12:0412(86)CA - Defense Logistics Agency (Cameron Station, Virginia), Defense Contract Administration Service Region (Boston, MA), Defense Contract Administration Services Plant Representative Office, General Electric (Lynn, MA), Defense Contract Administration Services Management Area, Hartford (Hartford, CT), Defense Contract Administration Services Management Area, Syracuse (Syracuse, NY), Defense Contract Administration Services Residency - Binghamton (Johnson City, NY), Defense Contract Administration Services Plant Representative Office - Raytheon Service Company (Burlington, MA), Defense Contract Administration Services Management Area - Bridgeport (Stratford, CT), Defense Contract Administration Services Residency - Buffalo (Buffalo, NY), Defense Contract Administration Services Plant Representative Office, General Electric (Burlington, VT) and NAGE -- 1983 FLRAdec CA



[ v12 p412 ]
12:0412(86)CA
The decision of the Authority follows:


 12 FLRA No. 86
 
 DEFENSE LOGISTICS AGENCY
 (CAMERON STATION, VIRGINIA)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICE
 REGION (BOSTON, MA)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICES
 PLANT REPRESENTATIVE OFFICE, GENERAL
 ELECTRIC (LYNN, MA)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICES
 MANAGEMENT AREA, HARTFORD (HARTFORD, CT)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICES
 MANAGEMENT AREA, SYRACUSE (SYRACUSE, NY)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICES
 RESIDENCY - BINGHAMTON (JOHNSON CITY, NY)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICES
 PLANT REPRESENTATIVE OFFICE - RAYTHEON
 SERVICE COMPANY (BURLINGTON, MA)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICES
 MANAGEMENT AREA - BRIDGEPORT (STRATFORD, CT)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICES
 RESIDENCY - BUFFALO (BUFFALO, NY)
 
 DEFENSE CONTRACT ADMINISTRATION SERVICES
 PLANT REPRESENTATIVE OFFICE, GENERAL
 ELECTRIC (BURLINGTON, VT)
 Respondent
 
 and
 
 NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES
 Charging Party
 
                                            Case No. 1-CA-213
 
                            DECISION AND ORDER
 
    The Administrative Law Judge in the above-entitled proceeding issued
 his Decision finding that the Respondent, Defense Contract
 Administration Service Region (Boston, MA), hereinafter referred to as
 DCASR-Boston, had engaged in certain unfair labor practices alleged in
 the complaint, and recommending that it be ordered to cease and desist
 therefrom and take certain affirmative action.  The Judge further found
 that the other named Respondents had not engaged in the unfair labor
 practices alleged in the complaint, and recommended that the complaint
 be dismissed with regard to them.  Thereafter, the General Counsel filed
 exceptions to the Judge's Decision and the Respondent filed both an
 opposition to the General Counsel's exceptions and cross-exceptions to
 the Judge's Decision.
 
    Pursuant to section 2423.29 of the Authority's Rules and Regulations
 and section 7118 of the Federal Service Labor-Management Relations
 Statute (the Statute), the Authority has reviewed the rulings of the
 Judge made at the hearing and finds that no prejudicial error was
 committed.  The rulings are hereby affirmed.  Upon consideration of the
 Judge's Decision and the entire record, the Authority hereby adopts the
 Judge's findings, conclusions and recommendations, as modified below.
 
    The record reveals that on May 9, 1979, the Defense Logistics Agency
 (DLA), a primary national subdivision of the Department of Defense,
 issued a revised regulation (DLAR No. 5500.1) entitled "Standards of
 Conduct" which contained various changes to the existing standards of
 conduct regulation.  The revised regulation which, among other things,
 broadened the category of employees required to submit financial
 disclosure forms, was forwarded on May 11, 1979, to DCASR-Boston and the
 other subordinate activities named in the complaint, at which levels
 there existed units of exclusive recognition represented by various
 locals of the National Association of Government Employees (NAGE).  The
 complaint herein, which named DLA and the subordinate activities as a
 single Respondent, alleged that DLA had violated section 7116(a)(1) and
 (5) of the Statute by unilaterally, and without prior notice to any of
 the NAGE locals involved, revising the standards of conduct regulation
 and imposing the revised regulation on DCASR-Boston;  that DCASR-Boston
 violated section 7116(a)(1) and (5) of the Statute by unilaterally
 changing existing conditions of employment in implementing the revised
 regulation without furnishing prior notice to NAGE locals and affording
 them an opportunity to bargain concerning the changes and/or their
 impact and implementation;  and that DCASR-Boston bypassed the NAGE
 locals and dealt directly with unit employees by announcing to them the
 changes in the standards of conduct.
 
    The Respondent's position is that no bargaining obligation existed on
 the part of DLA inasmuch as the units of exclusive recognition existed
 at levels subordinate to DLA;  that the subordinate activities were not
 prevented from negotiating on the impact and implementation of the
 revised regulation as it pertained to unit employees at those locations;
  and that the NAGE locals waived their bargaining rights by failing to
 request bargaining at the appropriate levels of exclusive recognition
 and by failing to submit impact and implementation proposals.
 Additionally, the Respondent argues that the revised regulation
 constituted a bar to negotiations under section 7117 of the Statute.
 /1/
 
    The Judge found, with regard to the latter assertion, that Part 2424
 of the Authority's Rules and Regulations relating to petitions for
 review of negotiability issues constitutes the exclusive procedure under
 which the Authority can decide questions as to whether there exists a
 compelling need for a regulation of an agency or primary national
 subdivision.  The Authority disagrees.
 
    Section 7117(b)(1) of the Statute /2/ empowers the Authority to
 resolve compelling need issues where, during the course of collective
 bargaining, "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 . . . ."
 Thus, 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, and no actual or
 contemplated changes in conditions of employment are involved, the
 exclusive manner of resolving the question of compelling need is
 pursuant to the procedures set forth in section 7117 of the Statute and
 Part 2424 of the Authority's Rules and Regulations.  See, e.g., National
 Federation of Federal Employees, Local 1332 and Headquarters, U.S. Army
 Materiel Development and Readiness Command, Alexandria, Virginia, 6 FLRA
 No. 66 (1981) (Union Proposal V).  /3/ By contrast, in exercising its
 statutory authority to resolve disputes involving alleged unilateral
 changes in conditions of employment where issues of negotiability are
 also raised, the Authority has promulgated procedures which recognize a
 labor organization's right to seek a resolution of the negotiability
 issues by filing an unfair labor practice charge and a negotiability
 appeal and which require the labor organization to select the forum in
 which to proceed first.  (See sections 2423.5 and 2424.5 of the
 Authority's Rules and Regulations.) Accordingly, and contrary to the
 Judge's conclusion, where a labor organization selects the unfair labor
 practice forum with regard to alleged unilateral changes in conditions
 of employment affecting unit employees resulting from the issuance of a
 new regulation or, as here, modification of an existing regulation, and
 agency management raises as an affirmative defense that it refused to
 bargain on the basis that there is a compelling need for the regulation
 in question, the compelling need issue must perforce be decided in the
 unfair labor practice proceeding.  /4/ Of course, an agency which raises
 compelling need as an affirmative defense in an unfair labor practice
 proceeding is required, as it would be in a negotiability proceeding, to
 come forward with affirmative support for that assertion.  /5/
 
    Turning to the instant case, and contrary to the Respondent's
 contention, the Authority finds that the record fails to establish that
 a compelling need existed for the revised "standards of conduct"
 regulation issued by DLA.  In this connection, the Respondent has failed
 to come forward with affirmative support for its assertion that a
 compelling need exists for the revised regulation so as to excuse it
 from its bargaining obligation.  /6/ Nor is any such support apparent
 from the record.  Thus, a bargaining obligation existed unless there is
 merit to any of Respondent's other defenses.
 
    As noted above, the record indicates that the revised regulation was
 promulgated by DLA on May 9, 1979, became effective on that date, and
 was forwarded to subordinate field activities on May 11.  Subsequently,
 on July 16, DCASR-Boston circulated a bulletin to all employees
 announcing the changes made by the revised regulation and, on July 17,
 distributed a supplement thereto to employees in the Boston region.  The
 record indicates that there was no notification given to any NAGE locals
 prior to implementation of the revised regulation or the issuance of the
 DCASR-Boston supplement.
 
