United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 8, 2011 Decided March 16, 2012

No. 11-1019

UNITED STATES DEPARTMENT OF COMMERCE,

PATENT AND TRADEMARK OFFICE,

PETITIONER

v.

FEDERAL LABOR RELATIONS AUTHORITY,

RESPONDENT

PATENT OFFICE PROFESSIONAL ASSOCIATION,

INTERVENOR

On Petition for Review of a Final Decision

 of the Federal Labor Relations Authority

Howard S. Scher, Attorney, United States Department of

Justice, argued the cause for the petitioner. Tony West, Assistant

Attorney General, and William Kanter and Thomas M. Bondy,

Attorneys, were on brief. 

Rosa M. Koppel, Solicitor, Federal Labor Relations

Authority, argued the cause for the respondent. Joyce G.

Friedman, Attorney, Federal Labor Relations Authority, entered

an appearance.

Richard J. Hirn argued the cause for intervenor Patent

Office Professional Association in support of the respondent. 
2

Gregory O’Duden, Larry J. Adkins, Peyton H.N.

Lawrimore, Andres M. Grajales and Teresa J. Idris were on

brief for the amici curiae, American Federation of Government

Employees et al. in support of the respondent.

Before: HENDERSON, ROGERS and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

Opinion concurring in the judgment filed by Circuit Judge

ROGERS.

KAREN LECRAFT HENDERSON, Circuit Judge: The Patent

and Trademark Office of the United States Department of

Commerce (PTO or Agency) seeks review of a decision of the

Federal Labor Relations Authority (FLRA or Authority)

upholding an arbitrator’s award in favor of the Patent Office

Professional Association (POPA or Union). U.S. Dep’t of

Commerce Patent & Trademark Office, 65 F.L.R.A. 290 (2010)

(PTO II). The arbitrator concluded PTO committed an unfair

labor practice in violation of the Federal Service

Labor-Management Relations Statute (FSLMRS or Statute), 5

U.S.C. § 7116(a)(1) and (5), when it repudiated a provision in an

agreement requiring that it make an annual request of the Office

of Personnel Management (OPM) to increase PTO’s special

schedule pay rates and, if OPM refuses, to discuss “substantially

equivalent alternatives” with POPA. Arbitration Decision in re

Patent Office Prof’l Ass’n v. U.S. Dep’t of Commerce, Patent &

Trademark Office, FMCS Case No. 04-01463-3 (Arbitral Award

of Arbitrator Arrigo) (July 25, 2006) (Award II). In particular,

PTO challenges the Authority’s determination that the provision

constitutes an “appropriate arrangement” under 5 U.S.C.

§ 7106(b)(3). We grant PTO’s petition on the ground that,

under the collateral estoppel doctrine, the Authority was bound

by its earlier decision concluding the provision did not constitute

an appropriate arrangement. See U.S. Dep’t of Commerce,

Patent & Trademark Office, 60 F.L.R.A. 839 (2005) (PTO I),
3

pet. for review dismissed, Patent Office Prof’l Ass’n v. FLRA,

180 F. App’x 176 (D.C. Cir. 2006).

I.

In 2000, PTO patent examiners’ wages, like those of most

executive branch employees, were determined pursuant to the

General Schedule (GS). Because it was experiencing problems

recruiting and retaining employees, PTO requested and obtained

OPM approval to pay employees special pay rates exceeding the

comparable GS rates by ten or fifteen per cent, depending on the

grade. Over time, however, special rates decrease in value

relative to the corresponding GS rates because, while both rates

receive annual general increases, only the latter include annual

locality increases. Accordingly, PTO and POPA negotiated the

following provision in an agreement effective January 2001:

The [PTO] shall request OPM approval for the next

five years to increase the special pay schedule so as to

maintain the 10% and 15% salary differentials relative

to the updated GS rates, in a manner consistent with

OPM regulations. If OPM refuses the request, the

Agency shall enter into discussions with POPA in

order to provide substantially equivalent alternatives.

Agreement on Initiatives for a New Millennium between [PTO

and POPA], § A.2 (JA 69) (Millennium Agreement).

In 2002, federal employees in the Washington, D.C. region

received a 3.6% general wage increase and a 1.17% locality pay

increase. Pursuant to section A.2 of the Millennium Agreement,

in February 2002, PTO requested that OPM increase the special

pay rate by 1.17% to maintain the ten and fifteen per cent

differentials, subsequently lowering the request to 1%. OPM

denied PTO’s request on the ground PTO’s filings did not show

it was “experiencing or . . . likely to experience significant

handicaps in recruiting or retaining patent professionals.” 

Award II at 11 (internal quotations omitted). OPM
4

recommended that PTO explore “the strategic use of other

compensation flexibilities to address targeted recruitment and

retention problems.” Id. Accordingly, PTO entered into

discussions with the Union regarding “substantially equivalent

alternatives” pursuant to the second sentence of section A.2.

When the discussions proved fruitless, the Union filed a

grievance, which was then submitted to arbitration.

The arbitrator concluded that PTO had violated section A.2

of the Millennium Agreement and ordered it to “engage in . . .

discussions [with POPA] in good faith with a sincere resolve to

find a way to make-up for the lost locality pay.” In re

Arbitration Between Patent & Trademark Office&Patent Office

Prof’l Ass’n, FMCS Case No. 04-00138 at 16 (Oct. 1, 2001)

(Arbitral Award of Arbitrator Evans) (Award I). In his order,

Arbitrator Evans “found that Section A.2 was intended to

address the adverse effect of special rate erosion that would

occur over time as non-special rate employees received locality

pay increases.” PTO I, 60 F.L.R.A. at 842 (citing Award I at

12).

