American Federation of Gov. Employees v. Nicholson

• Decision Date: 16 January 2007
• Docket Number: No. 05-5365.,05-5365.
• Citation: 475 F.3d 341
• Parties: AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, LOCAL 446, Appellant v. R. James NICHOLSON, Secretary of Veterans Affairs, and Michael J. Kussman, M.D., M.S., M.A.C.P., Acting Under Secretary for Health for the Veterans Health Administration, Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

475 F.3d 341

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, LOCAL 446, Appellant v. R. James NICHOLSON, Secretary of Veterans Affairs, and Michael J. Kussman, M.D., M.S., M.A.C.P., Acting Under Secretary for Health for the Veterans Health Administration, Appellees.

No. 05-5365.

United States Court of Appeals, District of Columbia Circuit.

Argued October 27, 2006.

Decided January 16, 2007.

Appeal from the United States District Court for the District of Columbia (No. 02cv00613).

Kevin M. Grile argued the cause for appellant. With him on the briefs were Charles A. Hobbie and Mark D. Roth.

Alan Burch, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Kenneth L. Wainstein, U.S. Attorney at the time the brief was filed, and R. Craig Lawrence, Assistant U.S. Attorney. Michael J. Ryan, Assistant U.S. Attorney, entered an appearance.

Before: GINSBURG, Chief Judge, and SENTELLE and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge.

This case has its roots in a labor dispute between the Department of Veterans Affairs ("VA") Medical Center in Asheville, North Carolina, and the American Federation of Government Employees, AFL-CIO, Local 446, ("the Union"), which represents operating room nurses who work at the Asheville Medical Center. The Union secured an arbitration award in favor of the Asheville nurses, but a subsequent decision by the VA's Under Secretary for Health made it impossible for the Union to enforce that award. The Union filed this lawsuit against the Secretary of Veterans Affairs and the VA's Under Secretary for Health to have that decision declared unlawful, so that the arbitration award could be enforced. The district court dismissed the Union's lawsuit for lack of subject matter jurisdiction. On this appeal, the Union argues that the district court erred in dismissing the suit and should have ruled in its favor on the merits. For the reasons that follow, we hold that the district court did have jurisdiction over the Union's complaint. On the merits, however, we hold that the district court should have ruled for the VA defendants.

I. Jurisdiction

A. Background

Title VII of the Civil Service Reform Act of 1978 ("CSRA"), which is codified at title 5, chapter 71 of the U.S.Code, authorizes most federal employees to collectively bargain over the "conditions of [their] employment." See 5 U.S.C. § 7102(2). The collective bargaining rights of doctors and nurses employed by the VA, however, are more limited. In Colorado Nurses Ass'n v. FLRA, 851 F.2d 1486 (D.C.Cir.1988), we held that the Secretary of the VA had the authority to set the conditions of employment for these employees by regulation and that VA medical professionals did not have a right to mandatory collective bargaining. Colo. Nurses, 851 F.2d at 1492. Following that decision, in 1991 Congress passed a new statute providing that:

Except as otherwise specifically provided in this title, the authority of the Secretary to prescribe regulations under section 7421 of this title is subject to the right of Federal employees to engage in collective bargaining with respect to conditions of employment through representatives chosen by them in accordance with chapter 71 of title 5 (relating to labor-management relations).

Department of Veterans Affairs Health-Care Personnel Act, Pub.L. No. 102-40, title II, § 202, 105 Stat. 187, 200 (1991), codified at 38 U.S.C. § 7422(a). Chapter 71 of title 5 governs federal employees' labor relations generally, including grievance procedures under collective bargaining agreements. 5 U.S.C. §§ 7121-7123. In other words, 38 U.S.C. § 7422(a) gives VA medical professionals the right to bargain according to the rules set out in chapter 71 of title 5, subject to limitations "specifically provided" in title 38. Title 38 imposes three substantive limitations on the VA nurses' bargaining rights under title 5:

Such collective bargaining (and any grievance procedures provided under a collective bargaining agreement) in the case of employees described in section 7421(b) of this title may not cover, or have any applicability to, any matter or question concerning or arising out of (1) professional conduct or competence, (2) peer review, or (3) the establishment, determination, or adjustment of employee compensation under this title.

38 U.S.C. § 7422(b). The third of these limitations — matters concerning employee compensation — is at issue in this case. In addition, Congress authorized the VA Secretary to determine whether a matter is subject to collective bargaining or instead falls under one of the three listed exceptions. As applicable to this case, the statute provides that "[a]n issue of whether a matter or question concerns or arises out of . . . the establishment, determination, or adjustment of employee compensation under this title shall be decided by the Secretary and is not itself subject to collective bargaining and may not be reviewed by any other agency." Id. § 7422(d). The VA Secretary has delegated this § 7422(d) authority to the Under Secretary for Health.

