19:0073(8)CA - HHS, Washington, DC and HHS Region X, Seattle, WA and NTEU -- 1985 FLRAdec CA



[ v19 p73 ]
19:0073(8)CA
The decision of the Authority follows:


 19 FLRA No. 8
 
 DEPARTMENT OF HEALTH AND HUMAN
 SERVICES, WASHINGTON, D.C. AND
 DEPARTMENT OF HEALTH AND HUMAN
 SERVICES, REGION X
 SEATTLE, WASHINGTON
 Respondents
 
 and
 
 NATIONAL TREASURY EMPLOYEES UNION
 Charging Party
 
                                            Case No. 9-CA-30148
 
                            DECISION AND ORDER
 
    The Administrative Law Judge issued her Decision in the
 above-entitled proceeding finding that Respondent Department of Health
 and Human Services, Region X, Seattle, Washington (the Activity), 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 found further that the
 Respondents had not engaged in certain other unfair labor practices
 alleged in the complaint, and recommended dismissal of those parts of
 the complaint.  Thereafter, the General Counsel filed exceptions to the
 Judge's Decision and the Respondents filed an opposition to the
 exceptions.
 
    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 only to the extent
 consistent herewith.
 
    The Judge found that the Activity violated section 7116(a)(1) and (5)
 of the Statute by its refusal to bargain with the National Treasury
 Employees Union (the Union) as to its Proposal 4 of December 22, 1982.
 /1/ The Judge concluded that, since no claim was made that the proposal
 was nonnegotiable, as infringing upon a reserved management right, the
 issue would not be dealt with in her Decision.  The Authority disagrees.
  If, in fact, Union Proposal 4 is nonnegotiable or negotiable only at
 the election of the Agency, the Activity's refusal to negotiate over
 such proposal would not be in violation of section 7116(a)(1) and (5) of
 the Statute.
 
    The proposal in question appears to be specifically aimed at
 non-bargaining unit employees and would allow such employees to compete
 for bargaining unit positions based on their earlier transfer out of the
 unit.  It is well established that proposals are not within the duty to
 bargain if they apply to employees or positions outside the bargaining
 unit.  See, e.g., American Federation of Government Employees, National
 Council of Social Security Administration Field Operations Locals,
 AFL-CIO and Social Security Administration, Office of Field Operations,
 Baltimore, Maryland, 17 FLRA No. 6 (1985) (Union Proposal 5).  Thus, the
 Authority finds that management was under no obligation to negotiate
 over this proposal.
 
    Moreover, in the Authority's view, the above proposal which could
 require management to consider and possibly fill vacancies without
 regard to its personnel ceilings concerns a determination of the
 "numbers, types and grades of employees or positions assigned" pursuant
 to section 7106(b)(1) of the Statute.  Specifically, to the extent that
 this portion of the proposal presumes an obligation on management to
 seek a waiver of its personnel ceilings in order to consider the
 employees in question for such positions, it is integrally related to
 the statutory right to determine the "numbers, types and grades of
 employees or positions assigned" which is a matter negotiable only at
 the election of the Agency.  See, e.g., National Federation of Federal
 Employees, Local 1650 and U.S. Forest Service, Angeles National Forest,
 12 FLRA 611 (1983) (Union Proposal 2), where the Authority found that
 part of Union Proposal 2 which would obligate management to attempt to
 recall When Actually Employed (WAE) employees wherever funding was
 available irrespective of whether management had decided to accomplish
 the work using WAE employees concerned the numbers, types and grades of
 employees or positions assigned and, thus, under section 7106(b)(1) of
 the Statute, was negotiable only at the election of the Agency.
 Accordingly, as Union Proposal 4 is negotiable only at the election of
 the Activity and there is no statutory duty to bargain with the Union,
 the Activity's refusal to negotiate on such matters does not violate
 section 7116(a)(1) and (5) of the Statute.
 
    Consequently, in agreement with the Administration Law Judge that the
 Respondents did not violate section 7116(a)(1), (5) or (8) of the
 Statute by terminating the dues assignments of employees transferred out
 of the bargaining unit and by refusing to recognize the Union as their
 exclusive representative, /2/ and consistent with the Authority's
 findings above concerning the Activity's refusal to bargain concerning
 Union Proposal 4, the Authority will order that the complaint herein be
 dismissed in its entirety.
 
