12:0412(86)CA - Defense Logistics Agency (Cameron Station, Virginia), Defense Contract Administration Service Region (Boston, MA), Defense Contract Administration Services Plant Representative Office, General Electric (Lynn, MA), Defense Contract Administration Services Management Area, Hartford (Hartford, CT), Defense Contract Administration Services Management Area, Syracuse (Syracuse, NY), Defense Contract Administration Services Residency - Binghamton (Johnson City, NY), Defense Contract Administration Services Plant Representative Office - Raytheon Service Company (Burlington, MA), Defense Contract Administration Services Management Area - Bridgeport (Stratford, CT), Defense Contract Administration Services Residency - Buffalo (Buffalo, NY), Defense Contract Administration Services Plant Representative Office, General Electric (Burlington, VT) and NAGE -- 1983 FLRAdec CA
[ v12 p412 ]
The decision of the Authority follows:
12 FLRA No. 86 DEFENSE LOGISTICS AGENCY (CAMERON STATION, VIRGINIA) DEFENSE CONTRACT ADMINISTRATION SERVICE REGION (BOSTON, MA) DEFENSE CONTRACT ADMINISTRATION SERVICES PLANT REPRESENTATIVE OFFICE, GENERAL ELECTRIC (LYNN, MA) DEFENSE CONTRACT ADMINISTRATION SERVICES MANAGEMENT AREA, HARTFORD (HARTFORD, CT) DEFENSE CONTRACT ADMINISTRATION SERVICES MANAGEMENT AREA, SYRACUSE (SYRACUSE, NY) DEFENSE CONTRACT ADMINISTRATION SERVICES RESIDENCY - BINGHAMTON (JOHNSON CITY, NY) DEFENSE CONTRACT ADMINISTRATION SERVICES PLANT REPRESENTATIVE OFFICE - RAYTHEON SERVICE COMPANY (BURLINGTON, MA) DEFENSE CONTRACT ADMINISTRATION SERVICES MANAGEMENT AREA - BRIDGEPORT (STRATFORD, CT) DEFENSE CONTRACT ADMINISTRATION SERVICES RESIDENCY - BUFFALO (BUFFALO, NY) DEFENSE CONTRACT ADMINISTRATION SERVICES PLANT REPRESENTATIVE OFFICE, GENERAL ELECTRIC (BURLINGTON, VT) Respondent and NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES Charging Party Case No. 1-CA-213 DECISION AND ORDER The Administrative Law Judge in the above-entitled proceeding issued his Decision finding that the Respondent, Defense Contract Administration Service Region (Boston, MA), hereinafter referred to as DCASR-Boston, 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 further found that the other named Respondents had not engaged in the unfair labor practices alleged in the complaint, and recommended that the complaint be dismissed with regard to them. Thereafter, the General Counsel filed exceptions to the Judge's Decision and the Respondent filed both an opposition to the General Counsel's exceptions and cross-exceptions to the Judge's Decision. 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, as modified below. The record reveals that on May 9, 1979, the Defense Logistics Agency (DLA), a primary national subdivision of the Department of Defense, issued a revised regulation (DLAR No. 5500.1) entitled "Standards of Conduct" which contained various changes to the existing standards of conduct regulation. The revised regulation which, among other things, broadened the category of employees required to submit financial disclosure forms, was forwarded on May 11, 1979, to DCASR-Boston and the other subordinate activities named in the complaint, at which levels there existed units of exclusive recognition represented by various locals of the National Association of Government Employees (NAGE). The complaint herein, which named DLA and the subordinate activities as a single Respondent, alleged that DLA had violated section 7116(a)(1) and (5) of the Statute by unilaterally, and without prior notice to any of the NAGE locals involved, revising the standards of conduct regulation and imposing the revised regulation on DCASR-Boston; that DCASR-Boston violated section 7116(a)(1) and (5) of the Statute by unilaterally changing existing conditions of employment in implementing the revised regulation without furnishing prior notice to NAGE locals and affording them an opportunity to bargain concerning the changes and/or their impact and implementation; and that DCASR-Boston bypassed the NAGE locals and dealt directly with unit employees by announcing to them the changes in the standards of conduct. The Respondent's position is that no bargaining obligation existed on the part of DLA inasmuch as the units of exclusive recognition existed at levels subordinate to DLA; that the subordinate activities were not prevented from negotiating on the impact and implementation of the revised regulation as it pertained to unit employees at those locations; and that the NAGE locals waived their bargaining rights by failing to request bargaining at the appropriate levels of exclusive recognition and by failing to submit impact and implementation proposals. Additionally, the Respondent argues that the revised regulation constituted a bar to negotiations under section 7117 of the Statute. /1/ The Judge found, with regard to the latter assertion, that Part 2424 of the Authority's Rules and Regulations relating to petitions for review of negotiability issues constitutes the exclusive procedure under which the Authority can decide questions as to whether there exists a compelling need for a regulation of an agency or primary national subdivision. The Authority disagrees. Section 7117(b)(1) of the Statute /2/ empowers the Authority to resolve compelling need issues where, during the course of collective bargaining, "an exclusive representative alleges that no compelling need exists for any rule or regulation . . . which is then in effect and which governs any matter at issue in such collective bargaining . . . ." Thus, where an exclusive representative submits proposals on a matter subject to collective bargaining and the agency or activity asserts that such proposals are nonnegotiable because they conflict with an existing agency regulation for which a compelling need exists, and no actual or contemplated changes in conditions of employment are involved, the exclusive manner of resolving the question of compelling need is pursuant to the procedures set forth in section 7117 of the Statute and Part 2424 of the Authority's Rules and Regulations. See, e.g., National Federation of Federal Employees, Local 1332 and Headquarters, U.S. Army Materiel Development and Readiness Command, Alexandria, Virginia, 6 FLRA No. 66 (1981) (Union Proposal V). /3/ By contrast, in exercising its statutory authority to resolve disputes involving alleged unilateral changes in conditions of employment where issues of negotiability are also raised, the Authority has promulgated procedures which recognize a labor organization's right to seek a resolution of the negotiability issues by filing an unfair labor practice charge and a negotiability appeal and which require the labor organization to select the forum in which to proceed first. (See sections 2423.5 and 2424.5 of the Authority's Rules and Regulations.) Accordingly, and contrary to the Judge's conclusion, where a labor organization selects the unfair labor practice forum with regard to alleged unilateral changes in conditions of employment affecting unit employees resulting from the issuance of a new regulation or, as here, modification of an existing regulation, and agency management raises as an affirmative defense that it refused to bargain on the basis that there is a compelling need for the regulation in question, the compelling need issue must perforce be decided in the unfair labor practice proceeding. /4/ Of course, an agency which raises compelling need as an affirmative defense in an unfair labor practice proceeding is required, as it would be in a negotiability proceeding, to come forward with affirmative support for that assertion. /5/ Turning to the instant case, and contrary to the Respondent's contention, the Authority finds that the record fails to establish that a compelling need existed for the revised "standards of conduct" regulation issued by DLA. In this connection, the Respondent has failed to come forward with affirmative support for its assertion that a compelling need exists for the revised regulation so as to excuse it from its bargaining obligation. /6/ Nor is any such support apparent from the record. Thus, a bargaining obligation existed unless there is merit to any of Respondent's other defenses. As noted above, the record indicates that the revised regulation was promulgated by DLA on May 9, 1979, became effective on that date, and was forwarded to subordinate field activities on May 11. Subsequently, on July 16, DCASR-Boston circulated a bulletin to all employees announcing the changes made by the revised regulation and, on July 17, distributed a supplement thereto to employees in the Boston region. The record indicates that there was no notification given to any NAGE locals prior to implementation of the revised regulation or the issuance of the DCASR-Boston supplement. With respect to an agency's promulgation of regulations relating to employee standards of conduct, the Authority has previously held that standards of conduct for employees are matters affecting conditions of employment