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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 6, 2006 Decided June 27, 2006

No. 05-5436

NATIONAL TREASURY EMPLOYEES UNION, ET AL.,

APPELLEES/CROSS-APPELLANTS

v.

MICHAEL CHERTOFF, SECRETARY,

UNITED STATES DEPARTMENT OF HOMELAND SECURITY 

AND LINDA M. SPRINGER, DIRECTOR OF THE 

OFFICE OF PERSONNEL MANAGEMENT,

APPELLANTS/CROSS-APPELLEES

Consolidated with

05-5437

Appeals from the United States District Court

for the District of Columbia

(No. 05cv00201)

Thomas M. Bondy, Attorney, U.S. Department of Justice,

argued the cause for appellants/cross-appellees. With him on

the briefs were Peter D. Keisler, Assistant Attorney General,

Kenneth L. Wainstein, U.S. Attorney, Gregory G. Katsas,

Deputy Assistant Attorney General, William G. Kanter, Deputy

Director, Tara Leigh Grove, Attorney, Leland E. Beck, Counsel,

Department of Homeland Security, and Mark A. Robbins, David

USCA Case #05-5436 Document #976773 Filed: 06/27/2006 Page 1 of 50
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B. Scholl, and Robin M. Richardson, Counsel, Office of

Personnel Management. 

Gregory O’Duden argued the cause for appellees/crossappellants. With him on the briefs were Elaine D. Kaplan,

Larry J. Adkins, Robert H. Shriver, III, Mark D. Roth, Susan

Tsui Grundmann, Kim D. Mann, Sally M. Tedrow, Robert

Matisoff, and Keith R. Bolek. Charles A. Hobbie entered an

appearance.

Before: RANDOLPH and GRIFFITH, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

EDWARDS.

ACRONYMS & ABBREVIATIONS IN OPINION

Act Homeland Security Act

Authority Federal Labor Relations Authority

Chapter 71 Codifies the Federal Services Labor-Management Statute 

Chertoff I The first District Court opinion at 385 F. Supp. 2d 1 (D.D.C.

2005)

Chertoff II The second District Court opinion at 394 F. Supp. 2d 137

(D.D.C. 2005)

Department Department of Homeland Security

DHS Department of Homeland Security

Final Rule DHS Human Resources Management System (at 5 C.F.R.

Part 9701)

FLRA Federal Labor Relations Authority

FSLMS Federal Services Labor-Management Statute (codifying

“Chapter 71”)

HR system The human resources management system adopted in Final

Rule

HSA Homeland Security Act 

HSLRB Homeland Security Labor Relations Board

MRP Mandatory Removal Panel under the HR system

MSPB Merit Systems Protection Board

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OPM Office of Personnel Management

regulations The Final Rule (at 5 C.F.R. Part 9701)

Secretary Secretary of Homeland Security

§ 9701 Statutory authorization for a human resources management

system at DHS

TABLE OF CONTENTS

I. Background

A. The Homeland Security Act

B. The Final Rule Adopting the HR System

1. Collective Bargaining

2. The Roles of the Homeland Security Labor Relations Board

and the Federal Labor Relations Authority

3. The Role of the Merit Systems Protection Board

C. Litigation Before the District Court

II. Analysis

A. Standing and Ripeness

B. Standard of Review

C . The Duty to Ensure Collective Bargaining

1. DHS’s Asserted Power to Unilaterally Abrogate Collective

Bargaining Agreements

2. The Scope of Bargaining

3. The Final Rule Fails to “Ensure Collective Bargaining” for

DHS Employees in Two Critical Respects – Therefore No

Deference is Due the Department’s Interpretation of the

HSA

D. The Role of the HSLRB

E. DHS’s Attempt to Regulate FLRA

F. The Role of MSPB

G. The Scope of the Injunction

III. Conclusion 

EDWARDS, Senior Circuit Judge: When Congress enacted

the Homeland Security Act of 2002 (“HSA” or the “Act”) and

established the Department of Homeland Security (“DHS” or the

“Department”), it provided that “the Secretary of Homeland

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Security may, in regulations prescribed jointly with the Director

of the Office of Personnel Management, establish, and from

time to time adjust, a human resources management system.” 5

U.S.C. § 9701(a) (Supp. II 2002). Congress made it clear,

however, that any such system “shall – (1) be flexible; (2) be

contemporary; (3) not waive, modify, or otherwise affect

[certain existing statutory provisions relating to, inter alia,

merit hiring, equal pay, whistleblowing, and prohibited

personnel practices], [and] (4) ensure that employees may

organize, bargain collectively, and participate through labor

organizations of their own choosing in decisions which affect

them, subject to any exclusion from coverage or limitation on

negotiability established by law.” Id. § 9701(b)(1)-(4). The Act

also mandated that DHS employees receive “fair treatment in

any appeals that they bring in decisions relating to their

employment.” Id. § 9701(f)(1)(A). Section 9701 does not

mention “Chapter 71,” which codifies the Federal Services

Labor-Management Statute (“FSLMS”), 5 U.S.C. §§ 7101-

7106, 7111-7123, 7131-7135 (2000), and delineates the

framework for collective bargaining for most federal sector

employees. 

In February 2005, the Department and Office of Personnel

Management (“OPM”) issued regulations establishing a human

resources management system. See Department of Homeland

Security Human Resources Management System, 70 Fed. Reg.

5272 (Feb. 1, 2005) (codified at 5 C.F.R. Chapter XCVII and

Part 9701) (“Final Rule” or “HR system”). The Final Rule, inter

alia, defines the scope and process of collective bargaining for

affected DHS employees, channels certain disputes through the

Federal Labor Relations Authority (“FLRA” or the “Authority”),

creates an in-house Homeland Security Labor Relations Board

(“HSLRB”), and assigns an appellate role to the Merit Systems

Protection Board (“MSPB”) in cases involving penalties

imposed on DHS employees. 

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Unions representing many DHS employees (the “Unions”)

filed a complaint in District Court raising a cause of action

under the Administrative Procedure Act, 5 U.S.C. § 701 et seq.,

to challenge aspects of the Final Rule. In a detailed and

thoughtful opinion, Nat’l Treasury Employees Union v. Chertoff,

385 F. Supp. 2d 1 (D.D.C. 2005) (“Chertoff I”), the District

Court found that the regulations would not ensure collective

bargaining, would fundamentally and impermissibly alter FLRA

jurisdiction, and would create an appeal process at MSPB that

is not fair. Based on these rulings, the District Court enjoined

DHS from implementing § 9701.706(k)(6) and all of Subpart E

(§ 9701.501 et seq.) of the regulations. However, the District

Court rejected the Unions’ claims that the regulations

impermissibly restricted the scope of bargaining and that DHS

lacked authority to give MSPB an intermediate appellate

function in cases involving mandatory removal offenses. The

Government filed a motion to alter or amend the judgment, but

the District Court denied that motion. See Nat’l Treasury

Employees Union v. Chertoff, 394 F. Supp. 2d 137 (D.D.C.

2005) (“Chertoff II”). The case is now before this court on

appeal by the Government and cross-appeal by the Unions. We

affirm in part and reverse in part.

We hold that the regulations fail in two important respects

to “ensure that employees may . . . bargain collectively,” as the

HSA requires. First, we agree with the District Court that the

Department’s attempt to reserve to itself the right to unilaterally

abrogate lawfully negotiated and executed agreements is plainly

unlawful. If the Department could unilaterally abrogate lawful

contracts, this would nullify the Act’s specific guarantee of

collective bargaining rights, because the agency cannot “ensure”

collective bargaining without affording employees the right to

negotiate binding agreements. 

Second, we hold that the Final Rule violates the Act insofar

as it limits the scope of bargaining to employee-specific

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personnel matters. The regulations effectively eliminate all

meaningful bargaining over fundamental working conditions

(including even negotiations over procedural protections),

thereby committing the bulk of decisions concerning conditions

of employment to the Department’s exclusive discretion. In no

sense can such a limited scope of bargaining be viewed as

consistent with the Act’s mandate that DHS “ensure” collective

bargaining rights for its employees. The Government argues

that the HSA does not require the Department to adhere to the

terms of Chapter 71 and points out that the Act states that the

HR system must be “flexible,” and from this concludes that a

drastically limited scope of bargaining is fully justified. This

contention is specious. Although the HSA does not compel the

Government to adopt the terms of Chapter 71 as such, Congress

did not say that Chapter 71 is irrelevant to an understanding of

how DHS is to comply with its obligations under the Act.

“Collective bargaining” is a term of art and Chapter 71 gives

guidance to its meaning. It is also noteworthy that the HSA

requires that the HR system be “contemporary” as well as

flexible. We know of no contemporary system of collective

bargaining that limits the scope of bargaining to

employee-specific personnel matters, as does the HR system,

and the Government cites to none. We therefore reverse the

District Court on this point.

We affirm the District Court’s judgment that the

Department exceeded its authority in attempting to conscript

FLRA into the HR system. The Authority is an independent

administrative agency, operating pursuant to its own organic

statute and long-established procedures. Although the

Department was free to avoid FLRA altogether, it chose instead

to impose upon the Authority a completely novel appellate

function, defining FLRA’s jurisdiction and dictating standards

of review to be applied by the Authority. In essence, the Final

Rule attempts to co-opt FLRA’s administrative machinery,

prescribing new practices in an exercise of putative authority

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that only Congress possesses. Nothing in the HSA allows DHS

to disturb the operations of FLRA. 

Finally, we reverse without prejudice the District Court’s

finding that DHS was without authority to change the standard

by which the MSPB might mitigate a penalty for employee

misconduct. This matter is not ripe for review. 

The case will be remanded to the District Court for further

proceedings consistent with this decision. 

I. BACKGROUND

A. The Homeland Security Act

The Homeland Security Act, Pub. L. No. 107-296, 116 Stat.

2135 (2002), was enacted in November 2002. It established the

Department, a cabinet-level agency whose mission is to “prevent

and deter terrorist attacks[,] protect against and respond to

threats and hazards to the nation[,] . . . ensure safe and secure

borders, welcome lawful immigrants and visitors, and promote

the free-flow of commerce.” Final Rule, 70 Fed. Reg. at 5273

(internal quotation marks omitted). The Act merged 22 existing

agencies from across the federal government, integrating

170,000 employees, 17 unions, 7 payroll systems, 77 collective

bargaining units, and 80 personnel systems. See Chertoff I, 385

F. Supp. 2d at 6 n.1 (quoting 148 CONG. REC. S11017

(Statement of Sen. Thompson) (Nov. 14, 2002)). 

