American Federation of Government Employees, Local 3385, AFL-CIO (Union) and Federal Home Loan Bank Board, District 7, Chicago, Illinois (Agency)

 



[ v07 p398 ]
07:0398(58)NG
The decision of the Authority follows:


 7 FLRA No. 58
 
 AMERICAN FEDERATION OF GOVERNMENT
 EMPLOYEES, AFL-CIO, LOCAL 3385
 Union
 
 and
 
 FEDERAL HOME LOAN BANK BOARD,
 DISTRICT 7, CHICAGO, ILLINOIS
 Agency
 
                                            Case No. 0-NG-108
 
                DECISION AND ORDER ON NEGOTIABILITY ISSUES
 
    THE PETITION FOR REVIEW IN THIS CASE COMES BEFORE THE FEDERAL LABOR
 RELATIONS AUTHORITY (THE AUTHORITY) PURSUANT TO SECTION 7105(A)(2)(D)
 AND (E) OF THE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE (THE
 STATUTE) (5 U.S.C. 7101 ET SEQ.).  THE ISSUES INVOLVED ARE THE
 TIMELINESS OF THE PETITION AND THE NEGOTIABILITY OF TWO UNION PROPOSALS.
 
    THE AGENCY REQUESTS THAT THE UNION'S PETITION FOR REVIEW BE DISMISSED
 AS UNTIMELY FILED, CLAIMING IT WAS FILED MORE THAN FIVE MONTHS AFTER
 EXPIRATION OF THE TIME PERMITTED BY THE STATUTE.  ACCORDING TO THE
 RECORD THE RELEVANT FACTS ARE AS FOLLOWS:  IN NEGOTIATIONS, THE AGENCY
 TOOK THE POSITION THAT UNION PROPOSALS I AND II, INFRA, WERE
 NONNEGOTIABLE AND SO NOTIFIED THE UNION BY LETTERS DATED JANUARY 17,
 1979, AND MARCH 30, 1979.  SUBSEQUENTLY, BY LETTER TO THE AGENCY DATED
 MAY 15, 1979, THE UNION REQUESTED AN AGENCY ALLEGATION CONCERNING THE
 DUTY TO BARGAIN ON THE MATTERS ENCOMPASSED IN THE PROPOSALS.  THE AGENCY
 ALLEGATION RENDERED IN RESPONSE TO THE UNION REQUEST WAS RECEIVED BY THE
 UNION ON JUNE 18, 1979, AND THE UNION FILED THE INSTANT PETITION WITH
 THE AUTHORITY WITHIN FIFTEEN DAYS, ON JULY 2, 1979.  FOR THE FOLLOWING
 REASONS, THE AUTHORITY CONCLUDES THAT THE UNION'S APPEAL WAS TIMELY
 FILED.
 
    SECTION 7117(C) OF THE STATUTE PROVIDES, IN PERTINENT PART, THAT " .
 . . IF AN AGENCY INVOLVED IN COLLECTIVE BARGAINING WITH AN EXCLUSIVE
 REPRESENTATIVE ALLEGES THAT THE DUTY TO BARGAIN IN GOOD FAITH DOES NOT
 EXTEND TO ANY MATTER, THE EXCLUSIVE REPRESENTATIVE MAY APPEAL THE
 ALLEGATION TO THE AUTHORITY . . . ON OR BEFORE THE 15TH DAY AFTER THE
 DATE ON WHICH THE AGENCY FIRST MAKES THE ALLEGATION . . . ." THUS, THE
 STATUTE PROVIDES THAT A UNION APPEAL IS TO BE FILED WITHIN FIFTEEN DAYS
 FROM THE DATE THE AGENCY FIRST MAKES AN ALLEGATION THAT A MATTER
 PROPOSED FOR BARGAINING IS NOT WITHIN THE DUTY TO BARGAIN.  THE STATUTE
 FAILS TO SPECIFY, HOWEVER, HOW AN AGENCY ALLEGATION OF NONNEGOTIABILITY
 WHICH WOULD START THE RUNNING OF THE TIME LIMIT FOR AN APPEAL IS TO BE
 DISTINGUISHED FROM STATEMENTS DESIGNED TO ELICIT DIALOGUE IN THE CONTEXT
 OF ONGOING NEGOTIATIONS WHICH, THEREFORE, WOULD NOT FORECLOSE FURTHER
 BARGAINING.  FURTHERMORE, IT DOES NOT PROVIDE FOR DOCUMENTING THE DATE
 ON WHICH SUCH AN ALLEGATION IS MADE SO AS TO PROVIDE THE MEANS OF
 DETERMINING WITH REASONABLE CERTAINTY WHEN THE FIFTEEN DAY PERIOD FOR
 FILING AN APPEAL WILL BEGIN TO RUN.
 
    HENCE, PURSUANT TO ITS MANDATE UNDER SECTIONS 7105 AND 7134 OF THE
 STATUTE, /1/ THE AUTHORITY ADOPTED THE FOLLOWING CLARIFYING RULE OF
 PROCEDURE IN SECTION 2424.3 (5 CFR 2424.3(1981)) WHEREBY ISSUES RELATED
 TO THE DUTY TO BARGAIN UNDER SECTION 7117(C) MAY BE PROCESSED AND
 RESOLVED:
 
    SEC. 2424.3 TIME LIMITS FOR FILING.
 