within the meaning of the Statute, /7/ and, to the extent such matters are discretionary, they are within the duty to bargain. /8/ Where, as here, there are levels of exclusive recognition subordinate to the level of the agency or primary national subdivision which issued the regulation, /9/ it is incumbent upon agency management at the level of exclusive recognition to notify the exclusive representative of its employees and afford the latter an opportunity to request bargaining concerning the regulation prior to implementation. /10/ Accordingly, when DCASR-Boston was notified by DLA of the revised regulation, DCASR-Boston was in turn obligated to notify NAGE Local R1-210 and afford it an opportunity to request bargaining on negotiable matters pertaining to both the substance and impact and implementation of the revised regulation as it applied to employees represented by Local R1-210. The failure of DCASR-Boston to so notify Local R1-210 constituted a violation of section 7116(a)(1) and (5) of the Statute. /11/ However, as the record fails to establish that DCASR-Boston was prevented from fulfilling its statutory bargaining obligation with Local R1-210 by the acts and conduct of DLA, no violation will be found against DLA. /12/ With respect to that portion of the complaint alleging that DCASR-Boston violated section 7116(a)(1) and (5) by failing to notify the NAGE locals at the subordinate levels within DCASR-Boston and to afford them an opportunity to request bargaining, the Authority finds, in agreement with the Judge, that this allegation must be dismissed. Thus, the record fails to establish that DCASR-Boston prevented the subordinate levels of agency management from fulfilling their respective statutory obligations to notify the appropriate NAGE locals so as to afford them an opportunity to bargain over the revised regulation. /13/ Similarly, the Authority finds, in agreement with the Judge, that the allegation in the complaint that DCASR-Boston violated section 7116(a)(5) in bypassing the NAGE locals and dealing directly with unit employees must be dismissed. Thus, the record fails to establish that there was an attempt by DCASR-Boston to deal directly with employees or to threaten or promise benefits to them. See Division of Military and Naval Affairs, State of New York, Albany, New York, 8 FLRA No. 71 (1982). Finally, the General Counsel argues that unit employees who were transferred as a result of the application of the revised standards of conduct regulations should be restored to their former positions and made whole. In response, the Respondent argues that any transfers which may have occurred were required under the provisions of 18 U.S.C. 208, /14/ rather than the revised standards of conduct regulation. Only one employee is specifically mentioned in the record as having been transferred after the revised regulation was issued. The record indicates that this employee was found to have been in a conflict of interest situation under the provisions of law and regulation prior to the issuance of the revised regulation. The commander of the local facility at which the employee was located, who was not the responsible management official for resolving conflict of interest situations, took certain actions which, in his view, eliminated the conflict of interest. After the revised regulation was issued, this same commander determined that the employee was still in a conflict of interest situation and that additional corrective action was needed. The transfer was the result of this determination. In the Authority's view, restoration of this employee to his former post of duty, as requested by the General Counsel, would not be appropriate in the circumstances of this case. Thus, in support of its contention that transfers of employees in conflict of interest situations are required by 18 U.S.C. 208, rather than the revised regulation, the Respondent submitted evidence which demonstrated that employees who were in conflict of interest situations similar to that of the employee here in question had been transferred in previous years under the provisions of that law. While the employee in question was not transferred until after the revised regulation was issued, noting that he was found to be in a conflict of interest before the revised regulation was issued and that employees in similar situations previously had been transferred pursuant to 18 U.S.C. 208, the Authority concludes that restoration of the employee to his former post of duty would not effectuate the purposes and policies of the Statute in these circumstances. Accordingly, the General Counsel's request for such a remedy herein is denied. 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 Defense Contract Administration Service Region, Boston, Massachusetts shall: 1. Cease and desist from: (a) Unilaterally implementing a revised standards of conduct regulation without first notifying the National Association of Government Employees, Local R1-210, the exclusive representative of its employees, and affording Local R1-210 an opportunity to bargain concerning the revised regulation as it would affect unit employees. (b) In any like or related manner interfering with, restraining or coercing employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute. 2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute: (a) Rescind the revised standards of conduct regulation and supplement thereto as it applies to the unit employees represented by the National Association of Government Employees, Local R1-210, and reinstitute the preexisting standards of conduct regulation as it applied to these unit employees. (b) Notify the National Association of Government Employees, Local R1-210, of any intended change in the standards of conduct regulation as it applies to unit employees represented by Local R1-210, and afford Local R1-210 an opportunity to request bargaining concerning such changes. (c) Post at the Defense Contract Administration Service Region, Boston, Massachusetts, copies of the attached Notice on forms to be furnished by the Federal Labor Relations Authority. Such forms shall be signed by the Commander, Defense Contract Administration Service Region, Boston, Massachusetts, or his designee, and shall be posted and maintained for 60 consecutive days thereafter, in conspicuous places, including all bulletin boards and other places where notices to employees are customarily posted. Reasonable steps shall be taken to insure that such Notices are not altered, defaced, or covered by any other material. (d) Pursuant to section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director, Region I, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order, as to what steps have been taken to comply herewith. IT IS FURTHER ORDERED that the complaint in Case No. 1-CA-213, to the extent that it alleges a violation of section 7116(a)(1) and (5) of the Statute by the named Respondents other than the Defense Contract Administration Service Region, Boston, Massachusetts be, and it hereby is, dismissed. IT IS FURTHER ORDERED that the complaint in Case No. 1-CA-213, to the extent that it alleges that the Defense Contract Administration Service Region, Boston, Massachusetts (1) failed to notify the exclusive representatives of employees at subordinate levels within the Region and afford them an opportunity to request bargaining, and (2) committed an unlawful bypass in violation of section 7116(a)(5) of the Statute be, and it hereby is, dismissed. Issued, Washington, D.C., July 29, 1983 Barbara J. Mahone, Chairman Ronald W. Haughton, Member Henry B. Frazier III, Member FEDERAL LABOR RELATIONS AUTHORITY 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 implement a revised standards of conduct regulation without first notifying the National Association of Government Employees, Local R1-210, the exclusive representative of our employees, and affording it an opportunity to bargain concerning the revised regulation as it would affect unit employees. 