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Parties Involved:
American Federation of Government Employees, Local 1547
Intervenor for Respondent
Federal Labor Relations Authority
Respondent
United States Department of the Air Force
Petitioner

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 14, 2016 Decided December 30, 2016

No. 15-1208

UNITED STATES DEPARTMENT OF THE AIR FORCE, LUKE AIR 

FORCE BASE, ARIZONA,

PETITIONER

v.

FEDERAL LABOR RELATIONS AUTHORITY,

RESPONDENT

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 

1547,

INTERVENOR

On Petition for Review of an Order of 

the Federal Labor Relations Authority

Mark W. Pennak, Attorney, U.S. Department of Justice, 

argued the cause for petitioner. With him on the brief were 

Benjamin C. Mizer, Principal Deputy Assistant Attorney 

General, and Leonard Schaitman and H. Thomas Byron, 

Attorneys. 

Zachary R. Henige, Deputy Solicitor, Federal Labor 

Relations Authority, argued the cause for respondent. With 

him on the brief were Fred B. Jacob, Solicitor, and Stephanie 

J. Fouse, Attorney.

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David A. Borer, Andres M. Grajales, and Mark L. Vinson

were on the brief for intervenor American Federation of 

Government Employees, Local 1547 in support of respondent. 

Judith D. Galat entered an appearance.

Before: TATEL, Circuit Judge, and EDWARDS and 

GINSBURG, Senior Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL. 

TATEL, Circuit Judge: The Federal Labor Relations 

Authority ordered the Air Force to bargain collectively with 

its civilian employees over access to an on-base shoppette—a 

gas station and convenience store that forms part of the 

military’s network of commissaries and exchanges. The Air 

Force challenges that decision, arguing, among other things, 

that the issue is not a proper subject of bargaining because 

Congress has given the military unfettered discretion to 

determine whether civilians may patronize commissaries and 

exchanges. For the reasons set forth below, we agree and 

grant the Air Force’s petition for review.

I.

The Federal Service Labor-Management Relations 

Statute, enacted in 1978 as Title VII of the Civil Service 

Reform Act, governs collective bargaining in the federal 

workplace. The statute grants federal employees the right to 

collectively bargain over “conditions of employment.” 5 

U.S.C. § 7102(2). Under Authority and D.C. Circuit 

precedent, however, employees have no right to bargain over 

matters that Congress has committed to an agency’s 

“unfettered discretion.” Illinois National Guard v. FLRA, 854 

F.2d 1396, 1401 (D.C. Cir. 1988); see Patent Office 

Professional Association & U.S. Department of Commerce, 

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59 F.L.R.A. 331, 346 (Sept. 30, 2003) (holding that the

Authority may not order an agency to bargain over matters 

within the agency’s “sole and exclusive discretion” (internal 

quotation marks omitted)).

The dispute here began when some 800 civilian 

employees of Luke Air Force Base, Arizona, represented by 

their exclusive bargaining agent, Local 1547 of the American 

Federation of Government Employees, sought access to the 

Base’s commissaries and exchanges—stores run by the 

Defense Department that sell reduced-price food and 

merchandise to members of the uniformed services, National 

Guardsmen and reservists, and certain retirees, dependents, 

and survivors. See 10 U.S.C. §§ 2481(a), 1061–1064.

Commissaries are similar to grocery stores. See id. § 2484(a).

Exchanges take a variety of forms, from department-store-like 

retail outlets to laundromats, gas stations, flower shops, and 

fast-food franchises. See Department of Defense Instruction 

1330.21, Enclosure 3.1.1 (July 14, 2005). If accepted, Local 

1547’s proposal would have significantly expanded shopping 

privileges for civilian employees, who, under existing rules, 

were allowed to buy only food and beverages from “any 

exchange food activity, if consumed on post.” See id., 

Enclosure 6, Table E6.T2.6.

In response, the Air Force filed with the FLRA what is 

known as a negotiability appeal, in which it argued that the 

proposal was nonnegotiable because it lacked a connection to 

employee working conditions. The FLRA disagreed and

ordered the Air Force to negotiate with the union. See

American Federation of Government Employees, Local 1547 

& U.S. Department of the Air Force, Luke Air Force Base, 

Arizona (“Local 1547 I”), 64 F.L.R.A. 642, 646–47 (Apr. 7, 

2010).

