NATIONAL TREASURY EMPLOYEES UNION, PETITIONER v. FEDERAL LABOR RELATIONS AUTHORITY, RESPONDENT UNITED STATES CUSTOMS AND BORDER PROTECTION, UNITED STATES DEPARTMENT OF HOMELAND SECURITY INTERVENOR
No. 04-1137
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 7, 2005 Decided July 8, 2005
Elaine D. Kaplan argued the cause for the petitioner. Gregory O‘Duden and Larry J. Adkins were on brief.
James F. Blandford, Attorney, Federal Labor Relations Authority, argued the cause for the respondent. David M. Smith, Solicitor, Federal Labor Relations Authority, and William R. Tobey, Deputy Solicitor, Federal Labor Relations Authority, were on brief.
Before: GINSBURG, Chief Judge, and HENDERSON and RANDOLPH, Circuit Judges.
Opinion for the court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: Granting the exceptions taken by the United States Department of the Treasury‘s Customs Service1 (Customs), the Federal Labor Relations Authority set aside an arbitration award in favor of the National Treasury Employees Union (NTEU). See United States Dep‘t of the Treasury Customs Serv., Washington, D.C. (Agency) & Nat‘l Treasury Employees Union (Union), 59 FLRA 703 (2004) (Customs Order), reprinted in Joint Appendix (J.A.) at 271-96. The NTEU now petitions for review of the Authority‘s order, alleging that the Authority erred twice: initially, by concluding that Customs exercised statutorily protected management rights when it implemented a revised National Inspectional Assignment Policy (NIAP); and, again, by concluding that, assuming arguendo that Customs in fact exercised its managements right in implementing the revised
I.
The Federal Service Labor-Management Relations Statute (FSLMRS or Statute),
(B) to assign work, to make determinations with respect to contracting out, and to determine the personnel by which agency operations shall be conducted;
(C) with respect to filling positions, to make selections for appointments from--
(i) among properly ranked and certified candidates for promotion; or
(ii) any other appropriate source; and
(D) to take whatever actions may be necessary to carry out the agency mission during emergencies.
(b) Nothing in this section shall preclude any agency and any labor organization from negotiating--
(1) at the election of the agency, on the numbers, types, and grades of employees or positions assigned to any organizational subdivision, work project, or tour of duty, or on the technology, methods, and means of performing work;
(2) procedures which management officials of the agency will observe in exercising any authority under this section; or
(3) appropriate arrangements for employees adversely affected by the exercise of any authority under this section by such management officials.
The distinction between an agency‘s exercise of management rights and its obligation to engage in impact and implementation bargaining is the crux of this controversy, which has its genesis in Customs’ revised policy governing the assignment of Customs inspectors to tours of duty and overtime work known as the National Inspectional Assignment Policy (NIAP). Customs and the NTEU, which represents “a nationwide unit” of Customs Service employees, including Customs inspectors, have negotiated a series of national level collective bargaining agreements (NLAs). The most recent NLA (and the one the parties were abiding by when this dispute arose) expired in 1999.
In 1993, the Congress passed the Customs Officers Pay Reform Act (COPRA), which overhauled the overtime system applicable to Customs inspectors. See
At the time the NIAP was formulated, Customs, along with all other federal agencies, was required under Executive Order 12871 to negotiate over the permissive subjects of bargaining set forth in section 7106(b)(1) of the FSLMRS. See 58 Fed. Reg. 52,201 (Oct. 1, 1993). Section 7106 identifies the subjects as “the numbers, types, and grades of employees or positions assigned to any organizational subdivision, work project, or tour of duty, or on the technology, methods, and means of performing work.”
Following Executive Order 13203, Customs advised the NTEU that it no longer intended to negotiate over permissive subjects of bargaining as previously required by article 5, section 2, of the NLA. In that section of the NLA, Customs agreed, “[i]n the interest of partnership, . . . to bargain with the Union over the numbers, types and grades of employees or positions assigned to any Customs Service organizational subdivision, work project or tour of duty, and the technology, methods and means of performing work within the Service.” J.A. 273. Customs further advised the NTEU that it no longer considered itself bound by provisions of agreements—including the NLA and the NIAP—relating to permissive subjects of bargaining. Customs transmitted to the NTEU a draft of a revised NIAP that it planned to implement on September 30, 2001.
A correspondence battle ensued during August and September of 2001, only the salient aspects of which we recount now. On August 6, the NTEU invoked its right to bargain over the impact and implementation of the revised NIAP and served notice of its intent to renegotiate the expired NLA. Customs responded on
On August 29, Customs and the NTEU met to discuss ground rules but to no avail. They exchanged correspondence the following day: Customs stated it did not “agree to merge,” as the NTEU had proposed, negotiations over the revised NIAP with those regarding the expired NLA, while the NTEU said it “continues to believe that concerns associated with” the NIAP “should be addressed as part of the overall negotiations” on the expired NLA. J.A. 53-54. In its letter, the NTEU also proposed that the existing NIAP be “rolled-over,” subject to a few specified revisions. J.A. 55. Customs responded that it did not intend to delay the implementation of the revised NIAP until the parties renegotiated the NLA. On September 6, 2001, Customs had the last word in this exchange: It notified the NTEU that any delay in implementing the revised NIAP “is unacceptable” and, consequently, it “decline[d] to accept the NTEU‘s suggestion that [it] forego revision and implementation of the NIAP in order to address it during renegotiation of the national agreement.” J.A. 56-57.
