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Parties Involved:
American Federation of Government Employees, Local 1812
Intervenor for Respondent
Broadcasting Board of Governors Office of Cuba Broadcasting
Petitioner
Federal Labor Relations Authority
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 13, 2014 Decided May 16, 2014

No. 12-1463

BROADCASTING BOARD OF GOVERNORS OFFICE OF CUBA 

BROADCASTING,

PETITIONER

v.

FEDERAL LABOR RELATIONS AUTHORITY,

RESPONDENT

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 

1812,

INTERVENOR

On Petition for Review of a Final Decision 

of the Federal Labor Relations Authority

Howard S. Scher, Attorney, U.S. Department of Justice, 

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

Stuart F. Delery, Assistant Attorney General, and Leonard 

Schaitman, Attorney.

Zachary R. Henige, Attorney, Federal Labor Relations 

Authority, argued the cause for respondent. On the brief was 

Rosa M. Koppel, Solicitor. 

USCA Case #12-1463 Document #1493233 Filed: 05/16/2014 Page 1 of 13
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Leisha A. Self argued the cause for intervenor. With her on 

the brief was David A. Borer. 

Before: GARLAND, Chief Judge, and TATEL and PILLARD, 

Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: Compared to the charges of 

cronyism, waste, and mismanagement that dominated this 

dispute in its earlier stages, the legal issue we confront is quite

tame. After an arbitrator found that Petitioner Broadcasting 

Board of Governors violated both a collective bargaining 

agreement and federal labor relations law when it laid off 

sixteen employees, the Federal Labor Relations Authority 

upheld the arbitrator’s determination. The Board of Governors 

now petitions for review. Because Congress has barred the 

courts from hearing challenges to FLRA orders that “involve[] 

an award by an arbitrator[], unless the order involves an unfair 

labor practice,” 5 U.S.C. § 7123(a), we must determine whether 

the order at issue here, which undoubtedly involves an award by 

an arbitrator, also involves an unfair labor practice. Finding that 

it does not, we dismiss the petition for lack of subject matter 

jurisdiction.

I.

The Office of Cuba Broadcasting, a division of Petitioner 

Broadcasting Board of Governors, producesradio and television 

programming for dissemination inside Cuba. This programming 

runs the gamut from breaking news to in-depth pro-democracy 

documentaries to the Major League Baseball playoffs. There’s 

just one problem. For as long as the Office has been 

broadcasting to Cuba, the Cuban government has engaged in a 

massive signal-blocking campaign. In response, the Office has 

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sought innovative ways to sneak its content through. For 

example, in order to maximize the strength of its signal, the 

Office has broadcast from an airplane flying as close to Cuba as 

possible.

So who’s winning—the Office or the Cuban government? 

Depends on whom you ask. Citing statistics suggesting high

levels of online engagement, the Office’s supporters insist that 

its programming has become an invaluable resource for Cubans

otherwise cut off from reliable news and information. See 

Broadcasting Board of Governors, Radio and TV Marti, 

http://www.bbg.gov/broadcasters/ocb/ (last viewed May 5, 

2014). By contrast, critics frequently cite Government 

Accountability Office studies suggesting that the blocking 

campaign has prevented virtually all Cubans from watching or 

listening to any of the Office’s programs. See, e.g., U.S. Gov’t 

Accountability Office, Broadcasting to Cuba: Actions Are 

Needed to Improve Strategy and Operations 3 (2009); see also 

U.S. Gov’t Accountability Office, Broadcasting Board of 

Governors Should Provide Additional Information to Congress 

Regarding Broadcasting to Cuba 11 (2011) (noting difficulties 

estimating audience size); cf. also Editorial, A New Voice of 

America, WALL ST. J., May 6, 2014, 

http://online.wsj.com/news/articles/SB10001424052702304831

304579545870588304300 (endorsing congressional efforts to 

reform the “U.S. international-broadcasting system”).

In 2009, members of Congress critical of the Cuba 

broadcasting program proposed reducing the Office’s budget by 

almost half—over $16 million. After program advocates 

complained, Congresssettled on a $4.2 million cut, anticipating 

that the Office could find the necessary savings by scrapping its 

expensive airplane program and reforming its contracting 

procedures. See American Federation of Government 

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Employees, Local 1812 v. Broadcasting Board of Governors, 

74–75 & n.39 (Nov. 19 2011) (Butler, Arb.) (“Arbitration 

Award”).

