From an AFGE Local in the Dallas Region

'Little Rock 3' grievant's unjust firing triggers damage award

CASE FILE: Social Security Administration and AFGE, Local 3291, 110 LRP 62387 (Fed. Arb. 10/22/10).

Ruling: Arbitrator Ed W. Bankston ruled that the agency did not have just cause to discharge the grievant for negligence.

What it means: The agency failed to prove that the grievant, through negligence and inattention to duties, was responsible for a considerable loss of Social Security monies through fraudulent payments. Rather, the arbitrator found that management failed to conduct a credible investigation, denied the grievant due process, and treated her in a disparate manner.

Summary: This matter was the third of the so-called "Little Rock 3" cases involving the discipline of three claims representatives for participating in another (now former) employee's scheme of approving Critical Payment System payments under fraudulent circumstances. Two of the employees received 90-day suspensions, while the grievant in this case was discharged. Each employee's case was to be heard separately before this arbitrator, with the first grievance upheld. See Social Security Administration and AFGE, Local 3291, 110 LRP 31508 (Fed. Arb. 05/28/10). The parties settled the second grievant's case, leaving the instant grievance for resolution.

The agency maintained that the grievant's negligence resulted in the loss of Social Security Trust Fund monies in excess of $57,000. Management rejected the allegation that the grievant, who is Hispanic, was treated disparately on the basis of her race. Finally, the termination decision was timely, as any delay was the result of local management being advised by the Office of the Inspector General to not initiate an investigation that might compromise the OIG investigation.

The union argued that the agency's case was built entirely on OIG documents as management did not conduct its own independent investigation. Also, despite repeated requests, the agency never furnished the union with material from the OIG's investigative file. The agency's claim that it held off processing the grievant's termination at the OIG's direction was not credible and the approximately one-year delay constituted a breach of the grievant's due process rights. Moreover, the grievant was treated disparately based on her race, as the other grievants, blacks, received suspensions and the lone white employee involved in the alleged misconduct not only escaped discipline but was promoted.

The arbitrator ruled that the grievant was not discharged for just cause. Initially, he dismissed the agency's motion to recuse, rejecting the allegation that he made improper findings about the other two employees in the first arbitration case.

Addressing the union's procedural claims, the arbitrator determined that the agency's failure to provide the union with the OIG report violated statute as well as the parties' national agreement and "seriously compromised" the grievant's due process rights. Similarly, the long delay in issuing discipline after the investigatory interview was prejudicial to the grievant.

Turning to the union's disparate-treatment allegation, the arbitrator held that since all members of the "Little Rock 3" committed the same infraction, they should have received the same discipline. However, the two black employees received suspensions while the grievant, a Hispanic, was terminated. A fourth employee, a white worker also implicated in the scheme, received no discipline. The arbitrator found that the grievant could not be faulted for following the practice of her coworkers in processing the claims and that management was culpable for failing to provide proper supervision and guidance when there was a divergence between policy and practice. Finally, the agency narrowly focused on the amount of money involved and did not consider the grievant's long, near disciplinary-free record, lack of wrongful intent, and her forthcoming and candid testimony.

The arbitrator directed that she be reinstated and made whole for all losses, with her record expunged of all references to this matter. The grievant was awarded $100,000 in compensatory damages for the agency's violation of the Civil Rights Act of 1991 and punitive damages in the amount of $100,000. The union was awarded reasonable attorney's fees and the agency was ordered to immediately furnish the union with a complete copy of the OIG report.