                                   ORDER
 
    IT IS ORDERED that the complaint in Case No. 9-CA-30148 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. 9-CA-30148
 
 
 
 
 
 
 
 
 
 -------------------- ALJ$ DECISION FOLLOWS --------------------
 
    Susan Callahan and
    William J. McIntire
       Attorneys for Respondents
 
    Lucinda Bendat
       Attorney for Charging Party
 
    Stefanie Arthur
       Attorney for General Counsel Federal Labor Relations Authority
 
    Before:  ISABELLE R. CAPPELLO
       Administrative Law Judge
 
                                 DECISION
 
    This is a proceeding under Title VII of the Civil Service Reform Act
 of 1978, Pub. L. No. 95-454, 92 Stat. 1192, 5 U.S.C. 7101 et seq.
 (1982), commonly known as the Federal Service Labor-Management Relations
 Statute, and hereinafter referred to as the "Statute", and the rules and
 regulations issued thereunder and published at 5 CFR 2411 et seq.
 
    Pursuant to charges filed by the Charging Party, on January 19, 1983,
 and amended on June 15, 1983, the General Counsel of the Federal Labor
 Relations Authority (hereinafter, the "Authority") investigated and, on
 June 20, 1983 issued the complaint initiating this proceeding.
 
    The complaint alleges that Region X of the Department of Health and
 Human Services, in Seattle, Washington (hereinafter "Respondent
 Seattle") has committed, and is committing unfair labor practices, in
 violation of sections 7116(a)(1), (5) and (8) of the Statute, /3/ and
 that the Department of Health and Human Services, Washington, D.C.
 (hereinafter, "Respondent Headquarters"), by preventing Respondent
 Seattle from fulfilling its bargaining obligations to the Charging Party
 (also referred to here in as the "Union") violated, and is violating the
 same statutory provisions.
 
    The alleged violative acts are that certain bargaining-unit employees
 at Respondent Seattle, in the Health Care Financing Administration
 ("HCFA") were transferred, pursuant to a decision of Respondent
 Headquarters, to the Office of Health Financing Integrity ("OHFI") in
 the Office of the Inspector General ("OIG"), at Seattle, and that
 Respondent Seattle no longer recognizes them as a part of the bargaining
 unit;  has refused to bargain concerning the impact and implementation
 of the transfer;  and has failed to honor written dues assignments from
 the transferred employees.
 
    Respondents deny that unfair labor practices have occurred, and
 alleges that no bargaining relationship exists between the Union and the
 transferred employees.
 
    A hearing was held on December 7, 1983, at Seattle, Washington.  The
 parties appeared, adduced evidence, and examined witnesses.  Briefs were
 received from the General Counsel, on February 9, 1984 and from the
 Respondents on February 13, pursuant to an order extending the time for
 filing briefs until February 9, for good cause shown, upon an unopposed
 motion of the General Counsel.  The brief on behalf of Respondents was
 dated and mailed on February 9, from Seattle.
 
    Based upon the record made in this proceeding, my observation of the
 demeanor of the witnesses, and the briefs, I enter the following
 findings and conclusions and recommend the entry of the following order.
 
                           Findings of Fact /4/
 
    1a.  On May 9, 1979, the Union was certified by the Authority as the
 exclusive representative of the following unit:
 
          Included:  All nonprofessional employees of the Regional Office
       of the Department of Health, Education and Welfare, Region X,
       Seattle, Washington.
 
          Excluded:  Professional employees, employees engaged in federal
       personnel work in other than a purely clerical capacity,
       management officials, and supervisors as defined in the Act.
 
 The Department of Health, Education and Welfare is now the Department of
 Health and Human Services ("HHS").
 
    b.  The list of employees eligible to vote in the election leading to
 the certification was prepared by Respondent in late April or early May
 of 1979, and was reviewed with the Union and representatives of the
 Authority.  No one objected to any of the exclusions.  Among the
 excluded were employees of the Audit Agency and Office of
 Investigations, including a clerk and a secretary.  See TR 139.  The
 list was used to send out the mail ballots, by which the election was
 conducted.  The Audit Agency and the Office of Investigations are a part
 of the OIG, and were at the time of the election.
 
    2a.  As of October 5, 1980, Respondent Seattle and Chapter 215 of the
 Union became parties to a collective bargaining agreement.  Five
 management officials signed for Region X, none of whom were the
 Secretary, Under Secretary of HHS, or an official of the OIG.
 
    b.  Article 1, Section 1 of the agreement, the "Recognition and
 Coverage" provision, provides as follows:
 
          The Department of Health and Human Services (HHS), Region X,
       hereinafter known as the employer, recognizes the National
       Treasury Employees Union (NTEU), hereinafter known as the union,
       as the exclusive representative of the following employees:
 
          All nonprofessional employees of the Regional Office of the
       Department of Health and Human Services, Region X, Seattle,
       Washington.
 
          Excluded from this group are the following:
 
          Professional employees, management officials, supervisors,
       confidential employees, employees engaged in federal personnel
       work in other than a purely clerical capacity, and employees of
       the Audit Agency.
 
