Department of Defense, Army-Air Force Exchange Service v. Federal Labor Relations Authority

Citation212 U.S.App.D.C. 256,659 F.2d 1140
Decision Date02 July 1981
Docket Number80-1351 and 80-1358,ARMY-AIR,P,Nos. 80-1119,AFL-CI,I,s. 80-1119
Parties107 L.R.R.M. (BNA) 2901, 212 U.S.App.D.C. 256 DEPARTMENT OF DEFENSE,FORCE EXCHANGE SERVICE, and Army-Air Force Exchange Service, Dix-McGuire Exchange, Fort Dix, New Jersey, Petitioners, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, American Federation of Government Employees,ntervenor. DEPARTMENT OF DEFENSE, DEPARTMENT OF the AIR FORCE, Air Force LogisticsCommand, and Air Force Logistics Command, Wright-Patterson Air Force Base,Ohio, Petitioners, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, American Federation of Government Employees,ntervenor. AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,etitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, Department of Defense, et al., Intervenors.
CourtU.S. Court of Appeals — District of Columbia Circuit

Petitions to Review and Cross-Application to Enforce Orders of the Federal Labor Relations Authority.

Howard S. Scher, Atty., Dept. of Justice, Washington, D. C., with whom Alice Daniel, Asst. Atty. Gen., at the time the briefs were filed, Washington, D. C., and William Kanter, Atty., Dept. of Justice, Washington, D. C., were on the brief, for petitioners in No. 80-1119.

Douglas N. Letter, Atty., Dept. of Justice, Washington, D. C., with whom Thomas S. Martin, Acting Asst. Atty. Gen., at the time the briefs were filed, Washington, D. C., and William Kanter, Atty., Dept. of Justice, Washington, D. C., were on the brief, for petitioners in No. 80-1351 and intervenors in No. 80-1358.

William J. Stone, Washington, D. C., with whom James R. Rosa and Charles A. Hobbie, Washington, D. C., were on the brief, for American Federation of Government Employees, petitioner in No. 80-1358 and intervenor in Nos. 80-1119 and 80-1351.

Steven H. Svartz, Atty., Federal Labor Relations Authority, Washington, D. C., with whom Elizabeth Medaglia, Associate Sol., Federal Labor Relations Authority, Washington, D. C., was on the brief, for respondent. Judith P. Wilkenfeld, Atty., Federal Labor Relations Authority, Washington, D. C., entered an appearance for respondent.

Janet Cooper and Catherine Waelder, Washington, D. C., were on the brief for amicus curiae National Federation of Federal Employees in No. 80-1119, urging affirmance.

Before ROBINSON, Chief Judge, WRIGHT, Circuit Judge, and VAN PELT, * Senior District Judge.

Opinion for the court filed by Circuit Judge J. SKELLY WRIGHT.

Senior District Judge VAN PELT concurs except as to Proposal III, as to which he would reverse.

J. SKELLY WRIGHT, Circuit Judge:

The Civil Service Reform Act of 1978 1 requires management officials of the federal agencies to bargain with employee representatives over conditions of employment. 2 But the duty to engage in collective bargaining is not absolute. 3 Section 7106 of the Reform Act enumerates certain reserved rights of management that cannot be lawful subjects of negotiation. 4 It is permissible to bargain over the "procedures" by which those rights are exercised, but not over the substance of the rights themselves.

These consolidated cases 5 raise important questions about the scope of management's duty to bargain under Section 7106. The issue arose when agency management refused to bargain over various union proposals for the terms of collective bargaining agreements. The negotiability of each of the proposals was considered in the first instance by the Federal Labor Relations Authority (FLRA or Authority). The Authority held three of the contested proposals to be mandatory subjects of collective bargaining; it found five to be excluded from the statutory obligation to bargain under the terms of Section 7106. We affirm the Authority in each of its holdings.

I

Labor relations within the federal civil service are governed by Title VII of the Civil Service Reform Act of 1978. Because these cases are among the first under that statute, see Nat'l Federation of Federal Employees v. FLRA, 652 F.2d 191 (D.C.Cir.1981); American Federation of Gov't Employees v. FLRA, 653 F.2d 669 (D.C.Cir.1981), it might be useful to sketch the background against which we consider the issues presented.

A.