    With respect to an agency's promulgation of regulations relating to
 employee standards of conduct, the Authority has previously held that
 standards of conduct for employees are matters affecting conditions of
 employment within the meaning of the Statute, /7/ and, to the extent
 such matters are discretionary, they are within the duty to bargain.
 /8/ Where, as here, there are levels of exclusive recognition
 subordinate to the level of the agency or primary national subdivision
 which issued the regulation, /9/ it is incumbent upon agency management
 at the level of exclusive recognition to notify the exclusive
 representative of its employees and afford the latter an opportunity to
 request bargaining concerning the regulation prior to implementation.
 /10/ Accordingly, when DCASR-Boston was notified by DLA of the revised
 regulation, DCASR-Boston was in turn obligated to notify NAGE Local
 R1-210 and afford it an opportunity to request bargaining on negotiable
 matters pertaining to both the substance and impact and implementation
 of the revised regulation as it applied to employees represented by
 Local R1-210.  The failure of DCASR-Boston to so notify Local R1-210
 constituted a violation of section 7116(a)(1) and (5) of the Statute.
 /11/ However, as the record fails to establish that DCASR-Boston was
 prevented from fulfilling its statutory bargaining obligation with Local
 R1-210 by the acts and conduct of DLA, no violation will be found
 against DLA.  /12/
 
    With respect to that portion of the complaint alleging that
 DCASR-Boston violated section 7116(a)(1) and (5) by failing to notify
 the NAGE locals at the subordinate levels within DCASR-Boston and to
 afford them an opportunity to request bargaining, the Authority finds,
 in agreement with the Judge, that this allegation must be dismissed.
 Thus, the record fails to establish that DCASR-Boston prevented the
 subordinate levels of agency management from fulfilling their respective
 statutory obligations to notify the appropriate NAGE locals so as to
 afford them an opportunity to bargain over the revised regulation.  /13/
 Similarly, the Authority finds, in agreement with the Judge, that the
 allegation in the complaint that DCASR-Boston violated section
 7116(a)(5) in bypassing the NAGE locals and dealing directly with unit
 employees must be dismissed.  Thus, the record fails to establish that
 there was an attempt by DCASR-Boston to deal directly with employees or
 to threaten or promise benefits to them.  See Division of Military and
 Naval Affairs, State of New York, Albany, New York, 8 FLRA No. 71
 (1982).
 
    Finally, the General Counsel argues that unit employees who were
 transferred as a result of the application of the revised standards of
 conduct regulations should be restored to their former positions and
 made whole.  In response, the Respondent argues that any transfers which
 may have occurred were required under the provisions of 18 U.S.C. 208,
 /14/ rather than the revised standards of conduct regulation.  Only one
 employee is specifically mentioned in the record as having been
 transferred after the revised regulation was issued.  The record
 indicates that this employee was found to have been in a conflict of
 interest situation under the provisions of law and regulation prior to
 the issuance of the revised regulation.  The commander of the local
 facility at which the employee was located, who was not the responsible
 management official for resolving conflict of interest situations, took
 certain actions which, in his view, eliminated the conflict of interest.
  After the revised regulation was issued, this same commander determined
 that the employee was still in a conflict of interest situation and that
 additional corrective action was needed.  The transfer was the result of
 this determination.  In the Authority's view, restoration of this
 employee to his former post of duty, as requested by the General
 Counsel, would not be appropriate in the circumstances of this case.
 Thus, in support of its contention that transfers of employees in
 conflict of interest situations are required by 18 U.S.C. 208, rather
 than the revised regulation, the Respondent submitted evidence which
 demonstrated that employees who were in conflict of interest situations
 similar to that of the employee here in question had been transferred in
 previous years under the provisions of that law.  While the employee in
 question was not transferred until after the revised regulation was
 issued, noting that he was found to be in a conflict of interest before
 the revised regulation was issued and that employees in similar
 situations previously had been transferred pursuant to 18 U.S.C. 208,
 the Authority concludes that restoration of the employee to his former
 post of duty would not effectuate the purposes and policies of the
 Statute in these circumstances.  Accordingly, the General Counsel's
 request for such a remedy herein is denied.
 
                                   ORDER
 
    Pursuant to section 2423.29 of the Federal Labor Relations
 Authority's Rules and Regulations and section 7118 of the Statute, it is
 hereby ordered that the Defense Contract Administration Service Region,
 Boston, Massachusetts shall:
 
    1.  Cease and desist from:
 
    (a) Unilaterally implementing a revised standards of conduct
 regulation without first notifying the National Association of
 Government Employees, Local R1-210, the exclusive representative of its
 employees, and affording Local R1-210 an opportunity to bargain
 concerning the revised regulation as it would affect unit employees.
 
    (b) In any like or related manner interfering with, restraining or
 coercing employees in the exercise of their 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) Rescind the revised standards of conduct regulation and
 supplement thereto as it applies to the unit employees represented by
 the National Association of Government Employees, Local R1-210, and
 reinstitute the preexisting standards of conduct regulation as it
 applied to these unit employees.
 
    (b) Notify the National Association of Government Employees, Local
 R1-210, of any intended change in the standards of conduct regulation as
 it applies to unit employees represented by Local R1-210, and afford
 Local R1-210 an opportunity to request bargaining concerning such
 changes.
 
    (c) Post at the Defense Contract Administration Service Region,
 Boston, Massachusetts, copies of the attached Notice on forms to be
 furnished by the Federal Labor Relations Authority.  Such forms shall be
 signed by the Commander, Defense Contract Administration Service Region,
 Boston, Massachusetts, or his designee, and shall be posted and
 maintained for 60 consecutive days thereafter, in conspicuous places,
 including all bulletin boards and other places where notices to
 employees are customarily posted.  Reasonable steps shall be taken to
 insure that such Notices are not altered, defaced, or covered by any
 other material.
 
    (d) Pursuant to section 2423.30 of the Authority's Rules and
 Regulations, notify the Regional Director, Region I, Federal Labor
 Relations Authority, in writing, within 30 days from the date of this
 Order, as to what steps have been taken to comply herewith.
 
    IT IS FURTHER ORDERED that the complaint in Case No. 1-CA-213, to the
 extent that it alleges a violation of section 7116(a)(1) and (5) of the
 Statute by the named Respondents other than the Defense Contract
 Administration Service Region, Boston, Massachusetts be, and it hereby
 is, dismissed.
 
    IT IS FURTHER ORDERED that the complaint in Case No. 1-CA-213, to the
 extent that it alleges that the Defense Contract Administration Service
 Region, Boston, Massachusetts (1) failed to notify the exclusive
 representatives of employees at subordinate levels within the Region and
 afford them an opportunity to request bargaining, and (2) committed an
 unlawful bypass in violation of section 7116(a)(5) of the Statute be,
 and it hereby is, dismissed.  
 
 Issued, Washington, D.C., July 29, 1983
 
                                       Barbara J. Mahone, Chairman
                                       Ronald W. Haughton, Member
                                       Henry B. Frazier III, 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
 OF TITLE
 5 OF THE UNITED STATES CODE FEDERAL SERVICE LABOR-MANAGEMENT
 RELATIONS
 WE HEREBY NOTIFY OUR EMPLOYEES THAT:
 
 WE WILL NOT unilaterally implement a revised standards of conduct
 regulation without first notifying the National Association of
 Government Employees, Local R1-210, the exclusive representative of our
 employees, and affording it an opportunity to bargain concerning the
 revised regulation as it would affect unit employees.  WE WILL NOT in
 any like or related manner interfere with, restrain, or coerce our
 employees in the exercise of their rights assured by the Federal Service
 Labor-Management Relations Statute.  WE WILL rescind the revised
 standards of conduct regulation, and supplement thereto, as it applies
 to our employees represented exclusively by the National Association of
 Government Employees, Local R1-210, and WE WILL reinstitute the
 preexisting standards of conduct regulation as it applies to these
 employees.  WE WILL notify the National Association of Government
 Employees, Local R1-210, of any intended changes in the standards of
 conduct regulation as it applies to employees represented exclusively by
 Local R1-210, and afford Local R1-210 an opportunity to request
 bargaining concerning such changes.
                                       (Activity)
 
 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,
 Region I, Federal Labor Relations Authority whose address is:  441
 Stuart Street, 9th Floor, Boston, Massachusetts 02116 and whose
 telephone number is:  (617) 223-0920.
 
 
 
 
 
 
 
 
 -------------------- ALJ$ DECISION FOLLOWS --------------------
 
                                       Case No. 1-CA-213
 
    Richard Zaiger, Esq.
          For the General Counsel
 
    Thomas Rhodes, Esq.
    Sumner Marcus, Esq.
          For the Respondent
 
    Richard C. Remmes, Esq.
          For the Charging Party
 
    Before:  FRANCIS E. DOWD
          Administrative Law Judge
 
                                 DECISION
 
                           Statement of the Case
 
    This is a proceeding under the Federal Service Labor-Management
 Relations Statute (the Statute), 92 Stat. 1191, 5 U.S.C. 7101 et seq.
 It was instituted by the issuance of a Complaint and Notice of Hearing
 on April 25, 1980.  The original charge of December 3, 1979 named
 "Defense Logistics Agency, DCASR-Boston" as the Activity against whom
 the charge was filed and stated that the Agency (of which the Activity
 is a part) is the Department of Defense, Defense Logistics Agency.  The
 First Amended Charge of February 13, 1980 named as additional Activities
 eight subordinate DCAS offices in eight other cities located in 4
 states.  The Second Amended Charge of April 11, 1980 additionally named
 Defense Logistics Agency, Headquarters, Cameron Station, Alexandria,
 Virginia.  /15/ A principal issue in this case is the distinction, if
 any, between other various Agency levels:  national, regional and
 sub-regional.
 
