Social Sec. Admin. v. Federal Labor Relations Authority, AFL-CI

• Decision Date: 05 March 1992
• Docket Number: AFL-CI,91-2102,I,Nos. 91-2065,s. 91-2065
• Citation: 956 F.2d 1280
• Parties: 139 L.R.R.M. (BNA) 2691, 60 USLW 2573 SOCIAL SECURITY ADMINISTRATION, Petitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, American Federation of Government Employees,ntervenor. SOCIAL SECURITY ADMINISTRATION, Respondent, v. FEDERAL LABOR RELATIONS AUTHORITY, Petitioner, American Federation of Government Employees,ntervenor.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1280

956 F.2d 1280

139 L.R.R.M. (BNA) 2691, 60 USLW 2573

SOCIAL SECURITY ADMINISTRATION, Petitioner, v. FEDERAL LABOR RELATIONS AUTHORITY, Respondent, American Federation of Government Employees, AFL-CIO, Intervenor.

SOCIAL SECURITY ADMINISTRATION, Respondent, v. FEDERAL LABOR RELATIONS AUTHORITY, Petitioner, American Federation of Government Employees, AFL-CIO, Intervenor.

Nos. 91-2065, 91-2102.

United States Court of Appeals Fourth Circuit.

Argued Dec. 4, 1991.

Decided Feb. 25, 1992.

As Amended March 5, 1992.

William Kanter, Civ. Div., U.S. Dept. of Justice, Washington, D.C., argued (Stuart M. Gerson, Asst. Atty. Gen., John F. Daly, on brief), for petitioner.

Frederick Herrera, Federal Labor Relations Authority, Washington, D.C., argued (William E. Persina, Sol., William R. Tobey, Deputy Sol., Arthur A. Horowitz, Associate Sol., James F. Blandford, on brief), for respondent.

Kevin Michael Grile, Asst. General Counsel, American Federation of Government Employees, AFL-CIO, Chicago, Ill., argued (Mark D. Roth, General Counsel, American Federation of Government Employees, AFL-CIO, Washington, D.C., on brief), for intervenor.

Before WIDENER and WILKINSON, Circuit Judges, and SHEDD, District Judge for the District of South Carolina, sitting by designation.

OPINION

WILKINSON, Circuit Judge:

In this case we must decide a question relating to the duty of federal agencies to bargain with unions that represent federal workers. The Federal Labor Relations Authority held that the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7101 et seq., requires federal agencies to conduct union-initiated midterm bargaining over issues not addressed by the applicable collective bargaining agreement. We conclude that union-initiated midterm bargaining is not required by the statute and would undermine the congressional policies underlying the statute. We therefore set aside the Authority's decision and deny its cross-application for enforcement.

I.

A.

The Federal Service Labor-Management Relations Statute (FSLMRS or statute), enacted as Title VII of the Civil Service Reform Act of 1978, 5 U.S.C. § 7101 et seq., establishes a comprehensive scheme governing labor relations between federal employers and their employees. Prior to enactment of the FSLMRS, a 1962 Executive Order and its successor governed labor relations in the public sector. See Exec. Order No. 10988, 3 C.F.R. 521 (1959-1963), reprinted in Subcomm. on Postal Personnel and Modernization of the House Comm. on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978, at 1211 (Comm. Print 1979) (hereinafter Legislative History ); Exec. Order No. 11491, 3 C.F.R. 861 (1966-1970), reprinted as amended in 5 U.S.C. § 7101 note. The Executive Order accorded federal employees limited rights to engage in concerted labor activity. See Bureau of Alcohol, Tobacco & Firearms v. FLRA (BATF), 464 U.S. 89, 91-92, 104 S.Ct. 439, 441, 78 L.Ed.2d 195 (1983).

In enacting the FSLMRS, Congress determined that "the right of employees to organize, bargain collectively, and participate through labor organizations of their own choosing in decisions which affect them" promotes both the public interest and "the amicable settlements of disputes between employees and their employers involving conditions of employment." 5 U.S.C. § 7101(a)(1). Thus, Congress "significantly strengthened the position of public employee unions." BATF, 464 U.S. at 92, 104 S.Ct. at 441. The FSLMRS, however, "is not simply an 'employees' rights' statute." U.S. Dep't of Health & Human Servs. v. FLRA (HHS), 844 F.2d 1087, 1089 (4th Cir.1988) (en banc ). Rather, in the statute "Congress sought to balance the public interest served by the protection of employees' rights against the public interest served by granting agency managers the powers needed to govern effectively." Id. In particular, Congress directed the courts to interpret the FSLMRS "in a manner consistent with the requirement of an effective and efficient Government." 5 U.S.C. § 7101(b).

