Big Gamble, Big Loss in New Customs Case

By on July 11, 2005 in Current Events with 0 Comments

The National Treasury Employees Union (NTEU) has a reputation in the federal labor relations community as a union that is often successful by forcing agencies into court and advancing innovative legal arguments to advance their point of view. But, as with any gambler, it is possible to lose big cases as well as win them. In a new case decision from the DC Circuit, the gamble backfired and, no doubt, the Customs negotiators are reveling in the vindication of the hard bargaining stance they took in facing down the NTEU legal juggernaut.

For readers who may still be wondering if labor-management "partnerships" advocated by President Clinton are dead, NTEU v. FLRA (No. 04-1137) may help make up your mind.

Under the concept of partnership, agencies were told to negotiate on "permissive" topics of bargaining. A permissive topic is one on which an agency does not have to negotiate with a labor union if it does not wish to do so. During the partnership era, a number of agencies embraced the partnership concept and expanded agreements with unions representing federal employees. In at least some cases, agencies did not like the results of these arrangements. In one of these cases, the Customs Service (which is now part of the Department of Homeland Security) reached agreement with the National Treasury Employees Union (NTEU) on the assignment of Customs inspectors.

The agreement between NTEU and Customs required the agency to negotiate with the union whenever a shift change was made. The agreement also resulted in the agency spending large amounts of money on overtime pay for inspectors.

When an executive order was issued by President Bush ending the requirement for agencies to bargain on permissive topics, Customs told the union it was rescinding agreements based on permissive topics of bargaining. One such agreement concerned the assignment of work to inspectors which the agency had concluded was not very efficient and was also expensive.

It told the NTEU that it was going to issue a new policy and rescind the agreement on assignment of work to Customs inspectors. The union was invited to submit its proposals for this new agreement. The union apparently liked the current agreement, which, among other things, resulted in paying more overtime to Customs employees. As a result, the union would not agree to bargain on the new agreement but, instead, wanted to simultaneously negotiate an entirely new national labor agreement.

One immediate result of this approach would be to delay, perhaps for several years, the changes desired by Customs on work assignment.

So, no longer bound by the restraints of trying to work in partnership with the union that represented Customs Inspectors, the agency implemented its new policy with regard to the assignment of work for Customs inspectors in October 2001. The union challenged the agency’s actions. The case wound its way through the administrative appeals processes and, some four years later, ended up in federal court.

The Court of Appeals for the District of Columbia Circuit heard the case and has now issued its decision. That decision upheld the actions taken by Customs to ditch the partnership arrangement on work assignment for inspectors.

The case turned on the issue of whether the union could insist the agency negotiate on ground rules under these circumstances. The ground rule the union proposed was that the agency would have to negotiate on the national labor agreement as well as the agreement regarding work assignment to Customs inspectors.

The court upheld the Federal Labor Relations Authority decision which concluded the agency did not have to bargain on a permissive topic and was within its rights to unilaterally implement the new agreement for inspectors.

In effect, by trying to slow down the changes to the policy on work assignment, and insisting the agency bargain on the entire agreement, the union waived its right to bargain and the agency was free to make unilateral changes to the work assignment policy.

The decision is significant and may well have ramifications throughout government. Keep in mind that this decision was not an interpretation of the new human resources policies that will soon go into effect for the Department of Homeland Security. It was issued under the provisions of the Civil Service Reform Act of 1978. Other agencies that also made agreements under the Clinton partnership executive order will undoubtedly be looking over this case to determine how it applies to their agreements as well.

In what may have made a bad day worse, and an illustration of how important this case was to the parties, the court added an unusual admonishment in a footnote: "NTEU is a frequent litigant in our court and its counsel is cautioned against trying to lead us astray in the future."

You can download the complete June 8th decision in NTEU v. FLRA (No. 04-1137) right here.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.


About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters onĀ federal human resources.