American Federation of Government Employees, AFL CIO, Local 1968 v. Federal Labor Relations Authority, AFL-CI

• Decision Date: 12 October 1982
• Docket Number: AFL-CI,LOCAL,No. 81-1274,81-1274
• Citation: 223 U.S.App.D.C. 376,691 F.2d 565
• Parties: 111 L.R.R.M. (BNA) 2549, 223 U.S.App.D.C. 376 AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,1968, Petitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 565

691 F.2d 565

111 L.R.R.M. (BNA) 2549, 223 U.S.App.D.C. 376

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, LOCAL 1968, Petitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent.

No. 81-1274.

United States Court of Appeals District of Columbia Circuit.

Argued Dec. 4, 1981.

Decided Oct. 12, 1982.

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

William J. Stone, Washington, D. C., with whom James R. Rosa, Washington, D. C., was on the brief, for petitioner.

Mary Elizabeth Medaglia, Associate Sol., Fed. Labor Relations Authority, with whom Marian R. Fox, and Dawn D. Bennett-Alexander, Attys., Fed. Labor Relations Authority, Washington, D. C., were on the brief, for respondent.

Before ROBINSON, Chief Judge, WALD and GINSBURG, Circuit Judges.

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

SPOTTSWOOD W. ROBINSON, III, Chief Judge:

Petitioner, Local 1968 of the American Federation of Government Employees, AFL-CIO, brings on for review a decision and order of the Federal Labor Relations Authority holding that three of petitioner's labor proposals encroach upon rights reserved to agency management by the Federal Labor-Management Relations Act, ¹ and are thus not subjects of mandatory collective bargaining. In light of the principles articulated by this court in Department of Defense v. FLRA ² and National Treasury Employees Union v. FLRA, ³ the latter issued today, we affirm the Authority's outcome.

I

The statutory and regulatory context in which this case arose is reviewed at some length in National Treasury Employees Union, ⁴ and need be only briefly recapitulated here. Under the Federal Labor-Management Relations Act, federal agencies are required to bargain with employees or their union representatives over "condition(s) of employment," ⁵ but only to the extent consistent with federal law or regulations. ⁶ The federal law most relevant here is Section 7106(a) of the Act, which reserves to management the right to "direct employees" ⁷ and "assign work." ⁸ The Act also instructs federal agencies to establish employee-performance appraisal systems, ⁹ the key components of which are "performance standards" for and "critical elements" of the job. ¹⁰

During collective bargaining between petitioner and the Department of the Treasury, a dispute arose over the negotiability of certain of petitioner's proposals regarding the Department's development of a performance-appraisal system. The Department concluded that the italicized portions of the following proposals were nonnegotiable:

PROPOSAL I

Section 1. The parties agree that critical elements of a position used for performance appraisal will be based only on the grade controlling factors of a position for which there will be an accurate position or job description. Such critical elements for performance appraisals will be weighted in direct proportion to the relative importance in grade determination.... ¹¹

PROPOSAL III

Section 4. There shall be no secret studies bearing on performance appraisals. All studies conducted by the (employer) will be conducted on typical workers under normal working conditions. The Union shall participate on an equal basis in the development or revisions of all measures of performance and studies including but not limited to selection of typical workers and conditions. If agreement cannot be reached, formal negotiations will be convened. Any impasses will be referred to the Federal Service Impasses Panel for resolution.

PROPOSAL IV

Section 6. Any disputes under this Article may be resolved under the negotiated grievance procedure including but not limited to:

1. Challenges to critical elements of position.

2. The measure of performance as set forth in performance standards. ¹²

As was its privilege under the Act, ¹³ petitioner obtained administrative review by the Federal Labor Relations Authority of the Department's determinations. The Authority ruled that the disputed portions of the proposals invaded areas confided to management by Section 7106(a), ¹⁴ and thus were outside the agency's statutorily-imposed duty to bargain. ¹⁵ In so concluding, the Authority relied upon an earlier holding ¹⁶ which we today sustain, ¹⁷ that establishment of performance standards and identification of critical job elements, as parts of an employee-performance appraisal system, are components of management's power, reserved by Section 7106(a), to direct employees and assign work, and as such are beyond the ambit of mandatory collective bargaining. ¹⁸ Applying that principle to this case, the Authority condemned each of the proposals in issue to the same fate. ¹⁹

