19:0003(1)CA - Transportation and AFGE Local 2747 -- 1985 FLRAdec CA



[ v19 p3 ]
19:0003(1)CA
The decision of the Authority follows:


 19 FLRA No. 1
 
 DEPARTMENT OF TRANSPORTATION
 Respondent
 
 and
 
 AMERICAN FEDERATION OF GOVERNMENT
 EMPLOYEES, LOCAL 2747, AFL-CIO
 Charging Party
 
                                            Case No. 2-CA-20217
 
    The Administrative Law Judge issued the attached Decision in the
 above-entitled proceeding, finding that the Respondent, Department of
 Transportation, had engaged in the unfair labor practices alleged in the
 complaint and recommending that it be ordered to cease and desist
 therefrom and take certain affirmative action.  Thereafter, the
 Department of Transportation filed exceptions to the Judge's Decision
 and an accompanying brief.
 
    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 only to the extent
 consistent herewith.
 
    The Judge concluded that the Department of Transportation violated
 section 7116(a)(1) and (5) of the Statute when it prevented the Third
 Coast Guard District from bargaining with the American Federation of
 Government Employees, Local 2747, AFL-CIO, the exclusive representative
 of a unit of employees at the Third Coast Guard District, concerning the
 substance of a proposed change in paycheck and savings bond
 distribution.  Subsequent to the issuance of the Judge's Decision in
 this case, the Authority issued its decision in Federal Employees Metal
 Trades Council, AFL-CIO and Department of the Navy, Mare Island Naval
 Shipyard, Vallejo, California, 16 FLRA No. 88 (1984), petition for
 review filed, No. 85-7039 (9th Cir. Jan. 22, 1985), wherein it found
 that the process which an agency adopts to fulfill its payroll
 obligation so as to ensure the continued, uninterrupted operation of the
 agency constitutes a support operation without which the agency's
 mission could not be accomplished.  Thus, the Authority found that
 mission-related matters which fall within the meaning of "performing
 work" under section 7106(b)(1) include support functions which are
 integrally related to the agency's mission.  In Federal Employees Metal
 Trades Council, the Authority found a proposal pertaining to the method
 of paycheck distribution to concern the methods and means of performing
 work, i.e., the agency's payroll function, within the meaning of section
 7106(b)(1) of the Statute /1/ and thus negotiable only at the election
 of the agency.  /2/ Thus, in the circumstances of this case, the
 Authority finds that the Department of Transportation's alleged
 interference with the bargaining relationship between the Third Coast
 Guard District and the Union, by preventing bargaining concerning the
 change of paycheck delivery, did not constitute a violation of section
 7116(a)(1) and (5) of the Statute.  /3/ Similarly, the Authority finds
 that there is no Agency obligation to bargain over its decision to
 change the method of distributing savings bonds.  In this regard, the
 Authority finds that inasmuch as an agency's distribution of savings
 bonds is part of the method by which the agency fulfills its payroll
 obligation, as would be other things such as paycheck distribution,
 accounting for leave, overtime, compensatory time and tax deductions, it
 too concerns the methods and means of performing work within the meaning
 of section 7106(b)(1) of the Statute and is negotiable only at the
 election of the Agency.  See Federal Employees Metal Trades Council,
 AFL-CIO, supra.  Accordingly, the Authority finds that the Respondent's
 refusal to bargain concerning a change in the method of distributing
 savings bonds did not constitute a violation of section 7116(a)(1) and
 (5) of the Statute.  Therefore, the complaint shall be dismissed in its
 entirety.
 
                                   ORDER
 
    IT IS ORDERED that the complaint in Case No. 2-CA-20217 be, and it
 hereby is, dismissed.  
 
 Issued, Washington, D.C., July 11, 1985
 
                                       Henry B. Frazier III, Acting
                                       Chairman
                                       William J. McGinnis, Jr., Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
                                       Case No. 2-CA-20217
 
 
 
 
 
 
 
 
 -------------------- ALJ$ DECISION FOLLOWS --------------------
 
    William J. Hufnell and
    Marilyn Marton, Esq.
       For the Respondent
 
    Richard A. Gomez and
    Robert D. Jensen
       For the Charging Party
 
    Alfred R. Johnson, Jr., Esq.
       For the General Counsel
 
    Before:  SALVATORE J. ARRIGO
       Administrative Law Judge
 
                                 DECISION
 
                           Statement of the Case
 
    This is a proceeding under the Federal Service Labor-Management
 Relations Statute, Chapter 71 of Title 5 of the U.S. Code, 5 U.S.C. 7101
 et seq.
 