    The Complaint alleges that Section 7116(a)(1) and (5) of the Statute
 has been violated by the following Activities or Agencies which are
 collectively referred to in the Complaint as Respondent, rather than as
 separate or joint Respondents:  the Defense Logistics Agency, Cameron
 Station, Virginia;  the Defense Contract Administration Service Region
 I, Boston, Massachusetts;  Defense Contract Administration Service Plant
 Representative Office, General Electric, Lynn, Massachusetts;  Defense
 Contract Administration Services Management Area, Hartford, Connecticut,
 Defense Contract Administration Services Management Area, Syracuse, New
 York;  Defense Contract Administration Services Residency-Binghamton,
 Johnson City, New York;  Defense Contract Administration Services Plant
 Representative Office-Raytheon Service Company, Burlington,
 Massachusetts;  Defense Contract Administration Services Management
 Area-Bridgeport, Stratford, Connecticut;  Defense Contract
 Administration Services Residency, Buffalo, New York;  and Defense
 Contract Administration Services Plant Representative Office, General
 Electric, Burlington, Vermont.
 
    More specifically, the Complaint sets forth the following
 allegations:
 
    1.  On or about May 9, 1979, Respondent by its Agent Lt. General
 Gerald J. Post, Director, Defense Logistics Agency, Cameron Station,
 Virginia, unilaterally and without notice to any of the locals of the
 National Association of Government Employees (hereafter NAGE) involved
 in this proceeding revised DLAR 5500.1 and thereafter imposed Revised
 DLAR 5500.1 on its subordinate Activity, Defense Contract Administration
 Service Region, Boston (hereafter DCASR-Boston).
 
    2.  On July 16, 1979, Respondent by its Agent Colonel Charles
 Wheeler, Commander, DCASR-Boston dealt directly with employees and
 by-passed the NAGE locals involved in this proceeding by announcing
 directly to employees changes in standards of conduct.
 
    3.  On July 17, 1979 Respondent by its Agent Colonel Charles Wheeler,
 unilaterally changed existing conditions of employment by implementing
 Revised DLAR 5500.1 without furnishing notice and/or opportunity to
 bargain concerning such change and/or the impact and implementation of
 such change to any of the NAGE locals involved in this proceeding.
 
    Respondent's defense, which will be more specifically detailed later
 in this decision, essentially is that it had no obligation to bargain
 about the substance of the decision and that NAGE waived its right to
 bargain about impact and implementation of the decision.
 
    At the hearing in Boston, Massachusetts all parties were afforded
 full opportunity to be heard, adduce evidence, examine and cross-examine
 witnesses, and argue orally.  Thereafter, Respondent and the General
 Counsel filed briefs which have been duly considered.  /16/
 
    Upon consideration of the entire record in this case, /17/ from my
 observation of the witnesses and their demeanor, and from all of the
 testimony and evidence presented at the hearing, I make the following
 findings of fact, conclusions of law and recommended order.
 
                             Findings Of Fact
 
    1.  The Defense Logistics Agency (DLA) is a primary national
 subdivision of the Department of Defense, and its headquarters is
 located in Cameron Station, Virginia.  DCASR-Boston is a regional
 headquarters.  Within the area under the jurisdiction of DCASR-Boston
 are various management area offices (DCASMA), plant representative
 offices (DCASPRO) and resident offices.
 
    a.  At all times material herein various locals of the National
 Association of Government Employees have been the exclusive
 representative of employees in nine (9) separate units within the
 DCASR-Boston region.  Each unit is covered by a separate collective
 bargaining agreement.  NAGE Local R1-210 represents an appropriate unit
 of employees at DCASR-Boston.  NAGE Local R1-110 represents an
 appropriate unit of employees at Respondent's General Electric Resident
 Office in Lynn, Massachusetts.  NAGE Local R1-76 represents an
 appropriate unit of employees at Respondent's Management Area Office in
 Hartford, Connecticut.  NAGE Local R2-65 represents an appropriate unit
 of employees at Respondent's Management Area Office in Hartford,
 Connecticut.  NAGE Local R2-65 represents an appropriate unit of
 employees at Respondent's Binghamton Residency Office in Johnson City,
 New York which also includes employees of Respondent located at the IBM
 plant in Owego, New York.  NAGE Local R1-211 represents an appropriate
 unit of employees at Respondent's Raytheon Plant Representative Office
 in Burlington, Massachusetts.  NAGE Local R1-181 represents an
 appropriate unit of employees at Respondent's Bridgeport Management Area
 in Stratford, Connecticut.  NAGE Local R2-45 represents an appropriate
 unit of employees at Respondent's Resident Office in Buffalo, New York.
 NAGE Local R1-170 represents an appropriate unit of employees at
 Respondent's General Electric Plant Representative Office in Burlington,
 Vermont.
 
    2.  The National Association of Government Employees does not have
 national consultation rights with DLA;  nor does a direct bargaining
 relationship exist between DLA and the National Association of
 Government Employees or any of the local union referred to above.
 
    3.  On March 23, 1977, DLA issued DLAR Regulation No. 5500.1
 entitled, "Standards of Conduct" (GCX).  DLAR No. 5500.1 was applicable
 to HQ DLA and all field activities and "prescribe(s) the standards of
 conduct relating to possible conflict between private interests and
 official duties, required of all DLA personnel, regardless of
 assignment" (GCX 13, p. 1).  Among the procedures set forth for
 implementing DLAR No. 5500.1 was the requirement that all DLA personnel
 classified at GS-13 or above submit initial and annual statements of
 Affiliations and Financial Interests (DD Form 1555) (GCX 13, pp. 14-15).
 
    4.  By letter dated February 16, 1979, DLA by its General Counsel,
 Karl Kabeisman, requested permission from the Office of Personnel
 Management (OPM) to require, "certain civilian employees of . . . DLA
 below the grade of GS-13 whose duties otherwise (met) the criteria for
 filing", to file DD Form 1555 (RX 8).  This letter points out that it is
 the nature of one's duties, regardless of grade level, which can give
 rise to a conflict of interest.  It is undisputed that prior approval by
 OPM is required by the Federal Personnel Manual before an agency can
 expand the filing requirements of DD Form 1555 to employees below the
 GS-13 level.
 
    5.  By letter dated March 5, 1979, Bernard Wrable, Director, Office
 of Government Ethics, OPM, granted the DLA request, "subject to the
 understanding . . . that while immediate supervisors will identify
 positions which should be subject to the filing of statements, actual
 decisions on each such position will be filed by Commanders, their
 general counsels or other senior officials" (RX 9).
 
    6.  On May 9, 1979, DLA issued a new DLAR No. 5500.1 (GCX 15) which
 superseded the March 23, 1977 Regulation.  This new regulation is also
 referred to herein as the Revised DLAR No. 5500.1.  The document stated
 that this "DLAR implements DOD Directive 5000.7, Standards of Conduct"
 and is "applicable to HQ DLA and all DLA field activities." I find that
 the effective date of this new or revised regulation was May 9, 1979 and
 that it was immediately effective.  This finding is based upon the
 document itself as well as the testimony of Sumner Marcus (R 15),
 Counsel for DCASR-Boston.
 
    While the "Purpose and Scope" Section of the predecessor regulation
 referred to "conflict between private interests and official duties,"
 the "Purpose and Scope" Section set forth in revised DLAR 5500.1 refers
 to "even the appearance, of an actual or potential conflict of interest
 . . . ." (Cf. GCX 15, p. 1 and GCX 13, p. 1).  Second, the revised DLAR
 5500.1 itself contains a section entitled, "Significant Changes," (GCX
 15, pp. 8-9) which states:
 
          This DLAR has been revised to make general refinements of
       existing policy and functional responsibilities.  The DLAR amends
       the categories of employees required to file DD Forms 1555,
       Confidential Statement of Affiliations and Financial Interests,
       Department of Defense Personnel;  expands the information required
       to be submitted on a disqualification notice;  alters the
       reporting requirements for suspected violations of the standards
       of conduct statutes and regulations;  and provides for advice to
       military personnel leaving active military service and civilians
       leaving federal employment.
 