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 Federal Service Labor-Management Relations Statute. WE WILL rescind the revised standards of conduct regulation, and supplement thereto, as it applies to our employees represented exclusively by the National Association of Government Employees, Local R1-210, and WE WILL reinstitute the preexisting standards of conduct regulation as it applies to these employees. WE WILL notify the National Association of Government Employees, Local R1-210, of any intended changes in the standards of conduct regulation as it applies to employees represented exclusively by Local R1-210, and afford Local R1-210 an opportunity to request bargaining concerning such changes. (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 or compliance with any of its provisions, they may communicate directly with the Regional Director, Region I, Federal Labor Relations Authority whose address is: 441 Stuart Street, 9th Floor, Boston, Massachusetts 02116 and whose telephone number is: (617) 223-0920. -------------------- ALJ$ DECISION FOLLOWS -------------------- Case No. 1-CA-213 Richard Zaiger, Esq. For the General Counsel Thomas Rhodes, Esq. Sumner Marcus, Esq. For the Respondent Richard C. Remmes, Esq. For the Charging Party Before: FRANCIS E. DOWD Administrative Law Judge DECISION Statement of the Case This is a proceeding under the Federal Service Labor-Management Relations Statute (the Statute), 92 Stat. 1191, 5 U.S.C. 7101 et seq. It was instituted by the issuance of a Complaint and Notice of Hearing on April 25, 1980. The original charge of December 3, 1979 named "Defense Logistics Agency, DCASR-Boston" as the Activity against whom the charge was filed and stated that the Agency (of which the Activity is a part) is the Department of Defense, Defense Logistics Agency. The First Amended Charge of February 13, 1980 named as additional Activities eight subordinate DCAS offices in eight other cities located in 4 states. The Second Amended Charge of April 11, 1980 additionally named Defense Logistics Agency, Headquarters, Cameron Station, Alexandria, Virginia. /15/ A principal issue in this case is the distinction, if any, between other various Agency levels: national, regional and sub-regional. The Complaint alleges that Section 7116(a)(1) and (5) of the Statute has been violated by the following Activities or Agencies which are collectively referred to in the Complaint as Respondent, rather than as separate or joint Respondents: the Defense Logistics Agency, Cameron Station, Virginia; the Defense Contract Administration Service Region I, Boston, Massachusetts; Defense Contract Administration Service Plant Representative Office, General Electric, Lynn, Massachusetts; Defense Contract Administration Services Management Area, Hartford, Connecticut, Defense Contract Administration Services Management Area, Syracuse, New York; Defense Contract Administration Services Residency-Binghamton, Johnson City, New York; Defense Contract Administration Services Plant Representative Office-Raytheon Service Company, Burlington, Massachusetts; Defense Contract Administration Services Management Area-Bridgeport, Stratford, Connecticut; Defense Contract Administration Services Residency, Buffalo, New York; and Defense Contract Administration Services Plant Representative Office, General Electric, Burlington, Vermont. More specifically, the Complaint sets forth the following allegations: 1. On or about May 9, 1979, Respondent by its Agent Lt. General Gerald J. Post, Director, Defense Logistics Agency, Cameron Station, Virginia, unilaterally and without notice to any of the locals of the National Association of Government Employees (hereafter NAGE) involved in this proceeding revised DLAR 5500.1 and thereafter imposed Revised DLAR 5500.1 on its subordinate Activity, Defense Contract Administration Service Region, Boston (hereafter DCASR-Boston). 2. On July 16, 1979, Respondent by its Agent Colonel Charles Wheeler, Commander, DCASR-Boston dealt directly with employees and by-passed the NAGE locals involved in this proceeding by announcing directly to employees changes in standards of conduct. 3. On July 17, 1979 Respondent by its Agent Colonel Charles Wheeler, unilaterally changed existing conditions of employment by implementing Revised DLAR 5500.1 without furnishing notice and/or opportunity to bargain concerning such change and/or the impact and implementation of such change to any of the NAGE locals involved in this proceeding. Respondent's defense, which will be more specifically detailed later in this decision, essentially is that it had no obligation to bargain about the substance of the decision and that NAGE waived its right to bargain about impact and implementation of the decision. At the hearing in Boston, Massachusetts all parties were afforded full opportunity to be heard, adduce evidence, examine and cross-examine witnesses, and argue orally. Thereafter, Respondent and the General Counsel filed briefs which have been duly considered. /16/ Upon consideration of the entire record in this case, /17/ from my observation of the witnesses and their demeanor, and from all of the testimony and evidence presented at the hearing, I make the following findings of fact, conclusions of law and recommended order. Findings Of Fact 1. The Defense Logistics Agency (DLA) is a primary national subdivision of the Department of Defense, and its headquarters is located in Cameron Station, Virginia. DCASR-Boston is a regional headquarters. Within the area under the jurisdiction of DCASR-Boston are various management area offices (DCASMA), plant representative offices (DCASPRO) and resident offices. a. At all times material herein various locals of the National Association of Government Employees have been the exclusive representative of employees in nine (9) separate units within the DCASR-Boston region. Each unit is covered by a separate collective bargaining agreement. NAGE Local R1-210 represents an appropriate unit of employees at DCASR-Boston. NAGE Local R1-110 represents an appropriate unit of employees at Respondent's General Electric Resident Office in Lynn, Massachusetts. NAGE Local R1-76 represents an appropriate unit of employees at Respondent's Management Area Office in Hartford, Connecticut. NAGE Local R2-65 represents an appropriate unit of employees at Respondent's Management Area Office in Hartford, Connecticut. NAGE Local R2-65 represents an appropriate unit of employees at Respondent's Binghamton Residency Office in Johnson City, New York which also includes employees of Respondent located at the IBM plant in Owego, New York. NAGE Local R1-211 represents an appropriate unit of employees at Respondent's Raytheon Plant Representative Office in Burlington, Massachusetts. NAGE Local R1-181 represents an appropriate unit of employees at Respondent's Bridgeport Management Area in Stratford, Connecticut. NAGE Local R2-45 represents an appropriate unit of employees at Respondent's Resident Office in Buffalo, New York. NAGE Local R1-170 represents an appropriate unit of employees at Respondent's General Electric Plant Representative Office in Burlington, Vermont. 2. The National Association of Government Employees does not have national consultation rights with DLA; nor does a direct bargaining relationship exist between DLA and the National Association of Government Employees or any of the local union referred to above. 3. On March 23, 1977, DLA issued DLAR Regulation No. 5500.1 entitled, "Standards of Conduct" (GCX). DLAR No. 5500.1 was applicable to HQ DLA and all field activities and "prescribe(s) the standards of conduct relating to possible conflict between private interests and official duties, required of all DLA personnel, regardless of assignment" (GCX 13, p. 1). Among the procedures set forth for implementing DLAR No. 5500.1 was the requirement that all DLA personnel classified at GS-13 or above submit initial and annual statements of Affiliations and Financial Interests (DD Form 1555) (GCX 13, pp. 14-15). 4. By letter dated February 16, 1979, DLA by its General Counsel, Karl Kabeisman, requested permission from the Office of Personnel Management (OPM) to require, "certain civilian employees of . . . DLA below the grade of GS-13 whose duties otherwise (met) the criteria for filing", to file DD Form 1555 (RX 8). This letter points out that it is the nature of one's duties, regardless of grade level, which can give rise to a conflict of interest. It is undisputed that prior approval by OPM is required by the Federal Personnel Manual before an agency can expand the filing requirements of DD Form 1555 to employees below the GS-13 level. 5. By letter dated March 5, 1979, Bernard Wrable, Director, Office of Government Ethics, OPM, granted the DLA request, "subject to the understanding . . . that while immediate supervisors will identify positions which should be subject to the filing of statements, actual decisions on each such position will be filed by Commanders, their general counsels or other senior officials" (RX 9). 