 See Joint 1(b) of Stip. 2, Jt. 1.
 
    c.  Chapter 215 bargained over the exclusion of the Audit Agency.
 There was no discussion with Chapter 215 over the exclusion or inclusion
 of the Office of Investigations.
 
    d.  Employees of the Regional Service Delivery Assessment Office were
 in the bargaining unit prior to October 3, 1982.  They were subsequently
 transferred to the OIG.  The Union was notified of the transfer, and
 that the employees of that office would no longer be in the bargaining
 unit.  No objection was made by the Union.
 
    e.  Article 56 of the agreement contains provisions and procedures
 governing voluntary withholding from the pay of unit employees of
 regular, periodic dues to be forwarded to Chapter 215.  Section 4D of
 Article 56 provides that Respondent Seattle will notify the employee,
 and Chapter 215, when an employee is not eligible to enroll in the
 automatic dues withholding program because the employee is not included
 "in the exclusively recognized unit on which the agreement is based."
 See page 96 of Jt. 1(b).
 
    3.  At all times since December 5, 1977, it has been the policy of
 Respondent Headquarters that OIG employees are excluded from the
 collective bargaining activities provided for in Executive Order 11491
 and its successor, the Statute.  /5/ See Joint 1(f) to Stip. 7 to Jt. 1.
 
    4.  As of January 9, 1983, no labor organization has ever been
 recognized or certified as the exclusive representative of any OIG
 employee.
 
                                    OIG
 
    5a.  The OIG was created by an Act of Congress passed on October 15,
 1976, P.L. 94-505 (hereinafter, the "IG Act").  See Joint Exh. 1(i) to
 Stip. 12, Jt. 1.  Its mission is to promote economy and efficiency, in
 HHS, through the elimination and reduction of fraud, waste and abuse.
 
    b.  The Inspector General ("IG") is appointed by the President of the
 United States and can only be removed from office by the President after
 notification in writing to the Senate.  He reports directly to the
 Congress.
 
    Although copies of his reports go first to the Secretary of HHS, the
 Secretary cannot change them.
 
    c.  The IG Act provides for independent authority for the IG, to
 insure that this officer is immune from departmental or management
 pressures.  The IG Act provides that the IG be under the general
 supervision of the Secretary of HHS or, to the extent such authority is
 delegated, to the Under Secretary, but not under the control of, or
 subject to supervision by, any other officer of HHS.  He has independent
 personnel authority, and authority for oversight of all HHS programs,
 unlike any other component of HHS.  The Secretary of HHS is required, by
 the IG Act, to provide the IG with appropriate and adequate office space
 at central and field offices, together with such equipment, office
 supplies, and communication facilities and services as may be necessary
 for the operation of such offices.
 
    d.  The OIG, headed by the IG and a Deputy IG, is divided into an
 office of Investigations ("OI");  an Office of Program Inspections
 ("OPI");  an Office of Audit ("OA");  and the Office of Health Financing
 Integrity ("OHFI"), the office into which the employees here involved
 were transferred.  Regional Directors of the OIG direct the field
 operations.  At Seattle, the OHFI is divided into a Case Development
 Division and a Program Inspection Division.
 
    e.  Employees assigned to the OIG are subject to an OIG Career Board
 created on September 27, 1982.  The Career Board controls promotions and
 awards for employees assigned to the OIG.  In February 11, 1982, OIG
 employees were placed in one nation-wide competition area, which is
 separate from the competitive areas for other components of HHS.
 
    f.  There are more training opportunities open to employees of the
 OIG, through an OIG training center maintained in Atlanta.
 
                            Respondent Seattle
 
    6a.  Respondent Seattle is organized into four operating divisions
 and various offices.  The four operating divisions are:  HCFA;  the
 Public Health Service;  the Office of Human Development Services;  and
 the Social Security Administration ("SSA").  Each operating division
 reports to a headquarters office in Baltimore with respect to program
 responsibilities.  The Regional Director for Region X has coordination
 and oversight responsibility for the employees in the divisions, as well
 as over employees in the Offices of Civil Rights and General Counsel.
 He has direct operational authority over the offices of Public Affairs,
 and Intergovernmental and Congressional Affairs and the Regional
 Administrative Support Center, which functions as a personnel office.
 He provides administrative support only for the OIG, at Seattle.
 
    b.  The Regional Director of Region X processes personnel actions for
 the operating divisions, but does not initiate them.
 
    c.  The bargaining unit of Chapter 215 of the Union includes
 employees of the operating divisions who work at the Seattle office of
 HHS.  See TR 49.  Respondent Seattle's Labor Relations Office has been
 delegated authority to negotiate with the Union on behalf of the
 operating divisions.  It has never been delegated such authority from
 the IG.
 