    THE TIME LIMIT FOR FILING A PETITION FOR REVIEW IS FIFTEEN (15) DAYS
 AFTER THE DATE THE
 
    AGENCY'S ALLEGATION THAT THE DUTY TO BARGAIN IN GOOD FAITH DOES NOT
 EXTEND TO THE MATTER
 
    PROPOSED TO BE BARGAINED IS SERVED ON THE EXCLUSIVE REPRESENTATIVE.
 THE EXCLUSIVE
 
    REPRESENTATIVE SHALL REQUEST SUCH ALLEGATION IN WRITING AND THE
 AGENCY SHALL MAKE THE
 
    ALLEGATION IN WRITING AND SERVE A COPY ON THE EXCLUSIVE
 REPRESENTATIVE . . . .
 
    IN ESTABLISHING THE ABOVE-QUOTED RULE OF PROCEDURE TO IMPLEMENT
 SECTION 7117(C) OF THE STATUTE, THE AUTHORITY HAS CARRIED OUT THE CLEAR
 INTENT OF CONGRESS IN TWO FUNDAMENTAL RESPECTS.  FIRST, THE RULE
 FACILITATES THE EXPEDITIOUS PROCESSING OF APPEALS UNDER SECTION 7117 TO
 THE EXTENT PRACTICABLE AND, FURTHER, IT FOSTERS THE AMICABLE SETTLEMENT
 OF DISPUTES THROUGH COLLECTIVE BARGAINING RATHER THAN THROUGH
 UTILIZATION OF THE AUTHORITY'S PROCESS.
 
    WITH RESPECT TO THE FORMER, SECTION 7117(C)(6) OF THE STATUTE
 REQUIRES THE AUTHORITY TO EXPEDITE PROCEEDINGS FOR THE RESOLUTION OF
 NEGOTIABILITY ISSUES TO THE EXTENT PRACTICABLE.  SECTION 2424.3 OF THE
 RULES, CONSISTENT WITH THIS CONGRESSIONAL INTENT, PROVIDES A SIMPLE AND
 OBJECTIVE BASIS UPON WHICH TO DETERMINE WHICH AGENCY STATEMENTS
 CONSTITUTE "ALLEGATIONS" WITHIN THE MEANING OF THE STATUTE AND, FURTHER,
 WHEN SUCH ALLEGATIONS ARE MADE FOR THE PURPOSE OF COMPUTING THE FIFTEEN
 DAY TIME LIMIT WITHIN WHICH A UNION APPEAL MUST BE FILED.  IN THIS
 MANNER, THE RULE OBVIATES THE POTENTIAL FOR DELAY IN NEARLY EVERY CASE
 CAUSED BY DISPUTES BETWEEN PARTIES AS TO WHETHER AND/OR WHEN AN
 ALLEGATION HAS BEEN MADE.  CORRELATIVELY, IT ENABLES THE AUTHORITY TO
 DEVOTE ITS RESOURCES TO RESOLVING SUBSTANTIVE NEGOTIABILITY ISSUES AS TO
 WHETHER PROPOSALS ARE INCONSISTENT WITH APPLICABLE LAW, RULE OR
 REGULATION, RATHER THAN INVOLVING ITSELF IN RESOLVING ESSENTIALLY
 FACTUAL DISPUTES.
 
    MOREOVER, AS TO THE SETTLEMENT OF DISPUTES THROUGH COLLECTIVE
 BARGAINING, CONGRESS, IN ENACTING SECTION 7101 OF THE STATUTE, EXPRESSLY
 FOUND THAT COLLECTIVE BARGAINING "FACILITATES AND ENCOURAGES THE
 AMICABLE SETTLEMENTS OF DISPUTES BETWEEN EMPLOYEES AND THEIR EMPLOYERS
 INVOLVING CONDITIONS OF EMPLOYMENT" AND, THUS, IS IN THE PUBLIC
 INTEREST.  THE RULE IS CONSISTENT WITH THIS FINDING.  BY PROVIDING THAT
 AN AGENCY'S ALLEGATION THAT A UNION'S PROPOSAL IS NOT WITHIN THE DUTY TO
 BARGAIN MUST BE MADE ONLY IN RESPONSE TO THE UNION'S REQUEST FOR AN
 ALLEGATION, THE RULE ENSURES THAT A UNION WILL NOT BE DIVERTED FROM
 FURTHER NEGOTIATIONS AND FORCED TO FILE AN APPEAL BEFORE IT WISHES TO DO
 SO, SIMPLY TO AVOID LOSING ITS RIGHT OF APPEAL BY THE RUNNING OF THE
 TIME LIMIT. RATHER, THE RULE PRESERVES THE UNION'S RIGHT UNTIL IT
 REQUESTS AN ALLEGATION, THEREBY ENABLING IT FIRST TO PROPOSE
 ALTERNATIVES OR TO BARGAIN OVER AGENCY COUNTERPROPOSALS AS A MEANS OF
 RESOLVING THE DISPUTE WITHOUT INVOKING THIRD-PARTY INTERVENTION.  THUS,
 THE RULE PROMOTES THE SETTLEMENT OF DISPUTES THROUGH COLLECTIVE
 BARGAINING.  /2/
 
