Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-12-01234/USCOURTS-caDC-12-01234-0/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 February 18, 2014 Decided March 21, 2014

No. 12-1234

NATIONAL TREASURY EMPLOYEES UNION,

PETITIONER

v.

FEDERAL LABOR RELATIONS AUTHORITY,

RESPONDENT

On Petition for Review of a Final Decision 

of the Federal Labor Relations Authority

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

on the briefs were Gregory O’Duden and Jacob HeymanKantor. Paras N. Shah entered an appearance. 

Zachary R. Henige, Attorney, Federal Labor Relations

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

Rosa M. Koppel, Solicitor, and David M. Shewchuk, Deputy

Solicitor.

Before: HENDERSON, ROGERS and KAVANAUGH, Circuit

Judges.

Opinion for the court by Circuit Judge ROGERS.

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ROGERS, Circuit Judge: The National Treasury Employees

Union petitions for review of the decision of the Federal Labor

Relations Authority that the Internal Revenue Service (“the

IRS”) did not commit an unfair labor practice under 5 U.S.C. 

§ 7116 when it failed to provide the Union notice or an

opportunity to bargain over an increase in the workloads of IRS

Case Advocates. Because Authority precedent established that

this bargaining obligation arises only when an agency initiates

a change in its policies, practices, or procedures, and the

Authority reasonably relied on that precedent, we deny the

petition for review.

I.

The Federal Service Labor-Management Relations Statute

(“the Statute”) requires agencies to bargain in good faith with

their employees’ recognized representative regarding

“conditions of employment,” 5 U.S.C. §§ 7102(2), 7103(a)(12),

7114(a)(4), (b), which include “personnel policies, practices,

and matters, whether established by rule, regulation, or

otherwise, affecting working conditions,” id. § 7103(a)(14). 

Although an agency is not required to bargain over its

management rights, including the right to control its internal

organization, the number of employees, and work assignments,

it must negotiate about the impact and implementation of its

exercise of those rights. Id. § 7106; see NTEU v. FLRA, 414

F.3d 50, 52–53 (D.C. Cir. 2005). Under 5 U.S.C. § 7116(a)(1)

and (5), it is an unfair labor practice for an agency “to interfere

with, restrain, or coerce any employee in the exercise by the

employee of any right under this chapter” or “to refuse to

consult or negotiate in good faith with a labor organization as

required by this chapter.” As interpreted by the Authority, the

requirement of good faith bargaining means that

prior to implementing a change in conditions of

employment, an agency is required to provide the

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exclusive representative with notice of the change and

an opportunity to bargain over those aspects of the

change that are within the duty to bargain, if the

change will have more than a de minimis effect on

conditions of employment.

Dep’t of the Air Force, Air Force Materiel Command, Space &

Missile Sys. Ctr., Detachment 12, Kirtland Air Force Base,

N.M., 64 F.L.R.A. 166, 173, 175 (2009); see id. at 176. Failure

to do so constitutes a violation of 5 U.S.C. § 7116(a)(1) and (5). 

Id. at 173, 175; see also Internal Revenue Serv., Washington,

D.C., 4 F.L.R.A. 488, 488, 498–99 (1980).

On June 25, 2008, the Union, as exclusive bargaining

representative, filed a national grievance on the ground that the

IRS had “measurably increased the caseloads of Case

Advocates within the Taxpayer Advoca[te] Service (TAS)

without giving notice to [the Union] and providing an

opportunity to bargain,” and violated the parties’ collective

bargaining agreement (the “National Agreement”) and 5 U.S.C.

§ 7116(a)(1) and (5). See Arb. Dec. at 3–4. An arbitrator found

that the IRS violated Article 47 of the National Agreement and

5 U.S.C. § 7116(a)(1) and (5) by changing employees’

conditions of employment without fulfilling its notice-andbargaining obligations. Concluding that “[t]he IRS cannot

control how many taxpayers use this service established by

Congress and cannot choose to ignore taxpayers’ inquiries and

concerns,” the Arbitrator found that “[w]orkload is not

determined solely by the number of cases coming into TAS,”

and that the IRS “has control over other factors that affect

workload,” including case processing procedures, deadlines for

completing individual actions, and the number of staff available. 

Arb. Dec. at 36. Because the “[s]ubstantial increases in the

number of cases . . . are not sufficiently mitigated by other

factors,” the Arbitrator concluded that the IRS was responsible

for the change in conditions of employment, triggering its

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notice-and-bargaining obligations. Id. at 39–40. The Arbitrator

awarded various remedies, including ordering the IRS to

bargain and to post a notice that it had committed an unfair

labor practice and violated the National Agreement, but denied

the Union’s requests for a status quo ante remedyand attorney’s

fees. Both the Union and the IRS filed exceptions.

