Court Opinion

ID: 9472669
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:07:00.720916+00
Date Added: 2024-06-11T17:43:03.923354
License: Public Domain

TAMM, Circuit Judge:
This is an appeal from a decision of the Federal Labor Relations Authority (the Authority) ordering petitioner Equal Employment Opportunity Commission (EEOC) to bargain over a union contract proposal that *845requires compliance with applicable laws and regulations regarding “contracting-out.” EEOC contends that it has no duty to bargain because the proposal concerns a subject exclusively reserved to management. The Authority has cross-petitioned for enforcement. For the reasons stated below, we enforce the Authority’s order.
I. Background
A. Statutory Framework
Title VII of the Civil Service Reform Act of 1978 (the Act), 5 U.S.C. §§ 7101-7135 (1982), substantially revised labor-management relations in the federal sector. The Act was designed to balance the right of federal employees to engage in concerted activity with the need of federal managers to achieve an “effective and efficient [federal] Government.” 5 U.S.C. § 7101(b). To administer the Act and establish labor-management relations policy, Congress created the Federal Labor Relations Authority. The Authority’s responsibilities include resolving issues relating to the duty to bargain.
The Act established a system of collective bargaining that requires federal agencies and employee unions to bargain in good faith “with respect to ... conditions of employment.” 5 U.S.C. § 7103(a)(12). The term “conditions of employment” is expansively defined in the Act as “personnel policies, practices, and matters, whether established by rule, regulation, or otherwise, affecting working conditions.” 5 U.S.C. § 7103(a)(14).
This broad duty to bargain is subject to certain limitations. Specifically, the Act contains a management rights clause that reserves certain prerogatives to management. 5 U.S.C. § 7106(a). Most important, for this case, the management rights clause reserves to management the authority “to make determinations with respect to contracting out.” 5 U.S.C. § 7106(a)(2)(B). The procedures used in exercising these reserved management rights are subject to negotiation. 5 U.S.C. § 7106(b).1
B. The Facts
The facts in this case are undisputed. During contract negotiations with the EEOC, the union2 advanced the following proposal:
“The EMPLOYER agrees to comply with OMB Circular A-76 and other applicable laws and regulations concerning contracting-out.” 3
Joint Appendix (J.A.) at 2. EEOC declared the proposal nonnegotiable and refused to bargain over it. To resolve the dispute, the union filed a petition for review with the Authority. J.A. at l.4
*846EEOC argued before the Authority that the union proposal was nonnegotiable primarily for two reasons.5 First, it contended that the proposal conflicted with the Act’s express reservation to management of the right “to make determinations with respect to contracting out.” 5 U.S.C. § 7106(a)(2)(B). Second, the EEOC argued that OMB Circular A-76 (the Circular) itself prohibited negotiation over the proposal.6 J.A. at 12-13.
On September 2, 1982, the Authority issued a decision holding that the union proposal was a mandatory subject of bargaining. American Federation of Government Employees, AFL-CIO National Council of EEOC Locals and Equal Employment Commission, 10 FLRA 3 (1982). The Authority concluded that the proposal did not impair EEOC’s statutory right to make contracting-out decisions because it recognized only existing limitations on EEOC’s power. By its terms, ruled the Authority, the proposal established no substantive limitations on management discretion. Id.
The Authority further concluded that the proposal was not rendered nonnegotiable by the terms of the Circular. EEOC apparently asserted that adoption of the proposal would result in subjecting all contracting-out disputes to the negotiated grievance procedure, thus conflicting with the Circular’s intent to allow EEOC to resolve such disputes internally.7 The Authority rejected EEOC’s underlying assumption that contracting-out disputes are not grievable in the absence of the proposed contract language. 10 FLRA at 4-5. Rather, the Authority found that such disputes were already grievable under section 7121 of the Act and that the Circular alone could not limit the statutorily prescribed scope of the grievance procedure.8 10 FLRA at 4-5. Concluding that the contract proposal was not prohibited by either the Act or the Circular, the Authority ordered EEOC to bargain. Id. at 5.
*847EEOC filed a timely petition for review in this court.9 The FLRA filed a cross-petition for enforcement. We have jurisdiction pursuant to 5 U.S.C. § 7123.10
II. Standard of Review
