Dept. of Treasury-I.R.S. v. F.L.R.A.

Decision Date03 April 2008
Docket NumberNo. 05-76391.,No. 05-76031.,05-76031.,05-76391.
Citation521 F.3d 1148
PartiesDEPARTMENT OF THE TREASURY-INTERNAL REVENUE SERVICE, Petitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, National Treasury Employees Union, Intervenor. Federal Labor Relations Authority, Petitioner, v. Department of the Treasury-Internal Revenue Service; National Treasury Employees Union, Respondents.
CourtU.S. Court of Appeals — Ninth Circuit

William G. Kanter, Esq., Christine N. Kohl, Esq., U.S. Department of Justice, Washington, DC, for the petitioner-respondent.

David M. Smith, William R. Tobey, Esq., David M. Shewchuk, Esq., and James F. Blandford, Esq., Federal Labor Relations Authority, Washington, DC, for the respondent-petitioner.

Barbara A. Atkin, Esq., Julie M. Wilson, Esq., Gregory O'Duden, Esq., National Treasury Employers Union, Washington, DC, for the intervenor.

On Petition for Review of an Order of the Federal Labor Relations Authority. No. 61 FLRA.

Before: ALEX KOZINSKI, Chief Judge, ROBERT E. COWEN,* and HAWKINS, Circuit Judges.

COWEN, Circuit Judge:

The Department of Treasury, Internal Revenue Service ("IRS"), petitions this court to review an August 10, 2005, order by the Federal Labor Relations Authority ("FLRA"). The FLRA, along with the intervenor, the National Treasury Employees Union ("NTEU"), has cross-petitioned this court to enforce the FLRA's order. For the following reasons, we will deny the IRS's petition for review and grant the FLRA's cross-petition for enforcement.


The facts underlying this case are not in dispute. In 1998, the IRS temporarily assigned revenue officers and revenue agents from its Tacoma, Everett, and Bellevue, Washington offices to work at the Seattle district headquarters. These employees assisted with walk-in and telephone customers.

At all times relevant to this case, the IRS and the NTEU operated under a collective bargaining agreement ("CBA"). Article 29, Section 3E of the CBA stated that, "[w]hen an employee travels from his/her residence to a point of destination within his/her official duty station, he/she should not be required to leave home any earlier or arrive home any later than he/she does when he/she travels to and from his/her usual assigned place of business." The Tacoma, Everett, Bellevue, and Seattle offices were all located within the same official duty station.

The NTEU filed a grievance asserting that the IRS failed to compensate the transferred employees for their increased commute time in violation of Article 29, Section 3E of the CBA. In July 2000, the arbitrator found that Article 29, Section 3E applied to the affected employees. The arbitrator also determined that the provision would allow for compensation for the extra commute time. Furthermore, the arbitrator found that the CBA provision constituted an "express provision," which permitted compensation to these federal employees under the Portal-to-Portal Act, 29 U.S.C. §§ 251-262. The arbitrator stated that the IRS "violated the FLSA[Fair Labor Standards Act, 29 U.S.C. §§ 201-219] by not permitting employees to travel to and from the Seattle Jackson Federal Building in accordance with the procedure required by Article 29, Section 3E." Thus, the arbitrator sustained the grievance and ordered the IRS to cease and desist from failing or refusing to implement Article 29, Section 3E of the CBA.

The IRS filed exceptions to the arbitrator's award with the FLRA. Before the FLRA, the IRS raised several arguments: (1) the arbitrator's award was contrary to law because 5 C.F.R. § 551.422(b)1 prohibited federal employees from being compensated for commute time; (2) Article 29, Section 3E of the CBA fell short of being the type of "express provision" of a contract necessary to fall under 29 U.S.C. § 254(b)(1) of the Portal-to-Portal Act; and (3) Article 29, Section 3E was not a clear statement of an agreement to allow payment to affected employees for their commute time. The FLRA denied the exceptions. United States Dep't of Treasury Internal Revenue Serv., 57 F.L.R.A. 444, 2001 WL 950798 (2001). It rejected the latter two arguments on the merits. With respect to the first argument, the FLRA concluded that the IRS had failed to make this argument to the arbitrator. Thus, pursuant to 5 C.F.R. § 2429.5,2 the FLRA refused to consider this new argument on appeal of the arbitrator's award.

After the FLRA denied the exceptions, the IRS refused to implement the arbitrator's award. As a result, the NTEU filed an unfair labor practice charge. The NTEU asserted that the IRS failed to comply with the arbitrator's award as required by 5 U.S.C. § 7121 and § 7122. It argued that this constituted an unfair labor practice under 5 U.S.C. § 7116(a)(1), (8). Initially, the FLRA determined that the NTEU's unfair labor practice charge was untimely. However, the D.C. Circuit reversed and remanded the matter back to the FLRA for consideration on the merits. See Nat'l Treasury Employees Union v. Fed. Labor Relations Auth., 392 F.3d 498, 501 (D.C.Cir.2004).

