FEDERAL LABOR RELATIONS AUTHORITY, PETITIONER V. ABERDEEN PROVING GROUND, DEPARTMENT OF THE ARMY No. 86-1715 In the Supreme Court of the United States October Term, 1987 On Petition for a Writ of Certiorari to the United States Court of Appeals for the Fourth Circuit Brief for the Respondent TABLE OF CONTENTS Opinions below Jurisdiction Question presented Statement Argument Conclusion OPINIONS BELOW The order of the court of appeals (Pet. App. 16a) summarily reversing the Authority's decision is unreported, as in the court of appeals' order (Pet. App. 17a) denying the Authority's motion for an initial hearing en banc. The court's earlier decision in United States Army Engineer Center, Fort Belvoir v. FLRA (Pet. App. 52a-69a), upon which the court based its summary reversal in this case, is reported at 762 F.2d 409. The Authority's decision and order (Pet. App. 18a-51a) is reported at 21 F.L.R.A. No. 100. JURISDICTION The judgment of the court of appeals was entered on January 28, 1987. The petition for a writ of certiorari was filed on April 24, 1987. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). QUESTION PRESENTED The Federal Labor-Management Relations Act, 5 U.S.C. (& Supp. III) 7101 et seq. provides that a federal agency's duty to bargain with its employees shall extend to a matter that is the subject of an agency regulation only if the Federal Labor Relations Authority (the Authority) has determined, in a negotiability appeal under 5 U.S.C. 7117(b), that there is no "compelling need" for the regulation at issue. The question presented in this case is whether a negotiability appeal under 5 U.S.C. 7117(b) is the only means by which the compelling need for an agency regulation may be challenged, or whether the Authority also has the power to resolve the compelling need issue in an unfair labor practice proceeding under 5 U.S.C. 7118. STATEMENT 1. The Federal Labor-Management Relations Act, 5 U.S.C. (& Supp. III) 7101 et seq. (the Act), "establishes a statutory basis for labor-management relations in the Federal service" (H.R. Rep. 95-1403, 95th Cong., 2d Sess. 38 (1978)). The Act requires federal agencies to bargain in good faith with the exclusive representatives of units of employees about the terms and conditions of employment. See 5 U.S.C. 7102, 7114. An agency's refusal or failure to bargain in good faith may constitute an unfair labor practice (5 U.S.C. 7116(a)(5)); whether it does so is determined in an unfair labor practice (ULP) proceeding under 5 U.S.C. 7118. The Act provides, however, that an agency's duty to bargain extends to matters covered by an agency-wide rule or regulation (or by a rule or regulation issued by a "primary national subdivision" of an agency, 5 U.S.C. 7117 (b)(4)) "only if the Authority has determined under (5 U.S.C. 7117(b)) that no compelling need * * * exists for the rule or regulation" (5 U.S.C. 7117(a)(2)). Section 7117(b) establishes the procedures by which the Authority is to determine the "compelling need" for an agency regulation. It provides that "(i)n any case of collective bargaining in which an exclusive representative alleges that no compelling need exists for any rule or regulation * * * which is then in effect and which governs any matter at issue in such collective bargaining, the Authority shall determine * * * whether such a compelling need exists" (5 U.S.C. 7117(b)(1)). In making this determination, the Authority may conduct a hearing. 5 U.S.C. 7117(b)(3). Unlike a ULP proceeding (compare 5 U.S.C. 7118), a Section 7117 hearing "shall be expedited to the extent practicable and shall not include the (Authority's) General Counsel as a party" (5 U.S.C. 7117(b)(3)), but shall include the agency or primary national subdivision as a necessary party (5 U.S.C. 7117(b)(4)). And whereas a ULP proceeding may result in the retroactive imposition of sanctions against the agency, a finding of no compelling need under Section 7117 has only the prospective effect of requiring the agency, or the local employer, to negotiate over the subject matter purportedly covered by the agency regulation. 2. The present case arose on September 14, 1981, when, in an effort to conserve energy, respondent decided to close operations at the Aberdeen Proving Ground (APG) for three days, beginning the day after Thanksgiving, November 27, 1981. On September 15, David R. Weppner, respondent's labor relations specialist, met with representatives of the various unions representing APG employees and notified them that, as a result of the decision to curtail operations, all APG employees would be obliged to take annual leave on November 27. Pet. App. 34a-35a. On October 6, respondent met with union representatives to discuss how the closure plans would be implemented. Colonel Robert P. Jones, who chaired the meeting, reiterated that employees would have to take annual leave on November 27, and that if an employee had not accrued annual leave time he could be advanced leave time, take compensatory time, take leave without pay, or would be permitted to work. Pet. App. 36a. Following the