    FOR THESE REASONS AND BASED UPON SECTION 2424.3 OF ITS RULES, THE
 AUTHORITY CONCLUDES THAT THE UNREQUESTED ALLEGATIONS PROFFERED IN THIS
 CASE BY THE AGENCY IN JANUARY DID NOT START THE RUNNING OF THE TIME
 LIMIT FOR THE UNOIN'S FILING OF THE INSTANT APPEAL.  RATHER, THE TIME
 LIMIT BEGAN TO RUN ONLY WHEN THE AGENCY RESPONDED TO THE UNION'S REQUEST
 FOR AN ALLEGATION AND, WITH RESPECT TO THAT RESPONSE, THE UNION'S APPEAL
 WAS FILED WITHIN THE PRESCRIBED 15-DAY PERIOD.  THEREFORE, THE AGENCY'S
 REQUEST TO DISMISS THE INSTANT PETITION AS UNTIMELY FILED IS DENIED.
 
                             UNION PROPOSAL I
 
    ARTICLE XIV -- OFFICIAL PERSONNEL FOLDERS AND PERFORMANCE STANDARDS
 
    SECTION 5 -- NO UNIT MEMBER WILL BE REQUIRED TO RATE, EVALUATE, OR
 GRADE PERFORMANCE
 
    ACHIEVEMENT LEVELS OF ANOTHER UNIT MEMBER.
 
                       QUESTION BEFORE THE AUTHORITY
 
    THE QUESTION IS WHETHER UNION PROPOSAL I IS OUTSIDE THE DUTY TO
 BARGAIN BECAUSE IT IS INCONSISTENT WITH SECTION 7106 OF THE STATUTE, AS
 ALLEGED BY THE AGENCY.
 
                                  OPINION
 
    CONCLUSION AND ORDER:  UNION PROPOSAL I IS OUTSIDE THE DUTY TO
 BARGAIN BECAUSE IT IS INCONSISTENT WITH MANAGEMENT'S RIGHT TO ASSIGN
 WORK PURSUANT TO SECTION 7106 OF THE STATUTE.  ACCORDINGLY, PURSUANT TO
 SECTION 2424.10 OF THE AUTHORITY'S RULES AND REGULATIONS (5 CFR 2424.10
 (1981)), IT IS ORDERED THAT THE PETITION FOR REVIEW OF THE DISPUTED
 PROPOSAL BE, AND IT HEREBY IS, DISMISSED.
 
    REASONS:  BASED UPON THE RECORD, THE CIRCUMSTANCES IN WHICH THE
 PROPOSAL WOULD APPLY ARE AS FOLLOWS.  PROFESSIONAL EMPLOYEES IN FIELD
 OFFICES OF THE AGENCY ARE ASSIGNED TO CONDUCT ON-SITE EXAMINATIONS OF
 SAVINGS AND LOAN ASSOCIATIONS.  THE AGENCY HAS ASSIGNED
 "EXAMINERS-IN-CHARGE," WHO MAY BE MEMBERS OF THE BARGAINING UNIT, THE
 DUTY OF EVALUATING THE PERFORMANCE OF ASSISTING EXAMINERS WHENEVER AN
 ASSIGNMENT EXCEEDS 40 HOURS.  UNION PROPOSAL I, ACCORDING TO THE UNION,
 SEEKS TO PROHIBIT MANAGEMENT FROM REQUIRING BARGAINING UNIT MEMBERS TO
 PERFORM THE DUTIES OF RATING, EVALUATING, OR GRADING THE PERFORMANCE OF
 OTHER BARGAINING UNIT MEMBERS.
 
    SECTION 7106(A)(2)(B) OF THE STATUTE, WHICH RESERVES TO MANAGEMENT
 THE RIGHT TO ASSIGN WORK, PROVIDES IN RELEVANT PART, AS FOLLOWS:
 
    SEC. 7106.  MANAGEMENT RIGHTS
 
    (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(.)
 
