreement and
consistent 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 be
conducted;
To prescribe a uniform dress to be worn by letter carriers and other designated employees; and
To 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 in
a situation which is not expected to be of a recurring nature.

ARTICLE 32. Subcontracting

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.

Administrative Support Manual 535.111 Postal Equipment

Maintenance of postal equipment should be performed by Postal Service personnel, whenever
possible. 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 a
commercial firm is the only practical source of required maintenance expertise.

535.112 Facility and Plant Equipment

Contract service is encouraged for Postal Service-operated facility and plant equipment maintenance,
when economically advantageous.

POSITION OF PARTIES
UNION:
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 The
Postal Service National Headquarters in a Step 4 decision has stated that the LeTS was not a
national contract
The local maintenance bargaining unit members do have the necessary skills to work with the
vendor that installed the units. In this case, the manufacturer utilized an outside vendor to install the
equipment The bargaining unit maintenance staff were capable and able to perform the needed
assistance 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 whole
for 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 the
sorters. The sorters were purchased and installed in approximately 170 different locations. It is the
contention of Management that the Memphis facility did not have the authority, or means, to purchase
the equipment for all of these 170 locations.
parties have agreed in the Step 4 settlement that after reviewing this matter, no national
interpretive issue is fairly represented in this case. Subcontracting implies that there already exists a
contract to do certain work and that work is given to another party. In this case the Postal Service did
not 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 many
times. It is a question of having an outside contractor, not a part of the bargaining unit, peforming
recognized CBA Union employees job classification work.
After a thorough review of the record, all evidence and the testimony of witnesses, the
Arbitrator 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 letter
dated June 18, 2003 sent to Mr. Lee Price, President of the local Union, stated his Step 2 decision in
the following pertinent and relevant statement:
"This letter is to acknowledge a Step 2 Meeting with your representative, Mr. Edward
Ringold, concerning the above captioned grievance. Both parties made a full
exchange of relevant facts and contractual provisions. Management provided all
requested documentation/information in its entirety at the Step 2 Meeting.

Issue: Was the installation of the Low Cost Tray Sorting System in violation of the
ASM 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 at

hand.

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 been
provided at either Step 1 or Step 2 of the grievance/arbitration process. Memphis
P&DC Management operated within the current CSA, as it should. The Union has not
introduced ANY valid supporting documentation concerning these issues in either the
Step 1 or Step 2 meetings.

Discussion: The Union cites references that do not pertain to the issue at hand. The
grievance cites the ASM as an alleged violation by Management. ASM 535.11 deals
with service contracts, not modifications, upgrades, or the purchase of new
equipment. ASM 532.22 deals with equipment modification. The Low Cost Tray
Sorter 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 Union
itself violates the CSA.

From Article 31 of the National Agreement:

'Requests for information relating to purely local mattersshould be submitted by the

local Union representative to the installation head or his designee. All other requests
for information shall be directed by the National President of the Union to the Vice-
President, Labor Relations.'

The purchase and installation of the Low Cost Tray Sorting System was done at the
national level. This is not a purely local matter, but a national matter. The local Union
knew, or should have known, that the work was not 'purely local' in nature, thus it was
obligated to comply with the procedure for obtaining information under Article 31.3.
Therefore, the Union's request for information in this grievance is procedurally
defective.

The purchase and installation of the Low Cost Tray Sorting System was a National
Level decision. The purchase was not finalized until the Low Cost Tray Sorting
System was installed and operating to U.S.P.S. specifications. The subject work in
these grievances was not even technically subcontracted work & therefore not
pertinent to Article 32 considerations. The work was installation of equipment that was
purchased from a vendor. The USPS does not technically own the equipment until
such time as the vendor completes the installation.

NOTE: The Union has not claimed at either Step 1 or Step 2 that any maintenance
employee was laid off, had hours reduced or was otherwise adversely impacted by the
installation of the subject equipment by the vendor. Remember, a grievance must not
be 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 Sorting
System. It only takes over the equipment after the installation work is performed and
acceptance tests are successfully run on it by the Service. The Contracted installation
work on the Low Cost Tray Sorting System must be shown to meet the standards
agreed to in the contract with the vendor. The installation work on the Low Cost Tray
Sorting System was performed by the contractor as part of a national contract, and it
was 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 Collective
Bargaining Agreement (CBA).

