# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 11, 2005 Decided April 15, 2005

No. 04-1157

N ATIONAL T

REASURY E

MPLOYEES U

NION

, P ETITIONER

v.

F EDERAL L

ABOR R ELATIONS A

UTHORITY

, R ESPONDENT

On Petition for Review of an Order of the Federal Labor Relations Authority

Timothy B. Hannapel argued the cause for pet i tioner. On

the br iefs were G regory O'Duden, Larry J. Adkins, a nd Caryl

L. Casden

.

David M. Shewchuk , Attorney, Federal Labor Relations Authority, argued the cause for

res pondent. With him on the brief were D avid M. Smith

, Solicitor, and William R. Tobey , Deputy Solicitor.

Before: E

DWARDS , S ENTELLE and R OBERTS

, Circuit Judges

.

Opinion for the Court filed by Circuit Judge S ENTELLE

.

Concurring opinion filed by Circuit Judge R OBERTS

.2

S ENTELLE

, Circuit Ju d ge : National Treasury Employees

Union (“NTEU” o r “the Union”) petitions for review of a decision of the Federal Labor Relations Authority (“F LRA” or

“the Authority”), wherein the Authority held that the United

States Customs Service (“Customs” or “the Serv ice”) is not requir ed to negotiate over a Union proposal concerning the

storage of handguns. Although the Authority correctly ruled

that the proposal came within the exemption of negoti ability for

“internal security practices” created by 5 U.S.C. § 7106(a)(1),

the Authority erred in failing to follow its own prec edent in determining whether the bargaining propo s al constituted an “appropri ate arrangement” subjecting it to bargainability under

5 U.S.C. § 7106(b)(3). Therefore, for the reasons more fully set out below, we grant the petition for review.

I. Background

Petitioner Union represents Customs Service employees
who, as a cond ition of their employment as law enforcement officers, are required to carry firearms. Customs employees

have carried firearms as a part of their duties for many years,

and over the years Customs has promulgated a number of

internal security practic es relating to the use and storage of those

firearms. In 1986, Customs Directive No. 45-07 (Feb. 10, 1986) required that “[e]ach Customs officer carrying a firearm in the performance of official d u ties is responsible for the safe storage, operation, general care and maintenance of the firearm.” In 1996, Customs issued a “Firearms and Use of Force Handbook,”

that again emphasized

the individual employee’s responsibility

for securing his firearm: “Employees are expected to ex ercise good judgment in providing adequate security to all Serviceissued and Service-au

thorized, personally-owned firearms.” Finally, in 2000, Customs issued two policy state ments on the subject of firearms. On March 3, 2000, the Acting Assistant

Commissioner of Customs, Office of Field Operations, issued a3

1 At the time that

this dispute began, the Service was part of
the United Sates Department of the Treasury. It was transferred to the
Department of Homeland Security pursuant to the Homeland Security

Act of 2002, Pub. L. No. 107-296, c odified at 6 U.S.C. § 203(1). Neither party suggests that this transfer affects any issue before this

Court. memorandum autho rizing customs agents, at their election, to

carry their firearms twenty-four hours a day. Prior to that time,

Customs had directed employees to store t heir firearms overnight in the Customs facilities “where appropri ate security

is available,” or to “

go directly home from work” in order to

secure their firearms at home. Under the new twenty-four-hour

carry policy, the agency in effect decreased the burden on employees by removing the requirement of travel directly to a n d

f rom home and work and giving them greater freedom of

movement, subject to such rest raints as avoiding the consumption of alcohol while carrying firearms.

On December 28, 2000, the Under Secretary of Treasury for

Enforcement 1 issue d a memorandum on the subject “Implementation of Treasury Firear m Safety and Security Policy,” which detailed safety and security responsi bilities required of firearms-carrying personnel. Among other things,

the m emorandum required that the firearm be placed in a secure

l ocked container in a government office, or, if stored in a residence, that the employee install a safety lock device and guard against theft or unauthorized use of the firearm.

In respon s e to the December 28, 2000 memorandum, the

Union introduced a p roposal that would have required Customs to provide secure on-site overnight firearms storage:

Cus toms will ensure that either a lockbox or other secure

and locked container such as a safe, file cabin et, or desk is4

available at all government offices where armed employees

work or are assigned. Routine overnight storage of a firearm in a government office is permitted.

NTEU v . US Dep’t of the Treasury, US Customs Service , 59

F.L.R.A. 749 (2004 ). Customs declared the proposal nonnegotiable. The Union filed a petition for review with the Authority. The Authority held that the proposal interfered with

Customs’s right to determi ne its “internal security practices”

under 5 U.S.C. § 7106(a)(1) and also that th e proposal did not constitute a “procedure” or an “appropriate arrangement” under

5 U.S.C. §§ 7106(b)(2) & (3). Together, these holdings

constitut e the Authority’s ruling that the proposal is nonnegotiable. The Union petitioned us for review.