    THE EXPRESS LANGUAGE OF THE PROPOSAL HERE IN DISPUTE WOULD PROHIBIT
 MANAGEMENT'S ASSIGNING CERTAIN DUTIES TO BARGAINING UNIT MEMBERS, I.E.,
 RATING, EVALUATING OR GRADING THE PERFORMANCE OF OTHER UNIT EMPLOYEES.
 PROPOSALS WHICH PROHIBIT MANAGEMENT FROM ASSIGNING DUTIES VIOLATE
 SECTION 7106(A)(2)(B) OF THE STATUTE AND THUS ARE OUTSIDE THE DUTY TO
 BARGAIN UNDER SECTION 7117(A).  E.G., ASSOCIATION OF CIVILIAN
 TECHNICIANS AND STATE OF GEORGIA NATIONAL GUARD, 2 FLRA 580(1980).  IN
 THAT CASE, THE AUTHORITY DETERMINED THAT THE UNION'S PROPOSAL, THE
 EXPRESS LANGUAGE OF WHICH PROHIBITED MANAGEMENT'S ASSIGNING GROUNDS
 MAINTENANCE OR OTHER NON-JOB RELATED DUTIES TO TECHNICIANS WITHOUT THEIR
 CONSENT, VIOLATED SECTION 7106(A)(2)(B) OF THE STATUTE.  SEE ALSO,
 AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO AND AIR FORCE
 LOGISTICS COMMAND, WRIGHT-PATTERSON AIR FORCE BASE, OHIO, 2 FLRA 603,
 622-623, 630-632(1980) ENFORCED AS TO OTHER MATTERS SUB NOM. DEPARTMENT
 OF DEFENSE V. FEDERAL LABOR RELATIONS AUTHORITY, 659 F.2D 1140 (D.C.
 CIR. 1981);  NATIONAL LABOR RELATIONS BOARD UNION, LOCAL 19 AND NATIONAL
 LABOR RELATIONS BOARD, REGION 19, 2 FLRA 774(1980);  AND INTERNATIONAL
 ASSOCIATION OF FIRE FIGHTERS, LOCAL F-61 AND PHILADELPHIA NAVAL
 SHIPYARD, 3 FLRA NO. 66(1980) AT 1-4.
 
    THUS, UNION PROPOSAL I CONFLICTS WITH SECTION 7106(A)(2)(B) AND MUST
 BE HELD TO BE OUTSIDE THE DUTY TO BARGAIN UNDER THE STATUTE.
 
                             UNION PROPOSAL II
 
    ARTICLE XXIV -- EXAMINER'S RIGHTS
 
    SECTION 2 - A UNIT EMPLOYEE SHALL NOT BE PROHIBITED FROM ACCEPTING
 LOANS FROM INSTITUTIONS
 
    WHICH ARE MEMBERS OF THE FEDERAL HOME LOAN BANK SYSTEM SO LONG AS THE
 UNIT EMPLOYEE IS GRANTED
 
    TERMS NO MORE FAVORABLE THAN WOULD BE AVAILABLE IN LIKE CIRCUMSTANCES
 TO PERSONS WHO ARE NOT
 
    EMPLOYEES OF THE AGENCY.  ALL LOANS TO UNIT EMPLOYEES GRANTED BY
 MEMBER INSTITUTIONS, WITH THE
 
    EXCEPTION OF SHARE LOANS, SHALL BE FULLY DISCLOSED TO THE DISTRICT
 DIRECTOR-EXAMINATIONS OR
 
    HIS DESIGNEE AT THE TIME OF APPLICATION.
 
                       QUESTION BEFORE THE AUTHORITY
 
    THE QUESTION IS WHETHER UNION PROPOSAL II IS OUTSIDE THE DUTY TO
 BARGAIN BECAUSE, AS ALLEGED BY THE AGENCY, IT IS INCONSISTENT WITH LAW,
 GOVERNMENT-WIDE RULE OR REGULATION, OR AGENCY-WIDE REGULATION FOR WHICH
 A COMPELLING NEED EXISTS.
 
                                  OPINION
 
    CONCLUSION AND ORDER:  UNION PROPOSAL II IS WITHIN THE DUTY TO
 BARGAIN UNDER THE STATUTE SINCE IT IS NOT INCONSISTENT WITH THE STATUTE
 OR OTHER FEDERAL LAW OR GOVERNMENT-WIDE RULES OR REGULATIONS, NOR IS IT
 INCONSISTENT WITH AN AGENCY-WIDE REGULATION FOR WHICH A COMPELLING NEED
 EXISTS.  ACCORDINGLY, PURSUANT TO SECTION 2424.10 OF THE AUTHORITY'S
 RULES AND REGULATIONS (5 CFR 2424.10(1981)), IT IS ORDERED THAT THE
 AGENCY SHALL UPON REQUEST (OR AS OTHERWISE AGREED TO BY THE PARTIES)
 BARGAIN CONCERNING UNION PROPOSAL II.  /3/
 
    REASONS:  THE RECORD SHOWS THAT THE DISPUTE OVER UNION PROPOSAL II
 WAS PART OF NEGOTIATIONS TO REACH A NEW AGREEMENT.  THE DISPUTED
 PROPOSAL IS A CARRYOVER FROM THE EXPIRED AGREEMENT AND REFLECTS THE
 AGENCY'S CONFLICT OF INTEREST REGULATIONS IN EFFECT AT THE TIME THAT
 AGREEMENT WAS NEGOTIATED.  DURING THE COURSE OF THAT AGREEMENT, THE
 AGENCY UNILATERALLY ADOPTED REVISED CONFLICT OF INTEREST REGULATIONS
 WHICH, INSTEAD OF PERMITTING AN UNLIMITED NUMBER OF LOANS FROM
 AGENCY-REGULATED INSTITUTIONS, RESTRICTED THE NUMBER OF SUCH LOANS WHICH
 COULD BE OBTAINED BY AGENCY EMPLOYEES.  IN RESPONSE TO THE UNION
 PROPOSAL THAT THE SECTION FROM THE EXPIRED AGREEMENT BE INCORPORATED
 INTO THE NEW AGREEMENT, THE AGENCY ADVANCES THE FOLLOWING REASONS IN
 SUPPORT OF ITS CONTENTION THAT THE PROPOSAL IS NOT WITHIN THE DUTY TO
 BARGAIN.
 
