Court Opinion

ID: 9006908
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:35:03.254606+00
Date Added: 2024-06-11T17:11:18.372028
License: Public Domain

MURNAGHAN, Circuit Judge,
concurring in part and dissenting in part:
While I concur in part, I do not agree with the majority in adopting and applying to the instant case the analysis set forth in Charleston. First, because of the Supreme Court’s vacatur of our decision in NRC (followed by its dismissal for mootness), I would find the analysis therein no longer controlling law. See, e.g., O’Connor v. Donaldson, 422 U.S. 563, 577 n. 12, 95 S.Ct. 2486, 2495 n. 12, 45 L.Ed.2d 396 (1975) (“Of necessity our decision vacating the judgment of the Court of Appeals deprives that court’s opinion of precedential effect_”); Durning v. Citibank, N.A., 950 F.2d 1419, 1424 n. 2 (9th Cir.1991) (“Although [the appellant] contends that the decision was ‘vacated on other grounds,’ we find that contention curious. A decision may be reversed on other grounds, but a decision that has been vacated has no precedential authority whatsoever.”) In so far as Charleston expressly relies on the reasoning of the vacated NRC — indeed, much of the discussion in Charleston consists of a long quote from NRC, followed by a statement that the ruling in NRC clearly controls the decision before the panel — Charleston also should not be binding precedent in the instant case. See, e.g., Busby v. Crown Supply, Inc., 896 F.2d 833, 840-41 (4th Cir.1990) (“[Customarily a panel considers itself bound by the prior decision of another panel, absent an in banc overruling or a superseding contrary decision of the Supreme Court.”); Faust v. South Carolina State Highway Dep’t, 721 F.2d 934, 940 (4th Cir.1983), cert. denied, 467 U.S. 1226, 104 S.Ct. *5842678, 81 L.Ed.2d 874 (1984); Gladhill v. General Motors Corp., 743 F.2d 1049, 1050-51 (4th Cir.1984) (“As a single panel of this court, we lack authority to reexamine or to overrule [the prior panel] short of an intervening Supreme Court decision warranting such action.”); Hutchins v. Woodard, 730 F.2d 953, 957 (4th Cir.1984) (“[W]e, as a panel of the court, are bound to give controlling precedential effect to earlier decisions of the Court, absent a clear and sufficient reason not to do so.”).
The majority and the concurrence conclude that Charleston is binding prece-dential authority and proceed to reach a result that depends on its logic. As a second reason why I have concluded that Charleston should not be here determinative, even if one assumes arguendo that Charleston continues as binding precedent despite the vacatur of NRC, the instant case is readily distinguishable from Charleston. A substantial difference exists between the proposal at issue here and the one discussed in Charleston. In Charleston, the allocation of profits was at issue, and the Shipyard’s “budget” came into being largely from the proceeds and profits of its contracts:
The Shipyard is among a unique breed of Department of Defense operations known as “industrially funded activities.” Much like a commercial shipyard, the Shipyard submits bids in competition with private contractors to do maintenance work for its “customer,” the Navy. A significant portion of the Shipyard’s operating revenues come from the proceeds of contracts it successfully bids for, including whatever “profit” it makes.
Navy Charleston Naval Shipyard v. FLRA, 885 F.2d 185, 186 (4th Cir.1989). Thus, no budgeted amount was determined in advance of the identification of the proceeds and profits. That is a controlling distinction from the case presently under consideration. The union in Charleston sought to negotiate over the percentage allocation of any profits earned under the Shipyard’s contract with the Navy to refurbish two ballistic missile submarines. The profits normally would have been subject solely to management's discretion and control, without union participation, and would have been directed to various operating expenses. The Charleston court held that
the proposal completely divests Shipyard managers of discretion and control over the allocation of profits to be realized. It is this discretion and control over agency’s funding decisions that Congress expressly reserved to managers in § 7106(a)(1).
Because the [union’s] proposal will have the ultimate effect of eliminating the Shipyard’s control over how to allocate its profits, the proposal interferes with the Shipyard’s prerogative to determine its budget.
Id. at 188 (citation omitted).
By significant contrast, the proposal in the instant case to negotiate over the distribution of the savings neither requires the SSA to include a new program in the budget nor demands that it spend a specific amount in the budget. In the instant case, the Union seeks to negotiate only after the budget is set and the funds have been allocated by management. Negotiations over the profit-sharing plan in Charleston, however, would have intruded directly on management decisions to allocate its “budget” once those funds were received. The relationship between the money at issue and the managers’ “budgets” is significantly different in the two cases.
The SSA itself here admits that under the incentives program, the budget has previously been determined:
