Hot News for 2014: D.C. Circuit Slams FLRA Appropriate Arrangements Decisions

By on January 5, 2014 in Current Events with 5 Comments

In a big win for the Department of the Treasury and a stinging loss for the Federal Labor Relations Authority (FLRA), the U.S. Court of Appeals for the D.C. Circuit in a January 3, 2014 case overturned FLRA’s  invention of a side-by-side “abrogation standard” and “excessive interference standard” for the same proposed language depending on when and how the issue got before them.

In its decision, the Court repeatedly cited former Member Thomas Beck’s dissent to the FLRA decision.  One can only hope that FLRA’s newest member reacts to the court’s message and  brings some sense to otherwise senseless decision making. This case proves that Tom Beck’s efforts were not for naught.

The Court said in its decision:

“In deciding to apply an “abrogation” standard in some circumstances and an “excessive interference” standard in others, the Authority invoked nothing in section 7106(b)(3)’s text. Instead, it concluded that using these different standards was justified by the distinction between, on the one hand, the text of the statutory provisions governing agency-head review of collective bargaining agreements and agency challenges to arbitration awards, and, on the other hand, the text of the provision governing an agency’s power to declare a union proposal nonnegotiable during collective bargaining.”

In a particularly caustic turn of phrase, the Court went on to find:

“Here, for the first time the Authority addresses section 7106(b)(3)’s language, arguing that what is “appropriate” may “vary[] depending on the circumstances.” Respondent’s Br. 27. But the “circumstances” relevant to determining whether an arrangement is “appropriate” within the meaning of section 7106(b)(3) are those governing how, in a particular agency, the arrangement will affect the exercise of the management rights listed in section 7106(a), not how the issue comes before the Authority. The Authority’s current interpretation of the statute could, as it concedes, mean that the propriety of two identical provisions, each affecting the exercise of management rights in precisely the same way, would rise or fall on the point at which the agency asserts the arrangement is inappropriate. Section 7106(b)(3) provides no basis for this sort of “magical[]” transformation, as Member Beck put it.” (My emphasis)

Signaling how it may come down on Agency Head Review (the issue was excluded because the Agency did not argue it before FLRA), the Court made this observation:

In this context, however, we see little reason to prefer the bargaining representatives’ assessment of a provision to that of the agency head. Although it may be true that the agency’s bargaining representatives are better positioned to understand the meaning of a particular provision and why it was included in an agreement, see NTEU I, 65 F.L.R.A. at 514, and while Congress may well have intended to preclude agency heads from second-guessing the legitimate concessions made during negotiations, see AFGE II, 778 F.2d at 858 & n.12, agency heads seem equally capable of assessing a given provision’s consistency with section 7106, and section 7114(c) expressly commits such legal questions to the agency head.”

Of course, any Agency representative who reads FLRA decisions knows that the members will ignore the Court on any issue unless specifically reversed so we can expect Agency Head Review to come up again.

The Court summed up its decision as follows:

“In sum, when an agency asserts that a contract provision falls outside section 7106(b)(3)’s exception to section 7106(a), whether the question concerns the agency’s duty to bargain, see 5 U.S.C. § 7117(c), or the provision’s consistency with law, see id. §§ 7114(c), 7122(a)(1), the underlying legal issue is precisely the same: does the provision represent an “appropriate arrangement[]”? In applying two different standards in these contexts, the Authority has set forth two inconsistent interpretations of the very same statutory term, and thus acted arbitrarily and capriciously.”

What Does This Mean?

I believe a careful reading of this this case points the way to a number of options for Agencies:

  • If FLRA persists in overturning Agency Head Review determinations, Agencies are on notice to appeal to a receptive court.
  • I’ve written before about the FLRA’s “sneaky” approach to avoiding a determination that a proposal is “permissive”.  The Court has indicated a suspicion of that approach which may provide arguments for Agency reps.
  • I know I may be beating a dead horse in my constant carping that Agencies create an evidentiary record in appropriate arrangement cases,  (See May 2013 article  but the Court has found FLRA arbitrary and capricious a number of times in recent years.  I do not think the FLRA will allow this but do believe the Court will slam them for relying on an argument of what is “appropriate” versus what is not.

Agency Labor Relations and Counsel staff need to get out the yellow pen on this case while cutting and pasting quotations from it in their next FLRA appeal.

IRS v FLRA No 12-1456. Decision from the US Court of Appeals for the District of Columbia Circuit

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About the Author

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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