On review, the Authority set aside the arbitral award as

violating section 7106 of the FSLMRS. The Statute generally

imposes on a federal agency a duty to bargain in good faith with

a public employee union over conditions of employment but

section 7106(a) exempts from the duty certain “management

rights,” including the right to retain its employees. See U.S.

Dep’t of the Treasury v. FLRA, ___ F.3d ___, ___; No. 11-

1102, slip op. at 4 (D.C. Cir. Feb. 7, 2012); 5 U.S.C.

§ 7106(a)(2)(A). Nonetheless, an agency must bargain over a

proposal—including one that affects a management right—if the

proposal constitutes an “ ‘appropriate arrangement[] for

employees adversely affected’ by the exercise of management

rights.” Nat’l Ass’n of Gov’t Emps., Inc. v. FLRA, 179 F.3d 946,

948 (D.C. Cir. 1999) (quoting 5 U.S.C. § 7106(b)(3)). In PTO

I, the Authority concluded section A.2 affected PTO’s
5

management right to retain employees and was not an

“appropriate arrangement” within the meaning of 5 U.S.C.

§ 7106(b)(3) because, “as interpreted and enforced by the

Arbitrator,” it sought to “ameliorate[] adverse effects” that result

not from the exercise of a management right but from “the

operation of law, specifically, the fact that under 5 C.F.R.

§ 531.606, special rate employees are not permitted to receive

locality pay adjustments.” 60 F.L.R.A. at 842. Thus, the

Authority concluded section A.2 was not a statutory

“arrangement” at all and set aside the arbitral award as “contrary

to management’s right to retain employees under

§ 7106(a)(2)(A).” Id. at 842, 843. In making this determination,

the Authority specifically rejected as “unsupported” POPA’s

claim that section A.2 was intended as an arrangement for

employees adversely affected by PTO’s decision “to eliminate

paper files and to include a customer service element in the

performance plans.”1

In 2003, the locality pay rate for the Washington, D.C.

region again increased by 1.17%. PTO determined it could not

certify to OPM that a special pay rate increase was “critical to

the mission of the Agency” and, accordingly, notified POPA it

would not submit a request that OPM increase the rate. PTO II,

1

According to the FLRA, POPA asserted in PTO I

that elimination of the paper files adversely affects

employees by requiring them to spend virtually their entire

work day tethered to a computer screen[,] that computer

images of patents are inferior to paper copies, that there are

problems with conducting key word searches of old patents

on computers, and that computer patents do not include

examiners’ notes that were in paper patents and which

facilitated the patent search for examiners.

60 F.L.R.A. at 842 (quotation marks omitted; brackets in original). 
6

65 F.L.R.A. at 291. POPA again filed a grievance, which was

again submitted to arbitration. 

Arbitrator Arrigo found section A.2 affected the Agency’s

management right to retain employees because “ ‘the essential

facts and circumstances’ ” were “ ‘substantially identical’ ” to

PTO I. Id. at 292 (quoting Award II at 24). He further

concluded that section A.2 was an “appropriate arrangement”

because “ ‘the entirety of [§] A,’ including § A.2, ‘was

negotiated as a quid pro quo for the elimination of paper patents

and the addition of customer service duties for employees[,]’

two changes desired by the Agency and opposed by the Union.”

Id. (quoting Award II at 24) (alteration in original). Arbitrator

Arrigo specifically found that “the linkage between a special pay

schedule and the paper file and customer service issues was

established ‘in every document concerning the discussions

between the parties,’ ” id. (quoting Award II at 25), and the

special pay rate provisions were “a ‘balm’ to ‘ameliorate the

adverse effects upon employees for the Union’s acceding to the

Agency’s desire to exercise its management rights regarding the

elimination of paper files . . . and employees being assigned

additional duties’ and were enforceable as appropriate

arrangements under § 7106(b)(3).” Id. (quoting Award II at

25-26). He further determined PTO’s breach of both sentences

of section A.2—by declining to submit a request to OPM, then

failing to enter discussions with POPA—“ ‘went to the heart of

the parties’ agreement’ ” because it was a “ ‘critical part’ of § A,

which was, in turn, necessary to [POPA’s] acceptance of the rest

of the [Millennium Agreement].” Id. (quoting Award II at 27).

Accordingly, Arbitrator Arrigo concluded PTO repudiated the

agreement in violation of 5 U.S.C. § 7116(a)(1) and (5).2

 He

2

The two subsections provide:

(a) For the purpose of this chapter, it shall be an unfair labor

practice for an agency—
7

decided that “the appropriate remedy was to ‘require the Agency

to fulfill its obligations under the agreement and to “enter

discussions with [the Union] in order to provide substantially

equivalent alternatives” to the erosion of the agreed-upon pay

differentials set forth in the agreement,’ ” to include “interest

‘on any money the employees might receive pursuant to the

discussions envisioned in [§] A.2.’ ” Id. at 292-93 (quoting

Award II at 29-30 (quoting § A.2)). 

PTO excepted to the award and the FLRA sustained it. The

FLRA first upheld Arbitrator Arrigo’s unchallenged finding that

section A.2 affected management’s right to retain employees.