                                   HCFA
 
    7.  Prior to January 9, 1983, the HCFA operating division at Seattle
 was composed of three branches-- Program Integrity ("PI");  Program
 Validations ("PV");  and Quality Control ("QC").  QC is still a part of
 HCFA, and deals with its day-to-day operations.  The PI and PV branches,
 now transferred to the OIG, dealt with oversight of contractors and
 providers of health care services for HCFA, and focussed on fraudulent
 and abusive practices.  See TR 180.  The functions of the PI and PV
 branches overlapped significantly with those of the OIG's Office of
 Audit (formerly known as the Audit Agency) and Office of Investigations.
  See TR. 188.
 
                     Transfer of HCFA Functions of OIG
 
    8.  Because of this overlap, the national offices of HCFA and OIG
 agreed to transfer the functions of HCFA's PI and PV branches to the
 OIG, into a division called OHFI.  The transfer was effected on January
 9, 1983.  This agreement was reached on December 10, 1982.  A problem
 eliminated by the transfer was that critical reports prepared by the PI
 and PV branches went through a regional manager who would be responsible
 for the faults found, thus eroding the independence of the review to
 headquarters.
 
                    Effect of the Transfer on Employees
 
    9a.  On or about January 9, 1983, fourteen employees assigned to the
 PI and PV branches of HCFA, at Seattle, were transferred or reassigned
 to OHFI, in the OIG's Seattle field office.  Two were secretaries;
 eight were program analysts;  one was a program integrity assistant;
 and the rest were management officials.
 
    b.  The position titles, pay plan, series, grade, salary, position
 number, and duty station of the transferred or reassigned employees
 remained unchanged after their transfer or reassignment to OIG at
 Seattle.
 
    c.  Two transferred program analysts testified about their jobs,
 subsequent to the transfer.  They established that their first and/or
 second line supervisors transferred to the OIG with them.  Their duties
 have, thus far, remained basically the same, and they operate under the
 same position descriptions.  /6/ Their day-to-day contact with HCFA
 employees remains the same, but is more formalized.  They now work more
 closely with OIG employees in the Office of Audit and Investigation, and
 now have free access to their files.  There is now more emphasis placed
 on developing and writing up sanction cases involving fraud and abuse by
 health care providers.  Ever since the transfer, they have had the new
 duty of investigating HHS employee misconduct cases.  However, as of the
 time of the hearing, only supervisors had received training for this new
 duty;  and the analysts had handled no such cases.  Only one employee
 misconduct case has developed in Region X;  and it has not yet been
 assigned for investigation.  The program analysts now have authority to
 take signed statements, under oath.  In August 1983, the program
 analysts in the Case Development Division were trained for and assumed
 new duties of working on civil monetary penalty cases.
 
    d.  The hours of work of the transferred and reassigned employees
 have remained the same, by direction of the Regional Director of the
 OHFI, at Seattle, to the OHFI staff.
 
    e.  Their physical location, in contiguous space with HCFA employees,
 has remained the same.  However, the OIG has a policy of colocating all
 OIG field staff and has endeavored, unsuccessfully, to do so at Seattle.
  The endeavour is now on the "back burner" (TR 360) because of a
 realignment potential for OIG components in Seattle and San Francisco.
 
    f.  Region X's personnel office continues to service the transferred
 and reassigned employees, in some areas, such as handling travel and
 life insurance matters;  arranging defensive driving courses;  and
 funding and approving training requests.  In January 1984, pursuant to
 an August 1983 request of the IG, this situation is due to change;  and
 the personnel needs of the OHFI employees in Seattle will be serviced
 entirely from headquarters.  From January 9, 1983, until some time
 between August 12 and October 1, Respondent Seattle handled appointing,
 classification, employee relations (but not labor relations), benefits,
 and training for the OIG staff in Seattle.  See R 19 and TR 235-236.
 
    g.  The transferred and reassigned employees have been issued new
 identification-type cards, since the transfer.
 
    h.  Since the transfer, the OIG has issued new review plans and
 instructions dealing with investigations of health care providers.
 
    i.  Program analysts in the OHFI now evaluate how HCFA performs its
 responsibilities.  When serving as program analysts for HCFA, they made
 recommendations for changes in HCFA policies and procedures;  but their
 recommendations were subject to internal HCFA review and change.
 
    j.  Immediately upon the transfer or reassignment to OHFI, employees
 became subject to the different promotion and award system and the
 different competitive area applicable to the OIG employees.
 
    k.  The Inspector General concedes that the "primary responsibility"
 of his OHFI staff is to uncover fraud and abuse among health care
 providers and contractors, which was also the "main thrust" of this
 staff when it was assigned to HCFA.  See TR 249 and 253-254.  He sees
 the "fundamental change" as being that his OHFI staff no longer reports
 through the "regional bureaucracy;" and that the OHFI looks at how well
 HCFA is performing its functions.  See TR 181-182 and 196.
 