6. On May 9, 1979, DLA issued a new DLAR No. 5500.1 (GCX 15) which superseded the March 23, 1977 Regulation. This new regulation is also referred to herein as the Revised DLAR No. 5500.1. The document stated that this "DLAR implements DOD Directive 5000.7, Standards of Conduct" and is "applicable to HQ DLA and all DLA field activities." I find that the effective date of this new or revised regulation was May 9, 1979 and that it was immediately effective. This finding is based upon the document itself as well as the testimony of Sumner Marcus (R 15), Counsel for DCASR-Boston. While the "Purpose and Scope" Section of the predecessor regulation referred to "conflict between private interests and official duties," the "Purpose and Scope" Section set forth in revised DLAR 5500.1 refers to "even the appearance, of an actual or potential conflict of interest . . . ." (Cf. GCX 15, p. 1 and GCX 13, p. 1). Second, the revised DLAR 5500.1 itself contains a section entitled, "Significant Changes," (GCX 15, pp. 8-9) which states: This DLAR has been revised to make general refinements of existing policy and functional responsibilities. The DLAR amends the categories of employees required to file DD Forms 1555, Confidential Statement of Affiliations and Financial Interests, Department of Defense Personnel; expands the information required to be submitted on a disqualification notice; alters the reporting requirements for suspected violations of the standards of conduct statutes and regulations; and provides for advice to military personnel leaving active military service and civilians leaving federal employment. The foregoing paragraphs speaks in general terms only. For any employee or Union official to determine what is actually meant by the phrase "amends the categories of employees required to file DD Forms 1555," it is necessary to obtain a copy of the 1977 regulation and compare it line-by-line with the 1979 revised regulation. The result of such comparison would show that in 1977 forms were required to be filed by "DLA personnel classified at GS-13 or above" (GCX 13 p. 16) whereas the revised regulation applies to all "DLA personnel, civilian or military, regardless of grade or rank", whose official responsibilities require making certain types of decisions (GCX 15 p. 12). It is not until the last page (p. 13) of the regulation that there is an oblique reference to the fact that the new regulation may apply to personnel below grade GS-13. Although the revised regulation (DLAR 5500.1) itself was effective on May 9, 1979, the reporting form did not have to be filed until October 31, 1979, almost six months later. In addition, Section IV of the revised regulation entitled, "Definitions" defined "financial interest" as follows (GCX 15): c. Financial Interest. Any wages, salaries, interest, dividends or any other form of income or benefit received by virtue of the relationship; includes potential benefit, such as pre-employment contacts with a potential future employer. Nowhere in the definition section of the predecessor regulation was the term "financial interest" defined (GCX 13, pp. 9-10). Finally, revised DLAR 1500.1 provided that "(s)upplementation is permitted at all levels" (GCX 15, p. 1). An example of such "supplementation" is G.C. Exhibit 14. To me, this exhibit demonstrates that the word "supplementation" merely means that DCASR-Boston and subordinate organizations have discretion with respect to minor or routine matters. I specifically find that this "supplementation" language did not have the effect of delegating discretionary authority to subordinate organizations to make or negotiate changes in the regulation itself, as distinguished from supplemental additions which do not have the effect of changing the substance of the regulations (Tr. 175). While Respondent asserts that the regulation did not "prohibit" DCASR-Boston from negotiating impact and implementation, I find that it did not expressly authorize and delegate such responsibility either. 7. On July 16, 1979 the Commander, DCASR-Boston by its Counsel and Standards of Conduct Officer, Sumner Marcus, distributed a bulletin to all employees within its region highlighting the changes in DLAR 5500.1 (GCX 12), and on July 17, 1979 DCASR-Boston issued its own regulation supplementing DLAR 5500.1 within its region (GCX 14). It is undisputed that notice of the revised regulation was not given to any official of any of the NAGE locals involved in this proceeding prior to its distribution to employees on July 17, 1979. However, Christopher Themistocles, President of Local R1-120 received a copy of GCX 14 in his individual capacity as an employee. 8. On September 26, 1979, DCASR-Boston issued guidelines pertaining to the filing of DD Form 1555 under revised DLAR 1500.1. The guidelines set forth a number of positions which probably would require the incumbent to file DD Form 1555, the procedure for identifying additional positions, and set October 31, 1979 as the date by which DD Form 1555 must be filed. 9. By letter dated October 24, 1979, NAGE by its Attorney, Richard Remmes, requested on behalf of all the NAGE locals within the DCASR-Boston Region "to negotiate the recent changes in DLAR 5500.1 as they refer to changes in the requirements for filing financial disclosure statements . . . ." (GCX 17). Remmes went on to state that, "until we have had an opportunity to negotiate this matter and consult on the impact and procedures, I am requesting the status quo ante be maintained". 10. By memorandum dated October 30, 1979, DCASR-Boston replied to Remmes and invited "Union views" on "DCASR-Boston implementation" of DLAR 5500.1; DCASR-Boston Supplement 1 to DLAR 5500.1; and the September 26, 1979, DCASR-Boston guidelines. The views could be submitted through the unit manager, the NAGE Council of DCASR-Boston locals, or directly. In addition, the deadline for filing DD Form 1555 was extended approximately one month to November 30, 1979 in order to provide an "opportunity to comment" on the revised DLAR. The memorandum went on to state that, "(t)o meet Agency imposed deadlines, (union) input must be received by 14 November in order to receive due consideration" (GCX 18). 11. The parties met on November 2, 1979. /18/ Marcus stated that the new regulation would expand the filing requirement from 150 employees to 1000. Remmes stated he could not see the sense to the new regulation since there had been no change in 18 U.S.C. 208; he referred to conflicts in interest involving spouses working at the same location which had been brought to his attention. Marcus explained that, "the DLA interpretation had changed", and, "under the interpretation now salary alone makes a conflict of interest. If your wife receives a salary from the same corporation then you are in a conflict of interest". The Union protested management's failure to give notice to the Union in June 1979, when the DLAR was received; requested certain information; and protested the DLA determination that employees below the GS-13 level must file DD Form 1555. At this meeting NAGE also demanded that the filing requirements be delayed pending resolution of complaints under FPM Chapter 735.1-4 that certain positions had been improperly included in the filing requirements. Finally, Newdick indicated that DCASR-Boston could take no action since they had to meet "the mandates of higher authority" and the meeting concluded with no agreement. Both Themistocles and Remmes testified that a proposal was made for a "grandfather principle" so that the revised regulation would have no impact on current employees. The minutes of this meeting are in the records as Respondent's Exhibit No. 1. 12. Although the November 30, 1979, date for the filing of DD Form 1555 was not further extended the parties discussed DLAR 5500.1 on December 13, 1979. Again the Respondent indicated that it did not have the authority to negotiate the substance of the decision and no agreement was reached regarding Revised DLAR 5500.1. (The Involuntary Reassignment of Golotko) 13. Edward Golotko is a quality assurance specialist assigned to Respondent's DCASPRO at IBM in Owego, New York. a. It is undisputed that when Golotko was employed by the Respondent in early 1977 his wife was already an IBM employee. It is also undisputed that approximately four or five months after Golotko was employed his immediate supervisor, Mr. Bryant, spoke to Golotko regarding a possible conflict of interest, but nothing came of it. At that time Golotko's wife was involved in the production of products inspected by her husband i.e., Federal work. b. Thereafter, the subject came up again and Golotko spoke to the officer-in-charge of the Respondent's operations in Owego, Commander Carl S. Park. In May 1979, the situation was resolved when Golotko's wife transferred to the commercial (non-Federal) side of IBM and Golotko was specifically told by Park that a conflict "no longer" existed. c. Thereafter, in late May or June 1979, Golotko was again called to Park's office and told that, "the conflict of interest had re-arisen" because of a change in the applicable regulation. At this time Golotko was part of NAGE Local R2-56 but not a union member. Subsequent to this meeting, Park met with James Hall, Vice President of NAGE Local R2-56 and pointed out the changes in the applicable Regulation which now emphasized the "appearance" of a conflict in interest. d. By letter dated August 24, 1979, Edward Golotko was informed that he was in violation of the provisions of 18 U.S.C. 208 /19/ because "your wife is employed by the IBM Corporation, Owego, New York and your duty assignment is at the same plant." Under "the provisions of 18 U.S.C. 208 and DLAR 5500.1" he was given three (3) choices: resign, accept a transfer to another location, or have his wife resign from IBM (GCX 20). e. Golotko wrote a letter of protest (GCX 21) and stated that his wife would remain at IBM. Commander Park wrote a letter in September 1979, on Golotko's behalf which referred