meeting, respondent invited the unions "to negotiate concerning the impact and implementation of th(e) decision" (id. at 37a (citation omitted)). Negotiations took place on October 19, 1981. Union representatives proposed that instead of having to take annual leave employees be granted administrative leave (Pet. App. 38a). Weppner, representing respondent, rejected this proposal, explaining that "'the rules and regulations * * * do not permit him to do this and that it verges on nonnegotiability in his opinion'" (ibid. (citation omitted)). Respondent relied in particular on Army and Department of Defense regulations that generally prohibit granting administrative leave when at least 24 hours' notice of an anticipated closure can be given. /1/ 3. The International Association of Machinists and Aerospace workers (the union) thereafter filed a ULP charge, alleging among other things that respondent had violated 5 U.S.C. 7116(a)(1) and (5) by refusing to bargain over the union's proposal that administrative leave be granted when APG was closed on November 27. On June 15, 1982, the administrative law judge ruled in respondent's favor and recommended that the Authority dismiss the union's complaint (Pet. App. 33a-51a). The ALJ found that "(r)espondent's reliance on the DOD and DA Regulations as the basis for its rejection of (the union's) demand for administrative leave was in good faith" (id. at 43a). Noting that the DOD regulations were "'agency' regulations within the meaning of (5 U.S.C. 7117(a)(2) and (3))" and that "the DA Regulations were issued by a primary national subdivision of said agency' within the meaning of (5 U.S.C. 7117(a)(3))," the ALJ explained that under Section 7117(a)(2) the agency therefore had a duty to bargain over the administrative leave proposal "'only if the Authority has determined under (Section 7117(b)) that no compelling need * * * exists for the rule or regulation'" (Pet. App. 44a). Because "(t)he Authority ha(d) made no such determination (with respect to) * * * either the DOD or the DA Regulation" (ibid.), the ALJ concluded that "(r)espondent was under no duty to bargain as to the grant of administrative leave for November 27, 1981" (id. at 45a). 4. The Authority reversed (Pet. App. 18a-32a). It first rejected respondent's contention (id. at 12a) that "it had no duty to establish a compelling need for its regulations without the issue having been raised by the Union under the Authority's negotiability procedures." The Authority acknowledged (id. at 22a-23a) that "when an agency refuses to bargain over a union proposal during ongoing collective bargaining negotiations because the proposal is alleged to be inconsistent with existing agency-wide regulation for which a compelling need exists, section 7117 of the Statute requires that the issue be resolved throught the procedures in section 7117 of the Statute and Part 2424 of the Authority's Rules and Regulations." But relying on its prior decision in Defense Logistics Agency (Cameron Station, Virginia), 12 F.L.R.A. 412 (1983), aff'd sub nom. Defense Logistics Agency v. FLRA, 754 F.2d 1003 (D.C. Cir. 1985), the Authority held (Pet. App. 23a) that "(a) different situation is presented" when an agency is alleged to have made "unilateral changes in conditions of employment" and "issues of negotiability -- including, as in the instant case, assertions of compelling need for agency regulations -- are raised as affirmative defenses" (ibid.). In such cases, the Authority stated (ibid.), the compelling need for an agency-wide regulation may be resolved in two different ways. "(T)he Authority has promulgated procedures * * * which recognize a union's right either: (1) to seek resolution of the entire dispute, including the negotiability issues, in the unfair labor practice forum; or (2) to seek initial and separate resolution of the negotiability issues in the negotiability appeal forum" (ibid.). In reaching this conclusion, the Authority reasoned that in the private sector issues of negotiability may be resolved in unfair labor practice proceedings and is discerned nothing in the Act or in its legislative history to "suggest() that Congress intended to make an exception in the federal sector to this principle" (Pet. App. 23a-24a). The Authority said that the negotiability appeals procedures contained in Section 7117(b) do not "preclude the Authority from resolving any necessary negotiability issues, including those related to the compelling need for an agency regulation, in a unilateral change unfair labor practice case" (Pet. App. 24a). And it found confirmation for that view in the "pre-Statute labor-management relations program, Executive Order 11491, (which) authorized precisely what the Authority's procedures * * * were promulgated to permit: unified processing of any compelling need negotiability issue in the unfair labor practice proceeding in which it arises" (id. at 25a (footnote omitted)). The Authority asserted that its approach to the determination of compelling need issues "effectuates Congress' goal to facilitate and promote