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Parties Involved:
Federal Labor Relations Authority
Respondent
Patent Office Professional Association
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 5, 1994 Decided February 28, 1995

No. 93-1676

PATENT OFFICE PROFESSIONAL ASSOCIATION,

PETITIONER

v.

FEDERAL LABOR RELATIONS AUTHORITY,

RESPONDENT

Petition for Review of an Order of the

Federal Labor Relations Board

Joseph V. Kaplan argued the cause and filed the briefs for petitioner.

William E. Persina, Attorney, Federal Labor Relations Authority, argued the cause for respondent.

With him on the brief were David M. Smith, Solicitor, Arthur A. Horowitz, Associate Solicitor, and

James F. Blanchard, Attorney, Federal Labor Relations Authority. Pamela Penny Johnson entered

an appearance for respondent.

Before BUCKLEY, GINSBURG, and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge: The Patent Office Professional Association (a union) petitions for

review of an order of the Federal Labor Relations Authority declaring non-negotiable certain

bargaining proposals that it submitted to the Patent and Trademark Office. Because the Authority

properlydetermined that theUnion's proposals were neither negotiable "procedures" nor "appropriate

arrangements" under the Federal Service Labor-Management Relations Statute, 5 U.S.C. §§ 7105-

7135, we deny the petition.

I. Background

The proposals at issue in this case concern patent classifiers, who are technically trained

professional employees with two broad areas of responsibility. First, patent classifiers create and

revise the Patent Classification System (PCS), whereby patents are categorized according to the

technologytheydescribe. Second, patent classifiers oversee the actual classification of patents within

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the PCS.

In the latter capacity, a patent classifier initially assigns a patent, based upon its description,

to the patent examiner responsible for the classification in which it appearsto belong. If the examiner

thinks the patent belongs in a different classification, then he or she refers it to the patent examiner

responsible for that classification. If the two examiners disagree about the correct classification, then

the classification issue goes back to the patent classifier with whom it started. If both the examiners

are in that classifier's grouping or "post," then he or she simply decides the matter; otherwise that

patent classifier must consult with the classifier for the other post involved. The latter classifier can

send the patent on to a third classifier (etc.), creating the potentialfor three or more classifiers having

to reach agreement upon the proper classification of a particular patent.

The PTO uses a number of objective criteria for evaluating a patent classifier's job

performance. For example, a classifier's success in revising and expanding the PCS is measured in

part by the amount ofstaff time used on the project. Performance in actual classification is assessed

in part upon the basis of errors madeassignmentsthat later prove incorrectmeasured both on an

absolute scale and as a percentage ofthe classifier'ssubmissions. Classification work is also evaluated

based upon the amount of time the classifier spends per classification error corrected and per

classification dispute resolved.

Some ofthese criteria look only at the accuracy ofthe classifier's own work, while others also

reflect his or her success in "supervis[ing] and check[ing] the work of others" and "consult[ing and]

cooperat[ing] with examiners and other classifiers." Thus, the classifier who makes the initial

assignment of a patent is held accountable (in the evaluation process) for the total amount of staff

time spent classifying that patentincluding time spent resolving any disputes arising out of that

assignmenteven though other classifiers and examiners over whom the classifier has no authority

may become involved in the matter before the patent is finally classified.

In 1990, when the PTO notified the Union that it planned to revise its performance appraisal

plan for patent classifiers, see 5 U.S.C. § 4302 (requiring performance appraisalsystems), the Union

submitted its own proposals. When the PTO refused to negotiate over several of the proposals, the

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Union petitioned the Authority for review pursuant to 5 U.S.C. § 7105(a)(2)(E) (directing the

Authority to "resolve issuesrelating to the duty to bargain in good faith"). The Authority determined

that some of the proposals were negotiable, but that three were not. Patent Office Professional

Association and U.S. Department of Commerce Patent and Trademark Office, 48 F.L.R.A. 129

(1993) (POPA II); cf. id. at 166 (Member Armendariz dissenting re Proposals 2 and 7). The Union

now seeks review of the Authority's adverse rulings.

