CJ3oc4p /~ NATIONAL ARBITRATION PANEL In the Matter of Arbitration ) NA-C 96 and between ) CASE NOS . H7C - i HOC-NA-C 6 UNITED STATES POSTAL SERVICE and AMERICAN POSTAL WORKERS UNION and NATIONAL ASSOCIATION OF LETTER CARRIERS . Snow BEFORE : Professor Carlton J : APPEARANCES : For the U .S . Postal Service Mr . Edward F . Ward For the American Postal Workers Union : Mr . Anton G . Hajjar For the National Association of Letter Carriers : Ms . Michelle D . Guerra PLACE OF HEARING : Washington, D .C . ; May 4, 1992 ; May 5, 1992 ; DATES OF HEARING : December 20, 1991 June 4, 1992 ; June 5, 1992 ; July 16, 199 2 ; July 17, 1992 ; August 20 , 1992 ; August 21, 1992 ; and October 15, 1992 February 15, 1993 . POST - HEARING BRIEFS : AWARD Having carefully considered all evidence submitted by the parties concerning this matter , the arbitrator con- cludes that the Employer violated Article 4 by failing to honor contractual rights of employes set forth in Article 4 .3 of the parties ' National Agreement . It is the Employer's obligation to determine tasks involved in Remote Video Encoding work . Once the nature of the job has been defined, it is the Employer ' s obligation to identify those employes capable of being trained for the job who should have had an opportunity to apply for the work . Once that task is accomplished , the Employer shall create a position or modify an existing one in order to offer the new jobs to affected workers . It , of course , is the Employer ' s obliga- tion to provide the jobs in a manner consistent with other provisions of the parties' agreement . The arbitrator shall retain jurisdiction in this matter in order to resolve any problems that might result from implementing the award in this case . It is so ordered and awarded . DATE : Carlton J . Show Professor of Law ii IN THE MATTER OF ARBITRATION BETWEEN UNITED STATES POSTAL SERVICE ANALYSIS AND AWARD AND AMERICAN POSTAL WORKERS UNION) Carlton J . Snow Arbitrator AND ) NATIONAL ASSOCIATION OF ) LETTER CARRIERS ) (Case Nos . H7C-NA-C 96 ) and HOC-NA-C 6) ) I . INTRODUCTION This matter came for hearing pursuant to a collective bargaining agreement between the parties effective from July 21, 1987 to November 20, 1990 . The parties filed the initial grievance in the matter on November 2, 1990 challenging (chiefly under Article 4) a decision by the Employer to sub- contract the performance of certain Remote Bar Coding services . Hearings took place on December 20, 1991, May 4 , 1992, May 5, 1992, June 4 , 1992, June 5 , 1992, July 16 , 1992, July 17, 1992, August 20, 1992, August 21, 1992, and October 15, 1992 . All meetings were held in a conference room of the United States Postal Service Headquarters located at 475 L'Enfant Plaza in Washington , D .C . Mr . Edward F . Ward, Chief Counsel of Labor Relations , represented the United States Postal Service with assistance from Mr . Kevin D . Rachel . Mr . Anton G . Hajjar of the O'Donnell , Schwartz & Anderson law firm in Washington , D .C ., represented the American Postal Workers Union, with assistance from Mr . Larry Gervais, Special Assis- tant to the President of the American Postal Workers Union . Weiss & Simon law firm Ms . Michelle D . Guerra of the Cohen , in New York City represented the National Association of Letter Carriers . The hearings proceeded in an orderly manner . There was a full opportunity to submit evidence , to examine and cross- All witnesses examine witnesses , and to argue the matter . testified under oath as administered by the arbitrator . A court reporter for Diversified Reporting Services, Inc . reported all proceedings and submitted a transcript of 1,689 . The advocates fully and fairly represented the parties . pages The arbitrator bifurcated the first hearing to address issues of arbitrability . Following an intervention by the National Association of Letter Carriers , however, the parties stipulated that the grievance was arbitrable and authorized the arbitrator to hear and decide the case on its merits . The parties also agreed to consolidate the initial grievance with a subsequent grievance challenging the same decision by the Employer to subcontract certain work under Article 32 of At the first hearing on the merits the parties' agreement . of the consolidated grievance , the Employer challenged the procedural arbitrability of the grievance encompassing Article 32 as it pertained to the first nine contracts covering remotee however, keying that had been let by the Employer . There , were no other challenges to the substantive or procedural 2 arbitrability of the grievance . The parties agreed that the arbitrator had jurisdiction to proceed to the merits of the case and authorized him to state the issues . The parties elected to submit post-hearing briefs . The Employer submitted a brief of 294 pages with an Appendix of 113 pages . The American Postal Workers Union submitted a brief of 176 pages . The parties submitted an unusually extensive record, and the index for the Union's exhibits covered twenty-three single-spaced, typewritten pages . II . STATEMENT OF THE ISSUES Did the Employer violate Articles 4 or 32 when it subcontracted work associated with video encoding for the Remote Bar Coding System? If so, what is the appropriate remedy? 