This is a summary of Regular Panel Arbitrator Andrew M. Strongin’s decision in case H06T-1H-C 08374323 regarding the Postal Service’s decision to subcontract the disassembly, transport, and installation of a Low Cost Tray Sorter from Cincinnati, Ohio to the West Palm Beach P&D. The Union contended that the work was subcontracted without the prerequisite “due consideration” of the five factors of Article 32.1.A of the National Agreement, and asked that all affected employees be made whole[1]. The Arbitrator sustained the Union’s grievance by ruling the Postal Service failed to give due consideration to the five factors of Article 32.1.A of the National Agreement, and that a make-whole award was appropriate. He found the Service’s repeated and continuous failure to provide relevant remedial information to the Union up to and including the date of hearing, and the lack of evidence that such information could be provided at arbitration that the remedy shall be measured by the only currently available evidence, which is the Maintenance Manager’s estimate of the subcontractor’s labor cost, as contained in his belated Article 32 analysis.

In requesting a make-whole remedy, the Union emphasizes that it timely sought from the Service, but even to date has not been provided, information relevant to the cost of the subcontract and the number of hours worked by the subcontractor’s employees. Based on the Service’s failure to provide the requested information, the Union argued that the appropriate measure for a make-whole remedy is the only evidence that exists in the record, which is the Service’s own estimate of the labor cost as set forth in Goodrich’s belated Article 32 analysis, or the lump sum of $91,580.00, to be divided between all affected employees.

Ruling for the Union the arbitrator correctly reasoned:

Ordinarily, a make-whole remedy in a subcontracting case would turn not upon the estimated labor cost of a subcontract, but instead on some measure of actual damages. Arbitrators differ over the question whether such actual damages should be measured, for example, by the subcontractor’s labor cost or by the number of hours devoted by the subcontractor to bargaining unit work, whether at straight time or overtime rates. In cases where evidence of actual damage is not available or is difficult to discern, it is not uncommon for questions of remedy to be returned to the parties for settlement. See, e.g., Case No. H7C-NA-C 36 (Mittenthal 1993) (“It may not be easy to construct a money remedy or to identify the injured employees. But the parties have been confronted in the past by remedy problems every bit as complicated as this one and they have been able through hard work and imagination to fine a mutually acceptable solution.”). . . Appropriate respect for the proper functioning of the grievance procedure generally, and the process for requesting and providing relevant information specifically, counsels in favor of an award of the estimated labor costs ($91,580.00) to be divided among all affected employees. The Service’s desire to limit the amount of the make-whole award is understandable, but the Service cites no contractual authority or arbitral precedent for limiting the award to the difference between the hours worked by bargaining unit employees during the time of the subcontracting, and the total hours they could have been required or allowed to work under the Agreement at that time. The Arbitrator rejects as inadequate that proposed measure of damages. Full employment of available employees generally is not a defense to subcontracting violations under the parties’ Agreement and related arbitral precedent with which the Arbitrator is familiar, and it bears noting that such a limitation on a make-whole remedy would permit the Service to violate Article 32.1 with virtual impunity in any facility where employees are fully occupied.

Gary Kloepfer

Assistant Director

American Postal Workers Union