American Federation of Government Employees, AFL-CIO v. Federal Labor Relations Authority

• Citation: 850 F.2d 782
• Decision Date: 01 July 1988
• Docket Number: AFL-CI,P,No. 87-1378,87-1378
• Parties: 128 L.R.R.M. (BNA) 2927, 271 U.S.App.D.C. 89 AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,etitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, Veterans Administration, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 782

850 F.2d 782

128 L.R.R.M. (BNA) 2927, 271 U.S.App.D.C. 89

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, Petitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, Veterans

Administration, Intervenor.

No. 87-1378.

United States Court of Appeals, District of Columbia Circuit.

Argued May 6, 1988.

Decided July 1, 1988.

Charles A. Hobbie, with whom Mark D. Roth, Washington, D.C., was on the brief, for petitioner.

Robert J. Englehart, Federal Labor Relations Authority, with whom Ruth E. Peters, Sol., William E. Persina, Deputy Sol., and Arthur A. Horowitz, Associate Sol., Federal Labor Relations Authority, Washington, D.C., were on the brief, for respondent.

Jeffrey Clair, Dept. of Justice, with whom James M. Spears, Acting Asst. Atty. Gen., and William Kanter, Dept. of Justice, were on the brief, for intervenor, Veterans Admin. E. Roy Hawkens, Dept. of Justice, Washington, D.C., also entered an appearance for intervenor, Veterans Admin.

Before WALD, Chief Judge, SILBERMAN, Circuit Judge, and PARKER, ^* Judge, United States District Court for the District of Columbia.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge:

This is a petition for review of a Federal Labor Relations Authority ("FLRA" or "Authority") decision holding that the Veterans Administration ("VA") did not commit an unfair labor practice by refusing to comply with an arbitrator's award. The Authority concluded that the agency was entitled to challenge the arbitrator's jurisdiction in an unfair labor practice proceeding and that the arbitrator lacked jurisdiction. We hold the Authority's decision not arbitrary and capricious and therefore deny the petition.

I.

Grace R. Kain, a staff nurse at the VA hospital in Fargo, North Dakota, was accused of professional misconduct in the dispensing of medication, and in February of 1984 she was reassigned pending an internal inquiry conducted by a Board of Investigation ("BOI"). As part of the VA's quality assurance program, see 38 U.S.C. Sec. 4151 (1982 & Supp. III 1985), a medical facility director may authorize a BOI to investigate, inter alia, medication errors that aggravate a patient's existing condition. 18 C.F.R. Sec. 17.508(a)-(c) (1987). Based on the BOI's findings and recommendations, the hospital's director determined that she should be removed. Kain requested a hearing, to which she was entitled as a health-care professional pursuant to 38 U.S.C. Sec. 4110 (1982 & Supp. III 1985), which covers charges of "inaptitude, inefficiency, or misconduct" and provides that the disciplinary decision of the VA Administrator shall be "final." 38 U.S.C. Sec. 4110(a), (d). ¹ Under that statutory provision, a disciplinary board composed of five senior employees was formed and conducted a hearing in October 1984. The board subsequently recommended that Kain be discharged, and accordingly the Chief Medical Director fired her effective June 30, 1985.

Meanwhile, in May 1984 petitioner, Local 3884 of the American Federation of Government Employees ("AFGE"), filed a grievance under its collective bargaining agreement with the Veterans Administration asserting that the BOI committed procedural errors when investigating Kain's case. Under the terms of the Federal Service Labor-Management Relations Act of 1978 ("FSLRA"), 5 U.S.C. Secs. 7101-7135 (1982 & Supp. IV 1986), every collective bargaining agreement must contain a "fair and simple" grievance procedure and allow both the union and the employer to invoke "binding arbitration" in case of a failure to reach a satisfactory settlement. Devine v. White, 697 F.2d 421, 428 (D.C.Cir.1983) (citing 5 U.S.C. Secs. 7121(a)-(b)), rev'd in part, Cornelius v. Nutt, 472 U.S. 648, 656 n. 7, 105 S.Ct. 2882, 2887 n. 7, 86 L.Ed.2d 515 (1985).

Specifically, the Union charged that the VA unduly delayed both the seating of the BOI and its final determination, generally treated Kain's case differently from previous, similar ones, and violated the agency's regulations and policies--all contrary to an alleged contractual right to due process. In addition, the union later submitted the transcript of the disciplinary board's October 1984 decision into evidence before the arbitrator as further evidence that the VA failed to comply with its own disciplinary procedures. Although the Veterans Administration challenged the arbitrator's jurisdiction to review proceedings conducted under section 4110, the arbitrator nevertheless determined that the BOI's procedures violated the collective bargaining agreement and ordered Kain's reinstatement with back pay. Contrary to the VA's argument, the arbitrator found that the disciplinary board under section 4110 did not cure any alleged deficiencies in procedure in the BOI's determination and further that these procedural errors would be addressed by the arbitrator--not the disciplinary board. The arbitrator directed the agency either to drop the charges against Kain or constitute a new BOI to conduct a fresh investigation. See VA Medical Center, Fargo, N.D. v. AFGE, FCMS No. 84K/22269 (Aug. 20, 1985) (Flagler, Arb.). The arbitrator concluded that while he lacked jurisdiction to adjudicate the merits of the underlying dispute--whether or not Kain engaged in misconduct--he nevertheless had jurisdiction under the collective bargaining agreement to correct procedural errors in the VA's investigation of the case. Id. at 10-12.