    Upon an unfair labor practice charge filed by Local 2747, American
 Federation of Government Employees, AFL-CIO (herein referred to as the
 Union) on January 27, 1982, as amended on March 10, 1982 and August 30,
 1982, against the Department of Transportation (herein sometimes
 referred to as Respondent or DOT), the General Counsel of the Authority,
 by the Regional Director for Region II, issued a Complaint and Notice of
 Hearing on September 22, 1982.  The Complaint alleged that Respondent
 refused to negotiate with the Union on the substance of a change in the
 method of delivering paychecks to employees of the Third Coast Guard
 District and thereafter unilaterally implemented the change in violation
 of section 7116(a)(1) and (5) of the Statute.
 
    A hearing on the Complaint was conducted on January 11, 1983 and
 September 21, 1983 at which all parties were represented and afforded
 full opportunity to adduce evidence, call, examine and cross-examine
 witnesses and argue orally.  Briefs, including supplemental briefs, were
 filed by Respondent and the General Counsel and have been carefully
 considered.
 
    Upon the entire record in this matter, my observation of the
 witnesses and their demeanor and from my evaluation of the evidence, I
 make the following:
 
                  Findings of Fact and Conclusions of Law
 
 Background
 
    At all times material herein the Union has been the exclusive
 collective bargaining representative of various employees of the Third
 Coast Guard District of the U.S. Coast Guard located in New York, New
 York (the Third District herein).  The U.S. Coast Guard (the Coast Guard
 herein) is an organizational entity within the Department of
 Transportation.
 
    Sometime prior to January 1983 Barry Lang, Labor Relations Specialist
 for the Third District, received a notice from Virgil Jackson, Civilian
 Personnel Specialist with Coast Guard Headquarters in Washington, D.C.,
 that the Department of Transportation was going to promulgate an order
 which would end the distribution of paychecks and savings bonds at
 employees' worksites.  At that time the majority of the approximately
 380 Third District bargaining unit employees had been receiving their
 checks and bonds at the worksite for some time.  Jackson suggested the
 Lang inform the Union of the pending issuance.  Jackson and Lang agreed
 that no negotiations with any union was required since the Agency had a
 meritorious "compelling need" argument.  Lang based his opinion on his
 recollection of a Coast Guard Commandant "instruction" which, in his
 view, indicated that any DOT order should be regarded as having
 compelling need attached to it.
 
    In early January 1983 Lang contacted Union President Richard Gomez
 and informed him that an order was going to be issued by DOT which would
 end the distribution of employee paychecks at the worksite.  Gomez
 inquired as to what management's position would be if the Union
 submitted a bargaining proposal that pay procedures remain "as is." Lang
 replied that management would take the position that such a proposal was
 nonnegotiable since it would conflict with the DOT regulation for which
 a compelling need existed.  Lang further informed Gomez that the Union
 could appeal the determination to the Authority but, in any event,
 management would be glad to entertain any proposal he had to negotiate
 on the impact and implementation of the order.  At some time subsequent
 to the meeting with Lang described above, Gomez told Lang he did not
 wish to bargain on the impact and implementation aspects of the matter.
 
    On January 7, 1982 the Department of Transportation issued DOT Order
 2730.3 entitled:  "Distribution of Paychecks and U.S. Savings Bonds."
 The Order, applicable to all civilian employees in the Department of
 Transportation stated as its purpose:
 
          "This order prescribes departmental policy for distributing
       paychecks and U.S. Savings Bonds and ADVISES EMPLOYEES WHO ARE
 NOT
       ALREADY COMPLYING WITH PROVISIONS OF THIS ORDER THAT
 CORRECTIVE
       ACTION IS REQUIRED BY FEBRUARY 26, 1982."
 