In restricting "critical elements of a position" for performance-appraisal purposes to those deemed grade-controlling, ²⁰ the Authority reasoned, Proposal I limited the agency's ability to itself select critical job elements, for it could not treat as critical an element not otherwise considered grade-controlling. ²¹ In this respect, Proposal I, the Authority said, was materially different from one it had upheld earlier, ²² which in the Authority's words had merely prescribed "general, non-quantitative criteria under which an arbitrator could review (the) application to an employee of a performance standard established by agency management." ²³ In contrast, Proposal I, the Authority declared, established a substantive criterion-classification as grade-controlling-in obedience to which critical job elements must be designated. ²⁴ The Authority thus concluded that this proposal directly interfered with management's reserved authority under Section 7106(a) to direct employees and assign work through use of critical job elements identified by management alone. ²⁵

Continuing, the Authority ruled that Proposal III, which envisioned equal union participation in development and revision of measures of performance, and called for formal negotiations on related disputes and possible resort to the Federal Service Impasses Panel, ²⁶ was inconsistent with management's rights. ²⁷ Because this proposal would require bargaining to impasse on questions concerning the particular performance standards to be adopted, the Authority deemed it indistinguishable from that condemned in National Treasury Employees Union. ²⁸ On the basis of that earlier holding, Proposal III was held to be outside the duty to bargain. ²⁹

Lastly, the Authority repulsed the petitioner's attack on Proposal IV, which would make grievance procedures applicable to disagreements growing out of the establishment and operation of performance-appraisal systems. ³⁰ Stating that a negotiated grievance procedure may not properly extend to any matter reserved by law to agency discretion, the Authority held that this proposal would effectively subject the agency's exercise of its exclusive right to direct the employees and assign work to review by an arbitrator, ³¹ and therefore would empower arbitrators to nullify management's judgment on performance standards and critical job elements and to substitute their own. ³² The Authority spurned the suggestion that the proposal dealt merely with procedural matters, and as such was not shielded from negotiation, ³³ and concluded that it trespassed upon the agency's reserved right to establish performance standards and identify critical job elements, and accordingly was outside the scope of the bargaining obligation. ³⁴

II

Petitioner complains of the Authority's ruling on a number of grounds, many of which are effectively disposed of by Department of Defense, ³⁵ which was rendered after filing of petitioner's principal brief herein, and National Treasury Employees Union, ³⁶ which we announce contemporaneously with this opinion.

A. Interpretation of the Act.

Petitioner's main challenge is to the Authority's holding that promulgation of performance standards and identification of critical job elements are ingredients of the right reserved to management by Section 7106(a) of the Federal Labor-Management Relations Act to direct employees and assign work, ³⁷ and thus are nonnegotiable. The Act, petitioner says, embodies a congressional determination that collective bargaining in the federal sector is in the public interest, and therefore is to be encouraged. ³⁸ Toward this end, petitioner continues, the Act imposes an obligation upon federal agencies to engage in collective bargaining ³⁹ over "conditions of employment," ⁴⁰ a term petitioner would have us define as including performance standards and critical job elements incorporated into a performance-appraisal system. ⁴¹

We reject this argument for the reasons articulated in National Treasury Employees Union. ⁴² There we today affirm the Authority's determination that formulation of performance standards and designation of critical job elements for performance-appraisal purposes are within the agency's statutorily-reserved prerogative to direct employees and assign work, and therefore fall outside the obligation to bargain. ⁴³ That holding obviously brings to naught a good many of the arguments advanced by petitioner.

Pressing a point not raised there, however, petitioner contends that Congress contemplated that performance standards would be subject to collective bargaining. In support, petitioner cites a statement by Representative Udall ⁴⁴ during the House debates that Section 7106(a)(2)(C) ⁴⁵ is designed

to preserve as bargainable (to the extent permitted by applicable laws and regulations) the standards, criteria, and procedures for establishing promotion certificates, while assuring management's right to make the actual selection from the certificate..... ⁴⁶

Promotion-certificate standards and criteria, it is argued, are not materially distinct from performance standards; by analogy, Congress is said to have anticipated negotiation of the latter. ⁴⁷ To this the Authority did not respond directly in its decision ⁴⁸ but instead relied upon a prior agency precedent...