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

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify the

Clerk of any formal errors in order that corrections may be made before the

bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 9, 2006 Decided February 17, 2006

No. 04-1433

NATIONAL TREASURY EMPLOYEES UNION,

PETITIONER

v.

FEDERAL LABOR RELATIONS AUTHORITY,

RESPONDENT

On Petition for Review of an Order of the

Federal Labor Relations Authority

Timothy B. Hannapel argued the cause for petitioner. With

him on the briefs were Larry J. Adkins and Gregory O’Duden.

David M. Shewchuk, Attorney, Federal Labor Relations

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

brief were David M. Smith, Solicitor and William R. Tobey,

Deputy Solicitor.

Before: HENDERSON, ROGERS and BROWN, Circuit Judges.

USCA Case #04-1433 Document #950236 Filed: 02/17/2006 Page 1 of 14
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Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: In National Treasury Employees

Union v. Federal Labor Relations Authority, 404 F.3d 454 (D.C.

Cir. 2005) (“NTEU I”), the court granted the Union’s petition

and remanded the case to the Authority because its findings

were unsupported by the record before it. The Union again

contends that a negotiability ruling of the Authority on two

Union proposals is arbitrary and capricious because they are

unsupported by the record and contrary to Authority precedent.

See NTEU v. U.S. Dep’t of Homeland Sec. Customs and Border

Prot. of Wash., D.C., 60 F.L.R.A 367 (Nov. 8, 2004)

(“Opinion”). We agree and grant the Union’s petition for

review. 

I.

 The Federal Service Labor-Management Relations Statute,

5 U.S.C. §§ 7101-7135 (2000), governs relations between

federal agency employers and federal employees. See NLRB v.

FLRA, 2 F.3d 1190, 1192 (D.C. Cir. 1993). The Statute confers

on federal employees a right to engage in collective bargaining

with respect to conditions of employment through their

representatives. See 5 U.S.C. § 7102(2). To effectuate this

right, the Statute requires each agency to “negotiate in good

faith” with the exclusive representative of the employees “for

the purposes of arriving at a collective bargaining agreement.”

Id. § 7114(a). The Statute sets some limits on the subjects over

which agencies are required to bargain. Certain management

rights are exempt from the duty to bargain, see id. § 7106(a),

including management’s right “to determine the . . . internal

security practices of the agency[,]” id. § 7106(a)(1). However,

section 7106 also provides:

Nothing in this section shall preclude any agency and

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1

 At the time the Union petitioned for review by the

Authority, the U.S. Customs Service was part of the Treasury

Department and the bargaining unit employees were subject to both

Treasury Department and Customs Service policies on firearms use

any labor organization from negotiating . . .

appropriate arrangements for employees adversely

affected by the exercise of any authority under this

section by such management officials.

Id. § 7106(b)(3) (emphasis added). The Statute further provides

that, upon an agency’s refusal to negotiate a proposal submitted

on behalf of its employees, the Authority shall “resolve[] issues

relating to the duty to bargain in good faith,” id. § 7105(a)(2)(E),

and that any person aggrieved by the Authority’s decision may

petition for review by a circuit court of appeals where the person

resides or transacts business or to this court, id. § 7123(a). No

objection not urged before the Authority shall be considered by

the court, unless the failure to object is “excused because of

extraordinary circumstances.” Id. § 7123(c). 

The National Treasury Employees Union represents U.S.

Customs Service employees who have been carrying firearms as

part of their duties for many years. According to undisputed

facts recited in the Authority’s Opinion, these employees are

located in approximately 300 locations, only some of which

have facilities for on-site storage of Agency-issued firearms

during non-duty work hours. The Union identified

approximately ten locations currently permitting such storage.

Hence, at most locations Agency employees carrying firearms

must travel directly from work to home and store their firearms

overnight at home under secure conditions with an Agencyprovided safety lock, unless they are covered by the 24-hour

carry policy for Office of Field Operations Personnel

promulgated by the U.S. Treasury Department.1

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and storage. See Opinion at **1.

The 24-hour carry policy, dated March 3, 2000, provides

that eligible Agency employees may carry their service-issued

firearms twenty-four hours a day, provided they “significantly

modif[y]” their behavior while armed. Such behavioral

modifications and restrictions include refraining from the

consumption of alcoholic beverages, limiting use of the firearm

and concealing the firearm when the employee is not in uniform.