The Authority reversed in part, affirmed in part, and

remanded in part. First, it set aside the unfair labor practice

violation under § 7116(a)(1) and (5), explaining that a finding

that an agency has failed to provide a union with notice and an

opportunity to bargain over changes to conditions of

employment requires a “threshold determination that the agency

made a change in a policy, practice, or procedure affecting unit

employees’ conditions of employment.” NTEU, 66 F.L.R.A.

577, 579 (2012). The Arbitrator found only that there had been

an increase in the number of incoming cases, not that the IRS

made any “unilateral change” that violated its notice-andbargaining obligations under the Statute. Id. at 580. Second, it

left standing, in the absence of an exception, the Arbitrator’s

finding that the IRS had violated the National Agreement and

therefore set aside only the posting requirement regarding the

unfair labor practice. See id. at 581. Third, it rejected the

Union’s exception that the Arbitrator’s denial of a status quo

ante remedy was contrary to law but agreed with the Union on

attorney’s fees and remanded that portion of the award to the

Arbitrator for additional factual findings, in the absence of

agreement by the parties. See id. at 582. 

The Union petitions for review of the Authority’s

determination that the IRS did not commit an unfair labor

practice in violation of 5 U.S.C. § 7116(a)(1) and (5). We first

address our jurisdiction.

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II. 

The court has jurisdiction to review a final order of the

Authority when an unfair labor practice under 5 U.S.C. § 71161

is “either an explicit ground for, or [] necessarily implicated by,

the Authority’s decision.” Overseas Educ. Ass’n v. FLRA, 824

F.2d 61, 67–68 (D.C. Cir. 1987) (adopting analysis in United

States Marshals Service v. FLRA, 708 F.2d 1417, 1420 (9th Cir.

1983)); see 5 U.S.C. § 7123(a)(1). Here, the Authority’s

reversal of the Arbitrator’s unfair labor practice finding clearly

involves an unfair labor practice. Further, the Statute, 5 U.S.C.

§ 7123(c), contemplates review of a part of an Authority order

by referencing 5 U.S.C. § 706, which refers to review of an

“agency action” defined to include “the whole or a part of an

agency . . . order.” Id. § 551(13); see id. § 701(b)(2). An

“order” is “the whole or a part of a final disposition . . . of an

agency.” Id. § 551(6). The Union’s petition for review of only

part of the Authority’s Decision therefore does not deprive the

court of jurisdiction, provided that Decision is “final” under

§ 7123(a). 

Although a remand can defeat the finality of an order, see

Meredith v. Fed. Mine Safety & Health Review Comm’n, 177

F.3d 1042, 1047 (D.C. Cir. 1999), for purposes of judicial

review a final agency action “need not be the last administrative

action contemplated by the statutory scheme.” Role Models

Am., Inc. v. White, 317 F.3d 327, 331 (D.C. Cir. 2003) (internal

quotation marks and brackets omitted). Rather it “must mark

the ‘consummation’ of the agency’s decisionmaking process —

it must not be of a merely tentative or interlocutory nature . . . 

Although the Statute refersto “an unfair labor practice under 1

section 7118,” the correct reference is to § 7116. See Am. Fed’n of

Gov’t Emps., Local 2510 v. FLRA, 453 F.3d 500, 502 n.* (D.C. Cir.

2006). 

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[and] the action must be one by which ‘rights or obligations

have been determined,’ or from which ‘legal consequences will

flow.’” Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (internal

citation omitted); Nat’l Ass’n of Home Builders v. Norton, 415

F.3d 8, 13 (D.C. Cir. 2005); see also John Doe, Inc. v. Drug

Enforcement Admin., 484 F.3d 561, 566 & n.4 (D.C. Cir. 2007). 

In adopting “a uniform rule that an unresolved issue of

attorney’s fees for the litigation in question does not prevent

judgment on the merits from being final” under 28 U.S.C.

§ 1291, the Supreme Court in Budinich v. Becton Dickinson &

Co., 486 U.S. 196, 202 (1988), explained that resolution of an

attorney’s fees claim “will not alter the order or moot or revise

decisions embodied in the order,” id. at 199, and generally “is

not part of the merits of the action to which the fees pertain,” id.

at 200. The Court recently reaffirmed this rule in Ray Haluch

Gravel Co. v. Central Pension Fund of International Union of

Operating Engineers &Participating Employers, 134 S. Ct. 773

(2014). 

Given the collateral nature of the determination of the

Union’s attorney’s fee request, we “discern no reason that the

Supreme Court’s holding would not apply to an appeal from the

decision of an administrative agency.” Fluor Constructors, Inc.

v. Reich, 111 F.3d 94, 95 (11th Cir. 1997); see Wagner v.

