File 2: Chairman Cabaniss Opinion
[ v58 p121 ]
Concurring opinion of Chairman Cabaniss:
I write separately to express my beliefs regarding the key matter at issue here.
In making a determination as to whether a provision has been negotiated under § 7106(b)(3), the Authority has in the past employed the framework announced in United States Dep't of the Treasury, United States Customs Serv., 37 FLRA 309 (1990) (Customs Service). Under that test, the Authority determined whether the relevant contract provision: (1) constitutes an arrangement under § 7106(b)(3) and (2) abrogates the exercise of a management right. See, e.g., United States Dep't of the Air Force, Seymour Johnson Air Force Base, N.C., 55 FLRA 163, 167 (1999). In this case, however, the Authority holds that it would no longer employ the Customs Service framework to determine if a contract provision, as interpreted by an arbitrator, was negotiated pursuant to § 7106(b)(3) of the Statute. In its place, the Authority will examine whether the contract provision, as interpreted and applied by an arbitrator, excessively interferes with the exercise of a management right. I note in that regard that the Authority had used the excessive interference test prior to Customs Service.
In reviewing an arbitrator's interpretation of a collective bargaining agreement, the Authority applies the deferential standard of review that Federal courts use in reviewing arbitration awards in the private sector. See 5 U.S.C. § 7122(a); AFGE, Council 220, 54 FLRA 156, 159 (1998). There is no such deferential standard, however, when an arbitrator's contract interpretation is challenged as being contrary to law, rule, or regulation: the analysis of the arbitrator's rationale is done de novo, and one looks at whether the arbitrator's reasoning is consistent with the "applicable standard of law," to determine whether the award violates § 7122(a)(1), i.e., whether it is contrary to law. That "applicable standard of law" is § 7106(b)(3) in this instance, and our case law uses § 7106(b)(3) to determine whether the agreement provision in question "excessively interferes" with an agency's § 7106(a) rights. Section 7106(b)(3) does not recognize or authorize the ability to use one § 7106(b)(3) "appropriate arrangement" legal standard for the negotiation of collective bargaining agreements (which must not "excessively interfere" with § 7106(a) rights), and then a different § 7106(b)(3) "appropriate arrangement" legal standard for the interpretation of those same collective bargaining agreements (which must not "abrogate" § 7106(a) rights). This attempted distinction is not provided for by §§ 7106 or 7122, and is not otherwise supportable.
Section 7114 of our Statute confirms that a § 7106(b)(3) conflict (or other matters discussed below) does not change after the appropriate arrangement language has gone into effect. Section 7114(c)(2) reflects an agency's right to review a collective bargaining agreement to determine whether it is in accordance with "the provisions of this chapter and any other applicable law, rule, or regulation." Actions taken to ensure that a provision is "in accordance with the provisions of this chapter" include, inter alia, whether a provision excessively interferes with the agency's rights and thus is barred by § 7106(b)(3). See, e.g., NTEU, 55 FLRA 1174 (1999) (disapproval of provision caused examination to determine whether provision excessively interfered with agency rights, in conflict with § 7106(b)(3)). Section 7114(c)(3) notes that, even where an agency does not approve or disapprove an agreement under § 7114(c)(2), the agreement then goes into effect and is binding, subject to those same "provisions of this chapter and any other applicable law, rule, or regulation."
Authority precedent does not change this conclusion. In AFGE, AFL-CIO, Local 1858, 4 FLRA 361, 362 (1980), the Authority held that an agency's failure to disapprove a provision does not otherwise make enforceable a provision that is contrary to the Statute or any other applicable law, rule, or regulation. In Veterans Admin., Washington, D.C. and Veterans Admin. Med. Ctr., Minneapolis, Minn., 15 FLRA 948, 953 (1984), the Authority dismissed a complaint against an agency accused of refusing to abide by certain contract provisions that the agency believed were in violation of "applicable law." The Authority held that, even though the agency's disavowal of the legality of the provisions was not timely under § 7114(c)(2), "such tardiness does not alter the result" of the agency's actions because of § 7114(c)(3). Id. Consequently, there is no basis for not finding that the standard of review under § 7114(c)(3) is the same as the standard of review under § 7114(c)(2), i.e., the use of an "excessive interference" test to determine whether a matter violates § 7106(b)(3).
In light of this statutory directive regarding the interpretation of collective bargaining provisions, regardless of whether the provision in question was challenged pursuant to agency head review, I find no justifiable basis for subjecting § 7106(b)(3) to a different interpretation (vis-a-vis an agency's § 7106(a) rights) when the same issue comes before an arbitrator. This lack of a justifiable basis is further reinforced by the fact that no other "provisions of this chapter and any other applicable law, rule, or regulation" discussed in § 7114(c)(3) are subjected to a different process when in arbitration. Most notably, § 7106(b)(2) is interpreted in [ v58 p122 ] the same manner regardless of whether the entity interpreting it is the Authority or an arbitrator. See GSA, 54 FLRA 1582, 1589 (1998) (Authority held that arbitrators must apply Authority precedent in resolving negotiability disputes).