Pursuant to their collective bargaining rights under 38 U.S.C. § 7422(a) and chapter 71 of title 5, operating room nurses at the VA Medical Center in Asheville, North Carolina are represented by the plaintiff Union, AFGE Local 446. The Asheville Medical Center is subject to a nationwide collective bargaining agreement ("CBA") between the American Federation of Government Employees and the VA. In February 1999 AFGE Local 446 filed a grievance. The Union claimed that, under the CBA, operating room nurses at the Medical Center were entitled to "premium pay" for any hours worked at night or on weekends. The Medical Center disagreed. The grievance went to arbitration, and in December 1999 the arbitrator ruled in favor of the Union. The arbitrator concluded that operating room nurses were entitled to premium pay for night and weekend work, and ordered appropriate back pay dating to the filing of the grievance. The details of the grievance, which are not relevant to the question of the district court's jurisdiction over this lawsuit, are discussed at greater length in section II of this opinion.

An arbitrator's award may be appealed to the Federal Labor Relations Authority ("FLRA"), but in this case the Medical Center waited too long before filing its appeal,¹ and the FLRA dismissed the appeal as untimely. The Medical Center refused to recognize the award. It is an unfair labor practice ("ULP") for a federal agency to fail to comply with a valid arbitration award, see Dep't of Health & Human Servs. v. FLRA, 976 F.2d 1409, 1413 (D.C.Cir.1992), so to enforce the award the Union filed a ULP charge with the FLRA. In September 2000 the FLRA served a ULP complaint on the Medical Center.

Meanwhile, by letter of February 14, 2000, the Medical Center had requested a determination from the VA that the arbitrator lacked the authority to rule on the Union's grievance, on the grounds that 38 U.S.C. § 7422(b) excludes matters concerning the determination of employee compensation from the bargaining and grievance process. Several months later, the VA Under Secretary for Health returned the Medical Center's request for a § 7422 determination. The Under Secretary instructed the Center to first attempt to resolve the matter through consultation with the Union, pursuant to the collective bargaining guidelines then in effect between the AFGE and the VA. Negotiations failed, and in October 2000 the Medical Center again requested a ruling from the Under Secretary.

With this request still pending with the Under Secretary, the FLRA General Counsel prepared to seek judgment against the Medical Center in the ULP proceeding. On March 5, 2001, the General Counsel moved for a summary judgment to enforce the arbitration award. Also on March 5th, the VA Under Secretary issued a Decision Paper (" § 7422 Decision"). The Under Secretary found, "[u]nder the authority in 38 U.S.C. 7422(d)," that the arbitrator's decision and the subsequent ULP proceeding before the FLRA "concern[] the establishment, determination, or adjustment of employee compensation."

With the § 7422 Decision in hand, the Medical Center opposed summary judgment in the FLRA proceeding and sought dismissal of the Union's attempt to enforce the arbitration award. The Medical Center argued that the FLRA lacked jurisdiction over the Union's complaint, and that the Under Secretary's § 7422 Decision conclusively decided the issue because a question decided by the VA under § 7422(d) "is not itself subject to collective bargaining and may not be reviewed by any other agency." 38 U.S.C. § 7422(d). The FLRA agreed and dismissed the complaint. The FLRA held that its jurisdiction could be challenged at any stage in its proceedings, and that because the Under Secretary "has made a § 7422(d) determination, the Authority lacks jurisdiction over this matter." U.S. Dep't of Veterans Affairs, VA Med. Ctr., Asheville, N.C., 57 F.L.R.A. 681, 2002 WL 1019134, at *5 (Jan. 31, 2002) ("VAMC Asheville").

The Union did not seek judicial review of the FLRA decision, for reasons that will be discussed below. Instead, in April 2002 it filed this lawsuit against the Secretary of Veterans Affairs and the Under Secretary for Health in their official capacities — collectively, the "VA" — on the theory that the Under Secretary's § 7422 Decision was unlawful. If the § 7422 Decision were declared unlawful by the district court, the Union reasoned, then the arbitration award would be enforceable against the Medical Center, and the operating room nurses at that facility would finally receive their "premium pay" for night and weekend work.

The Union and the VA filed cross motions for summary judgment. The VA also sought dismissal under Federal Rule of Civil Procedure 12(b)(1), arguing that the district court did not have subject matter jurisdiction over the claims...