in a straightforward manner to the changes in the Regulation as the reason for Golotko's problem (GCX 21), /20/ Golotko was then transferred to a new location thirty (30) miles from Owego in January 1980. The record is clear that prior to the issuance of Revised DLAR 5500.1 in May 1979, a number of bargaining unit employees were allowed to work at the same company which employed their spouses and that responsible management was aware of this fact. (R 71, 9-82) /21/ (Impact on Other Employees) 14. On or about the date of the instant hearing four other employees of the Respondent at various locations in New York State were confronted with the same choices presented to Golotko. The four employees were Edward Prusik, Andrew Kucer, M. Pauline Van Derbeck and Larry Tomenga (GCX 23-26). Like Golotko, each is a quality assurance specialist and each is married to an employee of a civilian contractor doing business with DLA. (GCX 23-26, p. 1 of each exhibit). The record also reveals that on March 20, 1980, Sumner Marcus responded to an inquiry from Commander Parks regarding "Standards of Conduct-- Conflicts of Interest" (GCX 29). Park's inquiry sought, "a final determination in the cases of five employees"-- Van Derbeck and Kucer, and three clerical employees. Marcus' response noted the definition of financial interest as set forth in the revised regulation. /22/ Marcus concluded that Van Derbeck and Kucer were in conflict of interest situations but that the three clerical employees were not. A fair reading of the Marcus memo makes it clear that the distinction between a so-called conflict of interest and no conflict of interest is based on the "position description" i.e., job duties of the DLA employees (GCX 29). Thus, it is clear that in spousal situations, a conflict of interest is dependent upon the job duties of a DLA employee; and, the criteria set forth in the revised regulation for filing DD Form 1555 appears to be the criteria followed in making such determinations. Furthermore, attachments to the Marcus reply make it clear that the new, "DLA policy as set forth in DLAR 5500.1 is to avoid even the appearance of impropriety." (GCX 29, March 5, 1980 letter from Admiral Thompson). Put another way, one of the changes in the revised regulation is to emphasize and eliminate situations involving the appearance of a conflict of interest even where such situations had previously been allowed. Although the Respondent asserts that the revised regulation had no impact on Golotko-type situations, no evidence was presented that the DLA has in its DCASR-Boston Region or, for that matter anywhere in the world, ever reassigned an employee where a private sector spouse has no involvement with Government contracts. Thus, the underlying facts in each of the examples relied on by the Respondent either established a direct conflict, like that of Golotko prior to his wife's transfer to the commercial side of IBM, or were left unexplained (R 161-163, 176-177, 181; RX 11 and 12). Furthermore, it was not until after implementation of the revised regulation that any action was taken against an employee represented by the NAGE Locals involved in this proceeding even though as shown above, the uncontradicted evidence establishes the existence of spousal situations involving possible conflicts of interest. 15. By memo dated March 13, 1980, Sumner Marcus gave notice to the Union of further proposed changes in DLAR 5500.1 (GCX 31). The proposed changes (GCX 31) dealt inter alia with an expansion of the definition of financial interest to add "also includes financial interest of spouse, minor child and member of household," and clarified Paragraph III D.1 by adding the following new sentence: All employees should be aware that not only stocks and other similar holding, but also the employment of a spouse, minor child and household member is considered a financial interest attributable to the DLA employee. By letter dated March 20, 1980 (GCX 33), the Union responded to Marcus setting forth a number of proposals. Discussion and Conclusions of Law A. In General When an agency institutes changes in conditions of employment without prior notice to the collective bargaining representative, it acts at its peril. If it subsequently is determined that the changes had no impact or only an insignificant impact on employees, then no obligation to bargain arises, and there is no accompanying obligation to provide the Union with adequate advance notice of the changes. In such event, the Respondent has not violated the Statute. Where, however, the changes instituted by the agency actually have or are reasonably expected to have a substantial impact adversely affecting employees, /23/ the duty to bargain arises and the failure to have provided the exclusive representative with adequate advance notice of the changes constitutes a violation of Section 7116(a)(5) and (1). Respondent herein raises a number of defenses which will be discussed hereinafter. B. Changes In Conditions Of Employment; Substantial Impact Adversely Affecting Employees Respondent contends that Mr. Golotko's reassignment was premised upon a conflict of interest within the meaning of 18 U.S.C. 208 and, therefore, did not "result from" the changes in DLAR 5500.1. Respondent relies on the testimony of Karl Kabeiseman, Standards of Conduct Counsellor of the Agency who testified that in cases similar to that of Mr. Golotko, it had been necessary on previous occasions to reassign employees based upon a spouse's employment. As noted earlier, the examples cited by Respondent were not precisely the same as Golotko's case. Be that as it may, the fact remains that responsible Agency management officials were aware of Golotko's situation and had resolved the possible conflict of interest by approving an arrangement pursuant to which his wife changed jobs within her employer's organization. Thus, insofar as Golotko is concerned his job retention was clearly a condition of employment within the meaning of Section 7103(a)(14) of the Act which ultimately was changed by involuntarily reassigning him to a new geographical location. In fact, it was the publication and issuance of revised DLAR 5500.1 containing a new definition of financial interest which prompted Commander Park to reopen the Golotko case, rather than the new filing requirement itself. I am persuaded by the evidence that but for the revised DLAR 5500.1 there would not have been a reassignment of Golotko. I reject Respondent's contention that the real reason for Golotko's reassignment was because of 8 U.S.C. 208. There is no evidence of any amendment to 8 U.S.C. 208 which prompted a revision in DLAR 5500.1. Thus, I conclude that the General Counsel has successfully demonstrated that revised DLAR 5500.1 had an adverse impact on the bargaining unit by virtue of the effect on Golotko and, of course, on others similarly situated. I also note a large number of employees below Grade 13 would now have to file DD Form 1555 and, in effect, report matters which might later be concluded to represent conflicts of interest real or apparent. Thus, it's not the filing requirement itself so much as it is the reasonable likelihood of an adverse impact on employees resulting directly from such filing requirement. It is my conclusion that Respondent's decision to reinterpret or redefine what constitutes a "financial interest" and to expand the filing requirements to employees below Grade 13 had a substantial and adverse impact on employees in the bargaining unit. C. Failure to Provide Adequate Advance Notice The Authority has held that appropriate advance notice of proposed changes in conditions of employment means notice to a Union agent or official in his or her capacity as a Union representative. United States Air Force, Air Force Logistics Command, 4 FLRA No. 70. There is no dispute and, I find, that Respondent failed to provide such notice herein. The only actual notice received was by one NAGE local President, Christopher Themistocles of Local R2-110, but this was in his capacity as en employee. Moreover, it is not surprising that he did not readily comprehend the extent of the changes for, as discussed earlier, they were not that easy to ascertain. Respondent's defense that DCASR-Boston gave "general notice" of the change through its July 16, 1979 bulletin to all employees is noted and found to be inadequate and improper notice. D. Whether Matters Which Are The Subject Of An Agency-Wide Regulation are Negotiable? Section 7117 of the Statute has the effect of removing from the ambit of collective bargaining those matters which are the subject of a government-wide or agency-wide rule or regulation under certain circumstances. Thus, Section 7117 states as follows: "Sec. 7117. Duty to bargain in good faith; compelling need; duty to consult "(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 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, as the case may be, to whom the rule or regulation is applicable. The regulations prescribed by the