The policy emphasizes that authority to carry a firearm “presents

a tremendous responsibility and has potential for significant

liabilities to the individual officer, as well as the Customs

Service.” Eligible employees who elect to be covered by the 24-

hour carry policy and to be bound by its terms are not required

to travel directly between home and work while carrying their

Agency-issued firearms. Under the guidelines contained in the

Agency’s handbook on firearms, employees must maintain

current credentials in order to carry a firearm, and the handbook

lists the types of conduct that could result in the loss of

credentials “based on a nexus between these actions and a threat

to the safety of the employee or others.” U.S. Department of the

Treasury, U.S. Customs Service, Firearms and Use of Force

Handbook (July 1996).

By the terms of the 24-hour carry policy dated December

28, 2000, all employees authorized to carry firearms in the

performance of their official duties “are personally responsible

for the security of all firearms to prevent unauthorized use,

unintentional discharge, and theft,” and specific requirements

are set on how firearms not in the employee’s immediate control

are to be secured. The Union sought to bargain over

implementation of the changes in the 24-hour carry policy and

made a number of proposals, two of which are at issue here. 

First, the Union proposed that employees who carry their

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weapons to and from their residences be permitted “to make

reasonable diversions and stops between their residence and

work. These diversions and stops will be defined as those that

any ordinary citizen would make before and after work,”

Proposal 11 (emphasis added). Examples of “reasonable

diversions and stops” on which the Union sought to bargain

included shopping at a supermarket, stopping for gas, or

attending a child’s after-school soccer match. The Union

claimed that the proposal would mitigate the burden of the

current policy, which restricts employees’ freedom of movement

without monetary compensation, reduces employees’ non-duty

hours, and increases the effort and expenses associated with the

extra travel necessitated by the policy. The Agency advised the

Authority that Proposal 11 interfered with management’s right

to determine its internal security practices, including the right to

determine those policies and actions that will safeguard its

personnel and physical property, and that employees with 24-

hour carry authority who have completed firearms training are

automatically eligible for that authority and were free to make

reasonable diversions and stops. Because, in the Agency’s view,

the proposal applied only to employees who elected to carry

personally-owned firearms and the Agency no longer permitted

such carriage, the proposal was moot.

The Authority rejected the notion that Proposal 11 was

moot, but concluded that Proposal 11 excessively interfered with

management’s right to determine its internal security practices

under section 7106(a)(1) and thus was not within the Agency’s

duty to bargain under section 7106(b)(2). The Authority stated

that the Agency had determined that, in order to safeguard its

personnel, the public, and physical property, employees not

covered by the 24-hour carry policy should be required to carry

their firearms directly from work to home during non-duty

hours, without stops, until their firearms could be secured. The

Authority found that although Proposal 11 was an “arrangement

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sufficiently tailored to aid those employees adversely affected

by the exercise of a management right, as it would benefit only

those employees who either fail training or refuse to sign the 24-

hour carry certificate,” Opinion at **11, it was not an

“appropriate arrangement,” id. The Authority reasoned that the

“minimal benefit” to be gained by such employees who cannot

or do not accept the conditions of the 24-hour carry policy “is

more than outweighed by the Agency’s interest in protecting the

public from the danger posed by employees carrying firearms,

especially if those employees are not operating under the

restrictions concerning conduct provided for in the 24-hour carry

policy.” Id.

Second, the Union proposed that internal investigations

upon suspension or rescission of an employee’s authority to

carry a firearm be conducted expeditiously. The Union made

several proposals regarding suspension or rescission, including

prompt notice to the employee of the reasons for the disciplinary

action, with an opportunity to respond promptly and to appeal,

and the Union’s right to file a grievance, but only one is at issue

on appeal. The Union proposed that “[i]n the event that [the

Agency] takes an officer’s firearm pending an internal

investigation, it will conduct an expeditious investigation on a

priority basis.” Proposal 14(f) (first sentence) (emphasis

added). In the absence of such language, the Union told the

Authority, it “cannot show arbitrators any [contract] language

which obligates the Agency to take any action within any time

frames once it has removed firearm carriage authority,” and that

the Agency “has no incentive, and before an arbitrator it will

argue it has no obligation, to conduct its investigations in an

expeditious manner, and as a result its firearms investigations

will continue in the same desultory manner that has been the

case for years.” Union’s Response to Agency’s Statement of

Position, dated Jan. 14, 2002, at 25. The Union explained that

the proposal would not prevent the Agency from taking the time

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necessary to conduct a thorough investigation, but it would