Shinseki, 733 F.3d 1343, 1349 (Fed. Cir. 2013). The finality

requirement is applied “in a ‘flexible’ and ‘pragmatic’ way,”

John Doe, Inc., 484 F.3d at 566 (quoting Ciba-Geigy Corp. v.

EPA, 801 F.2d 430, 435 (D.C. Cir. 1986) (quoting Abbott Labs.

v. Gardner, 387 U.S. 136, 149–50 (1967))), to ensure that courts

“neither improperly intrude into the agency’s decisionmaking

process nor squander judicial resources through piecemeal

review,” Union Pac. R.R. Co. v. Surface Transp. Bd., 358 F.3d

31, 34 (D.C. Cir. 2004) (quoting Ciba-Geigy Corp., 801 F.2d at

436) (internal quotation marks and brackets omitted). Neither

concern is implicated here. The Authority has made a final

determination that the Arbitrator erred in finding the IRS

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committed an unfair labor practice under 5 U.S.C. § 7116 (a)(1)

and (5). This determination satisfies each Bennett factor

because the Authority’s decisionmaking process with respect to

the statutory violation is complete and it has made a final

determination of the parties’ rights and obligations. See John

Doe, Inc., 484 F.3d at 566; see also Bennett, 520 U.S. at

177–78. The Authority determined that the unchallenged

finding that the IRS had violated the National Agreement could

support the Union’s request for attorney’s fees. See NTEU, 66

F.L.R.A. at 581. That the Authority remanded the attorney’s

fees issue therefore does not suggest that its decisionmaking

process with respect to the independent unfair labor practice

question is incomplete. Furthermore, there is little realistic

possibility of piecemeal review because it is unlikely this court

would have jurisdiction to review the attorney’s fee

determination. Orders involving only an arbitrator’s award of

attorney’s fees generally have no bearing upon the law of unfair

labor practices and are therefore not judicially reviewable. See

Am. Fed’n of Gov’t Emps., Local 2510, 453 F.3d at 504–05; 5

U.S.C. § 7123(a)(1). 

For these reasons, we hold that the court has jurisdiction to

consider the Union’s petition and turn to the merits.

III.

The court will set aside an order of the Authority only if it

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

in accordance with law.” 5 U.S.C. §§ 706(2)(A), 7123(c). 

Further, deference is due to the Authority’s interpretation of the

Statute under Chevron, U.S.A., Inc. v. Natural Resources

Defense Council, Inc., 467 U.S. 837 (1984). See NASA v.

FLRA, 527 U.S. 229, 234 (1999); Dep’t of Justice v. FLRA, 266

F.3d 1228, 1230 (D.C. Cir. 2001); 5 U.S.C. § 7105. The

Authority must “provide a rational explanation for its decision”

but in reviewing unfair labor practice determinations, the court

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“recogniz[es] that such determinations are best left to the expert

judgment of the [Authority].” FDIC v. FLRA, 977 F.2d 1493,

1496 (D.C. Cir. 1992) (internal quotation marks omitted). 

Although the Statute imposes a duty to bargain over

employees’ conditions of employment, see 5 U.S.C. §§ 7102(2),

7103(a)(12), 7114(a)(4), (b)(2), it does not refer to an

employer’s obligation to provide advance notice to an employee

representative of changes to employees’ working conditions. 

Rather, the “notice-and-bargaining” obligations derive from the

Authority’s interpretation of the Statute’s mandate in 5 U.S.C.

§ 7116(a)(1) and (5) that agencies must bargain in good faith

over working conditions. See, e.g., Dep’t of the Air Force, Air

Force Materiel Command, Space & Missile Sys. Ctr.,

Detachment 12, Kirtland Air Force Base, N.M., 64 F.L.R.A.

166, 173, 175 (2009); Dep’t of Veterans Affairs, Med. Ctr.,

Sheridan, Wyo., 59 F.L.R.A. 93, 94–95 (2003); Dep’t of Labor,

OSHA, Region 1, Bos., Mass., 58 F.L.R.A. 213, 215–16 (2002);

