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D.C. Circuit Slams FLRA on Permitting Violations of Appropriation Law

by Bob Gilson |

In a recent DC Circuit Decision, the court said:

“This case turns on whether a government agency may provide employees with free bottled water even when safe and drinkable water is available from water fountains at their work sites. Under federal appropriations law, the answer is no.”

Now this doesn’t sound like an important case.  The facts are that a Navy activity decided that certain water fountains served up contaminated water and stopped their use.  The Navy decided to give employees bottled water to make up.  After the fountains were replaced by safe ones, Navy stopped giving out bottled water claiming that appropriation law precluded provision of bottled water if safe tap water was available.  The unions involved claimed a change in past practice, grieved and won after the arbitrator ignored Navy’s argument that providing bottled water violated appropriations law as not specifically authorized and constituting an impermissible payment for employee personal expenses.

The Federal Labor Relations Authority (FLRA) in its review of the arbitrator’s award gave short shrift to the Agency’s claimed legal violation and found that even if it violated appropriations law, it was a past practice and that trumped any appropriations concerns.  The Court didn’t think so. It found:

“Federal collective bargaining is not exempt from the rule that funds from the Treasury may not be expended except pursuant to congressional appropriations. Indeed, the statute governing federal labor relations explicitly relieves agencies of the duty to bargain over any matter that would be “inconsistent with any Federal law or any Government-wide rule or regulation.” 5 U.S.C. § 7117(a)(1). Therefore, under Section 7117, “a collective bargaining proposal is contrary to law, and hence not subject to bargaining, if it requires expenditure of appropriated funds for a purpose not authorized by law.” Air Force, 648 F.3d at 848 (quoting Ass’n of Civilian Technicians, P.R. Army Chapter v. FLRA (ACT III), 534 F.3d 772, 776 (D.C. Cir. 2008)); see also Ass’n of Civilian Technicians, P.R. Army Chapter v. FLRA (ACT II), 370 F.3d 1214, 1217 (D.C. Cir. 2004).” (My Emphasis)

The Court went on to say:

“Congress’s control over federal expenditures is “absolute.” Rochester, 960 F.2d at 185 (internal quotation marks omitted). The Clause does not permit an agency, by contract with a union, “to authorize the expenditure of funds beyond what Congress has approved.” Air Force, 648 F.3d at 845; see also Ass’n of Civilian Technicians, P.R. Army Chapter v. FLRA (ACT I), 269 F.3d 1112, 1116 (D.C. Cir. 2001) (“This is not to say that the expenditure of appropriated funds in a manner not authorized by law is negotiable – it is not.”); 1 GAO, PRINCIPLES OF FEDERAL APPROPRIATIONS LAW 4-9 (3d ed. 2004) (“an agency cannot use the device of a contract, grant, or agreement to accomplish a purpose it could not do by direct expenditure”).” (Again, My emphasis)

Last August, FedSmith reported the Court’s slamming of FLRA for interpreting a law other than those provisions of 5 U.S. Code Chapter 71 it is authorized to interpret.  It ruled in this case:

“The Authority ruled that using appropriated funds to purchase bottled water at the Newport facilities would not contravene federal appropriations law. Dep’t of the Navy, Naval Undersea Warfare Ctr. Div. Newport, R.I., 64 F.L.R.A. 1136, 1139-40 (2010). The FLRA is entitled to “considerable deference” when interpreting and applying the Federal Service Labor-Management Relations Statute, its “own enabling statute.” ACT III, 534 F.3d at 776 (quoting Bureau of Alcohol, Tobacco & Firearms v. FLRA, 464 U.S. 89, 97 (1983); ACT II, 370 F.3d at 1219). It receives no deference, however, when it “has endeavored to reconcile its organic statute with another statute” – such as a federal appropriations statute – “not within its area of expertise.” Air Force, 648 F.3d at 846 (quoting Dep’t of Veterans Affairs v. FLRA, 9 F.3d 123, 126 (D.C. Cir. 1993)) (internal quotation marks, brackets, and ellipses omitted); see also Ass’n of Civilian Technicians, Tony Kempenich Mem’l Chapter 21 v. FLRA, 269 F.3d 1119, 1121 (D.C. Cir. 2001); SSA v. FLRA, 201 F.3d 465, 471 (D.C. Cir. 2000).” (My Emphasis)

Why Is This Significant?

Since 1980, FLRA has, in a somewhat cavalier manner, determined that the provision of a number of “employee personnel expenses” were negotiable working conditions.  No attention was paid to the idea Congress determined on what government spent its money.  While it might be politically incorrect to suggest it, absent a specific authorizing appropriation, how can an Agency legally provide such things as child care; college tuition and books for courses not directly job related; fitness costs if the job doesn’t have physical requirements; parking subsidies; personal liability insurance; cafeteria services and prices; refrigerators, microwave ovens, etc.; and any other matter classifiable as a personal expense not specifically authorized in general or Agency appropriations.

Since neither an arbitrator nor FLRA can enforce an obligation to commit an illegal act, it appears to me any contract provision in existence or pending union proposal must be subjected to scrutiny under theory of this decision.  It also appears that this may be a preview of how the Court will view FLRA’s abrogation test which ignores statutory violations in favor of enforcing an agreement, illegal or not.

This decision lays the groundwork for Agencies to assert their appropriations statutes when the union’s proposal has been ruled negotiable in FLRA precedent.  The Court also is clearly telling FLRA to defer to an Agency’s interpretation of its own law.  The Court will continue to reverse FLRA if it doesn’t get the message.

As always, any opinion you find above is either mine or the Court’s.  I’ve tried to highlight the difference with quotation marks.

Navy v. FLRA 10-1304-1352521

Based on discussions with some Agencies, and sponsored by RGS, I and some colleagues plan to offer a “Practitioner’s Course in Labor Relations” and a “Practitioner’s Course in Employee Relations” focusing on advising managers, using proven tools to enhance case management, and matters of interest to the specialist, advocate or attorney with a basic grounding in these programs. We plan to offer these around the country and in D.C. If you have an interest in learning more, please let me know. You can do so using the “contact” link at the bottom of this article. RGS has also given us the go ahead to do an update for practitioners this spring in the D.C. area. I’ll follow up with more information as arrangements firm up.

© 2014 Robert J. Gilson. All rights reserved. This article may not be reproduced without express written consent from Robert J. Gilson.

About the Author

Photo of Bob Gilson

Bob Gilson

Bob Gilson is a consultant with a specialty in working with and training Federal agencies to resolve employee problems at all levels. A retired agency labor and employee relations director, Bob has authored or co-authored a number of books dealing with Federal issues and also conducts training seminars.

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