We will overturn the Authority's decision only if it is "arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); see Bureau of Alcohol,

Tobacco and Firearms v. FLRA, 464 U.S. 89, 97 (1983) ("the Authority is entitled to considerable

deference when it exercises its special function of applying the general provisions of the [Statute] to

the complexities of federal labor relations"). More particularly, we approach our task mindful that

the "Congress has specifically entrusted the Authority with the responsibility to define the proper

subjects for collective bargaining, drawing upon its expertise and understanding of the special needs

of public sector labor relations." Library of Congress v. FLRA, 699 F.2d 1280, 1289 (D.C. Cir.

1983).

II. Analysis

In general, employees covered by the Federal Service Labor-Management Relations Statute

have the right "to engage in collective bargaining with respect to conditions of employment." 5

U.S.C. § 7102(2). Section 7106, however, excludes various "management rights" from the realm of

negotiation. That ambidextrous provision, on the one hand, makes non-negotiable any proposal that

would "affect the authority of any management official" to direct and to assign work to employees,

5 U.S.C. § 7106(a)(1)-(2), including the right to set substantive standards, see National Treasury

Employees Union v. FLRA, 691 F.2d 553 (D.C. Cir. 1982); on the other hand, it protects the

employees' right to negotiate over the "procedures which management officials of the agency will

observe in exercising any authority under thissection," 5 U.S.C. § 7106(b)(2), and over "appropriate

arrangements for employees adversely affected by the exercise of [such] authority." 5 U.S.C. §

7106(b)(3); see Dept. of Veterans Affairs v. FLRA, 33 F.3d 1391, 1394 (D.C. Cir. 1994)

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(distinguishing between"management's nonnegotiable substantive authority" and "properly negotiable

procedural matters"); National Ass'n of Government Employees, Local R14-87 and Kansas Army

National Guard, 21 F.L.R.A. 24 (1986) (hereinafter KANG ) (setting out balancing test whereby

FLRA weighs practical effects of proposal and approves proposals that do not "excessively" limit

management rights).

In this case, the Union does not dispute that the proposals at issue implicate management

rights under § 7106(a). Therefore each proposal must be either a "procedure" under § 7106(b)(2)

or an "appropriate arrangement" under § 7106(b)(3) to be negotiable under the Statute.

A. Proposal No. 1

It shall be unreasonable to adversely evaluate a patent classifier for failure to meet a

particular performance standard if meeting the performance standard is dependent

upon the action of another employee over whom the classifier has no control.

The Union contendsthat this proposal would simply confine evaluation proceduresto events

under the classifier's control and thereby insure that no classifier is held responsible for the

performance of another employee. The Union claims it is negotiable either as a procedure or as an

appropriate arrangement.

The Authority, however, determined that the proposal was not a mere procedure because it

"would limit management's ability to hold classifiers accountable for their performance in situations

where the performance of a particular job requirement involvesthe coordination ofthe work of other

employees." POPA II at 135. (Recall that a patent can pass through a number of hands before it is

finally classified, but the time of all concerned is "charged," for evaluation purposes, to the original

classifier.) The Authority concluded that the proposal, and particularly the phrase "no control" at the

end of the proposal, could be read to insulate a patent classifier from evaluation insofar as the

performance of his or her work depended in part upon the efforts of any other employee. The effect

of the proposal would then be significantly to alter the scope of the work for which a patent classifier

is held responsible, not simply the procedure by which the PTO monitors his or her performance.

