U.S. Dept. of Treasury, U.S. Customs Service v. Federal Labor Relations Authority, 93-1388

• Decision Date: 01 March 1995
• Docket Number: No. 93-1388,93-1388
• Parties: 148 L.R.R.M. (BNA) 2090, 310 U.S.App.D.C. 31, 63 USLW 2457 UNITED STATES DEPARTMENT OF the TREASURY, UNITED STATES CUSTOMS SERVICE, Petitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, National Treasury Employees Union, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 682

43 F.3d 682

148 L.R.R.M. (BNA) 2090, 310 U.S.App.D.C.

31, 63 USLW 2457

UNITED STATES DEPARTMENT OF the TREASURY, UNITED STATES

CUSTOMS SERVICE, Petitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, National Treasury Employees Union, Intervenor.

No. 93-1388.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 12, 1994.

Decided Dec. 30, 1994.

Rehearing and Suggestion for Rehearing In Banc Denied March 1, 1995.

Petition for Review of an Order of the Federal Labor Relations Authority.

Marc P. Richman, Atty., Dept. of Justice, Washington, DC, argued the cause, for petitioner. With him on the briefs were Frank W. Hunger, Asst. Atty. Gen., and William G. Kanter, Atty., Dept. of Justice, Washington, DC.

William E. Persina, Atty., Federal Labor Relations Authority, Washington, DC, argued the cause, for respondent. With him on the brief was David M. Smith, Sol., Federal Labor Relations Authority, Washington, DC. Arthur A. Horowitz and Pamela P. Johnson, Washington, DC, Attys., entered appearances for respondent.

Elaine D. Kaplan, Deputy Gen. Counsel, Nat. Treasury Employees Union, Washington, DC, argued the cause, for intervenor. With her on the brief was Gregory O'Duden, Gen. Counsel, Nat. Treasury Employees Union, Washington, DC. Barbara A. Atkin, Washington, DC, Atty., entered an appearance, for intervenor.

Before: EDWARDS, Chief Judge, and SILBERMAN and RANDOLPH, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge:

The government appeals the Federal Labor Relations Authority's affirmance of an arbitrator's award that held a regulation issued by the Customs Service in violation of a statute regulating coastwise trade. The Authority challenges our jurisdiction to review its order. We hold instead that the arbitrator and the FLRA exceeded their own jurisdiction.

I.

At the time this case arose, Sec. 1448(a) of the federal customs laws required ships originating from "a foreign port or place" to make "formal entry" with United States customs officials before unloading any goods or passengers at a United States port. 19 U.S.C. Sec. 1448(a) (1988) (superseded). Formal entry entails the presentation of the ship's manifest and other documentation at the port customshouse and was required of such vessels at all U.S. ports of call. Id. Since ships often arrive when customshouses are closed and formal entry impossible, Congress also provided for "preliminary entry" to enable unloading prior to formal entry. A ship's captain could make preliminary entry "by making oath or affirmation to the truth of the statements contained in the vessel's manifest and delivering the manifest to the customs officer who boards such vessel." Id. When preliminary entry was requested, the Customs Service would arrange to have customs personnel available to meet an incoming vessel and receive the manifest, after which cargo could be unloaded to approved warehouses or container yards pending formal entry. See id. The costs of this special attention were borne by the shipper. See 19 U.S.C. Sec. 261 (1988) (repealed 1993).

In 1990, the Customs Service adopted the Coastwise Advanced Preliminary Entry (CAPE) program for its operations in the Southeastern United States. The program streamlined preliminary entry for so-called "coastwise vessels"--those ships originating from a foreign port that have already made a formal entry with U.S. customs. Technological innovations such as the capacity to transmit manifests electronically in advance of arriving vessels had made unnecessary the actual physical transfer of manifests to waiting customs officials. Accordingly, the CAPE program effectively eliminated boarding as a routine aspect of preliminary entry.

An expected consequence of the change in policy--and one highly disagreeable to the National Treasury Employees Union (NTEU), which represents the customs employees affected by the CAPE program--was a diminution in the amount of lucrative overtime work assigned to customs agents, who were no longer needed to meet arriving vessels at odd hours of the day or night. Although not required to do so, the Service offered to negotiate over "appropriate arrangements" for employees adversely affected by the new program. ¹ The union rejected this proposal, however, and instead filed a grievance under the collective bargaining agreement.