The questions before us arise on appeal from two decisions by the Federal Labor Relations Authority. 6 An independent agency within the Executive Branch, 7 the FLRA was established under Reorganization Plan No. 2 of 1978. 8 It was continued under and administers the labor relations section of the Civil Service Reform Act, Title VII. Its role is analogous to that of the National Labor Relations Board under the National Labor Relations Act. 9 The Civil Service Reform Act invests the Authority with both rulemaking and adjudicatory powers. 10 Among its specific mandates, the FLRA possesses authority to determine appropriate units for labor organization and bargaining, 11 to conduct representation elections, 12 to adjudicate unfair labor practice complaints, 13 and to resolve exceptions to arbitrators' awards. 14 With only minor exceptions, final orders of the Authority are subject to review in the Courts of Appeals. 15 The Authority may petition any appropriate Court of Appeals for enforcement of its orders. 16

The FLRA has assumed its role as a successor agency to the Federal Labor Relations Council. Functioning pursuant to Executive Order 11491, 17 issued by President Nixon in 1969, the Council was composed of three federal management officials: the Chairman of the Civil Service Commission, the Secretary of Labor, and the Director of the Office of Management and Budget. Its decisions were not subject to judicial review. The general framework for collective bargaining administered by the Council dated from 1962, the year in which Executive Order 10988, 18 issued by President Kennedy, initially established a program of labor-management negotiations for federal employees.

B.

The legislative history indicates that Title VII of the Civil Service Reform Act was intended to serve a variety of purposes. Congress sought at least in part to strengthen the authority of federal management to hire and to discipline employees. 19 Representative Udall, who drafted the amendment that essentially became the labor relations chapter of the Reform Act, said explicitly that "one of the fundamental purposes of this bill is to make it easier and not harder to discharge incompetent employees * * *." 20 But the Reform Act also aimed to strengthen the position of employee unions in the federal service. The statutory statement of congressional purpose asserts that "protection of the right of employees to organize (and) bargain collectively" "safeguards the public interest," "contributes to the effective conduct of public business," and "facilitates and encourages the amicable settlements of disputes * * *." 21 Consistent with this view, the Reform Act replaced the Federal Labor Relations Council, which had been criticized as "defective" because its members "come exclusively from the ranks of management," 22 with an independent and bipartisan FLRA. There was no suggestion that employee unions might not seek procedural protections against arbitrary or mistaken employee discharges. On the contrary, Representative Udall stressed that he intended his amendment "to meet some of the legitimate concerns of the Federal employee unions as an integral part of what is basically a bill to give management the power to manage and the flexibility that it needs." 23 Other members articulated nearly identical sentiments during the floor debates. Endorsing the Udall amendment, Representative Ford agreed that "while considering the increased powers for management, we always had in mind that we would put together a totality here * * * that we hoped would represent a fair package of balanced authority for management, balanced with a fair protection for at least the existing rights the employees have." 24

The balance of statutory purposes is evidenced, not only in the legislative history, but in the text of the Reform Act. On the one side, Section 7106(a) purports to define certain reserved rights of management:

§ 7106. Management rights

(a) Subject to subsection (b) of this section, nothing in this chapter shall affect the authority of any management official of any agency

(1) to determine the mission, budget, organization, number of employees, and internal security practices of the agency; and

(2) in accordance with applicable laws

(A) to hire, assign, direct, layoff, and retain employees in the agency, or to suspend, remove, reduce in grade or pay, or take other disciplinary action against such 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;

(C) with respect to filling positions, to make selections for appointments from

(i) among properly ranked and certified candidates for promotion; or

(ii) any other appropriate source; and

(D) to take whatever actions may be necessary to carry out the agency mission during emergencies. 25

It is agreed that a union proposal intruding on protected management rights is not a proper subject of collective bargaining under the Act. 26

On the other side, the interest of employees in protecting their interests through collective bargaining is broadly recognized and protected. Federal management representatives are required to bargain in good faith over "conditions of employment" a term that is expansively defined, subject only to express statutory exceptions, to include "personnel policies, and matters, whether established by rule, regulation, or otherwise, affecting working conditions * * *." 27 Even with regard to reserved management rights, the Act authorizes collective bargaining over the "procedures which management officials of the agency will observe in exercising (their) authority * * *." 28 Nor is the duty to bargain one that...

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