On remand, the IRS did not dispute that it failed to implement the arbitrator's award. However, it argued that it did not commit an unfair labor practice because implementing the arbitrator's award would have required the IRS to engage in an illegal act of compensating the affected employees for their travel time. Specifically, the IRS asserted that the doctrine of sovereign immunity precluded an order of monetary relief absent a showing of an express waiver by the United States. Once again, the IRS argued that 5 C.F.R. § 551.422 precluded paying the employees for their commute time.

The FLRA considered the sovereign immunity argument on the merits after noting that the issue could be raised at any time. The FLRA determined that 5 C.F.R. § 551.422 had no affect on the sovereign immunity issue because 29 U.S.C. § 254(b) waived the government's sovereign immunity under the circumstances of this case. Therefore, the FLRA determined that the arbitrator's award was enforceable, and that the IRS violated 5 U.S.C. § 7116(a)(1), (8) by failing to comply with the arbitrator's award. It ordered the IRS to cease and desist from failing to comply with the arbitrator's award. The FLRA ordered that: "(1) bargaining unit employees who were required to travel outside their normal tour of duty to their temporary duty assignment be identified, including the length of their temporary assignment; and (2) affected bargaining unit employees be compensated for time spent commuting to their temporary duty assignment." The IRS brought this petition for review order and the FLRA cross-petitioned for enforcement of its order.


This Court has appellate jurisdiction over the FLRA's order pursuant to 5 U.S.C. § 7123(a). "[W]e will set aside only FLRA decisions that are `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.'" Nat'l Treasury Employees Union (NTEU) v. Fed. Labor Relations Auth., 418 F.3d 1068, 1071 n. 5 (9th Cir.2005) (quoting 5 U.S.C. § 706(2)(A)). We review de novo the FLRA's interpretation of a statute that it does not administer. See id. (citations omitted); see also United States Dep't of Air Force v. Fed. Labor Relations Auth., 952 F.2d 446, 450 (D.C.Cir.1991) (noting that no deference is accorded to FLRA's interpretation of the FLSA because "Congress specifically delegated to the [Office of Personnel Management] the authority `to administer'" the Act's provisions on overtime pay).


The issue presented in this case is whether the FLRA's award of compensation to those affected employees was in error because it violated the United States' sovereign immunity. The parties dispute whether the United States has waived sovereign immunity under the Portal-to-Portal Act. The IRS asserts that the Portal-to-Portal Act does not expressly waive sovereign immunity. The FLRA and the NTEU counter by arguing that the Portal-to-Portal Act must be read as a complement to the FLSA under these circumstances.

A. Sovereign Immunity, the FLSA and the Portal-to-Portal Act

We will consider the issue of sovereign immunity on the merits because it can be raised at any time by the government, as it goes to a court's jurisdiction. See Settles v. United States Parole Comm'n, 429 F.3d 1098, 1105 (D.C.Cir. 2005) (citing Brown v. Sec'y of Army, 78 F.3d 645, 648 (D.C.Cir.1996)). Indeed, as the Supreme Court has noted, "[i]t is axiomatic that the United States may not be Sued without its consent and that the existence of consent is a prerequisite for jurisdiction." United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983).

The waiver of the United States' sovereign immunity must be unequivocally expressed in the statutory text and will not be implied. See Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996). Furthermore, "a waiver of the Government's sovereign immunity will be strictly construed, in terms of its scope, in favor of the sovereign." Id. (citing United States v. Williams, 514 U.S. 527, 531, 115 S.Ct. 1611, 131 L.Ed.2d 608 (1995); Library of Cong. v. Shaw, 478 U.S. 310, 318, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986); Lehman v. Nakshian, 453 U.S. 156, 161, 101 S.Ct. 2698, 69 L.Ed.2d 548 (1981)). Additionally, "[a] statute's legislative history cannot supply a waiver that does not appear clearly in any statutory text; `the "unequivocal expression" of elimination of sovereign immunity that we insist upon is an expression in statutory text.'" Id. (quoting United States v. Nordic Vill., Inc., 503 U.S. 30, 37, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992)).

The FLSA was enacted in 1938, and, among other things, granted covered employees statutory rights to overtime compensation. See 29 U.S.C. § 207. These rights are enforceable under the FLSA through various remedies, as stated at 29 U.S.C. § 216.3 In ...

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