The statute imposes a duty to bargain in good faith on both federal agencies and employee unions. See id. § 7114(a)(4). Failure to negotiate in good faith is an unfair labor practice. See id. § 7116(a)(5) and (b)(5). The FSLMRS, however, imposes significant restrictions on the scope of an agency's duty to bargain. For example, certain management prerogatives are not negotiable, see id. § 7106(a), and an agency need not negotiate over any union proposal that is inconsistent with federal law or any government-wide rule or regulation, see id. § 7117(a)(1). Moreover, unlike in the private sector, in the public sector a union is prohibited from calling or participating in a strike or other job action. See id. § 7116(b)(7). If negotiations undertaken in good faith fail to achieve an agreement, the FSLMRS provides for binding arbitration before the Federal Service Impasses Panel (FSIP). FSIP, whose involvement may be invoked unilaterally by either party, see id. § 7119(b)(1), is authorized to impose any negotiable proposal on the agency. See id. § 7119(c)(5)(B) and (C). "A duty to bargain over a proposal, therefore, does more than simply require an agency to negotiate; it subjects the agency to the possibility that the proposal will become binding." HHS, 844 F.2d at 1089.

B.

The facts underlying this case are not in dispute. In 1982, the Social Security Administration (SSA) and the American Federation of Government Employees (AFGE or union) entered into a collective bargaining agreement. The initial term of the agreement was three years, after which it was automatically renewed on a yearly basis. This agreement was in effect at all times relevant to this case. Article 7 of the agreement provided that either party could reopen, amend, modify, or terminate the agreement by providing the other party with notice between ninety and 120 days prior to its expiration date. Article 7 also included the following "reopener" clause: "Negotiations during the term of this agreement to add to, amend or modify this agreement may be conducted only by mutual consent of the parties." Further, Article 4 of the agreement contained detailed procedures for the conduct of so-called impact and implementation bargaining--i.e., bargaining about SSA proposals, made during the term of the agreement, that would change the conditions of employment and about which midterm bargaining is required by the statute. See 5 U.S.C. § 7106(b)(2) and (3). Finally, the agreement provided that, in certain subject areas, SSA and the union could enter into supplemental agreements at the component level.

In December 1987, AFGE submitted to SSA a list of proposals over which it sought to initiate midterm bargaining. The AFGE proposals related to a subject about which the agreement was silent: the payment of relocation expenses for employees who relocate as a result of promotion from within SSA or other recruitment actions. On February 1, 1988, SSA by letter declined to participate in such bargaining. After AFGE filed a charge with the Federal Labor Relations Authority (FLRA) alleging that SSA had failed to bargain in good faith, the FLRA regional director filed an administrative complaint against SSA. The FLRA complaint alleged that SSA "has failed and refused ... to negotiate in good faith with the Union over Union initiated midterm bargaining proposals concerning payment of relocations expenses" and that such refusal constituted an unfair labor practice in violation of 5 U.S.C. § 7116(a)(1) and (5).

A hearing before an administrative law judge followed. Before the ALJ, SSA stipulated to all the factual allegations in the FLRA complaint. SSA argued, however, that federal agencies are not required to bargain over midterm union proposals and that, in any event, in the agreement AFGE waived its right to initiate midterm bargaining. The ALJ rejected SSA's arguments and concluded that SSA had committed an unfair labor practice. First, relying on FLRA precedent, the ALJ concluded that the FSLMRS obligated SSA to bargain over midterm union proposals that involve subjects not covered in the collective bargaining agreement. Further, the ALJ held that the agreement did not establish "a clear and unmistakable waiver" of the union's right to initiate midterm bargaining. According to the ALJ, although the reopener provision in Article 7 barred additions to the existing contract, it did not bar the execution of "a separate agreement covering any newly negotiated matters." Based on these conclusions, the ALJ issued a recommended cease and desist order.

SSA filed exceptions to the decision of the ALJ. The FLRA then affirmed the ALJ in a brief ruling and adopted his findings, conclusions, and recommended order. See 39 FLRA No. 52 (1991). Following that decision, SSA filed a petition for review and the FLRA filed a cross-application for enforcement of its order. AFGE has intervened in this appeal in support of the FLRA's position.

C.

Before proceeding to the merits of the parties' arguments, we must place the question of union-initiated midterm bargaining in its historical context. The position of the FLRA before this court--that the statute requires an agency to engage in midterm bargaining over any issue not contained in the collective bargaining agreement, unless the union had waived its right to bargain about the subject matter involved--is contrary to the FLRA's initial resolution of this issue. In a comprehensive 1985 decision, the FLRA concluded that, "other than negotiations leading to a basic collective bargaining agreement, there is no obligation to bargain over union-initiated proposals." Internal Revenue Serv. (IRS I), 17 FLRA 731, 736 (1985). The FLRA relied not only on statutory language, id. at 732-34, and legislative history, id. at 735-36, but also upon its conclusions that ...