3 III . RELEVANT CONTRACTUAL PROVISIONS ARTICLE 4 - TECHNOLOGICAL AND MECHANIZATION CHANGES Section 3 . New Jobs Any new job or jobs created by technological or mechanization changes shall be offered to present employees capable of being trained to perform the new or changed job and the Employer will provide such training . During training, the employee will maintain his/her rate . it is understood that the training herein referred to is on the job and not to exceed sixty (60) days . Certain specialized technical jobs may require additional and off - site training . An employee whose job is eliminated , if any, and who cannot be placed in a job of equal grade shall receive rate protection until such time as that employee fails to bid or apply for a position in the employee ' s former wage level . The obligation hereinabove set forth shall not be construed to, in any way , abridge the right of the Employer to make such changes . ARTICLE 32 - SUBCONTRACTING Section 1 . General Principles A . The Employer will give due considera- tion to public interest , cost, efficiency , avail- ability of equipment , and qualification of employees when evaluating the need to subcontract . B . The Employer will give advance notifi- cation to Unions at the national level when subcontracting which will have a significant impact on bargaining unit work is being con- sidered and will meet to consider the Unions' views on minimizing such impact . No final deci- sion on whether or not such work will be con- tracted out will be made until the matter is discussed with the Unions . 4 IV . STATEMENT OF FACTS the American Postal Workers Union and the In this case , National Association of Letter Carriers challenged the Employer ' s decision to subcontract work associated with a new . The Remote Bar Coding System is Remote Bar Coding System . one of many projects designed to automate mail processing The goal of automated processing is to place a computer read- able bar code on virtually all letter mail by 1995 . the Employer has Through the use of rate incentives , bar code approximately forty encouraged its customers to pre - . Bar coded percent of the mail volume in the United States mail can be automatically sorted at high speeds by a bar code is defined as : sorter . A "bar code sorter " controlled , high speed machine that A computer - . sorts letters , based upon an imprinted bar code Consisting of a mail feed and transport unit, , and associated electronic equip- stacker module .. ( See, ment, it can sort into 96 ;eparations Glossary of Postal Terms, 60) . of the bar code sorter reduces a need for manual and Use , also reduces a need other mechanized sorting . It , of course for skilled employes capable of memorizing complicated sorting schemes and operating other mechanized sorting equipment . The Employer also has developed multi-line optical line optical character readers character readers . Multi - read" the address of a letter and electronically scan or " . Once the code determine the correct nine - digit ZIP code the machine sprays the appropriate bar has been determined , Letters successfully read by the multi-line code on the letter . 5 optical character reader, then, are processed on bar code readers . The Employer anticipates that another forty percent of the mail can be routed to bar code readers using multi- line optical character readers . It is the remaining twenty percent of the mail which is not pre-coded and cannot be read by the multi-line optical character readers that prompted the Remote Bar Coding System at issue in this grievance . The Remote Bar Coding System functions by bringing additional computer systems to bear on mail unreadable by the multi-line optical character readers . Two additional systems are used by the Employer . First, mailrejected by multi-line optical character readers is re-read by a Remote Computer Reading system . The Remote Computer Reading system attempts to do what the multi- line optical character reader tries to do, but at a slower pace . Typically, the Remote Computer Reading system will be able to bar code about twenty-five percent of what the multi- line optical character readers reject . (See, Employer's Exhibit No . 13) . Remaining unreadable mail is to be processed by remote video encoding . Remote Video Encoding is the final step in the Remote Bar Coding system, and it has provided impetus for the central disagreement in this dispute . When the multi-line optical character readers cannot "read" an address on a letter, it "tags" the letter and stores an electronic image of the address in its computer memory .