The Authority's conclusion is far from arbitrary or capricious. For the Authority must pass

upon the proposal in its full breadth, without engrafting upon it any limiting construction. See

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Department of Defense, Army-Air Force Exchange Service v. FLRA, 659 F.2d 1140, 1146 n.32

(1981) ("The Authority may not approve a proposal not presently consistent with law by invoking

the theory that the proposal willsubsequently be rendered legally acceptable ... by the parties"). So

read, the Union's proposal can reasonably be understood to prevent the PTO from holding a patent

classifier accountable for his or her ability to facilitate and expedite the work of other patent

classifiers and of patent examiners over whom the classifier has no supervisory authority. See

National Fed'n of Fed. Employees and U.S. Dep't of Veterans Affairs, 46 F.L.R.A. 1170 (1993)

(finding proposalrequiring allowance to be made for "factors beyond the employee's control" "would

require the Agency to change or adjust its performance expectations in light of the specific factors

and, thereby, constitutes a substantive limitation on the Agency's ability to determine the content of

the standards"), review denied, Department of Veterans Affairs v. FLRA, 33 F.3d 1391, 1394 (D.C.

Cir. 1994). The Authority was therefore justified in concluding that under the reservation of

management rights in § 7106(a)(2), the PTO may not be required to bargain over Proposal No. 1.

The Union also argues, however, that the present decision isinconsistent with the Authority's

earlier decision in Patent Office Professional Ass'n and Patent and Trademark Office, 25 F.L.R.A.

384 (1987) (POPA I ). That case involved patent examiners rather than classifiers. The Authority

held negotiable a proposal that would have declared it "unreasonable to adversely evaluate an

examiner for failure to meet a particular timelinessstandard ... [when] completion is dependent upon

the action of another employee over whom the examiner has no control." There is an important

distinction between the two cases, however. A patent examiner has no control over, and is less

affected by, the work of other employees; he or she is simply not required to coordinate the work

of others. A patent classifier, in contrast, is expected to resolve disputes between examiners and to

work out classification disputes with other classifiers whose work he or she does not supervise;

indeed that is an important part of the job. Therefore, the present proposal, unlike the proposal in

POPA I, could effectively prevent the PTO from evaluating how wellsome of its employees perform

one of their major responsibilities.

In the alternative, the Union argues that Proposal No. 1 is negotiable as an "appropriate

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arrangement" under the balancing test of the KANG decision, i.e., that it would be of substantial

benefit to employees while imposing only a minimal burden upon management. The Authority, on

the other hand, maintains that the proposal could place a substantial burden upon the exercise of

management's authority: The PTO must be able to evaluate a patent classifier upon the basis of how

quickly and accurately he or she classifies patents and resolves classification disputes; and such an

evaluation necessarily reflectsin part the ability ofthe patent classifier to expedite the work of others.

The Authority seems reasonably to have concluded that any benefit that would accrue to

patent classifiers from the implementation of the proposal would be outweighed by the proposal's

effect upon the ability of the PTO to hold classifiers accountable for their work. Because the Union

presents us with no reason to think that conclusion arbitrary or capricious, we must uphold it. See

Library of Congress, 699 F.2d at 1289 (Authority better suited than court to balance practical effect

of proposal in workplace).

B. Proposal No. 2

Any classification practice or procedure which isset forth in [one of three listed PCS

manuals] shall not be considered an error unless the employee was given timely

written notice of a change in the practice or procedure.

The Union contends that its Proposal No. 2 would help a patent classifier to know what is to

be done in any given situation. According to the Union, it would not require that all procedures be

specified in writing, but it would insulate a classifier from adverse evaluation insofar as he or she

followed a written procedure.

The Authority, however, agreed with the PTO that this proposal would limit in two ways

management's ability to direct employees. First, it would make it difficult for the PTO to supplement

a practice or procedure as soon as a novel problem arises, i.e., without taking the time necessary to

revise a written manual. Second, it would prevent the PTO from holding a classifier accountable in

a situation calling for the exercise of professional judgment, i.e., where the manuals are incomplete

or contradictory or where application of a rule in a particular situation to which it nominally applies

would be inappropriate. See POPA II, 48 F.L.R.A. at 141.

Aproposalthat would require an agencymerelyto provide its employees with documentation

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relating to the exercise of a management right, and would not place a substantive limitation upon the

exercise of that right, is generally negotiable. See National Treasury Employees Union and U.S.