The Act provides that the Authority’s rulings are reviewable in accordance with section 10(e) of the Administrative Procedure Act (APA), 5 U.S.C. § 706 (1982). See 5 U.S.C. § 7123(c) (1982). The Authority’s determinations will thus be upheld “if they are supported by substantial evidence^] ... are not arbitrary, capricious, or an abuse of discretion^] and are otherwise in accordance with law.” National Treasury Employees Union v. FLRA, 721 F.2d 1402, 1405 (D.C.Cir.1983). Review is further circumscribed where, as here, the Authority has construed its enabling legislation. Indeed, the Authority is entitled to “considerable deference” when interpreting and applying the Act’s provisions to specific situations. Bureau of Alcohol, Tobacco and Firearms v. FLRA, — U.S. -, 104 S.Ct. 439, 444, 78 L.Ed.2d 195 (1983). Accordingly, we will uphold the Authority’s interpretation of the Act if it is “reasonably defensible,” Department of Defense v. FLRA, 659 F.2d 1140, 1162 n. 121 (D.C.Cir.1981), cert. denied, 455 U.S. 945, 102 S.Ct. 1443, 71 L.Ed.2d 658 (1982); Bureau of Alcohol, Tobacco and Firearms v. FLRA, 104 S.Ct. at 444 (1983), and not inconsistent with any congressional mandate or policy.11
III. Analysis
EEOC asserts that the Authority improperly construed the terms of the management rights clause, as well as the probable effect of the disputed proposal. EEOC suggests first that the plain text of the management rights clause insulates from collective bargaining all proposals regarding contracting-out. Second, EEOC contends that the proposal is nonnegotiable because its adoption would subject contracting-out decisions to the statutorily prescribed grievance procedure, thus infringing on EEOC’s reserved authority to make contracting-out decisions. Finally, EEOC argues that the proposal is inconsistent with the Circular.
*848A.
EEOC asserts that the management rights clause gives management unfettered authority to make contracting-out determinations. Apparently assuming that any proposal regarding contracting-out will restrict this authority, EEOC suggests that the management rights clause renders nonnegotiable all proposals regarding contracting-out.
EEOC’s argument is untenable in light of the plain text of the clause. The management rights clause provides that “nothing in [Title VII] shall affect the authority of any management official of any agency — ... in accordance with applicable laws — ... to make determinations with respect to contracting out.” 5 U.S.C. § 7106(a)(2)(B). This language plainly restricts the authority reserved to management by requiring that it be exercised “in accordance with applicable laws.” In addition, section 7106(b) provides that procedures used to exercise rights are negotiable. See supra note 1. Because the Act does not grant to management unqualified authority to contract-out, union proposals touching upon that authority are not automatically rendered nonnegotiable. Rather, management may refuse to bargain over only those proposals that would expand upon the restrictions contained in the Act. See infra note 12.
The union proposal here suggests contract language that essentially echoes the statutory requirement that contracting-out determinations be made in accordance with applicable laws. Any restriction imposed by the proposal on management’s contracting-out authority thus stems from the Act’s mandate. EEOC, of course, must comply with these requirements regardless of whether the proposal is adopted as part of the collective agreement. The union proposal at issue here thus does not of itself establish any substantive criteria guiding management’s contracting-out determinations. We therefore agree with the Authority’s conclusion that the proposal does not affect management’s reserved authority, within the meaning of the statutory language, to make contracting-out decisions.12
EEOC points to no expression of intent in the legislative history that contradicts this conclusion. Though far from conclusive, the legislative history indicates that the management rights clause should not be interpreted to negate the Act’s broad duty to bargain. In adopting the management rights clause, Congress sought to reserve to management the authority necessary to achieve an effective and efficient government. At the same time, however, Congress intended to broaden the scope of bargaining beyond that sanctioned under the previous labor-management relations *849system.13 Thus, as one member explained, the clause was designed to protect “genuine managerial prerogatives.”14 Indeed, Congress directed that the clause was to “be read to favor collective bargaining whenever there is doubt as to the negotiability of a subject or a proposal.” 15
In sum, neither the text nor the legislative history mandates a conclusion other than that reached by the Authority. We cannot say, therefore, that the Authority acted arbitrarily in concluding that the proposal does not affect EEOC’s reserved rights. We reject EEOC’s argument that the management rights clause renders the proposal nonnegotiable.
B.