The Authority further affirmed his determination that section

A.2 was an arrangement, relying on his finding “that the entire

subject of special pay was negotiated ‘to provide a “balm” to the

Union which would ameliorate the adverse effects upon

employees’ of ‘the Agency’s desire to exercise its management

rights regarding the elimination of paper files.’ ” 65 F.L.R.A. at

295 (quoting Award II at 25-26). Finally, the Authority

considered whether the arrangement was “appropriate” under

the “abrogation” standard, which it recently re-adopted in U.S.

Environmental Protection Agency, 65 F.L.R.A. 113 (2010) (U.S.

EPA).3

 Under the abrogation standard, the Authority assesses

(1) to interfere with, restrain, or coerce any employee

in the exercise by the employee of any right under

this chapter; 

. . . [or]

(5) to refuse to consult or negotiate in good faith with

a labor organization as required by this chapter; . . . .

5 U.S.C. § 7116(a)(1), (5).

3

Before its decision in U.S. EPA, the Authority reviewed arbitral

awards using its “excessive interference standard” under which the

enforcement of a contract provision in the award is appropriate unless
8

“whether the arbitration award ‘precludes [the] agency from

exercising’ the affected management right”—if it does not, the

Authority will “find that the arrangement is appropriate within

the meaning of § 7106(b)(3).” PTO II, 65 F.L.R.A. at 296

(quoting Dep’t of the Treasury, U.S. Customs Serv., 37 F.L.R.A.

309, 314 (1990)) (alteration in PTO II). In PTO II, the

Authority decided section A.2 satisfied the standard because

PTO “provided no basis for finding that the award precludes the

Agency from exercising its right to retain employees.” Id. at

296. Having approved section A.2, the Authority upheld

Arbitrator Arrigo’s finding that PTO repudiated the first

sentence of section A.2 in failing to submit a request to OPM

and thereby committed an unfair labor practice in violation of

7116(a)(1) and (5) of the Statute. Asserting that Arbitrator

Arrigo’s “finding of repudiation of the first sentence of § A.2

provides a separate and independent basis for his finding of a

violation of § 7116(a)(1) and (5),” the Authority found it

“unnecessary to determine whether the Arbitrator erroneously

found a repudiation of the second sentence of § A.2.” 65

F.L.R.A. at 297. PTO filed a timely notice of appeal.

II.

PTO contends, inter alia, that collateral estoppel precluded

the Authority from finding section A.2 constituted an

it “excessively interferes with management’s rights.” U.S. Dep’t of

Justice, Fed. Bureau of Prisons, 58 F.L.R.A. 109, 111 (2002). In U.S.

EPA, the Authority re-adopted the abrogation standard, which it had

previously applied to arbitral awards from 1990 until 2002. See Dep’t

of the Treasury, U.S. Customs Serv., 37 F.L.R.A. 309, 313-14 (1990)

(replacing excessive interference standard with abrogation standard);

Fed. Bureau of Prisons, supra (reinstating excessive interference

standard). 
9

“arrangement.” We agree.4

 

Under FLRA precedent, collateral estoppel, or issue

preclusion, requires a showing of five elements:

Before the doctrine of collateral estoppel can be

applied, it must be demonstrated that: (1) the same

issue was involved in both cases; (2) that issue was

litigated in the first case; (3) resolving it was necessary

to the decision in the first case; (4) the decision in the

first case, on the issue to be precluded, was final; and

(5) the party attempting to raise the issue in the second

case was fully represented in the first case. 

U.S. Dep’t of Energy W. Area Power Admin., Golden, Colo., 56

F.L.R.A. 9, 11 (2000) (citing U.S. Dep’t of the Air Force, Scott

Air Force Base, Ill., 35 F.L.R.A. 978, 982 (1990)). If all five

elements are met, the Authority is bound by its findings in the

earlier case. See Scott Air Force Base, 35 F.L.R.A. at 981. All

five are met here.

Regarding the first and second elements, in each proceeding

the parties litigated the issue whether section A.2 constituted an

appropriate arrangement or, more fundamentally, whether it

constituted an arrangement at all. In Award I, Arbitrator Evans

“found that Section A.2 was intended to address the adverse

effect of special rate erosion that would occur over time as

non-special rate employees received locality pay increases.”

PTO I, 60 F.L.R.A. at 842 (citing Award I at 12). The Authority

upheld this finding of intent but concluded that section A.2 was

not—indeed, could not—be an “arrangement” within the

meaning of section 7106(b)(3) because it “ameliorate[d] adverse

4

In light of our disposition, we do not address PTO’s alternative

grounds for review, including its challenge to the Authority’s adoption

of the abrogation standard. See supra p. 7 note 3 & accompanying

text.
10

effects that result from the operation of law, not the exercise of

a management right.” Id. 

In Award II, Arbitrator Arrigo addressed the same issue,

reaching a contrary conclusion. Recognizing that “ ‘the

essential facts and circumstances’ in the case before him were

‘substantially identical’ to those found by the Authority in PTO

I,” he therefore “found, in accordance with that decision, that

§ A.2 of the [Millennium Agreement] affected management’s

right to retain employees.” PTO II, 65 F.L.R.A. at 292 (quoting

Award II at 24-25). He nonetheless found that section A.2 was

indeed an arrangement because “ ‘the entirety of [§] A,’

including § A.2, ‘was negotiated as a quid pro quo for the

elimination of paper patents and the addition of customer service

duties for employees’[—]two changes desired by the Agency

and opposed by the Union.” Id. (quoting Award II at 24)

(bracketed material deleted).5

 In PTO II, the Authority upheld

this determination notwithstanding it had rejected the very same

finding in PTO I “as unsupported.” 60 F.L.R.A. at 842-43. In

short, despite contrary outcomes, the two FLRA decisions

involved the same issue—namely, whether section A.2

constitutes an (appropriate) arrangement. 

