**93 FLRR 1-8025**

***Department of Veterans Affairs v. Federal Labor Relations
Authority***

**D.C. Circuit Court of Appeals**

**92-1213 (D.C. Cir.); 9 F.3d 123**

**November 12, 1993**

Case Summary

VHA HYBRID EMPLOYEES COULD NOT BARGAIN OVER PROMOTION PROCEDURES. In 44
FLRA 356, 92 FLRR 1-1085, the Authority declared negotiable 12 proposals
concerning procedures to be followed by Professional Standards Boards in
reviewing their peers for promotion. These proposals applied to hybrid
employees of the VHA. The Authority found that the proposals were
negotiable under 38 USC 7403(f)(3) because they concerned \"matters
relating to. . .grievance procedures.\" On appeal, the D.C. Circuit
disagreed. The Court determined that, under 38 USC 7403(f)(1)(B), the
Secretary of the DVA had the power to prescribe regulations for the
promotion and advancement of hybrid employees. Therefore, the Secretary
was not obliged to negotiate about the criteria for promotions,
including the procedures for determining promotions. However, any
promotion in violation of the Secretary\'s specified promotion criteria,
whether procedural or substantive, might be grievable under applicable
grievance procedures. The statutory language stating that hybrid
employees could negotiate all matters relating to grievance procedures
did not mean that they could negotiate all matters that might become the
subject of grievance procedures. It meant that they could negotiate all
matters related to the settlement of grievances, including the scope of
the grievance procedure. The Court remanded the case to the FLRA for a
proper determination of the 12 proposals in light of this teaching.

Judge / Administrative Officer

Before: Wald, Edwards and Sentelle, JJ.

Full Text

APPEARANCES:

Jonathan R. Siegel, Attorney, United States Department of Justice,
argued the cause for petitioner. On the briefs were William Kanter and
E. Roy Hawkens, Attorneys, United States Department of Justice.

William R. Tobey, Deputy Solicitor, Federal Labor Relations Authority,
argued the cause for respondent. With him on the brief were David M.
Smith, Solicitor, Federal Labor Relations Authority, and Pamela P.
Johnson, Attorney, Federal Labor Relations Authority. William E. Persina
and Wendy B. Bader, Attorneys, Federal Labor Relations Authority,
entered appearances.

Mark D. Roth, General Counsel, and Kevin M. Grile, Assistant General
Counsel, American Federation of Government Employees, AFL-CIO, were on
the brief for *amicus curiae.*

Opinion

WALD, *Circuit Judge*

The Department of Veterans Affairs (\"Petitioner\" or \"VA\") challenges
a determination by the Federal Labor Relations Authority (\"FLRA\" or
\"Respondent\") that certain collective bargaining proposals submitted
to the VA by the National Association of Government Employees, Local
R1-109 (\"Union\") are negotiable.

The Union is the exclusive bargaining representative for, *inter alia,*
\"hybrid\" employees of the Veterans Health Administration (\"VHA\") at
the VA\'s Newington, Connecticut Medical Center.1 During mid-term
negotiations over the parties\' collective bargaining agreement, the
Union submitted to the VA twelve proposals concerning procedures to be
followed by Professional Standards Boards in reviewing their peers for
promotion.2 The VA refused to negotiate over the proposals, on the
grounds that they infringed upon the exclusive authority of the
Secretary of Veterans Affairs to \"prescribe\[ \]\" regulations for the
\"promotion and advancement\" of hybrid VHA employees. *See* 38 U.S.C. §
7403(f)(1)(B) (Supp. III 1991) (incorporating by reference 38 U.S.C. §
7403(c)).3 The Union filed a negotiability appeal and the FLRA
ultimately concluded that the proposals were negotiable because they
concerned \"matters relating to. . .grievance procedures\" within the
meaning of § 7403(f)(3)\'s exception to the Secretary\'s exclusive
authority over promotions. *See National Ass\'n of Gov\'t Employees,
Local R1-109,* 44 F.L.R.A. No. 29 (Mar. 13, 1992) \[92 FLRR 1-1085\]
*(\"NAGE, Local R1-109\").* The VA challenges this determination.

In reviewing the FLRA\'s determination that the Union\'s proposals are
negotiable under § 7403(f)(3), we examine more generally chapter 74 of
title 38, 38 U.S.C. §§ 7401-7474, governing VHA personnel
administration, and its relation to chapter 71 of title 5, 5 U.S.C. §§
7101-7135, governing collective bargaining rights of civil service
employees generally. While we analyze the interlocking provisions of
title 38, our interpretive approach is ultimately quite simple: we seek
to give meaning to § 7403(f)(3)\'s express limitation of negotiability
to \"matters relating to adverse actions, disciplinary actions, and
grievance procedures.\" Because we agree with the VA that proposals
relating to peer renew promotion procedures rather than grievance
procedures are nonnegotiable under § 7403, we remand to the FLRA for a
determination of the negotiability of the Union\'s proposals in light of
the interpretation of § 7403 set forth in this opinion.