As noted above, HSA authorizes the Secretary of Homeland

Security, with the Director of the Office of Personnel

Management, to promulgate regulations establishing a HR

system. See 5 U.S.C. § 9701 (Supp. II 2002). The Act reads in

pertinent part as follows:

(a) IN GENERAL. – Notwithstanding any other provision of this

part, the Secretary of Homeland Security may, in regulations

prescribed jointly with the Director of the Office of

Personnel Management, establish, and from time to time

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adjust, a human resources management system for some or

all of the organizational units of the Department of

Homeland Security.

(b) SYSTEM REQUIREMENTS. – Any system established under

subsection (a) shall – 

(1) be flexible;

(2) be contemporary;

(3) not waive, modify, or otherwise affect – 

(A) the public employment principles of merit and

fitness set forth in section 2301, including the

principles of hiring based on merit, fair treatment

without regard to political affiliation or other

nonmerit considerations, equal pay for equal

work, and protection of employees against reprisal

for whistleblowing;

(B) any provision of section 2302, relating to

prohibited personnel practices;

(C) (i) any provision of law referred to in section

2302(b)(1), (8), and (9); or (ii) any provision of

law implementing any provision of law referred to

in section 2302(b)(1), (8), and (9) by – 

(I) providing for equal employment opportunity

through affirmative action; or

(II) providing any right or remedy available to

any employee or applicant for employment

in the civil service;

(D) any other provision of this part (as described in

subsection (c)); or

(E) any rule or regulation prescribed under any

provision of law referred to in any of the

preceding subparagraphs of this paragraph;

(4) ensure that employees may organize, bargain

collectively, and participate through labor

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organizations of their own choosing in decisions which

affect them, subject to any exclusion from coverage or

limitation on negotiability established by law; and

(5) permit the use of a category rating system for

evaluating applicants for positions in the competitive

service.

* * * * 

(f) PROVISIONS RELATING TO APPELLATE PROCEDURES. – 

(1) SENSE OF CONGRESS. – It is the sense of Congress

that – 

(A) employees of the Department are entitled to fair

treatment in any appeals that they bring in

decisions relating to their employment; and

(B) in prescribing regulations for any such appeals

procedures, the Secretary and the Director of the

Office of Personnel Management – (i) should

ensure that employees of the Department are

afforded the protections of due process; and (ii)

toward that end, should be required to consult

with the Merit Systems Protection Board before

issuing any such regulations.

(2) REQUIREMENTS. – Any regulations under this section

which relate to any matters within the purview of

chapter 77 – 

(A) shall be issued only after consultation with the

Merit Systems Protection Board;

(B) shall ensure the availability of procedures which

shall – (i) be consistent with requirements of due

process; and (ii) provide, to the maximum extent

practicable, for the expeditious handling of any

matters involving the Department; and

(C) shall modify procedures under chapter 77 only

insofar as such modifications are designed to

further the fair, efficient, and expeditious

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resolution of matters involving the employees of

the Department.

(g) PROVISIONS RELATING TO LABOR-MANAGEMENT

RELATIONS. – Nothing in this section shall be construed as

conferring authority on the Secretary of Homeland Security

to modify any of the provisions of section 842 of the

Homeland Security Act of 2002.

Id. § 9701(a)-(b) &(f)-(g). 

As may be seen from the text of the Act, § 9701 says little

about the substantive terms of the HR system. Notably,

however, the Act mandates that any HR system “ensure that

employees may organize, bargain collectively, and participate

through labor organizations of their own choosing in decisions

which affect them.” Id. § 9701(b)(4) (Supp. II 2002). 

B. The Final Rule Adopting the HR System

On February 1, 2005, DHS and OPM promulgated the Final

Rule establishing the new HR system. See Final Rule, 70 Fed.

Reg. 5272. Although the HR system was established by DHS

and OPM, we will refer only to “DHS” or the “Department” as

the author of the regulations. (The District Court referred to

DHS and OPM collectively as the “Agencies.”) Our discussion

of the Final Rule will be limited to the portions of the

regulations at issue in this case, i.e., Subpart E (5 C.F.R.

§ 9701.501 et seq.), which governs labor relations at DHS, and

Subpart G (5 C.F.R. § 9701.701 et seq.), which addresses

employee appeals. 

1. Collective Bargaining

As the District Court noted, the Final Rule “contain[s] an

expansive management rights provision and severely restrict[s]

collective bargaining to issues that affect individual employees.”

Chertoff I, 385 F. Supp. 2d at 9. Collective bargaining under the

new HR system is defined to mean “the performance of the

mutual obligation of a management representative of the

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Department and an exclusive representative of employees . . . to

meet at reasonable times and to consult and bargain in a good

faith effort to reach agreement with respect to the conditions of

employment affecting such employees.” 5 C.F.R. § 9701.504

(2006). Most “conditions of employment,” however, are placed

off-limits for bargaining. Thus, the Final Rule states:

nothing in this subpart may affect the authority of any

management official or supervisor of the Department –

 (1) To determine the mission, budget, organization,

number of employees, and internal security practices of

the Department;

(2) To hire, assign, and direct employees in the

Department; to assign work, make determinations with

respect to contracting out, and to determine the

personnel by which Departmental operations may be

conducted; to determine the numbers, types, grades, or

occupational clusters and bands of employees or

positions assigned to any organizational subdivision,

work project or tour of duty, and the technology,

methods, and means of performing work; to assign and

deploy employees to meet any operational demand;

and to take whatever other actions may be necessary to

carry out the Department’s mission; and 

(3) To lay off and retain employees, or to suspend,

remove, reduce in grade, band, or pay, or take other

disciplinary action against such employees or, with

respect to filling positions, to make selections for

appointments from properly ranked and certified

candidates for promotion or from any other appropriate

source.

Id. § 9701.511(a). In addition, management “is prohibited from

bargaining over the exercise of any authority under paragraph

(a) of this section or the procedures that it will observe in

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exercising the authorities set forth in paragraphs (a)(1) and (2)

of this section.” Id. § 9701.511(b). 

The Final Rule states that management must bargain over

(1) Appropriate arrangements for employees adversely

affected by the exercise of any authority under

paragraph (a)(3) of this section and procedures which

management officials and supervisors will observe in

exercising any authority under paragraph (a)(3) of this

section; and

(2) (i) Appropriate arrangements for employees adversely

affected by the exercise of any authority under

paragraph (a)(1) or (2) of this section, provided that the

effects of such exercise have a significant and

substantial impact on the bargaining unit, or on those

employees in that part of the bargaining unit affected

by the action or event, and are expected to exceed or

have exceeded 60 days. Appropriate arrangements

within the duty to bargain include proposals on matters

such as – 

(A) Personal hardships and safety measures; and

(B) Reimbursement for out-of-pocket expenses

incurred by employees as the direct result of the

exercise of authorities under this section. 

Id. § 9701.511(e)(1)-(2)(i). However, “[a]ppropriate

arrangements within the duty to bargain do not include

proposals on such matters as – (A) [t]he routine assignment to

specific duties, shifts, or work on a regular or overtime basis;

and (B) [c]ompensation for expenses not actually incurred, or

pay or credit for work not actually performed.” Id.

§ 9701.511(e)(2)(ii). 

In analyzing the provisions of 5 C.F.R. § 9701.511, the

District Court wryly commented: 

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Translated into English, this Regulation would give

management full discretion over all aspects of the

Department except those that might be seen as personal

employee grievances.

Chertoff I, 385 F. Supp. 2d at 10.

The new HR system also authorizes the Department to

unilaterally abrogate lawfully negotiated and executed collective

bargaining agreements. In addition to securing DHS’s authority

to override agreements that are in existence when the HR system

takes effect, see 5 C.F.R. § 9701.506(a) (2006), the Final Rule

purports to authorize the Department to unilaterally set aside

provisions in agreements that are negotiated and executed under

the new HR system. An agreement may be invalidated by

DHS’s Secretary (or a designee) within 30 days of being

executed if found to be inconsistent with Departmental rules or

regulations. Id. § 9701.515(d)(1)-(2). Even if not explicitly

disapproved, an agreement takes effect “only if consistent with

law, the regulations in this part, Governmentwide rules and

regulations, Departmental implementing directives and other

policies and regulations, and Executive orders.” Id. at

9701.515(d)(3). 

The Final Rule also gives DHS ongoing authority to

abrogate agreements after they take effect:

Provisions in existing collective bargaining agreements are

unenforceable if an authorized agency official determines

that they are contrary to law, the regulations in this part,

Governmentwide rules and regulations, Departmental

implementing directives (as provided by § 9701.506) and

other policies and regulations, or Executive orders.

Id. § 9701.515(d)(5). Moreover, as noted above, the

“management rights” provision in the Final Rule authorizes the

Department “to take whatever other actions may be necessary to

carry out the Department’s mission.” Id. § 9701.511(a)(2).

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Taken together, these regulations subordinate all collective

bargaining agreements to the prerogatives of management. See

Chertoff I, 385 F. Supp. 2d at 11 (“The Agencies acknowledge

that these provisions would allow DHS to reject any term of a

collective bargaining agreement negotiated under the new HR

System if a subsequent implementing directive or other policy

or regulation were deemed inconsistent.”).

2. The Roles of the Homeland Security Labor Relations

Board and the Federal Labor Relations Authority

The Federal Labor Relations Authority is an independent

administrative federal agency that was created by Title VII of

the Civil Service Reform Act of 1978, also known as the Federal

Service Labor-Management Relations Statute and “FSLMRS”,

5 U.S.C. § 7101 et. seq. (2000). The FSLMRS allows certain

non-postal federal employees to organize, bargain collectively,

and participate through labor organizations of their choice in

decisions affecting their working lives. The primary statutory

responsibilities of FLRA include: (1) resolving complaints of

unfair labor practices, (2) determining the appropriateness of

units for labor organization representation, (3) adjudicating

exceptions to arbitrator’s awards, (4) adjudicating legal issues

relating to duty to bargain/negotiability, and (5) resolving

impasses during negotiations. Id. § 7105(a)(2).