 The foregoing paragraphs speaks in general terms only.  For any employee
 or Union official to determine what is actually meant by the phrase
 "amends the categories of employees required to file DD Forms 1555," it
 is necessary to obtain a copy of the 1977 regulation and compare it
 line-by-line with the 1979 revised regulation.  The result of such
 comparison would show that in 1977 forms were required to be filed by
 "DLA personnel classified at GS-13 or above" (GCX 13 p. 16) whereas the
 revised regulation applies to all "DLA personnel, civilian or military,
 regardless of grade or rank", whose official responsibilities require
 making certain types of decisions (GCX 15 p. 12).  It is not until the
 last page (p. 13) of the regulation that there is an oblique reference
 to the fact that the new regulation may apply to personnel below grade
 GS-13.  Although the revised regulation (DLAR 5500.1) itself was
 effective on May 9, 1979, the reporting form did not have to be filed
 until October 31, 1979, almost six months later.
 
    In addition, Section IV of the revised regulation entitled,
 "Definitions" defined "financial interest" as follows (GCX 15):
 
          c.  Financial Interest.  Any wages, salaries, interest,
       dividends or any other form of income or benefit received by
       virtue of the relationship;  includes potential benefit, such as
       pre-employment contacts with a potential future employer.
 
 Nowhere in the definition section of the predecessor regulation was the
 term "financial interest" defined (GCX 13, pp. 9-10).
 
    Finally, revised DLAR 1500.1 provided that "(s)upplementation is
 permitted at all levels" (GCX 15, p. 1).  An example of such
 "supplementation" is G.C. Exhibit 14.  To me, this exhibit demonstrates
 that the word "supplementation" merely means that DCASR-Boston and
 subordinate organizations have discretion with respect to minor or
 routine matters.  I specifically find that this "supplementation"
 language did not have the effect of delegating discretionary authority
 to subordinate organizations to make or negotiate changes in the
 regulation itself, as distinguished from supplemental additions which do
 not have the effect of changing the substance of the regulations (Tr.
 175).  While Respondent asserts that the regulation did not "prohibit"
 DCASR-Boston from negotiating impact and implementation, I find that it
 did not expressly authorize and delegate such responsibility either.
 
    7.  On July 16, 1979 the Commander, DCASR-Boston by its Counsel and
 Standards of Conduct Officer, Sumner Marcus, distributed a bulletin to
 all employees within its region highlighting the changes in DLAR 5500.1
 (GCX 12), and on July 17, 1979 DCASR-Boston issued its own regulation
 supplementing DLAR 5500.1 within its region (GCX 14).  It is undisputed
 that notice of the revised regulation was not given to any official of
 any of the NAGE locals involved in this proceeding prior to its
 distribution to employees on July 17, 1979.  However, Christopher
 Themistocles, President of Local R1-120 received a copy of GCX 14 in his
 individual capacity as an employee.
 
    8.  On September 26, 1979, DCASR-Boston issued guidelines pertaining
 to the filing of DD Form 1555 under revised DLAR 1500.1.  The guidelines
 set forth a number of positions which probably would require the
 incumbent to file DD Form 1555, the procedure for identifying additional
 positions, and set October 31, 1979 as the date by which DD Form 1555
 must be filed.
 
    9.  By letter dated October 24, 1979, NAGE by its Attorney, Richard
 Remmes, requested on behalf of all the NAGE locals within the
 DCASR-Boston Region "to negotiate the recent changes in DLAR 5500.1 as
 they refer to changes in the requirements for filing financial
 disclosure statements . . . ." (GCX 17).  Remmes went on to state that,
 "until we have had an opportunity to negotiate this matter and consult
 on the impact and procedures, I am requesting the status quo ante be
 maintained".
 
    10.  By memorandum dated October 30, 1979, DCASR-Boston replied to
 Remmes and invited "Union views" on "DCASR-Boston implementation" of
 DLAR 5500.1;  DCASR-Boston Supplement 1 to DLAR 5500.1;  and the
 September 26, 1979, DCASR-Boston guidelines.  The views could be
 submitted through the unit manager, the NAGE Council of DCASR-Boston
 locals, or directly.  In addition, the deadline for filing DD Form 1555
 was extended approximately one month to November 30, 1979 in order to
 provide an "opportunity to comment" on the revised DLAR.  The memorandum
 went on to state that, "(t)o meet Agency imposed deadlines, (union)
 input must be received by 14 November in order to receive due
 consideration" (GCX 18).
 
    11.  The parties met on November 2, 1979.  /18/ Marcus stated that
 the new regulation would expand the filing requirement from 150
 employees to 1000.  Remmes stated he could not see the sense to the new
 regulation since there had been no change in 18 U.S.C. 208;  he referred
 to conflicts in interest involving spouses working at the same location
 which had been brought to his attention.  Marcus explained that, "the
 DLA interpretation had changed", and, "under the interpretation now
 salary alone makes a conflict of interest.  If your wife receives a
 salary from the same corporation then you are in a conflict of
 interest".  The Union protested management's failure to give notice to
 the Union in June 1979, when the DLAR was received;  requested certain
 information;  and protested the DLA determination that employees below
 the GS-13 level must file DD Form 1555.  At this meeting NAGE also
 demanded that the filing requirements be delayed pending resolution of
 complaints under FPM Chapter 735.1-4 that certain positions had been
 improperly included in the filing requirements. Finally, Newdick
 indicated that DCASR-Boston could take no action since they had to meet
 "the mandates of higher authority" and the meeting concluded with no
 agreement.  Both Themistocles and Remmes testified that a proposal was
 made for a "grandfather principle" so that the revised regulation would
 have no impact on current employees.  The minutes of this meeting are in
 the records as Respondent's Exhibit No. 1.
 
    12.  Although the November 30, 1979, date for the filing of DD Form
 1555 was not further extended the parties discussed DLAR 5500.1 on
 December 13, 1979.  Again the Respondent indicated that it did not have
 the authority to negotiate the substance of the decision and no
 agreement was reached regarding Revised DLAR 5500.1.
 
                 (The Involuntary Reassignment of Golotko)
 
    13.  Edward Golotko is a quality assurance specialist assigned to
 Respondent's DCASPRO at IBM in Owego, New York.
 
    a.  It is undisputed that when Golotko was employed by the Respondent
 in early 1977 his wife was already an IBM employee.  It is also
 undisputed that approximately four or five months after Golotko was
 employed his immediate supervisor, Mr. Bryant, spoke to Golotko
 regarding a possible conflict of interest, but nothing came of it.  At
 that time Golotko's wife was involved in the production of products
 inspected by her husband i.e., Federal work.
 
    b.  Thereafter, the subject came up again and Golotko spoke to the
 officer-in-charge of the Respondent's operations in Owego, Commander
 Carl S. Park.  In May 1979, the situation was resolved when Golotko's
 wife transferred to the commercial (non-Federal) side of IBM and Golotko
 was specifically told by Park that a conflict "no longer" existed.
 
    c.  Thereafter, in late May or June 1979, Golotko was again called to
 Park's office and told that, "the conflict of interest had re-arisen"
 because of a change in the applicable regulation.  At this time Golotko
 was part of NAGE Local R2-56 but not a union member.  Subsequent to this
 meeting, Park met with James Hall, Vice President of NAGE Local R2-56
 and pointed out the changes in the applicable Regulation which now
 emphasized the "appearance" of a conflict in interest.
 
    d.  By letter dated August 24, 1979, Edward Golotko was informed that
 he was in violation of the provisions of 18 U.S.C. 208 /19/ because
 "your wife is employed by the IBM Corporation, Owego, New York and your
 duty assignment is at the same plant." Under "the provisions of 18
 U.S.C. 208 and DLAR 5500.1" he was given three (3) choices:  resign,
 accept a transfer to another location, or have his wife resign from IBM
 (GCX 20).
 
    e.  Golotko wrote a letter of protest (GCX 21) and stated that his
 wife would remain at IBM.  Commander Park wrote a letter in September
 1979, on Golotko's behalf which referred in a straightforward manner to
 the changes in the Regulation as the reason for Golotko's problem (GCX
 21), /20/ Golotko was then transferred to a new location thirty (30)
 miles from Owego in January 1980.  The record is clear that prior to the
 issuance of Revised DLAR 5500.1 in May 1979, a number of bargaining unit
 employees were allowed to work at the same company which employed their
 spouses and that responsible management was aware of this fact.  (R 71,
 9-82) /21/
 
                        (Impact on Other Employees)
 
    14.  On or about the date of the instant hearing four other employees
 of the Respondent at various locations in New York State were confronted
 with the same choices presented to Golotko.  The four employees were
 Edward Prusik, Andrew Kucer, M. Pauline Van Derbeck and Larry Tomenga
 (GCX 23-26).  Like Golotko, each is a quality assurance specialist and
 each is married to an employee of a civilian contractor doing business
 with DLA.  (GCX 23-26, p. 1 of each exhibit).  The record also reveals
 that on March 20, 1980, Sumner Marcus responded to an inquiry from
 Commander Parks regarding "Standards of Conduct-- Conflicts of Interest"
 (GCX 29).  Park's inquiry sought, "a final determination in the cases of
 five employees"-- Van Derbeck and Kucer, and three clerical employees.
 Marcus' response noted the definition of financial interest as set forth
 in the revised regulation.  /22/ Marcus concluded that Van Derbeck and
 Kucer were in conflict of interest situations but that the three
 clerical employees were not.
 