The FLRA contends the two cases did not involve the same

issue because they involved different arbitrators interpreting

5

The “entirety” of section A covers the “Uniform Special Pay

Schedule,” including the directive in section A.1 that PTO submit an

initial request for special rates in 2001 as well as the language in

section A.2 governing the request procedure for subsequent years. In

PTO I, the Authority stated: “Special rates are, by law, a means to

ameliorate recruitment and retention problems.” (citing 5 C.F.R.

§ 530.303(a) (“OPM may increase the minimum rates otherwise

payable under the pay schedules . . . to the extent it considers

necessary to overcome existing or likely significant handicaps in the

recruitment or retention of well-qualified personnel . . . .”)). 60

F.L.R.A. at 841.
11

section A.2 in different awards under different circumstances.

According to the Authority, one arbitrator’s interpretation of a

contract provision should not be binding on a subsequent

arbitrator’s interpretation in a different proceeding. But it is not

Arbitrator Evans’s interpretation in Award I that is binding

here—rather, it is the Authority’s legal conclusion in PTO I that

section A.2 does not qualify as an appropriate arrangement

because it “ameliorates adverse effects that result from the

operation of law, not the exercise of a management right.” 60

F.L.R.A. at 842; see Scott Air Force Base, 35 F.L.R.A. at 981

(on exceptions from arbitrator decision, “Authority is bound by

its finding” in previous decision reviewing administrative law

judge’s unfair labor practice decision); Resp’t’s Br. 21 (“The

Authority’s decision in PTO I set aside the First Award as

contrary to law . . . .”). The force of the Authority’s conclusion

applies no less to the facts in PTO II as to those in PTO I. 

The Authority further attempts to distinguish the cases by

asserting that PTO I involved a violation of section A.2’s second

sentence while PTO II found a breach only of its first sentence

only. PTO I, however, made no distinction between the intent

behind the first and the second sentences, stating: “Section A.2,

as interpreted and enforced by the Arbitrator, ameliorates

adverse effects that result from the operation of law, not the

exercise of a management right.” 60 F.L.R.A. at 842. 

Moreover, we do not see how the two intertwined sentences can

be viewed in isolation from each other (or assigned different

purposes) inasmuch as they operate together, in sequence, to

offset the annual pay erosion resulting from “the fact that under

5 C.F.R. § 531.606, special rate employees are not permitted to

receive locality pay adjustments,” 60 F.L.R.A. at 842; see also

Award I at 12 (“Section A.2 set up a two-track process to deal

with the potential of locality pay erosion. The first track is set

forth in the first sentence of Section A.2. It requires PTO to

submit a request to OPM for a special pay rate adjustment to

keep-up with the locality pay awarded in the Washington, DC
12

metropolitan area to GS employees. If that failed, which

happened here, the parties ultimately agreed to go down a

second track to find an alternative way to make-up for locality

pay erosion (for 5 years).”). Thus, the “arrangement” issue was

both involved and litigated in each proceeding.6 

The third through fifth collateral estoppel elements are

plainly satisfied: In PTO I, the resolution of the “arrangement”

issue was necessary in order to decide whether section A.2 was

an appropriate arrangement so as to be enforceable under section

7106(b)(3) notwithstanding it affected the management right to

retain employees; PTO I was a final FLRA decision which was

judicially unreviewable, see Patent Office Prof’l Ass’n v. FLRA,

180 F. App’x 176 (D.C. Cir. 2006) (dismissing petition for

review for lack of jurisdiction because “FLRA decision

reviewing an arbitration award is statutorily foreclosed ‘unless

the order involves an unfair labor practice under section

711[6].’ ” (quoting 5 U.S.C. § 7123(a)(1))); see also Scott Air

Force Base, 35 F.L.R.A. at 983 (“[U]nless and until a Federal

court of appeals denies enforcement to a decision of the

Authority, that decision must be treated as a final adjudicatory

action.”); and POPA and PTO were fully represented by counsel

throughout each proceeding. 

Finally, we reject Intervenor POPA’s claim that the court

lacks jurisdiction to address the collateral estoppel claim

because PTO failed to raise it before the Authority. See 5

U.S.C. 7123(c) (“No objection that has not been urged before

6

POPA argues the appropriate arrangement issue was not

“litigated” in the first proceeding, asserting: “In PTO I, Arbitrator

Evans did not address the issue of whether the [Millennium

Agreement], or any part of it, was intended as an ‘appropriate

arrangement’ within the meaning of § 7106(b)(3). It simply was not

an issue in the first arbitration case.” Intervenor’s Br. 24-25 (emphasis

in original). The issue was thoroughly addressed, however, on review

before the Authority.
13

the Authority, or its designee, shall be considered by the court,

unless the failure or neglect to urge the objection is excused

because of extraordinary circumstances.”). Unlike our

concurring colleague, we do not find it “questionable” whether

PTO adequately raised the objection below. See Concurrence

at 2-3. While it did not use the magic words “collateral

estoppel,” PTO nonetheless argued the substance of a collateral

estoppel defense in its exceptions to Award II. There, it cited

PTO I as “binding Authority precedent,” in which “[t]he

Authority has already determined that Section (A)(2) of the

Millennium Agreement is not an arrangement” because it

“ ‘ameliorates adverse effects that result from the operation of

law, not the exercise of a management right.’ ” Agency’s

Exceptions to Arbitrator’s Award at 14, PTO II (Aug. 28, 2006)

