26:0059(7)NG - NAGE Local R14-62 and Army Dugway Proving Ground, Dugway, UT -- 1987 FLRAdec NG

[ v26 p59 ]
The decision of the Authority follows:

 26 FLRA No. 7
 LOCAL R14-62
                                            Case No. 0-NG-727 
                                            18 FLRA No. 38
                         I.  Statement of the Case
    The Authority's previous decision in these cases held that two
 identical proposals conflicted with an agency regulation for which a
 compelling need existed.  18 FLRA No. 38 (1985).  While that decision
 was pending before the U.S. Court of Appeals for the Tenth Circuit, we
 reconsidered and overruled the previous decision in Lexington-Blue Grass
 Army Depot, Lexington, Kentucky and American Federation of Government
 Employees, AFL-CIO, Local 894, 24 FLRA No. 6 (1986).  We therefore
 requested and the Court granted remand of the decision.  The proposals
 involved, which were presented in response to the Agency's announcement
 of its intention to partially close its facilities during the Christmas
 -- New Year holiday period, stated as follows:
          Affected employees (shall) be placed on administrative leave
       without charge to annual leave for the period of partial closure.
    For the reasons which follow we find that the proposals are
 negotiable.  Accordingly, we reverse the Authority's previous decision.
                  II.  Analysis and Conclusion on Remand
          A.  Relationship of Monetary Savings to Compelling Need
    As we stated in Lexington-Blue Grass Army Depot, 24 FLRA No. 6, a
 demonstration of monetary savings alone is not sufficient to establish
 that a regulation is essential, as distinguished from helpful or
 desirable, to the accomplishment of the mission or the execution of the
 functions of an agency in a manner which is consistent with the
 requirements of an efficient and effective Government.
    We do not believe that effectiveness and efficiency are to be
 measured solely in monetary terms.  Financial considerations, of course,
 can be relevant to a determination on whether an agency regulation
 satisfies the compelling need criterion set forth in section 2424.11(a)
 of the Authority's regulations.  See National Treasury Employees Union,
 Chapter 207 and FDIC, Washington, D.C., 21 FLRA No. 36 (1986) (finding a
 compelling need under section 2424.11(a) for agency regulations
 establishing a uniform system for determining employee salaries).
 However, in determining whether an agency's regulation is essential, as
 distinguished from helpful or desirable to effective and efficient
 agency operations, other considerations are also pertinent.  Compare,
 for example, American Federation of Government Employees, AFL-CIO and
 Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 2
 FLRA 604, 608 (1980), aff'd on other grounds, 659 F.2d 1140 (D.C. Cir.
 1981), cert. denied, 455 U.S. 945 (1982) ("Only where an agency makes a
 substantial demonstration that an increase in costs is significant and
 unavoidable and is not offset by compensating benefits can an otherwise
 negotiable proposal be found to violate the agency's right to determine
 its budget under section 7106(a) of the Statute.").
    The language and legislative history of the Statute supports our
 conclusion that a broad balancing of factors is appropriate in
 evaluating compelling need assertions such as the Agency makes here. In
 enacting the Statute, Congress found that collective bargaining in the
 Federal sector is in the public interest because, among other things, it
 facilitates and improves employees' performance and the efficient
 accomplishment of the operations of the Government.  See section 7101(a)
 of the Statute.  Moreover, with respect to compelling need, it is clear
 from the legislative history of the Statute that Congress intended a
 regulation to bar negotiations only on narrow grounds.  In this regard,
 Congressman Ford, addressing this section of the Statute, stated:
          The compromise position in section 7117 was accepted with the
       understanding that the . . . compelling need test will be
       permitted to be raised in only a limited number of cases.  /1/
    Our conclusion is also consistent with a recent holding of the U.S.
 Court of Appeals for the District of Columbia Circuit, affirming a
 decision by the General Counsel in the context of an unfair labor
 practice case that an informal settlement agreement effectuated the
 purposes of the Statute.  The Court stated:
          (E)conomic hardship is a fact of life in employment, for the
       public sector as well as the private.  Such monetary
       considerations often necessitate substantial changes.  If an
       employer was released from its duty to bargain whenever it had
       suffered economic hardship, the employer's duty to bargain would
       practically be non-existent in a large proportion of cases.
    American Federation of Government Employees v. FLRA, 785 F.2d 333 at
 338 (D.C. Cir. 1986).
             B.  Application of This Principle to These Cases
    In these cases the Agency indicated that because of high absenteeism
 during the holiday period continuation of full operations would be
 inefficient.  In the face of such inefficiency, it decided to curtail
 operations to reduce expenditures during the relatively unproductive
 period.  The Union proposed that employees who would otherwise be
 compelled to take leave be granted administrative leave during the
 partial closure.  The Agency contended that the proposals conflicted
 with agency regulations which prohibited it from granting administrative
 leave where suspension of operations was anticipated sufficiently in
 advance to permit scheduling of annual leave.  Its sole assertion in
 support of its argument that its regulation met the Authority's
 compelling need criteria was that the regulation was essential to the
 monetary savings afforded by the partial closure.  Those savings were,
 in turn, essential to enabling it to perform its mission in an effective
 and efficient manner.
    The Agency has relied on monetary savings alone to support its
 contention that a compelling need exists for its regulations.  As
 explained above and in the circumstances involved this is not enough.
 /2/ We find that the Agency has failed to provide an adequate basis for
 finding that a compelling need exists for its regulations.  See also,
 Federal Employees Metal Trade Council, AFL-CIO and Department of the
 Navy, Mare Island Naval Shipyard, Vallejo, California, 25 FLRA No. 31
    As noted in our earlier decision in these cases the proposal would
 not prevent the Agency from deciding to shut down its facilities.
 Consequently, it does not interfere with the Agency's right to lay off
 employees under section 7106(a)(1).
    For the foregoing reasons, as stated in Lexington-Blue Grass Army
 Depot, 24 FLRA No. 6, the proposals presented in these two cases are
 within the duty to bargain.
                                III.  Order
    The Agency shall upon request (or as otherwise agreed to by the
 parties) bargain concerning these proposals.  /3/
    Issued, Washington, D.C., March 6, 1987.
                                       /s/ Jerry L. Calhoun, Chairman
                                       /s/ Henry B. Frazier III, Member
                                       /s/ Jean McKee, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
                ---------------  FOOTNOTES$ ---------------
    (1) 124 Cong. Rec. 29,199 (1978) (statement of Rep. Ford), reprinted
 in Sub-comm. on Postal Poersonnel and Modernization of the House Comm.
 on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative
 History of the Federal Service Labor-Management Relations Statute, Title
 VII of the Civil Service Reform Act of 1978, at 956 (Comm. print No.
    (2) As noted in Lexington-Blue Grass Army Depo