    10.  The inspections by the OHFI staff are "very much akin" to those
 of the Office of Audit (TR 272), but not as thorough.
 
                       Bargaining Over the Transfer
 
    11.  By a letter dated September 15, 1982, the Labor Relations
 Officer of Respondent Seattle, advised the Steward of Chapter 215 of the
 Union of the transfer of certain HCFA functions to OIG;  that the
 transfer had to be effected January 9, 1983;  and that employees
 occupying positions that had been identified as transferring with the
 function would be transferring to positions outside of the bargaining
 unit "in that the OIG is not included in the bargaining unit." See Joint
 Exh. 1(h) to Stip. 9 of Jt. 1.
 
    12.  Twelve of the transferred employees were included in the
 bargaining unit represented by Chapter 215, and four were dues-paying
 members.  At all times material herein, the bi-weekly dues have been
 $4.70.
 
    13.  Since January 9, 1983, Respondent Seattle has excluded employees
 transferred or reassigned to the OHFI from Chapter 215's bargaining
 unit, and has not recognized or dealt with Chapter 215 as the exclusive
 representative of such employees.
 
    14.  Effective January 23, 1983, Respondent Seattle terminated the
 dues assignments of the employees transferred or reassigned to OIG, and
 has not transmitted their dues to Chapter 215.
 
    15a.  On November 5, 1982, Chapter 215, formally requested
 "negotiations for all aspects of the proposed transfer, including the
 method of the change and prospective P.D.'s." See GC 15.  In the same
 letter, Chapter 215 expressed its view that all transferred DQC
 employees would remain in the bargaining unit.
 
    b.  The Regional Administrator of HCFA replied to Chapter 215's
 request, on November 16, and stated, inter alia, that Don Clifford,
 Chief of Region X's Labor Relations Branch had suggested that any
 questions concerning the transfer and bargaining-unit coverage be
 referred to him.
 
    16.  Chapter 215, on December 10, 1982, requested negotiations over
 the proposed transfer, to Mr. Clifford, and asked for a copy of the
 national agreement between HCFA and the OIG, and copies of the HCFA and
 OIG floor plans for the proposed space allocations.
 
    17.  On December 15, 1982, Mr. Clifford officially notified the Union
 of the transfer, to be effected by January 9, 1983, and that the
 transferred employees would be outside the bargaining unit.  See Joint
 Exh. 1(h) to Stip 9 of Jt. 1.
 
    18.  On December 20, 1982, HCFA's Regional Administrator sent to
 Chapter 215, a copy of the requested national agreement and informed it
 that, at present, there were no plans to physically relocate those HCFA
 staff members that would remain with HCFA.  He promised to keep the
 Union informed of any plans for organization placement and relocation of
 retained functions.
 
    19.  On December 22, 1982, Chapter 215 wrote to Mr. Clifford in
 response to his letter of December 15 Chapter 215 reiterated its
 position that the transferred employees should remain in the bargaining
 unit and if the agency had any questions about this, it should file a
 unit clarification petition.  The letter also presented nine bargaining
 proposals, one of which (#4) provided that:  "These employees (HCFA ones
 to be transferred) will be able to compete for HCFA positions for one
 year after the transfer regardless of HCFA ceilings." See GC 20.
 
    20.  On December 27, 1982, the Regional Personnel Officer replied to
 the December 22 letter of Chapter 215.  He declined to negotiate on six
 proposals, including #4, (s)ince employees of the Office of Inspector
 General have never been included in the bargaining unit." See GC 21.  He
 informed Chapter 215 that one proposal (that performance appraisals for
 1982 for transferred employees be completed by current supervisors) was
 being implemented.  As to two others (concerning RIF procedures), he
 stated that no effects of a RIF were anticipated and so they were
 "inappropriate." See GC 21.
 
    21.  At this point, Chapter 215 ceased its attempt to negotiate and
 resorted instead to the filing of an unfair labor practice charge.
 
    22.  Negotiations did occur with respect to those 17 employees who
 remained with HCFA, after the transfer or reassignments of the others to
 the OHFI in the OIG.
 
    23.  It was admitted by Respondents that, at all times material
 herein, Respondent Headquarters has been and is an agency, within the
 meaning of Section 7103(a)(3) of the Statute;  that Respondent Seattle
 has been and is a subcomponent and agent of Respondent Headquarters, and
 also an agency within the meaning of Section 7103(a)(3);  and that the
 Union has been and is a labor organization, within the meaning of
 Section 7103(a)(4) of the Statute.
 
