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 9 FLRA No. 46
 
 DEPARTMENT OF THE INTERIOR
 WATER AND POWER RESOURCES SERVICE
 GRAND COULEE PROJECT
 GRAND COULEE, WASHINGTON
 Respondent
 
 and
 
 OFFICE OF THE SECRETARY
 DEPARTMENT OF THE INTERIOR
 WASHINGTON, D.C.
 Respondent
 
 and
 
 COLUMBIA BASIN TRADES COUNCIL,
 AFL-CIO, GRAND COULEE, WASHINGTON
 Charging Party
 
 and
 
 OFFICE OF PERSONNEL MANAGEMENT
 Intervenor
 
                                            Case No. 9-CA-16
 
                            DECISION AND ORDER
 
    THIS MATTER IS BEFORE THE AUTHORITY PURSUANT TO THE REGIONAL
 DIRECTOR'S ORDER TRANSFERRING CASE TO THE FEDERAL LABOR RELATIONS
 AUTHORITY IN ACCORDANCE WITH SECTION 2429.1(A) OF THE AUTHORITY'S RULES
 AND REGULATIONS.
 
    UPON CONSIDERATION OF THE ENTIRE RECORD, INCLUDING THE PARTIES'
 STIPULATION OF FACTS;  ACCOMPANYING EXHIBITS AND BRIEFS SUBMITTED BY THE
 RESPONDENT OFFICE OF THE SECRETARY, DEPARTMENT OF THE INTERIOR;  THE
 GENERAL COUNSEL;  AND THE INTERVENOR, OFFICE OF PERSONNEL MANAGEMENT;
 THE AUTHORITY FINDS:  THE GRAND COULEE PROJECT HAS THE COMBINED
 RESPONSIBILITY FOR OPERATING AND MAINTAINING THE TWO EXISTING
 HYDROELECTRIC GENERATING FACILITIES AT GRAND COULEE DAM, AND
 ADMINISTERING THE CONSTRUCTION BY CONTRACT OF THE THIRD PLANT AND ITS
 APPURTENANT FEATURES.  PURSUANT TO A CHARGE FILED BY THE CHARGING PARTY
 (UNION), THE GENERAL COUNSEL ISSUED A COMPLAINT AGAINST THE RESPONDENTS
 GRAND COULEE PROJECT OFFICE OF THE WATER AND POWER RESOURCES SERVICE
 (PROJECT OR SERVICE) AND THE UNITED STATES DEPARTMENT OF INTERIOR
 (INTERIOR), ALLEGING THAT THE PROJECT, UNDER ORDERS OF INTERIOR, REFUSED
 TO NEGOTIATE WITH REGARD TO AN INCREASE IN THE WAGES OF EMPLOYEES IN
 EXCESS OF THE PAY CAP FOR FISCAL YEAR 1979, IN VIOLATION OF SECTION
 7116(A)(1) AND (5) OF THE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS
 STATUTE (THE STATUTE).  /1/ THE UNION WAS THE EXCLUSIVE REPRESENTATIVE
 OF THE PROJECT'S PREVAILING RATE EMPLOYEES AT ALL TIMES MATERIAL HEREIN.
 
    GENERALLY, THE PREVAILING RATE ACT OF 1972(P.L. 92-392;  5 U.S.C.
 5341 ET. SEQ.) ESTABLISHED PROCEDURES FOR ADJUSTING THE RATES OF CERTAIN
 SKILLED TRADE AND CRAFT EMPLOYEES OF THE FEDERAL GOVERNMENT.  IN THIS
 REGARD, CERTAIN "LEAD" AGENCIES WERE TO DEVELOP AND ESTABLISH
 APPROPRIATE WAGE SCHEDULES AND RATES FOR PREVAILING RATE EMPLOYEES IN
 DESIGNATED GEOGRAPHIC AREAS.  NEGOTIATED WAGE EMPLOYEES SUCH AS THOSE
 REPRESENTED BY THE UNION HEREIN ARE A RELATIVELY SMALL SUBSET OF THE
 RESPONDENTS' PREVAILING RATE EMPLOYEES WHO ARE PERMITTED BY THIS ACT TO
 NEGOTIATE THEIR RATES OF PAY WITH THEIR EMPLOYERS.
 