Under the Federal Service Labor-Management Relations Statute (FSLMRS or Statute), 5 U.S.C. Sec. 7121 (1988), collective bargaining agreements between federal agencies and unions representing their employees must "provide procedures for the settlement of grievances." The Statute defines "grievances" to comprise any complaint concerning

(i) the effect or interpretation, or a claim of breach, of a collective bargaining agreement; or

(ii) any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment....

Id. Sec. 7103(a)(9)(C). Parties are not required to adopt a grievance procedure coextensive with the Statute's provision, see id. Sec. 7121(a)(2) (the parties' contract "may exclude any matter from the application of the grievance procedures"), but the collective bargaining agreement between the Customs Service and the NTEU defines "grievance" in language identical to that of Sec. 7103(a)(9)(C).

The union's grievance alleged that the Service's decision not to require actual boarding as a component of preliminary entry under the CAPE program violated Sec. 1448(a) as well as its primary implementing regulations. The union argued that since the customs law requires delivery of "the manifest to the customs officer who boards such vessel," 19 U.S.C. Sec. 1448(a) (emphasis added), the Customs Service could not legally dispense with boarding.

Initially, the arbitrator dismissed the union's complaint. "The statutory and regulatory provisions upon which the union relies," he decided, "do not fall within the contractual category" of grievance. Although the CAPE program could be thought to "affect conditions of employment," the arbitrator reasoned that "every law-related action of the Agency has some impact on its employees" (emphasis added), and therefore a mere effect was an "insufficient nexus" to establish an arbitrable grievance. He thought that whether a particular "law, rule, or regulation" provided a cognizable basis for grievances should be answered by drawing upon a "zone of interest" analysis--i.e., by determining whether the law was intended to benefit the employees on whose behalf the grievance was brought. Persuaded that Sec. 1448(a) was not enacted with the interests of Customs officers in mind, he concluded that the dispute was not arbitrable.

The union appealed his decision to the FLRA, which has authority to review arbitration awards under 5 U.S.C. Sec. 7122. ² The Authority determined that the arbitrator had too narrowly construed the term "grievance" as used in the Statute. United States Dep't of Treasury, United States Customs Serv. v. NTEU (Customs I ), 43 F.L.R.A. No. 72, at 4-5 (1992). The Authority reasoned that "law" as used in Sec. 7103(a)(9)(C)(ii) had the same scope as the term "applicable law" under Sec. 7106(a), the section of the Statute that sets forth the management prerogatives of covered federal agencies. ³ Id. at 4. Under that latter section, an agency acting "in accordance with applicable laws" is guaranteed authority, notwithstanding any provision of the FSLMRS, to make all major personnel decisions. Since the Authority had previously interpreted "applicable law" to "include[ ] provisions of the U.S.Code, the U.S. Constitution, controlling judicial decisions, and Presidential Executive Orders," so long as they "relate to the conditions of employment of unit employees," National Treasury Employees Union & U.S. Dep't of Treasury, Bureau of Pub. Debt, 42 F.L.R.A. 1333, 1337, 1338 (1991) (Bureau Pub. Debt ), it read "law" under Sec. 7103(a)(9)(C)(ii) to have the same broad meaning. Nor was the term limited to "statutes that prescribe employee rights and benefits." Customs I, 43 F.L.R.A. No. 72, at 4 (quoting Bureau Pub. Debt, 42 F.L.R.A. at 1338). In short, there are no definitional constraints on the available grounds for grievances under Sec. 7103(a)(9)(C)(ii) other than that the law in question "affect" conditions of employment in some way in a particular circumstance.

The Authority remanded the case to the arbitrator, and, after being so instructed concerning the Statute's meaning, he determined that since the collective bargaining agreement defined a grievance in the same terms as did the Statute, the union had put forward an arbitrable dispute by alleging a violation of Sec. 1448(a). On the merits, the arbitrator held that the CAPE program was inconsistent with Sec. 1448(a) (and the Customs Service's own regulations) by virtue of having dispensed with boarding as an element of preliminary entry. To redress the violation, the arbitrator awarded back pay to the relevant customs officials in the amount that they would have earned but for the CAPE program; he also ordered the Customs Service "to comply with all applicable laws, rules and regulations in the future." ⁴

This time the Service appealed to the FLRA, arguing that Sec. 1448(a) was not grievable under the FSLMRS and, alternatively, that the CAPE program did not violate that section of the customs laws. Without any deference to the Customs Service's interpretation of a law that Congress entrusted to the Service to enforce, compare Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) (federal appellate courts owe deference to agencies' interpretations of the statutes they are charged with administering when the statutes are silent or ambiguous with respect to the issues in question), the FLRA held that Sec. 1448(a) plainly contemplated physical boarding as an aspect of...