The HSA does not specify a role for FLRA under the HR

system. The Authority’s jurisdiction is limited to actions

brought pursuant to the FSLMRS. Id. DHS and many of its

employees are within the purview of the Authority’s

jurisdiction. See 5 U.S.C. §§ 7103(a)(2)(A) (2000) (defining

“employees” covered by the FSLMRS as individuals employed

in agencies), 7103(a)(3) (listing agencies that are excluded from

coverage under the FSLMRS). The Authority’s jurisdiction to

hear matters affecting DHS employees is limited, however, to

the extent that the Final Rule supplants the substantive

provisions of the FSLMRS pursuant to § 9701 of the HSA.

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The Final Rule establishes the Homeland Security Labor

Relations Board, composed of a rotating board of members –

appointed by the Secretary of Homeland Security – who “must

be independent, distinguished citizens of the United States who

are well known for their integrity and impartiality” and have

“expertise in labor relations, law enforcement, or

national/homeland or other related security matters.” 5 C.F.R.

§ 9701.508(a)(2) (2006). The regulations empower HSLRB to,

inter alia, (1) resolve issues relating to the scope of bargaining

under the regulations and the duty to bargain in good faith, (2)

conduct hearings and resolve complaints of unfair labor

practices, (3) resolve exceptions to arbitration awards involving

the exercise of management rights and the duty to bargain, (4)

resolve negotiation impasses, (5) conduct de novo review of

legal conclusions involving all matters within its jurisdiction,

and (6) assume jurisdiction over any matter concerning DHS

employees that has been submitted to FLRA “if the HSLRB

determines that the matter affects homeland security.” Id.

§ 9701.509(a). The regulations also authorize HSLRB to “issue

binding Department-wide opinions,” id. § 9701.509(b), which

may be subject to judicial review pursuant to 5 C.F.R.

§ 9701.508(h), id. There is no doubt that the HSLRB was

created to supplant FLRA with respect to many matters that

would otherwise be within the Authority’s jurisdiction.

Although the Final Rule obviously was adopted to replace

many of the substantive provisions of the FSLMRS, the

regulations nonetheless purport to create a limited role for

FLRA under the HR system. The Final Rule provides that any

party who wishes to obtain judicial review of a HSLRB decision

must first seek FLRA review. Id. § 9701.508(h). But the

Authority’s role is tightly circumscribed: 

The Authority must defer to findings of fact and

interpretations of this part made by the HSLRB and sustain

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the HSLRB’s decision unless the requesting party shows

that the HSLRB’s decision was – 

(i) Arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law; 

(ii) Based on error in applying the HSLRB’s

procedures that resulted in substantial prejudice to

a party affecting the outcome; or

(iii) Unsupported by substantial evidence.

Id. The Final Rule also purports to give FLRA limited authority

to determine the appropriateness of bargaining units within

DHS, supervise or conduct elections, adjudicate some unfair

labor practice disputes, and resolve some exceptions to arbitral

awards. Id. § 9701.510(a). However, HSLRB “[a]ssume[s]

jurisdiction over any matter concerning Department employees

that has been submitted to FLRA . . . if the HSLRB determines

that the matter affects homeland security.” Id. § 9701.509(b)(7).

And the Final Rule confers sole authority on HSLRB to

determine whether a particular matter “affects homeland

security” or otherwise belongs on HSLRB’s docket. Id.

§ 9701.510(b). 

3. The Role of the Merit Systems Protection Board

Normally, Chapter 77 allows federal employees to appeal

adverse actions to the MSPB. As noted above, the HSA states

that DHS employees must receive due process in pursuing their

appeals, and that any modification of Chapter 77 by DHS must

be crafted in consultation with MSPB. 5 U.S.C. § 9701(f)

(Supp. II 2002). The Act also states that regulations “which

relate to any matters within the purview of chapter 77 . . . shall

modify procedures under chapter 77 only insofar as such

modifications are designed to further the fair, efficient, and

expeditious resolution of matters involving the employees of the

Department.” Id. § 9701(f)(2)(C).

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MSPB’s role under the HR system is sharply limited. The

regulations significantly diminish MSPB’s ability to mitigate

penalties imposed on employees. As DHS acknowledges,

normally, when MSPB reviews an agency’s penalty decision

under Chapter 77, it seeks to determine “not only whether [the

penalties] were too harsh or otherwise arbitrary but also whether

they were unreasonable under all the circumstances.” See Final

Rule, 70 Fed. Reg. at 5281 (discussing Douglas v. Veterans

Admin., 5 M.S.P.R. 280 (1981)). The Final Rule imposes a

narrower role for MSPB, stating that “MSPB may not modify

the penalty imposed by the Department unless such penalty is so

disproportionate to the basis for the action as to be wholly

without justification.” 5 C.F.R. § 9701.706(k)(6) (2006). 

The Final Rule also defines a new class of “mandatory

removal offenses” for DHS employees. A mandatory removal

offense is “an offense that the Secretary determines in his or her

sole, exclusive, and unreviewable discretion has a direct and

substantial adverse impact on the Department’s homeland

security mission.” Id. § 9701.703. Appeals of mandatory

removal actions are heard by DHS’s Mandatory Removal Panel

(“MRP”). Id. § 9701.707(a). An employee may only obtain

judicial review of a mandatory removal action after first seeking

review before the MRP. Id. § 9701.707(c)(1). When MSPB

reviews an MRP decision, it “must accept the findings of fact

and interpretations of this part made by the MRP and sustain the

MRP’s decision unless the employee shows” that the underlying

decision was:

(i) Arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law;

(ii) Caused by harmful error in the application of the

MRP’s procedures in arriving at such decision; or

(iii) Unsupported by substantial evidence.

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Id. MSPB is allotted a limited time in which to review MRP

decisions, and if “MSPB does not issue a final decision within

the mandatory time limit . . . MSPB will be considered to have

denied the request for review of the MRP’s decision, which will

constitute a final decision of MSPB” for purposes of judicial

review. Id. § 9701.707(c)(2)-(4). 

C. Litigation Before the District Court

As soon as DHS issued its Final Rule, the Unions filed suit.

Their complaint contained four counts. First, they claimed that

the regulations violated the HSA by failing to ensure collective

bargaining rights. Second, the Unions argued that DHS

exceeded its authority under the HSA by fundamentally

transforming the role of FLRA. Third, they claimed that the

regulations violated § 9701(f)(2)’s requirement that the

personnel system provide “fair” appellate procedures. And

finally, the Unions argued that no statutory authority allowed the

regulations to grant MSPB intermediate appellate duties in MRP

cases.

On August 12, 2005, the District Court issued a decision

addressing DHS’s motion to dismiss and the Unions’ motion for

summary judgment. The court rejected DHS’s claims that the

Unions lacked standing to challenge certain regulations and that

some of their claims were unripe. Chertoff I, 385 F. Supp. 2d at

17-22. The District Court then posited that the “sine qua non of

good-faith collective bargaining is an enforceable contract once

the parties reach an agreement.” Id. at 25. The court found that

the Final Rule flouted this standard by allowing DHS to

unilaterally abrogate agreements. The District Court tellingly

noted: 

A contract that is not mutually binding is not a contract.

Negotiations that lead to a contract that is not mutually

binding are not true negotiations. A system of “collective

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19

bargaining” that permits the unilateral repudiation of

agreements by one party is not collective bargaining at all.

Id. at 28. The court thus concluded that the Department was

owed no deference under Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984), on this

point. 

The District Court declined to accept the Unions’ argument

that the Final Rule impermissibly restricted the scope of

bargaining, however. Although the court agreed that the

regulations’ “eradication of virtually all bargaining over

‘operational’ issues will have a dramatic effect upon the work

lives of the employees the [Unions] represent,” it nonetheless

found that “Congress gave the [Department] the authority to

ignore the provisions of Chapter 71 and to establish new metes

and bounds for collective bargaining at DHS.” 385 F. Supp. 2d

at 28-29 (internal quotation marks omitted). 

Similarly, the District Court rejected the Unions’ opposition

to the HSLRB and their claim that the HR system failed to

provide adequate review by a neutral arbiter. The court found

that, “by deliberately and clearly giving the [Department] the

authority to establish an HR System for DHS without reference

to the FLRA or any other adjudicative system for labormanagement disputes, Congress left it to the Executive Branch

to formulate that system.” Id. at 29.

The District Court sustained the Unions’ objections to the

role assigned to FLRA by the Final Rule. On this point, the

court held that DHS could not “commandeer the resources of an

independent agency and thereby fundamentally transform its

functions, absent a clearer indication of congressional intent.”

Id. at 32. 

The District Court also found that the Final Rule violated

§ 9701(f)(2) of the HSA, because the restrictions on MSPB

review “result[ ] in a system that is not fair.” Id. at 35. The

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court found that, because the Final Rule specified that MSPB

could modify penalties only when they are “so disproportionate

as to be wholly without justification,” 5 C.F.R. § 9701.706(k)(6)

(2006), review would become “almost a nullity.” 385 F. Supp.

2d at 35. And, “since it is the MSPB decision that goes to the

Federal Circuit and not the employing agency decision,” the

District Court felt that DHS adverse actions would be effectively

insulated from meaningful review. Id. The District Court

therefore found that the Final Rule failed to abide the plain

meaning of the HSA. 

Finally, the District Court rejected the Unions’ claim

challenging the assignment to MSPB of an intermediate

appellate function in cases involving mandatory removal

offenses. The court found that “Congress authorize[d] the

[Department] to modify the internal regulations of MSPB,” and,

therefore, DHS’s “interpretation of the HSA to that effect is

entitled to Chevron deference.” Id. at 36. 

The District Court enjoined the Department from enforcing

Subpart E and one section of Subpart G (5 C.F.R.

§ 9701.706(k)(6)). It invited DHS, however, to submit a

proposed order that would “more selectively enjoin[ ] Subpart

E in a manner otherwise comporting with [the court’s]

memorandum opinion.” Id. at 38. The Department then filed a

motion to alter or amend the District Court’s judgment under

Federal Rule of Civil Procedure 59(e). The Department sought

to have the court limit its injunction to five discrete subsections

of Subpart E. The District Court denied the motion:

Having given the Court’s ruling the most narrow of

interpretations, the [Department] argue[s] that the

remainder of Subpart E is severable from five specific

regulations they state were held to be invalid. The principal

flaw in this argument is that the Court disallowed all parts

of the Regulations that allow the unilateral repudiation of

lawful contracts – whether by issuance of directives,

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21

policies and rules, or other means. Inasmuch as there are

significant additional avenues by which DHS would allow

itself to ignore its contractual obligations, and the

[Department] suggest[s] no modification to those regulatory

provisions that would bring the Regulations into conformity

with the Court’s ruling, the Court declines to modify its

August 12, 2005, Memorandum Opinion and Order.