Instead of grounding the plane and reforming its procedures,

however, the Office announced a “reduction-in-force”—in other 

words, layoffs. According to the Office, this would save money 

without sacrificing program quality. But the union representing 

the affected employees, the American Federation of Government 

Employees, Local 1812, objected, claiming that the layoffs were

unjustified. And even assuming the layoffs were justified, the 

Union insisted that the Office had an obligation under both the 

collective bargaining agreement and sections 7116(a)(5) and 

(a)(8) of the Federal Service Labor-Management Relations 

Statute (the Statute), 5 U.S.C. § 7101 et seq., to engage in socalled impact and implementation bargaining over how it would

carry them out, see 5 U.S.C. § 7116(a) (“[I]t shall be an unfair

labor practice for any agency . . . to refuse to consult or negotiate 

in good faith with a labor organization as required by this 

chapter; . . . [or] otherwise fail or refuse to comply with any 

provision of this chapter.”). After an extensive back-and-forth

between the Union and management, the Office decided to

proceed as planned, ultimately terminating sixteen employees. 

Believing that the Office had carried out unjustified layoffs 

in an impermissible manner, the Union initiated formal 

proceedings under the Federal Service Labor-Management 

Relations Statute. The Statute “contains a two-track system for 

resolving labor disputes.” Ass’n of Civilian Technicians, N.Y. 

State Council v. FLRA, 507 F.3d 697, 699 (D.C. Cir. 2007)

(ACT) (internal quotation marks omitted). “Under the first track 

. . . , a party may file an unfair labor practice charge with the 

[FLRA’s] General Counsel, who will investigate and issue a 

complaint, if warranted. The matter is then adjudicated by the 

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[FLRA],” and the FLRA’s order is then fully reviewable by this 

Court. Id. (internal citations omitted). “Under the second 

track . . . , a party may file a grievance in accordance with its 

collective bargaining agreement. . . . The grievance is subject to 

binding arbitration, and the arbitral award is subject to review by 

the [FLRA].” Id. (internal citations omitted). In this case, the 

Union pursued the second track, filing a formal grievance and 

then taking the Office’s parent agency, the Broadcasting Board

of Governors, to binding arbitration.

After considering extensive evidence regarding, among 

other things, the background of the layoffs and the intent of the 

parties to the collective bargaining agreement, the arbitrator 

sided with the Union. In a comprehensive and blistering opinion, 

the arbitrator dismissed the Board’s justifications for the 

reduction-in-force, determining that the layoffs were in fact part 

of the then-Office director’s “bad faith plan to at least 

intimidate, if not actually get rid of, his internal critics.” 

Arbitration Award at 76. As for the methods by which the Office 

had carried out the layoffs, the arbitrator examined the text of 

the collective bargaining agreement, the intent of the negotiators, 

and the way in which layoffs had been implemented in the past,

concluding that the Office had violated the agreement by failing

to engage in impact and implementation bargaining. Id. at 61, 

67–68. Moreover, the arbitrator agreed with the Union that by 

failing to engage in such bargaining, the Office had committed a 

statutory unfair labor practice. See id. at 94. In doing so, the

arbitrator expressly rejected the Board’s invocation of the

“covered by” defense, under which parties have no statutory 

obligation to negotiate over an issue that the collective 

bargaining agreement already addresses with sufficient 

particularity. Arbitration Award at 64; see also id. at 58

(explaining that the “covered by” defense applies only to 

statutory duties, not contractual duties); Federal Bureau of 

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Prisons v. FLRA, 654 F.3d 91, 94–95 (D.C. Cir. 2011) 

(describing the defense). The arbitrator then went on to find that 

the Office had breached the collective bargaining agreement in 

several additional ways, including by failing to give affected 

employees “priority consideration” for certain vacant positions.

Arbitration Award at 79–80. In the end, these contractual and 

statutory violations combined with management’s bad faith

conduct led the arbitrator to award the Union a “status quo ante” 

remedy, requiring that all terminated employees be reinstated 

and paid damages. Id. at 94.

Appealing to the FLRA, the Board of Governors argued that 

the arbitrator had improperly rejected its “covered by” defense. 