    In addition to requiring all entities of Respondent, including all
 Districts of the United States Coast Guard, to discontinue the practice
 of delivering employee paychecks and bonds to the employee's office or
 post of duty, the Order also provided that future delivery would be
 accomplished by either:  (a) direct mail delivery to an address or post
 office box (other than the office or post of duty) designated by the
 employee in writing or;  (b) to a financial institution that was
 designated by the employee.  The Order concluded with a paragraph
 entitled "Waiver," which stated:  "Requests for waivers to the
 provisions of this order shall be addressed to the Office of Financial
 Management, M-80."
 
    DOT is comprised of various components such as the Coast Guard, the
 Federal Aviation Administration, the Federal Highway Administration and
 the Maritime Administration.  At the time DOT Order 2730.3 issued, all
 but around 5,000 of the approximately 60,000 employees within the DOT
 organization were already in compliance with the requirements of the
 Order.  Thus, full compliance with DOT's Order would result in virtually
 all employees under DOT's jurisdiction receiving paychecks and bonds at
 non-worksite locations.
 
    On January 22, 1982 the Coast Guard Commandant notified by teletype
 all its constituent organizations, including the Third District, that
 they were to comply with the requirements of DOT Order 2730.3 by
 February 19, 1982.  The Union received a copy of the Commandant's
 teletype on January 22 and, on that same day, submitted to the Third
 District Commander a written request that the parties negotiated on the
 matter.  The Union's request also contained its bargaining proposal that
 paychecks continue to be distributed to employees at the worksite as
 they had been in the past.  The Union further contended that no
 compelling need existed for the DOT action.
 
    By memorandum to the Union dated January 25, 1982 the Third District
 refused to negotiate on the Union's proposal contending that the
 proposal was not negotiable "because it conflicts with DOT Order 2730.23
 of January 7, 1982 for which a compelling need exists." On January 28,
 1982 the Third District issued a notice to employees which stated that
 the delivery of Third District paychecks to the jobsite would cease by
 February 15, 1982, and, by that date, all employees must designate their
 home address, a post office box or a financial institution for the
 receipt of paychecks.  By February 16, 1982 all employees of the Third
 District complied with this notice and therefore direct distribution of
 paychecks and bonds at the worksite ceased.  Respondent's Contentions
 
    Recognition for representational purposes herein runs between the
 Union and the Third District.  Accordingly, Respondent contends that no
 bargaining obligation exists between DOT, the named Respondent, and the
 Union and therefore, no failure or refusal to bargain within the meaning
 of the Statute can be found in these circumstances.  /4/ Respondent
 further contends that the proper forum to resolve this matter is through
 the negotiability appeal procedure as a "compelling need" case and, in
 any event, a "compelling need" exists for the issuance of DOT Order
 2730.3.  /5/ The Proper Respondent
 
    In 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), the Authority held:
 
          " . . . under the Statute, when the obligation to negotiate is
       breached by the acts and conduct of agency management, such a
       breach may provide the basis for a section 7116(a)(1) and (5)
       violation regardless of the location of that agency management in
       the agency chain of command.  In the instant case, where agency
       management at the Regional level directed the immediate
       implementation of a policy which altered an established condition
       of employment in the Galveston District, such act was properly
       found to have violated section 7116(a)(1) and (5) of the Statute."
       (Footnotes omitted).
 
    In Department of Health and Human Services, et al., the Authority
 reached the conclusion cited above holding Region IV violated section
 7116(a)(1) and (5), notwithstanding the fact that the union therein was
 the bargaining representative for Galveston District employees and not
 the parent Region IV employees.  The complaint against the Galveston
 District was dismissed since the Authority found their conduct in
 implementing the directive was merely the ministerial action of
 complying with instructions of higher agency management " . . . because
 it had no choice except to do so . . . " See also Department of the
 Interior Water and Power Resources Service, Grand Coulee Project, Grand
 Coulee, Washington, 9 FLRA No. 46 (1982).  In a subsequent case, Defense
 Logistics Agency (Cameron Station Virginia), et al., 12 FLRA No. 86, 12
 FLRA 412, (1983), the Authority similarly dismissed that portion of a
 complaint against an activity because the record failed to establish
 that the parent organization " . . . prevented the subordinate levels of
 agency management from fulfilling their respective statutory obligations
 . . . " (Id. at 418).
 