Authority are set forth in Part 2424 of the Rules and Regulations. There is no dispute that the Unions herein failed to utilize the procedures established by the Board to resolve issues concerning "compelling need." Respondent contends that Section 7117 of the Statute is a bar to negotiations because DLAR 5500.1 is an agency-wide regulation /24/ and the Authority has not made a determination that "no compelling need" exists for the regulation. I find merit to this defense. Indeed, I specifically find and conclude that Part 2424 of the Rules and Regulations is the exclusive procedure wherein the Authority may determine whether compelling need exists for an agency-wide regulation. To begin with, a literal reading of the statutory language makes clear that it is "only if the Authority has determined" (past tense) that no compelling need exists for an agency-wide regulation that the duty to bargain even arises. Thus, an initial determination by the Authority pursuant to its prescribed procedures is a condition precedent which must be satisfied before a determination can be made that a duty to bargain in fact exists. The Authority's function under Section 7117 is to determine whether the agency-wide regulation is a bar to negotiations. Stated differently, the Authority's role is to resolve a "negotiability" issue; its role is not to resolve the underlying "obligation to bargain" in the same proceeding. The General Counsel contends, however, that the issue of "compelling need" may be resolved in an unfair labor practice proceeding. I reject this contention for the same reasons stated by Judge Arrigo in Boston District Recruiting Command, Boston, Massachusetts, Case No. 1-CA-206 et al., OALJ-81-023, at pp. 13-15, (December 22, 1980). In that case, Judge Arrigo concluded as follows: Counsel for the General Counsel also suggests . . . that if the agency regulation stands as a bar to negotiations, then the proceeding herein served to put the issue of compelling need before the Authority for determination. In my view neither the Statute nor the Authority's regulations appear to envision this approach. Indeed, section 7117(b)(3) of the Statute provides that where a hearing is held to make a determination of compelling need, it, ' . . . shall not include the General Counsel as a party.' Accordingly, to combine a compelling need determination with an unfair labor practice proceeding, where the General Counsel has the responsibility of presenting the evidence in support of the complaint and carries the burden of proving the allegations of the complaint, would run contrary to Statutory prohibition. Therefore, Counsel for General Counsel's contention is rejected." (footnote omitted). Therefore, based upon the foregoing reasoning, I conclude that the Authority does not even have the option of litigating the compelling need issue in a Section 7116 proceeding where the General Counsel is a party. When the Union first learned of the issuance of this agency-wide regulation, it could have sought a determination by the Authority on the compelling need issue. Regardless of which way the Authority decided the case, it is my opinion that its decision would have removed an impediment to meaningful negotiations and may have assisted in paving the way to voluntary settlement of the unfair labor practice issues. Even if a Section 7116 proceeding could not be avoided altogether, the issues to be litigated might well be narrowed and simplified. In short, the Statutory scheme of providing an expedited forum before the Authority, without the presence of the General Counsel, makes sense. In an excellent brief filed by Counsel for the General Counsel, the contention is made that the compelling need aspects of Section 7116(a)(2) are only applicable in cases where an agency invokes an existing rule or regulation as a bar to negotiations. It is argued that the present case should be viewed as a unilateral change (or revision) of an existing regulation. Accordingly, it is argued that this issue may be litigated in a Section 7116 proceeding and that "the compelling need provisions of the Statute are in reality not applicable to the facts of this case." I disagree. The problem with this theory is that its practical effect is to prevent an agency "from acting at all", that is, issuing a regulation containing a change in conditions of employment. Moreover, under this theory, even if an agency informed a Union and proposed putting into effect an agency-wide regulation, and the Union failed to seek a compelling need determination from the Authority, the agency still would be required to act at its peril and risk the allegation that it violated the Act, if it decided to make the regulation effective notwithstanding the Union's inaction. While it is true that the legislative history does not envision that an agency may unilaterally remove issues from the bargaining table merely by issuing regulations, it does not follow that an agency is prohibited from acting at all. Section 7117(b)(1) and (2) clearly contemplate that agencies may issue regulations prior to their being put to a compelling need challenge. Thus, Section 7117(b)(1) refers to an exclusive representative challenging a regulation "which is then in effect" and Section 7117(b)(2)(A) refers in the past tense to an agency "which issued" the rule or regulation. It follows, therefore, that the Authority is not deprived of jurisdiction in a Part 2424 proceeding simply because the agency regulation involves a "unilateral" change. Furthermore, if a union were permitted to litigate compelling need issues in an unfair labor practice proceeding with the aid of the General Counsel, it would mean the union had a choice of forums and could choose to by-pass the expedited forum designated by the Authority in Part 2424 of the Rules and Regulations. I concede that Sections 2423.5 and 2426.5 of the Rules and Regulations may raise some doubt as to my interpretation. However, I believe that the last sentence in those sections is intended to reserve to the Authority exclusive jurisdiction of (1) all compelling need issues and (2) those negotiability issues which, because no action has been taken, may not form the basis for a possible unfair labor practice and therefore may not be litigated in a Section 7116 proceeding. I further note that even in cases where a party elects to file a negotiability petition and is referred by the Authority to a Section 7116 proceeding it is because (1) the Respondent denies any changes occurred or (2) resolution of the dispute is dependent upon the resolution of factual issues related to the parties' conduct, both of which are more related to the underlying obligation to bargain. National Treasury Employees Union and NTEU Chapter 66, 6 FLRA No. 16. Since neither of these situations obtains here, I believe the Authority could have made a "compelling need" determination had the Union only invoked the expedited procedures of Part 2424. Finally, I would observe that, in the absence of a clear delegation from the Authority, I am reluctant to assume that I have the authority to make compelling need determinations in an unfair labor practice proceeding. And, unless I have that authority, an agency will be foreclosed from ever obtaining such a determination since, as noted above, it cannot initiate a petition for review under Section 2424.2 of the Rules and Regulations. The net result of this discussion is that the agency regulation is a bar to negotiations. E. Status Of The Named Respondents And Their Duty To Bargain 1. Respondent DLA /25/ This Respondent argues that simply because no direct bargaining relationship exists between DLA and any of the NAGE locals, DLA cannot be found to have violated Section 7116(a)(1) and (5) of the Statute. In cases arising under the Executive Order and the Statute, it has been held by the Federal Labor Relations Council /26/ and the Authority /27/ that the absence of a direct bargaining relationship is not a basis, in and of itself, for escaping liability for committing an unfair labor practice. Accordingly, this argument is rejected. However, I must point out that such precedent is not applicable herein, and not dispositive of the issues of liability. Naval Air Rework, for example, involved conduct by higher agency headquarters which blatantly interfered with a contractual relationship of the local parties. That case did not involve the issuance of an agency-wide regulation. As previously discussed, it is my opinion that Respondent DLA's agency-wide regulation is a bar to negotiations. Therefore, the duty to bargain did not arise, either as to decision or to its impact and implementation. Accordingly, I recommend dismissal as to Respondent DLA. In reaching this conclusion I rely on the fact that revised DLAR 5500.1 was issued on May 9, 1979 and that the effective date of the new filing requirement was not until October 31, 1979. Thus, there was ample time during which the Locals could be notified and given a reasonable time in which to request bargaining about impact and implementation. 