I further find that the Authority's negotiability case law establishes the kind of substantive rights under a statute that are incorporated into a negotiated grievance procedure. See, e.g., NTEU, 53 FLRA 1469, 1490 (1998) (FDIC). In FDIC, the Authority discussed the differences between substantive rights and procedural rights, and noted that standards and burdens of proof are substantive in nature. Id. In discussing why a statute of limitations under 29 U.S.C. § 255(a) was substantive rather than procedural, the Authority noted that the statute in question "establishes standards by which violations of the FLSA [Fair Labor Standards Act] are to be judged, and supports a finding that Congress viewed this section as a substantive part of the FLSA." Id.
In assessing § 7106 against these comments, few would have difficulty finding that statute (and its implementing precedent) to be substantive rather than procedural in nature. It clearly establishes standards by which bargaining proposals and provisions, and conduct based thereon, are judged. Put another way, § 7106 affirmatively establishes both limitations and entitlements upon the rights and obligations of agencies and unions. Few statutes have such a substantive impact on the parties affected by it. Therefore, adherence to Authority negotiability precedent is nondiscretionary on the part of arbitrators.
In contrast to these concerns, the Customs Service decision essentially argues that negotiation of agreements, and arbitral interpretation of those same agreements, are different. What Customs Service does is to conflate the distinction between an arbitrator's deference in determining what a contract means (an essence analysis) with the total lack of deference to that same interpretation in terms of whether it conflicts with law (a de novo analysis).
It is apparent that the Customs Service decision disregards that distinction by attempting to provide arbitral deference where none is permitted. [n*] Several portions of the Customs Service decision are illustrative of this conflation. That decision rejected use of the excessive interference test because it "unduly impinges on the role of arbitration and arbitrators under the Statute." 37 FLRA at 315. The Authority also went on to explain that it believed Congress expected it to "narrowly review" arbitration awards. Id. at 315-16. The Authority's discussion is replete with references to narrow review authority and speaks in terms of all arbitration awards, yet we now know (and it is undisputed) that legal challenges to arbitration awards are not subject to some deferential standard regarding the arbitrator's application of law, rule, or regulation to the parties' agreement, and that the arbitration exception process does "impinge" on arbitrators as to legal issues by denying them the deference normally accorded them. While there may have been some doubt by the Authority in 1990 as to the extent to which an arbitrator's legal analysis would be accorded deference, that doubt was eliminated by the decision of United States Dep't of the Treasury, United States Customs Service, 43 F.3d 682, 686-87 (D.C. Cir. 1994), which stated that reviews of such legal questions would be "de novo." Id.
Therefore, I believe the Customs Service framework is in violation of §§ 7106, 7114, and 7122(a) of the Statute. Accordingly, we should no longer follow it. Instead, we should utilize the Authority's negotiability precedent regarding "appropriate arrangements" to review the Agency's exceptions, including application of the "tailoring" requirement to the arbitrator's interpretation of the provision.
Henceforth, in determining whether a provision, as interpreted by an arbitrator, is an appropriate arrangement, we should apply the analytical framework set forth in NAGE, Local R14-87, 21 FLRA 24 (1986) (KANG). Under this analysis, the Authority first determines whether the provision is intended to be an "arrangement" for employees adversely affected by the exercise of a management right. See also United States Dep't of the Treasury, Office of the Chief Counsel, Internal Revenue Serv. v. FLRA, 960 F.2d 1068, 1073 (D.C. Cir. 1992). To establish that a provision is an arrangement, a union must identify the effects or reasonably foreseeable effects on employees that flow from the exercise of management's rights and how those effects are adverse. See KANG, 21 FLRA at 31. Provisions that address purely speculative or hypothetical concerns, or that are unrelated to management's exercise of its reserved rights, do not constitute arrangements. See, e.g., NAGE, Local R1-100, 39 FLRA 762, 766 (1991). [ v58 p123 ]
The claimed arrangement must also be sufficiently "tailored" to compensate only those employees suffering adverse effects attributable to the exercise of management's rights. See id. That is, section 7106(b)(3) brings within the duty to bargain proposals that provide "balm" to be administered "only to hurts arising from" the exercise of management rights. AFGE, Nat'l Border Patrol Council, 51 FLRA 1308, 1319 (1996). Section 7106(b)(3) does not bring within the duty to bargain proposals that are so broad in their sweep that the "balm" afforded would be applied to employees indiscriminately without regard to whether the group as a whole is likely to suffer adverse effects as a consequence of management action under section 7106. Id.
If the provision is an arrangement that is sufficiently tailored, the Authority then determines whether it is appropriate, or whether it is inappropriate because it excessively interferes with the relevant management right(s). KANG, 21 FLRA at 31-33. In doing so, the Authority weighs the benefits afforded to employees under the arrangement against the intrusion on the exercise of management's rights. Id.
Finally, I note that my earlier dissents (and my position in this case) challenging the use of the abrogation test rely on a different rationale than that set out by Member Armendariz in his concurring opinion. However, I believe there is no difference between us regarding the methodology by which the excessive interference standard will be applied, although there may always be some difference in opinion regarding the outcome of its application.
Footnote * for 58 FLRA No. 22 - Opinion of Chairman Cabaniss
Although the Authority has consistently followed Customs Service, this adherence does not provide support for its continued validity. See Dep't of the Air Force, 315th Airlift Wing v. FLRA, 294 F.3d 192, 198 (D.C. Cir. 2002) ("merely applying an unreasonable statutory interpretation for several years cannot transform it into a reasonable interpretation.") (citations omitted).