    THE AGENCY STATES THAT, PURSUANT TO EXECUTIVE ORDER 11222 /4/ AND THE
 OFFICE OF PERSONNEL MANAGEMENT GOVERNMENT-WIDE REGULATION WHICH
 IMPLEMENTS IT, 5 CFR 735(1981), FEDERAL AGENCIES ARE REQUIRED TO
 PROMULGATE REGULATIONS WHICH PRESCRIBE STANDARDS OF CONDUCT AND
 RESPONSIBILITIES FOR AGENCY EMPLOYEES.  THUS, THE AGENCY CONTENDS IT HAS
 A LEGAL MANDATE TO ESTABLISH REGULATIONS WHICH RESTRICT FINANCIAL
 TRANSACTIONS OF EMPLOYEES THAT MAY RESULT IN CONFLICT OF INTEREST
 SITUATIONS AND TO DISCIPLINE EMPLOYEES WHO VIOLATE SUCH REGULATIONS.  IN
 FURTHERANCE OF THIS REQUIREMENT, THE AGENCY ADOPTED NEW CONFLICT OF
 INTEREST REGULATIONS ON NOVEMBER 8, 1977;  THEY WERE APPROVED BY OPM ON
 NOVEMBER 22, 1977, AND PUBLISHED AT 12 CFR 511.735-11(1980).
 
    ALTHOUGH 5 CFR 735(1981) REQUIRES AGENCIES TO PREPARE AND SUBMIT TO
 OPM FOR APPROVAL APPROPRIATE STANDARDS OF EMPLOYEE CONDUCT, AGENCIES
 HAVE DISCRETION UNDER THE REGULATION TO DEFINE AND DELINEATE SPECIFIC
 STANDARDS OF CONDUCT BEFORE SUBMITTING THEM TO OPM FOR APPROVAL.
 NEITHER THE CITED EXECUTIVE ORDER NOR THE REGULATION PROVIDES THAT AN
 IMPLEMENTING AGENCY REGULATION CANNOT BE NEGOTIATED.  MOREOVER, NEITHER
 CONTAINS SPECIFIC REQUIREMENTS WITH WHICH UNION PROPOSAL II IS
 INCONSISTENT.  SPECIFICALLY, WHILE BOTH THE EXECUTIVE ORDER AND THE
 REGULATION CITED BY THE AGENCY PRECLUDE AN EMPLOYEE FROM SOLICITING OR
 ACCEPTING A LOAN FROM A PERSON WHO CONDUCTS OPERATIONS OR ACTIVITIES
 THAT ARE REGULATED BY HIS AGENCY, BOTH ALLOW AGENCIES IN THEIR
 DISCRETION TO GRANT EXCEPTIONS WHICH WOULD PERMIT ACCEPTANCE OF LOANS
 FROM BANKS OR OTHER FINANCIAL INSTITUTIONS FOR PROPER AND USUAL
 ACTIVITIES OF EMPLOYEES, SUCH AS HOME MORTGAGE LOANS.  TO THE EXTENT
 THAT AN AGENCY HAS DISCRETION WITH RESPECT TO A MATTER AFFECTING
 CONDITIONS OF EMPLOYMENT OF ITS EMPLOYEES, THAT MATTER IS WITHIN THE
 DUTY OF THE AGENCY TO BARGAIN CONSISTENT WITH LAW, RULES AND
 REGULATIONS.  SEE, E.G., NATIONAL TREASURY EMPLOYEES UNION, CHAPTER 6
 AND INTERNAL REVENUE SERVICE, NEW ORLEANS DISTRICT;, 3 FLRA NO.
 118(1980) AT 12-13 OF AUTHORITY DECISION.  THUS, SINCE EXECUTIVE ORDER
 11222 AND 5 CFR 635(1981) LEAVE TO THE DISCRETION OF AGENCIES THE
 DEFINING OF STANDARDS INCLUDING PERMISSIBLE EXCEPTIONS AS TO THE
 ACCEPTANCE OF LOANS, UNION PROPOSAL II IS NOT INCONSISTENT WITH ANY
 FEDERAL LAW OR ANY GOVERNMENT-WIDE RULE OR REGULATION AND, THEREFORE, IS
 NOT OUTSIDE THE DUTY TO BARGAIN ON THAT GROUND.
 