    Thus it would appear from an analysis of the cases cited above that
 an unfair labor practice of refusing to bargain may be established
 against a parent organization where the parent organization (higher
 agency management) directs a subordinate activity that has a bargaining
 obligation with a union to alter an established condition of employment
 and no opportunity to negotiate is afforded the union.  On the other
 hand, no unfair labor practice lies against a subordinate activity where
 the subordinate has no choice but to comply with the instruction of
 higher management or is prevented by higher management from fulfilling
 its bargaining obligations.
 
    In the case herein recognition runs between the Third District and
 the Union.  However, DOT is the Third District's "top" management and
 its regulations are binding on the Third District.  By its terms DOT
 Order 2730.3 required compliance by all employees within approximately
 seven weeks from the date of the Order.  Indeed, recognizing its
 obligation to follow the dictates of higher management in dealing with
 the Union on the matter at issue, the Third District clearly took the
 position that the Union's proposal on distributing employee paychecks
 was not negotiable as to its substance since it conflicted with the DOT
 regulation which it was required to follow.  While the Order indicated
 that a waiver to its provisions could be requested, no standards for
 requesting a waiver were set forth in the Order.  Nor was there any
 indication in the Order that the waiver language was applicable to only
 individual employees or the waiver could be obtained by an entire
 organizational entity within the Department or whether a bargaining
 obligation on the part of a subordinate activity would be an acceptable
 reason for granting such a waiver.  Indeed, quite obviously the Third
 District did not interpret the waiver language to apply to it as an
 organization because of its outstanding bargaining obligation with the
 Union, as evidenced by the lack of its having made any request for a
 waiver.  Accordingly, in the circumstances herein I conclude that DOT
 Order 2730.3 provided no discretion on the part of the Third District as
 to whether the substance of the Order could be ignored, modified or
 implemented.  Thus, the Third District had no choice but to comply with
 the requirements of the Order and thereby alter an established condition
 of employment without negotiating with the Union on the matter.
 Compelling Need
 
    Respondent contends that a compelling need within the meaning of
 section 7117 of the Statute existed for the Order.  /6/ To support its
 position Respondent elicited testimony which revealed that the Order was
 promulgated at a time when its budget and resources were reduced and the
 Order was seen as a means of saving money and jobs.  By reducing the
 work of "designated agents" in distributing paychecks, the overall
 savings to the Department by using the direct mailing process was
 established to have been in excess of 100,000 a year.  /7/ Testimony was
 adduced which indicated that direct mailing of checks improved the
 security of paycheck distribution and delivery since less individuals
 handled the checks.  Thus, worksite distribution of checks involved
 mailing the checks from Kansas City to the payroll offices and the
 transfer to designated agents for distribution.  An employee would
 occasionally not be available to receive a paycheck and a designated
 agent would sometimes not follow the "formal" procedure of returning the
 check to the payroll office for safekeeping but keep the check in a desk
 drawer instead of awaiting the return of the employee.  However, no
 specific testimony was adduced as to the frequency of such desk drawer
 retention nor is there any evidence that checks were, in fact, lost or
 stolen while using this procedure.
 
    Respondent further argues that since there exists 120 bargaining
 units covering over 23,000 employees under DOT's jurisdiction, if a
 compelling need was not found to exist herein, Respondent could be faced
 with bargaining demands and negotiations which could produce many
 different paycheck distribution systems resulting in costs far exceeding
 those involved in the previous distribution system.
 
    Section 2424.11(a) of the Authority's Rules and Regulations, entitled
 "Illustrative Criteria," provides:
 
          "A compelling need exists for an agency rule or regulation
       concerning any condition of employment when the agency
       demonstrates that the rule or regulation meets one or more of the
       following illustrative criteria:
 
          "(a) The rule or regulation is essential, as distinguished from
       helpful or desirable, to the accomplishment of the mission or the
       execution of functions of the agency or primary national
       subdivision in a manner which is consistent with the requirements
       of an effective and efficient government."
 
    Respondent suggests that an examination of the illustrative criteria
 contained in section 2424.11 of the Authority's Interim Regulations
 (Federal Register, Vol. 44, No. 147, July 30, 1979), would be helpful in
 determining compelling need herein.  The relevant criteria in the
 Interim Regulations provided:
 
          "(a) The rule or regulation is essential, as distinguished from
       helpful or desirable, to the accomplishment of the mission of the
       agency or primary national subdivision;
 
          "(b) The rule or regulation is essential, as distinguished from
       helpful or desirable, to the management of the agency or the
       primary national subdivision;
 
                                .  .  .  .
 