Internal Revenue Serv., Washington, D.C., 4 F.L.R.A. 488, 488,

498–99 (1980). Under that precedent, these obligations arise

only if the agency has “made a change in a policy, practice, or

procedure affecting unit employees’ conditions of

employment.” NTEU, 66 F.L.R.A. at 579. More particularly,

“where employees’ ‘volume’ of work or ‘number’ of

assignments increases, but those increases are not attributable

to any change in the agency’s policies, practices, or procedures

affecting working conditions, . . . [the] increases ‘[s]tanding

alone’ do not trigger notice-and-bargaining obligations under 

§ 7116(a)(5).” Id. at 579–80 (quoting Dep’t of Veterans Affairs,

59 F.L.R.A. at 94–95). 

The Union does not suggest that the Authority’s

interpretation requiring a unilateral change by an agency to

trigger notice-and-midterm bargaining is contraryto the Statute,

and we agree that the Authority’s interpretation “is certainly

consistent with the [Statute] and, to the extent the statute and

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congressional intent are unclear, we may rely on the Authority’s

reasonable judgment.” NASA, 527 U.S. at 234. Instead, the

Union contends, as it had argued to the Authority in opposing

the IRS’s exceptions, that the Arbitrator, in emphasizing factors

within the IRS’s control, applied the correct legal standard for

changes to working conditions in finding an unfair labor

practice by the IRS. Responding, the Authority reasonably

rejected, in light of its precedent, both the Arbitrator’s approach

and the Union’s proposal for a “‘bright-line rule’ that

significantly increased workloads trigger an agency’s noticeand-bargaining obligations under § 7116 regardless of whether

the increase is ‘precipitated by the agency.’” NTEU, 66

F.L.R.A. at 580 (quoting Union’s Opposition to the Agency’s

Exceptions at 30). The Authority explained that “[t]he Union

has not explained how an agency could unilaterally change

conditions of employment — and thereby violate § 7116 — if

it has not made any change to a policy, practice, or procedure

affecting conditions of employment.” Id. 

The Union no longer presses its bright-line rule, which the 

Authority viewed as seeking a change in its precedent. Instead

the Union contends first that the Authority impermissibly

ignored the Arbitrator’s factual findings that there was a change

in conditions of employment. The Union relies on the principle

that in reviewing questions of law, the Authority is to defer to

the Arbitrator’s findings of fact. See Dep’t of Commerce,

Patent & Trademark Office, 52 F.L.R.A. 358, 367 (1996);

accord Nat’l Fed’n of Fed. Emps., Local 1437, 53 F.L.R.A.

1703, 1710 & n.6 (1998). It points to the Arbitrator’s findings

that the IRS “has control” over factors that affect Case

Advocates’ workloads, including staffing and case processing

procedures. Arb. Dec. at 36. In the Union’s view, even under

the Authority’s narrow “policy, practice, and procedure”

standard the Authority’s application of it was erroneous because

the IRS was an actor in creating a different and difficult work

environment. But the Authority’s determination that the IRS

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did not make any unilateral change was consistent with the

Arbitrator’s factual finding that the IRS “divide[d] up an evergrowing pool of cases among virtually the same number of

existing Case Advocates without making other reasonable

adjustments.” Arb. Dec. at 40. Under Authority precedent, this

was the critical finding: The IRS responded to outside factors,

but initiated no change of its own to its policies, practices, or

procedures.

Similarly, the Union’s second contention, that the

Authority’s narrow standard is inconsistent with the statutory

definition of “conditions of employment,” which includes

“personnel policies, practices, and matters . . . affectingworking

conditions,” 5 U.S.C. § 7103(a)(14), is unconvincing. Although

the Case Advocates may have experienced a change in

“practices” and “matters” affecting their working conditions

between 2006 and 2009, the Arbitrator did not find that these

changes had been initiated by the IRS. The reasonableness of

the Authority’s judgment in adopting a clear threshold principle

for triggering an agency’s “notice-and-bargaining” obligations

is highlighted by the Arbitrator’s implicit recognition that any

other rule would leave an agency guessing about when its

obligations are triggered by the gradual influence of external

factors; in rejecting the Union’s request for a status quo ante

remedy, the Arbitrator observed that “it would be difficult if not

impossible to determine exactly to what point in time the [IRS]

must return.” Arb. Dec. at 46. The Authority’s determination,

relying on its precedent, that the Arbitrator erred in finding an

unfair labor practice was adequately explained and is neither

arbitrary nor capricious. See 5 U.S.C. §§ 706(2)(A), 7123(c). 

And to the Union’s assertion that under the Authority’s narrow

standard unions would be denied the ability to negotiate over

changes in working conditions solely because the changes were

not initiated by an agency, the Authority responds that its

interpretation does not relieve an agency of its duty to respond

to union-initiated proposals within the duty to bargain; it only

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limits an agency’s obligation to provide advance notice and an

opportunity to bargain to situations where the agency itself has

initiated a unilateral change. See Resp’t’s Br. at 26; see also

Library of Congress v. FLRA, 699 F.2d 1280, 1289–90 (D.C.

Cir. 1983). 

Accordingly, we deny the petition for review.

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