Chertoff II, 394 F. Supp. 2d at 147. 

DHS now appeals the District Court’s judgment insofar as

it holds that aspects of the HR system are inconsistent with the

HSA. The Department also argues that, even if the District

Court’s legal rulings stand, a more narrow injunction is

appropriate. The Unions cross-appeal three of the District

Court’s determinations: its denial of the Unions’ claim that the

regulations impermissibly restrict the scope of bargaining, its

conclusion sustaining the role of HSLRB, and its finding that the

expanded role of MSPB under the regulations is entitled to

deference.

II. ANALYSIS

A. Standing and Ripeness

As an initial matter, the Government argues that some of the

Unions’ claims are not presently justiciable, either for want of

standing or ripeness. The Government does “not dispute that the

. . . unions have standing, as parties likely to engage in collective

bargaining in the near future, to challenge the management

rights provisions restricting the range of topics for bargaining.”

DHS’s Br. at 28 n.5. The Government “also do[es] not dispute

that the . . . unions have standing, as parties likely to appear

before the HSLRB and the FLRA in the near future, to challenge

the roles of these administrative bodies under the new DHS

scheme.” Id. Rather, the Government argues that the Unions

lack standing to challenge the terms of the Final Rule covering

collective bargaining, because “it is entirely unclear how DHS

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will exercise the authority conferred by these provisions.” Id. at

27. According to the Government, “DHS may conclude that it

rarely (if ever) needs to issue additional regulations or

implementing directives that are inconsistent with collective

bargaining agreements. Likewise, DHS may rarely (if ever) act

contrary to collective bargaining agreements in exercising its

authority to take actions necessary to carry out its mission.” Id.

at 27. Thus, the Government says, “DHS’s mere reservation of

discretionary authority to take certain kinds of actions in the

future does not give rise to a presently justiciable controversy.”

Id. The Government also argues that the Unions “lack standing

to challenge the ‘wholly without justification’ standard (5 C.F.R.

§ 9701.706(k)(6)) used in MSPB review of DHS penalty

determinations. That standard is not self-defining, and it

remains to be seen how the MSPB will flesh it out in actual

cases.” DHS’s Br. at 28.

The Unions surely have standing to challenge the provisions

in the Final Rule covering collective bargaining, and their claims

surely are ripe for review. As the District Court explained,

standing to invoke the jurisdiction of the federal courts under

Article III of the Constitution requires the Unions to show that

they have (1) “suffered an ‘injury in fact’ that is (a) concrete and

particularized and (b) actual or imminent, not conjectural or

hypothetical; (2) the injury is fairly traceable to the challenged

action of the defendant; and (3) it is likely, as opposed to

merely speculative, that the injury will be redressed by a

favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl.

Servs., Inc., 528 U.S. 167, 180-81 (2000) (citing Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560-561 (1992)). A Union

can assert standing on behalf of itself as an institution or on

behalf of its members. See United Food & Commercial

Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544,

553 (1996) (“[A]n association has standing to bring suit on

behalf of its members when (a) its members would otherwise

have standing to sue in their own right; (b) the interests it seeks

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23

to protect are germane to the organization’s purpose; and (c)

neither the claim asserted nor the relief requested requires the

participation of individual members in the lawsuit.”) (quoting

Hunt v. Washington Apple Adver. Comm’n, 432 U.S. 333, 343

(1977)); see also Am. Library Ass’n v. FCC, 401 F.3d 489,

492-93 (D.C. Cir. 2005) (explaining the requirements of

associational and representational standing). The Unions easily

meet these standards. 

The District Court correctly explained that the Unions’

claim does not depend on any particular act of abrogation.

Rather, their bargaining position in all negotiations is

fundamentally diminished, because they will be unable to ever

reach a mutually binding contract. Chertoff I, 385 F. Supp. 2d

at 22. The District Court’s decision also details how the Final

Rule “eliminates all bargaining over what were formerly

‘permissive’ subjects – the Regulations actually prohibit

bargaining over such topics as numbers, types, and grades of

employees assigned to any subdivision or work project; tours of

duty; technology; and means and methods of doing work.

Compare 5 C.F.R. § 9701.511(a)(2) (2006), with 5 U.S.C. §

7106(b)(1) (2000). Further, the Regulations would permit DHS

to avoid bargaining with the Unions over the procedures

management will observe when exercising its management

rights.” Chertoff I, 385 F. Supp. 2d at 28. Obviously, the

regulations will greatly diminish the role of the Unions in

collective negotiations, for they have very little about which to

bargain. And the Final Rule limits the possible fruits of

bargaining for the employees who are represented by the

Unions. These harms are far from conjectural and they will be

remedied if the Unions prevail on their claims here. 

The Unions also convincingly explain the “immediate

practical impact” of the Final Rule on their organizations and

their members:

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The Unions cannot effectively formulate strategies or

evaluate tradeoffs to secure concessions from DHS because

DHS (and even individual managers and supervisors) could

later neutralize any concessions DHS had made at the table.

As the district court understood, it does not matter whether

DHS actually declares a contract clause unenforceable next

month or three years from now. It is the change wrought on

the bargaining process itself by the presence of these

powers that causes immediate injury to the Unions.

Unions’ Br. at 28-29 (citations and internal quotation marks

omitted); see also Clinton v. City of New York, 524 U.S. 417,

433 n.22 (1998) (noting earlier holding that “a denial of a

benefit in the bargaining process can itself create an Article III

injury, irrespective of the end result”) (citing N.E. Fla. Ch.,

Associated Gen. Contractors of Am. v. Jacksonville, 508 U.S.

656, 666 (1993)). 

It does not matter that “DHS may rarely (if ever) act

contrary to collective bargaining agreements in exercising its

authority to take actions necessary to carry out its mission.”

DHS’s Br. at 27. What matters is that, under the proposed HR

system, the Unions will enter collective bargaining with little to

bargain over, and they will face an ever-present threat that DHS

will abrogate any agreement that they reach with management.

This harm to their bargaining position is certainly a real injury

that is fairly traceable to the Final Rule and would be redressed

by a favorable ruling.

The Unions’ challenge to the provisions in the Final Rule

covering collective bargaining is also ripe for review. In

evaluating ripeness, we examine the “fitness of the issues for

judicial decision and the hardship to the parties of withholding

court consideration.” Abbot Labs. v. Gardner, 387 U.S. 136,

149 (1967). Gauging an issue’s fitness for review involves

assessing: “whether the agency action is final; whether the issue

presented for decision is one of law which requires no additional

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25

factual development; and whether further administrative action

is needed to clarify the agency’s position.” Action Alliance of

Senior Citizens of Greater Phila. v. Heckler, 789 F.2d 931, 940

(D.C. Cir. 1986). None of these considerations counsels against

evaluating the collective bargaining provisions now. 

As with its challenge to standing, the Government argues

that the Unions’ challenge to the collective bargaining

provisions is unfit for immediate review, because the

Department may never choose to override an agreement. This

argument is specious. As noted above, whether DHS ever

chooses to displace the outcome of collective bargaining is

irrelevant to the ripeness inquiry, since the Unions cite a threat

to the process of collectively bargaining. The Unions’ argument

that collective bargaining cannot occur without an ex ante

presumption of mutual obligation is entirely independent of any

injury that might occur if the Department eventually exercises

its discretion to vitiate an agreement. Accordingly, waiting to

observe DHS’s actions would only exacerbate the Unions’

asserted injury while doing nothing to enable judicial review.

See Nat’l Ass’n of Home Builders v. United States Army Corps

of Eng’rs, 417 F.3d 1272, 1282 (D.C. Cir. 2005) (a purely legal

challenge to final agency action is not unfit for review merely

because the application of the disputed rule remains within the

agency’s discretion). 

There is also no doubt that the Unions’ challenge to the

limited scope of bargaining under the Final Rule is ripe. There

is no further agency action to be taken with respect to this

matter. The Final Rule states, without equivocation, that certain

subjects are not subject to collective bargaining. The Unions’

challenge to these regulatory limits raises “a purely legal claim

in the context of a facial challenge . . . [that] is ‘presumptively

reviewable.’” Id. 

Finally, the Government asserts that the Unions lack

standing to challenge MSPB’s role in penalty mitigation cases.

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While we reject the Government’s standing argument, we agree

that the asserted defects in MSPB’s penalty mitigation

procedures are not yet ripe for review. “[A] purely legal claim

may be less fit for judicial resolution when it is clear that a later

as-applied challenge will present the court with a richer and

more informative factual record.” Sabre, Inc. v. Dep’t of

Transp., 429 F.3d 1113, 1119 (D.C. Cir. 2005). Although

determining whether the penalty mitigation standard comports

with the HSA’s requirement of “fair” appellate procedures

presents a purely legal question, it is a question that will “stand

on a much surer footing in the context of a specific application

of [the] regulation than could be the case in the framework of

the generalized challenge made here.” Toilet Goods Ass’n, Inc.

v. Gardner, 387 U.S. 158, 164 (1967). 

And there is no real hardship to the Unions in deferring any

challenge to the penalty mitigation procedures. The disputed

procedures do not have any “direct and immediate” impact on

the Unions’ “primary conduct.” Better Gov’t Ass’n v. Dep’t of

State, 780 F.2d 86, 92, 93 (D.C. Cir. 1986). And the “mere

uncertainty as to the validity of a legal rule [does not constitute]

a hardship for purposes of the ripeness analysis.” Nat’l Park

Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803, 811 (2003).

Indeed, nothing in the disputed penalty mitigation procedures

purports to regulate the primary conduct of DHS employees, nor

do the procedures modify the potential penalties available to

DHS in the first instance. Problems with MSPB’s review will

arise only after DHS has disciplined an employee and the

penalty has been appealed. See 5 C.F.R. § 9701.707 (2006).

Any challenges to the procedures will then be ripe for review.