I. Statutory Background

The Department of Medicine and Surgery, now the Veterans Health
Administration, 4 was created in 1946 \"to provide a complete medical
and hospital service for the medical care and treatment of veterans.\"
38 U.S.C. § 7301(b). *See* Veterans\' Administration, Department of
Medicine and Surgery, Pub. L. No. 79-293, 59 Stat. 675 (1946). Because
at that time Congress was concerned that the civil service system was
insufficiently flexible to accommodate the swift hiring necessary to
satisfy the medical needs of returning World War II veterans, it created
an independent personnel system for the VHA under title 38. Pub. L. No.
79-293, §§ 2-15, 59 Stat. at 675-79 (codified as amended at 38 U.S.C. §§
7401-7474). *See* S. REP. No. 858 (1945) *reprinted in* 1945 U.S. CODE
CONG. & ADMIN. NEWS 956; S. REP. No. 215, 100th Cong., 1st Sess. 145
(1987). The Secretary (then Administrator) of Veterans Affairs was
authorized to \"prescribe by regulation the hours and conditions of
employment\" of these employees without regard to \"any law, Executive
order, or regulation.\" Pub. L. No. 79-293, § 7(b), 59 Stat. at 677
(codified as amended at 38 U.S.C. § 7421(a)). The specified personnel
employed under this independent system are consequently referred to as
\"non-hybrid\" employees because their employment is almost exclusively
governed by title 38.5

In 1978 Congress passed the Federal Service Labor-Management Relations
Act of 1978, Pub. L. No. 95-454, 92 Stat. 1111 (1978) (codified at
chapter 71 of title 5, 5 U.S.C. §§ 7101-7135), providing for collective
bargaining rights of civil service employees generally, and establishing
the FLRA in order to \"carry\[ \] out the purpose of. . .chapter \[71 of
title 5\].\" 5 U.S.C. § 7105. Soon thereafter Congress amended title 38,
adding § 4119 (now § 7425), to reemphasize that \"where title 5 is
\'inconsistent with\' title 38, the latter governs. *"American Fed\'n of
Gov\'t Employees v. FLRA,* 850 F.2d 782, 786 (D.C. Cir. 1988) \[88 FLRR
1-8036\] (quoting 38 U.S.C. § 4119 (Supp. IV 1980) (recodified at 38
U.S.C. § 7425)). *See* Veterans Administration Health-Care Amendments of
1980, Pub. L. No. 96-330, § 116(a)(1), 94 Stat. 1030, 1039 (1980).
Non-hybrid VHA employees were not to enjoy the collective bargaining
rights conferred upon civil service employees under title 5. *Id.* at
786-87; *see also Colorado Nurses Ass\'n v. FLRA,* 851 F.2d 1486,
1491-92 (D.C. Cir. 1988) \[88 FLRR 1-8037\].

In addition to these \"non-hybrid\" title 38 employees, Congress in 1983
created a new category of \"hybrid\" VHA employees who are subject to
both title 38 and title 5. *See* Veterans\' Health Care Amendments of
1983, Pub. L. No. 98-160, §§ 201, 203(a), 97 Stat. 993, 1000 (1983)
(codified as amended at 38 U.S.C. §§ 7401(3), 7403(f)(1) & (f)(2)). In
creating the category of \"hybrid\" personnel Congress sought to improve
the VHA\'s ability to recruit and retain certain kinds of health care
workers apart from the \"non-hybrid\" employees governed exclusively by
the title 38 personnel system.6 In 1988 Congress further amended the VHA
personnel provisions expressly to provide greater collective bargaining
rights for these hybrid employees. *See* Veterans\' Benefits and
Services Act of 1988, Pub. L. No. 100-322, § 221, 102 Stat. 487, 531
(1988) (codified at 38 U.S.C. § 7403(f)(3)). In 1991 Congress conferred,
for the first time, certain collective bargaining rights upon non-hybrid
employees as well. *See* Department of Veterans Affairs Health-Care
Personnel Act of 1991, Pub. L. No. 102-40, § 202, 105 Stat. 187, 200-01
(1991) (codified at 38 U.S.C. § 7422). This case involves only the
collective bargaining rights of hybrid employees as expressly set forth
in § 7403(f)(3).

II\. Discussion

The FLRA and the VA do not dispute that under § 7403, the Secretary need
not bargain over the substantive criteria governing appointment,
promotion and advancement of hybrid employees, *e.g.,* time-in-grade
requirements or qualifications. Nor do they dispute that the Secretary
must bargain over the mechanics of grievance procedures *(i.e.,* the
filing, processing, or resolving of grievances) even when the grievance
procedures include the resolution of promotion-related grievances. *See*
Respondent\'s Brief at 6-7; Petitioner\'s Brief at 15-18;7*see United
States Dep\'t of Veterans Affairs Medical Center, Newington, CT,* 37
F.L.R.A 111 (1990) \[90 FLRR 1-1444\] (arbitration of promotion-related
grievance permissible under title 38). The parties do disagree, however,
about whether promotion procedures themselves are negotiable, and more
generally about the scope of the Secretary\'s obligation under §
7403(f)(3) to bargain over \"all matters relating to. . .grievance
procedures.\" 38 U.S.C. § 7403(f)(3).

We note preliminarily that we owe no deference to the FLRA\'s statutory
interpretation where it has endeavored to \"reconcile its organic
statute *\[i.e.,* chapter 71 of title 5\-\--the Federal Service
Labor-Management Relations Act\] with an\[other\] statute *\[i.e.,*
title 38\] not within its area of expertise. *"Colorado Nurses,* 851
F.2d at 1488 (citations omitted). *Accord Library of Congress v. FLRA,*
699 F.2d 1280, 1286 n. 29 (D.C. Cir. 1983) \[83 FLRR 1-8005\].
Consequently, our review of the FLRA\'s interpretation of the scope of §
7403(f)(3) is *de novo. See also Professional Airways Sys. Specialists,
MEBA v. FLRA,* 809 F.2d 855, 857-58 & n.6 (D.C. Cir. 1987) \[87 FLRR
1-8001\] (FLRA\'s refusal to award back pay subject to *de novo* review
where decision rested on interpretation of its organic statute and
another general statute). In our interpretive exercise, we turn first to
the language of the VHA personnel provisions. Because we find the text
clear, we allude to the sparse legislative history only as necessary to
evaluate arguments raised by the parties invoking its use.