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The parties resumed discussions but soon reached

impasse. The union brought the matter to the Federal Service 

Impasses Panel, which ordered the parties to participate in 

mediation-arbitration before an arbitrator, who the Panel 

empowered to issue a binding decision if the parties were 

unable to reach a settlement. Before mediation began,

however, the union circulated a revised proposal seeking 

shopping privileges only at the Base’s Shoppette, a 24-hour 

gas station and convenience store that sells such things as

fresh and frozen food, gas, and certain health and household 

items. After mediation over this more limited proposal failed, 

the arbitrator sided with the union and ordered the Air Force 

to give its civilian employees access to the Shoppette. 

When the Air Force refused to implement the arbitrator’s 

decision, the union filed a second negotiability appeal with 

the FLRA. Although the Air Force again insisted that the 

proposal had nothing to do with employee working 

conditions, it added a second argument: that the proposal was 

not a proper subject of bargaining because Title 10 of the U.S. 

Code, which governs all military operations, gives the 

Secretary of Defense “unfettered discretion” over 

commissaries and exchanges. See, e.g., Illinois National 

Guard, 854 F.2d at 1401. Unpersuaded, the FLRA ordered the 

Air Force to implement the proposal. See American 

Federation of Government Employees, Local 1547 & U.S. 

Department of the Air Force, Luke Air Force Base, Arizona

(“Local 1547 II”), 67 F.L.R.A. 523, 525–30 (July 29, 2014). 

One member dissented, reasoning that Title 10, when “read in 

its entirety and in its historical context,” leaves the question of 

“authoriz[ing] access to military exchanges . . . to the sole 

discretion of the Secretary of Defense.” Id. at 532–33 

(Member Pizzella, Dissenting). The Air Force sought 

reconsideration, which the FLRA denied. American 

Federation of Government Employees, Local 1547 & U.S. 

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Department of the Air Force, Luke Air Force Base, Arizona, 

68 F.L.R.A. 557, 558–61 (May 13, 2015).

The Air Force petitions for review. It argues, as it did 

before the FLRA, that it has no duty to bargain over the 

Shoppette proposal because Title 10 grants the Secretary of 

Defense complete discretion to decide whether civilian 

employees may shop at commissaries and exchanges. It also 

argues that the Authority failed to point to any record 

evidence in support of its conclusion that the proposal 

concerns employee working conditions.

II.

We begin with the Air Force’s first argument, and 

because it relies on a particular interpretation of several 

provisions of Title 10, we think it best to proceed by first 

exploring the parties’ understanding of these provisions and 

then setting forth our own interpretation of the statute’s 

meaning. In doing so, we owe the Authority no deference, as 

we “review[] de novo the FLRA’s interpretation of a statute it 

is not charged with administering.” U.S. Department of the 

Air Force v. FLRA, 648 F.3d 841, 846 (D.C. Cir. 2011).

A.

The Air Force anchors its unfettered-discretion argument 

in 10 U.S.C. § 2481, which provides that “[t]he Secretary of 

Defense shall operate, in the manner provided by this chapter 

and other provisions of law, a world-wide system of 

commissary stores and a separate world-wide system of 

exchange stores.” Id. § 2481(a). Both systems may “sell, at 

reduced prices, food and other merchandise” to a closed set of 

military and military-related patrons—i.e., “members of the 

uniformed services on active duty, members of the uniformed 

services entitled to retired pay, dependents of such members, 

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and persons authorized to use the system under chapter 54 of 

this title.” Id.; see id. § 101(a)(5) (defining “uniformed 

services”). Chapter 54 extends shopping privileges to

members of the Guard and Reserve, along with certain 

retirees, dependents, and survivors. See id. §§ 1061–1064. 

Section 2481 also sets forth Congress’s reasons for creating 

these stores, explaining that they are “intended to enhance the 

quality of life of members of the uniformed services, retired 

members, and dependents of such members, and to support 

military readiness, recruitment, and retention.” Id. § 2481(b). 

As the Air Force points out, missing from section 2481’s list 

of authorized patrons and beneficiaries is any mention of 

civilian employees of the Defense Department.