the collective bargaining process by providing for the resolution of all relevant issues in one proceeding, thereby obviating the delay inherent in two separate and consecutive proceedings" (ibid.). Having decided that the compelling need for the regulations in this case could be resolved in the ULP proceedings, the Authority next found that respondent had "failed to sustain its burden of establishing a compelling need for the DOD and DA regulations in accordance with * * * the Authority's Rules and Regulations (Pet. App. 27a). It held that respondent had not shown that the regulations in question promoted the "goal of conserving energy" in that "(t)he record is barren of evidence which would demonstrate how the granting of administrative leave to unit employees, rather than annual leave, as the Union's proposal at issue here would require, in any way affects the Respondent's stated objective of conserving energy" (ibid.). The Authority accordingly held that respondent had violated Section 7116(a)(1) and (5) when it refused to negotiate concerning the administrative leave proposal (Pet. App. 28a). It ordered respondent to cease and desist from its refusal to negotiate, and it granted certain additional affirmative relief (id. at 28a-30a). 5. Relying on its earlier decision in United States Army Engineer Center, Fort Belvoir v. FLRA, 762 F.2d 409 (1985) (Pet. App. 52a-69a), the court of appeals, in an unpublished order, summarily reversed (id. at 16a). In Fort Belvoir, a union instituted a ULP proceeding under Section 7118 when Fort Belvoir, a component of the Department of the Army, refused to negotiate concerning an Army regulation that established a new performance appraisal system. As in the present case, the Authority decided in the context of the ULP proceeding that there was no compelling need for the Army regulation. The court of appeals reversed, holding (Pet. App. 57a-58a (emphasis in the original)) that "(t)he Federal Labor Management Relations Act states in unambiguous terms that, where an agency regulation is asserted as a bar to negotiations between a governmental employer and a union, the FLRA must determine that no compelling need for the regulation exists before any duty to bargain arises on the part of the part of the employer." The court observed further that "(i)t is illogical, in light of this language, to maintain that a union could charge an agency with having engaged in or engaging in an unfair labor practice,' 5 U.S.C. Section 7118(a), because the employer has refused to bargain over subject matter as to which no duty to bargain has been determined to exist" (id. at 61a (emphasis in the original)). The court examined the legislative history of the Act and concluded that Congress had deliberately chosen "to provide separate avenues of negotiability appeals and unfair labor practice proceedings to resolve different kinds of questions" (id. at 67a (emphasis in the orignial)). Noting in particular the procedural differences between a negotiability appeal under Section 7117(b) and a ULP proceeding, the court held that Congress intended under Section 7117 "to give a governmental agency the "flexibility to issue and revise regulations which the agency deems essential to accomplish its executive function,' * * * while protecting the agency from the risk of thereby incurring the sanctions of an unfair labor practice proceeding" (Pet. App. 69a). The court accordingly concluded (ibid.) that "Congress meant the Section 7117(b) negotiability appeal to be the sole means of determining a compelling need question under the statute." ARGUMENT The court of appeals' decision is correct. There is, however, a conflict between the Fourth Circuit and the D.C. Circuit concerning whether the compelling need for agency-wide regulations must be determined in a negotiability appeal under Section 7117, or may also be determined in a ULP proceeding. While it is not clear that the D.C. Circuit would decide the present case differently than the Fourth Circuit did, we believe that this case is an appropriate vehicle to resolve the conflict. We therefore agree with petitioner that further review by this Court is warranted. 1. The court of appeals predicted its summary reversal in this case on its prior decision in Fort Belvoir. There, the Fourth Circuit held that compelling need may be challenged only in a negotiability appeal under Section 7117. The plain language of the statute requires that conclusion. Section 7117(a)(2) states that the duty to bargain in good faith extends to matters covered by agency regulations "only is the Authority has determined under (Section 7117(b)) that no compelling need * * * exists for the rule or regulation." Until the Authority has made a determination of compelling need, an agency is under no duty to bargain over a matter covered by a regulation and thus cannot have committed an unfair labor practice. As the court of appeals put it, "(i)t is illogical, in light of this language, to maintain that a union could charge an agency with 'having engaged in or engaging in an unfair labor