A. Grievance Procedures for Hybrid Employees

> As we explain below, under the VHA personnel provisions of title 38,
> the power of the Secretary of Veterans Affairs to prescribe
> regulations governing the promotion and advancement of hybrid
> employees derives from his power over non-hybrid employees. Therefore,
> we begin by briefly discussing the Secretary\'s powers over the
> promotion of non-hybrid employees.
>
> 1\. Non-hybrid Employees
>
> Until 1991 the Secretary had no obligation to negotiate any conditions
> of employment for non-hybrid employees. *See* 38 U.S.C. §§ 4106,
> 4108(a) (1988) (amended and recodified as 38 U.S.C. §§ 7403, 7421);
> *Colorado Nurses,* 851 F.2d 1486 \[88 FLRR 1-8037\].8 Former § 4106(c)
> provided that the Secretary had the power to \"prescribe\[ \]\"
> regulations for the promotion of non-hybrid employees, 38 U.S.C. §
> 4106(c) (1988), and former § 4108(a) underscored that the Secretary\'s
> power to \"prescribe\[ \]\" under § 4106(c) existed
> \"\[n\]otwithstanding any law, Executive order, or regulation.\"*Id.*
> at § 4108(a). In 1988, a panel of this court held that under § 4108(a)
> the conditions of employment of non-hybrid employees were
> nonnegotiable. *Colorado Nurses,* 851 F.2d at 1492.9
>
> In 1991, Congress amended and recodified the VHA personnel provisions
> adding § 7422.10 Subsection (a) of that provision creates a baseline
> of negotiability of all working conditions for non-hybrid employees.
> Subsection (b), however, leaves nonnegotiable any matter concerning
> \"(1) professional conduct or competence, (2) peer review, or (3) the
> establishment, determination, or adjustment of employee compensation
> under. . .title \[38\].\" 38 U.S.C. § 7422(b). It also leaves
> nonnegotiable grievance procedures relating to these three
> nonnegotiable subject matters. *Id.* Subsection (d) leaves with the
> Secretary final authority over the decision of whether any specific
> matter concerns or arises out of these nonnegotiable subject areas.
> *Id.* at § 7422(d). Therefore, peer review procedures for the
> promotion of *non*-hybrid employees remain nonnegotiable after the
> passage of § 7422.
>
> 2\. Hybrid Employees
>
> Section 7403 establishes both the Secretary\'s exclusive power to
> prescribe regulations for the promotion of hybrid employees generally
> and explicitly excepts from this power certain negotiable matters.
> Section 7403(f)(1) provides:
>
> \[T\]he Secretary may\-\--
>
> ... (b) use the authority provided in subsection (c) for the promotion
> and advancement of Department employees serving in such \[hybrid\]
> positions.
>
> 38 U.S.C. § 7403(f)(1). As discussed earlier, subsection (c) of §
> 7403, relating to *non*-hybrid employees, provides:
>
> Promotions \[of non-hybrid employees\]. . .shall be made only after
> examination given in accordance with regulations prescribed by the
> Secretary. Advancement within grade may be made in increments of the
> minimum rate of basic pay of the grade in accordance with regulations
> prescribed by the Secretary.
>
> *Id.* at § 7403(c) (former § 4106(c)). Through this mechanism of
> incorporation, then, § 7403(f)(1)(B) essentially grants the Secretary
> the corresponding power to \"prescribe\[ \]\" regulations for the
> promotion and advancement of hybrid employees. *See id.* at §§
> 7403(c), 7403(f)(1)(B). However, this power over the promotion of
> hybrid employees is limited by § 7403(f)(3) which provides:
>
> Notwithstanding any other provision of. . .title \[38\] or other law,
> all matters relating to adverse actions, disciplinary actions, and
> grievance procedures involving individuals appointed to \[hybrid\]. .
> .positions. . .shall be resolved under the provisions of title 5 as
> though such individuals had been appointed under that title.
>
> *Id.* at § 7403(f)(3). Our task, therefore, is to reconcile §
> 7403(f)(1)(B) and § 7403(f)(3). Since the parties agree that the
> Union\'s proposals relate to neither adverse actions nor disciplinary
> actions, we focus on the negotiability of matters relating to
> \"grievance procedures. *"See NAGE, Local R1-109,* at 6.
>
> In the FLRA\'s negotiability proceeding, it held the Union\'s entire
> array of twelve proposals negotiable under § 7403(f)(3) as \"matters
> *within* or pertaining to the scope of the parties\' negotiated
> grievance procedure.\"*Id.* at 9 (emphasis added). The FLRA reasoned:
>
> We find that because the proposals address matters that may be grieved
> under the parties\' agreement, the proposals are matters relating to
> the grievance procedures involving \'hybrid\' employees.
>
> *Id.* Put otherwise, the FLRA maintains that procedures relating to
> the way in which promotions are administered are negotiable as
> \"matters relating to. . .grievance procedures,\" because the
> violation of these promotion procedures will give rise to grievances.
> *Id.* at 9-10. The FLRA would seem to equate \"matters relating to. .
> .grievance procedures\" with matters *subject* to grievance
> procedures. We strongly disagree with this reading of § 7403(f)(3) in
> general, and, in particular, do not read § 7403(f)(3) to require
> negotiation of promotion procedures.
>
> a\. The Baseline of Non-negotiability of Hybrid Promotions
>
> We held in *Colorado Nurses* that the Secretary\'s core power under §
> 4108(a) (now § 7421(a)) to \"prescribe\[ \]\" regulations for
> employment conditions of *non*-hybrid employees rendered such
> regulations nonnegotiable. We reasoned that \"by directing the
> \[Secretary\] to prescribe regulations\-\--rather than simply issue or
> promulgate them\-\--Congress intended that the \[Secretary\] determine
> the content of those regulations. *"Colorado Nurses,* 851 F.2d at
> 1489. Moreover, we said that § 4108 \"underscores the exclusive nature
> of the \[Secretary\]\'s authority by exempting its exercise from \'any
> law, Executive order, or regulation.\'\"*Id.* We concluded finally
> that \"\[t\]he purpose of this language is clear: when the
> \[Secretary\] prescribes regulations concerning conditions of
> employment, he is to be unhampered by the range of federal personnel