The Air Force then moves to a more specific provision of 

Title 10, section 2484, which prescribes in subsection (b) an 

exacting list of goods that may be sold in commissaries:

“[m]eat, poultry, seafood, and fresh-water fish,” etcetera. Id. 

§ 2484(b). Subsection (c)(1) provides that the Secretary may 

add additional items to that list, so long as he notifies 

Congress, see id. § 2484(c)(1), and subsection (c)(2) then 

explains that “[n]otwithstanding [subsection (c)](1), the 

Department of Defense military resale system shall continue 

to maintain the exclusive right to operate convenience stores, 

shopettes, and troop stores . . . [,]” id. § 2484(c)(2) (emphases 

added).

The Air Force argues that the phrase “exclusive right to 

operate . . . shopettes,” id., means what it says: that the 

military has unfettered discretion to operate “shopettes” like 

the one at Luke AFB. And because, in its view, “common 

usage [of] the term ‘operate’ includes access determinations,” 

Petitioner’s Br. 33, Congress conferred “unfettered 

discretion” on the military to determine who may patronize 

commissaries and exchanges, thereby exempting the Air 

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Force from bargaining over the union’s proposal, see Illinois 

National Guard, 854 F.2d at 1402.

For its part, the Authority argues that section 2484(c)(2)’s 

reference to the Secretary’s “exclusive right to operate . . . 

shopettes” relates not to who can patronize them, but rather 

only to the selection of merchandise and the setting of prices.

The Authority also points out that the commissary-andexchange provisions nowhere state that the Secretary has 

authority to control access “‘notwithstanding’ other 

provisions of law”—language that, according to the 

Authority, this court has found signals congressional intent to 

exempt an agency from the duty to bargain. See Respondent’s 

Br. 38 (quoting Colorado Nurses Association v. FLRA, 851 

F.2d 1486, 1488 (D.C. Cir. 1988), superseded by statute, 

Department of Veterans Affairs Labor Relations Improvement 

Act of 1991, Pub. L. No. 102–40, title II, § 202, 105 Stat. 187, 

200, as recognized in National Federation of Federal

Employees Local 589 v. FLRA, 73 F.3d 390, 390–91 (D.C. 

Cir. 1996).

B.

We agree that Congress has given the military unfettered 

discretion to determine whether civilians may patronize 

commissaries and exchanges, though for reasons that are slightly 

different from those offered by the Air Force. Our starting point 

is section 113(b) of Title 10, which gives the Secretary of 

Defense “the authority, direction, and control over the 

Department of Defense.” 10 U.S.C. § 113(b). Sections 3013, 

5013, and 8013, in turn, grant the Secretaries of the Army, 

Navy, and Air Force “the authority necessary to conduct[] all 

affairs of the[ir respective] Department[s],” including the 

“functions [of] . . . Recruiting[,] . . . Administering (including 

the morale and welfare of personnel)[,] . . . and Maintaining” 

Department personnel. Id. §§ 3013(b); 5013(b); 8013(b). 

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Those sections also authorize the Branch Secretaries to 

“prescribe regulations to carry out [their] functions, powers,

and duties under this title,” subject only to “the authority, 

direction, and control of the Secretary of Defense.” Id. 

§§ 3013(b), (g); 5013(b), (g); 8013(b), (g). 

These three enumerated duties—recruiting, 

administering, and maintaining—appear in almost identical 

form in section 2481, in which Congress explained that it 

“intended [commissaries and exchanges] . . . to support 

military readiness, recruitment, and retention.” Id. § 2481(b)

(emphasis added). The symmetry between these purposes and 

the functions delineated in sections 3013, 5013, and 8013 is 

unmistakable, and we draw from it two basic conclusions.

First, Congress intended commissaries and exchanges to 

advance the objectives of recruiting, administering, and 

maintaining the armed forces. Second, Congress gave the 

Branch Secretaries authority to decide how best to achieve 

those objectives, subject only to direction by the Secretary of 

Defense. See 10 U.S.C. §§ 3013(b), (g); 5013(b), (g); 8013(b), 

(g).