    A fair reading of the Marcus memo makes it clear that the distinction
 between a so-called conflict of interest and no conflict of interest is
 based on the "position description" i.e., job duties of the DLA
 employees (GCX 29).  Thus, it is clear that in spousal situations, a
 conflict of interest is dependent upon the job duties of a DLA employee;
  and, the criteria set forth in the revised regulation for filing DD
 Form 1555 appears to be the criteria followed in making such
 determinations.  Furthermore, attachments to the Marcus reply make it
 clear that the new, "DLA policy as set forth in DLAR 5500.1 is to avoid
 even the appearance of impropriety." (GCX 29, March 5, 1980 letter from
 Admiral Thompson).  Put another way, one of the changes in the revised
 regulation is to emphasize and eliminate situations involving the
 appearance of a conflict of interest even where such situations had
 previously been allowed.  Although the Respondent asserts that the
 revised regulation had no impact on Golotko-type situations, no evidence
 was presented that the DLA has in its DCASR-Boston Region or, for that
 matter anywhere in the world, ever reassigned an employee where a
 private sector spouse has no involvement with Government contracts.
 Thus, the underlying facts in each of the examples relied on by the
 Respondent either established a direct conflict, like that of Golotko
 prior to his wife's transfer to the commercial side of IBM, or were left
 unexplained (R 161-163, 176-177, 181;  RX 11 and 12).  Furthermore, it
 was not until after implementation of the revised regulation that any
 action was taken against an employee represented by the NAGE Locals
 involved in this proceeding even though as shown above, the
 uncontradicted evidence establishes the existence of spousal situations
 involving possible conflicts of interest.
 
    15.  By memo dated March 13, 1980, Sumner Marcus gave notice to the
 Union of further proposed changes in DLAR 5500.1 (GCX 31).  The proposed
 changes (GCX 31) dealt inter alia with an expansion of the definition of
 financial interest to add "also includes financial interest of spouse,
 minor child and member of household," and clarified Paragraph III D.1 by
 adding the following new sentence:
 
          All employees should be aware that not only stocks and other
       similar holding, but also the employment of a spouse, minor child
       and household member is considered a financial interest
       attributable to the DLA employee.
 
 By letter dated March 20, 1980 (GCX 33), the Union responded to Marcus
 setting forth a number of proposals.
 
                     Discussion and Conclusions of Law
 
 A. In General
 
    When an agency institutes changes in conditions of employment without
 prior notice to the collective bargaining representative, it acts at its
 peril.  If it subsequently is determined that the changes had no impact
 or only an insignificant impact on employees, then no obligation to
 bargain arises, and there is no accompanying obligation to provide the
 Union with adequate advance notice of the changes.  In such event, the
 Respondent has not violated the Statute.  Where, however, the changes
 instituted by the agency actually have or are reasonably expected to
 have a substantial impact adversely affecting employees, /23/ the duty
 to bargain arises and the failure to have provided the exclusive
 representative with adequate advance notice of the changes constitutes a
 violation of Section 7116(a)(5) and (1).  Respondent herein raises a
 number of defenses which will be discussed hereinafter.  B.  Changes In
 Conditions Of Employment;  Substantial Impact
 
    Adversely Affecting Employees
 
    Respondent contends that Mr. Golotko's reassignment was premised upon
 a conflict of interest within the meaning of 18 U.S.C. 208 and,
 therefore, did not "result from" the changes in DLAR 5500.1.  Respondent
 relies on the testimony of Karl Kabeiseman, Standards of Conduct
 Counsellor of the Agency who testified that in cases similar to that of
 Mr. Golotko, it had been necessary on previous occasions to reassign
 employees based upon a spouse's employment.  As noted earlier, the
 examples cited by Respondent were not precisely the same as Golotko's
 case.  Be that as it may, the fact remains that responsible Agency
 management officials were aware of Golotko's situation and had resolved
 the possible conflict of interest by approving an arrangement pursuant
 to which his wife changed jobs within her employer's organization.
 Thus, insofar as Golotko is concerned his job retention was clearly a
 condition of employment within the meaning of Section 7103(a)(14) of the
 Act which ultimately was changed by involuntarily reassigning him to a
 new geographical location.  In fact, it was the publication and issuance
 of revised DLAR 5500.1 containing a new definition of financial interest
 which prompted Commander Park to reopen the Golotko case, rather than
 the new filing requirement itself.  I am persuaded by the evidence that
 but for the revised DLAR 5500.1 there would not have been a reassignment
 of Golotko.
 
    I reject Respondent's contention that the real reason for Golotko's
 reassignment was because of 8 U.S.C. 208.  There is no evidence of any
 amendment to 8 U.S.C. 208 which prompted a revision in DLAR 5500.1.
 Thus, I conclude that the General Counsel has successfully demonstrated
 that revised DLAR 5500.1 had an adverse impact on the bargaining unit by
 virtue of the effect on Golotko and, of course, on others similarly
 situated.  I also note a large number of employees below Grade 13 would
 now have to file DD Form 1555 and, in effect, report matters which might
 later be concluded to represent conflicts of interest real or apparent.
 Thus, it's not the filing requirement itself so much as it is the
 reasonable likelihood of an adverse impact on employees resulting
 directly from such filing requirement.  It is my conclusion that
 Respondent's decision to reinterpret or redefine what constitutes a
 "financial interest" and to expand the filing requirements to employees
 below Grade 13 had a substantial and adverse impact on employees in the
 bargaining unit.  C. Failure to Provide Adequate Advance Notice
 
    The Authority has held that appropriate advance notice of proposed
 changes in conditions of employment means notice to a Union agent or
 official in his or her capacity as a Union representative.  United
 States Air Force, Air Force Logistics Command, 4 FLRA No. 70.  There is
 no dispute and, I find, that Respondent failed to provide such notice
 herein.  The only actual notice received was by one NAGE local
 President, Christopher Themistocles of Local R2-110, but this was in his
 capacity as en employee.  Moreover, it is not surprising that he did not
 readily comprehend the extent of the changes for, as discussed earlier,
 they were not that easy to ascertain.  Respondent's defense that
 DCASR-Boston gave "general notice" of the change through its July 16,
 1979 bulletin to all employees is noted and found to be inadequate and
 improper notice.  D.  Whether Matters Which Are The Subject Of An
 
    Agency-Wide Regulation are Negotiable?
 
    Section 7117 of the Statute has the effect of removing from the ambit
 of collective bargaining those matters which are the subject of a
 government-wide or agency-wide rule or regulation under certain
 circumstances.  Thus, Section 7117 states as follows:
 
          "Sec. 7117.  Duty to bargain in good faith;  compelling need;
       duty to consult
 
          "(a)(1) Subject to paragraph (2) of this subsection, the duty
       to bargain in good faith shall, to the extent not inconsistent
       with any Federal law or any Government-wide rule or regulation
       only if the rule or regulation is not a Government-wide rule or
       regulation.
 
          "(2) The duty to bargain in good faith shall, to the extent not
       inconsistent with Federal law or any Government-wide rule or
       regulation, extend to matters which are the subject of any agency
       rule or regulation referred to in paragraph (3) of this subsection
       only if the Authority has determined under subsection (b) of this
       section that no compelling need (as determined under regulations
       prescribed by the Authority) exists for the rule or regulation.
 
          "(3) Paragraph (2) of the subsection applies to any rule or
       regulation issued by any agency or issued by any primary national
       subdivision of such agency, unless an exclusive representative
       represents an appropriate unit including not less than a majority
       of the employees in the issuing agency or primary national
       subdivision, as the case may be, to whom the rule or regulation is
       applicable.
 
 The regulations prescribed by the Authority are set forth in Part 2424
 of the Rules and Regulations.  There is no dispute that the Unions
 herein failed to utilize the procedures established by the Board to
 resolve issues concerning "compelling need."
 
    Respondent contends that Section 7117 of the Statute is a bar to
 negotiations because DLAR 5500.1 is an agency-wide regulation /24/ and
 the Authority has not made a determination that "no compelling need"
 exists for the regulation.  I find merit to this defense.  Indeed, I
 specifically find and conclude that Part 2424 of the Rules and
 Regulations is the exclusive procedure wherein the Authority may
 determine whether compelling need exists for an agency-wide regulation.
 