    THE AGENCY FURTHER CONTENDS THAT THE DISPUTED PROPOSAL CONFLICTS WITH
 MANAGEMENT'S RIGHT TO DISCIPLINE EMPLOYEES PURSUANT TO SECTION
 7106(A)(2)(A) /5/ OF THE STATUTE.  THE AGENCY STATES THAT ITS CONFLICT
 OF INTEREST REGULATIONS INSTRUCT EMPLOYEES AS TO CONDUCT REQUIRED OF
 THEM AND, ACCORDINGLY, SPECIFY CONDUCT FOR WHICH EMPLOYEES MAY BE
 DISCIPLINED AND REMOVED.  AN ESSENTIAL PART OF MANAGEMENT'S RIGHT TO
 DISCIPLINE EMPLOYEES, THE AGENCY ARGUES, IS THE RIGHT TO DETERMINE
 UNILATERALLY THE CONDUCT FOR WHICH EMPLOYEES WILL BE DISCIPLINED.
 
    IN NATIONAL TREASURY EMPLOYEES UNION AND INTERNAL REVENUE SERVICE, 3
 FLRA NO. 112(1980), THE AGENCY SIMILARLY ASSERTED THAT A UNION PROPOSAL
 CONCERNING OUTSIDE EMPLOYMENT VIOLATED MANAGEMENT'S RIGHT UNDER SECTION
 7106(A)(2)(A) TO DISCIPLINE ITS EMPLOYEES.  THE AUTHORITY HELD THE
 PROPOSAL WOULD NOT RESTRICT THAT AGENCY'S RIGHT TO DISCIPLINE.  THE
 AUTHORITY FOUND THAT NEITHER THE LANGUAGE NOR THE STATED INTENT OF THE
 PROPOSAL WOULD PREVENT MANAGEMENT FROM DISCIPLINING AN EMPLOYEE WHO
 FAILED UPON DIRECTION TO DISCONTINUE OUTSIDE EMPLOYMENT.
 
    LIKEWISE, IN THE INSTANT CASE, NEITHER THE LANGUAGE NOR THE STATED
 INTENT OF THE DISPUTED PROPOSAL WOULD PRECLUDE THE AGENCY'S RIGHT TO
 DISCIPLINE A UNIT EMPLOYEE WHO TOOK ACTION INCONSISTENT WITH ITS TERMS.
 IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE PROPOSED LANGUAGE
 APPEARED IN THE AGREEMENT BETWEEN THE PARTIES FROM 1973 THROUGH 1978
 WITHOUT, INSOFAR AS APPEARS IN THE RECORD, ANY RESTRICTION OF THE
 AGENCY'S RIGHT OR ABILITY TO DISCIPLINE EMPLOYEES.  ACCORDINGLY, THE
 AGENCY'S CLAIM THAT THE DISPUTED PROPOSAL VIOLATES MANAGEMENT'S RIGHT TO
 DISCIPLINE EMPLOYEES CANNOT BE SUSTAINED, AND THE ALLEGATION TO THAT
 EFFECT IS SET ASIDE.
 
    THE AGENCY FURTHER CONTENDS THAT UNION PROPOSAL II IS NOT WITHIN THE
 DUTY TO BARGAIN BECAUSE IT IS INCONSISTENT WITH AN AGENCY-WIDE
 REGULATION FOR WHICH A COMPELLING NEED EXISTS.  AS NOTED ABOVE, DURING
 THE TERM OF THE PRIOR AGREEMENT THE AGENCY ADOPTED AN AGENCY-WIDE
 REGULATION (12 CFR 511.735-11(1980)) WHICH LIMITS EMPLOYEE ACCEPTANCE OF
 LOANS FROM AGENCY-REGULATED INSTITUTIONS.
 
    SECTION 2424.11(A) OF THE AUTHORITY'S RULES AND REGULATIONS, THE
 CRITERION UPON WHICH THE AGENCY ESSENTIALLY RELIES IN ALLEGING THAT ITS
 REGULATION IS SUPPORTED BY A COMPELLING NEED, REQUIRES THE AGENCY TO
 SHOW THAT ITS RULE OR REGULATION IS "ESSENTIAL, AS DISTINGUISHED FROM
 HELPFUL OR DESIRABLE, TO THE ACCOMPLISHMENT OF THE MISSION . . . OF THE
 AGENCY" IN ORDER TO DEMONSTRATE THAT A COMPELLING NEED FOR IT EXISTS.
 /6/ AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO, LOCAL 1928 AND
 DEPARTMENT OF THE NAVY, NAVAL AIR DEVELOPMENT CENTER, WARMINSTER,
 PENNSYLVANIA, 2 FLRA 450(1980).
 
