17:0329(49)CA - HHS, FDA, Region II and AFGE Council No. 242 -- 1985 FLRAdec CA



[ v17 p329 ]
17:0329(49)CA
The decision of the Authority follows:


 17 FLRA No. 49
 
 DEPARTMENT OF HEALTH AND HUMAN SERVICES
 FOOD AND DRUG ADMINISTRATION, REGION II
 Respondent
 
 and
 
 AMERICAN FEDERATION OF GOVERNMENT
 EMPLOYEES, AFL-CIO, COUNCIL NO. 242
 Charging Party
 
                                            Case No. 2-CA-1162
 
                            DECISION AND ORDER
 
    The Administrative Law Judge issued his Decision in the
 above-entitled proceeding, finding that the Respondent had not engaged
 in the unfair labor practices alleged in the complaint and recommending
 that the complaint be dismissed in its entirety.  Thereafter, the
 Charging Party and the General Counsel filed exceptions to the Judge's
 Decision with supporting briefs, and the Respondent filed oppositions to
 the General Counsel's and the Charging Party's exceptions.  /1/
 
    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 recommended Order, as modified herein.
 
    The Authority adopts the Judge's conclusion that the Respondent did
 not violate section 7116(a)(1) and (5) of the Statute when it refused to
 bargain over the Charging Party's proposal regarding reduction-in-force
 competitive areas.  Thus, the Authority agrees with the Judge that the
 proposal would directly determine working conditions of employees
 outside the Charging Party's exclusively-recognized unit.  In this
 regard, the Authority finds that the proposal on its face would define
 the competitive area of non-unit employees in the San Juan District
 Office.  American Federation of Government Employees, Local 32, AFL-CIO
 and Office of Personnel Management, 14 FLRA 754 (1984).  /2/
 
                                   ORDER
 
    IT IS ORDERED that the complaint in Case No. 2-CA-1162 be, and it
 hereby is, dismissed.  
 
 Issued, Washington, D.C., March 27, 1985
 
                                       Henry B. Frazier III, Acting
                                       Chairman
                                       William J. McGinnis, Jr., Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
                                       Case No.: 2-CA-1162
 
 
 
 
 
 
 
 
 
 
 -------------------- ALJ$ DECISION FOLLOWS --------------------
 
    Susan Cohen DeStefano, Esq.
       For the Respondent
 
    Allan W. Stadtmauer, Esq.
       For the General Counsel
 
    Sidney P. Morse
       For the Charging Party
 
    Before:  WILLIAM NAIMARK
       Administrative Law Judge
 
 
 
 
                                 DECISION
 
                           Statement of the Case
 
    Pursuant to a Complaint and Notice of Hearing issued on January 17,
 1983 by the Regional Director for the Federal Labor Relations Authority,
 New York, New York Region, a hearing was held before the undersigned on
 April 11, 1983 at New York, New York.
 
    This is a proceeding arising under the Federal Service
 Labor-Management Relations Statute (herein called the Statute).  It is
 based on a first amended charge filed on December 20, 1982 by American
 Federation of Government Employees, AFL-CIO, Council No. 242 (herein
 called the Union or AFGE Council No. 242) against Department of Health
 and Human Services, Food and Drug Administration, Region II (herein
 called Respondent).
 
    The Complaint herein alleged, in substance, that since June 10, 1981
 Respondent (a) rejected the Union's proposals for bargaining re
 reduction-in-force competitive areas for unit employees as being
 nonnegotiable since they conflicted with higher-level agency regulations
 that could not be modified at the lower level;  (b) refused to bargain
 with the Union re competitive areas to be utilized in a
 reduction-in-force affecting unit employees-- all in violation of
 Sections 7116(a)(1) and (5) of the Statute.
 
    Respondent filed its Answer dated February 11, 1983 wherein it
 admitted the foregoing allegations but denied the commission of any
 unfair labor practice.  It averred that the refusal to bargain was based
 on DHHS Instruction 351-1 defining competitive areas in the Region;
 that no determination has been made by the Authority that no compelling
 need exists for this Agency-wide rule, and the Instruction is thus
 nonnegotiable;  that a decision herein should be reserved pending the
 outcome of two other cases involving the same issue.
 
