# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 15, 2021 Decided August 2, 2022

No. 20

- 1400

N ATIONAL T REASURY E MPLOYEES U NION , P ETITIONER

v.

F EDERAL L ABOR R ELATIONS A UTHORITY , R ESPONDENT

O FFICE OF P ERSONNEL M ANAGEMENT AND U NITED S TATES D EPARTMENT OF A GRICULTURE , I NTERVENORS

Consolidated with 20

- 1402, 20

- 1403

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

Kathryn W. Bailey argued the cause for petitioners. With her on the briefs were Gregory O’ Duden

, Julie M. Wilson

, Jessica Horne
, David A. Borer, Andres M. Grajales

, Mark L. Vinson
, Judith E. Rivlin

, and Teague P. Paterson

.

Rebecca J. Osborne , Deputy Solicitor, Federal La bor Relations Authority, argued the cause for respondent. With her2

on the brief were Noah Peters , Solicitor, and Sarah C. Blackadar and Joshua D. Brown , Attorneys.

Joseph F. Busa , Attorney, U.S. Department of Justice, argued the cause for intervenors. With him on the brief were Brian M. Boynton , Acting Assistant Attorney General, and Melissa N. Patterson , Attorney.

Before: M ILLETT , K ATSAS , and R AO , Circuit Judges

. Opinion for the Court filed by Circuit Judge K ATSAS

.

K

ATSAS , Circuit Judge : The Federal Service Labor

Management Relations Statute grants the heads of federal agencies the right to review collective bargaining agreement s before they go into effect. O nce an agreeme nt passes such review, the Statute forbids enforcement of new regulations that conflict with the agreement. The question presented is whether the triggering of a continuance clause, which extends a contract pending negotiations of a successor agreement , permits a second round of agency

- head review and enforcement of conflicting r egulations that became effective after the original agreement . We hold that the operation of a continuance clause does not have either consequence

.

I

A

The Statute gives cert ain federal workers the right to engage in collective bargain ing with the ir employing agency. 5 U.S.C. § 7 102(2). Negotiations result in a collective bargaining agreement , which sets the terms and conditions of3

employment within the agency. Id. § 7114(a )(4). The Federal Labor Relations Authority administers the Statute

. Id. § 7105.

The Statute permits an agency head to review a collective bargaining agreement before it takes effect. 5 U.S.C. § 7114 (c) (1)

. The agency head must approve the agreement unless it conflict s with applicable federal law. Id. § 7114 (c)(2). If the agency he ad fails to act within 30 day s of the agreement’s execution

, the agreement takes effect and binds the parties for its duration

. Id. § 7114 (c)(3).

The Statute generally prohibits agencies from enforcing regulations that conflict with the terms of an existing collective bargaining agreement and that became effective after the agreement

. 5 U.S.C. § 7116(a)(7). Th is prohibition runs for the life of the agreement . But once a collective bargaining agreement expires, all r egulations issued since its effe ctive date become enforceable. Dep’t of Com. PTO & NTEU Chapter 245 , 65 F

. L

. R

. A

. 817, 819 (2011).

B

Collective bargaining agreements often specify what happens when the agreement nears its expiration and the parties have not negotiated a successor contra ct

. Relevant terms may include contin uance clauses and rollover clause s

.
A continuance clause allows either party to extend the duration of an expiring agreement until its successor is in place

. As the FLRA ha s explained

, a continuance clause provides that , “where renegotiations are requested, the existing agreement continues in force until the parties reach a new one.” Decision On Request For General Statement Of Policy Or Guidance , 71 F

. L

. R

. A

. 986
, 986 (2020) ( Guidance )

. The following langua ge is illustrative :4

If renegotiation of the Agreement is in process but not completed upon the expiration date of this Agreement, this Agreement will be extended until the renegotiations have been completed.

Collective Bargaining Agreement between the National Alliance of Postal and Federal Employees (NAPFE) and the Centers f or Disease Control and Prevention 42 , Art. 40.

A rollover clause

, by contrast, automatically renews a collective bargaining agreement when neither party w ishes to renegotiat e

. Such a clause typically specif ies a window for either party to give notice of its desire to re negotiate

. If neither party does , the agreement “ rolls over” for a new term. The following language is illustrative :
This Agreement will remain i n full force and effect for 6 years from its effective date and automatically renew itself from year to year thereafter. However, either party may give written or electronic notice of its intent to add, amend, reopen, modify or terminate existing Articles of the Agreement not more than 120 or less than 90 calendar days prior to the expiration date.

National Agreement between the American Federation of Government Employees (AFGE) and the Social Security Administration 33 , Art. 7, § 2

.