2. Respondent DCASR-Boston This is not a case, like Naval Air Rework, where the subordinate activity was performing a ministerial action. DLA's issuance of an agency-wide regulation did not preclude DCASR-Boston from carrying out its statutory duty to notify the local union with which it had a bargaining relationship (Local R1-210) about the revised regulation and the changes contained therein so that the local could request bargaining about impact and implementation. As previously noted, formal notice to the Union was not provided. Accordingly, I find that DCASR-Boston violated Section 7116(a)(1) and (5). The General Counsel alleges that DCASR-Boston also had an obligation to notify the NAGE Locals which had exclusive representation at the eight subordinate activities named as Respondents in the Complaint. The evidence does not establish, however, that DCASR-Boston's conduct, standing alone, may provide the basis in this proceeding for concluding that the eight subordinate activities were left with nothing to do but perform the ministerial act of implementing the revised regulation. /28/ I am not persuaded by the evidence that the eight subordinate activities were precluded in any way by DCASR-Boston from living up to their statutory obligation to provide their respective Local Unions with adequate notice and a reasonable opportunity to bargain about impact and implementation. Subsequent to the July dissemination by DCASR-Boston of the revised DLAR 5500.1 there still was time for the remaining Respondents to notify their respective locals of the revised regulations. /29/ This they failed to do. However, the Complaint does not allege a separate violation by each of these Respondents. Summing up, the only violation I find is that Respondent DCASR-Boston violated Section 7116(a)(1) and (5) with respect to its duty to bargain with Local R1-210. /30/ In its brief, the General Counsel makes an extensive well-developed argument for holding that in reality this case really involves a single Respondent (DLA Headquarters, DCASR-Boston, and each of the eight subordinate activities), all in the same chain of command. There is much to be said for this theory and I note that the General Counsel relies rather heavily on the views expressed by my colleague, Judge Arrigo, in Internal Revenue Service, supra, fn. 13. In that case, Judge Arrigo astutely pointed out the problems encountered by a Charging Party and the General Counsel in identifying the proper Respondent's-- problems which I believe are a direct result of that portion of the Naval Air Rework decision which relieved the subordinate activity from any unfair labor practice liability assertedly because its actions as an agent of higher authority were only ministerial in nature. The Authority, however, declined to address the problems discussed by Judge Arrigo and, therefore, since Naval Air Rework has not been overruled it constitutes precedent binding upon me. F. The Remedy Respondent contends that the Union's right to negotiate was waived by its subsequent conduct and failure to submit specific proposals. In my view, the issue is whether, under the circumstances of this case, the Respondent's violation of Section 7116(a)(1) and (5) requires, in addition to the usual cease and desist order, an order to bargain about impact and implementation. In United States Air Force, 4 FLRA No. 70, the Authority held that the failure of the Activity to give appropriate notice to a union official in his capacity as a union representative constituted inadequate notice and, therefore, a violation of the obligation to bargain in good faith in violation of Section 7116(a)(5) and (1). In considering the appropriate remedy, the Authority stated as follows: However, the Complainant did not suggest that a demand to bargain based on actual knowledge of the change would have been futile, nor was it shown that the failure of appropriate advance notice would have made effective negotiation impossible. Indeed, Steward Price decided that negotiations were unnecessary at the time. Therefore, as the Union declined to act on its actual knowledge, it is not deemed appropriate to order bargaining herein. The above decision is applicable, I believe, to the present case in which the Union did act, albeit belatedly and ineptly. Here, Union President Themistocles had actual knowledge of the issuance of revised DLAR 5500.1 in July 1979. Yet, it was not until October 24, 1979, a week before the effective date of the new filing requirement, /31/ that the Union requested bargaining and requested that the status quo be maintained. (As discussed previously the Union did not even seek a compelling need determination from the Authority.) DCASR-Boston promptly replied on October 3; invited the Union's comments on DLAR 5500.1, the DCASR-Boston Supplement 1, and the September 26 guidelines; and extended the date for filing DD Form 1555 to November 30, 1979. Three days later on November 2, the parties met. From the testimony and the minutes of the meeting it is clear that the Union's principal goal was to bargain about the substance of the decision, rather than impact and implementation. Respondent made clear that as far as the decision was concerned, this had been made by higher authority and couldn't be negotiated by it. From the evidence it does not appear that the Golotko case was raised specifically although it may well have been covered by the abbreviated discussion of a "grandfather principle." Respondent asserts that the Union at both meetings (November 2 and December 13) failed to submit specific proposals on impact and implementation. This appears to be the case. It seems to me that the Union's main concern was the substance of the decision which, in my opinion, was barred from negotiations. On balance, it is clear that notwithstanding Respondent's failure to provide appropriate advance notice, the Union nevertheless had an opportunity-- prior to the effective date for filing the DD Form 1555 to submit specific proposals and simply failed to do so. Put another way, I am not persuaded by the evidence in this record that once negotiations were commenced Respondent refused to receive and consider any Union proposals concerning impact and implementation. I conclude that the lack of success in the negotiations is attributable to the conduct of the Union and not to the Respondent. In these circumstances, I believe it would not effectuate the purposes of the Act to order bargaining. In view of my conclusion that Respondent's decision was nonnegotiable and that a bargaining order on impact and implementation is not appropriate, I also reject the General Counsel's request for a status quo remedy. Having found that Respondent DCASR-Boston has engaged in conduct violative of Sections 7116(a)(1) and (5) of the Act, I recommend that the Authority issue the following order designed to effectuate the purposes of the Federal Service Labor-Management Relations Statute. ORDER Pursuant to Section 2423.29 of the Rules and Regulations of the Federal Labor Relations Authority and Section 7118 of the Federal Service Labor-Management Relations Statute, the Authority hereby orders that the Defense Contract Administration Service, Region, Boston, MA, shall: 1. Cease and desist from: (a) Failing to provide appropriate advance notice of changes in conditions of employment, involving the revised standards of conduct regulations, affecting unit employees represented by Local R1-210, National Association of Government Employees, or any other labor organization having exclusive representation rights. (b) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of rights assured by the Federal Service Labor-Management Relations Statute. 2. Take the following affirmative action in order to effectuate the purposes and policies of the Federal Service Labor-Management a Relations Statute: (a) Post at the facility named below copies of the attached notice marked "Appendix" on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by an authorized representative and they shall be posted for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. The authorized representative shall take reasonable steps to insure that such notices are not altered, defaced, or covered by any other material. Defense Contract Administration Service Region (Boston, MA) (b) Notify the Regional Director for Region 1, in writing, within 30 days from the date of this Order, what steps it has taken to comply herewith. FRANCIS E. DOWD Administrative Law Judge Dated: July 7, 1981 Washington, DC 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 fail to provide appropriate advance notice of changes in conditions of employment, involving the revised standards of conduct regulations, affecting unit employees at DCASR-Boston represented by Local R1-210, National Association of Government Employees, or any other labor organization having exclusive representative rights. 