American Federation of Government Employees, AFL-CIO v. Office of Personnel Management, AFL-CI

• Decision Date: 26 June 1987
• Docket Number: AFL-CI,86-5457 and 86-5461,Nos. 86-5456,A,s. 86-5456
• Citation: 821 F.2d 761,261 U.S.App.D.C. 273
• Parties: 28 Wage & Hour Cas. (BN 217, 261 U.S.App.D.C. 273, 106 Lab.Cas. P 34,933 AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,ppellant, v. OFFICE OF PERSONNEL MANAGEMENT, et al. NATIONAL TREASURY EMPLOYEES UNION, Appellant, v. Constance HORNER, Director, Office of Personnel Management. NATIONAL FEDERATION OF FEDERAL EMPLOYEES, Appellant, v. Constance HORNER, Director, Office of Personnel Management.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 761

821 F.2d 761

28 Wage & Hour Cas. (BN 217, 261 U.S.App.D.C. 273,

106 Lab.Cas. P 34,933

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, Appellant, v. OFFICE OF PERSONNEL MANAGEMENT, et al.

NATIONAL TREASURY EMPLOYEES UNION, Appellant, v. Constance HORNER, Director, Office of Personnel Management.

NATIONAL FEDERATION OF FEDERAL EMPLOYEES, Appellant, v. Constance HORNER, Director, Office of Personnel Management.

Nos. 86-5456, 86-5457 and 86-5461.

United States Court of Appeals District of Columbia Circuit.

Argued Feb. 19, 1987.

Decided June 26, 1987.

Joseph F. Henderson, with whom Mark D. Roth, Washington, D.C., was on the brief for appellant, American Federation of Government Employees, AFL-CIO, in No. 86-5456.

Elaine D. Kaplan and Lois G. Williams, Washington, D.C., were on the brief for appellant, National Treasury Employees Union, in No. 86-5657.

Edwin H. Harvey, with whom H. Stephan Gordon and Clinton D. Wolcott, Washington D.C., were on the brief for appellant, National Federation of Federal Employees, in No. 86-5461.

Peter R. Maier, Atty., Dept. of Justice, with whom Richard K. Willard, Asst. Atty. Gen., Dept. of Justice, Joseph E. diGenova, U.S. Atty. and William Kanter, Atty., Dept. of Justice, Washington, D.C., were on the brief, for appellees.

Before WALD, Chief Judge, BORK and SILBERMAN, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge:

The history of this case is protracted and much of it was reviewed in National Treasury Employees Union v. Devine, 733 F.2d 114, 115-16 (D.C.Cir.1984). Briefly, in March, 1983, the Office of Personnel Management ("OPM") proposed new rules for implementing reductions-in-force ("RIFs") that increased the importance of merit (as measured by the results of employee performance evaluations) and decreased the importance of seniority in determining which employees keep their jobs, which get transferred, and which are terminated. OPM also proposed to change the method of determining which employees are entitled to overtime compensation under the Fair Labor Standards Act, 29 U.S.C. Sec. 201 et seq. (1982) ("FLSA"). Not until July, 1985, however, did these proposed rules go into effect. The delay was caused primarily by riders on congressional appropriation bills preventing OPM from using funds to issue or carry out the rules. The riders expired finally on July 1, 1985, whereupon OPM immediately implemented, over the unions' strenuous objections, a revised version of the rules.

Since July 1983, this matter has been almost continuously under the aegis of the federal courts. In 1983-84, the parties fought over the proper interpretation of the congressional rider--whether it in fact precluded OPM from putting the regulations into effect. That dispute was resolved by our opinion in Devine, which held the statutory language effectively, albeit temporarily, precluded OPM from implementing the rules, 733 F.2d at 120. The current phase of the litigation began on June 27, 1985, three days before the ban was due to expire, when the American Federation of Government Employees ("AFGE") filed suit in district court seeking a temporary restraining order preventing OPM from implementing the rules. The next day, the National Federation of Federal Employees ("NFFE") and the National Treasury Employees Union ("NTEU") filed similar actions, all of which the district judge denied from the bench. Although the Court of Appeals reversed, No. 85-5767 (June 29, 1985) (unpublished memorandum and order), Chief Justice Burger vacated the reversal, 473 U.S. 1301, 105 S.Ct. 3467, 87 L.Ed.2d 603 (1985), permitting the rules to go into effect on July 3, 1985. The unions pressed on with their lawsuit in the district court, seeking a preliminary injunction, which the district judge also denied. 618 F.Supp. 1254 (1985). On appeal, we affirmed the district judge. 782 F.2d 278 (1986). The case then went back to the district judge for determination on the merits of the unions' challenge. The unions argued that OPM violated the Administrative Procedure Act, 5 U.S.C. Sec. 551 et seq. (1982), by implementing the regulations immediately upon the congressional ban's expiration instead of providing new opportunities for notice and comment, and by failing to consider the unions' objections to the increased use of merit in RIF decisions; that various isolated provisions of the RIF rules conflict with statutory or constitutional requirements; and that OPM's overtime regulations exceed OPM's regulatory authority and are inconsistent with provisions of the FLSA. On cross motions for summary judgment, the district judge granted the government's motion on all issues and dismissed the unions' complaint, No. 85-2092 (June 30, 1986). The unions now appeal.