reduce the amount of time between the initial denial, revocation,

or suspension of firearm carry authority and thus benefit the

employee whose authority is ultimately reinstated. The Agency

advised the Authority that Proposal 14(f) (first sentence) would

require it to make a decision based on set time frames rather

than on investigative facts and thus without full knowledge of

the circumstances. The Agency also claimed that the proposal

would interfere with management’s right to assign work.

The Authority concluded, with one Member dissenting, that

to the extent that Proposal 14(f) (first sentence) would require

the Agency to conduct an expeditious investigation on a priority

basis, the intrusion of the proposal into management’s right to

determine its internal security practices outweighed the benefits

it would provide some employees and therefore was not an

appropriate arrangement under section 7106(b)(3). The

Authority construed the Union’s proposal to “require the

Agency to give investigations related to firearms carriage

authority greater priority than any other investigations it

conducts in the course of accomplishing the Agency’s mission

no matter how much more time-critical or important those other

investigations might be.” Opinion at **22. It rejected the

Agency’s position that the proposal would interfere with its

ability to assign work. 

II.

In NTEU I, 404 F.3d at 458, the court remanded the Union’s

proposal concerning the storage of handguns after the Authority

had ruled the proposal excessively interfered with

management’s rights to determine its internal security practices,

because the Authority’s determination was not supported by the

record before it. The Union contends the same defects exist in

the Authority’s decision here, particularly as the Authority failed

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to abide by its precedent requiring it to balance the practical

effects of a proposal on management and employee interests.

Specifically, the Union contends that the Authority’s finding

that Proposal 11 was of “minimal benefit” to Agency employees

was without explanation or record support; that the Authority’s

finding regarding the Agency’s interest in “protecting the

public” is without record support and was not an interest

asserted by the Agency; and that the Authority’s implicit finding

that employees not covered by the 24-hour carry policy pose a

greater threat to the public than those who elect to be governed

by its restrictions is contradicted by the record. Similarly, the

Union contends that the Authority’s finding that Proposal 14(f)

(first sentence) would require the Agency to make investigations

of suspended certifications to carry firearms the Agency’s top

priority is neither based on record evidence nor a burden that

was asserted by the Agency. Because the Authority’s

determinations are not supported by the record, the Union

maintains that the Authority did not engage in a proper

application of its balancing test.

Our review is deferential, limited to determining whether

the Authority’s decision is arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law. See Bureau

of Alcohol, Tobacco and Firearms v. FLRA, 464 U.S. 89, 97 n.7

(1983); NTEU I, 404 F.3d at 456; Nat’l Ass’n of Gov’t

Employees, Local R5-136 v. FLRA, 363 F.3d 468 (D.C. Cir.

2004); Overseas Educ. Ass’n v. FLRA, 827 F.2d 814, 816 (D.C.

Cir. 1987); 5 U.S.C. § 706(2)(A) (2000).

The Authority applies a two-part test, known as “the KANG

test,” to determine whether proposals impinging upon

management rights under section 7106(a) should nonetheless be

considered negotiable under section 7106(b)(3) as “appropriate

arrangements” for adversely affected employees. See NTEU I,

404 F.3d at 457; NLRB, 2 F.3d at 1192, citing Nat’l Ass’n of

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Gov’t Employees Local R14-87, 21 F.L.R.A. 24 (1986) (“Kansas

Army National Guard” or “KANG”). Under the KANG test, the

Authority first examines the record to determine whether a

proposal is intended to be an “arrangement” for employees

adversely affected by the exercise of a management right. See

KANG, 21 F.L.R.A. at 31. The burden is on the Union to

explain how employees will be detrimentally affected by

management’s action and how the proposal for bargaining is

intended to address or compensate for such effect. See id.