> statutes and regulations that might otherwise constrain his
> authority.\"*Id.* Non-hybrid employees\' conditions of employment were
> nonnegotiable.
>
> Promotion policies are conditions of employment, *see* 5 U.S.C. §
> 7103(a)(14), *American Fed\'n of Gov\'t Employees, Local 3884 v.
> FLRA,* 930 F.2d 1315, 1325 (8th Cir. 1991) \[91 FLRR 1-8005\], and §
> 4108 is \"an integral part of an independent personnel system that
> Congress has placed under the direct control of the
> \[Secretary\],\"*Colorado Nurses,* 851 F.2d at 1489. Therefore, prior
> to the 1991 amendments, former § 4106(c) granting the Secretary
> authority over non-hybrid promotions similarly made nonnegotiable the
> regulation of non-hybrid promotions. With the addition of § 7422
> conferring collective bargaining rights on non-hybrids in 1991,
> however, Congress limited the Secretary\'s power to \"prescribe\[ \]\"
> non-hybrid conditions of employment generally. But in the same
> amendment Congress excepted from the new collective bargaining mandate
> his plenary power to prescribe regulations in three areas: (1)
> professional conduct or competence, (2) peer review, and (3) the
> establishment, determination, or adjustment of employee compensation.
> 38 U.S.C. § 7422(a) & (b). Thus, even after the 1991 amendments, the
> Secretary can still prescribe, without negotiating, regulations
> governing, for example, peer review procedures with respect to
> *non*-hybrid employees. Insofar, then, as the Secretary\'s power over
> hybrids follows along from his power over *non*-hybrids, he would
> retain the absolute right to prescribe the regulations for *hybrid*
> promotions involving (1) professional conduct or competence, (2) peer
> review, or (3) the establishment, determination, or adjustment of
> employee compensation.11
>
> As a result of this analysis, we find that regulations \"for the
> promotion and advancement\" of hybrid employees are generally
> nonnegotiable. 38 U.S.C. § 7403(f)(1)(B). From this baseline of
> non-negotiability, then, § 7403(f)(3) carves out one further
> exception: \"\[n\]otwithstanding any other provision of title
> \[38\],\" it says \"all matters relating to. . .grievance procedures\"
> are negotiable and should be resolved \"under the provisions of title
> 5.\"*Id.* at § 7403(f)(3). Accordingly, the central goal of our
> statutory exercise is to give appropriate effect to § 7403(f)(3)\'s
> exception to the non-negotiability baseline, while still preserving
> for § 7403 a meaningful scope for its clear non-negotiability mandate.
> *See United States v. Menasche,* 348 U.S. 528, 538-39 (1955) (applying
> principle of statutory construction \"to give effect, if possible, to
> every clause and word of a statute\" (internal quotes and citation
> omitted)); *Michigan Citizens for an Indep. Press v. Thornburgh,* 868
> F.2d 1285, 1293 (D.C. Cir. 1989), *aff\'d by an equally divided
> court,* 493 U.S. 38 (1989) (per curiam) (holding that agency\'s
> construction impermissibly \"resulted in \'an effective repeal\' of
> part of the statute, and thereby frustrated the intent of Congress\"
> (quoting *American Fed\'n of Gov\'t Employees, Council of Locals No.
> 214 v. FLRA,* 798 F.2d 1525, 1529 (D.C. Cir. 1986) \[86 FLRR
> 1-8063\])). We turn, then, to the question of whether peer review
> procedures for the promotion of hybrid employees are \"matters
> relating to. . .grievance procedures\" within § 7403(f)(3)\'s
> exception to the general non-negotiability of promotion regulations.
>
> b\. Negotiability of Grievance Procedures Under § 7403(f)(3)\'s
> Exception to the Baseline of Non-negotiability
>
> In order to discern the proper interpretation of \"grievance
> procedures\" appropriate for resolution by negotiation under title 5,
> we turn to title 5 itself and its definition of what \"grievance
> procedures\" include. Section 7121 of title 5 provides in relevant
> part:
>
> § 7121. Grievance procedures
>
> (a)(1) Except as provided in paragraph (2) of this subsection, any
> collective bargaining agreement shall provide procedures for the
> settlement of grievances, including questions of arbitrability\...
>
> \(2\) Any collective bargaining agreement may exclude any matter from
> the application of the grievance procedures, which are provided for in
> the agreement.
>
> 5 U.S.C. § 7121.12 Reading 38 U.S.C. § 7403(f)(3) in conjunction with
> 5 U.S.C. § 7121, we discern three issues concerning hybrid employees,
> which are subject to negotiation. First, as both parties agree, the
> procedures for the filing and processing of a grievance are
> negotiable. Second, questions about the binding arbitration of
> grievances that are \"not satisfactorily settled under the negotiated
> grievance procedure\" are negotiable as well. 5 U.S.C. §
> 7121(b)(3)(C). Finally, the scope of the grievance procedures may also
> be negotiated, *i.e.,* which potential grievances shall be
> \"exclude\[d\]. . .from the application of the grievance procedures.\"
> 5 U.S.C. § 7121(a)(2). The necessity of including all three aspects of
> the grievance procedures within the duty to negotiate satisfactorily
> explains the expansive language of § 7403(f)(3); not only are
> grievance procedures, *i.e,* the procedures for the filing of a
> grievance to be negotiated, but \"all matters relating to. .
> .grievance procedures\" are negotiable, *i.e.,* the scope of grievance
> procedures and questions concerning the binding arbitration of
> grievances not satisfactorily resolved through grievance procedures.
> This reading of § 7403(f)(3) accounts for its expansive phrasing while
> still maintaining the congressionally mandated division between
> negotiable and nonnegotiable matters.
>
> B. The FLRA\'s Decision
>
> The FLRA\'s far-reaching interpretation of § 7403(f)(3)\'s
> negotiability, on the other hand, extends to any procedure the
> violation of which could give rise to a grievance. Such an
> interpretation, we fear, would effectively deny the Secretary any
> sphere of non-negotiability in matters relating to the promotion of
> hybrid employees. While the FLRA disavows any intent to hold