B. Standard of Review

As noted above, the HSA provides that “the Secretary of

Homeland Security may, in regulations prescribed jointly with

the Director of the Office of Personnel Management, establish,

and from time to time adjust, a human resources management

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system.” 5 U.S.C. § 9701(a) (Supp. II 2002). The authority

granted to the Department by the HSA is not without limits,

however. Congress made it clear that any HR system adopted

pursuant to the HSA “shall – (1) be flexible; (2) be

contemporary; (3) not waive, modify, or otherwise affect

[certain existing statutory provisions relating to, inter alia, merit

hiring, equal pay, whistleblowing, and prohibited personnel

practices], [and] (4) ensure that employees may organize,

bargain collectively, and participate through labor organizations

of their own choosing in decisions which affect them, subject to

any exclusion from coverage or limitation on negotiability

established by law.” Id. § 9701(b)(1)-(4). The HSA also

mandates that DHS employees receive “fair treatment in any

appeals that they bring in decisions relating to their

employment.” Id. § 9701(f)(1)(A). 

The question here is whether the disputed portions of the

HR system adhere to the limitations imposed by § 9701. In

particular, we must determine whether, in promulgating the

Final Rule, DHS reasonably interpreted the controlling

provisions of the HSA. In reviewing the Department’s

interpretations of the Act, we apply the familiar standards

enunciated by the Supreme Court in Chevron and United States

v. Mead Corp., 533 U.S. 218 (2001). Under these standards, we

first employ the traditional tools of statutory construction to

determine whether Congress has spoken to the precise question

at issue. Chevron, 467 U.S. at 842-43 & n.9. “If the intent of

Congress is clear, that is the end of the matter; for the court, as

well as the Agency, must give effect to the unambiguously

expressed intent of Congress.” Id. at 842-43. However, where

a statute is ambiguous and the agency has acted within its

delegated authority, we will defer to the agency’s interpretation

only if it is reasonable. Am. Library Ass’n. v. FCC, 406 F.3d

689, 698-99 (D.C. Cir. 2005) (citing Chevron, 467 U.S. at 843-

44).

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An “agency’s interpretation of [a] statute is not entitled to

deference absent a delegation of authority from Congress to

regulate in the areas at issue.” Motion Picture Ass’n of Am., Inc.

v. FCC, 309 F.3d 796, 801 (D.C. Cir. 2002). The Court’s

decision in Mead reiterates the command in Chevron that

deference to an agency’s interpretation of a statute is due only

when the agency acts pursuant to delegated authority. Mead,

533 U.S. at 226-27; see also Cal. Indep. Sys. Operator Corp. v.

FERC, 372 F.3d 395, 399 (D.C. Cir. 2004); Bluewater Network

v. EPA, 370 F.3d 1, 11 (D.C. Cir. 2004); AT&T Corp. v. FCC,

323 F.3d 1081, 1086 (D.C. Cir. 2003).

Chevron “requires a reviewing court to ask . . . whether an

agency’s specific course of action is permitted by statute. It is

possible that a statute might grant an agency authority to act in

some fashion, but not in the particular manner it has chosen.”

Arent v. Shalala, 70 F.3d 610, 619 n.1 (D.C. Cir. 1995) (Wald,

J., concurring). This point is particularly important here,

because the Unions do not question DHS’s authority to

promulgate regulations defining collective bargaining; they

contend instead that the specific regulatory standards selected by

the Department to narrow the scope of bargaining and allow for

the unilateral abrogation of agreements do not give effect to the

HSA’s command to “ensure that employees may organize,

bargain collectively, and participate through labor organizations

of their own choosing in decisions which affect them.” 5 U.S.C.

§ 9701(b)(4) (Supp. II 2002). Likewise, the Unions do not

doubt that the Department could have opted to have disputes

arising under the HR system be resolved by FLRA pursuant to

the terms of the Federal Services Labor-Management Statute

(Chapter 71); rather, they contend that DHS had no authority to

conscript the Authority to function under the HR system on

terms defined by the Department.

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C . The Duty to Ensure Collective Bargaining

In a vain effort to defend the Final Rule’s construction of a

purported structure for collective bargaining, the Government

points to § 9701(a), which says that the Department is

authorized to promulgate a HR system “[n]otwithstanding any

other provision of this part,” and § 9701(b)(3), which says that

any such system “shall – . . . (3) not waive, modify, or otherwise

affect [certain existing statutory provisions relating to, inter alia,

merit hiring, equal pay, whistleblowing, and prohibited

personnel practices].” The Government appears to argue that,

read together, these two provisions authorize DHS to waive any

provision relating to employee relations, save those specifically

listed in § 9701(b)(3), and then to do entirely as it pleases in

establishing a HR system. This argument is completely

unconvincing. When § 9701 is read in its entirely, it is

absolutely clear that DHS does not have a free hand to construct

a HR system entirely as it prefers. The HSA does not require

the Department to adopt any existing human resources

management system, but it does specify “system requirements”

that DHS must follow in promulgating a HR system. See id.

§ 9701(b). Thus, the system must be “flexible” and

“contemporary,” id. § 9701(b)(1)-(2); it must comply with

certain provisions of law, id. § 9701(b)(3); and, it must include

several substantive features, including “ensur[ing] that

employees may . . . bargain collectively,” id. § 9701(b)(4). In

other words, DHS’s discretion to establish “a human resources

management system for some or all of the organizational units

of the Department of Homeland Security,” id. § 9701(a), is

limited by all of the requirements listed in § 9701(b). Most

importantly, at least with respect to the issues in this case, when

Congress added the substantive requirement in the HSA

guaranteeing DHS employees the right to bargain collectively,

it obviously intended for this requirement to be construed

reasonably and applied fully. 

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Although the HSA requires the Department to “ensure” that

their employees may bargain collectively, the Act does not

define collective bargaining. Fortunately, this is not a term

without meaning. Indeed, “collective bargaining” is a term of

art in the federal sector that has been defined by Congress in the

FSLMS:

“[C]ollective bargaining” means the performance of the

mutual obligation of the representative of an agency and the

exclusive representative of employees in an appropriate unit

in the agency to meet at reasonable times and to consult and

bargain in a good-faith effort to reach agreement with

respect to the conditions of employment affecting such

employees and to execute, if requested by either party, a

written document incorporating any collective bargaining

agreement reached, but the obligation referred to in this

paragraph does not compel either party to agree to a

proposal or to make a concession.

5 U.S.C. § 7103(a)(12) (2000). The Government’s incantation

of the truism that collective bargaining “is not a static concept

with a fixed meaning in all circumstances,” DHS’s Br. at 32, is

thus beside the point. In the context of federal sector laborrelations, collective bargaining is a term of art with a wellestablished statutory meaning. The Department presumably

understood this, because its Final Rule adopts essentially the

same definition as the one in the FSLMS: 

Collective bargaining means the performance of the mutual

obligation of a management representative of the

Department and an exclusive representative of employees

in an appropriate unit in the Department to meet at

reasonable times and to consult and bargain in a good faith

effort to reach agreement with respect to the conditions of

employment affecting such employees and to execute, if

requested by either party, a written document incorporating

any collective bargaining agreement reached, but the

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obligation referred to in this paragraph does not compel

either party to agree to a proposal or to make a concession.

5 C.F.R. § 9701.504 (2006). And “collective bargaining

agreement” is defined in nearly identical terms in the FSLMS

and under the Final Rule, as “an agreement entered into as a

result of collective bargaining pursuant to the provisions of this

subpart.” Compare 5 U.S.C. § 7103(a)(8) (2000), with 5 C.F.R.

§ 9701.504 (2006). 

There is a presumption that Congress uses the same term

consistently in different statutes. See Smith v. City of Jackson,

Miss., 544 U.S. 228, 233 (2005) (emphasizing the “premise that

when Congress uses the same language in two statutes having

similar purposes, particularly when one is enacted shortly after

the other, it is appropriate to presume that Congress intended

that text to have the same meaning in both statutes”); see also

Hawaiian Airlines v. Norris, 512 U.S. 246, 254 (1994); cf.

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 126 S. Ct.

1503, 1513 (2006) (“[W]hen ‘judicial interpretations have

settled the meaning of an existing statutory provision, repetition

of the same language in a new statute indicates, as a general

matter, the intent to incorporate its . . . judicial interpretations as

well.’”) (quoting Bragdon v. Abbot, 524 U.S. 624, 645 (1998))

(ellipsis in original). Given the parallel provisions in the

FSLMS, the HSA, and the Final Rule, it is clear that “collective

bargaining” under the HSA gains meaning from the application

of that same term under Chapter 71. Indeed, these parallel

provisions give “a strong indication” that the common term

should be construed consistently under each statute. Indep.

Fed’n of Flight Attendants v. Zipes, 491 U.S. 754, 758 n.2

(1989); see also Kooritzky v. Herman, 178 F.3d 1315 (D.C. Cir.

1999) (similar language in two different statutes is strong

indication that the language is to be interpreted alike).

The Government argues that the Department was free to

“modify the collective bargaining provisions” of Chapter 71 in

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promulgating a new HR system pursuant to the HSA. DHS’s

Br. at 31. This is undoubtedly correct. But nothing in the HSA

suggests that the meaning of “collective bargaining” under

Chapter 71 could be disregarded by the Department in its

promulgation of the HR system. There are many “provisions”

relating to collective bargaining in Chapter 71 – e.g., resort to

FLRA, determination of appropriate units, handling of refusalto-bargain complaints, exceptions to arbitral awards, and use of

an impasses panel – that the Department was free to ignore in its

Final Rule. The core meaning of “collective bargaining” itself,

however, could not be ignored or supplanted. Why? Because

the HSA states explicitly that, in establishing a new HR system,

the Department “shall”

ensure that employees may organize, bargain collectively,

and participate through labor organizations of their own

choosing in decisions which affect them, subject to any

exclusion from coverage or limitation on negotiability

established by law.

5 U.S.C. § 9701(b)(4) (Supp. II 2002). This statutory obligation

is mandatory, not optional. And if, as shown above, “collective

bargaining” means the same thing under both the HSA and the

FSLMS, then application of the term under the latter statute

cannot possibly be irrelevant to an understanding of how the

term applies under the former.