practice,' 5 U.S.C. Section 7118(a), because the employer has refused to bargain over subject matter as to which no duty to bargain has been determined to exist" (Pet. App. 61a (emphasis in the original)). The language of the statute is well-suited to its evident purpose of "prescrib(ing) the rights and obligations of employees" while at the same time "establish(ing) procedures to meet the special needs of the Federal Government in the labor-management relationship" (H.R. Rep. 95-1403, supra at 38). In order to ensure "Federal agencies the right to manage government operations efficiently and effectively" (S. Rep. 95-969, 95th Cong., 2d Sess. 12 (1978)), Congress enacted in Section 7117 a separate "procedure for determining whether matters affecting conditions of employment which are the subject of any * * * (agency-wide) rule or regulation shall be negotiable" (H.R. Rep. 95-1403, supra at 51). Hearings under that section must be "expedited"; they do not include the Authority's General Counsel as a party; and they provide for participation by the agency or primary national subdivision that issued the regulation as a necessary party (5 U.S.C. 7117(b)(3) and (4)). These procedures were carefully designed to give the agency an appropriate opportunity to establish that "there is a demonstrated, and justified, and overriding need" for the regulation at issue (H.R. Rep. 95-1403, supra, at 51). Having enacted the negotiability appeal procedures with such meticulous care, Congress cannot be supposed at the same time to have, sub silentio, empowered the Authority to circumvent Section 7117 entirely by deciding compelling need questions in the context of a ULP proceeding -- to which the General Counsel is a party, and to which the agency that promulgated the regulation ordinarily is not. 2. In rejecting the Authority's position in Fort Belvoir, the Fourth Circuit took issue (Pet. App. 61a) with the decision of the D.C. Circuit in Defense Logistics Agency v. FLRA, 754 F.2d 1003 (1985). In that case the agency issued a revised regulation redefining the class of employees required to file "Confidential Statements of Affliations and Financial Interests" (754 F.2d at 1004 (citation omitted)). After one of the subordinate offices of the agency announced the changes to its employees, a union representing an appropriate bargaining unit proposed certain changes in the new regulation. The agency claimed that the regulation was nonnegotiable and the union thereupon filed a ULP charge with the Authority. Disagreeing with the ALJ in the case, the Authority concluded that it was free to resolve the compelling need for the new regulation in the context of the ULP proceeding. It acknowledted (id. at 1006 (citations omitted; emphasis added)) that "the Section 7117(b) negotiability appeal is the sole avenue for resolving the question of compelling need in the case 'where an exclusive representative submits proposals on a matter subject to collective bargaining and the agency or activity asserts that such proposals are nonnegotiable because they conflict with an existing agency regulation for which a compelling need exists.'" The Authority contended, however, that "(t)he promulgation of a new agency-wide rule that effects * * * 'actual or contemplated changes in conditions of employment'" (ibid. (emphasis added)) may be considered in a ULP proceeding. The D.C. Circuit held that while the Authority's construction of the statute was "not required" (754 F.2d at 1011) (footnote omitted)), there was a "permissible" and "reasonable" basis (id. at 1014) for the Authority's "distinction between, on the one hand, an Agency's refusal to bargain over a proposed put forth during ongoing negotiations that concerns a matter covered by an existing agency-wide rule, and, on the other hand, a refusal to bargain over a new agency-wide rule that effects a change in working conditions" (id. at 1008). The court found the language and history of the statute indeterminate (see id. at 1007-1011), and relied instead on policy reasons that it found to justify determining the compelling need for new regulations (as opposed to existing regulations) in a ULP proceeding (id. at 1012-1013): From the perspective of the employees, the ULP proceeding is far more desirable than the Section 7117(b) proceeding in the context of an agency's refusal to bargain over a proposed or newly promulgated rule affecting working conditions. When an agency, during the course of negotiations over a contract, refuses to bargain over a proposal that the agency believes to be in conflict with an agency-wide rule, the employees suffer no harm or lost expectations; they simply fail in an effort to change existing working conditions. * * * By contrast, when the agency refuses to bargain over a new rule, promulgated in the middle of a contract term, the employees are made to suffer whatever detriment * * * the rule effects. In light of these policies, the court found that it could not "say the Authority acted in contravention of the statutory purpose" (id. at 1013) when it concluded that it was free under the Act to resolve the compelling need for newly-issued regulations in a ULP proceeding. 