    ON OCTOBER 10, 1978, CONGRESS ENACTED A 5.5% LIMITATION ON PAY
 INCREASES FOR FEDERAL EMPLOYEES IN FISCAL YEAR 1979(P.L. 95-429).
 DURING WAGE NEGOTIATIONS BETWEEN REPRESENTATIVES OF THE UNION AND THE
 PROJECT IN 1978, A QUESTION AROSE REGARDING THE EFFECT OF THE
 CONGRESSIONAL PAY CAP ON THOSE NEGOTIATIONS.  ON OCTOBER 23, 1978, THE
 QUESTION WAS SUBMITTED TO THE COMPTROLLER GENERAL BY INTERIOR.  ON
 DECEMBER 15, 1978, THE UNION AND PROJECT ENTERED INTO AN AGREEMENT ON
 WAGE INCREASES PENDING THE OUTCOME OF THE SUBMISSION TO THE COMPTROLLER
 GENERAL.  THIS MEMORANDUM OF UNDERSTANDING PROVIDED FOR A 5.5% WAGE
 INCREASE, AND FOR THE RIGHT TO NEGOTIATE ADDITIONAL RETROACTIVE
 INCREASES ABOVE 5.5% IN THE EVENT THE COMPTROLLER GENERAL SHOULD
 DETERMINE THAT THE "PAY CAP" CONTAINED IN PUBLIC LAW 95-429 DID NOT
 APPLY TO PREVAILING RATE EMPLOYEES COVERED BY SECTION 9(B) OF PUBLIC LAW
 92-392 (PREVAILING RATE ACT).  IN REPLY TO INTERIOR'S REQUEST, THE
 COMPTROLLER GENERAL, ON FEBRUARY 1, 1979, DECIDED THAT THE CONGRESSIONAL
 ENACTMENT IN FACT DID NOT APPLY TO SUCH EMPLOYEES, AND THAT AGENCIES,
 SUCH AS THE RESPONDENT HEREIN, WERE STILL BOUND BY THE BARGAINING
 OBLIGATIONS UNDER SECTION 9(B) OF THE PREVAILING RATE ACT.
 
    MEANWHILE, ON JANUARY 4, 1979, A PRESIDENTIAL MEMORANDUM HAD BEEN
 ISSUED TO THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES.  THAT
 MEMORANDUM STATED, IN PERTINENT PART, THAT:
 
    IN THE PUBLIC INTEREST TO CONTROL INFLATION, EACH OFFICER OR EMPLOYEE
 OF THE EXECUTIVE BRANCH WHO HAS ADMINISTRATIVE AUTHORITY TO SET RATES OF
 PAY FOR ANY FEDERAL OFFICERS OR EMPLOYEES SHOULD EXERCISE SUCH
 AUTHORITY, TO THE EXTENT PERMISSIBLE UNDER LAW, TREATY, OR INTERNATIONAL
 AGREEMENT, IN SUCH A WAY AS TO ENSURE THAT NO RATE OF PAY FOR ANY
 CATEGORY OF OFFICERS OR EMPLOYEES IS INCREASED MORE THAN 5.5% DURING
 FISCAL YEAR 1979.
 
    IN A LETTER DATED FEBRUARY 1, 1979, INTERIOR DIRECTED ALL ITS OFFICES
 AND BUREAUS, INCLUDING THE PROJECT, THAT PURSUANT TO THE PRESIDENT'S
 MEMORANDUM OF JANUARY 4, 1979, NO WAGE INCREASE IN EXCESS OF 5.5% COULD
 BE OFFERED OR AGREED TO AT THE BARGAINING TABLE.  ACCORDINGLY, PROJECT
 SPOKESPERSONS AT THE BARGAINING TABLE, AS STIPULATED BY THE PARTIES,
 WERE LEFT WITH NO DISCRETION TO IGNORE OR OTHERWISE EXCEED THE 5.5% PAY
 CAP FOR FISCAL YEAR 1979.
 
    IN RESOLVING THE ISSUES PRESENTED BY THIS CASE, THE AUTHORITY NOTES
 THE CONSOLIDATED DECISION OF THE COURT OF APPEALS FOR THE DISTRICT OF
 COLUMBIA IN NATIONAL FEDERATION OF FEDERAL EMPLOYEES AND AMERICAN
 FEDERATION OF GOVERNMENT EMPLOYEES V. BROWN, 645 F.2D 1017(D.C. CIR.
 1981).  THE COURT HELD THAT THE SECRETARY OF DEFENSE HAD IMPROPERLY
 IMPOSED THE 5.5% PAY CAP FOR FISCAL YEAR 1979 ON PREVAILING RATE
 EMPLOYEES PURSUANT TO THE PRESIDENT'S MEMORANDUM OF JANUARY 4, 1979,
 SINCE, CONTRARY TO THE GOVERNMENT'S POSITION, SUCH IMPOSITION WAS NOT
 PURSUANT TO THE "PUBLIC INTEREST" CLAUSES OF THE "PREVAILING RATE
 STATUTE." THIS DECISION WAS NOT APPEALED BY THE GOVERNMENT.
 
