# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 19, 2012 Decided June 1, 2012

No. 11-1281

U NITED S TATES D EPARTMENT OF THE A IR F ORCE

, L UKE A IR
F ORCE B ASE

, A RIZONA

, P ETITIONER

v.

F EDERAL L ABOR R ELATIONS A UTHORITY

, R ESPONDENT

A MERICAN F EDERATION OF G OVERNMENT E MPLOYEES

, L OCAL 1547,

I NTERVENOR

On Petition for Review of a Final Decision of the Federal Labor Relations Authority

Robert D. Kamenshine , Attorney, U.S. Department of Justice, argued the cause for petitioner. With him on the

briefs were Tony West , Assistant Attorney General, and Thomas M. Bondy

.

David Shewchuk , Deputy Solicitor, Federal Labor Relations Authority, argued the cause for respondent. On the

brief was Rosa M. Koppel , Solicitor.2

David A. Borer and Judith Galat were on the brief for intervenor American Federation of Government Employees, Local 1547, in support of respondent.

Before: S ENTELLE

, Chief Judge , B ROWN and G RIFFITH

, Circuit Judges

.

Opinion for the Court filed by Circuit Judge B ROWN

.

B ROWN

, Circuit Judge : In 2006, the United States Department of the Air Force announced it would conduct a reduction-in-force (“RIF”) at Luke Air Force Base in Arizona. In response, the union represen ting employees at the Base—

the American Federation of Government Employees, Local 1547 (the “Union”)—made seve ral proposals about how the

RIF should be conducted and asked the Air Force to enter into negotiations. The Air Force claimed it had no duty to negotiate over three of the Union’s proposals, prompting the Union to appeal to the Federal Labor Relations Authority. The Authority determined the Ai r Force had an obligation to negotiate over two of the three disputed proposals. See Am. Fed’n of Gov’t Emp., Local 1547 v. U.S. Dep’t of the Air Force, Luke Air Force Base , 65 F.L.R.A. 911, 917 (2011) (“ Luke Air Force Base ”).

The Air Force now petitions for review of the Authority’s unfavorable rulings.

I

Federal employees have the right “to engage in collective bargaining with respect to conditions of employment,” 5 U.S.C. § 7102(2), but that right only extends so far. Federal agencies have no duty to negotiate over a proposal that is “inconsistent with any Federa l law or any Government-wide3

rule or regulation.” Id. § 7117(a)(1). They also have no duty to negotiate over a proposal that interferes with their authority “to hire, assign, direct, layoff, [or] retain employees,” id. § 7106(a)(2)(A), unless the propo sal concerns “appropriate arrangements for employees adversely affected by the exercise” of that management authority, id. § 7106(b)(3).

The two proposals at issue here—Proposals 1 and 2—

related to the RIF’s effect on veterans recruitment appointments (“VRAs”). Rooted in the Federal policy “to promote the maximum of empl oyment and job advancement opportunities within the Federa l Government for qualified covered veterans,” 38 U.S.C. § 4214(a)(1), VRAs are “excepted appointments, made without competition, to positions [at Federal agencies] otherwise in the competitive service.” 5 C.F.R. § 307.103. These excepted appointments are not permanent; “[u]pon satisfa ctory completion of 2 years of substantially continuous service, [an] incumbent’s VRA

must be converted to a career or career conditional appointment.” Id.

The Air Force’s planned RIF only eliminated competitive service positions, which mean t VRA appointees who had not been converted to competitiv e service employees would not have been affected. Although the Union represented both VRA appointees and competitive service employees, it did

not want to insulate the VRA appointees from the RIF because, in many cases, the appointees had accrued less service time than competitive service employees in comparable positions. To address that issue, the Union offered Proposal 1: if the Air Force determined a competitive service employee would be displaced by the RIF, and a VRA appointee with less seniority occupied a similar position, the

Air Force should convert that VRA appointee to a term appointee whose term expired before the RIF took effect.4

Luke Air Force Base , 65 F.L.R.A. at 911. And to address its

related concern that the Air Fo rce would fill “vacant positions with excepted service VRA employees” before the RIF was completed, the Union offered Proposal 2: the Air Force should only fill a new position with a VRA appointee if the position would not be affected by the ongoing RIF. Id . at
914

.