I.

Appellants contend that OPM's implementation of the regulations on July 3 1985--immediately after the appropriations rider expired--was unlawful because the agency failed to provide new notice and an opportunity for additional comment after the rider's expiration on July 1, 1985. This was required, appellants argue, because our opinion in Devine held the ban rendered OPM's proposed regulations completely "null and void." 733 F.2d 121. Consequently, there were no "proposed regulations" to implement. Appellants also maintain that a new notice and comment period was required because the regulations had become, in some respects, obsolete during the two-year hiatus, ¹ and because, as appellants put it, OPM's "sudden implementation" in July, 1985 gave neither federal agencies nor the unions sufficient time to prepare for the rules' adoption.

The district judge found none of these arguments persuasive, and neither do we. Although we did, in Devine, describe OPM's regulations as "null and void" while under the congressional ban, our view that this invalidity was merely temporary was plainly stated. We explained that the ban did not "permanently repeal[ ] OPM's authority to implement the disputed regulations," but only prevented OPM from implementing the regulations while Congress studied them. 733 F.2d at 120. We also pointed out that upon expiration, "OPM will be free to take any steps deemed necessary to implement, administer and enforce the regulations...." Id. Since OPM had already completed notice and comment proceedings, and in fact had published the rules in final form just two days before Congress imposed its ban, id. at 116, implementation could be and was virtually automatic once the ban expired; the unions have identified no additional steps "necessary" to put the rules into effect.

Although admittedly some parts of the regulations were obsolete when implemented in July, 1985, no hardship resulted and OPM quickly cured the defects in a subsequent rulemaking. ² Nor can it be said that interested parties had insufficient time to prepare for the new regulations; nothing in the rider prevented agencies or private parties from preparing themselves for the effects of the new regulations once the ban expired and, as we have mentioned, it was (or should have been) quite clear to everyone familiar with this rulemaking process that the rules were subject to implementation immediately upon expiration of the ban.

II.

Appellants challenge the regulations' increased emphasis on employee performance evaluation results in determining an employee's retention rights during a RIF. ³ When a RIF occurs, employees are generally laid-off according to their seniority--employees with fewer years of service lose their positions before employees with more years of service. But employees may earn extra years of service credit if they receive high marks in annual performance evaluations. Under the old RIF system, employees could earn up to four "performance credit years" for good work, thereby giving them a greater chance of keeping their jobs during a RIF action. The new regulations increase from four to twenty the maximum number of performance credit years employees may receive as a supplement to their seniority. Appellants contend OPM lacked statutory authority to promulgate the new regulations and, in any event, did so arbitrarily and capriciously because it improperly failed to explain why the particular numbers of credit years selected were the "correct" ones, and failed to consider the unions' complaints that the heightened importance of subjective performance evaluations in the rules would render employment decisions increasingly subject to the unfair or biased evaluations of supervisors.

These objections are insubstantial. Congress gave OPM broad authority to issue regulations governing the release of employees under a reduction-in-force, requiring only that OPM give effect to four factors:

(1) tenure of employment;

(2) military preference ...;

(3) length of service; and

(4) efficiency or performance ratings.

5 U.S.C. Sec. 3502 (1982). Congress thus delegated to OPM the authority to determine the weight to be placed on each factor. Nothing elsewhere in the statute nor in its legislative history suggests any congressional intent to cabin OPM's discretion. That OPM's prior method treated seniority as the most important factor, and that Congress, as appellants argue, expressed no displeasure with that method is simply immaterial. Congress gave OPM broad regulatory authority, including the authority to reconsider and alter its prior balance of factors to diminish the relative importance of seniority.

Nor can this aspect of OPM's rulemaking be characterized as "arbitrary and capricious." Contrary to appellants' suggestion, OPM had no obligation to conduct any sort of empirical tests to determine what number of performance credit years was appropriate. This was, after all, a policy decision, not a technical question for which data can provide a mathematically "correct" answer. In this situation, we think it sufficient that OPM identified the need to significantly increase the importance of performance in...