With these considerations in mind, we now review the

provisions of the Final Rule to determine whether the

Department’s regulations “ensure that employees may . . .

bargain collectively,” as the HSA requires. The obvious

problem with the HR system is that very few “conditions of

employment” are subject to meaningful bargaining, and the few

conditions over which the parties can negotiate may be

unilaterally abrogated by management. A system of this sort

does not even give an illusion of collective bargaining. 

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1. DHS’s Asserted Power to Unilaterally Abrogate

Collective Bargaining Agreements

The most extraordinary feature of the Final Rule is that it

reserves to the Department the right to unilaterally abrogate

lawfully negotiated and executed agreements. This is plainly

impermissible under the HSA. If the Department could

unilaterally abrogate lawful contracts, this would nullify the

statute’s specific guarantee of collective bargaining rights,

because DHS cannot “ensure” collective bargaining without

affording employees the right to negotiate binding agreements.

The District Court’s decision on this point is exactly right:

The Regulations fail because any collective bargaining

negotiations pursuant to its terms are illusory: the Secretary

retains numerous avenues by which s/he can unilaterally

declare contract terms null and void, without prior notice to

the Unions or employees and without bargaining or

recourse. 

Chertoff I, 385 F. Supp 2d at 25.

There can be no doubt that the Final Rule authorizes DHS

to unilaterally abrogate any collective bargaining agreement that

is negotiated under the HR system, not just those in existence

when the Final Rule was promulgated. Indeed, the Government

conceded this point, before the District Court, in its briefs to this

court, and during oral argument. See Tr. of Oral Argument at

6-9 (Government counsel explicitly affirmed his understanding

of the provisions in Subpart E as permitting DHS to override

any collectively bargained agreement it enters, not just those

extant when the regulations take effect.). We “‘give substantial

deference to an agency’s interpretation of its own regulations.’”

Castlewood Prods., L.L.C. v. Norton, 365 F.3d 1076, 1082 (D.C.

Cir. 2004) (quoting Thomas Jefferson Univ. v. Shalala, 512 U.S.

504, 512 (1994)). Accordingly, “‘the agency’s interpretation

must be given controlling weight unless it is plainly erroneous

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34

or inconsistent with the regulation.’” Id. (quoting Shalala, 512

U.S. at 512).

As the District Court found, the Government’s proffered

interpretation of the regulations is consistent with the language

employed in key provisions of Subpart E. An agreement

negotiated pursuant to the HR system will not take effect if

found by DHS officials to be inconsistent with Department rules

or regulations. Id. § 9701.515(d)(1)-(2). Even if not explicitly

disapproved, an agreement takes effect only if it comports with,

inter alia, the Department’s “implementing directives and other

policies and regulations.” Id. at § 9701.515(d)(3). Most

significantly, the regulations give DHS ongoing authority to

render collective bargaining agreements “unenforceable if an

authorized agency official determines that they are contrary to

. . . Departmental implementing directives . . . and other policies

and regulations.” Id. § 9701.515(d)(5). Moreover, in elaborating

the list of “management rights,” the regulations state that

“nothing in [Subpart E of the regulations] may affect the

authority of any management official or supervisor of the

Department . . . to take whatever . . . actions may be necessary to

carry out the Department’s mission.” Id. § 9701.511(a), (a)(2).

Read together, these provisions permit unilateral abrogation of

collectively bargained contracts.

In the Government’s view, the provisions at issue represent

a reasonable, and therefore permissible, understanding of

“collective bargaining.” Congress required DHS to craft a HR

system that is “flexible” and “contemporary,” 5 U.S.C.

§ 9701(b)(1)-(2) (Supp. II 2002), and the Government insists that

DHS deserves deference in weighing those objectives in its

efforts to ensure collective bargaining. The Government’s

arguments on this point are completely unconvincing, because

they ignore Congress’ explicit command that any HR system

“ensure that employees may . . . bargain collectively,” 5 U.S.C.

§ 9701(b)(4) (Supp. II 2002). A system that gives the

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Department a free hand to selectively vitiate collectively

bargained agreements does not obey that command. 

As noted above, “collective bargaining” is a term of art,

defined in other statutory schemes, and DHS was not free to treat

it as an empty linguistic vessel. See Smith, 544 U.S. at 233.

None of the major statutory frameworks for collective bargaining

allows a party to unilaterally abrogate a lawfully executed

agreement. See, e.g., 5 U.S.C. §§ 7102(2), 7103(a)(12) (2000)

(federal sector bargaining); 29 U.S.C. § 158(a)(5), (b)(3) & (d)

(2000) (private sector bargaining); 39 U.S.C. § 1206 (2000)

(U.S. Postal Service); 45 U.S.C. § 152 (Fourth) (2000) (common

carriers). Indeed, no statutorily mandated collective bargaining

system that we are aware of dispenses with the premise that

negotiated agreements bind both parties – no matter what the

scope of bargaining was ex ante. Indeed, when pressed at oral

argument, the Government could provide no counterexample.

See Tr. of Oral Argument at 9-10. 

The HR system embodied in the Final Rule has no

antecedent, because it undermines the very idea of collective

bargaining. Structuring collective bargaining so that labor and

management meet to negotiate terms until they reach an accord

or an impasse only makes sense on the assumption that each

side’s evolving bargaining position will reflect a series of tradeoffs that move the parties toward a mutually satisfactory end

point. It is therefore dispositive that the HSA refers to collective

bargaining – not merely “consultation” or “notification” – in

describing the Department’s obligations under § 9701(b)(4).

When Congress intended to deny collective bargaining rights and

provide only advisory roles to employee representatives, it used

different language. Compare 5 U.S.C. § 9701(b)(4) (Supp. II

2002) (“bargain collectively”), with id. § 9701(e)

(“collaboration” or “consultation” through “meet and confer”

process), and 5 U.S.C. § 7113 (2000) (“national consultation

rights”).

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Finally, the Government’s position not only defies the wellunderstood meaning of collective bargaining, it also defies

common sense. As noted above, collective bargaining is a

method of structuring the formation of labor contracts, and the

notion of mutual obligation is inherent in contract law. See

Restatement (Second) of Contracts § 3 (1979) (“An agreement

is a manifestation of mutual assent on the part of two or more

persons. A bargain is an agreement to exchange promises or to

exchange a promise for a performance or to exchange

performances.”). To imagine that a system might “ensure

collective bargaining” without imposing mutual obligations is

simply bizarre. 

We emphasize that our holding relates only to DHS’s power

to abrogate collectively bargained contracts executed pursuant to

the HR system. The Unions do not contest the Department’s

authority to supersede labor contracts inherited from the

previously independent agencies that now constitute DHS. See

5 C.F.R. § 9701.506(a) (2006). Our holding does nothing to

undercut the Department’s authority to exercise that power. 

2. The Scope of Bargaining

The right to negotiate collective bargaining agreements that

are equally binding on both parties is of little moment if the

parties have virtually nothing to negotiate over. That is the result

of the Final Rule adopted by DHS. The scope of bargaining

under the HR system is virtually nil, especially when measured

against the meaning of collective bargaining under Chapter 71.

And this is saying a lot, because the scope of bargaining under

Chapter 71 is extraordinarily narrow. This was made clear in

NTEU v. FLRA, 910 F.2d 964 (D.C. Cir. 1990) (en banc), where

we pointed out

the unique structure of the federal sector labor relations

statute, which, because of “the special requirements and

needs of the Government,” 5 U.S.C. § 7101(b), excludes

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37

from negotiations a host of subjects that employers would be

obliged to bargain about in the private sector. For instance,

section 7106(a), the “management rights” provision of the

statute, ensures that agencies need not bargain over the

number of employees, their hiring, assignment, and

discharge, the right to contract out work, and the authority

“to take whatever actions may be necessary to carry out the

agency mission during emergencies.” 5 U.S.C. § 7106(a).

Id. at 968. There is no doubt that the restricted scope of

bargaining under Chapter 71 gives federal agencies great

“flexibility” in collective bargaining, of the sort contemplated by

5 U.S.C. § 9701(b)(1) (Supp. II 2002).

Having reviewed the Final Rule with care, we find that the

limited scope of bargaining under the proposed HR system

violates the Act, and on this point we reverse the District Court.

In upholding the narrow scope of bargaining permitted under the

HR system, the District Court rested its analysis primarily on the

HSA’s enumeration of certain nonwaivable provisions of law.

Since “Congress gave the [Department] the authority to ignore

the provisions of Chapter 71 and to establish new metes and

bounds for collective bargaining at DHS,” the court felt

compelled to defer to DHS’s new framework. Chertoff I, 385 F.

Supp. 2d at 28-29. This line of reasoning fails.

The problem with the District Court’s analysis and with the

Government’s arguments in the same vein is that they elevate

one provision of the HSA over another: the Department’s

authority to modify the provisions of Chapter 71 is given

precedence over § 9701(b)(4)’s command to ensure collective

bargaining. If DHS enjoys unlimited discretion to define the

“metes and bounds” of collective bargaining under the HSA, it

can whittle the scope of bargaining so drastically as to render

collective bargaining meaningless. Under the District Court’s

view, there is no stopping point – the court recognizes nothing

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38

inherent in federal sector collective bargaining that fixes the

scope of bargaining in the absence of Chapter 71. 

This reasoning is fatally flawed, because, as noted above,

nothing in the HSA suggests that the meaning of “collective

bargaining” under Chapter 71 can be disregarded by the

Department in its promulgation of the HR system. If, as we

have shown, “collective bargaining” in the HSA derives its

meaning from the same term in the FSLMRA, then application

of the term under the latter statute must guide our understanding

of how the term applies under the former. We cannot assume

that Congress deployed a term of art, with a long history of legal

usage, while contemplating that DHS could completely drain that

term of significance. 

A core element of collective bargaining is a requirement that

labor and management bargain in good faith over conditions of

employment for purposes of reaching an agreement. Indeed, the

Final Rule purports to adopt this understanding of collective

bargaining in its definition of the term. See 5 C.F.R. § 9701.504

(2006). The scope of bargaining under the Final Rule, however,

does not come close to reaching this core element. As the

District Court found, “[t]he HR System essentially reduces

collective bargaining to employee-specific terms affecting

discipline, discharge and promotion.” Chertoff I, 385 F. Supp.

2d at 29. This is so far short of the meaning of collective

bargaining under Chapter 71 that we are constrained to hold that

the Final Rule does not meet the HSA’s requirement of

bargaining in good faith over conditions of employment for

purposes of reaching an agreement.