EEOC argues next that even if the text of the proposal does not impose additional restrictions, its adoption would effectively hinder EEOC’s ability to make contracting-out decisions. Specifically, EEOC contends that the proposal would invade its reserved management rights by making compliance with the Circular a contractual prerequisite of any decision regarding contracting-out. The union could then challenge EEOC’s decisions to contract-out by alleging that EEOC violated the collective agreement in failing to comply with appropriate procedures. Any contracting-out decision would then be subject to grievance procedures and ultimately to arbitral review. According to EEOC, contracting-out decisions could thus become the prerogative not of management but of the arbitrator. In this way, EEOC implies, the union would be able to achieve precisely what the management rights clause was intended to prevent.
EEOC’s argument assumes that a complaint asserting that a contracting-out determination was not made in accordance with applicable laws, including the Circular, would not be grievable in the absence of the contract proposal. This assumption, however, is contrary to the text of the Act.
The Act expansively defines the subjects covered under the statutory grievance procedure. Grievances include complaints concerning “any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment” as well as complaints “concerning any matter relating to the employment of the employee.” 5 U.S.C. § 7103(a)(9).16 Only five subjects, not including the subject of contracting-out, are expressly ex-*850eluded from coverage under the grievance mechanism.17 An allegation that the EEOC failed to comply with the OMB Circular, or with any other law or rule governing contracting-out, plainly falls within this expansive definition.18
EEOC maintains, however, that in addition to the five subjects expressly designated in section 7121 of the Act, all prerogatives reserved to management under the management rights clause are excluded from the scope of matters grievable. EEOC asserts that because the management rights clause provides that “nothing in this chapter shall affect” management’s authority to contract-out, such decisions are removed from grievance procedures. 5 U.S.C. § 7106(a) (emphasis added). A grievance alleging noncompliance with the Circular, however, does not affect management’s substantive authority, within the meaning of the statutory language, to contract-out. Rather, it provides a procedure for enforcing the Act’s requirement that contracting-out decisions be made in accordance with applicable laws.19 Any substantive limitation on management’s au*851thority stems from the externally established criteria contained in the Circular. See supra text accompanying note 12. We therefore find that a grievance asserting that management failed to comply with its statutory or regulatory parameters in making a contracting-out decision is not precluded by the management rights clause.20
The statutorily defined grievance procedure therefore encompasses a claim that a contracting-out determination was not made in accordance with law. EEOC’s initial assumption that including the proposal in the collective bargaining agreement would expose for the first time EEOC’s contracting-out determinations to employee grievance challenges, and arbitral review, is contradicted by the plain text of the Act. We thus conclude that adoption of the proposal in no way expands an employee’s right to challenge management’s contracting-out decisions under the grievance procedure.21 Accordingly, we reject EEOC’s contention that the proposal will impair its management rights by making compliance with the Circular a contractual prerequisite of contracting-out decisions.
C.
Finally, EEOC argues that the language of the OMB Circular renders the proposal nonnegotiable. As noted, the Circular states that its provisions “shall not be construed to create” any right of appeal except as provided in the Circular itself. J.A. at 37. EEOC maintains that the Authority’s ruling that the proposal is negotiable conflicts with the Circular’s limiting language because it allows alternative enforcement actions through the grievance mechanism. Two considerations compel us to reject this argument.
First, the proposal is not inconsistent with the Circular’s limiting language. The proposal does not “create” any new right of appeal. Rather, as we have already determined, the right to file grievances regarding contracting-out decisions is created by the Act.
Second, and more important, the Circular’s restrictive language cannot be construed to limit the statutory right to file grievances asserting a violation of contraeting-out regulations. There is no indication in the Act or elsewhere of a congressional intent to allow agencies to limit by regulation the statutorily defined grievance procedure. To allow the text of the Circular to restrict the scope of grievances would place “limitations in the statute not placed *852there by Congress.” Colgate-Palmolive Peet Co. v. NLRB, 338 U.S. 355, 363, 70 S.Ct. 166, 171, 94 L.Ed. 161 (1949). Accordingly, we reject EEOC’s argument that the Circular bars negotiation over the proposal.22
IV. CONCLUSION
For the reasons stated herein, we conclude that the Authority’s interpretation should be upheld and that its order should be enforced.