(JA 14) (quoting PTO I, 60 F.L.R.A. at 842). The Authority

understood this argument to implicate collateral estoppel. See

PTO II, 65 F.L.R.A. at 295 n.5 (rejecting argument “Arbitrator

was collaterally estopped from finding § A.2 to be an

appropriate arrangement” “[t]o the extent that the Agency’s

exceptions can be construed as [so] arguing”); id. at 301

(Member Beck, dissenting in part) (“[T]he arbitral proceedings

and the Agency’s exceptions are rife with collateral estoppel

implications. Both parties and the Arbitrator recognized the

implications of the Authority’s prior decision and the Agency

addressed the impact of that decision throughout its exceptions.”

(internal citations omitted)). We do as well.

For the foregoing reasons, we conclude that POPA was

estopped from arguing section A.2 is an appropriate

arrangement intended to lessen the adverse effects from the

elimination of paper files and addition of customer service
14

duties and that the Authority should have so held.7

 Accordingly,

we grant PTO’s petition for review.

So ordered.

7

We see no reason to deviate, as our concurring colleague

suggests, from the general rule that “a valid and final adjudicative

determination by an administrative tribunal has the same effects under

the rules of res judicata, subject to the same exceptions and

qualifications, as a judgment of a court.” Restatement (Second) of

Judgments § 83(1). It is true that that the rules are “ ‘applied more

flexibly to administrative adjudications than to judicial proceedings,’ ”

Concurrence at 8-9 (quoting Clark-Cowlitz Joint Operating Agency v.

FERC, 826 F.2d 1074, 1080-81 n.5 (D.C. Cir. 1987) (en banc))—to

take into account that “an ambiguous or broadly worded statute may

admit of more than one interpretation.” Id. at 1080-81 n.5 —but the

rules nonetheless are applied. And this case involves no

administrative peculiarity requiring that they be modified. Nor does

this case suffer from the flaw—fatal in Clark-Cowlitz that the party

asserting preclusion (a losing power plant license applicant) was not

a losing party in the earlier proceeding on which preclusion was

premised. Rather, the applicant and the Commission had been “fellow

travelers” on the prevailing side of the earlier proceeding. Id. at 1080.

Accordingly, the purpose underlying preclusion—which is “meant to

provide an affirmative defense that one party to a prior proceeding

may raise against another party that took an adverse position in that

proceeding” and “to prevent parties from rearguing issues they have

already lost,” id. at 1080 n.5—would not have been served. See id. 

Here, by contrast, the POPA sought to relitigate in PTO II the issue it

had lost in PTO I. We thus face the classic issue preclusion scenario. 
ROGERS, Circuit Judge, concurring in the judgment: I write

separately regarding the distinction between the collateral

estoppel doctrine and the Administrative Procedure Act’s

requirement, as part of the prohibition on arbitrary or capricious

agency action, that if an agency departs from its precedent it

must provide a reasoned explanation for its decision to do so. 

Traditionally, precedent binds adjudicators and collateral

estoppel precludes parties, yet the Authority conflates the two

doctrines. Because the Authority has not provided a reasoned

explanation for its departure from its precedent in U.S. Dep’t of

Commerce, Patent & Trademark Office, 60 F.L.R.A. 839 (2005)

(“PTO I”), pet. for review dismissed, Patent Office Prof’l Ass’n

v. FLRA, 180 F. App’x 176 (D.C. Cir. 2006), I would grant the

petition for review without reaching the question of whether the

Authority was arbitrary and capricious in its application of its

own collateral estoppel doctrine.

I.

The Patent and Trademark Office (“the PTO”) makes two

distinct, but related, claims regarding the Authority’s treatment

of its precedent. The court’s review of both is to determine

whether the Authority’s order was “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.” 5

U.S.C. § 7123(c) (incorporating 5 U.S.C. § 7106's standards);

Nat’l Treasury Emps. Union v. FLRA, 399 F.3d 334, 337 (D.C.

Cir. 2005). First, the PTO contends that the Authority

unlawfully departed from its precedent in PTO I without

providing a reasoned explanation. The Authority “must either

follow its own precedent or ‘provide a reasoned explanation for’

its decision to depart from that precedent.” Nat’l Fed’n of Fed.

Emps. v. FLRA, 412 F.3d 119, 124 (D.C. Cir. 2005) (quoting

Local 32, Am. Fed’n of Gov’t Emps. v. FLRA, 774 F.2d 498, 502

(D.C. Cir. 1985)). Second, the PTO contends that the Authority

erred in applying its collateral estoppel doctrine, which it first

adopted in Dep’t of the Air Force, Scott Air Force Base, Ill., 35
2

F.L.R.A. 978, 982–83 (1990). Here, the PTO observes that the

Authority accepted the PTO’s “binding precedent” argument as

a collateral estoppel argument. The second contention, however,

only needs to be considered if the court rules in favor of the

Authority as to the first. If the Authority did not provide a

reasoned explanation for its departure from its precedent, our

inquiry ends. If it did, then the court must determine if the

Authority was arbitrary and capricious in applying its collateral

estoppel doctrine.