Under the second step, the Authority must evaluate whether an

“arrangement” “is inappropriate because it excessively

interferes” with the exercise of a management right. Id. This

requires the Authority to “weigh[] the practical needs of

employees and managers,” id. at 31-32, and involves an “openended balancing analysis that may include consideration of such

factors as ‘the nature and extent of the impact experienced by

the adversely affected employees’ and ‘the nature and extent of

the impact on management’s ability to deliberate and act

pursuant to its statutory rights,’” NLRB, 2 F.3d at 1193, citing

KANG, 21 F.L.R.A. at 31-32.

In NTEU I, the court held that the Authority erred in

applying the KANG test to determine that a proposal did not

constitute an “appropriate arrangement” subject to bargaining

under section 7106(b)(3) because the record before the

Authority did not support its description of the Agency’s

security policy. See NTEU I, 404 F.3d at 457-58. The Authority

had concluded that a proposal on the storage of firearms would

preclude the Agency from exercising its right to determine its

internal security practices, notwithstanding the fact that the

record established that in many locations the Agency had

permitted on-site storage of firearms for off-duty employees and

even provided facilities for such storage. Id. at 458. The court

declared:

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On the record before it and this [c]ourt, the Authority

has not established that the proposal would “negate and

nullify” the [A]gency’s right to implement the practice

it followed at the time the Union made the proposal.

The most the proposal would require is the institution

at other facilities of a method of carrying out [A]gency

internal security policies already in place at some

locations. Whether this constitutes an appropriate

arrangement is a question for the Authority to answer

but it must do so on findings based on the record

before it, and by a process consistent with its own

precedent.

Id. (citations omitted).

Similarly here, the Authority found both Union proposals

were arrangements within the internal security exception of

section 7106(a)(1), but the Authority’s determinations that the

proposals were not appropriate arrangements is not supported by

findings based on the record before it. The Authority reasoned

that:

Proposal 11 would require the Agency to permit

employees who cannot or do not accept the conditions

required for 24-hour carry authority to make stops

between their work site and their residence, while in

possession of their authorized firearm. This minimal

benefit is more than outweighed by the Agency’s

interest in protecting the public from the danger posed

by employees carrying firearms, especially if those

employees are not operating under the restrictions

concerning conduct provided for in the 24-hour carry

policy. 

Opinion at **14 (emphasis added). The Authority offers no

explanation or basis in the record for its conclusion that the

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2

 Contrary to the Authority’s position, 5 U.S.C. § 7123(c)

does not bar consideration of the Union’s challenges to the findings

underlying the Authority’s determination that its proposals were not

appropriate arrangements, for the Union argued before the Authority

that the proposals were appropriate arrangements and set forth its

reasoning. Cf. U.S. Dep’t of Defense, National Guard Bureau, Rhode

Island National Guard v. FLRA, 982 F.2d 577, 580 (D.C. Cir. 1993).

benefit to the officers in being permitted to make the

“reasonable diversions and stops” would be “minimal.” Neither

does the Authority explain its conclusion that this “minimal

benefit” was “more than outweighed by the Agency’s interest in

protecting the public from the dangers posed by employees

carrying firearms, especially if those employees are not

operating under the restrictions concerning conduct provided for

in the 24-hour carry policy.” In purporting to describe the

Agency’s safety policy, the Authority pointed to nothing in the

record to indicate that the Agency, in fact, has an internal

security policy based on protecting the public from the greater

danger posed by employees carrying firearms who are not bound

by the 24-hour carry restrictions.

The Authority maintains on appeal that the restrictions in

the 24-hour carry policy and the Agency handbook “are

reasonably understood as objective evidence of [the Agency]’s

public safety concern over the carriage of firearms by employees

who are off-duty.” Resp.’s Br. at 24. “Firearms are dangerous,

and extraordinary dangers sometimes justify unusual

precautions.” Florida v. J.L., 529 U.S. 266, 272 (2000). The

question posed by the Union’s proposal, however, is whether

there is any material difference between the conditions under

which employees who volunteer for the 24-hour carry policy

carry firearms and the conditions under which other authorized

employees carry firearms. The Union contends there are no

material differences.2 The Authority also maintains that

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Proposal 11 would have nullified certain safety-oriented