    At the hearing the parties introduced into evidence a "Stipulation of
 Facts" which incorporated therein, by reference, 16 exhibits that are
 annexed to the stipulation.  None of the parties desired to introduce
 testimony through witnesses.  Briefs were filed thereafter with the
 undersigned which have been duly considered.
 
    Upon the entire record herein, including the stipulated facts and
 exhibits in evidence, I make the following findings and conclusions:
 
                           Findings of Fact /3/
 
    1.  At all times material herein the Union has been the collective
 bargaining representative of all professional and non-professional
 employees of the New York, New York;  Newark, New Jersey;  and Buffalo,
 New York District office s of the Food and Drug Administration (FDA),
 Region II, excluding all professional and non-professional employees of
 the office of the Regional Director, Region II, all employees in the San
 Juan, Puerto Rico, District office, and other employees not relevant to
 this matter.
 
    2.  At all times material herein, the National Treasury Employees
 Union, Chapter 210 has been the collective bargaining representative of
 all professional and non-professional employees of the office of the
 Regional Director, Region II, DHHS, as well as all professional and
 non-professional employees of the Region II office of the Public Health
 Service.  Five NTEU bargaining unit employees were and are physically
 located at FDA headquarters in Brooklyn, New York.
 
    3.  At all times material herein, no collective bargaining agreement
 has existed between the Union/AFGE Council No. 242 and Respondent
 covering all employees in the unit described in paragraph 1 above.
 
    4.  Prior to August 22, 1979 employees in Respondent's New York, New
 York District, Newark, New Jersey District, and its Buffalo, New York
 District were represented for the purposes of collective bargaining in
 separate units by AFGE Local 2637, Local 3485 and Local 3174
 respectively.  On August 22, 1979 said units were consolidated pursuant
 to a Certification of Consolidation of Units issued by the Regional
 Director, Region II, and were thereafter represented in the consolidated
 unit described in paragraph 1 above.
 
    5.  Prior to August 22, 1979 collective bargaining agreements were in
 effect between Respondent's Districts and the Local Unions referred to
 in paragraph 4 above.  There has been no express agreement between the
 Respondent and the Union herein to continue the predecessor agreement as
 being in full force and effect following the consolidation of units.
 Said agreements have, however, been generally viewed by the parties as
 guides for continuing regular working conditions.  Where necessary, the
 parties have expressly discussed and mutually agreed to the continuation
 or application of given provisions of the predecessor agreements to
 specific work situations which have arisen, but no such agreements are
 relevant to this proceeding.
 
    6.  In mid-May, 1981 Respondent notified the Union of a proposed
 reduction-in-force (RIF) affecting employees in Public Health Service
 (PHS) Region II, and therefore potentially affecting employees in FDA,
 Region II, affording the Union the opportunity to bargain concerning the
 impact and implementation of the said RIF.
 
    7.  By memorandum dated May 18, 1981 Respondent's Regional Food and
 Drug Director, Caesar Roy, forwarded to Sidney Morse, President of the
 Union herein, a memo from William F. Confalone, Respondent's Labor
 Relations Officer re "Negotiability of RIF Procedures." This memo
 stated, inter alia, that Department Instruction 351-1 serves as
 authority for those areas on which the Department has discretion
 concerning bargaining;  also that matters already determined at the
 Department level, as well as those within its discretion, would be
 decisions made above the level for which the Council has recognition
 and, thus, outside the bargaining obligation.  Listed were various
 subjects deemed not negotiable, including one designated as:
 
                      Establishing Competitive Areas
 
    8.  By memorandum dated May 28, 1981 addressed to Respondent's
 Regional Food and Drug Director, Union President Morse demanded
 negotiations of the procedures that would be followed to effect any RIF,
 and the arrangements for unit employees who might be adversely affected.
  In the memo Morse listed 10 subjects to be negotiated, including
 "Establishment of competitive areas."
 
    9.  Representatives of the Union and Respondent met on or about June
 8, 1981 to discuss the request to negotiate made by AFGE Council No.
 242.  Respondent's Regional Director requested that the Union present
 specific proposals on the 10 enumerated areas in its May 28, 1981
 memorandum, so that Respondent could analyze the proposals, develop
 counter proposals, and enter into negotiations.
 