Given these legislative directives, we cannot imagine that 

Congress intended to empower a civilian agency like the 

Federal Labor Relations Authority to second-guess the 

military’s judgment about non-military access to 

commissaries and exchanges. As the Supreme Court has made 

clear, “[i]n construing a statute that touches on” matters of 

internal military governance, like troop morale or discipline, 

“courts must be careful not to circumscribe the authority of 

military commanders to an extent never intended by 

Congress.” Brown v. Glines, 444 U.S. 348, 360 (1980)

(citation and internal quotation marks omitted). We have 

taken this concern seriously in the federal-labor-relations 

context, declining to require bargaining over proposals that 

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could potentially undermine military judgment even where 

the relevant statute never expressly shields the military from 

bargaining. In National Federation of Federal Employees, 

Local 1623 v. FLRA, 852 F.2d 1349 (D.C. Cir. 1988), for 

example, we found “unbargainable” a proposal by dual-status 

guard technicians that would have required civilian 

supervisors to attempt to “convince military officials to assign 

personnel in some manner other than the one they originally 

thought best.” Id. at 1352. Although the proposal would not

have led to civilians directly interfering with militarymanagement choices, and although the Technician Act “d[id] 

not specifically countermand the Local’s proposal,” we 

concluded that it fell outside the duty to bargain because it 

would “subject [military personnel decisions] to civilian 

influence.” Id. at 1352–53 (second emphasis added); see also 

American Federation of Government Employees, Local 2953 

v. FLRA, 730 F.2d 1534, 1544–46 (D.C. Cir. 1984) (rejecting

a proposal requiring military leaders to disregard National 

Guard technicians’ military evaluations in favor of civilian 

evaluations when conducting layoffs, where the statute’s 

purpose was “to assure that the military mission of the Guard 

would be carried out effectively and efficiently”).

In this case, by requiring negotiation over the Shoppette 

proposal, the Authority has similarly second-guessed the 

Secretary’s judgment in deciding how best to use a military 

benefit to achieve military purposes. The panel arbitrator

required civilian access to the Shoppette because, in her view,

“it is illogical that it is acceptable to have civilians enter a 

store to buy hot dogs, but damaging to [troop] morale if they 

are allowed to purchase aspirin, batteries, or tissues.” Panel 

Arbitrator’s Decision, at Joint Appendix 23. Agreeing with 

the arbitrator, the Authority reasoned that nothing in Title 10 

“suggests that the incremental extension of benefits . . . from 

hot dogs to aspirin, batteries, [and] tissues . . . is unlawful.” 

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Local 1547 II, 67 F.L.R.A. at 530 (internal quotations marks 

omitted) (alteration in original). But the Air Force Secretary, 

exercising his delegated “authority . . . to conduct[] all affairs 

of the Department” subject only to review by the Defense 

Secretary, 10 U.S.C. § 8013(b), decided otherwise. Contrary 

to both the arbitrator and the Authority, this case is not about 

hot dogs and aspirin, but rather whether the military retains its 

unfettered authority to determine if and under what 

circumstances non-military persons may enjoy access to 

commissaries and exchanges.

To be sure, in American Federation of Government 

Employees, Local 2761 v. FLRA, 866 F.2d 1443 (D.C. Cir. 

1989), we concluded that access to a military exchange fell 

within the duty to bargain. Id. at 1447. But that decision 

predated by fifteen years Congress’s enactment of Title 10’s

commissary-and-exchange provisions which, as we have 

explained, vest the Secretary with sole discretion over 

civilian-employee access to commissaries and exchanges. See

Ronald W. Reagan National Defense Authorization Act for 

Fiscal Year 2005, Pub. L. No. 108–375, § 651, 118 Stat. 

1811, 1964–73 (2004).

The Authority nonetheless argues that the Shoppette 

proposal is negotiable because nothing in Title 10 expressly 

precludes civilian employees from bargaining over access to 

commissaries and exchanges. In support, it points to Illinois 

National Guard, in which we held that the Technician Act 

gives the Army Secretary unfettered discretion to determine 

National Guard technicians’ work schedules because the 

statute provides that, “[n]otwithstanding [the scheduling and 

overtime provisions] of title 5 or any other provision of law, 

the Secretary concerned may . . . prescribe the hours of duty 

for technicians.” 854 F.2d at 1401 (quoting 33 U.S.C. 