The Authority granted Customs‘s exceptions and set the award aside. See Customs Order, 59 FLRA at 708-11. At the outset of its analysis, the Authority observed that, because Customs had “proposed a specific change in unit employees’ conditions of employment pursuant to the exercise of its management rights under § 7106 of the Statute while the parties were contemplating negotiation of a new term agreement,” the case presented an issue of first impression. Id. at 708. Resolution of the case, it said, turned on Customs‘s “legal ability, if any, to refuse to
The Authority chose the first answer, finding that “the Union‘s proposed ground rule constitutes a permissive subject of bargaining and, consequently, that the Agency was under no obligation to bargain on that subject as a precondition to impact and implementation of the revised NIAP.” Id. In articulating the basis of its decision—i.e., “that an agency cannot be compelled to bargain over combining impact and implementation and term bargaining and it has the right to insist that such bargaining proceed on separate tracks“—the Authority delineated two principles. Id. First, it noted that “[w]here an agency action constitutes the exercise of a management right” under sections 7106(a) and 7106(b)(1) of the FSLMRS, its “obligation is limited to bargaining over the procedures governing the exercise of the right, under § 7106(b)(2) of the Statute, or appropriate arrangements for employees adversely affected by the exercise of the right, under § 7106(b)(3).” Id. Second, relying on our decision in FLRA v. United States Dep‘t of Justice, 994 F.2d 868 (D.C. Cir. 1993), the Authority observed that, because an agency exercising a management right need not bargain over matters beyond the scope of impact and implementation bargaining, its “duty to bargain over ground
After finding that the NTEU‘s right to bargain “was limited to the impact and implementation of the proposed changes in the revised NIAP,” id. at 711; see also id. at 708, because implementation of the revised NIAP involved the exercise of a statutory management right, the Authority then considered whether the NTEU‘s “proposed ground rule addresse[d] only procedures or appropriate arrangements relating to the change in conditions of employment proposed” by the revised NIAP. Id. at 710. “Clearly, it does not,” the Authority concluded, because “[b]ased on the record, there is no question but that bargaining over a new term agreement would extend beyond the narrow scope of issues related to the procedures and appropriate arrangements governing implementation of the revised NIAP.” Id. While it acknowledged that the NTEU “identified provisions of the NLA that related to the NIAP that it wished to discuss in term negotiations,” the Authority found that “it also demanded to bargain over other, unrelated provisions of the NLA as well.” Id. Therefore, the Authority concluded, because the “Union proposed, as a condition precedent to bargaining over the impact and implementation of the revised NIAP, that [Customs] agree to bargain that matter as a part of bargaining over a new term agreement,” the Union‘s ground rule “exceeded the scope of impact and implementation bargaining and [Customs] had no obligation to bargain over [it].” Id.
The Authority additionally explained that, because the proposed ground rule sought in effect a waiver of Customs‘s right to bargain only over those procedures and arrangements related to the revised NIAP, it constituted a “permissive subject of bargaining.” Id. Consequently, in the Authority‘s view, Customs had the “right not only to refuse to bargain to impasse over the matter, but also to implement the revised NIAP without completing bargaining.” Id. Therefore, the Authority
The Authority further reasoned that a contrary rule—i.e., one “requiring agencies to bargain [over] a ground rule conditioning impact and implementation bargaining on the negotiation of a term agreement“—would, to its mind, “frustrate the compromise reached by Congress in enacting § 7106.” Id. (emphasis in original). Such a rule “would not,” the Authority explained, “give full effect to the place of management rights in the statutory scheme because it would tie the exercise of a right to objectives that have nothing to do with the purposes for which the right was being exercised.” Id. Indeed, the Authority observed, “it would be exceedingly anomalous if a union could achieve through ground rules bargaining an expansion of negotiations that it could not accomplish through bargaining over procedures and appropriate arrangements.” Id. at 711.
Because Customs’ “implementation of the revised NIAP, in the face of a proposal over which it was not obligated to bargain, was, therefore, not a violation of the Statute,” the Authority concluded that the arbitrator erred as a matter of law in deciding otherwise and set his award aside.4 Id. at 712. The NTEU then timely
II.