    10.  By memorandum dated June 8, 1981, and entitled "COMPETITIVE
 AREAS," Morse proposed to Respondent's Regional Food and Drug Director
 that competitive areas be set up solely within the FDA, Region II,
 within each District office, and be applicable to all employees of the
 District Office.  He stated that no one from another primary operating
 component of the Department of Health and Human Services would be a part
 of an FDA reduction-in-force, nor would anyone from another primary
 operating component displace an employee of FDA Region II unless such
 displacement was dictated by law.  The competitive area in FDA Region II
 would be the District including its Resident posts.
 
    11.  By memorandum dated June 10, 1981, and entitled "Negotiations on
 Competitive Areas," Respondent's Regional Food and Drug Director, Caesar
 Roy, advised Morse that the Union's June 8 proposal re competitive areas
 was inconsistent with Department of Health and Human Services policy as
 described in Departmental Instruction 351-1-40.  Thus, the proposals on
 competitive areas were rejected on the basis that they were
 nonnegotiable.
 
    12.  In a letter dated June 12, 1981 Morse wrote John Mulholland,
 Director, Labor-Management Services Department, AFGE and requested that
 he institute a negotiability appeal on behalf of the Union.  Morse
 attached copies of the memos of May 28, June 8, and June 10 (set forth
 respectively in paragraphs 8, 10, and 11 above).
 
    13.  In a letter dated June 25, 1981 Mulholland requested that Caesar
 Roy furnish the Union the employer's written allegations concerning the
 nonnegotiability of the Union's proposals on competitive areas.
 
    14.  In a letter dated July 9, 1981 Caesar Roy informed Mulholland
 that the subject of competitive areas was not within his discretion to
 negotiate, but was imposed upon FDA, Region II by the Department of
 Health and Human Services, Region II, under law, regulation and
 Departmental Instruction 351-1-40.
 
    15.  By memorandum dated August 5, 1981 Union President Morse
 formally demanded of the Regional Food and Drug Director that Respondent
 return to the bargaining table with an individual who had the authority
 to negotiate competitive areas in any RIF that could impact on the
 members of the Union;  that the person should be capable of negotiating
 any areas of a RIF called for in the Union's earlier memo on the
 subject.
 
    16.  By memorandum dated August 5, 1981 Caesar Roy responded to
 Morse's August 5 memo re the proposals to negotiate the subject of
 competitive areas in a reduction-in-force.  Roy referred Morse to the
 earlier correspondence, as set forth herein in paragraph 11 and 14
 above, stating that such documents expressed his position re the issue
 of negotiation on competitive areas.
 
    17.  The referenced Departmental Instruction 351-1, was originally
 established in 1973 as HEW Instruction 351-1, with minor modifications
 in 1980 and 1982.  Neither of these modifications has changed the
 language of the pertinent portion of the Instruction at 351-1-40A.(5)(d)
 on COMPETITIVE AREAS. The competitive area established in the
 Departmental Instruction would "include non-members of the Union's
 bargaining unit, including employees represented by NTEU under the
 certification referenced in paragraph 2 above, as well as supervisory
 and managerial employees.
 
    18.  Department of Health and Human Services Instruction 351-1-40,
 effective during the period in question, provided inter alia:
 
          351-1-40 COMPETITIVE AREAS
 
          A. The normal subdivisions of the Department for reduction in
       force are outlined below:
 
                                .  .  .  .
 
          5.  Positions under a regional office's appointing authority
       form competitive areas as follows:
 
                                .  .  .  .
 
          d.  For positions other than those covered by 5.a., b., or c.
       above, /4/ separate competitive areas are established region-wide
       within each of the following components:  Office of the Secretary,
       Public Health Service, Health Care Financing Administration,
       Office of Child Support Enforcement, Office of Human Development
       Services, and Social Security Administration.  (Underscoring
       supplied)
 
    19.  No negotiability appeal was instituted on the Union's proposals
 on competitive areas.
 
    20.  From June 10, 1981 and at all times thereafter the Union (AFGE
 Council No. 242) has made no other proposals pertaining to any other
 aspect of the reduction-in-force which is the subject of this complaint,
 and Respondent has refused and continues to refuse to negotiate over the
 proposal which was made by the Union referred to in paragraph 10 above,
 for the reasons specified in paragraphs 11, 14, and 16 above.
 