§ 709(g)(2) (1988) (emphasis omitted)); see, e.g., National 

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Treasury Employees Union (NTEU) v. FLRA, 435 F.3d 1049, 

1051 (2006) (holding that Comptroller of the Currency had 

sole and exclusive discretion over bank-examiner salaries 

where Congress provided that the “‘employment and 

compensation of examiners . . . shall be without regard to the 

provisions of other laws applicable to officers or employees 

of the United States’” (quoting 12 U.S.C. § 481 (2006))). 

Since Title 10 contains no similar carve-out for commissaries 

and exchanges, the FLRA reasons, Congress must have 

intended them to be a proper subject of collective bargaining. 

The Authority’s argument suffers from two flaws. First, 

although it is true that the Authority “consider[s] the absence 

of such preemptive language . . . to be a strong indication that 

Congress did not intend [an agency] to have unfettered 

discretion” over a given matter, Department of Veterans 

Affairs Veterans Administration Medical Center, Veterans 

Canteen Service, 44 F.L.R.A. 162, 164–65 (Feb. 28, 1992), 

neither it—nor for that matter this Court—has ever held that a 

statute must contain phrases like “notwithstanding any law” to 

place a subject outside an agency’s duty to bargain.

Second, in each of the cases cited by the Authority, the

agency argued that the statute it administered—a statute that 

expressly addressed employment matters, such as hours, pay, 

and benefits, for a defined category of federal employees—

exempted it from Title 5’s broadly applicable civil-service 

rules, including collective-bargaining requirements. See 

National Treasury, 435 F.3d at 1051 (interpreting statute

giving the Treasury Secretary authority to employ and 

compensate bank examiners); Illinois National Guard, 854 

F.2d at 1403 (interpreting statute giving the Army Secretary

authority to set work schedules for dual-status guard 

technicians); Colorado Nurses Association, 851 F.2d at 1488 

(interpreting statute giving the Secretary of Veterans Affairs 

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authority to control hours and working conditions of medical 

personnel). In this case, however, the Air Force is not seeking 

to exempt itself from collective bargaining; it merely seeks to 

limit the scope of bargaining with respect to a matter that it 

believes Congress has committed to its unfettered discretion.

Moreover, Title 10’s commissary-and-exchange

provisions differ significantly from the statutes at issue in the 

case cited by the Authority. Those statutes all directly 

addressed an agency’s employment-related authority, so it 

makes sense that the FLRA would describe its interpretive 

task as “ascertain[ing] whether Congress has clearly 

expressed an intent to deprive employees of their rights under 

the [FSLMRS].” Respondent’s Br. 31 (emphasis added); see

Colorado Nurses, 851 F.2d at 1489 (court must determine 

whether Congress intended to “exempt [a federal employer] 

from all laws governing the terms and conditions of federal 

employment”). Title 10’s commissary-and-exchange 

provisions stand on wholly different footing, as they have

absolutely nothing to do with civilian employment and 

everything to do with creating a military benefit designed to 

“support military readiness, recruitment, and retention.” 10 

U.S.C. § 2481(b). Given Congress’s focus on defining a 

military benefit, which has nothing at all to do with terms and 

conditions of civilian employment, it would have had no 

reason to include a “notwithstanding” clause exempting that 

benefit from “‘other laws applicable to [civilian] officers or 

employees of the United States.’” National Treasury, 435 F.3d 

at 1051 (quoting 12 U.S.C. § 481). 

For all of these reasons, we hold that civilian access to 

commissaries and exchanges is not a proper subject of 

collective bargaining because Congress has vested the 

military with “unfettered discretion” over the matter. See

Illinois National Guard, 854 F.2d at 1401. Although this is 

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sufficient to resolve this case, we think it nonetheless helpful 

to consider the Air Force’s alternative argument—that the 

Authority failed to make any factual findings in support of its 

conclusion that the proposal concerns unit employee’s 

conditions of employment—since that issue is likely to arise 

again in cases where collective bargaining is not barred by 

legislation giving the agency unfettered discretion over the 

subject of negotiations.

III.

As the Authority has itself explained, in evaluating 

whether a proposal concerns conditions of employment, it 

must, among other things, determine if “the record 

establishes . . . a direct connection between the proposal and 

the work situation or employment relationship of bargaining 

unit employees.” Antilles Consolidated Education Association 

& Antilles Consolidated School System, 22 F.L.R.A. 235, 237 

(June 24, 1986). The Authority must also, as this Court has 

held, “point to evidence in the record establishing this link.” 