According to the Board, “the covered-by doctrine relieves an 

agency from its obligation to bargain over a matter if that matter 

is contained in an agreement or that matter is inseparably bound 

up with a subject expressly covered by an agreement.” See 

Broadcasting Board of Governors Office of Cuba Broadcasting, 

66 FLRA 1012, 1014 (2012) (“FLRA Order”). As a result, the 

Board argued, it had no statutory or contractual obligation to 

engage in impact and implementation bargaining over the 

layoffs. The FLRA rejected this argument, reasoning that the 

“covered by” defense applies only to statutory duties, not 

contractual duties, and that the arbitrator’s award could rest

equally well on contractual or statutory grounds. In a footnote

central to the issue before us, the FLRA explained that it had no 

need to address the merits of the Union’s statutory unfair labor

practice claims or the Board’s “covered by” defense: 

The Agency also argues that the Arbitrator’s 

interpretation of Article 3 and Article 30, Section 2 is 

contrary to law because it is inconsistent with the 

covered-by doctrine. Although the Arbitrator stated 

that the Agency violated the Statute, it is unnecessary 

to address the Agency’s exception. The Arbitrator’s 

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contractual interpretation of these provisions of the 

parties’ agreement serves as a separate and independent 

basis for the award, and the Agency has not established 

that this basis is deficient. Thus, we need not address 

any claims regarding an alleged statutory violation. 

See, e.g., Broad. Bd. of Governors, 66 FLRA 380, 385-

86 (2011) (Member Beck dissenting) (finding it 

unnecessary to address contrary-to-law exceptions 

because party did not establish that arbitrator’s contract 

interpretation, which was a separate and independent 

basis for the award, was deficient).

Id. at 1019 n.5 (internal quotation marks and citations omitted). 

After rejecting every one of the Board’s contractual arguments, 

the FLRA upheld the status quo ante remedy. Id. at 1020–21.

The Board of Governors now petitions for review. Before

addressing the merits of the Board’s arguments, however, we 

must determine whether we have subject matter jurisdiction. See 

Department of the Navy v. FLRA, 665 F.3d 1339, 1344 (D.C. 

Cir. 2012).

II.

Lying at the heart of this case is a fundamental principle of 

federal labor relations law: arbitration awards are presumed final 

and not subject to judicial review. Reflecting this principle, the 

Statute prohibits courts from reviewing an FLRA order 

“involving an award by an arbitrator, unless the order involves 

an unfair labor practice.” 5 U.S.C. § 7123(a). “Insulating

arbitration awards from judicial review reflects a strong 

Congressional policy favoring arbitration of labor disputes and 

furthers Congress’s interest in providing arbitration results 

substantial finality.” Department of the Navy, 665 F.3d at 1344

(internal quotation marks omitted). The “limited exception that 

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allows . . . judicial review . . . furthers Congress’s other stated 

interest of ensuring a single, uniform body of case law 

concerning unfair labor practices.” ACT, 507 F.3d at 699

(internal quotation marks omitted). Thus, for this Court to have 

subject matter jurisdiction over the Board’s petition, the order

under review must “involve[]” a statutory unfair labor practice.

The word “involves” is far from precise. Simplifying our 

task, this Court has addressed the word’s scope in a series of 

decisions, all of which faithfully respect Congress’s desire to 

limit judicial review of arbitration awards. We first considered

the meaning of “involves” in Overseas Education Association v. 

FLRA, 824 F.2d 61 (D.C. Cir. 1987), in which we held that “a 

statutory unfair labor practice [must] actually be implicated to 

some extent in the [FLRA’s] order,” so even if certain conduct is 

“capable of characterization as a statutory unfair practice . . . [,]

the conduct must actually be so characterized and the claim 

pursued, by whatever route, as a statutory unfair labor practice, 

not as something else.” Id. at 66. Not only that, but in American 

Federation of Government Employees, Local 2510 v. FRLA, 453 

F.3d 500 (D.C. Cir. 2006) (AFGE), we emphasized that even 

when an aggrieved party argues that the other party committed a 

statutory unfair labor practice, and even when the arbitrator’s 

award addresses that alleged unfair labor practice, “it is the order 

of the [FLRA] that is the subject of the petition for judicial 

review,” not the arbitrator’s decision or the initial grievance. Id. 

at 504. That order, moreover, must do more than merely 

acknowledge an unfair labor practice. As we made clear in 

Department of the Interior v. FLRA, 26 F.3d 179 (D.C. Cir. 