The VA filed exceptions to the arbitrator's award with the FLRA, challenging the arbitrator's jurisdiction. The VA claimed that section 4110 of title 38 provides the exclusive remedy for a health-care employee disputing discipline or discharge, and therefore that none of the procedures of the FSLRA--including provisions for arbitration of collective bargaining disputes--could apply to Kain's discharge. Although the FLRA has authority to review directly arbitral awards that are assertedly "contrary to any law, rule, or regulation," 5 U.S.C. Sec. 7122(a)(1), the FLRA lacks jurisdiction to review certain discipline cases, including removals under Sec. 7512. See 5 U.S.C. Secs. 7121(f), 7122(a), 7512; see also Devine v. White, 697 F.2d at 429 n. 26. In section 7512 removal cases, the aggrieved employee, in her discretion, may elect to pursue her claim either under the appellate procedures of 5 U.S.C. Sec. 7701 or the negotiated procedure under a collective bargaining agreement--but not both. Devine v. White, 697 F.2d at 444 (Appendix A). Under the former, an employee first appeals to the Merit Systems Protection Board ("MSPB") and then to the Federal Circuit. But, in negotiated procedure cases, review of the arbitral decision is taken to the Federal Circuit "as if the matter had been decided by the [MSPB]." 5 U.S.C. Sec. 7121(f). The arbitrator must apply the same statutorily prescribed standards in deciding the case as would be applied if the matter had been appealed to the MSPB first. 5 U.S.C. Sec. 7121(e)(2). By that device, Congress assured uniformity of direct review of adverse personnel actions, at least of Sec. 7512 removal cases. Cornelius v. Nutt, 472 U.S. at 661 n. 16, 105 S.Ct. at 2890 n. 16. Accordingly, the FLRA determined that it had no jurisdiction, on direct review, to consider the VA's exceptions. See VA Medical Center, Fargo, N.D. v. AFGE, 20 F.L.R.A. 854 (1985).

The VA, however, as a government employer, is not entitled to direct review of an adverse MSPB decision or arbitrator's award before the Federal Circuit in section 7512 removal cases. 5 U.S.C. Secs. 7121(f), 7701-7703; see also Devine v. White, 697 F.2d at 437. That review can be sought on behalf of the agency only by the Director of the Office of Personnel Management ("OPM"). See Devine v. White, 697 F.2d at 437; 5 U.S.C. Sec. 7703(d). Apparently, the VA did not ask OPM to seek review; instead, it refused to comply with the award.

At that point, the union filed an unfair labor practice charge and the general counsel of the FLRA issued a complaint asserting the VA's refusal to abide by the award violated 5 U.S.C. Sec. 7122(b), which obligates agencies to comply with a final, binding arbitrator's award. The ALJ agreed, but the Authority rejected the ALJ's recommended decision. In the case's posture as an unfair labor practice proceeding, as opposed to an exception to an arbitral award, the Authority determined that it should entertain the VA's argument that the arbitrator lacked jurisdiction, and it held that he did. Although normally the FLRA will not permit a party to challenge an arbitrator's award collaterally in an unfair labor practice proceeding, see, e.g., United States Dep't of Justice v. AFGE, 22 F.L.R.A. 928, 932 (1986); United States Army v. AFGE, 22 F.L.R.A. 200, 206-07 (1986), it concluded that where the challenge is to the arbitrator's very jurisdiction--as opposed to his interpretation of a collective bargaining agreement--its usual approach is inappropriate. Then the Authority--abandoning its earlier position that section 4110 was not the exclusive means for review of a grievance and acquiescing in two circuit court opinions ²--concluded that 38 U.S.C. Sec. 4110 provides the exclusive remedy for Kain to challenge her discharge. It relied, inter alia, on section 4119, part of the 1980 amendment to title 38 (the Veterans Administration statute), which states:

Notwithstanding any other provision of law, no provision of title 5 or any other law pertaining to the civil service system which is inconsistent with any provision of this subchapter shall be considered to supersede, override, or otherwise modify such provision of this subchapter except to the extent that such provision of title 5 or of such other law specifically provides, by specific reference to a provision of this subchapter, for such provision to be superseded, overridden, or otherwise modified.

Veterans Administration Health-Care Amendments of 1980, Pub.L. No. 96-330, Title I, Sec. 116(a)(1), 94 Stat. 1030, 1039, codified...