3. As the Fourth Circuit recognized (Pet. App. 61a), its holding in Fort Belvoir was in conflict with the D.C. Circuit's decision in Defense Logistics Agency. Both of these cases involved newly issued regulations. The Fourth Circuit rejected (Pet. App. 61a) any distinction between cases involving preexisting regulations nd cases involving new or changed regulations, and held that in all cases compelling need may be decided only by a negotiability appeal under Section 7117. By contrast, the D.C. Circuit held in Defense Logistics Agency that the compelling need for newly-issued regulations may be resolved in a ULP proceeding. Contrary to petitioner's assertion (Pet. 12, 25), that conflict is not squarely presented by the present case. Here, unlike in Defense Logistics Agency, the agency did not issue a new regulation; rather, it asserted that an existing regulation (as applied in the particular situation of a post-Thanksgiving shutdown) precluded negotiation concerning the union's administrative leave proposal. The D.C. Circuit's opinion in Defense Logistics Agency expressly declined to consider whether the compelling need for existing regulations may be determined outside Section 7117. But while it is thus unclear whether the D.C. Circuit would have reached the same result as the Fourth Circuit did in the present case, we believe that the conflict between the circuits should be resolved and that this case is an appropriate vehicle to do so. For the reasons adduced by the Fourth Circuit, the D.C. Circuit's distinction between new and existing regulations is untenable. Nothing in Section 7117 carves out an exception for newly-issued regulations and the D.C. Circuit found no textual basis for the distinction that it drew. Moreover, the policy reasons for the statutes do not justify any such distinction: an agency's need for flexibility in promulgating regulations -- and its strong interest in being a necessary party to any proceeding in which the compelling need for its regulations is at issue -- are not diminished when new, rather than existing, regulations are involved. In addition, while the D.C. Circuit's decision is by its terms limited to newly-issued regulations, the Authority has made it clear that it reads the case quite broadly. As both its decision and its petition to this Court in this case confirm, the Authority is apparently intent on resolving compelling need challenges in ULP proceedings whenever a regulation -- newly-issued or otherwise -- effects an "alleged unilateral change in conditions of employment" (Pet. 4). Because the phrase "conditions of employment" is deliberately broad under the statute (see 5 U.S.C. 7103(a)(14)), and because (as illustrated by this case) the application of an existing regulation to new circumstances in a manner that can be said to change conditions of employment is a frequent occurence, the Authority, if unchecked, will continue to decide a wide range of compelling need issues outside the format established by Section 7117. /2/ We believe that such a practice is at odds with the compromise reached by Congress between the rights of federal employees on the one hand, and, on the other hand, the flexibility that federal agencies require in order to discharge their public functions. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. CHARLES FRIED Solicitor General RICHARD K. WILLARD Assistant Attorney General WILLIAM KANTER DEBORAH RUTH KANT Attorneys JULY 1987 /1/ DA Regulation CPR 990-2 provides, in relevant part (Pet. App. 42a-43a (quotation marks omitted)): S3-2. Relieving Daily, Hourly, or Piecework Employees From Duty * * * * C. Where advance notice can be given. The authority to excuse employees administratively is not to be used in instances where the period of interruption or suspended operations can be anticipataed sufficiently in advance to permit arranging for assignment to other work or the scheduling of annual leave. Normally, where 24 hours' advance notice can be given, employees who cannot be assigned to other work must be placed on annual leave with or without their consent. DOD Regulation 1400.25-M provides, in relevant part (Pet. App. 43a (quotation marks omitted)): S3-1 * * * d. Limitation on Authority to Dismiss Employees Without Charge to Leave == * * * * (2) When, because of planned management reasons, the closing of all or part of an activity is required for short periods of time, employees will no notified no less than one full work shift in advance and will be required to take annual leave unless leave without pay is requested. (3) Group dismissal authority will not be used to create a holiday. /2/ In fact, we are advised by the Department of the Army that the Authority has sought or is presently seeking to decide in ULP proceedings the compelling need for agency-wide regulations governing matters as diverse as Army civilian drug testing, pay and fringe benefits, merit promotions, reductions in force, and travel and per diem allowances.