    21.  No reduction-in-force which has taken place since June 10, 1981,
 has affected bargaining unit employees in FDA Region II.
 
    22.  Since the date of the filing of the instant charge, the
 Authority has determined that there is no compelling need for HHS
 Instruction 351-1-40.  Respondent does not assert a compelling need
 defense in this case.
 
    23.  The issue presented herein is whether the Respondent failed or
 refused to consult or negotiate in good faith in violation of Sections
 7116(a)(1) and (5) of the Statute by rejecting the Union's proposals for
 bargaining regarding reduction-in-force competitive areas for unit
 employees as being nonnegotiable because they conflicted with higher
 level agency regulations which could not be modified at the local level.
  /5/
 
                                Conclusions
 
    In support of an alleged violation of Sections 7116(a)(1) and (5) of
 the Statute it is contended that no justification existed for
 Respondent's refusal to negotiate as to the Union's proposals re
 reduction-in-force competitive areas.  It is argued that the Authority
 has deemed competitive areas to be negotiable as to substance.  Further,
 that no merit may be found in Respondent's insistence that the said
 proposals conflict with higher level agency regulations since the
 Authority has concluded no compelling need exists for such regulation,
 or in this instance, Instruction 351-1-40.  Finally, General Counsel
 avers the bargaining proposals would not determine conditions of
 non-unit employees so as to render them nonnegotiable.
 
    Respondent, contrariwise, asserts that its higher level Instruction
 351-1-40 warrants a refusal to bargain on the Union's proposals.  It
 maintains that these proposals would determine conditions of employment
 of employees outside the Union's bargaining unit;  that its assertion of
 nonnegotiability, due to a conflicting agency-wide regulation, was made
 in good faith.  Accordingly, it maintains that the rejection of the
 proposals for bargaining on competitive areas as nonnegotiable did not
 constitute a violation of the Statute.
 
    The Union insists it was merely attempting to establish a competitive
 area within FDA in Region II.  It contends that while the June 8, 1981
 proposals might impact upon employees outside the bargaining unit, the
 effect was of a 'spillover' nature.  Further, the Union argues that the
 limitation of a competitive area, as proposed, would not result in
 determining conditions of employment concerning non-unit employees.
 Whatever incidental effect it might have upon those outside the
 bargaining unit, it is urged, would not cause the proposal to become a
 non-bargainable matter.
 
    A competitive area is defined in 5 CFR 351.402.  The term refers to
 the part of an agency within which an employee, who occupied an
 abolished position, may compete with other employees to determine which
 one shall be retained in the agency.  The area may be described in
 organizational and geographic terms.  Typically, the competitive area
 includes a part of an agency wherein employees are assigned under a
 single administrative authority.  Under 351.402(c) and (d) smaller and
 larger areas than the standard may be established.
 
    The Authority has made several recent determinations regarding
 competitive areas and the negotiability of proposals involving the use
 thereof in the event of a reduction-in-force.  Thus, in National
 Treasury Employees Union and Department of Health and Human Services,
 Region IV, 11 FLRA No. 53 (1983), it held that agencies may establish
 competitive areas through negotiation provided that such areas are in
 conformance with standards promulgated by OPM, and not otherwise
 inconsistent with law, rule, or regulations - all pursuant to 5 U.S.C.
 3502.
 
    Where a particular proposal by a union does not require an agency to
 act beyond its discretion under applicable OPM regulations, or to agree
 to a competitive area inconsistent with applicable law or regulation,
 the proposal re competitive area is negotiable.  See American Federation
 of Government Employees and General Services Administration, 11 FLRA No.
 54 (1983).
 