    THE AGENCY ARGUES THAT ITS CONFLICT OF INTEREST REGULATION IS
 ESSENTIAL TO THE ACCOMPLISHMENT OF THE AGENCY'S MISSION AND IS AN
 ESSENTIAL ADJUNCT TO THE EFFECTUATION OF THE PUBLIC INTEREST.  ITS
 MISSION, THE AGENCY STATES, IS TO DISCHARGE ITS REGULATORY
 RESPONSIBILITIES OVER THE SAVINGS AND LOAN INDUSTRY IN SUCH A WAY THAT
 EVERY CITIZEN WILL HAVE COMPLETE CONFIDENCE IN THE INTEGRITY OF THE
 AGENCY'S OPERATIONS.  THE AGENCY CONTENDS THAT IT IS NECESSARY TO
 MAINTAIN UNUSUALLY HIGH STANDARDS OF HONESTY, INTEGRITY, AND
 IMPARTIALITY IN ORDER TO MAINTAIN THAT PUBLIC CONFIDENCE IN THE AGENCY'S
 OPERATIONS WHICH IS NECESSARY TO THE SUCCESS OF THE AGENCY'S MISSION.
 THE UNION ARGUES THAT THE AGENCY HAS NOT MET ITS BURDEN OF DEMONSTRATING
 COMPELLING NEED, SINCE THE AGENCY WAS ABLE TO ACCOMPLISH ITS MISSION
 UNDER ITS PRIOR REGULATION (THE LANGUAGE OF WHICH IS REFLECTED IN THE
 UNION'S PROPOSAL) AND THAT, ACCORDINGLY, THE PRESENT CONFLICT OF
 INTEREST REGULATION CANNOT BE DEEMED "ESSENTIAL" TO THE AGENCY'S
 MISSION.
 
    THE AGENCY HAS NOT ARGUED, NOR DOES IT APPEAR FROM THE RECORD, THAT
 THE AGENCY WAS UNABLE TO ACCOMPLISH ITS MISSION UNDER THE PRIOR
 REGULATION WHICH WAS IN EFFECT AT LEAST FROM 1973 UNTIL THE ADOPTION OF
 THE NEW REGULATION IN 1977 AND DURING ALL OF WHICH TIME EXECUTIVE ORDER
 11222 AND 5 CFR 735(1981) WERE IN EFFECT.  THEREFORE, THE AGENCY HAS NOT
 MET ITS BURDEN OF DEMONSTRATING THAT THIS REGULATION IS ESSENTIAL, AS
 DISTINGUISHED FROM HELPFUL OR DESIRABLE, TO THE ACCOMPLISHMENT OF THE
 MISSION OF THE AGENCY.  ACCORDINGLY, THE AGENCY HAS NOT DEMONSTRATED
 UNDER THE REQUIREMENTS SET FORTH IN THE AUTHORITY'S RULES AND
 REGULATIONS THAT A COMPELLING NEED EXISTS FOR ITS CONFLICT OF INTEREST
 REGULATION AND ITS CLAIM THAT THE REGULATION IS A BAR TO NEGOTIATIONS ON
 UNION PROPOSAL II CANNOT BE SUSTAINED.
 
    ISSUED, WASHINGTON, D.C., DECEMBER 18, 1981
 
                       RONALD W. HAUGHTON, CHAIRMAN
 
                       HENRY B. FRAZIER III, MEMBER
 
                        LEON B. APPLEWHAITE, MEMBER
 
                     FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
 --------------- FOOTNOTES: ---------------
 
 
    /1/ SECTION 7105(A)(2)(E) OF THE STATUTE PROVIDES IN RELEVANT PART,
 AS FOLLOWS:
 
    SEC. 7105.  POWERS AND DUTIES OF THE AUTHORITY
 
   .          .          .          .
 
 
    (A)(2) THE AUTHORITY SHALL, TO THE EXTENT PROVIDED IN THIS CHAPTER
 AND IN ACCORDANCE WITH REGULATIONS PRESCRIBED BY THE AUTHORITY--
 
   .          .          .          .
 
 
    (E) RESOLVES ISSUES RELATING TO THE DUTY TO BARGAIN IN GOOD FAITH
 UNDER SECTION 7117(C) OF
 
    THIS TITLE(.)
 
    AND SECTION 7134 OF THE STATUTE PROVIDES AS FOLLOWS:
 
    SEC. 7134.  REGULATIONS
 
    THE AUTHORITY, THE GENERAL COUNSEL, THE FEDERAL MEDIATION AND
 CONCILIATION SERVICE, THE
 
    ASSISTANT SECRETARY OF LABOR FOR MANAGEMENT RELATIONS, AND THE PANEL
 SHALL EACH PRESCRIBE
 
    RULES AND REGULATIONS TO CARRY OUT THE PROVISIONS OF THIS CHAPTER
 APPLICABLE TO EACH OF THEM,
 
    RESPECTIVELY.  PROVISIONS OF SUBCHAPTER II OF CHAPTER 5 OF THIS TITLE
 SHALL BE APPLICABLE TO
 
    THE ISSUANCE, REVISION, OR REPEAL OF ANY SUCH RULE OR REGULATION.
 