We begin with the standards by which we review the Authority‘s order. First, there is the familiar Administrative Procedure Act standard, see
The NTEU‘s opening attack is on the Authority‘s conclusion that Customs exercised its statutory management rights in proposing revisions to the NIAP. According to the NTEU, the Authority‘s “erroneous premise” falls apart once it is recognized that the proposed revisions altered “pre-existing negotiated procedures and appropriate arrangements,” a topic outside Customs’ statutory management rights and therefore within Customs’ duty to bargain. Petitioner‘s Br. at 32. That is, in the NTEU‘s words: “[W]hen Customs proposed to replace the negotiated procedures and appropriate arrangements of [the NIAP] with new procedures and appropriate arrangements . . . it was proposing a change in conditions of employment over which it had a substantive obligation to bargain.” Petitioner‘s Br. at 34.
The NTEU‘s Chevron step-one argument—i.e., that the Authority mischaracterized the implementation of the NIAP as the exercise of a management right rather than as a bargainable change to appropriate arrangements and procedures—is a non-starter at best. The NTEU is right that the language and structure of section 7106 manifest a “deliberate distinction” between an agency‘s management rights, on the one hand, and matters subject to bargaining on the other. Petitioner‘s Br. at 33. The language of the statute does indeed qualify the management rights: The phrase “nothing . . . shall affect the authority of any management official of any agency” begins subsection (a), while the provision that “[n]othing . . . shall preclude any agency and any labor organization from negotiating” introduces the matters set forth in subsection (b).
The gist of NTEU‘s argument on this point appears to be based on its view that “it is clear that several significant provisions of the NIAP had no relationship whatsoever to the exercise of any management right,” a view it supports by citing various “procedures and appropriate arrangements that the parties had previously negotiated to govern the exercise of Customs‘s authority to assign work” resulting from the revisions. Petitioner‘s Br. at 32. The Authority, however, reached a contrary conclusion. The NIAP involves management rights, it said, because its review of the revised NIAP “indicate[d] that the revised NIAP constitutes, among other
The NTEU also argues that, in concluding the revised NIAP implicates management rights, the Authority departed from an earlier decision—United States Dep‘t of Treasury, Customs Serv. Region IV, Miami Dist., Miami, Fla. (Respondent) & Nat‘l Treasury Employees Union (Charging Party), 38 FLRA 838 (1990) (Miami Customs)—without explanation. Miami Customs, according to the NTEU, “demonstrates that Customs was obligated to bargain over the substance of its decision to revise [the] NIAP, not merely its impact and implementation.” Petitioner‘s Br. at 34. We do not agree. In Miami Customs, the Authority held that the Miami District Customs Service violated the FSLMRS in implementing a new rotation system after refusing to bargain over a negotiable union proposal addressing the length of an inspector‘s time on a given assignment. See Miami Customs, 38 FLRA at 844. Unless a proposal involving the right to assign work directly interferes with the exercise of a management right, the Authority explained, it is negotiable. See id. at 842. Accordingly, because “proposals which address only the length of an assignment within such a rotation schedule do not interfere with
We find the NTEU‘s next argument—i.e., even assuming that Customs exercised its management rights in implementing the revised NIAP, it was nevertheless obligated to bargain over the proposed ground rule regarding the timing of bargaining over both the NIAP and a new NLA—wanting as well. The Authority‘s conclusion in this regard, the NTEU maintains, stems from a misapplication of the analysis we outlined in FLRA v. United States Dep‘t of Justice, 994 F.2d 868 (D.C. Cir. 1993), to its ground rule proposal and produces “an anomalous result that undermines the statutory purposes.”5 Petitioner‘s Br. at 50.
First, we cannot say the Authority misapplied our Dep‘t of Justice decision here. There, we addressed a petition for enforcement of an Authority order requiring the San Diego Border Patrol to bargain over the impact and implementation of a relocation of employees to various locations in San Diego County. See Dep‘t of Justice, 994 F.2d at 870-72. We held that the Border Patrol did not violate the FSLMRS in refusing to bargain over the union‘s proposal to use the vacated space resulting from the relocation. See id. at 873. We explained that “the term ‘impact and implementation’ includes only the procedures which management officials of the agency will observe in exercising management rights and appropriate arrangements for employees adversely affected by the exercise of such rights.” Id. at 872 (further internal quotation marks & citations omitted). The “disputed subject matter” did not “fit[] within either of those subsets,” we concluded, because it was “clear that the creation of an office for the Union has nothing to do with the procedures used by management for the resource and personnel allocation involved in the decentralization of the unit.” Id.
Moreover, the Authority‘s interpretation of the mutual statutory duty to bargain in good faith makes sense even without resort to supporting precedent. Notwithstanding the NTEU‘s contrary characterization, the Authority did not conclude that an agency is never obligated to bargain over a ground rule proposal to combine negotiations; rather, it held only that Customs was under no such duty to do so in this instance because the NTEU‘s “proposed ground rule exceeded the scope of impact and
For the foregoing reasons, we deny the NTEU‘s petition for review.
So ordered.