Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-01230/USCOURTS-caDC-05-01230-0/pdf.json

Parties Involved:
Federal Labor Relations Authority
Respondent
National Treasury Employees Union
Petitioner

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 24, 2006 Decided June 23, 2006

No. 05-1230

NATIONAL TREASURY EMPLOYEES UNION,

PETITIONER

v.

FEDERAL LABOR RELATIONS AUTHORITY,

RESPONDENT

On Petition for Review of an Order of the

Federal Labor Relations Authority

Julie M. Wilson argued the cause for petitioner. With her

on the briefs were Gregory O'Duden and Barbara A. Atkin.

William E. Persina, Attorney, Federal Labor Relations

Authority, argued the cause for respondent. With him on the

brief was William R. Tobey, Acting Solicitor.

Before: GINSBURG, Chief Judge, and SENTELLE and

HENDERSON, Circuit Judges.

Opinion for the Court filed by Chief Judge GINSBURG.

GINSBURG, Chief Judge: The National Treasury Employees

Union petitions for review of a decision of the Federal Labor

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Relations Authority holding the Internal Revenue Service did

not have a duty to bargain over the Union’s proposed “Leave

Swapping Program.” Because the Authority reasonably

concluded that the subject of how leave would be allocated

among employees was “covered by” the pre-existing collective

bargaining agreement between the Union and the IRS, we deny

the Union’s petition for review.

I. Background

The Union and the IRS are parties to a national collective

bargaining agreement that governs the terms and conditions of

employment at, among other locations, the Service’s call site in

Denver, Colorado. Article 32, Section 1.C of that agreement

provides:

[T]he Employer will resolve a conflict in requests by

employees in the same occupation for scheduled

annual leave by granting preference to the employee

with the most service as determined by enter on duty

(EOD) date.

U.S. Dep’t of the Treasury, Internal Revenue Serv., Denver,

Colo., 60 F.L.R.A. 572 app. at 574 (2005) (IRS). The managers

at the Denver site scheduled local employees’ annual leave in

accord with their seniority, per Article 32, and with the

scheduling requirements set centrally by the business operating

division of the IRS, which requirements dictated the number of

employees needed to answer calls on any given day.

Employees who believed their requests for leave had been

unfairly denied complained about this arrangement. Ms.

Patience Ellis, the senior official at the Denver call center,

created a committee of union and management representatives

to consider the issue. The committee developed a consensus

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“Leave Swapping Program” under which one employee could

transfer his approved leave to another employee with the same

job skills, regardless of either employee’s seniority. Id. at 575.

Representatives of the Union took the position that the

leave-swapping program was a binding collective bargaining

agreement, but management refused either to implement or to

bargain further over it on the ground that the subject was already

covered by Article 32 of the national agreement. This prompted

the Union to file a grievance claiming the IRS had violated the

Federal Service Labor-Management Relations Statute, 5 U.S.C.

§§ 7116(a)(1), (5), by “refus[ing] to consult or negotiate in good

faith.” When the Union and the IRS were at an impasse over the

grievance, the Union demanded arbitration.

The arbitrator concluded the national agreement “does not

cover the leave swapping program”; rather, it “only governs how

the agency will initially assign annual leave” and does “not

speak to the situation in which an employee chooses not to use

approved leave.” Unlike the national agreement, the arbitrator

explained, the leave-swapping program involves only “voluntary

swaps among willing employees”; seniority “is not a

consideration” because “there is no conflict [when] both

employees want to make the swap.” It followed that, because

the leave-swapping proposal was not “covered by” the national

agreement, the agency had violated 5 U.S.C. §§ 7116(a)(1) and

(5) by refusing to bargain over it.

The IRS appealed to the Authority, which held “the

Arbitrator erred in determining [the leave swapping program]

‘covers an entirely different subject’” than does the national

agreement. IRS, 60 F.L.R.A. at 574. In the Authority’s view,

the proposed leave-swapping program “would circumvent” the

system of seniority established by the national agreement

because it would “permit[] an employee with approved annual

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leave ... to grant [that] annual leave to any employee, whether or

not there is a more senior employee who has requested leave for

that same period.” Id. Accordingly, the Authority concluded,

the national agreement having “expressly addressed” the

standard for determining who gets leave when not all requests

can be granted, “the Union’s leave swapping proposal is covered

by the agreement and the Agency has no duty to bargain” over

it. Id.