    AS SET FORTH IN THE PARTIES' STIPULATION, THE RIGHT TO NEGOTIATE
 WAGES IS "RECOGNIZED IN P.L. 92-392(5 U.S.C. 5341) . . . AND IN SECTION
 704 OF THE CIVIL SERVICE REFORM ACT OF 1978.  THE PARTIES DID BEGIN
 NEGOTIATIONS WITH REGARD TO WAGE INCREASES FOR ITS PREVAILING RATE
 EMPLOYEES IN 1978.  HOWEVER, THE QUESTION REMAINING IN THE RESPONDENT'S
 MIND WAS WHETHER THE STATUTORY 5.5% PAY CAP APPLIED TO PREVAILING RATE
 EMPLOYEES.  IT WAS AGREED BY THE PARTIES THAT A 5.5% INCREASE WOULD BE
 GRANTED IMMEDIATELY, AND THAT AN ADDITIONAL OBLIGATION TO NEGOTIATE IN
 EXCESS OF THIS AMOUNT WOULD BE CONTINGENT UPON THE DECISION OF THE
 COMPTROLLER GENERAL REQUESTED BY INTERIOR.  CLEARLY THEN, THE GRANT OF
 THE INITIAL 5.5% INCREASE DID NOT CONCLUDE THE PROJECT'S OBLIGATION TO
 BARGAIN ON THIS ISSUE.  THEREAFTER, THE COMPTROLLER GENERAL,
 INTERPRETING THE CONGRESSIONAL PAY CAP, FOUND THAT IT DID NOT APPLY TO
 PREVAILING RATE EMPLOYEES AND THAT THE IMPOSITION OF THE PAY CAP ON
 PREVAILING RATE EMPLOYEES WAS IMPROPER.  THUS, IN THE OPINION OF THE
 AUTHORITY, THE PROJECT WAS NOT RELIEVED OF ITS OBLIGATION TO BARGAIN, IN
 THE PARTICULAR CIRCUMSTANCES OF THIS CASE, WITH REGARD TO ADDITIONAL
 WAGE INCREASES.  NOTWITHSTANDING THE COMPTROLLER GENERAL'S DECISION,
 INTERIOR DIRECTED ITS OFFICES, INCLUDING THE PROJECT, NOT TO NEGOTIATE
 WITH REGARD TO WAGE INCREASES IN EXCESS OF 5.5% FOR SUCH EMPLOYEES.
 
    ACCORDINGLY, THE AUTHORITY FINDS THAT INTERIOR VIOLATED SECTION
 7116(A)(1) AND (5) OF THE STATUTE BY ITS DIRECTION TO THE PROJECT WHICH
 FORBADE ADDITIONAL WAGE NEGOTIATIONS AND THUS PREVENTED THE PROJECT FROM
 FULFILLING ITS STATUTORY BARGAINING OBLIGATION.  FURTHER, THE AUTHORITY
 FINDS THAT, UNLIKE INTERIOR, WHICH HAD LIMITED DISCRETION UNDER THE
 PRESIDENTIAL MEMORANDUM OF JANUARY 4, 1979, /2/ AND HAD REQUESTED AND
 WAS AWARE OF THE SUBSEQUENT DETERMINATION OF THE COMPTROLLER GENERAL,
 THE PROJECT HAD NO CHOICE BUT TO MINISTERIALLY FOLLOW THE DICTATES OF
 INTERIOR AND THUS DID NOT ITSELF VIOLATE THE STATUTE BY REFUSING TO
 NEGOTIATE ADDITIONAL WAGE INCREASES IN EXCESS OF 5.5%.
 
    UNDER THE FOREGOING CIRCUMSTANCES, WE SHALL ORDER INTERIOR TO
 INSTITUTE APPROPRIATE REMEDIAL ACTIONS AND SHALL DISMISS THE COMPLAINT
 INSOFAR AS IT ALLEGES A VIOLATION OF THE STATUTE BY THE PROJECT.
 