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 Federal Service Labor-Management Relations Statute. (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 or compliance with any of its provisions, they may communicate directly with the Regional Director, Federal Labor Relations Authority, whose address is: 441 Stuart Street, 8th Floor, Boston, MA 02116, and whose telephone number is: (617) 223-0920. --------------- FOOTNOTES$ --------------- /1/ Section 7117(a) of the Statute provides, in pertinent part, as follows: Sec. 7117. Duty to bargain in good faith; compelling need; duty to consult . . . . (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, as the case may be, to whom the rule or regulation is applicable. /2/ Section 7117(b) provides, in pertinent part, as follows: (b)(1) In any case of collective bargaining in which an exclusive representative alleges that no compelling need exists for any rule or regulation referred to in subsection (a)(3) of this section which is then in effect and which governs any matter at issue in such collective bargaining, the Authority shall determine under paragraph (2) of this subsection, in accordance with regulations prescribed by the Authority, whether such a compelling need exists. (2) For the purpose of this section, a compelling need shall be determined not to exist for any rule or regulation only if-- (A) the agency, or primary national subdivision, as the case may be, which issued the rule or regulation informs the Authority in writing that a compelling need for the rule or regulation does not exist; or (B) the Authority determines that a compelling need for a rule or regulation does not exist. (3) A hearing may be held, in the discretion of the Authority, before a determination is made under this subsection. If a hearing is held, it shall be expedited to the extent practicable and shall not include the General Counsel as a party. . . . /3/ The General Counsel, who is responsible under sections 7104(f)(2) and 7118 of the Statute for investigating and prosecuting alleged unfair labor practices, would not be a party to a Part 2424 proceeding since no unfair labor practice allegations would be involved. See sections 7117(b)(3) and (c)(5) of the Statute. /4/ See also State of Nevada National Guard, 7 FLRA No. 37 (1981), appeal docketed, No. 82-7034 (9th Cir. Jan. 18, 1982), remanded January 7, 1983, wherein the Authority addressed the issue of compelling need in an unfair labor practice proceeding involving the agency's failure to comply with a decision of the Federal Service Impasses Panel. /5/ See American Federation of Government Employees, AFL-CIO, National Joint Council of Food Inspection Locals and Department of Agriculture, Food Safety and Quality Service, Washington, D.C., 9 FLRA No. 74 (1982); American Federation of Government Employees, AFL-CIO, Local 1928 and Department of the Navy, Naval Air Development Center, Warminster, Pennsylvania, 2 FLRA 451 (1980). /6/ Indeed, the Respondent did not even raise compelling need as an affirmative defense in its answer to the complaint but, rather, addressed this matter for the first time in its post-hearing brief to the Judge. /7/ American Federation of Government Employees, AFL-CIO, Local 3385 and Federal Home Loan Bank Board, District 7, Chicago, Illinois, 7 FLRA No. 58 (1981) (Union Proposal II); National Treasury Employees Union and Internal Revenue Service, 6 FLRA No. 98 (1981) (Union Proposal VIII). /8/ National Treasury Employees Union, Chapter 6 and Internal Revenue Service, New Orleans District, 3 FLRA 748 (1980). /9/ Inasmuch as there is no collective bargaining relationship between DLA and NAGE at the primary national subdivision level, the Authority concludes that DLA had no duty to bargain with NAGE before revising the regulation involved herein. /10/ Department of the Air Force, Scott Air Force Base, Illinois, 5 FLRA No. 2 (1981). /11/ It follows that, as NAGE Local R1-210 was not provided with prior notice of the revised regulation, it could not be found to have waived its bargaining rights as alleged by the Respondent, and therefore the Authority finds this contention to be without merit. /12/ The Authority has previously held that the acts and conduct of higher level agency management may constitute an unfair labor practice where such conduct prevents agency management at the level of exclusive recognition from fulfilling its bargaining obligation under the Statute. 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); Department of the Interior, Water and Power Resources Service, Grand Coulee Project, Grand Coulee, Washington, 9 FLRA No. 46 (1982). /13/ There was no allegation in the complaint that these subordinate levels of agency management had themselves failed to fulfill their statutory obligation. Accordingly, the Authority need not address whether there was a violation of the Statute in this regard, or whether the NAGE locals at these subordinate levels had waived their bargaining rights. /14/ Title 18 of the United States Code relating to Crimes and Criminal Procedure provides, in pertinent part, as follows: Sec. 208. Acts affecting a personal financial interest (a) Except as permitted by subsection (b) hereof, whoever, being an officer or employee of the executive branch of the United States Government, or any independent agency of the United States, a Federal Reserve bank director, officer, or employee, or of the District of Columbia, including a special Government employee, participates personally and substantially as a Government officer or employee, through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, in a judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in which, to his knowledge, he, his spouse, minor child, partner, organization in which he is serving as officer, director, trustee, partner or employee, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment, has a financial interest-- Shall be fined not more than $10,000, or imprisoned not more than two years, or both. (b) Subsection (a) hereof shall not apply (1) if the officer or employee first advises the Government official responsible for appointment to his position of the nature and circumstances of the judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter and makes full disclosure of the financial interest and receives in advance a written determination made by such official that the interest is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from such officer or employee, or (2) if, by general rule or regulation published in the Federal Register, the financial interest has been exempted from the requirements of clause (1) hereof as being too remote or too inconsequential to affect the integrity of Government officers' or employees' services. In the case of class A and B directors of Federal Reserve banks, the Board of Governors of the Federal Reserve System shall be the Government official responsible for appointment. /15/ Section 7118(a)(4) of the Statute, which bars the issuance of a complaint based upon any alleged unfair labor practice which occurred more than 6 months before the filing of the charge, was not interposed as an affirmative defense by Respondent. /16/ There being no objection, the General Counsel's Motion to Correct Transcript is hereby granted as follows: "NAGE" on page 152, line 5 is corrected to read "AFGE." /17/ R refers to record citations, GCX to General Counsel Exhibits and RX to Respondent's Exhibits. The transcript is hereby corrected to show that GCX 2 and 29 were received into evidence. /18/ The Union was represented by Remmes, Local R2-110 President Christopher Themistocles and Vice-President Joe Mazzotta, and two representatives from Connecticut. The Respondent was represented by Labor Relations Specialist Edwin Newdick and DCASR Counsel and Standards of Conduct Officer Sumner Marcus. Remmes acted as spokesman for the Union. /19/ 18 U.S.C. 208 is one of the Statutes referred to in DLAR 5500.1. As set forth in Enclosure 3 pp. 1-2 of GCX 15 that Statute refers to financial interests and the test for its application is "whether the individuals might reasonably anticipate that their Government action, or the decisions in which they participate or with respect to which they advise, will have a direct and predictable effect upon such financial interest." The Enclosure also notes that DLA has discretion to grant ad hoc exemptions. /20/ Paragraph 6 of GCX 22 states in pertinent part as follows: "DLAR 5500.1 dated 7 May 1979 further expanded the conflict of interest implications as to appearance aspects, to cause management to revisit the prior decision . . . " /21/ Indeed, at the hearing Commander Park admitted that it was his policy at Owego that, "an employee could be permitted to work at Owego IBM even though his wife was employed there as long as the wife was not on the government side". /22/ As previously noted the predecessor regulation did not define financial interest. /23/ For a discussion of actual versus probable impact see my decision in U.S. Government Printing Office, Case No. 3-CA-549, OALJ-81-183 (April 9, 1981).