The Agency’s budgetary incentives program diverges from the general practice at many federal agencies of providing managers with operational funds earmarked for particular purposes. Under the program, the managers of eight areas and two districts were to be provided with a lump sum to fund their operations, to be allocated in large part as they choose.
Brief for the Petitioner, SSA, at 5 (emphasis added). Each manager at a site thus will allocate the lump sum, previously pro*585vided for in the budget, as he or she may see fit. Bargaining over the distribution of any savings which will come later, i.e., remaining at the end of a year, does not affect the amount or the dispersal at the outset of the lump sum or the local managerial decisions allocating the funds.1 Thus, to the extent that any savings are generated, the division of that money previously budgeted between the Social Security Trust Fund and employee awards is negotiable.2 Compare United States Dep’t of the Army v. FLRA, 977 F.2d 1490 (D.C.Cir. Nov. 6, 1992).
The FLRA defined the term “budget” when formulating the Wright-Patterson3 test. Adopting the dictionary meaning, it defined “budget” as “a statement of the financial position of a body for a definite period of time based on detailed estimates of planned or expected expenditures during the period and proposals for financing them.” Wright-Patterson, 2 F.L.R.A. at 608 (quoting Webster’s Third New International Dictionary (Unabridged) (1966)). Under a common-sense view of the budgetary process, the proposal at issue focusses on a sum outside of the budget. Thus, “determining the budget” in the instant case begins with the calculation of and provision of the lump sum {i.e., the “budget”) to local managers and then ends, with a process distinct from the budget itself, as each manager implements his or her cost-allocations among various programs and operations.
I do not agree with the majority in preventing negotiations because the Union proposal will determine the “specific allocation of funds to the employees once the savings are realized.” Title VII attempts to strike a balance between employer and employee. It recognizes the benefits of collective bargaining yet preserves management’s right to manage its affairs effectively and efficiently. See, e.g., United States Dep’t of Health & Human Servs. v. FLRA, 844 F.2d 1087, 1090-92 (4th Cir.1988) (noting the balance struck between “the public interest served by collective bargaining” and the interest served by an “effective and efficient government”). The majority’s expansive view of nonnegotiable issues tips that balance and effectively guts the right to bargain over any conditions of employment.
The holding of the majority expands the first prong of the Wright-Patterson test. The first prong focuses on the budget process, not the mere use of agency funds already budgeted. See, e.g., Fort Stewart Schools v. FLRA, 495 U.S. 641, 652, 110 S.Ct. 2043, 2050, 109 L.Ed.2d 659 (1990) (“Petitioner does not take issue with the Authority’s premise that § 7106 does not make a proposal nonnegotiable simply because it ‘imposes a cost upon the agency which requires the expenditure of appropriated agency funds.’ ”) (quoting Wright-Patterson, 2 F.L.R.A. at 607). In the instant case, although bargaining over the division of savings generated by each site’s cost-saving measures ultimately would direct the allocation of “money,” such negotiations would not involve the union in budget determinations, in violation of the first prong of the test. Under the incentives program, the size of the budget and the allocation of a lump sum to various programs already will have been decided by the SSA long before the savings (if any) can be ascertained and distributed. Thus, although the proposal to bargain addresses the use of funds, it clearly does not intrude *586on budgetary decisions and satisfies the first prong of the Wright-Patterson test.
I therefore dissent and would require the SSA to bargain with the Union over the formula to determine percentages used for the allocation to employees of savings generated by the incentives programs, as those funds, if any, exist only in the aftermath of the provision and allocation of the budget. I agree with the majority in affirming the FLRA’s determination that the arbitration award was deficient for failing to consider impact and implementation arrangements under 5 U.S.C.A. § 7106(b)(2) and (3).

.The SSA points out that the savings generated during the program’s first year will have an affect on the lump sum to be allocated at each location the following year. Reply Brief for Petitioner, SSA, at 6. Bargaining over the percentage allocation of savings from a budgetary amount already established, however, does not affect management’s right to implement cost-cutting decisions that may (or may not) generate any savings to be allocated.

. Once senior management decides to budget for the purchase of, say, ten automobiles, its subsequent decisions regarding what models to purchase — a Corvette, Duster, or Mustang — are not new budget items.

. 2 F.L.R.A. (No. 77) 604, 607-08 (Jan. 31, 1980), enf’d on other grounds sub nom. Department of Defense v. FLRA, 659 F.2d 1140 (D.C.Cir.1981), cert. denied, 455 U.S. 945, 102 S.Ct. 1443, 71 L.Ed.2d 658 (1982).