Judgment accordingly.

. Section 7X06 provides in pertinent part:
(a) Subject to subsection (b) of this section, nothing in this chapter shall affect the authority of any management official of any agency—
(2) in accordance with applicable laws—
(B) to assign work, to make determinations with respect to contracting out, and to determine the personnel by which agency operations shall be conducted;
(b) Nothing in this section shall preclude any agency and any labor organization from negotiating—
(2) procedures which management officials of the agency will observe in exercising any authority under this section;
5 U.S.C. §§ 7106(a)(2)(B), (b)(2).

. The union, intervenor in this appeal, is the American Federation of Government Employees, AFL-CIO, National Council of EEOC Locals.

. OMB Circular A-76 (the Circular) prescribes guidelines for determining whether the goods and services needed by the federal government should be acquired from the private sector or obtained "in-house" with government facilities and personnel. Joint Appendix (J.A.) at 37. The Circular specifies that the government generally should acquire its goods and services from private enterprise if it is cost-effective. The Circular contains a Cost Comparison Handbook outlining procedures to be followed in determining whether contracting-out is most cost-effective. Since the petition in this case was filed, OMB Circular A-76 has been revised. The revision in no way affects the issues before us.

. 5 U.S.C. § 7105(a)(2)(E) provides that the Authority shall “resolve[ ] issues relating to the duty to bargain." The Act further provides that *846"if an agency involved in collective bargaining ... alleges that the duty to bargain in good faith does not extend to any matter, the [union] may appeal the allegation to the Authority.” 5 U.S.C. § 7117(c)(1). The Authority is required to issue a written decision containing reasons for its determination. If the Authority concludes that the disputed issue is within the scope of the duty to bargain, it orders the agency to bargain in good faith. The Authority does not, however, address the merits of the proposal. See Library of Congress v. FLRA, 699 F.2d 1280, 1284 (D.C.Cir.1983).
If a proposal is determined to be within the duty to bargain, the parties must negotiate, although they may adhere to a particular position to the point of impasse. If an impasse is reached, the parties may refer the dispute to the Federal Service Impasses Panel. 5 U.S.C. §§ 7119(b), (c).

. In addition to the two arguments noted here, the agency also asserted that the proposal fell outside the scope of the duty to bargain because it involved matters that do not directly affect conditions of employment. The FLRA's decision did not address this contention. American Federation of Government Employees, AFLCIO, National Council of EEOC Locals and Equal Employment Opportunity Commission, 10 FLRA 3 (1982). Since the EEOC did not raise this argument in its petition to this court, we will not discuss the issue.

. The Circular provides that its text “shall not be construed to createf ] any substantive or procedural basis for any person to challenge any . agency action or inaction on the basis that such action was not in accordance with [this] Circular, except as specifically set forth in [this Circular].” J.A. at 37. The Circular further directs agencies to develop procedures for an informal review of determinations made pursuant to its provisions and states that those procedures and agency determinations are not subject to negotiation or arbitration. J.A. at 50.