II. Analysis

The Federal Service Labor Manageme nt Relations statute,

5 U.S.C. §§ 7101-7135 (“the statute”), governs relations

betwee n federal agency employers and federal employees. The

statute imp oses a general duty upon the parties to bargain in good faith, 5 U.S.C. § 7117, subject to specified statutory exceptions. The Authority ruled that the proposal before it came

within one of those

exceptions. Specifically, the Authority

relied upon the “management rights” section of the s tatute, which protects the authority of management officials and agencies, inter alia

, “to determi ne the . . . internal security practices of the agency.”

5 U.S.C. § 7106(a)(1). However, the

management rights section limits that protection by providing

that “[n]othing in this section shall preclude any agency an d any

la bor organization from negotiating . . . procedures which

management officials of the agency will observe in exercising

any authority under

this section; or . . . appropriate arrangements for employees adversely affected by the exercise of any

authorit y under this section by such management officials.” 55

U. S.C. § 7106(b)(2) & (3). The Authority went on to rule that

the proposal be fore it did not constitute a “procedure” exempting the proposal from the management rights negotiability preclusion under § 7106(b)(2), or an “appropriate arrangement” exempting the proposal under § 7106(b)(3).

W e review decisions of the Authority unde r the

Administrative Procedure Act (“APA”), and will set such a
decision aside when it is “arbitrar y, capricious, an abuse of discretion, or otherwise not in accordance w i th law[.]” Bureau of Alcohol, Tobacco and Firearms v. FLRA

, 464 U.S. 89, 97 n.7
(1983). We will apply that standard of review to each step of the Authority’s decision.

First, the Authority concluded that the Service had

established a link between its objective o f securing its operations

and i t s policy or practices, and that the proposal conflicted with

its policy or practices. Therefore, the Authority held that the proposal affected manage ment’s right to determine its internal security practices under § 7106(a)(1). 59 F.L.R.A. at 753-54 (citing Fraternal Order of Police, Lodge 1-F

, 51 F.L.R.A. 143,
145 (1995) (“

Lodge 1-F ”)).

Second, the Authority concluded that the proposa l required adoption of security measures to ensure a specific l evel of security. Therefore, the Authority held that the proposal was not

a negotiable pr ocedure under Section 7106(b)(2). I d. at 754 (citing NFFE Local 1482 , 44 F.L.R.A. 637, 648 (1992)).

With respect to Sections 7106(a)(1) and 7106(b)(2), the Authority’s decision quite clearly was not arbitrary or capricious. Storage of firearms at Service facilities certainly

i m plicates management’s right to determine its internal security practices. 5 U.S.C. § 7106(a)(1). Likewise, because the proposal would directly interfere with man agement’s right to6

determine its internal security practices by forcing the A gency

to commit to a change in its curren t security practices, the proposal is simply not a negotiable procedure. 5 U.S.C. § 7106(b)(2); AFGE v. Air Force Logistics Command

, 2 F.L.R.A.
604, 612-13 (1980), aff’d sub nom. Dep’t of Defense v. FLRA

, 659 F.2d 1140, 1159 (D.C. Cir. 1981).

However, the Authority an d the court still are left with the question of wh

ether the proposal constituted a negotiable “appropriate arrangement” under § 7106(b)(3) . The Authority’s

conclusion on tha t subject is not so unassailable as the first two. Authority precedent establish e d nearly twenty years ago holds

that:

In this and future cas e s where the Authority addresses a management allegation that a union proposal o f appropriate

arrangements is nonnegotiable because it conf licts with

management rights described in sectio n 7106(a) or (b)(1),

the Authority will consider whether such an arrangement is appropriate for n

e gotiation within the meaning of section 7106(b)(3) or, whether it is inappropr iate b ecause it excessively interferes with the exercise of management’s rights

.

Nat’l Assoc. of Gov’t Employees, Local R14-87 v. Kansas Army

Nat’l Guard

, 21 F.L.R.A. 24, 31 (1986) (“ KANG ”) (emphasis
added). More specifically, the K ANG test asks first what “the

nature and extent of the impact exper ienced by adversely

affected employees

. . . is.” 21 F.L.R.A. at 32. Otherwise put,

the Authority determines “ what conditions of employment are

affected and to what degree.” I d. If the effect is there so as to raise the opportunity of an appropriate arrangement, the Authority then asks “what is the precise limitation imposed by

the proposed arrangement on manageme nt’s exercise of its

reserved discretion or to what extent is m a nagerial judgment7

preserved?” I

d. In the present context, to apply the K ANG test the Authority had to ascertain how the agency exercised its right

to determin e its internal security practices so that the Authority

could then determine whether the proposal “excessively interfere[d]”

with the agency’s exercise of its right. In the

decision before us, the Authority did not follow its own precedent established in KANG

. S e e, e.g.
, A ssociation of

Civilian Technicians v. FLRA , 370 F.3d 1214, 1221 (D.C. Cir.
2004) (vacating a n Authority decision and directing application

of the KANG test on rehearing).