          "(e) The rule or regulation establishes uniformity for all or a
       substantial segment of the employees of the agency or primary
       national subdivision where this is essential to the effectuation
       of the public interest."
 
    When the Final Rules and Regulations were published (Federal
 Register, Vol. 45, No. 12, January 7, 1980), the Authority, in the
 Part-by-Part Analysis of Comments and Changes portion of the
 publication, explained certain revisions in section 2424.11 as follows:
 
          "The Authority also has considered the illustrative criteria.
       Criterion (a), namely, the rule or regulation is essential to the
       accomplishment of the mission of the agency or primary national
       subdivision, has been amended to cover, also, the execution of
       agency functions.  In addition, this criterion has been clarified
       to emphasize that it must be applied consistent with the finding
       and purpose of Congress stated in 5 U.S.C. 7101 that the
       provisions of the Statute should be interpreted in a manner
       consistent with the requirement of an effective and efficient
       Government.
 
          "As to criteria (b) and (e) of the interim rules and
       regulations, they were determined to be unnecessary and therefore
       this section has been amended to delete them.  It was determined
       that the essence of these criteria is subsumed in amended
       criterion (a)."
 
    Accordingly, Respondent takes the position that DOT Order 2730.3,
 when viewed in the context of its purpose, i.e., financial savings,
 improved security of paycheck delivery, and uniformity of paycheck
 delivery, meets the requirements set forth in section 2424.11 of the
 Regulations.  Respondent contends the Order:  (1) is essential to the
 execution of functions of the agency in a manner which is consistent
 with the requirement of an effective and efficient government;  (2) is
 essential to the management of the agency;  and, (3) establishes
 uniformity for a substantial segment of the employees of the agency
 where this is essential to the effectuation of the public interest.
 
    To support its contention Respondent relies on American Federation of
 Government Employees, Local 2875, and Department of Commerce, National
 Oceanic and Atmospheric Administration, National Marine Fisheries
 Service, Southeast Fisheries Center, Miami Laboratory, Florida, 5 FLRA
 441 (1981) wherein the Authority in finding no compelling need for an
 agency regulation, stated:
 
          "The Agency does not demonstrate that the policy reflected in
       the subject regulation requiring leave charges to be made in
       increments of one hour was established because operation of its
       payroll and leave administration functions would be less costly if
       leave was charged to employees in hourly, as opposed to
       quarter-hour, increments.  That is, the Agency does not show that
       modification of its present payroll data system to accommodate
       leave charges in quarter hour increments would preclude the Agency
       from administering its payroll functions efficiently and
       effectively . . . . " (Id. at 448, 449).
 
    By citing this language Respondent seems to urge that a showing of a
 less costly payroll operation would support a finding that a rule in
 furtherance thereof would meet the requirement of section 2424.11 of the
 Regulations since cost savings would be " . . . consistent with the
 requirements of an effective and efficient government." However, in the
 above quoted language, the Authority, in finding no compelling need,
 merely pointed out that the modification sought by the Union would not
 "preclude the Agency from administering its payroll functions
 efficiently and effectively." Moreover, the Authority held that the
 obligation to bargain does not require an agency to agree to a proposal.
  In this latter regard the Authority further stated:
 
          " . . . after bargaining over the Union's proposal, should the
       Agency's estimate of the cost of implementing the Union's proposal
       remain an obstacle to agreement, those considerations as to cost
       may be presented to the Federal Service Impasses Panel in a
       proceeding to resolve a negotiation impasse pursuant to section
       7119 of the Statute." (Id. at 449).
 