A.

The court grants the petition on the basis of collateral

estoppel. See Op. at 10–12. There are good reasons not to

address this argument.

 

First, it is questionable whether the PTO sufficiently raised

the issue in its exceptions to the PTO II arbitrator’s award, and

thus whether the court has jurisdiction to address this argument. 

“No objection that has not been urged before the Authority, or

its designee, shall be considered by the court, unless the failure

or neglect to urge the objection is excused because of

extraordinary circumstances.” 5 U.S.C. § 7123(c). The PTO

referred to PTO I as “binding precedent” in its exceptions but

did not mention “collateral estoppel” or “issue preclusion.” 

Agency’s Exceptions to Arbitrator’s Award at 14, PTO II (Aug.

28, 2006). The Authority’s collateral estoppel doctrine, which

it seemingly applies to itself, see infra Part I.B.,involves a fivepart test, see Scott Air Force Base, 35 F.L.R.A. at 982–83, no

factor of which was expressly mentioned in PTO’s exceptions. 

A “generalized objection” that “implicitly” raises arguments is

insufficient to satisfy the jurisdictional requirement. See U.S.

Dep’t of Commerce, Nat’l Oceanic & Atmospheric Admin. v.

NLRB, 7 F.3d 243, 245 (D.C. Cir. 1993); see Nat’l Ass’n of

Gov’t Emps., Local F5-136 v. FLRA, 363 F.3d 468, 479–80
3

(D.C. Cir. 2004) (construing NLRB and FLRA jurisdictional

statutes identically). 

Although the dissenting Member in PTO II would have

ruled that the Authority was bound by collateral estoppel to

apply its decision in PTO I, he noted only that the PTO’s

exceptions were “rife with collateral estoppel implications.” 

PTO II, 65 F.L.R.A. at 301 (Member Beck, dissenting)

(emphasis added). The majority’s discussion appears only in a

brief footnote, dismissing the claim “[t]o the extent that the

[PTO]’s exceptions can be construed as arguing” collateral

estoppel. Id. at 295 n.5 (emphasis added). Even though the

Authority may have addressed the issue, “[s]ection 7123(c)

requires a party to present its own views to the Authority in

order to preserve a claim for judicial review.” U.S. Dep’t of the

Treasury v. FLRA, __ F.3d __, __; No. 11-1102, slip op. at 10

(D.C. Cir. Feb. 7, 2012) (internal quotation marks and citation

omitted) (emphasis in original). “Discussion of an issue by the

[Authority] does not necessarily prove compliance with section”

7123(c), and “the most delicate [§ 7123(c)] questions arise in

cases such as the one before us, where . . . the objection is not

unmistakable.” Local 900, Int’l Union of Elec., Radio & Mach.

Workers v. NLRB, 727 F.2d 1184, 1191, 1193 (D.C. Cir. 1984). 

The “delicate” nature of the issue, combined with the fact that it

is unnecessary to the disposition of this appeal, counsel against

deciding the question. 

Second, the Authority’s precedent describing its collateral

estoppel doctrine implies that the Authority itself can be

collaterally estopped in its own proceedings by its prior

decisions. In adopting the collateral estoppel doctrine in Scott

Air Force Base, the Authority spoke in terms of both “the party

[being] precluded,” and “the Authority [being] estopped,” 35

F.L.R.A. at 983; see also U.S. Dep’t of Energy W. Area Power

Admin., Golden, Colo., 56 F.L.R.A. 9, 9-12 (2000) (discussing
4

whether the administrative law judge was collaterally estopped). 

 To the extent the Authority suggested that collateral estoppel

applies to itself, however, the Authority misconstrues the

collateral estoppel doctrine. In Clark-Cowlitz Joint Operating

Agency v. FERC, 826 F.2d 1074 (D.C. Cir. 1987) (en banc), the

court explained the difference in considering whether the

Federal Energy Regulatory Commission (“FERC”) was

“precluded” from changing its statutory interpretation of a

provision that gave licensing preference to municipal, rather

than private, power plants, after the Eleventh Circuit had already

upheld its opposite interpretation: 

It is true as a general matter that preclusion principles

can apply to parties to administrative proceedings . . .

. The doctrine of preclusion is meant to prevent parties

from rearguing issues they have already lost. . . . It

was the decisionmaker, FERC, that changed its

position. Thus, to the extent preclusion analysis is

appropriate at all, it is applicable to the extent FERC

participated as a party before the Eleventh Circuit. 

Preclusion principles are meant to provide an

affirmative defense that one party to a prior proceeding

may raise against another party that took an adverse

position in that proceeding. 

Id. at 1080 n.5 (second emphasis in original); see also United

States v. Andrews, 479 F.3d 894, 900 (D.C. Cir. 2007) (stating

that collateral estoppel “requires that a party be estopped from

relitigating an identical issue previously decided.”) (emphasis

added);BLACK’S LAW DICTIONARY 298 (9th ed. 2009) (defining

collateral estoppel as “a doctrine barring a party from

relitigating an issue determined against that party in an earlier

action.”) (emphasis added).
5

To the extent collateral estoppel is relevant in the instant

case, it is not a question of whether the Authority is precluded

by its order as the decisionmaker in PTO I, it is instead whether

the Authority was arbitrary and capricious in not precluding the

Union from relitigating against the PTO an issue it had lost in

PTO I.