    In addition to the foregoing determinations by the Authority, the
 latter also had occasion to consider the same HHS Personnel Manual
 Instruction 351-1-40 as is involved in the case at bar.  Thus, in
 National Treasury Employees Union and Department of Health and Human
 Services, Region IV, supra, the agency contended a union proposal re
 establishing a competitive area was nonnegotiable.  It claimed that
 negotiations were barred by the agency-wide regulation - Instruction
 351-1-40 - since a compelling need existed for the regulation under the
 criteria presented by Section 2424.11 of the Authority's Rules and
 Regulations.  Concluding that no compelling need existed for the said
 regulation, the Authority held that the union proposal for establishing
 a competitive area was negotiable and within the agency's duty to
 bargain.
 
    The Authority has had occasion to consider the negotiability of
 proposals concerning competitive areas involving a reduction-in-force.
 In Service Employees' International Union, AFL-CIO, Local 556 and
 Department of the Army, Office of the Adjutant General, Hale Koa Hotel,
 Honolulu, Hawaii, 9 FLRA No. 81 (1982) the union proposed the
 establishment of a competitive area for RIF purposes which included
 bargaining unit employees and employees in another unit of exclusive
 representation.  It was held that the agency had no obligation to
 bargain on said proposal.  As proposed, unit employees would be given
 rights to non-unit positions, and thus non-unit employees could be
 displaced from their employment.  Accordingly, the Authority concluded
 the proposal determined the condition of employment of non-unit
 employees.  It reasoned that such a proposal reached beyond the
 representation rights of the exclusive representative.
 
    In a similar view, the Authority found a union proposal nonnegotiable
 which declared that in a RIF the bargaining unit members could bump
 employees in other competitive levels.  /6/ See International Federation
 of Professional and Technical Engineers, AFL-CIO, NASA Headquarters
 Professional Association and National Aeronautics and Space
 Administration, Headquarters, Washington, D.C., 8 FLRA No. 46 (1982).
 The duty to bargain, declared the Authority, does not extend to matters
 concerning positions and employees outside the bargaining unit.  Under
 the proposal by the union in the cited case the rights of employees
 outside the bargaining unit could be prescribed thereby.  Since,
 therefore, the proposal would result in its being applied uniformly to
 non-unit as well as unit employees, it was held that the agency could
 not be required to negotiate thereon.
 
    No case has been cited, nor uncovered, which involved the precise
 situation as involved herein.  The General Counsel takes the position
 that the Service Employees' International Union et al., supra, is
 distinguishable from the one at bar.  After due and careful
 consideration, however, I have concluded that the rationale and holding
 in said case has applicability to the instant matter.  It is true that
 the proposal by the Union herein re the establishment of a competitive
 area within FDA in Region II is sanctioned by the federal regulations (5
 CFR 351.402).  Moreover, the area as proposed does not encompass a
 non-bargaining unit as was true in the cited case, supra.  However, the
 proposed language herein also states "nor will anyone from another POC
 /7/ displace an employee of FDA Region II unless such displacement is
 dictated by law".  (Underscoring supplied).  Apart from a RIF at FDA,
 Region II, this clause precludes an employee at another division of the
 Department from ever displacing or bumping an employee in this FDA
 region.  As such, the proposal is concerned with more than the retention
 rights of the bargaining unit employees in the event of a
 reduction-in-force.  It extends to the right of reassignment or transfer
 of employees outside the bargaining unit.  Thus the proposal is not
 limited to a reduction-in-force at FDA, Region II, but deals with
 employment conditions and rights of non-unit employees.  An employee
 from outside FDA, Region II may not, under this proposal, be hired to
 work in this competitive area and displace someone in the bargaining
 unit whose displacement occurs under any circumstances.  A limitation or
 restriction in regard to such article, be it transfer, hire or
 reassignment, would necessarily determine the conditions of employment
 of such individual who has been employed in the Department as a non-unit
 employee.
 