    To begin with, a literal reading of the statutory language makes
 clear that it is "only if the Authority has determined" (past tense)
 that no compelling need exists for an agency-wide regulation that the
 duty to bargain even arises.  Thus, an initial determination by the
 Authority pursuant to its prescribed procedures is a condition precedent
 which must be satisfied before a determination can be made that a duty
 to bargain in fact exists.  The Authority's function under Section 7117
 is to determine whether the agency-wide regulation is a bar to
 negotiations.  Stated differently, the Authority's role is to resolve a
 "negotiability" issue;  its role is not to resolve the underlying
 "obligation to bargain" in the same proceeding.
 
    The General Counsel contends, however, that the issue of "compelling
 need" may be resolved in an unfair labor practice proceeding.  I reject
 this contention for the same reasons stated by Judge Arrigo in Boston
 District Recruiting Command, Boston, Massachusetts, Case No. 1-CA-206 et
 al., OALJ-81-023, at pp. 13-15, (December 22, 1980).  In that case,
 Judge Arrigo concluded as follows:
 
          Counsel for the General Counsel also suggests . . . that if the
       agency regulation stands as a bar to negotiations, then the
       proceeding herein served to put the issue of compelling need
       before the Authority for determination.  In my view neither the
       Statute nor the Authority's regulations appear to envision this
       approach.  Indeed, section 7117(b)(3) of the Statute provides that
       where a hearing is held to make a determination of compelling
       need, it, ' . . . shall not include the General Counsel as a
       party.' Accordingly, to combine a compelling need determination
       with an unfair labor practice proceeding, where the General
       Counsel has the responsibility of presenting the evidence in
       support of the complaint and carries the burden of proving the
       allegations of the complaint, would run contrary to Statutory
       prohibition.  Therefore, Counsel for General Counsel's contention
       is rejected." (footnote omitted).
 
 Therefore, based upon the foregoing reasoning, I conclude that the
 Authority does not even have the option of litigating the compelling
 need issue in a Section 7116 proceeding where the General Counsel is a
 party.
 
    When the Union first learned of the issuance of this agency-wide
 regulation, it could have sought a determination by the Authority on the
 compelling need issue.  Regardless of which way the Authority decided
 the case, it is my opinion that its decision would have removed an
 impediment to meaningful negotiations and may have assisted in paving
 the way to voluntary settlement of the unfair labor practice issues.
 Even if a Section 7116 proceeding could not be avoided altogether, the
 issues to be litigated might well be narrowed and simplified.  In short,
 the Statutory scheme of providing an expedited forum before the
 Authority, without the presence of the General Counsel, makes sense.
 
    In an excellent brief filed by Counsel for the General Counsel, the
 contention is made that the compelling need aspects of Section
 7116(a)(2) are only applicable in cases where an agency invokes an
 existing rule or regulation as a bar to negotiations.  It is argued that
 the present case should be viewed as a unilateral change (or revision)
 of an existing regulation.  Accordingly, it is argued that this issue
 may be litigated in a Section 7116 proceeding and that "the compelling
 need provisions of the Statute are in reality not applicable to the
 facts of this case." I disagree.  The problem with this theory is that
 its practical effect is to prevent an agency "from acting at all", that
 is, issuing a regulation containing a change in conditions of
 employment.  Moreover, under this theory, even if an agency informed a
 Union and proposed putting into effect an agency-wide regulation, and
 the Union failed to seek a compelling need determination from the
 Authority, the agency still would be required to act at its peril and
 risk the allegation that it violated the Act, if it decided to make the
 regulation effective notwithstanding the Union's inaction.  While it is
 true that the legislative history does not envision that an agency may
 unilaterally remove issues from the bargaining table merely by issuing
 regulations, it does not follow that an agency is prohibited from acting
 at all.  Section 7117(b)(1) and (2) clearly contemplate that agencies
 may issue regulations prior to their being put to a compelling need
 challenge.  Thus, Section 7117(b)(1) refers to an exclusive
 representative challenging a regulation "which is then in effect" and
 Section 7117(b)(2)(A) refers in the past tense to an agency "which
 issued" the rule or regulation.  It follows, therefore, that the
 Authority is not deprived of jurisdiction in a Part 2424 proceeding
 simply because the agency regulation involves a "unilateral" change.
 
    Furthermore, if a union were permitted to litigate compelling need
 issues in an unfair labor practice proceeding with the aid of the
 General Counsel, it would mean the union had a choice of forums and
 could choose to by-pass the expedited forum designated by the Authority
 in Part 2424 of the Rules and Regulations.  I concede that Sections
 2423.5 and 2426.5 of the Rules and Regulations may raise some doubt as
 to my interpretation.  However, I believe that the last sentence in
 those sections is intended to reserve to the Authority exclusive
 jurisdiction of (1) all compelling need issues and (2) those
 negotiability issues which, because no action has been taken, may not
 form the basis for a possible unfair labor practice and therefore may
 not be litigated in a Section 7116 proceeding.  I further note that even
 in cases where a party elects to file a negotiability petition and is
 referred by the Authority to a Section 7116 proceeding it is because (1)
 the Respondent denies any changes occurred or (2) resolution of the
 dispute is dependent upon the resolution of factual issues related to
 the parties' conduct, both of which are more related to the underlying
 obligation to bargain.  National Treasury Employees Union and NTEU
 Chapter 66, 6 FLRA No. 16.  Since neither of these situations obtains
 here, I believe the Authority could have made a "compelling need"
 determination had the Union only invoked the expedited procedures of
 Part 2424.
 
    Finally, I would observe that, in the absence of a clear delegation
 from the Authority, I am reluctant to assume that I have the authority
 to make compelling need determinations in an unfair labor practice
 proceeding.  And, unless I have that authority, an agency will be
 foreclosed from ever obtaining such a determination since, as noted
 above, it cannot initiate a petition for review under Section 2424.2 of
 the Rules and Regulations.  The net result of this discussion is that
 the agency regulation is a bar to negotiations.  E.  Status Of The Named
 Respondents And Their Duty To Bargain 1.  Respondent DLA /25/
 
    This Respondent argues that simply because no direct bargaining
 relationship exists between DLA and any of the NAGE locals, DLA cannot
 be found to have violated Section 7116(a)(1) and (5) of the Statute.  In
 cases arising under the Executive Order and the Statute, it has been
 held by the Federal Labor Relations Council /26/ and the Authority /27/
 that the absence of a direct bargaining relationship is not a basis, in
 and of itself, for escaping liability for committing an unfair labor
 practice.  Accordingly, this argument is rejected.  However, I must
 point out that such precedent is not applicable herein, and not
 dispositive of the issues of liability.  Naval Air Rework, for example,
 involved conduct by higher agency headquarters which blatantly
 interfered with a contractual relationship of the local parties.  That
 case did not involve the issuance of an agency-wide regulation.  As
 previously discussed, it is my opinion that Respondent DLA's agency-wide
 regulation is a bar to negotiations.  Therefore, the duty to bargain did
 not arise, either as to decision or to its impact and implementation.
 Accordingly, I recommend dismissal as to Respondent DLA.  In reaching
 this conclusion I rely on the fact that revised DLAR 5500.1 was issued
 on May 9, 1979 and that the effective date of the new filing requirement
 was not until October 31, 1979.  Thus, there was ample time during which
 the Locals could be notified and given a reasonable time in which to
 request bargaining about impact and implementation.  2.  Respondent
 DCASR-Boston
 
    This is not a case, like Naval Air Rework, where the subordinate
 activity was performing a ministerial action.  DLA's issuance of an
 agency-wide regulation did not preclude DCASR-Boston from carrying out
 its statutory duty to notify the local union with which it had a
 bargaining relationship (Local R1-210) about the revised regulation and
 the changes contained therein so that the local could request bargaining
 about impact and implementation.  As previously noted, formal notice to
 the Union was not provided.  Accordingly, I find that DCASR-Boston
 violated Section 7116(a)(1) and (5).
 
    The General Counsel alleges that DCASR-Boston also had an obligation
 to notify the NAGE Locals which had exclusive representation at the
 eight subordinate activities named as Respondents in the Complaint.  The
 evidence does not establish, however, that DCASR-Boston's conduct,
 standing alone, may provide the basis in this proceeding for concluding
 that the eight subordinate activities were left with nothing to do but
 perform the ministerial act of implementing the revised regulation.
 /28/ I am not persuaded by the evidence that the eight subordinate
 activities were precluded in any way by DCASR-Boston from living up to
 their statutory obligation to provide their respective Local Unions with
 adequate notice and a reasonable opportunity to bargain about impact and
 implementation.  Subsequent to the July dissemination by DCASR-Boston of
 the revised DLAR 5500.1 there still was time for the remaining
 Respondents to notify their respective locals of the revised
 regulations.  /29/ This they failed to do.  However, the Complaint does
 not allege a separate violation by each of these Respondents.
 