It is readily apparent that the Final Rule reflects a flagrant

departure from the norms of “collective bargaining” underlying

Chapter 71. In fact, the Government acknowledges the striking

disparity between the FSLMS framework and the system

established for DHS. See DHS’s Reply Br. at 13. Even a quick

glance at the Final Rule confirms what the Government

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39

acknowledges, i.e., that the HR system shrinks the scope of

bargaining well below what Chapter 71 provides. For example,

“permissive” areas of bargaining under Chapter 71 are off limits

for negotiation at DHS. Compare 5 U.S.C. § 7106(b)(1) (2000),

with 5 C.F.R. § 9701.511(a)(2) & (b) (2006). This distinction is

critical. Procedures for exercising rights affecting issues like

work assignments and deployments are negotiable under Chapter

71, but not under the HR system. And, under the HR system,

when management exercises one of its rights, it need not provide

notice to labor representatives in advance. 5 C.F.R.

§ 9701.511(d) (2006). Moreover, the proposed HR system gives

DHS broad new authority “to take whatever other actions may be

necessary to carry out the Department’s mission.” Id.

§ 9701.511(a)(2) (2006). Presumably, this provision empowers

DHS to take any matter off the bargaining table at any time,

regardless of what concessions have already been made by union

representatives. No analogous power exists anywhere in Chapter

71. Most strikingly, DHS management is prohibited from

negotiating over the “procedures it will observe in exercising”

the authority laid out in subsections (a)(1) and (a)(2) of the

management rights provision. Id. § 9701.511(b). Instead,

management must merely “confer” with labor representatives

about the procedures it will use. Id. § 9701.511(c). These

provisions stand in sharp contrast to Chapter 71’s obligation to

bargain over the procedures used to exercise management rights.

5 U.S.C. § 7106(b)(2) (2000). 

Finally, Chapter 71 requires agencies to bargain over

“appropriate arrangements” for employees adversely affected by

the exercise of a management right. Id. § 7106(b)(3). The HR

system shrinks such bargaining considerably. For the

“operational matters” committed to management discretion

under § 9701.511(a)(1)-(a)(2), DHS must negotiate appropriate

arrangements only when “the effects of [management’s exercise

of a right] have a significant and substantial impact on the

bargaining unit, or on those employees in that part of the

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40

bargaining unit affected by the action or event, and are expected

to exceed or have exceeded 60 days.” Id. § 9701.511(e)(2)(i).

Even under these narrow circumstances, appropriate arrangement

proposals must be limited to such matters as personal hardships

and safety measures, or reimbursements for out-of-pocket

expenses. Id. § 9701.511(e)(2)(i)(A)-(B). The Final Rule thus

effectively strips the term “collective bargaining” of any real

meaning in limiting the scope of bargaining.

 Our decision in Amalgamated Transit Union Int’l, AFL-CIO

v. Donovan, 767 F.2d 939 (D.C. Cir. 1985) (“ATU”), although

not controlling here, is instructive. The Urban Mass

Transportation Act allowed formerly private transit companies

that had been transferred to public ownership to receive federal

funds if the Secretary of Labor certified that the transit authority

had forged a “fair and equitable” labor protective agreement with

its union that included, inter alia, provisions ensuring employees

of “the continuation of collective bargaining rights.” See id. at

940 (explicating 49 U.S.C. App. § 1609(c) (1982)). We found

that “collective bargaining” had accumulated significance

through its history of usage. The ATU court rejected the

Secretary’s invitation to measure the right to collective

bargaining by reference to state law:

Congress neither imposed upon the states the precise

definition of “collective bargaining” established by the

[National Labor Relations Act] and the case law that has

developed under that Act, nor did it employ a term of art

devoid of all meaning, leaving the states free to interpret and

define it as they saw fit. Instead, Congress used the phrase

generically, incorporating within the statute the commonly

understood meaning of “collective bargaining.” The 1964

Congress was not writing on a clean slate. Then as now,

collective bargaining was universally understood to require,

at a minimum, good faith negotiations, to a point of

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41

impasse, if necessary, over wages, hours and other terms

and conditions of employment.

Id. at 949. We noted that those principles “have long been the

bedrock of collective bargaining in the federally-regulated

private sector” and that they had also “provided the common

denominator of the public sector collective bargaining schemes

enacted by the states.” Id. Accordingly, we acknowledged that

the statute attempted “a delicate balance” by conditioning federal

transportation aid on collective bargaining rights while not

incorporating the NLRA wholesale, but we deemed it “clear that

federal labor policy would dictate the substantive meaning of

collective bargaining for purposes of section 13(c).” Id. at 950.

A similar analysis applies here, because Congress “was not

writing on a clean slate” when it enacted the HSA. The

Government would have us impute to Congress the expectation

that, as used in the HSA, “collective bargaining” has no

particular content, thus leaving DHS wholly unconstrained to

define the term as it wishes. Because we have no evidence to

indicate that Congress chose to “employ a term of art devoid of

all meaning,” we conclude that Chapter 71 must inform the

substantive meaning of collective bargaining for purposes of

§ 9701(b)(4). Accordingly, the scope of bargaining under HSA

must be guided by the federal labor policy underlying the

permissible scope of bargaining in the federal sector. The

parameters of the scope of collective bargaining under the

FSLMS are narrow and flexible, so Chapter 71 gives appropriate

guidance to DHS in how to ensure collective bargaining for its

employees. See, e.g., FLRA v. OPM, 778 F.2d 844, 845 (D.C.

Cir. 1985) (“[T]he scope of collective bargaining is far narrower

in the federal sector than in the private sector.”) (citing H.

ROBINSON, NEGOTIABILITY IN THE FEDERAL SECTOR 189

(1981)). For example, Chapter 71’s enumeration of management

rights places a number of substantive topics off limits for

bargaining, 5 U.S.C. § 7106(a) (2000), but it also requires that

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agencies negotiate over the “impact and implementation” of

those rights, id. § 7106(b). See FLRA v. U.S. Dep’t of Justice,

994 F.2d 868, 871-72 (D.C. Cir. 1993). This general framework

must be followed by DHS to ensure collective bargaining for its

employees, as required by the HSA.

Using Chapter 71 to give content to the HSA’s collective

bargaining requirement is perfectly consistent with the Act’s

authorization to proceed “notwithstanding” many sources of law.

Chapter 71 has numerous provisions that do not directly inform

the definition of collective bargaining; many would impede

DHS’s flexibility if it lacked the freedom to waive them. Most

conspicuously, Chapter 71 envisions a significant role for FLRA:

it establishes that the “Authority shall provide leadership in

establishing policies and guidance relating to matters under this

chapter” and that, with specified exceptions, it should “be

responsible for carrying out the purpose of this chapter.” 5

U.S.C. § 7105(a)(1) (2000). It also gives the Authority extensive

power to investigate, adjudicate, and enforce labor practices in

the federal sector. Id. § 7105(a)(2) & (g). Yet, it is beyond

dispute that the HSA permits DHS to bypass the Authority

altogether in setting up a HR system. Similarly, Chapter 71

establishes a process for the resolution of bargaining impasses,

id. § 7119, which DHS chose not to incorporate into its HR

system. Chapter 71 also proscribes numerous unfair labor

practices. See id. § 7116. The ability to selectively waive or

modify § 7116 clearly comports with the HSA’s stated

imperatives of flexibility and contemporaneity. 

Furthermore, it must be recalled that the duty to bargain

does not require agreement, only a good faith effort by the

parties to reach agreement. Id. §§ 7103(a)(12), 7114(a)(4) & (b).

Additionally, employees in the federal sector are forbidden from

striking, Prof’l Air Traffic Controllers Org. v. FLRA, 685 F.2d

547, 550 (D.C. Cir. 1982), so they can add no economic leverage

to their bargaining demands as can employees in the private

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sector. And, most importantly, employees covered by DHS’s

HR system will not have the advantage of an impasses panel –

which can impose conditions of employment if the parties’

negotiations reach an impasse, see 5 U.S.C. § 7119(c)(5)(B)(iii)

(2000) – as do employees who are covered by Chapter 71. In

other words, if the Department follows the core notion of

“collective bargaining” in the federal sector in defining the scope

of bargaining under the HR system, as the Act requires, DHS

will have extraordinary “flexibility” to achieve the goals of the

statute and, at the same time, “ensure” that the limited benefits

flowing from a “contemporary” program of collective bargaining

in the federal sector are made available to its employees. The

Act mandates no less. 

3. The Final Rule Fails to Ensure Collective Bargaining

for DHS Employees in Two Critical Respects –

Therefore No Deference is Due the Department’s

Interpretation of the HSA

The foregoing discussion makes it clear that, insofar as the

Final Rule permits the Department to abrogate final agreements

and narrowly limits the scope of bargaining to employee-specific

terms, the regulations fail to “ensure” collective bargaining for

DHS employees. In these circumstances, we owe no deference

to DHS’s interpretation of the HSA. 

As we explain above, Chevron analysis typically “is focused

on discerning the boundaries of Congress’ delegation of

authority to the agency; and as long as the agency stays within

that delegation, it is free to make policy choices in interpreting

the statute, and such interpretations are entitled to deference.”

Aid Ass’n for Lutherans v. United States Postal Serv., 321 F.3d

1166, 1174 (D.C. Cir. 2003) (citation and inner quotation marks

omitted). An agency construction of a statute cannot survive

judicial review, however, if a contested regulation reflects an

action that is inconsistent with the agency’s authority. It does

not matter whether the unlawful action arises because the

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disputed regulation defies the plain language of a statute or

because the agency’s construction is utterly unreasonable and

thus impermissible. Am. Library Ass’n, 406 F.3d at 699 (citing

Aid Ass’n for Lutherans, 321 F.3d at 1174). 

In this case, as we have shown, DHS’s Final Rule defies the

plain language of the Act, because it renders “collective

bargaining” meaningless; and it is utterly unreasonable and thus

impermissible, because it makes no sense on its own terms. The

Government’s argument is premised on a view that DHS’s

authority to modify the provisions of Chapter 71 takes

precedence over § 9701(b)(4)’s command to ensure collective

bargaining. As we have explained, this is simply wrong. The

agency’s policy preferences cannot trump the words of the

statute. 

