American Federation of Government Employees v. FLRA, 25 F.4th 1

Background

The Labor-Management Relations Statute requires certain federal employers to bargain over "conditions of employment;" the FLRA historically applied a de minimis exception (since mid-1980s) excluding trivial management-initiated changes from bargaining.
In 2019 the Departments of Education and Agriculture asked the FLRA to adopt a clearer threshold; they proposed requiring bargaining only for changes with a "substantial impact."
On September 30, 2020, the FLRA issued a four-page general statement of policy replacing the "more than de minimis" test with a "substantial impact" standard, adopted over a dissent and without soliciting public comment.
Three federal employee unions petitioned for review, arguing the new standard is contrary to the statute and, alternatively, arbitrary and capricious under the Administrative Procedure Act (APA).
The D.C. Circuit held that the FLRA’s policy change was arbitrary and capricious because the agency failed to supply a reasoned explanation for abandoning its longstanding de minimis precedent and vacated the FLRA’s policy statement; the court did not resolve the statutory-interpretation claim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the FLRA’s shift from a "more than de minimis" to a "substantial impact" test was arbitrary and capricious under the APA	The FLRA gave an inadequate, inconsistent explanation for abandoning decades of precedent and failed to show the new test is better or more administrable	The FLRA defended the change as a predictive, expert judgment that would create clearer, more administrable lines and cited NLRB practice	Court: FLRA’s explanation was insufficient and the change arbitrary and capricious; policy vacated
Whether the substantial-impact test is contrary to the Labor-Management Relations Statute	The new threshold excludes changes that the statute plainly requires to be bargained over; de minimis is the proper exception	The FLRA contends the substantial-impact standard is permissible and aligns with private-sector precedent	Court: Did not decide statutory claim because APA arbitrary-and-capricious ruling was dispositive
Whether the FLRA adequately justified departing from its own precedent and prior agency reasoning	Unions: FLRA failed to engage with or rebut its prior explanations for the de minimis rule and court precedent upholding it	FLRA: Prior adoption was flawed; convergence with NLRB precedent supports returning to substantial-impact	Court: FLRA failed to grapple with its past decisions and controlling D.C. Circuit authority; departure not sufficiently reasoned
Whether procedural steps (e.g., no public comment) or reliance on NLRB precedent cured the lack of explanation	Unions: Forgoing notice-and-comment and relying on post-hoc rationales worsened the decision’s inadequacy	FLRA: Argued it was aware of confusion from precedent and could rely on private-sector NLRB authority	Court: Noted lack of public comment and rejected post-hoc rationalizations; FLRA’s reliance on NLRB practice was not advanced in the decision and cannot cure the failure to explain

Key Cases Cited

AFGE v. FLRA, 961 F.3d 452 (D.C. Cir. 2020) (agency must supply reasoned analysis when departing from precedent)
Ass’n of Admin. Law Judges v. FLRA, 397 F.3d 957 (D.C. Cir. 2005) (de minimis exception permissible under the statute)
Fred Meyer Stores, Inc. v. NLRB, 865 F.3d 630 (D.C. Cir. 2017) (review requires examining relevant data and rational connection between facts and choice)
FCC v. Prometheus Radio Project, 141 S. Ct. 1150 (2021) (agencies must engage in reasoned decisionmaking)
Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (1983) (courts may not accept post-hoc rationalizations for agency action)