. This argument is not expressly articulated in the EEOC’s statement of position before the Authority. We therefore rely on the Authority’s characterization of the agency’s position. See American Federation of Government Employees, AFL-CIO, National Council of EEOC Locals and Equal Employment Opportunity Commission, 10 FLRA at 4-5 (1982).

. 5 U.S.C. § 7121(a) requires all collective bargaining agreements to include a system for settling grievances. The negotiated grievance procedure must provide for binding arbitration for grievances not settled through the procedure. 5 U.S.C. § 7121(b)(3)(C). "Grievance” is broadly defined in the Act as any complaint concerning employment, the terms of a collective agreement, or the interpretation of any law, rule or regulation affecting conditions of employment. 5 U.S.C. § 7103(a)(9).

. EEOC filed a request for reconsideration with the Authority on September 16, 1982. J.A. at 64. On March 18, 1983, the Authority issued an order denying the EEOC’s request. Brief for Federal Labor Relations Authority at C-l.

. 5 U.S.C. § 7123(a) provides that ”[a]ny person aggrieved by any final order of the Authority ... may ... institute an action for judicial review of the Authority’s order ... in the United States Court of Appeals for the District of Columbia.” The Authority may petition any appropriate United States court of appeals for enforcement of any of its orders. 5 U.S.C. § 7123(b).

. The dissent contends that the Act’s reservation to management of the right to contract-out is a limitation on the Authority’s power to direct labor-management relations. Consequently, argues the dissent, the Authority’s interpretation of the scope of management’s reserved rights is not entitled to great deference. The dissent ignores the fact that the dispute here concerns the negotiability of a specific proposal. Congress has expressly entrusted to the Authority the power and the obligation to resolve all such disputes. See supra note 4. Decisions in this circuit have uniformly recognized that the Authority, and not the court, must exercise the judgment necessary to determine whether a proposal that allegedly violates management's rights is bargainable. ”[T]he distinction between proposals encroaching on management’s non-negotiable substantive authority and those concerning properly negotiable procedural matters [is] primarily to be made by the Authority in an exertion of its expertise ____” National Treasury Employees Union v. FLRA, 691 F.2d 553, 561 (D.C.Cir.1982) (footnote omitted) (citing Department of Defense v. FLRA, 659 F.2d 1140, 1161 (D.C.Cir.1981), cert. denied, 455 U.S. 945, 102 S.Ct. 1443, 71 L.Ed.2d 658 (1982)).
The dissent’s reliance on Vanguard Interstate Tours, Inc. v. ICC, 735 F.2d 591 (D.C.Cir.1984), is misplaced. In the statute at issue in Vanguard, Congress expressly limited the discretion previously granted to the ICC and set out the precise criteria governing the issue in the case. Here, in contrast, Congress has expressly delegated to the Authority the task of resolving issues relating to the duty to bargain. We therefore conclude that even if the management rights clause acts as a limitation on the power of the Authority, the Authority’s exercise of its expertise primarily to determine whether an issue in a particular case is negotiable is entitled to deference.

. The precise scope of management’s reserved authority is difficult to define. In previous rulings, the Authority has effectively defined the protection accorded management by classifying proposals as either negotiable procedures under section 7106(b) or nonnegotiable substantive rights. To distinguish between the two, the Authority has developed a "direct interference” test. Under this test, a proposal involves a nonnegotiable substantive right if it would "directly interfere” with management’s ability to make the relevant determination. We have repeatedly affirmed the Authority’s use of this test. See Department of Defense v. FLRA, 659 F.2d 1140, 1159 (D.C.Cir.1981), cert. denied, 455 U.S. 945, 102 S.Ct. 1443, 71 L.Ed.2d 658 (1982). Although in the present case the Authority did not expressly classify the proposal as procedural and did not explicitly apply the direct interference test, the analysis used was quite similar. In concluding that the proposal was negotiable, the Authority focused on the agency’s retention of the full degree of discretion that exists in the absence of the proposal. We find this analysis fully acceptable as a guideline to determine the scope of substantive rights reserved to management.
The dissent misconstrues both the direct interference test and the import of our conclusion here. The direct interference test is essentially definitional. It determines whether a particular proposal is in fact substantive and therefore nonnegotiable. Although the Authority did not expressly apply this test here, it did use the same functional analysis: only proposals that limit substantively management’s contracting-out determinations involve nonnegotiable rights. Implicit in the Authority’s opinion is the conclusion that the disputed proposal represents more of a procedural than a substantive limitation on management’s right to contract-out.