    /2/ ADDITIONAL PRACTICAL BENEFITS ALSO FLOW FROM THE RULE.  AS A
 CONSEQUENCE OF ALLOWING UNIONS SOME CONTROL OVER WHEN THE TIME LIMIT FOR
 FILING AN APPEAL WILL START TO RUN, THE RULE TENDS TO INHIBIT THE
 UNNECESSARY ENLARGEMENT OF THE AUTHORITY'S DOCKET WITH CASES FILED ONLY
 TENTATIVELY FOR THE PURPOSE OF PRESERVING A RIGHT OF APPEAL.
 FURTHERMORE, THE RULE MITIGATES AGAINST THE PROLIFERATION OF APPEALS BY
 GIVING A UNION THE OPPORTUNITY TO CONSOLIDATE SOME OR ALL OF THE VARIOUS
 DISPUTES ARISING IN THE SAME NEGOTIATIONS INSTEAD OF BEING FORCED TO
 FILE A SEPARATE APPEAL WITH RESPECT TO EACH INDIVIDUAL DISPUTE.  THUS,
 IT FOSTERS MORE ECONOMICAL OPERATIONS BOTH FOR THE GOVERNMENT AND THE
 UNIONS SIMPLY BY PROVIDING THE OPPORTUNITY FOR A SUBSTANTIAL REDUCTION
 IN THE AMOUNT OF PAPERWORK NECESSARY FOR PARTIES TO PRESERVE THEIR
 RIGHTS UNDER THE STATUTE.
 
    /3/ IN SO DECIDING THAT THE DISPUTED PROPOSAL IS WITH THE DUTY TO
 BARGAIN, THE AUTHORITY, OF COURSE, MAKES NO JUDGMENT AS TO THE MERITS OF
 THE PROPOSAL.
 
    /4/ EXECUTIVE ORDER 11222 PROVIDES IN RELEVANT PART:
 
    SECTION 201.  (A) EXCEPT IN ACCORDANCE WITH REGULATIONS ISSUED
 PURSUANT TO SUBSECTION (B)
 
    OF THIS SECTION, NO EMPLOYEE SHALL SOLICIT OR ACCEPT, DIRECTLY OR
 INDIRECTLY, ANY GIFT,
 
    GRATUITY, FAVOR, ENTERTAINMENT, LOAN, OR ANY OTHER THING OF MONETARY
 VALUE, FROM ANY PERSON,
 
    CORPORATION, OR GROUP WHICH--
 
   .          .          .          .
 
 
    (2) CONDUCTS OPERATIONS OR ACTIVITIES WHICH ARE REGULATED BY HIS
 AGENCY(.)
 
    (B) AGENCY HEADS ARE AUTHORIZED TO ISSUE REGULATIONS, COORDINATED AND
 APPROVED BY THE CIVIL
 
    SERVICE COMMISSION, IMPLEMENTING THE PROVISIONS OF SUBSECTION (A) OF
 THIS SECTION AND TO
 
    PROVIDE FOR SUCH EXCEPTIONS THEREIN AS MAY BE NECESSARY AND
 APPROPRIATE IN VIEW OF THE NATURE
 
    OF THIER AGENCY'S WORK AND THE DUTIES AND RESPONSIBILITIES OF THEIR
 EMPLOYEES.  FOR EXAMPLE,
 
    IT MAY BE APPROPRIATE TO PROVIDE EXCEPTIONS . . .
 
    (3) PERMITTING ACCEPTANCE OF LOANS FROM BANKS OR OTHER FINANCIAL
 INSTITUTIONS ON CUSTOMARY
 
    TERMS TO FINANCE PROPER AND USUAL ACTIVITIES OF EMPLOYEES, SUCH AS
 HOME MORTGAGE LOANS(.)
 
    THE RELEVANT PORTIONS OF 5 CFR 735(1981) DUPLICATE THE ABOVE PORTIONS
 OF EXECUTIVE ORDER 11222.
 
    /5/ SECTION 7106(A)(2)(A) OF THE STATUTE, WHICH RESERVES TO
 MANAGEMENT THE RIGHT TO DISCIPLINE EMPLOYEES, PROVIDES IN RELEVANT PART
 AS FOLLOWS:
 
    SEC. 7106.  MANAGEMENT RIGHTS
 
    (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--
 
    (A) TO HIRE, ASSIGN, DIRECT, LAYOFF, AND RETAIN EMPLOYEES IN THE
 AGENCY, OR TO SUSPEND,
 
    REMOVE, REDUCE IN GRADE OR PAY, OR TAKE OTHER DISCIPLINARY ACTION
 AGAINST SUCH EMPLOYEES(.)
 
    /6/ THE AGENCY APPEARS TO BASE ITS POSITION ON CRITERIA FOR
 COMPELLING NEED (A) AND (E) OF SECTION 2424.11 OF THE AUTHORITY'S
 INTERIM RULES (44 FR 44766 (1979)).  IN ITS FINAL RULES, HOWEVER, THE
 AUTHORITY DETERMINED THAT (E) WAS SUBSUMED IN THE EXPANDED CRITERION
 (A).  45 FR 3485. SECTION 2424.11 OF THE AUTHORITY'S RULES AND
 REGULATIONS (5 CFR 2424.11(1981)) PROVIDES THE CRITERIA FOR DETERMINING
 COMPELLING NEED FOR AGENCY RULES AND REGULATIONS IN PERTINENT PART, AS
 FOLLOWS:
 
    SEC. 2424.11 I