1

 Although the Authority, or arbitrators and

administrative law judges may reach an incorrect decision in

applying (or not applying) the collateral estoppel doctrine to

parties’ arguments, they, as adjudicators, are not themselves

“estopped” by prior decisions. Because “collateral estoppel . . .

[is an] affirmative defense[] that must be pleaded,” Rivet v.

Regions Bank of Louisiana, 522 U.S. 470, 476 (1998) (internal

quotation marks and citation omitted), or else is waived, see

Dep’t of Treasury v. FLRA, 762 F.2d 1119, 1121 (D.C. Cir.

1985), it is odd to speak of the Authority as being estopped in

its own proceedings. 

This is not to say that an agency cannot ever be precluded

or estopped in administrative proceedings. Instead, an agency

may be precluded, whether in an administrative adjudication or

in court, if it was in the position of a party in an earlier

adversary proceeding and attempts, as a party in a later

1

 In concluding that our precedent suggests the PTO’s

exceptions may not have sufficiently raised a collateral estoppel

argument, I suggest no deviation from the general rule that res judicata

(or claim preclusion) and collateral estoppel (or issue preclusion)

apply to final decisions of administrative tribunals. See Op. at 14 n.7. 

Had the Authority provided a reasoned explanation for departing from

its precedent, it would be necessary to decide whether the court has

jurisdiction and if so to address the merits of the collateral estoppel

argument. Furthermore, Clark-Cowlitz confirms that the Authority

misapplies the collateral estoppel doctrine to itself; but neither it nor

I suggest decisions of administrative agencies cannot have preclusive

effect. 
6

proceeding, to relitigate an issue. Cf. Graphic Commc’ns Int’l

Union, Local 554 v. Salem-Gravure Div. of World Color Press,

Inc., 843 F.2d 1490, 1493 (D.C. Cir. 1988); see also Drummond

v. Comm’r of Soc. Sec, 126 F.3d 837, 841 (6th Cir. 1997);

Medina v. INS, 993 F.2d 499, 503–04 (5th Cir. 1993); 18

CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL

PRACTICE AND PROCEDURE § 4475 (2d ed. 2002) (citing cases). 

Because the Authority’s order in PTO I was held to be

unappealable, see Patent Office Prof’l Ass’n v. FLRA, 180 F.

App’x 176 (D.C. Cir. 2006); 5 U.S.C. § 7123(a)(1), the

Authority was not a party in any proceeding to which issue

preclusion could apply to its PTO I order. The importance of

clarity and precision in distinguishing between precedent that

may bind an adjudicator (absent a reasoned explanation for

departure) and the effect of collateral estoppel on parties is

highlighted by the operation of statutes strictly limiting judicial

review of agency adjudications to those claims specifically

urged before the agency, as illustrated above. See, e.g., 5 U.S.C.

§ 7123(c) (governing judicial review of Authority orders); 29

U.S.C. § 160(e) (governing judicial review of National Labor

Relations Board orders); 15 U.S.C. § 717r(b) (governing judicial

review of Federal Energy Regulatory Commission orders). 

B.

 As the court recounts, see Op. at 4–5, in PTO I, the

Authority concluded that Section A.22

 of the parties’ agreement

2

 Section A.2 of the parties’ agreement provides:

The [PTO] shall request OPM approval for the next five years

to increase the special pay schedule so as to maintain the 10%

and 15% salary differentials relative to the updated GS rates,

in a manner consistent with OPM regulations. If OPM refuses

the request, the Agency shall enter into discussions with [the

Union] in order to provide substantially equivalent
7

of January 4, 2001, was not an “appropriate arrangement” under

5 U.S.C. § 7106(b)(3)3

 because it “ameliorates adverse effects

that result from the operation of law, not the exercise of a

management right.” PTO I, 60 F.L.R.A. at 842. In particular,

the Authority rejected the Union’s argument that Section A.2

was instead an “appropriate arrangement” in response to the

PTO’s elimination of paper patent files and inclusion of a

customer service element in performance plans. Id. To the

contrary, the Authority upheld in the instant case an arbitrator’s

conclusion that Section A.2 was an “appropriate arrangement”

aimed at ameliorating the effects of the elimination of paper

patent files and the introduction of customer service

requirements. See U.S. Dep’t of Commerce Patent &

Trademark Office, 65 F.L.R.A. 290, 295–96 (2010) (“PTO II”).

The Authority’s denial that it departed from its PTO I

precedent is unavailing. As the court explains, see Op. at 10–11,

the Authority relied on the proposition that different arbitrators

can interpret the same contract differently based on their being

“presented with different facts and arguments,” PTO II, 65

F.L.R.A. at 295, to suggest that there has been no departure from

precedent. This is plainly wrong. The Authority, not the

arbitrator, ruled in PTO I that Section A.2 was unlawful under

5 U.S.C. § 7106(b)(3). The Authority must, consistent with the

alternatives.

For purposes of the instant appeal there is no relevant distinction

between the first and second sentences. See Op. at 11–12.

3

 5 U.S.C.§ 7106, “Management rights,” provides in

subsection (b)(3): “Nothing in this section shall preclude any agency

and any labor organization from negotiating . . . (3) appropriate

arrangements for employees adversely affected by the exercise of any

authority under this section by such management officials.” 
8

Administrative Procedure Act’s requirements, squarely address

why this precedent should be changed: “[A]n agency changing

its course must supply a reasoned analysis indicating that prior

policies and standards are being deliberately changed, not

casually ignored, and if an agency glosses over or swerves from

prior precedents without discussion it may cross the line from

tolerably terse to intolerably mute.” W & M Props. of Conn.,

Inc. v. NLRB, 514 F.3d 1341, 1347 (D.C. Cir. 2008) (internal

quotation marks and citation omitted) (emphasis added). 