    Summing up, the only violation I find is that Respondent DCASR-Boston
 violated Section 7116(a)(1) and (5) with respect to its duty to bargain
 with Local R1-210.  /30/
 
    In its brief, the General Counsel makes an extensive well-developed
 argument for holding that in reality this case really involves a single
 Respondent (DLA Headquarters, DCASR-Boston, and each of the eight
 subordinate activities), all in the same chain of command.  There is
 much to be said for this theory and I note that the General Counsel
 relies rather heavily on the views expressed by my colleague, Judge
 Arrigo, in Internal Revenue Service, supra, fn. 13.  In that case, Judge
 Arrigo astutely pointed out the problems encountered by a Charging Party
 and the General Counsel in identifying the proper Respondent's--
 problems which I believe are a direct result of that portion of the
 Naval Air Rework decision which relieved the subordinate activity from
 any unfair labor practice liability assertedly because its actions as an
 agent of higher authority were only ministerial in nature.  The
 Authority, however, declined to address the problems discussed by Judge
 Arrigo and, therefore, since Naval Air Rework has not been overruled it
 constitutes precedent binding upon me.  F. The Remedy
 
    Respondent contends that the Union's right to negotiate was waived by
 its subsequent conduct and failure to submit specific proposals.  In my
 view, the issue is whether, under the circumstances of this case, the
 Respondent's violation of Section 7116(a)(1) and (5) requires, in
 addition to the usual cease and desist order, an order to bargain about
 impact and implementation.
 
    In United States Air Force, 4 FLRA No. 70, the Authority held that
 the failure of the Activity to give appropriate notice to a union
 official in his capacity as a union representative constituted
 inadequate notice and, therefore, a violation of the obligation to
 bargain in good faith in violation of Section 7116(a)(5) and (1).  In
 considering the appropriate remedy, the Authority stated as follows:
 
          However, the Complainant did not suggest that a demand to
       bargain based on actual knowledge of the change would have been
       futile, nor was it shown that the failure of appropriate advance
       notice would have made effective negotiation impossible.  Indeed,
       Steward Price decided that negotiations were unnecessary at the
       time.  Therefore, as the Union declined to act on its actual
       knowledge, it is not deemed appropriate to order bargaining
       herein.
 
 The above decision is applicable, I believe, to the present case in
 which the Union did act, albeit belatedly and ineptly.
 
    Here, Union President Themistocles had actual knowledge of the
 issuance of revised DLAR 5500.1 in July 1979.  Yet, it was not until
 October 24, 1979, a week before the effective date of the new filing
 requirement, /31/ that the Union requested bargaining and requested that
 the status quo be maintained.  (As discussed previously the Union did
 not even seek a compelling need determination from the Authority.)
 DCASR-Boston promptly replied on October 3;  invited the Union's
 comments on DLAR 5500.1, the DCASR-Boston Supplement 1, and the
 September 26 guidelines;  and extended the date for filing DD Form 1555
 to November 30, 1979.  Three days later on November 2, the parties met.
 From the testimony and the minutes of the meeting it is clear that the
 Union's principal goal was to bargain about the substance of the
 decision, rather than impact and implementation.  Respondent made clear
 that as far as the decision was concerned, this had been made by higher
 authority and couldn't be negotiated by it.  From the evidence it does
 not appear that the Golotko case was raised specifically although it may
 well have been covered by the abbreviated discussion of a "grandfather
 principle."
 
    Respondent asserts that the Union at both meetings (November 2 and
 December 13) failed to submit specific proposals on impact and
 implementation.  This appears to be the case.  It seems to me that the
 Union's main concern was the substance of the decision which, in my
 opinion, was barred from negotiations.  On balance, it is clear that
 notwithstanding Respondent's failure to provide appropriate advance
 notice, the Union nevertheless had an opportunity-- prior to the
 effective date for filing the DD Form 1555 to submit specific proposals
 and simply failed to do so.  Put another way, I am not persuaded by the
 evidence in this record that once negotiations were commenced Respondent
 refused to receive and consider any Union proposals concerning impact
 and implementation.  I conclude that the lack of success in the
 negotiations is attributable to the conduct of the Union and not to the
 Respondent.  In these circumstances, I believe it would not effectuate
 the purposes of the Act to order bargaining.  In view of my conclusion
 that Respondent's decision was nonnegotiable and that a bargaining order
 on impact and implementation is not appropriate, I also reject the
 General Counsel's request for a status quo remedy.
 
    Having found that Respondent DCASR-Boston has engaged in conduct
 violative of Sections 7116(a)(1) and (5) of the Act, I recommend that
 the Authority issue the following order designed to effectuate the
 purposes of the Federal Service Labor-Management Relations Statute.
 
                                   ORDER
 
    Pursuant to Section 2423.29 of the Rules and Regulations of the
 Federal Labor Relations Authority and Section 7118 of the Federal
 Service Labor-Management Relations Statute, the Authority hereby orders
 that the Defense Contract Administration Service, Region, Boston, MA,
 shall:
 
    1.  Cease and desist from:
 
          (a) Failing to provide appropriate advance notice of changes in
       conditions of employment, involving the revised standards of
       conduct regulations, affecting unit employees represented by Local
       R1-210, National Association of Government Employees, or any other
       labor organization having exclusive representation rights.
 
          (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 Federal Service Labor-Management a
 Relations Statute:
 
          (a) Post at the facility named below copies of the attached
       notice marked "Appendix" on forms to be furnished by the Federal
       Labor Relations Authority.  Upon receipt of such forms, they shall
       be signed by an authorized representative and they shall be posted
       for 60 consecutive days thereafter, in conspicuous places,
       including all places where notices to employees are customarily
       posted.  The authorized representative shall take reasonable steps
       to insure that such notices are not altered, defaced, or covered
       by any other material.
 
        Defense Contract Administration Service Region (Boston, MA)
 
          (b) Notify the Regional Director for Region 1, in writing,
       within 30 days from the date of this Order, what steps it has
       taken to comply herewith.
 
                                       FRANCIS E. DOWD
                                       Administrative Law Judge
 
 Dated:  July 7, 1981
          Washington, DC
 
 
 
 
                                 APPENDIX
 
                          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
 OF TITLE
 5 OF THE UNITED STATES CODE FEDERAL SERVICE LABOR-MANAGEMENT
 RELATIONS
 WE HEREBY NOTIFY OUR EMPLOYEES THAT:
 
 WE WILL NOT fail to provide appropriate advance notice of changes in
 conditions of employment, involving the revised standards of conduct
 regulations, affecting unit employees at DCASR-Boston represented by
 Local R1-210, National Association of Government Employees, or any other
 labor organization having exclusive representative rights.  WE WILL NOT,
 in any like or related manner, interfere with, restrain, or coerce our
 employees in the exercise of their rights assured by the Federal Service
 Labor-Management Relations Statute.
                                       (Agency or Activity)
 
 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,
 Federal Labor Relations Authority, whose address is:  441 Stuart Street,
 8th Floor, Boston, MA 02116, and whose telephone number is:  (617)
 223-0920.
 
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ Section 7117(a) of the Statute provides, in pertinent part, as
 follows:
 
          Sec. 7117.  Duty to bargain in good faith;  compelling need;
       duty to consult
 
                                .  .  .  .
 
          (2) The duty to bargain in good faith shall, to the extent not
       inconsistent with Federal law or any Government-wide rule or
       regulation, extend to matters which are the subject of any agency
       rule or regulation referred to in paragraph (3) of this
 
 subsection
 
       only if the Authority has determined under subsection (b) of this
       section that no compelling need (as determined under regulations
       prescribed by the Authority) exists for the rule or regulation.
 
          (3) Paragraph (2) of the subsection applies to any rule or
       regulation issued by any agency or issued by any primary national
       subdivision of such agency, unless an exclusive representative
       represents an appropriate unit including not less than a majority
       of the employees in the issuing agency or primary national
       subdivision, as the case may be, to whom the rule or regulation is
       applicable.
 
 
    /2/ Section 7117(b) provides, in pertinent part, as follows:
 
          (b)(1) In any case of collective bargaining in which an
       exclusive representative alleges that no compelling need exists
       for any rule or regulation referred to in subsection (a)(3) of
       this section which is then in effect and which governs any matter
       at issue in such collective bargaining, the Authority shall
       determine under paragraph (2) of this subsection, in accordance
       with regulations prescribed by the Authority, whether such a
       compelling need exists.
 
          (2) For the purpose of this section, a compelling need shall be
       determined not to exist for any rule or regulation only if--
 
          (A) the agency, or primary national subdivision, as the case
       may be, which issued the rule or regulation informs the Authority
       in writing that a compelling need for the rule or regulation does
       not exist;  or
 
          (B) the Authority determines that a compelling need for a rule
       or regulation does not exist.
 