The Air Force claimed it had no obligation to negotiate over either Proposal because each interfered with its management authority. Id. at 912, 914. It further claimed it had no obligation to negotiate over Proposal 1 because the Proposal conflicted with various federal regulations relating to RIFs and term employment. Id. at 912. The Authority disagreed on all counts. It found Proposal 1 did not contravene the RIF and term-employment regulations and did not infringe on the Air Force’s authority to assign or layoff employees. Id. at 912–14. And though it was willing to “assum[e]” that Proposal 2 inte rfered with the Air Force’s right to hire employees, the Authority found the Proposal negotiable under 5 U.S.C. § 7106(b)(3) because it concerned “appropriate arrangements for em ployees adversely affected” by the Air Force’s exercise of its hiring authority. Id. at 914.

II

In its petition, the Air Force contends, for the first time, that it had no duty to negotia te over Proposals 1 and 2 because they conflicted with federal st atutes and regulations governing VRAs. It also argues the Author ity erred when it determined that Proposals 1 and 2 did not improperly infringe on management authority. We find the first claim waived and

the second insufficient to overcome our deferential standard

of review. See Nat’l Fed’n of Fed. Emps. v. FLRA , 745 F.2d 705, 707–08 (D.C. Cir. 1984) (holding an Authority ruling5

may only be set aside “if arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”).

A

The Air Force identifies two alleged conflicts between the Proposals and the laws cr eating the VRA program. It claims Proposal 1 conflicted with 5 C.F.R. § 307.103 because it required the conversion of VRA appointees to career appointees before “completion of 2 years of substantially

continuous service.” And it clai ms Proposal 2 conflicted with 38 U.S.C. § 4214(a)(1) because its restriction on hiring VRA appointees did not “promote the maximum of employment and job advancement opportun ities within the Federal Government for qualified covered veterans.”

The Air Force concedes it did not present either of these objections to the Authority. Petitioner’s Br. 13, 23. Accordingly, we may only consider them if the Air Force’s failure to raise them before the Authority “is excused because of extraordinary circumstances .” 5 U.S.C. § 7123(c).

Our precedents demonstrat e that “extraordinary circumstances” truly are extraordinary. With certain inapplicable exceptions, we have only found they exist when the newly raised arguments im plicate constitutional issues like “separation of powers,” U.S. Dep’t of the Air Force v.

FLRA , 648 F.3d 841, 845 (D.C. Cir. 2011), or “sovereign immunity,” U.S. Dep’t of the Army v. FLRA , 56 F.3d 273, 275 (D.C. Cir. 1995). And we ha ve consistently found they do not exist when, as here, the new argument is based on statutory inconsistency alone. See U.S. Dep’t of the Air Force , 648 F.3d at 845; U.S. Dep’t of Air Force v. FLRA , 949 F.2d 1169, 1174–75 (D.C. Cir. 1991).6

The Air Force asserts that th is is not a t ypical case of statutory inconsistency because its new objections protect the “employment rights under the VRA program of third-party veterans who were not participan ts in the proceedings before the [Authority].” Petitioner’s Br. 24. It submits this Court

has never held that a “wai ver by a government agency deprives the Court of jurisdic tion to consider . . . an abrogation of third-party statut ory rights.” Petitioner’s Reply

Br. 8.

That distinction is not dispositive here. The “extraordinary circumstances” requirement “was designed to ensure that the Authority’s exper tise be used to dispose of all arguments relating to cases with in its jurisdiction,” and an “agency’s legal strategy or, ar guably, deficient lawyering by agency counsel cannot provide a waiver from this clear congressional directive.” U.S. Dep’t of Housing & Urban

Dev. v. FLRA , 964 F.2d 1, 5 (D.C. Cir. 1992). Moreover,

strict enforcement of the waiv er statute promotes “agency autonomy and judicial efficiency.” U.S. Dep’t of the Air

Force , 648 F.3d at 846; see also Marine Mammal Conservancy, Inc. v. Dep’t of Agriculture , 134 F.3d 409, 414 (D.C. Cir. 1998) (observing th at the policies underlying similar waiver provisions in clude “giving agencies the opportunity to correct their own errors, . . . compiling a record adequate for judicial review, [and] promoting judicial efficiency”). It may be tempting to ignore these abstract principles out of concern for the rights of our veterans, but we cannot selectively enforce the waiver statute based on whose rights are at stake. Nor can we simply decline to enforce the

waiver statute whenever third- party rights are implicated, for doing so would make “extraord inary circumstances” quite ordinary. We therefore find the Air Force’s claims of conflict

waived.7

B

The Air Force’s alternative ar gument is that the Authority acted arbitrarily when it found the Proposals did not interfere with management authority. Th at claim falls short because

“we can discern a reasoned path from the facts and considerations before the [agency] to the decision it reached.” Neighborhood TV Co., Inc. v. FCC , 742 F.2d 629, 639 (D.C. Cir. 1984).