                        Discussion and Conclusions
 
    I.  The General Counsel has not established, by the preponderance of
 the evidence, /7/ that the HCFA employees transferred to the OHFI, in
 the Office of Inspector General, on or about January 9, 1983, remained a
 part of the certified bargaining unit.
 
    The certified bargaining unit includes "employees of the Regional
 Office . . . Region X." See finding 1a.  Prior to the transfer here at
 issue, employees of the OIG have not been treated by management, or
 labor, as members of the unit.  See findings 1b;  2b, c and d;  3;  and
 6c, above.
 
    The OIG is a discrete organization at HHS, only under the general
 supervision of the Secretary of HHS and, as to delegated authorities,
 the Under Secretary, but under no other HHS official.  By the
 legislation creating this Office, the Secretary is required to furnish
 certain administrative support to the OIG such as office space in field
 offices.  But the IG has independent personnel authority and has never
 delegated authority to Respondent Seattle to negotiate with a union on
 his behalf.  See findings 5 and 6c, above.
 
    Pursuant to his independent personnel authority, the IG, in 1982,
 created his own Career Board, which controls promotions and awards for
 OIG staff.  Also in 1982, OIG staff became part of one nationwide
 competitive area, separate from that of other HHS employees.  See
 finding 5e, above.
 
    Immediately upon transfer or reassignment of the HCFA employees to
 the OIG, certain changes occurred in their responsibilities and working
 relationships.  As part of the OIG, they began to work more closely with
 the Offices of Audit and Investigation and have free access to their
 files.  As part of the OIG, they immediately assumed oversight
 responsibilities for their former co-workers and organization, with a
 statutory independence to criticize and recommend changes, and to take
 signed statements, under oath, when conducting investigations.  See
 findings 5b, 8, and 9c, above.
 
    Immediately upon transfer or reassignment, the employees became
 differentiated from their former co-workers in HCFA in a number of
 significant respects, such as coming under a different promotion and
 award system and entering into a different competitive area.  See
 finding 9, above.
 
    All of the above indicates that, upon transfer or reassignment, the
 former HCFA employees ceased to be employees of Region X and, as such,
 included in the bargaining unit represented by the Union.  /8/
 
    The General Counsel argues that reliance should not be placed upon a
 finding that the IG is an independent entity within HHS, "in light of
 the uncontroverted fact that the existing bargaining unit, whose
 appropriateness is not in question, itself consists of an amalgamation
 of independent operating divisions and offices, each with its own
 headquarters and lines of authority." See GC Br. 14 and also 18-19.
 This is a salient point.  However, the OIG still stands out as unique in
 its independence, which is necessary for the accomplishment of its
 mission, including oversight of both HHS personnel and HHS policies and
 procedures.  No other operating division or office was shown, on this
 record, to have this mission.  No other was shown to have a tradition of
 exclusion from the bargaining unit.  No other was shown to have a
 separate Career Board and competitive area for its staff.
 
    The General Counsel argues that the "transferred employees continued
 to share a community of interest with other employees in the bargaining
 unit." See GC Br. 14 and see also 20-23.  True, they continue to occupy
 space adjacent to their former HCFA co-workers, and share servicing by
 the same personnel office.  But the latter factor has probably already
 changed by now (see finding 9f, above);  and the former is merely
 coincidental and due to the fact that the OIG has been unable to secure
 other space for them.  See finding 9e above.  True, they work the same
 hours as others in the Seattle office;  but this is so only at the
 direction of the Regional Director of the OHFI of the OIG, at Seattle.
 See finding 9d, above.  True, they continue to work under the same first
 and second-time supervisors;  but this is so only because the
 supervisors transferred with them.  See finding 9c, above.  True, they
 continue to have day-to-day dealings with HCFA employees;  but these
 dealings are now more formalized, and probably more strained since, as
 OHFI employees, they now are in a position to investigate and report
 misconduct by HCFA staff.  True, their position descriptions were still
 the same, as of the date of the hearing;  but this too has probably
 changed by now.  See finding 9c and footnote 4 thereto, above.
 
    The General Counsel places too much stress upon the delay of the OIG
 in effectuating new position descriptions, new duties, colocation of OIG
 staff at Seattle, and personnel servicing out of headquarters instead of
 Region X.  See GC Br. 20-21.  Reorganizations of the type here at issue
 usually encounter transition problems and delays.  The delays, however,
 do not, in and of themselves, constitute convincing proof that the
 transferred and reassigned employees remained a part of the Region X
 staff covered by the certified bargaining unit.
 