1994), a “passing reference does not satisfy the requirement that 

an unfair labor practice be an explicit ground for or necessarily 

implicated by the [FLRA’s] decision.” Id. at 184 (internal 

quotation marks omitted). We thus concluded that we lack

jurisdiction where, as in that case, the FLRA describes an unfair 

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labor practice claim solely to “reject the notion that an unfair 

labor practice is any part of the case before [it].” Id. Reinforcing 

this requirement, we held in ACT, 507 F.3d 697 (D.C. Cir. 

2007), that the order must “contain a substantive discussion of

an unfair labor practice claim,” id. at 700—though we later 

clarified in Department of the Navy v. FLRA, 665 F.3d 1339 

(D.C. Cir. 2012), that the discussion need not be “explicit,” id. at 

1345 (holding that when an FLRA order “necessarily implicates 

a statutory unfair labor practice,” we have jurisdiction even if 

the order never “explicitly discuss[es]” the unfair labor practice).

These decisionsstrongly suggest that we lack subject matter 

jurisdiction in this case. True, as the Board points out, the Union 

alleged and the arbitrator found a statutory unfair labor practice. 

But under AFGE what matters is the FLRA’s final order—not 

the arbitrator’s award or the initial grievance—and in that order

the FLRA mentioned the Union’s unfair labor practice claim

only in a footnote and only to explain why it had no need to 

consider the claim. As we made clear in Department of the 

Interior, the FLRA must do more than simply note the existence 

of an unfair labor practice claim for its order to “involve” an 

unfair labor practice—indeed, even explaining why it will not 

address an unfair labor practice argument is insufficient. The 

FLRA’s order must, as we held in ACT, reach and discuss the 

merits of a statutory unfair labor practice or in some “other way 

affect[] substantive law regarding” a statutory issue, something

the order in this case never does. 507 F.3d at 700.

Seeking to escape the clear dictate of our precedent, the 

Board of Governors makes two arguments. First, it contendsthat 

the FLRA’s order “involves an unfair labor practice” by virtue 

of the Board’s invocation of the “covered by” defense, “a 

statutory defense, [which] as such involves—or at least 

implicates—the question of a statutory duty to bargain.”

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Petitioner’s Br. 41. Although the FLRA maintains that the 

“covered by” defense applies only to statutory duties, the Board

of Governors insists that the defense applies as well to at least 

some contractual duties, including the one the arbitrator found 

here. According to the Board, the arbitrator’s consideration of 

extrinsic evidence reveals that the arbitrator looked beyond the 

text of the collective bargaining agreement when defining the 

scope of the Board’s contractual duty to bargain, something the 

arbitrator could not have done without first rejecting the Board’s

statutory “covered by” defense—in other words, determining

that the agreement itself fails to “cover” the impact and 

implementation of layoffs sufficiently to relieve the Board of 

any further bargaining obligation. Because, at least in this case, a

“contractual duty to bargain is not independent of a statutory

duty to bargain,” id. at 42, the Board urges us to take jurisdiction 

on the ground that the FLRA had no basis for upholding the 

arbitrator’s decision without at least implicitly rejecting the 

Board’s statutory “covered by” defense. In support, the Board

relies on our recent opinion in Federal Bureau of Prisons v. 

FLRA, 654 F.3d 91 (D.C. Cir. 2011), claiming that it stands for 

the proposition that contractual and statutory duties are neither 

separate nor independent. Thus, according to the Board, the

collective bargaining agreement could provide no “separate and 

independent” basis for the arbitrator’s award.

Had the FLRA necessarily rejected the “covered by” 

defense when it upheld the arbitrator’s award, we might well

agree that we have subject matter jurisdiction. See Department 

of the Navy, 665 F.3d at 1345 (taking jurisdiction where the 

FLRA’s order necessarily found an unfair labor practice, even 

though the FLRA had ostensibly found only a contractual duty). 