U.S. Department of the Air Force, Griffis Air Force Base v. 

FLRA, 949 F.2d 1169, 1174 (D.C. Cir. 1991). And as with all 

Authority fact-finding, our role is limited to ensuring that its 

“findings of fact [are] supported by substantial evidence on 

the record considered as a whole.” Pension Benefit Guarantee

Corp. v. FLRA, 967 F.2d 658, 665 (D.C. Cir. 1992).

Consider a few examples. In one case, we upheld an 

Authority decision that declined to require the Department of 

Defense Dependents Schools to bargain over a proposal that 

would have extended into retirement a benefit allowing 

teachers to travel for free aboard military aircraft. Overseas 

Education Association, Inc. v. FLRA, 858 F.2d 769, 770, 772 

(D.C. Cir. 1988). Although we recognized the clear link 

between free travel and working conditions for active

employees, who were “called upon . . . to situate 

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themselves . . . abroad,” we agreed with the Authority that 

nothing in the record showed that extending the free-travel 

benefit into “the golden years of retirement” would have had a 

“direct impact on an employee’s day-to-day allegiance to his 

or her job.” Id. at 772–73. In another case, civilian employees 

sought to bargain over an Air Force decision requiring them 

to challenge disciplinary actions, not on base, as they had 

been permitted to do for years, but rather before a magistrate

court forty-two miles away. Griffis Air Force Base, 949 F.2d 

at 1171. Ruling for the employees, the Authority found a 

direct connection between the change in policy and the 

employee’s working conditions, citing record evidence 

showing “that the [new] policy would cause employees to 

expend annual leave time to travel . . . , appear before the 

Magistrate, and prepare for trial.” Id. at 1172. Given those 

findings, we had little difficulty deciding that the Authority’s 

direct-connection conclusion rested “on firm ground.” Id. at 

1174.

In its brief on appeal here, the Authority acknowledges 

that its obligation to “ascertain whether there is a direct 

connection . . . is a factual determination, dependent on the 

record evidence in each individual case, and reviewed for 

substantial evidence supporting [its] conclusion.” 

Respondent’s Br. at 21–22. Surprisingly, however, the 

Authority engaged in no such fact-finding in this case. Instead 

of pointing to the circumstances at Luke AFB that tie 

Shoppette access to employee working conditions, the 

Authority simply cited its earlier decision in this case for the 

proposition that “access to military exchange and exchangerelated facilities . . . concerns employees’ conditions of 

employment.” Local 1547 II, 67 F.L.R.A. at 525. 

Of course, this would not be a problem had the earlier 

decision established the required factual link between 

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Shoppette access and employee working conditions. But it did 

no such thing. Even though the Air Force insisted that 

conditions at Luke AFB did not justify civilian access, the 

Authority made no contrary findings, instead rejecting the Air 

Force’s arguments by simply citing its own precedent. For 

instance, the Air Force argued that nothing in the record 

supported allowing civilians to purchase groceries 

“not . . . ready for consumption.” Local 1547 I, 64 F.L.R.A. at 

646. In response, instead of describing the circumstances that, 

in its judgment, made it necessary for civilian employees to 

purchase such groceries, the Authority simply stated that its 

“precedent does not support finding that only proposals 

involving prepared foodstuffs concern conditions of 

employment.” Id. The Air Force also argued that civilian 

employees had no need to shop during non-duty hours. Id. But 

rather than identifying the conditions on base that warranted 

off-duty access to the Shoppette, the Authority simply 

declared that “no decisions . . . support [the Air Force’s]

assertion.” Id.

We could go on and on with more examples, but we think 

the point is clear: the Authority has entirely failed to establish 

a factual link between Shoppette access and base-employee 

working conditions. Although our role in reviewing 

negotiability determinations is limited, the Authority must 

find facts to give us something to review. Because it failed to 

do so in this case, we would grant the Air Force’s petition for 

review on this ground were we not granting it on the 

antecedent ground that access to commissaries and exchanges 

falls outside the scope of collective bargaining.

IV.

We grant the petition for review and vacate the 

Authority’s order.

So ordered.

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