    More significant, in terms of community of interest, is that the
 transferred and reassigned employees went under a different and
 already-established promotion and award system and into a different,
 already-established competitive area, and were placed in positions where
 they have investigative responsibilities over any misconduct cases that
 may arise as to employees in the bargaining unit, one of which has
 already arisen, at Seattle.  Compare International Association of
 Machinists and Aerospace Workers, Local 830, AFL-CIO, 6 FLRA 480 (1981),
 where the Authority did not find that employees should be included in a
 unit just because they shared, with other unit employees, the same
 location, car pools, cafeterias, parking, various station-wide
 facilities, and use of the same personnel office.
 
    The General Counsel cites cases for the proposition that
 "(h)istorically, such employees (ones who review work of others) have
 been included in bargaining units with the employees they review." See
 GC Br. 24-25.  None, however, involved employees whose duties encompass
 investigating other bargaining-unit employees for misconduct and taking
 signed statements from them, given under oath.
 
    In point of fact, having OHFI employees in the same bargaining unit
 as HCFA employees could create a conflict of interest, in that OHFI
 employees have the role of internal policemen, vis-a-vis HCFA employees.
  Thus, the Union's bargaining stances might not be able to accommodate
 both interests.
 
    The General Counsel finally argues that "inclusion of the transferred
 employees in the bargaining unit would promote effective dealings and
 efficient operations of the agency." See GC Br. 27.  The only example
 cited is that bargaining-unit employees, through negotiations, might
 obtain a compressed work week or a modified flexitime schedule, thereby
 making necessary HCFA resources not available to OHFI employees on
 certain days or at certain times.  If such a problem developed, however,
 the Regional Director of OHFI would have authority to readjust the hours
 of his staff.  See R 9.  Furthermore, the same type problem would occur
 if the OHFI employees were included in the bargaining unit, since they
 work closely with the OIG's field staff, in the Offices of Audit and
 Investigation, and rely upon their files and assistance.
 
    Indeed, in view of the fact that the OIG has no other employees in a
 bargaining unit (see finding 4, above), it cannot be said to promote
 "efficient dealings" and "efficient operations," in the OIG, for there
 to be one set of rules for the employees of OHFI, at Seattle, and
 another set for all the rest of OIG employees, particularly since all
 OHFI employees share the same mission of oversight of HHS programs and
 work closely together to combat fraud, waste and abuse in them.
 
    Moreover, there is no one official in Seattle able to negotiate with
 the Union on matters affecting OHFI employees and the other employees
 located at Seattle and represented by Chapter 215.  See International
 Association of Machinists and Aerospace Workers, Local 830, AFL-CIO and
 Department of Defense, Department of the Navy, U.S. Naval Ordnance
 Station, Louisville, Kentucky, 6 FLRA 480 (1981) where the Authority
 held this to be one factor which "would not foster effective dealings or
 efficiency of operations." Id at 483.
 
    The above considered, it is concluded that Respondent did not commit
 unfair labor practices by revoking the dues assignments of employees
 transferred to the OHFI, in January 1983, and by failing to recognize
 the Union as their exclusive representative, since the transfers.
 
    II.  The General Counsel has established, by the preponderance of the
 evidence, that an unfair labor practice was committed by failure to
 negotiate with the Union, prior to the transfers in January 1983.
 
    On December 22, 1982, Chapter 215 of the Union presented number of
 bargaining proposals to Respondent Seattle.  See finding 19, above.  One
 (#4) provided that HCFA employees to be transferred to the OIG would be
 able to compete for HCFA positions, for one year after the transfer,
 regardless of HCFA ceilings.  On December 27, Respondent Seattle
 declined to negotiate this proposal because it involved OIG employees.
 See finding 19, above.  /9/ In fact, at the time of the refusal, the
 proposal involved HCFA employees who were in the bargaining unit.  The
 fact that they would be transferring out, shortly, and the fact that the
 proposal would have an operative effect after their transfer, did not
 automatically suspend the bargaining obligations of Respondent Seattle.
 
    Respondents have ignored this issue, in both the brief and opening
 argument made in this case, even though it is raised in the complaint
 and was argued by Counsel for the General Counsel in her opening
 argument.  See TR 14 and 22.  This may represent a tacit admission that
 Respondent Seattle erred in not negotiating proposed #4.  In any event,
 I conclude that it did.
 
    III.  In view of the above resolutions of the issues, it is deemed
 unnecessary to consider others raised by the parties.
 
                  Ultimate Findings and Recommended Order
 
    1.  Respondents did not commit unfair labor practices by terminating
 the dues assignments of, and refusing to bargain with the Union on
 behalf of employees transferred from HCFA to the OHFI of the OIG, as of
 the dates of their transfers.
 
    2.  Respondent Seattle did commit an unfair labor practice by
 refusing to bargain with the Union over proposal #4, submitted on
 December 22, 1982.
 