D. The Role of the HSLRB

The Unions also argue that DHS’s HR system impermissibly

shrinks the collective bargaining requirement in a third way: by

funneling bargaining disputes to HSLRB. The Unions object to

HSLRB, because, in their view, the new board lacks sufficient

independence to provide the neutral adjudication required of a

collective bargaining regime. As noted above, HSLRB is

composed of members appointed by the Secretary of Homeland

Security. 5 C.F.R. § 9701.508(a)(1) (2006). The Secretary also

retains discretion to remove HSLRB members “on the same

grounds as an FLRA member,” id. § 9701.508(a)(2), i.e., “upon

notice and hearing and only for inefficiency, neglect of duty, or

malfeasance in office,” 5 U.S.C. § 7104(b) (2000). Among other

things, HSLRB adjudicates disputes concerning the scope of

bargaining and the duty to bargain in good faith, most unfair

labor practice charges, disputes concerning information requests,

exceptions to arbitration awards in cases involving the exercise

of management rights or the duty to bargain, and negotiation

impasses. 5 C.F.R. § 9701.509(a)(1)-(5) (2006). The Unions

insist that concentrating so much authority in a body effectively

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run by management obliterates any chance for review by a

neutral arbiter. Existing labor relations statutes, the Unions

argue, reveal Congress’ understanding that neutral arbitration is

fundamental to collective bargaining in the federal sector. The

regulations thus violate the statute, according to the Unions, by

assigning responsibility for adjudicating labor disputes to a

management-controlled board.

Our holding in Part E below, relating to the role of FLRA

under the HR system, renders this issue unripe for resolution.

The Final Rule is flawed insofar as it allows DHS to encroach on

FLRA’s operations without the statutory authority to do so.

Accordingly, we affirm the District Court’s judgment vacating

the portions of the regulations pertaining to the Authority. We

have no way to know, however, what form the revised

regulations will take. In particular, we have no way of knowing

what HSLRB’s role will be under a revised Final Rule, nor do we

know whether DHS will opt to create other boards to carry out

the functions now assigned to FLRA. Indeed, we do not know

whether DHS might elect to allow disputes arising under the HR

system to be resolved by FLRA pursuant to the Authority’s

defined jurisdiction under Chapter 71. In short, the issues

relating to the efficacy of HSLRB under the HR system are

premature.

E. DHS’s Attempt to Regulate FLRA

The Government appeals the District Court’s finding that

DHS exceeded its statutory authority by assigning new protocols

to FLRA. The District Court was “convinced that [DHS] cannot

commandeer the resources of an independent agency and thereby

fundamentally transform its functions, absent a clearer indication

of congressional intent.” Chertoff I, 385 F. Supp. 2d at 32. We

agree.

As explained above, the Final Rule quite clearly intends to

impose a novel procedural scheme on FLRA, even though

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nothing in the HSA authorizes DHS to regulate the work of the

Authority or alter its statutory jurisdiction. The Authority is an

independent agency operating pursuant to its organic statute

under Chapter 71. See 5 U.S.C. § 7104 (2000). Chapter 71

prescribes FLRA’s functions and authority. The Authority is

empowered to make a host of determinations related to labor

negotiations and disputes, including “resolv[ing] issues relating

to the duty to bargain in good faith,” “conduct[ing] hearings and

resolv[ing] complaints of unfair labor practices,” and

“resolv[ing] exceptions to arbitrator’s awards” under Chapter 71.

Id. § 7105(a)(2)(E) & (G)-(H). DHS’s Final Rule attempts to

conscript FLRA into reviewing a narrowly defined area of cases

under an intensely deferential standard of review. See 5 C.F.R.

§ 9701.508(h) (2006). Whereas FLRA’s statutory function

involves the exercise of judgment and significant authority, the

Final Rule shrinks the Authority’s role, using it only to guard

against substantial adjudicative failures by HSLRB. Indeed,

under the Final Rule, FLRA’s role with respect to any matter

relating to a DHS employee would evaporate if HSLRB

“determines that the matter affects homeland security.” Id.

§ 9701.509(a)(7); see also id. § 9701.510(b). The role of FLRA

under the HR system bears no resemblance to its normal

statutory role, and conforming to the regulations would therefore

require FLRA to substantially change its operating functions.

The Government fruitlessly searches 5 U.S.C. § 9701 for the

authority necessary to rearrange FLRA’s operations. To justify

its purported exercise of authority over FLRA, the Government

relies, first, on § 9701(a)’s mandate to establish a new human

resources scheme “notwithstanding any other provision of this

part.” But this language does not justify DHS’s attempt to

regulate FLRA, because the cited provision applies only to

regulations relating to “a human resources management system

for some or all of the organizational units of the Department of

Homeland Security.” 5 U.S.C. § 9701(a) (Supp. II 2002).

FLRA, quite obviously, is not an organizational unit of DHS.

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Consequently, the “notwithstanding” clause is not relevant. The

“notwithstanding” clause does nothing more than establish

DHS’s freedom to design its own internal human resources

scheme. It does not serve as a license for DHS to draft an

independent agency to do its bidding pursuant to terms

prescribed by the Department. 

 The Department’s second defense of its intrusion into

FLRA’s internal operations is similarly farfetched. Citing the

enumeration of certain non-waivable provisions of law, DHS

urges us to draw a sweeping negative implication, claiming

authority to “modify” any unenumerated legal provision. We

refuse to negatively infer, from a restriction of authority, a broad

grant of power that would authorize DHS to prescribe

procedures for independent agencies. See Ry. Labor Executives’

Ass’n v. Nat’l Mediation Bd., 29 F.3d 655, 671 (D.C. Cir. 1994)

(en banc) (“Were courts to presume a delegation of power absent

an express withholding of such power, agencies would enjoy

virtually limitless hegemony, a result plainly out of keeping with

Chevron and quite likely with the Constitution as well.”).

Extended to its logical limit, the Government’s interpretation of

the statute would allow the Department to overtake any agency

to achieve its own ends – indeed, it could even claim to revise

the standards of review in federal courts. Such a sweeping grant

of authority exists nowhere in the HSA. 

F. The Role of MSPB

Two issues related to the role of MSPB under the HR system

are before us on appeal. As we explained above, DHS appeals

the District Court’s determination that MSPB’s standard of

review in penalty mitigation cases violates HSA’s command to

provide “fair” appellate procedures; we reversed that holding,

finding the Unions’ claim unripe for review. Additionally, the

Unions cross-appeal the District Court’s determination that DHS

was entitled to Chevron deference in assigning MSPB an

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appellate role in mandatory removal cases. We affirm the

District Court on this point.

The Act explicitly contemplates that, under certain

conditions, the HR system will effectively “modify procedures

under chapter 77 [5 U.S.C. §§ 7701-7703 (2000)],” which is the

statutory framework governing MSPB’s appellate procedures.

5 U.S.C. § 9701(f)(2)(C) (Supp. II 2002). Unlike its intrusion

into FLRA’s domain, then, the Department’s modification of

MSPB’s procedures has a clear statutory predicate. It is also

noteworthy that Congress directed DHS and OPM to consult

with MSPB in crafting appellate procedures. 

Moreover, the statute delineating MSPB’s powers and

functions authorizes it to:

hear, adjudicate, or provide for the hearing or adjudication,

of all matters within the jurisdiction of the Board under this

title, chapter 43 of title 38, or any other law, rule, or

regulation, and, subject to otherwise applicable provisions

of law, take final action on any such matter.

5 U.S.C. § 1204(a)(1) (2000) (emphasis added). Congress thus

clearly intended MSPB to serve a broad function that may be

defined in diverse ways. Given MSPB’s broad statutory

underpinning, we find no error in the District Court’s judgment

upholding DHS’s action. 

G. The Scope of the Injunction 

 Because we have substantially upheld the District Court’s

judgments regarding the legality of the Final Rule, we must

address DHS’s contention that the District Court’s injunction

sweeps too broadly. DHS contends in particular that it was

improper to enjoin Subpart E in its entirety. The Government’s

argument is mostly pointless, however, because our decision here

invalidates a broader portion of Subpart E than did the District

Court. Curing the problems we have identified will require not

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only making collective bargaining mutually binding and

respecting FLRA’s independent authority, but also adjusting the

scope of bargaining. The injunction the Government proposed

to the District Court did not anticipate our holding, and the

Government’s appellate brief supplies no insight into how

Subpart E might be revised to address the concerns raised by our

decision. 

Even if the Government had anticipated our holdings and

attempted to address them, we still would have been disinclined

to pursue a dissection of the Final Rule. “Severance and

affirmance of a portion of an administrative regulation is

improper if there is ‘substantial doubt’ that the agency would

have adopted the severed portion on its own.” Davis County

Solid Waste Mgmt. v. EPA, 108 F.3d 1454, 1459 (D.C. Cir. 1997)

(quoting North Carolina v. FERC, 730 F.2d 790, 795-96 (D.C.

Cir. 1984). Moreover, we are obliged to respect “the

fundamental principle that agency policy is to be made, in the

first instance, by the agency itself – not by courts, and not by

agency counsel.” Harmon v. Thornburgh, 878 F.2d 484, 494

(D.C. Cir. 1989). Accordingly, courts generally “do not attempt,

even with the assistance of agency counsel, to fashion a valid

regulation from the remnants of the old rule.” Id. We will leave

these matters to be addressed by the parties and the District

Court on remand of this case.

III. CONCLUSION

The allowance of unilateral contract abrogation and the

limited scope of bargaining under DHS’s Final Rule plainly

violate the statutory command in the HSA that the Department

“ensure” collective bargaining for its employees. We therefore

vacate any provisions of the Final Rule that betray this

command. DHS’s attempt to co-opt FLRA’s administrative

machinery constitutes an exercise of power far outside the

Department’s statutory authority. We therefore affirm the

District Court’s decision to vacate the provisions of the Final

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Rule that encroach on the Authority. We reverse the District

Court’s holding that MSPB’s standard of review in penalty

modification cases represents a failure to provide “fair” appellate

procedures, because that issue is not yet ripe for review. And we

express no view on the role of the HSLRB, because the matter

cannot be addressed until DHS revises the Final Rule. Finally,

we decline to amend the injunction.

The judgments of the District Court are affirmed in part and

reversed in part, and the case is hereby remanded for further

proceedings consistent with this opinion.

So ordered.

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