    An agency which raises compelling need as an affirmative defense in
 an unfair labor practice proceeding is obligated to affirmatively
 support that assertion.  Defense Logistics Agency, (Cameron Station,
 Virginia), 12 FLRA No. 86 (1983).  Thus, Respondent must show that DOT
 Order 2730.3 is . . . essential as distinguished from helpful or
 desirable to the accomplishment of its mission.  National Federation of
 Federal Employees, Local 1332 and Headquarters, U.S. Army Material
 Development and Readiness Command, Alexandria, Virginia, 6 FLRA 361
 (1981) at 371.  Financial savings to the Agency alone is not sufficient
 to demonstrate the essentiability of the Order within the meaning of
 section 2424.11(a) of the Regulations.  American Federation of
 Government Employees, AFL-CIO, Local 2875, supra, at 220.  Indeed, if
 savings and security were viewed by Respondent as being essential to the
 accomplishment of its mission, Respondent nevertheless has now shown why
 these objectives could not be achieved through means other than
 requiring all employees to use the system of direct deposit of paychecks
 and bonds.  Cf. American Federation of Government Employees, AFL-CIO,
 Local 3804 and Federal Deposit Insurance Corporation, Chicago Region,
 Illinois, 7 FLRA 217 (1981), at 220 and American Federation of
 Government Employees, AFL-CIO, Local 3385 and Federal Home Loan Bank
 Board, District 7, Chicago, Illinois, 7 FLRA 398 (1981), at 407-408.
 
    Further, the Authority has held that an agency's desire to have a
 uniform policy does not in itself demonstrate that a regulation meets
 the compelling need criteria of section 2424.11(a) of the Regulations.
 American Federation of Government Employees, AFL-CIO, Local 2670, et
 al., 10 FLRA No. 19 (1982).  Rather, an agency must demonstrate and
 justify, under the Authority's criteria, an "overriding need" that the
 policy reflected in the rule be uniformly applied throughout the agency.
  Id. at 74.  Whether other unions will seek to negotiate on this matter
 is speculative at best.  In any event Respondent's concern, if it should
 materialize and is deemed significant, could be presented to the Federal
 Service Impasses Panel for resolution.  Cf. American Federation of
 Government Employees, Local 2875, supra, at 449.  Accordingly, I find
 Respondent has not shown an "overriding need" for a uniform policy of
 direct deposit of paychecks and bonds as opposed to worksite
 distribution to those employees who would opt for this type of delivery.
 
    In the circumstances herein I conclude that Respondent has not met
 its burden of demonstrating that Order 2730.3 is essential, as
 distinguished from helpful or desirable, to the execution of its
 functions in a manner which is consistent with the requirement of an
 effective and efficient government.  Accordingly, I conclude that the
 Department of Transportation, by requiring the Third Coast Guard
 District to implement DOT Order 2730.3 discontinuing the distribution of
 unit employees' paychecks and bonds, a condition of employment within
 the meaning of the Statute, /8/ violated section 7116(a)(1) and (5) of
 the Statute and recommend the Authority issue the following:
 
                                   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 Department of Transportation shall:
 
    1.  Cease and desist from:
 
          (a) Unilaterally changing established conditions of employment
       at the Third Coast Guard District of the U.S. Coast Guard
       concerning the manner of distributing paychecks and savings bonds
       of employees represented by Local 2747, American Federation of
       Government Employees, AFL-CIO, the employees exclusive collective
       bargaining representative.
 
          (b) In any like or related manner interfering with, restraining
       or coercing its employees in the exercise of their rights assured
       by the Federal Service Labor-Management Relations Statute.
 
    2.  Take the following affirmative action:
 
          (a) Withdraw and rescind Order 2730.3 concerning the manner of
       distribution of paychecks and savings bonds as applicable to
       employees of the Third Coast Guard District represented by Local
       2747, American Federation of Government Employees, AFL-CIO, and
       reinstate the procedures and policies in effect prior to its
       issuance.
 
          (b) Notify Local 2747, American Federation of Government
       Employees, AFL-CIO, the exclusive representative of the employees
       of the Third Coast Guard District, of any intended change in the
       manner of distributing bargaining unit employees' paychecks and
       savings bonds and provide such exclusive representative an
       opportunity to request negotiations with the Third Coast Guard
       District, or other appropriate management representative, and
       bargain in good faith on any such proposed change in an
       established condition of employment.
 