    Accordingly, and pursuant to 5 U.S.C. 7118 and 5 CFR 2423.26, it is
 hereby ordered that the Respondent Seattle shall:
 
    1.  Cease and desist from:
 
          (a) Refusing or failing to bargain with Chapter 215 of the
       Union on its proposal #4 of December 22, 1982, to the extent
       consistent with law and regulation.
 
          (b) In any like or related manner, refusing or failing to
       bargain with Chapter 215 of the Union.
 
    2.  Take the following affirmative action in order to effectuate the
 purposes and policies of the Federal Service Labor-Management Relations
 Statute:
 
          (a) Upon request, and to the extent consistent with law and
       regulation, bargain with Chapter 215 of the Union over proposal
       #4, submitted on December 22, 1982.
 
          (b) Post at its Seattle District Office, copies of the attached
       Notice.  Copies of said Notice, to be furnished by the Regional
       Director for Region IX of the Authority, shall be signed by an
       appropriate official of Respondent's Region X and posted by him
       immediately upon receipt, and remain posted for 60 consecutive
       days thereafter, in conspicuous places, including all places where
       notices to employees are customarily posted.  Reasonable steps
       shall be taken to insure that said Notices are not altered,
       defaced, or covered by any other material.
 
          (c) Notify the Authority's Regional Director for Region IX, in
       writing, within 30 days from the date of this Order, as to what
       steps it has taken to comply herewith.
 
                                       ISABELLE R. CAPPELLO
                                       Administrative Law Judge
 
 Dated:  March 27, 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
 STATUTE WE HEREBY NOTIFY OUR EMPLOYEES THAT:
 
 WE WILL NOT refuse or fail to bargain with Chapter 215 of the National
 Treasury Employees Union over its proposal #4, submitted on December 22,
 1982, and involving the rights of HCFA employees about to be transferred
 to the OHFI, to the extent consistent with law and regulation.  WE WILL
 NOT in any like or related manner refuse to bargain with Chapter 215.
 WE WILL, upon request, bargain with Chapter 215 over its proposal #4 of
 December 22, 1982, to the extent consistent with law and regulation.
                                       . . . (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 of compliance with any of its
 provisions, they may communicate directly with the Regional Director of
 the Federal Labor Relations Authority, Region IX, whose address is 530
 Bush Street, Suite 542, San Francisco, California 94108 and whose
 telephone number is:  (415) 556-8106.
 
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ Proposal 4 states:
 
          These employees will be able to compete for HCFA positions for
       one year after the transfer regardless of HCFA ceilings.
 
 
    /2/ See Department of Health and Human Services, Washington, D.C. and
 Department of Health and Human Services, Region VII, Kansas City,
 Missouri, 16 FLRA No. 85 (1984).
 
 
    /3/ Section 7116 of the Statute provides, in pertinent part, that:
 
    (a) For the purpose of this chapter, it shall be an unfair labor
 practice for an agency--
 
          (1) to interfere with, restrain, or coerce any employee in the
       exercise by the employee of any right under this chapter;  (or) .
       . .
 
          (5) to refuse to consult or negotiate in good faith with a
       labor organization as required by this chapter;  . . . (or)
 
          (8) to otherwise fail or refuse to comply with any provision of
       this chapter.
 
 Section 7115 of the Statute provides, in pertinent part, that:
 
    (a) If an agency has received from an employee in an appropriate unit
 a written assignment which authorizes the agency to deduct from the pay
 of the employee amounts for the payment of regular and periodic dues of
 the exclusive representative of the unit, the agency shall honor the
 assignment and make an appropriate allotment pursuant to the assignment.
  Any such allotment shall be made at no cost to the exclusive
 representative or the employee.  Except as provided under subsection (b)
 of this section, any such assignment may not be revoked for a period of
 1 year.
 
    (b) An allotment under subsection (a) of this section for the
 deduction of dues with respect to any employee shall terminate when--
 
          (1) the agreement between the agency and the exclusive
       representative involved ceases to be applicable to the employee .
       . ..
 
 
    /4/ The following abbreviations will be used herein "TR" refers to
 the transcript;  "Jt" to the Joint Exhibits;  "Stip" to the Stipulation
 of Facts, which is Jt. 1;  "GC" to the exhibits of the General Counsel;
 "R" to the exhibits of the Respondents;  "GC Br" to the brief of the
 General Counsel;  and "R Br" to the brief of Respondents.
 
 
    /5/ Under the Executive Order, an agency could eliminate entire
 offices from a bargaining unit, if its primary function related to
 internal audit and investigation.  See Section 3(a)(4) of the Order,
 reprinted in 5 U.S.C.(Supp. V) 7101, note at 312.  Under the Statute,
 the exclusion from a bargaining unit is on