28:0625(80)NG - NTEU, CHAPTER 207 VS FDIC



[ v28 p625 ]
28:0625(80)NG
The decision of the Authority follows:


28 FLRA NO. 80



NATIONAL TREASURY EMPLOYEES UNION,
CHAPTER 207

                   Union

      and

FEDERAL DEPOSIT INSURANCE
CORPORATION, WASHINGTON, D.C.

                    Agency

Case No. 0-NG-446
21 FLRA No. 36

DECISION AND ORDER ON REMAND

I . Statement of the Case

This case is before the Federal Labor Relations Authority (Authority) pursuant to a remand from the United States Court of Appeals for the District of Columbia Circuit. The question before us is whether a proposal concerning wages is negotiable under the Federal Service Labor - Management Relations Statute (the Statute). Based on the following reasons we find the proposal is negotiable. 1

II . The Proposal

Article 59 - Salary

Section 1

The salary structure, that is the grades and steps of the schedule, being used by FDIC will be maintained. Hereafter, all employees will have their current salaries adjusted for the cost-of-living/comparability factor. The adjustment will be equal to the statistical adjustment recommended to the President by the Pay Advisory Council. (After October 1980 the adjustment factor developed by the Council will be modified to account for the different comparability positions between FDIC and those employees under the General Schedule. Beginning in January 1981 the parties will meet to seek agreement on the modification formula.) This adjustment will become effective the beginning of the first pay period following the announcement of it by the council or other appropriate sources. It will be unaffected by Presidential or congressional actions.

Section 2

NTEU agrees to establish with the EMPLOYER a productivity committee that will monitor the impact of the new salary adjustment system and seek reasonable ways to increase the productivity of the EMPLOYER, e.g., decrease employee turnover, remove work obstacles, improve upon available machinery and procedures, raise employee morale, etc.

III . Background

In earlier decisions in this case the Authority found that this proposal conflicted with an agency regulation for which a compelling need exists. National Treasury Employees Union, Chapter 207 and Federal Deposit Insurance Corporation, Washington, D.C., 14 FLRA 598 (1984); National Treasury Employees Union, Chapter 207 and Federal Deposit Insurance Corporation, Washington, D.C., 21 FLRA No. 36 (1986). On appeal, the court reversed the Authority as to that holding and remanded the case. The court also noted that in further proceedings the Authority should be mindful of the bearing which the question of the negotiability of pay and fringe benefits had on the case. National Treasury Employees Union v. FLRA, No. 84-1286 (D.C. Cir. Mar. 20, 1987).

The Agency has requested that we consider a statement of position which it submitted on the issue of the proposal's conflict with an agency regulation for which a compelling need exists. The Union opposes the Agency's request contending that, under the remand, the compelling need question is not before the Authority.

The court's decision reversed the Authority's previous decisions in this case which had been based on a finding that a compelling need existed for the Agency's regulation. In so doing the court rejected the assertion that a uniform  method of setting salaries was essential to the efficient accomplishment of the Agency's mission.

IV . Analysis and Conclusions

We accept as the law of the case the court's opinion that the Agency's regulation does not bar negotiation of the proposal. For the reasons found by the court, we find that the Agency has not established that its regulation is essential to the accomplishment of its mission in a manner which is consistent with the requirements of an effective and efficient government. In regard to this particular compelling need criterion the Agency's supplemental submission presents nothing new; it merely reasserts the alleged essentiality of a uniform method of setting pay.

However, in its supplemental submission the Agency also asserts a new argument as to compelling need. It contends that its regulation establishing a uniform pay system also meets the criterion set forth at section 2424.11(b) of the Authority's regulations. 2 This argument was not raised as a bar to negotiation of the proposal prior to the most recent remand to the Authority. We, therefore, grant the Union's request that we not consider the Agency's supplemental submission to the extent that it asserts section 2424.11(b) as a bar to negotiation of the proposal. See National Treasury Employees Union and Internal Revenue Service, 27 FLRA No. 25 (1987), petition for review filed sub nom. Internal Revenue Service v. FLRA, (D.C. Cir. July 28, 1987).

