691 F.2d 553 (D.C. Cir. 1982), 80-1895, National Treasury Employees Union v. Federal Labor Relations Authority

Docket Nº:80-1895.
Citation:691 F.2d 553
Case Date:October 12, 1982
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

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691 F.2d 553 (D.C. Cir. 1982)




No. 80-1895.

United States Court of Appeals, District of Columbia Circuit

October 12, 1982

Argued Sept. 18, 1981.

Robert M. Tobias, Washington, D. C., for petitioner. William E. Persina, Washington,

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  1. C., also entered an appearance for petitioner.

    Mary Elizabeth Medaglia, Associate Sol., Fed. Labor Relations Authority, with whom Marian R. Fox, Atty., Fed. Labor Relations Authority, Washington, D. C., was on the brief for respondent.

    Before ROBINSON, Chief Judge, GINSBURG, Circuit Judge, McGOWAN, Senior Circuit Judge.

    Opinion for the Court filed by Chief Judge SPOTTSWOOD W. ROBINSON, III.


    This petition launches judicial review of a decision and order of the Federal Labor Relations Authority holding that the promulgation of performance standards for federal civil service employees and the identification of the critical elements of their jobs are included in the package of rights reserved to management officials of federal agencies by Title VII of the Civil Service Reform Act of 1978, 1 commonly known as the Federal Labor-Management Relations Act, 2 and consequently do not fall within the duty to bargain imposed by that legislation. Our careful examination of the Act and its relevant legislative history leads us to conclude that this interpretation must stand. Accordingly, we affirm the Authority's action.

    I. Statutory and Regulatory Framework

    Petitioner, National Treasury Employees Union, is the exclusive representative of the employees in the bargaining unit of the Treasury Department's Bureau of Public Debt. 3 All of these employees are covered by the Federal Labor-Management Relations Act. Passed in 1978 in an effort to comprehensively remodel the federal civil service system, the Act restructured labor-management relations in the Federal Government. In adopting the Act, Congress sought to strengthen federal management's control over hiring and firing of employees, and simultaneously to buttress the status of employee unions in the federal sector. 4 In recognition of these goals, the Act declares that the public interest is served both by higher standards of employee performance and by collective bargaining in the civil service. 5

    Federal employers are expressly required by the Act to engage in collective bargaining, 6 defined as a "good faith effort to reach agreement with respect to the conditions of employment." 7 The statutory phrase "conditions of employment" is in turn defined as "(p)ersonnel policies, practices, and matters, whether established by rule, regulation, or otherwise, affecting

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    working conditions." 8 By equally positive terms of the Act, however, the duty to bargain does not extend to proposals inconsistent with federal law or some government-wide rule or regulation. 9 In this context, Section 7106(a) of the Act 10 reserves specific rights to management, providing pertinently for this case that

    (n)othing in (the Act) shall affect the authority of any management official of any agency ...

    (A) to hire, assign, direct, lay off, and retain employees...

    (B) to assign work, to make determinations with respect to contracting out, and to determine the personnel by which agency operations shall be conducted.

    Thus, a proposal calling for negotiation over exercise of one or more of the management rights enumerated in Section 7106(a) 11 clashes with federal law, and it is not within the employing agency's duty to bargain.

    The Act is administered by the Federal Labor Relations Authority, 12 an independent bipartisan agency within the Executive Branch which succeeded the Federal Labor Relations Council. 13 The Authority's role in federal employment is analogous to that of the National Labor Relations Board 14 in the private sector. 15 Under its statutory mandate, the Authority must determine units appropriate for union organization and bargaining, 16 conduct representation elections, 17 adjudicate unfair labor practice complaints, 18 and resolve negotiability disputes. 19

    As part of its comprehensive effort to reform the civil service, Congress also revised the methodology for appraising employee performance. That process, as reconstructed, seeks to assure accurate evaluations of job performance through use of objective criteria. 20 Each agency must develop one or more performance-appraisal systems, 21 and these systems must, in turn, provide for establishment of objective and job-related performance standards tied to the demands of the employee's position. 22