                                   ORDER
 
    PURSUANT TO SECTION 2423.29 OF THE FEDERAL LABOR RELATIONS
 AUTHORITY'S RULES AND REGULATIONS AND SECTION 7118 OF THE STATUTE, THE
 AUTHORITY HEREBY ORDERS THAT THE OFFICE OF THE SECRETARY, DEPARTMENT OF
 THE INTERIOR, WASHINGTON, D.C. SHALL:
 
    1.  CEASE AND DESIST FROM:
 
    (A) ORDERING THE DEPARTMENT OF THE INTERIOR, WATER AND POWER
 RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE, WASHINGTON, NOT
 TO NEGOTIATE REGARDING WAGE INCREASES ABOVE 5.5% WITH REGARD TO ITS
 PREVAILING RATE EMPLOYEES, RETROACTIVE TO DECEMBER 17, 1978, AS REQUIRED
 BY THE TERMS OF THE MEMORANDUM OF UNDERSTANDING AGREED TO ON OR ABOUT
 DECEMBER 15, 1978, BETWEEN THE DEPARTMENT OF THE INTERIOR, WATER AND
 POWER RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE, WASHINGTON,
 AND COLUMBIA BASIN TRADES COUNCIL, AFL-CIO, GRAND COULEE, WASHINGTON.
 
    (B) IN ANY LIKE OR RELATED MANNER INTERFERING WITH, RESTRAINING OR
 COERCING ITS EMPLOYEES IN THE EXERCISE OF RIGHTS ASSURED BY THE FEDERAL
 SERVICE LABOR-MANAGEMENT RELATIONS STATUTE.
 
    2.  TAKE THE FOLLOWING AFFIRMATIVE ACTION IN ORDER TO EFFECTUATE THE
 PURPOSES AND POLICIES OF THE STATUTE:
 
    (A) UPON REQUEST OF COLUMBIA BASIN TRADES COUNCIL, AFL-CIO, GRAND
 COULEE, WASHINGTON, PERMIT THE DEPARTMENT OF INTERIOR, WATER AND POWER
 RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE, WASHINGTON, TO
 NEGOTIATE REGARDING WAGE INCREASES ABOVE 5.5% WITH REGARD TO ITS
 PREVAILING RATE EMPLOYEES, RETROACTIVE TO DECEMBER 17, 1978, AS REQUIRED
 BY THE TERMS OF THE MEMORANDUM OF UNDERSTANDING AGREED TO ON OR ABOUT
 DECEMBER 15, 1978, BETWEEN THE DEPARTMENT OF THE INTERIOR, WATER AND
 POWER RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE, WASHINGTON,
 AND COLUMBIA BASIN TRADES COUNCIL, AFL-CIO, GRAND COULEE, WASHINGTON.
 
    (B) POST AT ITS FACILITY IN THE OFFICE OF THE SECRETARY, DEPARTMENT
 OF INTERIOR, WASHINGTON, D.C., AND AT ITS WATER AND POWER RESOURCES
 SERVICE, GRAND COULEE, PROJECT, GRAND COULEE, WASHINGTON FACILITY,
 COPIES OF THE ATTACHED NOTICE ON FORMS TO BE FURNISHED BY THE FEDERAL
 LABOR RELATIONS AUTHORITY.  UPON RECEIVING SUCH FORMS, THEY SHALL BE
 SIGNED BY THE SECRETARY, DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C.,
 AND SHALL BE POSTED AND MAINTAINED BY HIM FOR SIXTY CONSECUTIVE DAYS
 THEREAFTER, IN CONSPICUOUS PLACES, INCLUDING BULLETIN BOARDS AND ALL
 OTHER PLACES WHERE NOTICES TO EMPLOYEES IN THE OFFICE OF THE SECRETARY,
 DEPARTMENT OF INTERIOR, WASHINGTON, D.C. AND THE DEPARTMENT OF INTERIOR
 WATER AND POWER RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE,
 WASHINGTON ARE CUSTOMARILY POSTED.  THE SECRETARY, DEPARTMENT OF
 INTERIOR SHALL TAKE REASONABLE STEPS TO INSURE THAT SUCH NOTICES ARE NOT
 ALTERED, DEFACED, OR COVERED BY OTHER MATERIAL.
 
    (C) NOTIFY THE REGIONAL DIRECTOR, REGION IX, IN WRITING, WITHIN 30
 DAYS FROM THE DATE OF THIS ORDER, AS TO WHAT STEPS HAVE BEEN TAKEN TO
 COMPLY WITH THIS ORDER.
 
    IT IS HEREBY FURTHER ORDERED THAT THE COMPLAINT IN CASE NO.  9-CA-16,
 INSOFAR AS IT ALLEGES A VIOLATION OF SECTION 7116(1)(A) AND (5) OF THE
 STATUTE BY THE DEPARTMENT OF INTERIOR, WATER AND POWER RESOURCES
 SERVICE, GRAND COULEE PROJECT, GRAND COULEE, WASHINGTON, BE, AND IT
 HEREBY IS, DISMISSED.
 