We next consider the larger question of the extent to which the subject of wages is within the duty to bargain and the bearing of that issue on the negotiability of this proposal. Initially, we note that the Agency has never asserted that this proposal is nonnegotiable purely on the ground that it addresses the subject of wages. In any event, in American Federation of Government Employees, AFL - CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986), 3 we held  that nothing in the Statute, or its legislative history, bars negotiation of proposals relating to pay and fringe benefits insofar as (1) the matters proposed are not specifically provided for by law and are within the discretion of the agency and (2) the proposals are not otherwise inconsistent with law, Government-wide rule or regulation or an agency regulation for which a compelling need exists.

As noted in our original decision in this case, 4 the Agency is a government corporation and is not subject to the pay and allowance provisions of Chapter 51 of title 5 of the U.S. Code. Rather, such matters are within the discretion of the Agency. Its contention that the proposal interfered with its right under section 7106(a)(1) to determine its budget was rejected in 21 FLRA No. 36 and there is no reason to reconsider that disposition here. The Agency has asserted no other ground for finding that the proposal is nonnegotiable, nor is any apparent. In view of the rejection of its compelling need and budget arguments and in the absence of any other basis for finding the proposal nonnegotiable, we find that the proposal is within the duty to bargain.

V . Order

The Agency shall upon request, or as otherwise agreed to by the parties, bargain concerning the proposal. 5

Issued, Washington, D.C., August 21, 1987

Henry B. Frazier III, Member

Jean McKee, Member

FEDERAL LABOR RELATIONS AUTHORITY 

Separate Opinion of Chairman Calhoun

I . Introduction

In its decision remanding this case to the Authority, the United States Court of Appeals for the District of Columbia Circuit observed that, "beyond the facts of this case . . . there lies a larger issue. There is some question as to whether the Federal government has any duty to bargain over wages and fringe benefits . . . . We trust . . . that the FLRA will proceed in this case mindful of the bearing upon it of the larger issue subjudice." Memorandum Opinion at page 4.

In response, my colleagues find that this case is controlled by the decision in American Federation of Government Employees, AFL - CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986). I agree that Eglin Air Force Base is applicable to this case as a general proposition, and I expressly reassert the views espoused in my dissenting opinion therein. I also think it necessary and appropriate to make some further observations concerning the negotiability of wage and money-related fringe benefit proposals as they relate to the Federal Deposit Insurance Corporation (FDIC).

II . The "Compelling Need" Question

I do not interpret the Court's decision as foreclosing further consideration of this issue by the Authority on remand. My colleagues accept as law of the case the Court's finding that the FDIC regulation establishing a uniform salary structure, including the calculation of cost-of-living adjustments, has not been shown to be "essential to the accomplishment of its mission in a manner which is consistent with the requirements of an effective and efficient government." Majority Opinion at 3.

I leave for another day any attempt at an in-depth articulation of the standards to be applied in making a "compelling need" determination. I note, however, that in enacting section 7117(b) of the Statute, Congress must have foreseen certain agency regulations as falling within its confines. While the legislative history of that provision amply supports a conclusion that the provision should be narrowly construed, I am concerned that the Authority and the Courts not leave it bereft of meaning. Furthermore, resolution of the legal question of whether or not a given  regulation or regulatory scheme meets the criteria established in 5 C.F.R. 2424.11 will frequently turn on the totality of the factual circumstances surrounding the regulation's promulgation and administration. Such matters are often within the knowledge of the parties and not this Agency. As in all negotiability cases decided under section 7117(c) of the Statute, those factual circumstances must be established by the parties themselves. With all due respect to the Court of Appeals, if the record in this case permitted thorough review of the effects of the establishment o