The Air Force objects to the Authority’s determination that Proposal 1 did not interfere with its right to “layoff” employees. The Authority has explained that “management’s right to layoff employees incl udes the right to conduct a RIF

and to exercise its discre tion in determining which positions

will be abolished and retained in a RIF.” Nat’l Treasury Emps. Union v. U.S. Dep’t of Treasury , 60 FLRA 219, 222 (Sept. 3, 2004) (emphasis a dded). Here, the Authority reasonably found that Proposal 1 did not restrict the Air Force’s right to conduct a RI F, nor limit the Air Force’s discretion in deciding which positions to cut, because the Proposal only took effect afte r the Air Force had decided which positions it wished to eliminate. See Luke Air Force

Base , 65 F.L.R.A. at 913–14.

In the Air Force’s telling, Proposal 1 was no different than an earlier Union propos al the Authority found nonnegotiable. See Am. Fed’n of Gov’t Emps., Local 1547 v.

Luke Air Force Base , 64 F.L.R.A. 813 (May 27, 2010). That

is not so. The Union’s earlier proposal barred the Air Force from conducting a RIF until a ll VRA appointees had accrued two years of service and had been converted to competitive service employees. See id. at 816. That proposal plainly

interfered with the Air Force’ s right “to conduct a RIF” by dictating when the Air Force could begin implementing its8

RIF plan. Nat’l Treasury Emps. Union v. United States Dep’t of Treasury , 60 FLRA at 222. Proposal 1 had no such effect. 1

With regard to Proposal 2, th e Authority dete rmined that even if the Proposal interfered with the Air Fo rce’s right to hire employees, the Air Force nonetheless had a duty to negotiate because the Proposal concerned “appropriate arrangements for employees adversely affected” by the Air Force’s exercise of that right. 5 U.S.C. § 7106(b)(3). The Authority arrived at that conc lusion by applying a two-part test, under which a proposal concerns “appropriate arrangements” if it was “intended as an arrangement,” and was “appropriate because it d[id] not excessively interfere with the exercise of management’s rights.” Luke Air Force

Base , 65 F.L.R.A. at 915 (empha sis added). The Authority found Proposal 2 satisfied th e “arrangement” requirement because the RIF would have had “a severe, negative impact” on terminated employees, and the Proposal was sufficiently tailored “because it benefit[ ted] employees who could be affected by the RIF.” Id. And the Authority found the Proposal satisfied the “appropria teness” requirement because the benefits to employees outweighed the burden on the Air Force’s hiring authority. See id.

The Air Force only challenges the Authority’s appropriateness finding. It argu es that when the Authority weighed the benefits to employees against the burden on management, it failed to account for “the vital and independent statutory interest in preser ving hiring . . . [of]

1 The Air Force also argues Propo sal 1 was non-negotiable because the Proposal interfered with its right to “retain . . . employees,” but the Air Force waived that argument by failing to present it to the Authority. See Luke Air Force Base , 65 F.L.R.A. at 912 (listing Air Force’s objections to Proposal 1).9

veterans.” Petitioner’s Br. 31. While it is true the Authority did not explicitly discuss the interests of veterans in its appropriateness analysis, its d ecision explained why the RIF’s impact on veterans might not be that severe. The Authority observed that the Proposal’s “hiring limitation only applie[d] to RIF-affected positions”; that the Air Force could still “fill vacancies during the RIF from other sources,” including veterans not on VRAs; and that the “hiring restriction [wa]s only effective until the termina tion of the RIF,” meaning the Air Force could always cut the RIF short if it felt that the

effect on veterans was too dramatic. Luke Air Force Base , 65 F.L.R.A. at 915. Taken together, these justifications for the appropriateness finding adequately addressed the Air Force’s

concerns about veterans—concerns , it is worth noting, that the Air Force never raised explicitly in its submissions to the Authority.

III

Because the Air Force’s obj ections to the Authority’s ruling are either waived or una vailing, the petition for review

is

Denied

.