. H.R.Rep. No. 1403, 95th Cong., 2d Sess. 43 (1978), reprinted in House of Representatives Committee on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978 [hereinafter cited as Legislative History] at 689 (1979); see National Treasury Employees Union v. FLRA, 691 F.2d 553, 559 (D.C.Cir.1982).

. 124 Cong.Rec. 29,199 (1978) (remarks of Rep. Ford), reprinted in Legislative History at 956.

. H.R.Rep. No. 1403, 95th Cong., 2d Sess. 44 (1978), reprinted in Legislative History at 690. The management rights clause that appears in the Act was adopted as an amendment on the House floor to the clause reported by the House Committee on Post Office and Civil Service. This amendment, however, did not change the purpose behind the clause as explained in the report accompanying the Committee version of the bill. "This substitute [the amendment that was adopted on the floor] strengthens the 'Management rights’ section reported by the Committee, but it is still to be treated narrowly as an exception to the general obligation to bargain over conditions of employment.” 124 Cong.Rec. 29,183 (1978), reprinted in Legislative History at 924. The amendment adopted on the House floor was adopted by the House-Senate Conference Committee without change. H.R.Rep. No. 1717, 95th Cong., 2d Sess. 153-54 (1978) (Conference Report), U.S.Code Cong. & Admin.News 1978, p. 2723, reprinted in Legislative History at 821-22.

. 5 U.S.C. § 7103(a)(9) provides in full:
(9) "grievance” means any complaint—
(A) by any employee concerning any matter relating to the employment of the employee;
(B) by any labor organization concerning any matter relating to the employment of any employee; or
(C) by any employee labor organization, or agency concerning—
(i) the effect or interpretation, or a claim of breach, of a collective bargaining agreement; or
(ii) any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation affecting conditions of employment.

. The [sections requiring a grievance procedure] shall not apply with respect to any grievance concerning—
(1) any claimed violation of subchapter III of chapter 73 of this title (relating to prohibited political activities);
(2) retirement, life insurance, or health insurance;
(3) a suspension or removal under section 7532 of this title;
(4) any examination, certification, or appointment; or
(5) the classification of any position which does not result in the reduction in grade or pay of an employee.
5 U.S.C. § 7121(c).

. The dissent contends that a complaint asserting a failure to comply with the Circular does not fall within the statutory definition of grievance. Because the Act defines grievance to include claims alleging violations of regulations "affecting conditions of employment," and because "conditions of employment" is in turn defined as "matters affecting working conditions,” the dissent maintains that grievances are restricted to claims involving surroundings and hazards.
The dissent's narrow definition of "working conditions” does not apply in the context of this Act. The definition of working conditions as hazards and surroundings derives from Corning Glass Works v. Brennan, 417 U.S. 188, 201-03, 94 S.Ct. 2223, 2231-2232, 41 L.Ed.2d 1 (1974), a case construing the language of the Equal Pay Act. The Court in Corning Glass Works based its definition of the term “working conditions” on Congress’s intent as expressed in an extensive discussion of the term in the legislative history of the Equal Pay Act. The Court noted that "working conditions” has a generally accepted meaning in the "specialized language of job evaluation systems.” 417 U.S. at 202, 94 S.Ct. at 2232. A definition adopted in the context of a specific statute and in light of a detailed legislative history, however, is not immediately transferable to this case. See Copper Valley Machine Works, Inc. v. Andrus, 653 F.2d 595, 600 n. 7 (D.C.Cir.1981). The legislative history of Title VII nowhere indicates that Congress intended such a restriction on the rights granted employees. Indeed, the Authority has consistently adopted, with this court's sanction, a broad interpretation of the phrase "conditions of employment.” See Department of Defense v. FLRA, 685 F.2d 641, 647-48 & n. 3 (D.C.Cir.1982); National Treasury Employees Union and Internal Revenue Service, 3 FLRA No. 112 at 693, 695 (1980) (conditions of employment concerns working situation and employment relations of bargaining unit employee). Moreover, as the dissent itself notes, the term "conditions of employment” includes personnel policies and practices as well as matters affecting working conditions. See Dissent at n. 12. Even if the phrase "matters affecting working conditions” comprises only hazards and surroundings, contracting-out decisions, which ultimately may result in a layoff, undoubtedly fall under the umbrella of personnel policies or practices.
In addition, we note that the dissent’s restrictive definition applies only to grievances defined in section 7103(a)(9)(C)(ii) as violations of regulations affecting conditions of employment. The dissent's analysis, of course, does not apply to grievances defined in sections 7103(a)(9)(A) or (B) as any matter relating to the employment of an employee. A claim that work was improperly contracted out surely falls within this definition of grievance.