C

T he Department of Agriculture asked the FLRA for guidance on whether an agency head may review a collective5

bargaining agreement when it is extended under a continuance clause. The Authority concluded t hat agency heads may do so

. Guidance , 71 F

. L

. R

. A

. at 989

. It further concluded that , when an agreement is so extended, the employing agency may begin to enforce regulations that conflict with the agreement and that became effective after the agreement’s original effective date. Id

.
Member DuBester dissented. In his view, the Authority should not have given general guidance divorced from the precise language of specific continuance clauses. Id. at 990. Further, he concluded that the guidance conflict s with the Statute and with FLRA prec edent

. Id

. at 990

– 91

. Three unions petitioned for review of the FLRA ’s order

. The USDA, along with the Office of Personnel Management, intervened to defend the guidance. We have jurisdiction under 5 U.S.C. § 7 123 (a)

. See AFGE v. FLRA , 750 F.2d 143, 144 (D.C. Ci r. 1984).

II

We review FLRA orders under the standards set forth in the Administrative Procedure Act. 5 U.S.C. § 7123(c) . And we review FLRA interpretations of the Statute under the familiar Chevron framework. AFGE, AFL

- CIO, Local 2031 v. FLRA , 878 F.2d 460, 464 (D.C. Cir. 1989) (per curiam) ; see Chevron U

. S

. A

. Inc. v. NRDC , 467 U.S. 837 (1984). Thus, we defer if the Auth ority has reasonably construed an ambiguous provision, but we use all available tools of statutory construction to decide whether the provision is ambiguous. See id. at 842

– 43 & n.9

.6

I II

T he guidance at issue interpreted two provisions. First, the FLRA read section 7114 (c) to permit agency

- head review of a collective bargaining agreement when a party has extended it under a continuance clause . Second, the FLRA read section 7116 (a)(7) not to bar the employing agency from enforcing later

- in

- time regulations that conflict with the agreement. W e set aside both interpretations

.

A

We s tart with agency

- head review

. S ection 7114 (c) permits such review only “30 days from the date the agreement is executed.” 5 U.S.C. § 7114(c)(2). So the question is whether the extension of a n agreement under a continuance clause constitutes the execution of a new agreement

. T he Statute does not define “executed,” so that t erm presumably derives its meaning from background principles of contract law. See FAA v. Cooper , 566 U.S. 284, 292 (2012). Under those principles, a written agreement is executed when the parties complete the formalities necessary to bring the agreement into its final, legally enforceable form. See
, e.g. , Housing Auth

. of City of Dallas v. Killingsworth , 331 S.W.3d 806, 811 (Tex. Ct. App. 2011) ; Nielsen Constr. Co. v. Int ’ l Iron Prod s

. , 22 Cal. Rptr. 2d 497, 500 ( Ca l . Ct. App. 1993) ; Execute
, Black’s Law Dictionary (11th ed. 2019)

. The guidance posits the execution of a new agreement

—
a nd thus a second round of agency

- head review

— w henever a n existing agreement is extended under a continuance clause

. 71 F.L.R.A. at 988. But a continuance clause takes effect when either party seeks unilaterally to renegotiate the terms of an expiring agreement. It manifests the parties’ intent to be bound by the terms of their original agreement pending further7

negotiations. And it remains in effect only while the parties continue to disagree over the terms of any successor agreement. Thus, a continuance clause “simply lengthens the existing agreement for a new period of time.” Eastham v. Chesapeake Appalachia, LLC , 754 F.3d 356, 362 (6th Cir

. 2014) (applying Ohio law) (emphasis added) ; see also Nebo Ventures , LLC v. NovaPro Risk Sols.

, LP , 752 S.E.2d 18, 27 (Ga. Ct. App. 2013) (“An extension ... does not contemplate a new agreement.” (cleaned up) ); Extension , Black’s Law Dictionary (11th ed. 2019) (providing for the “continuation of the same contract for a specified period” ); Renewal a nd Extension o f Contracts, Generally , 17B C.J.S. Contracts § 668 (2020) ( similar )

. In other words

, an agreement with a continuance clause i s simply a contract that expires on the later of a date certain or the adoption of a successor agreement. For these reasons, n either the invocation nor the operation of a continuance clause executes a new agreement.