Decision: Considering the facts, discussion and findings above, this grievance is
denied.

If I can be of further assistance in this or other matters, please feel free to contact me
at 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 in
clear and unambiguous language states in Section 1B, "no final decision on whether or not will be
contracted 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 a
USPS 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 our
contractual grievance procedure.

The issue in this grievance is whether the Postal Service violated the National
Agreement when it made the decision to subcontract the installation of the Low Cost
Tray Sorter.

After reviewing this matter the parties agreed that no national interpretive issue is fairly
represented in this case. The Postal Service in concluding its discussions with the
Union on the Low Cost Tray Sorter indicated that it was not a national contract, and
with this understanding the parties agreed that the installation of the Low Cost Tray
Sorter was not a national contract. Therefore, whether there was a violation of the
National Agreement must be determined locally based on the application of the
particular fact circumstances involved.

Without prejudice to the parties' position regarding subcontracting and grievance time
limits on this specific issue, we agree to remand this issue to the parties at the local
level and/or Step 3 for processing or to be scheduled for regional arbitration if
appropriate. Any grievances filed based on this decision shall not be ruled as
untimely.

Please sign and return the enclosed copy of this decision as your acknowledgement of
agreement to remand this issue and to withdraw the Union's unfair labor practice
charge regarding the information request for the Low Cost Tray Sorter from the
National 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:

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 B. The Employerwill give advance notification to the Union at the national level when
subcontracting which will have a significant impact on bargaining unit work is being
considered and will meet with the Union while developing the initial Comparative
Analysis report. The Employer will consider the Union's views on costs and other
factors, together with proposals to avoid subcontracting and proposals to minimize
the impact of any subcontracting. A statement of the Union's views and proposals will
be included in the initial Comparative Analysis and in any Decision Analysis Report
relating to the subcontracting under consideration. No final decision on whether or not
such work will be contracted out will be made until the matter is discussed with the
Union.

C. When a decision has been made at the Field level to subcontract bargaining unit
wok, 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. The
Arbitrator finds that in deciding issues over subcontracting, Management must give
due consideration to subcontract or not. In giving due consideration Management
must consider public interest, cost, efficiency, availability of equipment and
qualifications of employees. Not all factors are needed for consideration. Arbitrator
Mittenthal stated that, "To ignore these factors or to examine them in cursory fashion
in making its decision would be improper." The Arbitrator finds that it was clearthat
the EI Paso Frs were qualified to perform the work that they possessed the
necessary skills, training and equipment to move and set up the OCR machine from
Tulsa, OK to EI Paso TX. The Arbitratorfinds that because the Postal Service failed
to provide the information the Union requested that is relevant and applicableto the
factors enunciated in Article 32 leave a negative inference that the local management
examined these factors in cursory fashion when the decision was reached to
subcontract out the work (emphasis added). Thus, the Postal Service failed its duty to
give due consideration. With respect to employee availability, Arbitrator
Eisenmenger's opinion requested the Postal Service's argument that employees were
not available because they had other work to perform. She stated that the contracted
work could have been performed by maintenance employees on a project basis with
the proper scheduling of staff. In this regard, the subcontracted work could have been
scheduled 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 determine
the 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 limits
Management'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 Service
personnel whenever possible. That regulation protects the bargaining unit work from
indiscriminately being given to outsiders. The regulation, however, also specifies that,
under certain conditions, Management has the right to contract out where capable
employees are not available and when a piece of equipment is a prototype or
experimental model or unusually complies, so that a commercial firm is the only

Class Action -
 practical source of required maintenance expertise. Article 32 of the National
Agreement also addresses this principle. In order to justify contracting out of
bargaining unit work, Management must have a sound basis for its decision. It must
be able to prove, for example, that the employees were not capable enough or
qualified to perform the work. This cannot be based on just the say so of
Management. It must be based on an analysis of the qualifications and skills of the
bargaining 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 and
evaluation process before proceeding to any sub-contracting of bargaining unit employees. The
National Contract, given the evidence, does not enter into or is a factor in this case.
CONCLUSION
There 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 contract
erasing 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 enunciated
language required by the eBA, Article 32.
AWARD
The grievance is sustained. The bargaining unit will be made whole for the lost opportunity to
install the LeTS.

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