But as the FLRA explains, the Board of Governors’s argument

misconstrues the “covered by” defense, which applies only to 

statutory duties. Simply put, the “covered by” defense respects 

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the bargain the parties struck: if the agreement covers an issue in 

sufficient depth, then we assume the parties have already fully

negotiated over that issue and therefore refrain from imposing 

additional statutory obligations that appear nowhere in the

agreement. See Federal Bureau of Prisons, 654 F.3d at 94 (“If a 

collective bargaining agreement ‘covers’ a particular subject, 

then the parties to that agreement are absolved of any further 

duty to bargain about that matter during the term of the 

agreement.”) (citations and quotation marks omitted). It would 

make little sense to consider such a defense when evaluating a 

purported contractual duty, since contractual duties are 

themselves products of the very bargaining the “covered by” 

defense is designed to respect. And given that extrinsic evidence 

of the mutual intent of the parties furnishes an appropriate 

source of insight into the meaning of contractual terms, an

arbitrator’s consideration of such evidence hardly transforms the 

contractual inquiry into a statutory one, opening the door to a 

“covered by” defense. See RESTATEMENT (SECOND) OF 

CONTRACTS § 214 (1981); see also National Treasury 

Employees Union v. FLRA, 466 F.3d 1079, 1081 (D.C. Cir. 

2006) (“[C]ourts interpret labor agreements in light of the

practice, usage and custom of the parties. In particular, where the

terms of a bargaining agreement are ambiguous, we look to 

evidence of the parties’ contemporaneous understanding.” 

(internal citations and quotation marks omitted)).

Federal Bureau of Prisons is not to the contrary. There,

unlike here, we clearly had jurisdiction because the FLRA had 

explicitly addressed and found a statutory unfair labor practice.

654 F.3d at 454; see also ACT, 507 F.3d 699 (noting that where 

an unfair labor practice is explicitly discussed in the FLRA’s 

order, our jurisdiction is clear). Nor does that decision provide

any support for the Board’s argument that the “covered by” 

defense applies to contractual duties. To be sure, after rejecting a 

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statutory unfair labor practice claim on the ground that a 

particular issue was “covered by” the collective bargaining 

agreement, we went on to “reject . . . the contention” that the 

collective bargaining agreement provided a “‘separate and 

independent basis’ for the arbitral award.” Federal Bureau of 

Prisons, 654 F.3d at 97. We did so, however, not because the

“covered by” defense applies to contractual duties, as the Board 

contends, but rather “because the arbitral award ma[de] no 

distinction between the purportedly ‘separate’ statutory and 

contractual grounds.” Id. Since under these circumstances the 

Bureau of Prisons “was not required to file a separate exception” 

outlining contractual arguments, the FLRA had no basis for 

holding that the Bureau’s failure to file such an exception

waived all such arguments. Id. Here, the FLRA’s “separate and 

independent basis” holding suffers from no similar defect: the 

arbitrator found both a statutory and a contractual duty, and the 

Board of Governors made both statutory and contractual 

arguments before the FLRA. Accordingly, given Board 

counsel’s refreshingly candid concession that he knows of no 

cases where either the FLRA or any court has found a “covered 

by” defense relevant to the scope of a contractual duty, Oral Arg. 

Rec. 2:05–:30, we decline the Board’s invitation to do so here.

Second, the Board of Governors argues that we have subject 

matter jurisdiction because the FLRA’s order might implicate 

sovereign immunity. Recall that the arbitrator interpreted the 

collective bargaining agreement as requiring the Board to 

provide employees affected by the layoffs with “priority 

consideration” for certain vacant positions. See Arbitration 

Award at 79–80. This requirement, the Board argues, forces it to 

violate a government-wide Office of Personnel Management 

regulation barring agencies from “assign[ing] an employee in an 

excepted position to a position in the competitive service,” 5 

C.F.R. § 351.705(b)(6), even though the Statute prohibits

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agencies from entering into agreements “inconsistent with any 

Federal law or any Government-wide rule or regulation,” 5 

U.S.C. § 7117(a)(1). Thus, the Board maintains, the FLRA’s 

order “would require management officials to violate the law, 

implicating principles of sovereign immunity and giving this 

Court jurisdiction to review such questions.” Petitioner’s Br. 42–

43. Again, we disagree.

Even assuming that we always have jurisdiction to review 

FLRA orders that implicate principles of sovereign immunity, 

the order at issue here does no such thing. After all, as the FLRA 

clearly explained, “priority consideration” and “assignment” are 

separate concepts—an agency might provide a candidate 

“priority consideration” for a particular position yet ultimately 

refuse to “assign” the candidate to that position because she 

proved ineligible. See FLRA Order at 1017. Since the order 

before us mandates only “priority consideration,” management 

officials can follow it without violating government-wide 

regulations. See Reply Br. 16 (conceding that the order would be 

“unobjectionable” if it mandated only “consideration” rather 

than “assignment”).

III.

Lacking subject matter jurisdiction, we dismiss the petition

for review.

So ordered.

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