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    The agency is directed to communicate both the standards and the critical elements of the position to the employee. 23 The results of the required performance appraisals are to be used as the basis for rewarding and promoting employees, reducing them in grade, and retaining or removing them. 24

    Quite obviously, the concepts of "performance standards" and "critical elements" of a position are key features of the performance-appraisal systems. As defined by the Office of Personnel Management, a performance standard is the "express measure of the level of achievement by management for the duties ... of a position." 25 Similarly, a critical element is a "component of an employee's job that is of sufficient importance that performance below the minimum standards ... requires remedial action and denial of within grade increases, and may be the basis for removing or reducing the level of that employee." 26 The potential importance of these aspects of performance-appraisal systems is reflected by the specific statutory requirement that agencies encourage employee participation in the development of performance standards. 27

    II. Factual Background of the Litigation

    Pursuant to the latter directive, the Bureau of Public Debt informed petitioner in February of 1979 that it planned to institute new standards of performance for the Bureau's accounts maintenance clerks. 28 Petitioner requested negotiations over the substance, impact and implementation of changes. 29 The Bureau took the position that it would negotiate the impact and implementation of the proposals, but not the substance of any standard. 30

    Ultimately, petitioner submitted the following proposal:

    Accounts Maintenance Clerks (GS 5203/5) must maintain the following minimum rates:

    1. To retain his/her position, incumbent must process 9.0 batches per hour. 31

    As part of the Bureau's performance-appraisal system, this proposal would have identified batch-processing as a critical element of an accounts maintenance clerk's position, and would have fixed nine batches per hour as the minimum performance acceptable

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    for those in that position. 32 The Bureau felt that this proposal usurped nonnegotiable prerogatives of management, and refused to bargain; 33 and, as was its statutory right, 34 petitioner filed a negotiability appeal with the Authority. 35 The appeal was consolidated with sixteen others for purposes of oral argument on the question whether and to what extent performance-appraisal systems, and performance standards they include, are bargainable under the Act. 36

    In its decision in the instant case, the Authority concluded that establishment of performance standards and identification of critical job elements are within the scope of the power reserved exclusively to management by Section 7106(a) to "direct employees" and "assign work." 37 The Authority further held that petitioner's proposal directly interfered with those functions, and therefore was not a proper subject of negotiation because inconsistent with federal law. 38 It is this determination that petitioner now challenges. The principal issue presented for resolution, then, is whether management's statutorily-reserved right to direct employees and assign work properly encompasses formulation of performance standards and ascertainment of critical job elements in discharge of an agency's responsibility for development of an objective performance appraisal system.

    In support of its decision, the Authority contends that its interpretation of the management-rights section, and the corresponding interpretation of agencies' duty to bargain, further the congressional intent manifest in the Act and its legislative history to provide federal agencies with the authority and flexibility essential to accomplishment of their respective missions. 39 The Authority asserts, as it did in the decision under review, 40 that implementation of petitioner's proposal would encumber exercise of an agency's statutory prerogative to direct employees and assign work. 41

    Petitioner argues strenuously that the obligation to bargain in good faith which the Act imposes upon federal employers 42 is to be broadly construed, and reciprocally that exceptions to that obligation are to be read narrowly. 43 Thus, petitioner urges that the management-rights exemption from the employer's duty to bargain cannot be said to encompass the development of performance-appraisal systems. 44 Petitioner further asserts that relevant Authority precedents 45 establish that before a proposal may properly be termed nonnegotiable, it must relate directly and integrally to a reserved management right, and directly impinge upon that right. 46 Petitioner vigorously contests the Authority's view that

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    performance standards for critical job elements are determinative of the quantity, quality or timeliness of any given employee's work. 47 That conclusion, petitioner asserts, is not supported by either evidence or logic; such standards, by petitioner's lights, have no effect until an evaluation is made after an employee has completed the work assigned...

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