The Union filed a motion for reconsideration, arguing the

Authority had failed to defer to the arbitrator’s interpretation of

the national agreement, as required by precedent. The Authority

denied the motion, explaining that “although the Authority

defers to an arbitrator’s factual findings and contract

interpretations, the Authority does not defer to an arbitrator’s

conclusions as to the legal effect of those findings and

interpretations.” U.S. Dep’t of the Treasury, Internal Revenue

Serv., Denver, Colo., 60 F.L.R.A. 893, 894 (2005). In this case,

the Authority explained, it had disagreed only with the

arbitrator’s application of the “covered by” doctrine, id., which

application it reviews de novo, see, e.g., Nat’l Treasury

Employees Union Chapter 168, 55 F.L.R.A. 237, 241-42 (1999).

The Union petitions for review of both the Authority’s orders

denying relief.

II. Analysis

We will not set aside an order of the Authority unless it is

“arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2)(A); see id. § 7123(c)

(adopting standard in § 706); Nat’l Treasury Employees Union

v. FLRA, 414 F.3d 50, 57 (D.C. Cir. 2005). The Union argues

the Authority acted arbitrarily because it failed to defer to the

arbitrator’s interpretation of the national agreement, even though

in the past the Authority has “consistently declined to overturn

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arbitral interpretations of collective bargaining agreements.” As

evidence of this alleged failure to defer, the Union notes the

Authority (1) twice described its own decision as “contrary to

the Arbitrator’s conclusion,” IRS, 60 F.L.R.A. at 574, and (2)

ignored Ms. Ellis’s testimony that the national agreement did not

“address” whether employees were required to consider

seniority if they wanted to trade leave. In sum, the Union argues

the Authority’s decision cannot stand because it is “fabricated

out of whole cloth,” with “nothing in the record evidence” to

support it. 

The Authority argues the “Union misapprehends the issue

in this case”: The Authority rejected “the arbitrator’s legal

conclusion as to the interrelationship between the proposal and

[the national agreement], not his interpretation of the

agreement.” The Authority maintains it (1) owes no deference

to the arbitrator’s application of the “covered by” doctrine,

which it accordingly reviewed de novo, and (2) reasonably

concluded a proposal that would allow an employee to transfer

his leave to another, notwithstanding the request of a third

employee with greater seniority than that of the transferee,

would “effectively nullify the operation of [Article 32, Section

1.C]” of the national agreement.

As we recently explained in another case brought by the

same Union, an agency’s “duty to bargain [over disputes arising]

mid-term derives from the ... command [of the Statute] to both

labor and management to ‘meet and negotiate in good faith.’”

Nat’l Treasury Employees Union v. FLRA, 399 F.3d 334, 337

(2005). Such bargaining is not required, however, with respect

to a matter “covered by” a collective bargaining agreement

already in place. Id.

The Authority uses a two-step analysis to determine

whether a proposal for mid-term bargaining is “covered by” an

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existing collective bargaining agreement. First the Authority

considers whether the subject matter “is expressly addressed by

the terms of the parties’ collective bargaining agreement.” Nat’l

Treasury Employees Union, 59 F.L.R.A. 217, 218 (2003). The

Authority does not require an “exact congruence” between the

matter proposed for bargaining and the text of the existing

agreement; “if a reasonable reader would conclude that the

provision [in the agreement] settles the matter in dispute,” then

the matter is “covered.” U.S. Dep’t of Health & Human Servs.,

Soc. Sec. Admin., Balt., Md., 47 F.L.R.A. 1004, 1017-18 (1993).

Second, if the Authority determines the matter is not expressly

addressed in the agreement, then it must decide whether the

matter is “inseparably bound up with ... a subject expressly

covered by the contract.” Id. at 1018. In this case the Authority

concluded, pursuant to the first step of the analysis, that the

“standards for granting leave are expressly addressed” in, and

are therefore “covered by,” the national agreement. IRS, 60

F.L.R.A. at 574. 