. The dissent maintains that grievances alleging a failure to comply with applicable laws regarding contracting-out will affect management by delaying implementation of a decision. Of course, any review of an agency decision, whether conducted by the courts or through a contractual grievance mechanism, may cause some delay. This court has previously recognized that a proposal that may result in delay, including delay created by the arbitral process, need not infringe management’s reserved authority, and may thus be negotiable. See Department of Defense v. FLRA, 659 F.2d at 1153—58.

. Our reading of the text of the Act is supported by the legislative history. Congress unambiguously stated that the management rights clause, at least in one instance, does not affect an employee’s right to enforce the Act’s requirement that management exercise its reserved right in accordance with applicable laws and regulations.
[Management has the reserved right to make the final decision to "remove" an employee, but that decision must be made in accordance with applicable laws and procedures, and the provisions of any applicable collective bargaining agreement. The reserved management rights to “remove" would in no way affect the employee’s right to appeal the decision through statutory procedures or, if applicable, through the procedures set forth in a collective bargaining agreement.
124 Cong.Rec. 29,183 (1978), reprinted in Legislative History at 924. Similarly, we believe that EEOC’s reserved right to make determinations regarding contracting-out does not insulate EEOC from challenges, through the grievance mechanism, asserting violations of applicable laws or regulations. Cf. National Treasury Employees Union v. FLRA, 691 F.2d 553, 564-65 (D.C.Cir.1982) (noting that although establishment of performance standards is encompassed within management’s reserved rights, employees may challenge those standards in grievance proceedings).
The dissent suggests that this conclusion requires us to construe the statutory grievance mechanism as an applicable law with which management must comply. This construction, suggests the dissent, does not comport with the statutory language which states that "nothing in Title VII shall affect” management's authority to make determinations regarding contracting-out. We do not determine here whether the section 7121 grievance mechanism is an "applicable law.” Rather, we conclude only that a grievance alleging that management has not complied with externally established criteria does not affect management’s reserved substantive authority.

. The scope of the grievance procedure can of course be limited in negotiation. We address here only the statutorily defined grievance procedure.

. EEOC also argues that section 7117(a)(1) of the Act, which prohibits bargaining over matters that are inconsistent with other laws, limits the matters subject to grievance procedures. 5 U.S.C. § 7117(a)(1). EEOC asserts that bargaining over contracting-out is inconsistent with the management rights clause and therefore contracting-out determinations are excluded from the grievance mechanism. Reply Brief for Petitioner at 5. EEOC’s assertion that the proposal at issue in this case is inconsistent with other law is derivative in nature. EEOC contends the proposal is inconsistent with the management rights clause. We have already stated, however, that the management rights clause does not, on its face, render this proposal nonnegotiable. The proposal cannot be “inconsistent with other law” if it is not inconsistent with the management rights clause.