          (3) A hearing may be held, in the discretion of the Authority,
       before a determination is made under this subsection.  If a
       hearing is held, it shall be expedited to the extent practicable
       and shall not include the General Counsel as a party. . . .
 
 
    /3/ The General Counsel, who is responsible under sections 7104(f)(2)
 and 7118 of the Statute for investigating and prosecuting alleged unfair
 labor practices, would not be a party to a Part 2424 proceeding since no
 unfair labor practice allegations would be involved.  See sections
 7117(b)(3) and (c)(5) of the Statute.
 
 
    /4/ See also State of Nevada National Guard, 7 FLRA No. 37 (1981),
 appeal docketed, No. 82-7034 (9th Cir. Jan. 18, 1982), remanded January
 7, 1983, wherein the Authority addressed the issue of compelling need in
 an unfair labor practice proceeding involving the agency's failure to
 comply with a decision of the Federal Service Impasses Panel.
 
 
    /5/ See American Federation of Government Employees, AFL-CIO,
 National Joint Council of Food Inspection Locals and Department of
 Agriculture, Food Safety and Quality Service, Washington, D.C., 9 FLRA
 No. 74 (1982);  American Federation of Government Employees, AFL-CIO,
 Local 1928 and Department of the Navy, Naval Air Development Center,
 Warminster, Pennsylvania, 2 FLRA 451 (1980).
 
 
    /6/ Indeed, the Respondent did not even raise compelling need as an
 affirmative defense in its answer to the complaint but, rather,
 addressed this matter for the first time in its post-hearing brief to
 the Judge.
 
 
    /7/ American Federation of Government Employees, AFL-CIO, Local 3385
 and Federal Home Loan Bank Board, District 7, Chicago, Illinois, 7 FLRA
 No. 58 (1981) (Union Proposal II);  National Treasury Employees Union
 and Internal Revenue Service, 6 FLRA No. 98 (1981) (Union Proposal
 VIII).
 
 
    /8/ National Treasury Employees Union, Chapter 6 and Internal Revenue
 Service, New Orleans District, 3 FLRA 748 (1980).
 
 
    /9/ Inasmuch as there is no collective bargaining relationship
 between DLA and NAGE at the primary national subdivision level, the
 Authority concludes that DLA had no duty to bargain with NAGE before
 revising the regulation involved herein.
 
 
    /10/ Department of the Air Force, Scott Air Force Base, Illinois, 5
 FLRA No. 2 (1981).
 
 
    /11/ It follows that, as NAGE Local R1-210 was not provided with
 prior notice of the revised regulation, it could not be found to have
 waived its bargaining rights as alleged by the Respondent, and therefore
 the Authority finds this contention to be without merit.
 
 
    /12/ The Authority has previously held that the acts and conduct of
 higher level agency management may constitute an unfair labor practice
 where such conduct prevents agency management at the level of exclusive
 recognition from fulfilling its bargaining obligation under the Statute.
  Department of Health and Human Services, Social Security
 Administration, Region VI, and Department of Health and Human Services,
 Social Security Administration, Galveston, Texas District, 10 FLRA No. 9
 (1982);  Department of the Interior, Water and Power Resources Service,
 Grand Coulee Project, Grand Coulee, Washington, 9 FLRA No. 46 (1982).
 
 
    /13/ There was no allegation in the complaint that these subordinate
 levels of agency management had themselves failed to fulfill their
 statutory obligation.  Accordingly, the Authority need not address
 whether there was a violation of the Statute in this regard, or whether
 the NAGE locals at these subordinate levels had waived their bargaining
 rights.
 
 
    /14/ Title 18 of the United States Code relating to Crimes and
 Criminal Procedure provides, in pertinent part, as follows:
 
          Sec. 208.  Acts affecting a personal financial interest
 
          (a) Except as permitted by subsection (b) hereof, whoever,
       being an officer or employee of the executive branch of the United
       States Government, or any independent agency of the United States,
       a Federal Reserve bank director, officer, or employee, or of the
       District of Columbia, including a special Government employee,
       participates personally and substantially as a Government officer
       or employee, through decision, approval, disapproval,
       recommendation, the rendering of advice, investigation, or
       otherwise, in a judicial or other proceeding, application, request
       for a ruling or other determination, contract, claim, controversy,
       charge, accusation, arrest, or other particular matter in which,
       to his knowledge, he, his spouse, minor child, partner,
       organization in which he is serving as officer, director, trustee,
       partner or employee, or any person or organization with whom he is
       negotiating or has any arrangement concerning prospective
       employment, has a financial interest--
 
          Shall be fined not more than $10,000, or imprisoned not more
       than two years, or both.
 
          (b) Subsection (a) hereof shall not apply (1) if the officer or
       employee first advises the Government official responsible for
       appointment to his position of the nature and circumstances of the
       judicial or other proceeding, application, request for a ruling or
       other determination, contract, claim, controversy, charge,
       accusation, arrest, or other particular matter and makes full
       disclosure of the financial interest and receives in advance a
       written determination made by such official that the interest is
       not so substantial as to be deemed likely to affect the integrity
       of the services which the Government may expect from such officer
       or employee, or (2) if, by general rule or regulation published in
       the Federal Register, the financial interest has been exempted
       from the requirements of clause (1) hereof as being too remote or
       too inconsequential to affect the integrity of Government
       officers' or employees' services.  In the case of class A and B
       directors of Federal Reserve banks, the Board of Governors of the
       Federal Reserve System shall be the Government official
       responsible for appointment.
 
 
    /15/ Section 7118(a)(4) of the Statute, which bars the issuance of a
 complaint based upon any alleged unfair labor practice which occurred
 more than 6 months before the filing of the charge, was not interposed
 as an affirmative defense by Respondent.
 
 
    /16/ There being no objection, the General Counsel's Motion to
 Correct Transcript is hereby granted as follows:  "NAGE" on page 152,
 line 5 is corrected to read "AFGE."
 
 
    /17/ R refers to record citations, GCX to General Counsel Exhibits
 and RX to Respondent's Exhibits.  The transcript is hereby corrected to
 show that GCX 2 and 29 were received into evidence.
 
 
    /18/ The Union was represented by Remmes, Local R2-110 President
 Christopher Themistocles and Vice-President Joe Mazzotta, and two
 representatives from Connecticut.  The Respondent was represented by
 Labor Relations Specialist Edwin Newdick and DCASR Counsel and Standards
 of Conduct Officer Sumner Marcus.  Remmes acted as spokesman for the
 Union.
 
 
    /19/ 18 U.S.C. 208 is one of the Statutes referred to in DLAR 5500.1.
  As set forth in Enclosure 3 pp. 1-2 of GCX 15 that Statute refers to
 financial interests and the test for its application is "whether the
 individuals might reasonably anticipate that their Government action, or
 the decisions in which they participate or with respect to which they
 advise, will have a direct and predictable effect upon such financial
 interest." The Enclosure also notes that DLA has discretion to grant ad
 hoc exemptions.
 
 
    /20/ Paragraph 6 of GCX 22 states in pertinent part as follows:
 
          "DLAR 5500.1 dated 7 May 1979 further expanded the conflict of
       interest implications as to appearance aspects, to cause
       management to revisit the prior decision . . . "
 
 
    /21/ Indeed, at the hearing Commander Park admitted that it was his
 policy at Owego that, "an employee could be permitted to work at Owego
 IBM even though his wife was employed there as long as the wife was not
 on the government side".
 
 
    /22/ As previously noted the predecessor regulation did not define
 financial interest.
 
 
    /23/ For a discussion of actual versus probable impact see my
 decision in U.S. Government Printing Office, Case No. 3-CA-549,
 OALJ-81-183 (April 9, 1981).
 
 
    /24/ For convenience, I will refer to DLAR 5500.1 as an agency-wide
 regulation, although DLA actually is a primary national subdivision of
 the Department of Defense.
 
 
    /25/ I note that Respondent DLA's Answer was filed "in its own behalf
 only and to the exclusion of all other named Respondents." A separate
 Answer was filed by DCASR-Boston.
 
 
    /26/ Naval Air Rework Facility, Pensacola, Florida and Secretary of
 the Navy Department of the Navy, Washington, D.C., 5 FLRC 303, FLRC No.
 76A-37 (May 4, 1977), Report No. 125.
 
 
    /27/ Veterans Administration, 1 FLRA No. 101 (1979);  Internal
 Revenue Service, Washington, D.C., and Internal Revenue Service,
 Hartford District Office, 4 FLRA No. 37 (1980), a case not involving a
 violation of Section 7116(a)(5).
 
 
    /28/ Naval Air Rework Facility, supra fn. 11.
 
 
    /29/ The July 16 dissemination of the revised regulation by
 DCASR-Boston was not an attempt to negotiate or deal directly with
 employees and therefore was not an independent violation of Section
 7116(a)(5).  The General Counsel cites no cases