    ISSUED, WASHINGTON, D.C., JULY 8, 1982
 
                       RONALD W. HAUGHTON, CHAIRMAN
                       HENRY B. FRAZIER III, MEMBER
                       LEON B. APPLEWHAITE, MEMBER
                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
        NOTICE TO ALL EMPLOYEES PURSUANT TO A DECISION AND ORDER OF
 
           THE FEDERAL LABOR RELATIONS AUTHORITY AND IN ORDER TO
 
           EFFECTUATE THE POLICIES OF CHAPTER 71 TITLE 5 OF THE
 
            UNITED STATES CODE FEDERAL SERVICE LABOR-MANAGEMENT
 
              RELATIONS WE HEREBY NOTIFY OUR EMPLOYEES THAT:
 
    WE WILL NOT ORDER THE DEPARTMENT OF THE INTERIOR WATER AND POWER
 RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE, WASHINGTON TO
 REFUSE TO NEGOTIATE REGARDING WAGE INCREASES ABOVE 5.5% WITH REGARD TO
 ITS PREVAILING RATE EMPLOYEES, RETROACTIVE TO DECEMBER 17, 1978, AS
 REQUIRED BY THE TERMS OF THE MEMORANDUM OF UNDERSTANDING AGREED TO ON
 OR
 ABOUT DECEMBER 15, 1978, BETWEEN THE DEPARTMENT OF THE INTERIOR, WATER
 AND POWER RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE,
 WASHINGTON AND COLUMBIA BASIN TRADES COUNCIL, AFL-CIO, GRAND COULEE,
 WASHINGTON.
 
    WE WILL NOT IN ANY LIKE OR RELATED MANNER INTERFERE WITH, RESTRAIN,
 OR COERCE ANY EMPLOYEES IN THE EXERCISE OF THEIR RIGHTS ASSURED BY THE
 STATUTE.
 
    WE WILL UPON REQUEST OF COLUMBIA BASIN TRADES COUNCIL, AFL-CIO, GRAND
 COULEE, WASHINGTON, PERMIT THE DEPARTMENT OF INTERIOR WATER AND POWER
 RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE, WASHINGTON TO
 NEGOTIATE REGARDING WAGE INCREASES ABOVE 5.5% WITH REGARD TO ITS
 PREVAILING RATE EMPLOYEES, RETROACTIVE TO DECEMBER 17, 1978, AS REQUIRED
 BY THE TERMS OF THE MEMORANDUM OF UNDERSTANDING AGREED TO ON OR ABOUT
 DECEMBER 15, 1978, BETWEEN THE DEPARTMENT OF THE INTERIOR, WATER AND
 POWER RESOURCES SERVICE, GRAND COULEE PROJECT, GRAND COULEE, WASHINGTON,
 AND COLUMBIA BASIN TRADES COUNCIL, AFL-CIO, GRAND COULEE, WASHINGTON.
 
                                 (AGENCY)
 
    DATED:
 
                             BY:  (SIGNATURE)
 
    THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE
 OF POSTING, AND MUST NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER
 MATERIAL.
 
    IF EMPLOYEES HAVE ANY QUESTIONS CONCERNING THIS NOTICE OR COMPLIANCE
 WITH ANY OF ITS PROVISIONS, THEY MAY COMMUNICATE DIRECTLY WITH THE
 REGIONAL DIRECTOR FOR THE FEDERAL LABOR RELATIONS AUTHORITY, WHOSE
 ADDRESS IS:  530 BUSH STREET, ROOM 542, SAN FRANCISCO, CALIFORNIA 94108,
 AND WHOSE PHONE NUMBER IS:  (415) 556-8105.
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ SECTION 7116 PROVIDES, IN PERTINENT PART:
 
    (A) FOR THE PURPOSE OF THIS CHAPTER, IT SHALL BE AN UNFAIR LABOR
 PRACTICE FOR AN AGENCY --
 
    (1) TO INTERFERE WITH, RESTRAIN, OR COERCE ANY EMPLOYEE IN THE
 EXERCISE BY THE EMPLOYEE OF
 
    ANY RIGHT UNDER THIS CHAPTER;  . . .
 
    (5) TO REFUSE TO CONSULT OR NEGOTIATE IN GOOD FAITH WITH A LABOR
 ORGANIZATION AS REQUIRED
 
    BY THIS CHAPTER;  . . .
 
    /2/ AS NOTED IN THAT MEMORANDUM, THE POLICY SET FORTH THEREIN WAS TO
 BE APPLIED "TO THE EXTENT PERMISSIBLE UNDER LAW." 
 
 
 

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