24 F.4th 666
D.C. Cir.2022Background:
- OPM asked the Federal Labor Relations Authority (FLRA) for a Policy Statement (2019) resolving whether contractual "zipper clauses"—clauses that bar midterm bargaining—are mandatory or permissive subjects of bargaining.
- The FLRA issued the Policy Statement (Sept. 30, 2020) that (1) rejected its prior default rule from Interior that the Statute requires midterm bargaining, and (2) held zipper-clause proposals are mandatory subjects of bargaining that the Federal Service Impasses Panel may impose at impasse.
- Three federal‑employee unions challenged the Policy Statement as arbitrary and capricious and asked the D.C. Circuit to vacate it.
- The D.C. Circuit reviewed under the APA arbitrary-and-capricious standard, focusing first on the FLRA’s reversal of Interior (the rule that midterm bargaining is presumptively required when the contract is silent) and then on the zipper‑clause holding, which the FLRA expressly rested on that reversal.
- The court concluded the FLRA’s repudiation of Interior was unreasoned: it misread Supreme Court precedent (Local 1309), relied on conclusory textual parsing, and offered no labor‑relations expertise or response to reliance interests.
- Because the zipper‑clause holding depended on the flawed first holding, the court vacated the entire Policy Statement.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Statute requires midterm (post‑term) bargaining as a default when the agreement is silent | Unions: Interior correctly held statute presumes a right to midterm bargaining; FLRA cannot reverse without reasoned explanation | FLRA/OPM: Statute is indeterminate as to midterm bargaining; better to leave midterm obligations to parties in term negotiations | Court: FLRA's reversal was arbitrary and capricious; vacated FLRA's holding that statute does not require midterm bargaining |
| Whether zipper clauses are mandatory subjects of bargaining (i.e., impasses panel may impose them) | Unions: Zipper clauses should be permissive because allowing imposition will impair midterm bargaining, increase term bargaining burden, and eliminate unions' default rights | FLRA/OPM: Zipper proposals concern midterm‑bargaining obligations and, absent a unilateral statutory right, fall within the default presumption that conditions of employment are mandatory subjects | Court: FLRA’s zipper‑clause holding relied on its flawed first holding and lacked independent support; vacated the zipper‑clause determination |
| Whether FLRA followed its own policy‑statement issuance criteria (procedural rule issues) | Unions: FLRA ignored its issuance criteria and failed to give notice it would revisit Interior | FLRA: Not addressed as an independent defense in decision | Court: Did not reach merits because substantive holdings were vacated; noted lack of notice but ruled on reasoning defects first |
Key Cases Cited
- National Federation of Federal Employees, Local 1309 v. Interior, 526 U.S. 86 (1999) (Supreme Court found the Statute ambiguous about a general right to midterm bargaining and remanded to FLRA)
- American Federation of Government Employees v. FLRA, 712 F.2d 640 (D.C. Cir. 1983) (matters relating to conditions of employment are presumptively mandatory unless statute vests a unilateral right)
- Nat'l Treasury Employees Union v. FLRA, 399 F.3d 334 (D.C. Cir. 2005) (clarifies when statutory rights are "unilateral" and thus permissive subjects)
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (1983) (agency action must be reasoned and not arbitrary or capricious)
- SEC v. Chenery Corp., 332 U.S. 194 (1947) (courts must judge agency action by the agency's stated grounds)
- Bureau of Alcohol, Tobacco & Firearms v. FLRA, 464 U.S. 89 (1983) (agencies have expertise to resolve ambiguous statutory questions on remand)
- FCC v. Fox Television Stations, 556 U.S. 502 (2009) (when an agency changes course it must provide reasonable explanation)
- American Petroleum Institute v. EPA, 862 F.3d 50 (D.C. Cir. 2017) (severability and when to vacate parts of an agency action)