restrictions on employee carriage of firearms off duty. Maybe

so, but the Authority did not identify those restrictions in its

Opinion, much less balance the practical effect of any

differences against the employee benefits, which the KANG test

requires. Finally, the Authority maintains that it was reasonable

for it to recognize that the Agency has an interest in

safeguarding the public as part of management’s right to

determine its internal security practices. Even so, this leaves

open the question presented by Proposal 11. The Agency did

not identify any specific safety concern to explain why

employees who did not have 24-hour carry authority could not

be granted some of the leeway in carrying firearms off duty that

the 24-hour policy affords. Moreover, the Agency’s reason for

refusing to bargain over this proposal was that after completion

of training all employees are automatically eligible for 24-hour

carry authority. This lends some support for the Union’s

position that employees who do not have 24-hour carry authority

do not pose any greater danger to public safety and, therefore,

should not be bound by greater firearm carriage restrictions than

those employees covered by the 24-hour carry policy. 

The Union expressed concern that the internal security

policy as stated by the Authority in its Opinion, and not

advanced by the Agency, is so broad as to render any Union

proposal involving firearms non-negotiable, rather than

reflecting an actual KANG balancing of competing needs, which

would give meaning to section 7106(b)(3). See Am. Fed of

Gov’t Employees, AFL-CIO, Local 2782 v. FLRA, 702 F.2d

1183, 1186-87 (D.C. Cir. 1983). The problem is not one of

overbreadth but rather the Authority’s dismissal without

explanation of any counter-balancing benefit to employees

under Proposal 11. The Authority may be of the opinion that no

employee interest could outweigh the Agency’s interest in

controlling and restricting the use of firearms. It nonetheless

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remains incumbent on the Authority in considering Proposal 11

to examine the record to determine the relevant differences, if

any, between restrictions for employees who are and who are

not subject to the 24-hour carry policy, to identify the

significance of any differences, to weigh the practical effects of

such differences on the competing interests under the KANG

test, and to set forth its reasoning and the principles underlying

its ultimate determination. See NTEU I, 404 F.3d at 458. The

Authority has not yet done this. 

As for Proposal 14(f) (first sentence), the Authority

reasoned that expedited investigation related to firearm carriage

authority would come at the expense of all other pending

internal security investigations, and that this “intrusion upon the

Agency’s right to decide which investigative work is most

important to the accomplishment of the Agency’s operations

outweighs the benefits.” Opinion at **22. The opinion of the

dissenting Member, who characterized the expeditious

investigation provision of Proposal 14(f) as “a significant benefit

for employees,” id. at **34 (Member Pope, dissenting in part

and concurring in part), highlights the problems with the

Authority’s determination. First, the Agency had failed to

explain how expediting a relatively small number of cases

would intrude on its management right. The dissenting opinion

noted that the Agency had cited a survey showing the proposal

would apply to only 55 out of 8,000 employees who have had

their firearms authority removed for other than medical or

qualifications reasons. Second, the Agency did not dispute the

Union’s claim that employees are unable to perform important

aspects of their job when firearm carry permission is withdrawn.

Third, the Agency never asserted that proposal caused the

burden that the Authority found. Fourth, the Agency’s claim

that the proposal would require it to conclude investigations

prematurely was not only “inconsistent with the wording of the

proposal [but] expressly disavowed by the Union.” Id. at **34.

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On appeal, the Authority points to the Union’s statement

that its proposal called for firearm-authority investigations to be

given priority in relation to other Agency investigations. This

still is not the same as a proposal calling for top priority over all

other Agency investigations. The Union’s statement, viewed in

context, was that its proposal was designed to provide

employees with an expected time frame for completion of the

internal investigation and some incentive for the Agency to

conduct investigations more expeditiously. The Union

submitted evidence that employees could not find out when their

investigations might be completed and that investigations,

despite Union inquiry, could linger for several years for no

apparent reason, to the detriment of employee loyalty,

motivation, and ability to earn overtime pay. The Union noted

that the situation was exacerbated by the fact that the Agency

was understaffed. Because the Authority’s determination that

Proposal 14(f) (first sentence) is not an appropriate arrangement

is based on findings that are unsupported by the record and, in

fact, appears to be contradicted by it and the Authority failed to

engage in a proper KANG balancing, we reverse the nonnegotiability determination.

Accordingly, we grant the petition, remanding Proposal 11

to the Authority to clarify its rationale and reversing the

Authority’s determination that Proposal 14(f) (first sentence) is

not an appropriate arrangement under 5 U.S.C. § 7106(b)(3).

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