    In its brief General Counsel insists that a bargaining proposal is
 within the duty to bargain even though it affects conditions of
 employment of non-unit employees.  The case of National Treasury
 Employees Union and Internal Revenue Service, 7 FLRA No. 42 (1981) is
 cited in support thereof.  Said case, however, involved proposals by the
 union to management which would establish procedures for filling
 vacancies within the bargaining unit to be followed before such
 vacancies could be filled for non-bargaining unit employees.  It was
 expressly provided that the employer could consider applicants from
 other sources.  /8/ Accordingly, the Authority declared such a proposal
 to be negotiable since the agency would not have been prevented from
 excusing its statutory authority.  Moreover, the procedure was well
 within the duty to bargain under Section 7106(b)(2) of the Statute.  The
 case at bar presents a situation far different, for we are not concerned
 herein with a proposal regarding procedures to be followed in filling
 vacancies.  The Union herein would prevent anyone outside the bargaining
 unit from being selected to displace any unit employee.  Under Section
 7106(a)(2)(A) management's right to hire and assign employees are
 preserved.  Restricting the transfer of an employee to the competition
 area interferes with that right.  Moreover, it extends beyond the
 conditions of employment of bargaining unit employees, which is a
 predicate for imposing upon an employer an obligation to bargain under
 Sections 7103(a)(12) and (14) of the Statute.
 
    In sum, I am constrained to conclude that the bargaining proposal
 made by the Union would, in fact, bear on and prescribe working
 conditions of employees outside the FDA, Region II unit.  In this
 posture, the Union's submission would determine rights of employees in
 non-bargaining units.  Hence, the proposal is nonnegotiable and, as
 such, does not impose a bargaining obligation upon the Respondent.
 Accordingly, I conclude the latter has not refused to bargain as alleged
 in the complaint in violation of Sections 7116(a)(1) and (5) of the
 Statute;  and, further, it is recommended that the Complaint herein be
 dismissed.  /9/
 
    Having concluded that Respondent did not violate Sections 7116(a)(1)
 and (5) of the Statute, it is recommended the Authority adopt the
 following order:
 
                                   ORDER
 
    It is ordered that the Complaint herein be, and the same hereby is,
 dismissed.
 
                                       WILLIAM NAIMARK
                                       Administrative Law Judge
 
 Dated:  November 3, 1983
       Washington, D.C.
 
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ Contrary to the Respondent's contention, the Charging Party's
 exceptions were timely filed.  Thus, the Authority's records indicate an
 extension of time to file exceptions was granted until January 5, 1984,
 and that the Charging Party's exceptions were filed on that date.
 
 
    /2/ In view of this disposition, the Authority finds it unnecessary
 to reach and does not adopt the Judge's finding that the proposal was
 nonnegotiable because it interfered with management's right to hire and
 assign employees under section 7106(a)(2)(A) of the Statute.
 
 
    /3/ Except for a few variations, which results from an attempt by the
 undersigned to clarify language or include additional evidence, the
 findings track the Stipulation of Facts entered into by the parties
 herein.
 
 
    /4/ 5/(a)(b) and (c) refer respectively to separate competitive areas
 for a) PHS Hospital, SSA Program Service Center, SSA Data Operations
 Center;  b) Indian Health Service positions;  c) All other clerical,
 secretarial and wage rate positions in a commuting area.
 
 
    /5/ Although the parties have so framed the issue, the undersigned is
 constrained to broaden it to consider whether the proposal by the Union
 is negotiable and require Respondent to bargain thereon.
 
 
    /6/ A competitive level includes positions in a competitive area in
 the same grade or occupational level.  These positions are sufficiently
 alike in various respects so that an incumbent therein may be assigned
 to any of the other positions.  In such an instance, it would not change
 terms of his appointment or unduly interrupt the work program.  (5 CFR
 351.403).
 
 
    /7/ This refers to an operating component or, as later described, an
 operating division.
 
 
    /8/ The union in the cited case asserted that the proposal was not
 intended to prevent the agency from making selections from any
 appropriate source.
 
 
    /9/ The Union maintains that Respondent's refusal to bargain in good
 faith is evidenced by its raising a defense of nonnegotiability two
 years after it declined to negotiate based on its regulation and a
 compelling need therefor.  However, at the time the Respondent claimed a
 compelling need existed no determination in this regard had been made by
 the Authority.  It was later declared that there was no compelling need
 for regulation 351-1-40.  Thus, I reject the contention that the
 Respondent could not have raised a good faith doubt of its obligation to
 bargain in 1981.  Further, I cannot conclude that the agency was barred
 from raising the issue of non-negotiability herein.  See Delaware
 National Guard and Associat