We are not persuaded by the Union’s arguments that the

Authority erred in so holding. To begin, we agree with the

Authority that the Union has mistaken the arbitrator’s

application of the “covered by” doctrine for an “interpretation”

of the national agreement. Application of the “covered by”

doctrine is an exercise in construction; it requires the adjudicator

of a dispute over the meaning of a collective bargaining

agreement to determine how broadly or narrowly the agreement

should be read in view of the policies embodied in the statute

establishing the duty to bargain. See Dep’t of the Navy, Marine

Corps Logistics Base, Albany, Ga. v. FLRA, 962 F.2d 48, 58-59

(D.C. Cir. 1992) (“covered by” doctrine should be applied to

further the “stability and repose” the Statute is intended to

promote). In short, whether a subject is “covered by” an

existing agreement is a question of law. See Garden State

Tanning, Inc. v. Mitchell Mfg. Group, Inc., 273 F.3d 332, 335

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(3d Cir. 2001) (“construction” “determines [the] legal operation”

of agreement; “interpretation” of agreement resolves any

ambiguity in terms used).

The “covered by” analysis is thus analogous to the inquiry

we make in order to determine whether a federal statute

impliedly preempts related state law; rather than focusing only

upon the meaning of a particular word or words in search of

congressional intent, as we might in a case of statutory

interpretation, see, e.g., Friends of the Earth, Inc. v. EPA, 446

F.3d 140, 142 (D.C. Cir. 2006) (word “daily” as used in the

Clean Water Act “means daily, nothing else”), “the entire

scheme of the statute must ... be considered .... If the purpose of

the [federal] act cannot otherwise be accomplished[,] ... the state

law must yield.” Crosby v. Nat’l Foreign Trade Council, 530

U.S. 363, 373 (2000) (internal quotation marks removed); see

also Sheridan Kalorama Historical Ass’n v. Christopher, 49

F.3d 750, 757-58 (D.C. Cir. 1995) (considering “comprehensive

scheme[s]” provided by federal statute and D.C. law and holding

federal law controlled). Therefore, although the Authority

defers to an arbitrator’s interpretation of a contract, it properly

reviews de novo the arbitrator’s application of the “covered by”

doctrine. See Nat’l Treasury Employees Union Chapter 168, 55

F.L.R.A. at 241-42; cf. Bldg. & Constr. Trades Dep’t, AFL-CIO

v. Allbaugh, 295 F.3d 28, 32 (D.C. Cir. 2002) (reviewing de

novo decision of district court regarding preemption).

Although the Union here argues the Authority did not defer

to the arbitrator’s interpretation of the national agreement, the

Union has not pointed to any word or phrase in that agreement

to which the Authority attributed a different meaning than had

the arbitrator. The Authority disagreed with the arbitrator only

with regard to what the national agreement “speak[s] to,”

“governs,” and “address[es]” -- in other words, what the

agreement, or more specifically Article 32 of the agreement,

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“covers.” Because the Authority properly decides de novo what

the agreement covers, it did not err in failing to defer to the

arbitrator in this regard; nor for the same reason was it required,

as the Union implies, to rely upon Ms. Ellis’s testimony

regarding what she believed the national agreement addressed.

Therefore the Authority’s decision cannot fairly be

described, the Union’s assertion notwithstanding, as having been

“fabricated out of whole cloth” and without “record evidence”

to support it. The Authority reasoned that the Union’s leaveswapping proposal would depart from the criterion of seniority

to which the parties had subscribed in the national agreement.

IRS, 60 F.L.R.A. at 574. Under the Union’s proposal an

employee with leave approved on the basis of his seniority could

trade that leave to an employee other than the next most senior

employee who had requested, but was denied, leave for that

same period. Consistent with its past decisions, therefore, the

Authority concluded the leave-swapping program was “covered

by” the national agreement, which had established seniority as

the sole criterion upon which employees would qualify for leave

when not all who wanted leave for a particular period could be

accommodated. SeeProf’l Airways Sys. Specialists, 56 F.L.R.A.

798, 804 (2000) (proposal to train employees who could not

sustain a certain level of pay due to lack of training was

“covered by” provision of agreement setting forth agency’s

obligations to provide training and to compensate employees

unable to sustain that level of pay). That conclusion, if not

compelled, was eminently reasonable.

III. Conclusion

The Authority neither failed to defer to the arbitrator’s

interpretation of the national agreement nor otherwise erred in

concluding the national agreement “covered” the subject of how

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leave would be allocated. The Union’s petition for review is,

therefore,

Denied.

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