> substantive promotion criteria negotiable, the inevitable reach of its
> interpretation would cover the negotiability of *all* promotion
> criteria. By the sweeping logic of the FLRA\'s definition of
> negotiability, any matter, including any substantive promotion
> criterion, could become negotiable, because it is a matter that if
> violated \"may be grieved.\" We reject this interpretation because it
> would effectively repeal *in toto* the Secretary\'s authority to
> prescribe regulations for the promotion of hybrid employees under §
> 7403(f)(1)(B).
>
> The FLRA implies that its expansive definition of negotiability would
> be tempered by requiring negotiable proposals to leave reserved
> management powers undisturbed in \"important respects.\" Respondent\'s
> Brief at 33. The proposals at hand, it argues, are negotiable
> precisely because they properly preserve the Secretary\'s power to
> promote hybrid employees in \"important respects.\"*Id.* But while
> preserving management rights in \"important respects\" may be a proper
> standard to determine negotiability under title 5, it is not suitable
> as the sole criterion for determining whether a proposal relates to
> grievance procedures under title 38. *Cf. Dep\'t of Defense v. FLRA,*
> 659 F.2d 1140, 1153, 1159 (D.C. Cir. 1981) \[81 FLRR 1-8011\], *cert.
> denied,* 455 U.S. 945 (1982) (upholding FLRA\'s requirement that
> negotiable proposals under title 5 not prevent management from
> \"acting at all,\" or, in the alternative, not \"directly interfere\"
> with management\'s reserved powers).13
>
> Section 7403(f)(3) provides that only grievance procedures and matters
> relating thereto shall be governed by title 5. If a proposal does not
> relate to grievance procedures, it cannot be treated as a grievance
> procedure simply on the basis that it preserves management powers in
> important respects. There is no general right under § 7403(f)(3) to
> bargain over any proposal that leaves management rights significantly
> undisturbed. Nor does § 7121 of title 5, relating to grievance
> procedures under title 5, imply such a right. The FLRA would have this
> court incorporate into title 38 a *different* provision of title 5,
> namely § 7106(b)(2), which provides that title 5 employees retain the
> right to negotiate *\"procedures* which management officials of the
> agency will observe in exercising any \[reserved management\]
> authority.. . .\" 5 U.S.C. § 7106(b)(2) (emphasis added). *See Dep\'t
> of Defense,* 659 F.2d at 1146. In part because of the difficulty of
> distinguishing under 5 U.S.C. § 7106(b)(2) between proposals that are
> procedural from those that are substantive in nature, the FLRA has
> developed various tests of negotiability under § 7106(b)(2) that
> require the significant preservation of reserved management rights.
> *See Dep\'t of Defense,* 659 F.2d at 1151-52 & n.64. But the basic
> fact remains that title 5 rights of *title 5 employees* are more
> expansive than those of hybrid title 38/title 5 employees in this
> respect. Hybrid employees have no general right to negotiate
> procedures governing management\'s exercise of its reserved rights.
> Title 38 precludes any wholesale transfer of general rights under
> title 5 to negotiate procedures governing management\'s exercise of
> authority to the hybrid context. In the absence of a specific
> reference incorporating general title 5 rights into title 38, an
> extension of title 5 negotiability over and above those involving
> grievance procedures to the hybrid context would be in direct
> violation of title 38, *see* 38 U.S.C. § 7425,14 and unwarranted by
> the language of title 5 itself, *see* 5 U.S.C. § 7103.15
>
> Our textual interpretation is further supported by a proper reading of
> the legislative history cited by the FLRA. The FLRA contends that when
> creating the special category of hybrid employees in 1983, Congress
> did not intend to curtail their collective bargaining rights under
> title 5. *See* Explanatory Statement of House Bill, Senate Amendment,
> and Compromise Agreement, *reprinted in* 1983 U.S. CODE CONG. & ADMIN.
> NEWS 1459, 1468 (1983).16 It maintains that the report of the Senate
> Committee on Veterans\' Affairs in 1987 reaffirmed Congress\'
> intention to preserve these rights in their entirety and explained
> that § 7403(f)(3) (then § 4106(g)) was added to accomplish that
> purpose. *See* S. REP. No. 215, 100th Cong., 1st Sess. 145 (1987). We
> disagree with the FLRA\'s reading. Congress itself recognized that
> soon after creation of the hybrid category in 1983, confusion arose
> with respect to collective bargaining rights of hybrid employees. *See
> id.* at 144-45. When Congress got around to the task of clearing up
> the confusion by adding § 7403(f)(3), it specifically expressed a
> limited intent to invest hybrid employees with collective bargaining
> rights under title 5 only for the \"resolution of grievance and
> disciplinary matters.\"*Id.* at 145.17 That same limitation on
> bargaining rights is expressly reflected in the language of §
> 7403(f)(3) itself. In other words, § 7403(f)(3) preserves not *all*
> title 5 collective bargaining rights for hybrid employees, but only
> some\-\--namely those relating to grievance procedures.
>
> We similarly reject the FLRA\'s contention that our interpretation of
> title 38 leaves hybrid employees with fewer collective bargaining
> rights than non-hybrid employees. Contrary to the FLRA\'s assertion,
> hybrid employees continue to retain greater collective bargaining
> rights than non-hybrid employees with respect to peer review
> procedures such as are involved here. Under title 38, hybrid and
> non-hybrid employees alike are not permitted to bargain over peer
> review procedures relating to promotions. *Compare* 38 U.S.C. §
> 7403(f)(1)(B) (hybrid) *with id.* at § 7422(b) (non-hybrid).
> Non-hybrid employees may also not bargain over grievance procedures
> relating to peer review mechanisms; hybrid employees, on the other
> hand, are explicitly permitted to do so. *Compare id.* at § 7403(f)(3)
> (hybrid) *with id.* at § 7422(b) (non-hybrid).