          (c) Post at its Office of the Secretary, Department of
       Transportation, Washington, D.C. facility and its Third Coast
       Guard District, U.S. Coast Guard, New York, New York facility,
       copies of the attached Notice on forms to be furnished by the
       Federal Labor Relations Authority.  Upon receiving such forms,
       they shall be signed by the Secretary, Department of
       Transportation, Washington, D.C., and shall be posted and
       maintained by him for sixty consecutive days thereafter, in
       conspicuous places, including bulletin boards and all other places
       where notices to employees in the Office of the Secretary,
       Department of Transportation, Washington, D.C., and the Third
       Coast Guard District, U.S. Coast Guard, New York, New York are
       customarily posted.  The Secretary, Department of Transportation,
       shall take reasonable steps to insure that such Notices are not
       altered, defaced, or covered by other material.
 
          (c) Notify the Regional Director, Region II, in writing, within
       30 days from the date of this Order, as to what steps have been
       taken to comply with this Order.
 
                                       SALVATORE J. ARRIGO
                                       Administrative Law Judge
 
 Dated:  January 16, 1984
         Washington, D.C.
 
 
 
                                 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 unilaterally change established conditions of employment at
 the Third Coast Guard District of the U.S. Coast Guard concerning the
 manner of distributing paychecks and savings bonds of employees
 represented by Local 2747, American Federation of Government Employees,
 AFL-CIO, the employees exclusive collective bargaining representative.
 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
 Statute.  WE WILL withdraw and rescind Order 2730.3 concerning the
 manner of distribution of paychecks and savings bonds as applicable to
 employees of the Third Coast Guard District represented by Local 2747,
 American Federation of Government Employees, AFL-CIO, and reinstate the
 procedures and policies in effect prior to its issuance.  WE WILL notify
 Local 2747, American Federation of Government Employees, AFL-CIO, the
 exclusive representative of the employees of the Third Coast Guard
 District, of any intended change in the manner of distributing
 bargaining unit employees' paychecks and savings bonds and provide such
 exclusive representative an opportunity to request negotiations with the
 Third Coast Guard District, or other appropriate management
 representative, and bargain in good faith on any such proposed change in
 an established condition of employment.
                                       . . . (Activity or Agency)
 
 Dated:  . . .  By:  . . . (Signature) This Notice must remain posted for
 60 consecutive days from the date of posting, and must not be altered,
 defaced, or covered by any other material.  If employees have any
 questions concerning this Notice or compliance with its provisions, they
 may communicate directly with the Regional Director, Region II, Federal
 Labor Relations Authority, whose address is:  26 Federal Plaza, Room
 24-102, New York, New York 10278, and whose telephone number is:  (212)
 264-4934.
 
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ Section 7106(b)(1) provides in pertinent part:
 
    Sec. 7106.  Management rights
 
                                .  .  .  .
 
          (b) Nothing in this section shall preclude any agency and any
       labor organization from negotiating--
 
          (1) at the election of the agency, . . . on the technology,
       methods, and means of performing work(.)
 
 
    /2/ The record does not indicate, nor does the General Counsel argue,
 that the parties' collective bargaining agreement included provisions
 constituting an exercise by the Respondent or the Third Coast Guard
 District of the option under section 7106(b)(1) of the Statute to
 negotiate with regard to pay practices.
 
 
    /3/ In view of the decision herein, it is unnecessary to address the
 Respondent's assertion that a compelling need exists under section 7117
 of the Statute for the Agency regulation involved herein.
 
 
    /4/ On February 9, 1982 the Union filed a negotiability appeal in
 this matter to the Authority.  DOT responded to the appeal on March 17,
 contending that a compelling need within the meaning of section 7117 of
 the Statute existed for the Order, supplying arguments in support
 thereof.  On April 28 the Union elected, pursuant to section 2424.5 of
 the Rules and Regulations, to suspend action on the negotiability appeal
 and proceed with the unfair labor practice charge filed on January 27,
 1982, supra.
 
 
    /5/ At the opening of the hearing on January 11, 1983 Respondent
 moved to dismiss the Complaint based upon the above contention.  I
 reserved ruling on the motion.  After issuance of Defense Logistics
 Center, (Cameron Station, Virginia), et al., 12 FLRA No. 86 on July 29,
 1983, infra, I ordered the hearing be reopened to take evidence on the
 "compelling need" issue.  In view of my disposition of this matter, the
 motion is denied.
 
 
    /6/ Section 7117(a) of the Statute provides:
 
          "(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,
       extend to matters which are the subject of any 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,