Because the Authority failed to provide a reasoned analysis for

departing from its precedent, I concur in the judgment granting

the petition for review.

II.

 

A final note regarding the Authority’s collateral estoppel

doctrine is in order. The Union as intervenor contends that

because PTO I was held unappealable, it was not collaterally

estopped by PTO I from arguing in the instant case that Section

A.2 was an “appropriate arrangement.” Because PTO I did not

involve review of an unfair labor practice arbitration, this court

lacked jurisdiction to review the Authority’s order. See Patent

Office Prof’l Ass’n, 180 F. App’x 176; 5 U.S.C. § 7123(a)(1).

As a general matter, collateral estoppel does not apply to

preclude relitigation of an issue when the earlier determination

was unappealable. See RESTATEMENT (SECOND) OF JUDGMENTS

§ 28 (1982). “The fact that an agency adjudication was

subjected to judicial review and was upheld is a factor that

supports giving it preclusive effect.” Id. § 83, cmt. c. The

purpose of this exception is to “ensure the quality of the initial

decision,” 18 CHARLES ALAN WRIGHT & ARTHUR R. MILLER,

FEDERAL PRACTICE AND PROCEDURE § 4421 (2d ed. 2002),

before binding future litigants to it. The court’s precedent is

clear that a party is not precluded, by an unappealable agency
9

determination, from litigating an issue in a later court

proceeding. See Sea-Land Serv., Inc. v. Dep’t of Transp., 137

F.3d 640, 648 (D.C. Cir. 1998); Alabama Mun. Distribs. Grp. v.

FERC, 312 F.3d 470, 473 (D.C. Cir. 2002). Although the court

has yet to decide whether this exception applies to prevent

preclusion in subsequent administrative proceedings, it has

emphasized that “administrative proceedings vary much more

widely than judicial proceedings” and thus “as a general matter

preclusion principles are to be applied more flexibly to

administrative adjudications than to judicial proceedings.” 

Clark-Cowlitz, 826 F.2d 1074, 1080–81 n.5; see also

RESTATEMENT (2D)JUDGMENTS § 83(1) & cmt. f (applying rules

and exceptions for judicial collateral estoppel, §§ 27-28, to

administrative collateral estoppel). 

In Scott Air Force Base, the Authority adopted its collateral

estoppel doctrine based on the requirements that “courts have

determined . . . must be satisfied.” 35 F.L.R.A. at 982. In so

doing the Authority had no occasion to determine whether the

general exception to collateral estoppel for unappealable

determinations would also apply to the Authority’s application

of the collateral estoppel doctrine; Scott Air Force Base

involved Authority review of unfair labor practice arbitrations,

see id. at 983, cases over which judicial review is available, see

5 U.S.C. § 7123(a)(1). Similarly, the Authority had no occasion

to consider whether other general exceptions to the doctrine

would apply in its proceedings, for example where there are

intervening changes in law, where factors relating to the

allocation of jurisdiction between two adjudicative bodies are

implicated, or where the burden of persuasion has shifted

between the parties in the subsequent action. See RESTATEMENT

(SECOND) OF JUDGMENTS § 28(1)-(5) (1982), see also id. § 83(1)

& cmt. f.
10

 The Union’s contention raises the appealability question

unaddressed by the Authority in Scott Air Force Base and

unanswered by this court’s precedent. The reason PTO I was

unappealable is, however, critical to whether the exception

applies. There is a “major distinction [] between decisions of a

sort that ordinarily cannot be appealed and decisions that are

ineligible for appeal only because of some special

circumstance.” 18A WRIGHT & MILLER § 4433. Preclusion is

denied to cases of the latter category, e.g., where a case becomes

moot pending an appeal. Id. On the other hand, “[d]ecisions of

a sort that ordinarily cannot be appealed may be surrounded by

alternative protections or special policies that support

preclusion.” Id. Such is the case here, where PTO I was not

made unappealable by special circumstances, but by Congress. 

In enacting 5 U.S.C. § 7123(a)(1), Congress was concerned with

aligning the scope of judicial review of private and public sector

arbitrations and “the conferees determined it would be

inappropriate for there to be subsequent review by the Court of

Appeals in such matters.” H.R. Conf. Rep. No. 95-1717, at 153

(1978), reprinted in 1978 U.S.C.C.A.N. 2860, at 2887 (1978);

see U.S. Dept Navy v. FLRA, 665 F.3d 1339, 1344 (D.C. Cir.

2012). 

Because Congress deemed the Authority qualified to

provide the final judgment on arbitration awards not involving

unfair labor practice allegations, the concern underlying the

general rule that only appealable decisions have preclusive

effects — i.e., that appellate review “ensure[s] the quality of the

initial decision,” 18 WRIGHT & MILLER, § 4421 — does not

apply. And so the Authority erred in failing to apply collateral

estoppel to the Union’s attempt to reargue that Section A.2 was

an “appropriate arrangement.” The broader question, whether

this and other exceptions to the collateral estoppel doctrine also

apply to agencies’ applications of the doctrine (as they do to

courts), remains to be decided another day.