III\. Conclusion We conclude that the FLRA erroneously determined that
promotion procedures for hybrid VHA employees are negotiable, and reject
the FLRA\'s reasoning that any \"matter\[ \] that may be grieved\" is
negotiable under § 7403(f)(3). *See NAGE, Local R1-109,* at 9. Under §
7403(f)(1)(B) the Secretary has the power to \"prescribe\[ \]\"
regulations for the \"promotion and advancement\" of hybrid employees.
38 U.S.C. § 7403(f)(1)(B) (incorporating by reference Secretary\'s power
under 38 U.S.C. § 7403(c)). Therefore, the Secretary need not negotiate
about the criteria for promotions, including the procedures for
determining promotions. However, any promotion in violation of the
Secretary\'s specified promotion criteria\-\--whether procedural or
substantive\-\--may be grievable under applicable grievance procedures.

In addition, \"\[n\]otwithstsnding any other provision of. . .title
\[38\] or other law,\" hybrid employees retain the right to resolve
\"all matters relating to. . .grievance procedures. . .under the
provisions of title 5.\"*Id.* at § 7403(f)(3). In other words, hybrid
employees may negotiate all matters relating to grievance procedures. We
interpret the phrase \"all matters relating to. . .grievance
procedures\" to mean all matters relating to procedures for the
settlement of grievances. *See* 38 U.S.C. § 7463, 5 U.S.C. § 7121. This
interpretation emphatically does not include as negotiable all matters
that may become the subject of grievance procedures. It includes as
negotiable (i) the procedures for filing, processing, and resolving
grievances, (ii) the scope of the grievance procedures, *i.e.,*
selecting from among potential grievances those that may be resolved
under the grievance procedures, and (iii) questions of arbitrability of
grievances that are not satisfactorily resolved through the applicable
grievance procedures.

Because the FLRA is charged with deciding issues of negotiability in the
first instance we will not determine the negotiability of the Union\'s
specific proposals under § 7403(f)(3). *See United States Information
Agency v. FLRA,* 960 F.2d 165, 169 (D.C. Cir. 1992) \[92 FLRR 1-8013\]
(FLRA has expertise to determine negotiability in the first instance).
Accordingly, we remand the case to the FLRA for a proper determination
of the proposals\' negotiability in conformity with the statutory
interpretations set out in this opinion.

So ordered.

**1** \"Hybrid\" employees currently include \"clinical or counseling
psychologists who hold diplomas as diplomates in psychology from an
accrediting authority approved by the Secretary, certified or registered
respiratory therapists, licensed physical therapists, licensed practical
or vocational nurses, pharmacists, and occupational therapists.\" 38
U.S.C. § 7401(3).

**2** The Union\'s submission provides in relevant part:

The purpose of this agreement is to outline procedures to be utilized by
Professional Standards Boards (\[\"PSB\'s\"\]) when reviewing eligible
bargaining unit employees for promotions.

The PSB\'s act as an examining body in applying the aforementioned
\[promotion\] criteria.

The parties hereby agree as follows:

**1.** This agreement shall apply to all bargaining unit employees whose
promotions are subject to Professional Standards Boards.

**2.** All actions taken under this agreement will be job related,
without any discrimination, and shall be consonant with law, applicable
selection guidelines, and this agreement.

**3.** To be eligible for promotion to the next higher grade an employee
must:

> **a.** have served the required time in grade; and
>
> **b.** have met the established qualifications/criteria, as determined
> by the examining board.