Department of Health and Human Services, Social Security Administration, Office of Hearings and

Appeals, 47 F.L.R.A. 705 (1993). The Authority reasonably concluded, however, that Proposal No.

2 runs afoul of this general rule by foreclosing upon management's ability to evaluate and to take

corrective action against a classifier for his or her handling of a situation covered in a manual, even

where some other authoritya written or an oraldirective, a conflicting provision in another manual,

or even common sensedictates otherwise. POPA II, 48 F.L.R.A. at 141. The proposal would

effectively require that the PTO's manuals cover each situation a patent classifier may face, regardless

whether the situation was reasonably foreseeable. This would intrude substantially upon

management's abilityto direct employees and to assign themwork requiring the exercise ofjudgment.

Indeed, the result could be similar to what British labor unions achieve by "working to rule," namely

the tangle that inevitably occurs when a bureaucracy is bound and gagged with red tapeno matter

that the tape is of its own making.

The Union raises two other arguments in support of Proposal No. 2. Having failed to raise

them before the agency, however, it cannot prevail with them here. See 5 U.S.C. § 7123(c) ("No

objection that has not been urged before the Authority ... shall be considered by the court").

Nor does the Union give us cause to upset the Authority's conclusion that Proposal No. 2 is

not an "appropriate arrangement." Granted, an employee would be better off under a scheme that

offers a safe harbor if he or she sails strictly by the book. The only question is whether the Authority

was unreasonable in concluding that the proposal fails the balancing test of KANG because "it does

not permit consideration ofthe extent to which a reasonablycompetent professionalshould recognize

that a different choice of practice or procedure is called for." POPA II, 48 F.L.R.A. at 146. We think

it eminently reasonable to suppose that binding management to the black letter ofits manualsin every

situation would excessively interfere with its ability to set performance standards for employees to

meet and procedures for employees to follow.

C. Proposal No. 7

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Management shall identify ... the circumstances under which it will consider that a

[Patent] Classifier has committed an error in the assignment of an application even

though (1) an examiner has, or would have, accepted the application for examination

purposes from the [ ] Classifier, or (2) the [ ] Classifier relied on an informal

understanding between patent examiners which was contrary to written definitions or

classification rules. If [these circumstances are not identified], then classifiers shall

be entitled to assume that the two identified situations are not errors for evaluation

purposes.

The Union claims this proposal was designed to "elicit specific direction" in controversial

classifications by allowing the classifier safely to assume that his or her classification was proper if

either the examiner to whomhe orshe referred the assignment accepted it or the classifier wasrelying

upon an "informal understanding" between examiners asto the proper classification. Therefore, says

the Union, the proposal would require only that the PTO give classifiers notice of any change from

established classification procedures.

According to the Authority, however, the proposal is not so sharply drawn; it would, in

essence, require the PTO "to anticipate at the time it prepares the performance plan all possible

circumstancesin which a classifier's assignment of an application would be erroneous." POPA II, 48

F.L.R.A. at 164. Thus, like Proposal No. 2, Proposal No. 7 would effectively prohibit the agency

from holding a classifier accountable for his or her performance in any situation that the PTO had not

anticipated and addressed in writing.

There is apparently significant room for disagreement over the proper classification of many

a patent; as with all but the few entirely mechanical aspects of life, the exercise of judgment is

required. The Authority concluded that to take away the PTO's right to treat adversely a classifier

who fails to exercise good judgment, so as to minimize error and expense, in what are by definition

the most difficult cases, would invade the territory protected by § 7106(a) under the heading of

management rights. For the same reason, the Authority also concluded that Proposal No. 7 is not

negotiable as an "appropriate arrangement." The Union has asserted the contrary, but does not

thereby establish that either conclusion involves an impermissible construction of the terms of the

statute or an arbitrary or capricious exercise of the Authority's expertise.

III. Conclusion

The FLRA reasonably determined that the three proposals at issue in this case are not

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negotiable, either as procedures or as appropriate arrangements within the meaning of 5 U.S.C. §

7106. The petition for review is therefore

Denied.

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