T he guidance relied on administrative precedent addressing the operation of rollover clauses. 71 F.L.R.A. at 988

– 89 & nn.29

– 30. It cited a n order holding that an “automatically renewed agreement is subject to agency

- head approval” upon each renewal. Kansas Army Nat ’ l Guard , 47 F.L.R.A. 937 , 942 (1993)

. Whatever the merits of that ruling

, it has no applicability to continuance clauses. A rollover clause takes effect when neither party expresses a desire to renegotiate during a specified window , which may plausibly be descr ibed

as assenting to a new agreement through mutual inaction. See
, e.g. , Eastham , 754 F.3d at 361

– 62 ( rollover clause specifies how “ to execute a new contrac t” ( cleaned up)) ; Distillery Rectifying & Wine Workers Int ’ l Union of Am. v. Brown

Forman Distillers Corp. , 213 S.W.2d 610, 613 (Ky. 1948 ). In contrast, we have found no support for treating the invocation of a continuance clause as executing a new agreement

.8

T he FLRA contends that the word “executed” is at least ambiguous enough for its interpretation to warrant Chevron deference. Two of the cases it cites merely confirm the uncontroversial principle that the parties themselves may determine what steps should be required to execute

— i.e.
, finalize

— their agreement

. See Ass’n of Civilian Technicians Kentucky , 70 F

. L

. R

. A

. 968, 969 (2018) ; Ft. Bragg Ass’n of Teachers , 44 F.L.R.A. 852, 857

– 58 (1992)

. Its third case held that the agreemen t subject to agency

- head review includes terms imposed by the Federal Service Impasses Panel in binding arbitration. AFGE v. FLRA , 778 F.2d 850 , 857 (D.C. Cir. 1985). That holding rests on the statutory definition of the phrase “collective bargaining agreement,” which includes terms imposed by the Impasses Panel. 5 U.S.C. § 7103(a)(8);

see AFGE v. FLRA , 712 F.2d 640, 646 n.24 (D.C. Cir. 1983). Our reasoning on this point does nothing to undercut the default rule that, absent a statutory directive to the contrary, a contractual agreement requires the parties’ mutual assent. See
, e.g. , North land Capital Corp. v. Silver , 735 F.2d 1421, 1427 (D.C. Cir. 1984). Nor do the AFGE cases say anything about when an agreement is “executed”

— a question we did not address. See 778 F. 2 d at 857 ( “a Panel

- imposed settlement, once adopted by the parties , sho uld be regarded as part of a collective bargaining agreement” ( emphasis added ) (quoting 712 F.2d 640, 646 n.24 ) )

. None of th e se cases bears on the question presented here

. Because invoking a continuance clause does not execute a

new agreement , there is no statutory basis for a second round of agency

- head review.9

B

Section 7116 (a)(7) forbids employing agencies from enfor cing most regulations that conflict with a collective bargaining “ agreement ” that was “in effect” before the regulation issu ed. 5 U.S.C

. § 7116(a)(7). The FLRA concluded that, once an agreement has been extended through a continuance clause, the agency may enforce all conflicting regulations that became effective before the extension.

For many of the reasons already discussed, section 7 116 (a)(7) cannot bear that interpretation

. As shown above,

c ontract extensions preserve an existing agreement rather than supplant it with a new one. Thus, an extended contract is the

same “agreement” that was “in effect” before the extension. And so lo ng as it remains in effect, the employing agency may not enforce new r egulations that conflict with it.

T he FLRA’s own description of continuance clauses reinforces our conclusion. According to the Authority , a continuance clause provides for an existing agreement to remain “ in force ” during renegotiations. Guidance

, 71 F.L.R.A. at 986. Yet s ection 7116 (a)(7) bars enforcement of conflicting regulations while an agreement remains “in effect.” And t here is n o difference between the terms “in force” and “in effect

, ” which are use d interchangeably. See
, e.g. , Bhd

. of R.R. Trainmen v. Akron & Barberton Belt R.R. Co. , 385 F.2d 581, 611 (D.C. Cir. 1967) ( labor agreements “ in force continued in effect ” ); Liddell by Liddell v. Bd. of Educ. of St. Louis , 105 F.3d 1208, 1211 (8th Cir. 1997) (similar).

Seeking deference, th e FLRA contends that the phrase “in effect” is ambiguous because the terms of expired collective bargaining agreement s sometimes continue to have legal force

. For support, the Authority cites U.S. Border Patrol Livermore10

Sector
, 58 F

. L

. R

. A

. 231 (2002), which states “ the general principle that parties to an expired agreement continue to be bound by the provisions of that agreement until othe rwise agreed or the provisions are modified in a manner consistent with the Statute. ” Id. at 233. But this case does not involve expired agreements . And the fact that even expired agreements
may in some sense remain “ in effect ” hardly supports the FLRA ’s position that agreements extended under a continuance clause do not remain “ in effect .”

Because the invocation of a continuance clause extends a collective bargaining agreement pending negotiations over its

successor , the exist ing agreement remains “in effect” until a new agreement is in place

. Thus, the employing agency may not enforc e r egulations that conflict with the agreement and that became effective after it did.

IV

T he FLRA’s guidance conflicts with the Statute
, so we grant the petition s for review and set aside the guidance. 1

So ordered.

1 Given our disposition, we need not address the unions’ alternative argument that the FLRA insufficiently justified its decision to issue general guidance divorced from the terms of a n actual agreement.