**4.** To insure equal treatment of individuals the criteria for
promotions shall be standardized to the extent possible, and shall be
sufficiently specific to prevent subjective application. A copy of this
criteria \[sic\] shall be given to employees upon entering the review
period, for example, upon attaining a GS-3, the employee will receive
the criteria for achieving the GS-4, upon attaining the GS-4, the
employee will receive the criteria for achieving the GS-5, and so on.

**5.** No less than 90 days prior to the time the employees meet the
time in grade requirement, they shall be appraised \[sic\] by the
appropriate management official, of the preliminary recommendation with
respect to promotion.

**6.** No less than 60 days prior to the completion of the time in grade
requirements, the preliminary recommendation shall be forwarded to the
PSB, by the appropriate management official.

**7.** If the management official forwards a negative recommendation to
the Board, the employee shall have 46 days to respond to the
recommendation. No action shall be taken by the PSB until the employees
\[sic\] response is received.

**8.** Candidates for promotion will be informed in writing \[sic\] of
the Board\'s decision within 7 calendar days. The employee shall be
given written and specific rationale for the decision and copies of
appeal rights, including the right to utilize the parties \[sic\]
negotiated grievance procedure.

**9.** The employer shall endeavor to make promotion actions effective
at the start of the first pay period following the notice of the PSB,
and in any case the employer shall not unreasonably delay the promotion
action.

**10.** The employee through the \[U\]nion, shall have access to any and
all records maintained by the PSB, pursuant to the terms of 5 \[U.S.C.\]
§ 7114(b)(4).

**11.** Employees who have met the time in grade requirement may be
reviewed by the PSB periodically, but not less than every 6 months.

**12.** The Employer shall give consideration to Union nominations of
eligible and qualified employees to serve as members of the PSB\'s.

*National Ass\'n of Gov\'t Employees, Local R1-109,* 44 F.L.R.A. No. 29
at 12-14 (Mar. 13, 1992) (Appendix).

**13.** Unless otherwise indicated, references to the United States Code
are to the third supplement, 1991, and the parenthetical indication will
be omitted.

**14.** *See* Department of Veterans Affairs Health-Care Personnel Act
of 1991, Pub. L. No. 102-40, § 2, 105 Stat. 187 (1991).

**15.** \"Non-hybrid\" employees are currently (i) physicians, (ii)
dentists, (iii) podiatrists, (iv) optometrists, (v) nurses, (vi)
physician assistants, and (vii) expanded-function dental auxiliaries.
*See* 38 U.S.C. § 7403(a)(2). Since 1946 the *retirement* of all
employees has been subject to the title 5 retirement provision governing
civil service employees. *See* Pub. L. No. 79-293, § 9, 59 Stat. at 678
(codified as amended at 38 U.S.C. § 7426).

**16.** All other VHA health care personnel, *i.e.,* who are neither
\"hybrid\" nor \"non-hybrid,\" are employed under the regular civil
service system of title 5. *See generally* S. REP. No. 215, 100th Cong.,
1st Sess. 141-45 (1987).

**17.** While in the FLRA proceeding below, the VA did \"not concede
that. . .promotions are grievable under title 5,\"*NAGE Local R1-109,*
at 6, its brief to this court concedes that \"the Union might,
consistent with \[title 38\], submit a proposal relating to the filing,
processing, or resolving of grievances concerning the VA\'s failure to
adhere to its promulgated policy regarding the promotion or advancement
of hybrid employees.\" Petitioner\'s Brief at 16-17 (footnote omitted).

**18.** *Colorado Nurses* was decided prior to recodification and
significant amendment of title 38 in 1991. *See* Pub. L. No. 102-40, 105
Stat. 224 (1991). In 1991, 38 U.S.C. §§ 4106(c), 4106(g)(1), and
4106(g)(3) were repealed and reenacted without substantive change, as 38
U.S.C. §§ 7403(c), 7403(f)(1), and 7403(f)(3), respectively. Quotations
from the earlier codification are the same as in the recodified version.

**19.** Section 4108(a) provides:

Notwithstanding any law, Executive order, or regulation, the
\[Secretary\] shall prescribe by regulation the hours and conditions of
employment. . .\[of non-hybrid employees\].. . .

38 U.S.C. § 4108(a) (1988) (recodified at 38 U.S.C. § 7421(a)).

**20.** Section 7422 provides in relevant part:

> \(a\) Except as otherwise specifically provided in this title, the
> authority of the Secretary to prescribe regulations \[for non-hybrid
> employees\] under section 7421 of this title is subject to the right
> of Federal employees to engage in collective bargaining with respect
> to conditions of employment through representatives chosen by them in
> accordance with chapter 71 of title 5 (relating to labor management
> relations).
>
> \(b\) Such collective bargaining (and any grievance procedures
> provided under a collective bargaining agreement) in the case of
> \[non-hybrid\] employees. . .may not cover, or have any applicability
> to, any matter or question concerning or arising out of (1)
> professional conduct or competence, (2) peer review, or (3) the
> establishment, determination, or adjustment of employee compensation
> under this title.
>
> ....
>
> \(d\) An issue of whether a matter or question concerns or arises out
> of (1) professional conduct or competence, (2) peer review, or (3) the
> establishment, determination, or adjustment of employee compensation
> under this title shall be decided by the Secretary and is not itself
> subject to collective bargaining and may not be reviewed by any other
> agency.