It is well establis hed that, despite the narrow scope of court

review of FLRA decisions, any agency’s “unexplained departure

from prior agency determinations” is inherently arbitrary and capri cious in violation of APA § 706(2)(A). A merican

Federation of Government Employees, Local 2761 v. FLRA

, 866 F.2d 1443, 1446 (D.C. Cir. 1989). The Authority’s failure to

follow its own we ll-established precedent without explanation

is the very essence of arbitrariness. Therefore, we must set aside

its determination that the proposal did not c o nstitute an appropriate arrangement and return t he question to the Authority

for further proceedings consistent with this opinion and Authority precedent.

Under KANG

, the Authority mu st conduct a so-called “excessively interferes with” inquiry “by weighing the practical

needs of the em

ployees and managers.” 21 F.L.R.A. at 31-32.

It did not do so on the present recor d. The Authority’s path to error was set when it erroneously found that “the agency has

exercised its right to determine its internal security by having employees who are trained and qualified to carry firearms maintain possession and access to their weapons when off duty.”

5 9 F.L.R.A. at 754. That finding was crucial to the Authority’s

conclusion that the proposal “would operate so as to completely preclude the agency from exercising that right.” In fact, the8

record did not support the Authority’s description of the agency’s security policy. On the record, the agency apparently,

in many locations, permit ted on-site storage of firearms of offduty officers, and, indeed, provided facilities for such storage.

We are not suggesting that the Authori ty must rule that the

agency must make such arrangements in al l locations, but only

that the Authori

ty must consider the evidence in the record

before it, conduct the ba l anced inquiry required by the KANG

line of precedent, and then reach its conclusion as to w hether the

pr oposal “excessively interferes” with the agency’s internal security practices.

On the record before it and this Court, the Authority has not

established that the proposal would “negate and nullify” the agency’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 o f carrying out agency int ernal security policies already in place at

some locations. Whether this constitutes an appropriate arrangement is a question for the Authority to answer in the first instance, but it must do so on findin gs based on the record before it, and by a process consistent with its own precedent.

III. Conclusion

For the reasons set forth above, we hold that the petition for

review is allowed. The Authority’s order is vacated and remanded for further proceedings consistent with this opinion.R OBER TS

, Circuit Judge , concur ring: I agre e with the court

that the Authority was not arbitra ry and capricious in determining that the Union’s proposal implicated manage ment’s ri ght to

determine interna

l securit y pr actice s, 5 U.S.C. § 7106(a)(1), and

was not a neg otiable

“procedure,” id. at § 7106(b)(2). The court

goes on to fault the Authority for finding that the proposal was

not an “appropriate arrang ement,” id. at § 71 0 6(b)(3) , becau se th e Authority considered tha t question in light of the inc orrec t premise that agency

policy require d all

employees to take

their

we ap on s h om e w he n o ff

-d ut y.

The court is correct that this is not the a gency policy , but it

is arguable that the Authority appreciated this fact. See

, e.g. , 59

F.L.R.A. at 753 (“The Agency has determined . . . t

hat by not allowing storag e during

off-dut y pe riods at those facilities which

lack adequate

security , it is reducing the ri skof theft and furthering its asserted intern al se curity practice determinations.” ) (emphas is added) ; id. at 755 (concluding that the

Union’s proposal “effectively overrid[es] the Agency ’s internal security determination regarding those empl oyee s working at facilities and locati

ons ill-eq uipped an d unsuitabl e for off-d uty
storage of firearms ”) (emphasis added). At the same time, it is

difficul t to fault the court’s reading, given tha t the agenc

y its elf

to ld the Authority below that ag ency “ policy and prac

tice . . .

never authorized routine overn ight s torage of issued firear ms in employ ees’ work locations.” Agency Statement of Position at 4.

Given all this, it is r easonable to read the Authority ’s analy sis as the co

urt does, and to find

that analysis wanting . On remand, the Authority must consider whethe r the Union’s proposal is an “appropri ate arrangement” in light of a c orrect
view of the agency ’s policy. I join the cour

t ’s opinion on the understanding that nothin g in it pr ecludes the Au thority from concluding on rem and that the proposal to provide “a lockbox

or other secure and lo cked co ntain er” for overn igh t s torage of

firear ms “at all

government offices where a rmed employees

work or are a ssigned ,” 59 F.L .R.A. at 74 9 (empha sis added ), complete ly

overrides or excessively

interf ere s with a policy of2

allowi ng overnight storage only when the agency

determines security at a par

tic ular location is adequate. Cf. id. at 755 n.5 (“The fact that the Agency provide s overnig

ht storag e at some
locations also constitutes a determination by mana gement that security at those lo cations is safe and effective — itself an

exercis e of

the right to determine internal security practices.”).