38 U.S.C. § 7422(a), (b), (d).

**21.** We assume that in reenacting the VHA personnel provisions in
1991, Congress\' retention of relevant statutory terms included their
judicial construction in *Colorado Nurses. See Apex Hosiery Co. v.
Leader,* 310 U.S. 469, 488 (1940); *Ankenbrandt v. Richards,* 112 S. Ct.
2206, 2213 (1992); *Dart v. United States,* 848 F.2d 217, 229 (D.C. Cir.
1988). We know for certain that Congress was aware of this court\'s
interpretation of § 7403(c) in *Colorado Nurses. See* H.R. REP. NO. 466,
101st Cong., 2d Sess. 27-28 (1990), *see also* 137 CONG. REC. S4542-43
(daily ed. Apr. 17, 1991) (statement of Sen. Cranston, Chairman of the
Committee on Veterans\' Affairs).

**22.** Title 38 itself defines grievance procedures similarly as
\"procedures for the consideration of grievances\" when setting forth
the Secretary\'s power to prescribe such procedures for non-hybrid
employees. 38 U.S.C. § 7463(a). *See also id.* at §§ 7462, 7464.

**23.** We are not concerned here with a requirement that a proposal
which all parties have agreed concerns a grievance procedure must, *in
addition,* preserve management powers in significant respects. The
FLRA\'s argument here posits significant preservation of management
powers as a sufficient rather than a necessary condition for a finding
of negotiability.

**24.** Section 7425(b) provides:

Notwithstanding any other provision of law, no provision of title 5 or
any other law pertaining to the civil service system which is
inconsistent with any \[VHA personnel\] provision. . .shall be
considered to supersede, override, or otherwise modify such \[VHA
personnel\] provision. . .except to the extent that such provision of
title 5 or of such other law specifically provides, by specific
reference to a provision of this chapter, or such provision to be
superseded, overridden, or otherwise modified.

38 U.S.C. § 7425(b).

**25.** Title 5 itself limits negotiability of conditions of employment
to matters not \"specifically provided for by \[another\] Federal
statute.\" 5 U.S.C. § 7103(a)(14). *See id.* at § 7102(2). Since title
38 specifically provides for the regulation of promotions of hybrid
employees, title 5 by its own terms does not apply.

**26.** The Explanatory Statement provides:

The Committees note that it is not the intent of the provisions of this
legislation relating to the. . .\[hybrid\] occupations involved to
diminish or impair in any way the rights and protections guaranteed the
employees in those occupations under the express provisions of chapter
71 of the title 5, United States Code, relating to federal labor
management relations.

Explanatory Statement of House Bill, Senate Amendment, and Compromise
Agreement, *reprinted in* 1983 U.S. CODE CONG. & ADMIN. NEWS 1459, 1468
(1983). The Explanatory Statement at the same time affirms:

These provisions would permit the \[Secretary\] to set rates of pay and
qualifications standards for these. . .\[hybrid\] occupations without
regard to civil-service laws, rules, and regulations; authorize the
\[Secretary\], when necessary for recruitment and retention purposes, to
use additional pay authorities under title 38 to compensate individuals
in these. . .occupations; and permit the \[Secretary\] to take action,
without such action being statutorily subject to review by the President
as under current law, to adjust rates of basic pay for individuals in
these occupations when necessary for recruitment and retention purposes.

*Id.* at 1467.

**27.** The 1987 report of the Senate Committee on Veterans\' Affairs
purported to \"reaffirm\" an earlier Congress\' \"original intent\" with
reference to hybrid employees, but unequivocally concluded that hybrid
employees \"will have the full panoply of rights available to title 5
employees *for the resolution of grievance and disciplinary matters
including, for those in recognized bargaining units, access to
negotiated grievance procedures involving outside arbitration.\"* S.
REP. No. 215, 100th Cong., 1st Sess. 145 (1987) (emphasis added).

Related Index Numbers

> **04.39**
>
> **42.44 Scope of Bargaining, Determination of Negotiability, Conflict
> With Laws**
>
> **44.222 Subjects of Bargaining,
> Recruitment/Hiring/Promotion/Reassignment, Promotion, Procedures**
>
> 44.9114 Subjects of Bargaining, General Agreement Provisions,
> Grievances and Appeals/Arbitration, Grievances and Appeals, Procedures
>
> **44.9116 Subjects of Bargaining, General Agreement Provisions,
> Grievances and Appeals/Arbitration, Grievances and Appeals, Scope**

Cases Cited

> **850 F.2d 782**
>
> **87-1378 (D.C. Cir.)**
>
> **88 FLRR 1-8036**
>
> **851 F.2d 1486**
>
> **87-1104 (D.C. Cir.)**
>
> **87-1242 (D.C. Cir.)**
>
> **88 FLRR 1-8037**
>
> **37 FLRA 111**
>
> **37 FLRA No. 5**
>
> **90 FLRR 1-1444**
>
> **699 F.2d 1280**
>
> **809 F.2d 855**
>
> **85-1769 (D.C. Cir.)**
>
> **87 FLRR 1-8001**
>
> **930 F.2d 1315**
>
> **90-1379 (8th Cir.)**
>
> **90-1380 (8th Cir.)**
>
> **91 FLRR 1-8005**
>
> **348 U.S. 528**
>
> **868 F.2d 1285**
>
> **798 F.2d 1525**
>
> **85-1500 (D.C. Cir.)**
>
> **86 FLRR 1-8063**
>
> **310 U.S. 469**
>
> **112 S. Ct. 2206**
>
> **848 F.2d 217**
>
> **659 F.2d 1140**
>
> **960 F.2d 165**
>
> **90-1617 (D.C. Cir.)**
>
> **92 FLRR 1-8013**

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