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The decision of the Authority follows:
19 FLRA No. 1 DEPARTMENT OF TRANSPORTATION Respondent and AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL 2747, AFL-CIO Charging Party Case No. 2-CA-20217 The Administrative Law Judge issued the attached Decision in the above-entitled proceeding, finding that the Respondent, Department of Transportation, had engaged in the unfair labor practices alleged in the complaint and recommending that it be ordered to cease and desist therefrom and take certain affirmative action. Thereafter, the Department of Transportation filed exceptions to the Judge's Decision and an accompanying brief. 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 only to the extent consistent herewith. The Judge concluded that the Department of Transportation violated section 7116(a)(1) and (5) of the Statute when it prevented the Third Coast Guard District from bargaining with the American Federation of Government Employees, Local 2747, AFL-CIO, the exclusive representative of a unit of employees at the Third Coast Guard District, concerning the substance of a proposed change in paycheck and savings bond distribution. Subsequent to the issuance of the Judge's Decision in this case, the Authority issued its decision in Federal Employees Metal Trades Council, AFL-CIO and Department of the Navy, Mare Island Naval Shipyard, Vallejo, California, 16 FLRA No. 88 (1984), petition for review filed, No. 85-7039 (9th Cir. Jan. 22, 1985), wherein it found that the process which an agency adopts to fulfill its payroll obligation so as to ensure the continued, uninterrupted operation of the agency constitutes a support operation without which the agency's mission could not be accomplished. Thus, the Authority found that mission-related matters which fall within the meaning of "performing work" under section 7106(b)(1) include support functions which are integrally related to the agency's mission. In Federal Employees Metal Trades Council, the Authority found a proposal pertaining to the method of paycheck distribution to concern the methods and means of performing work, i.e., the agency's payroll function, within the meaning of section 7106(b)(1) of the Statute /1/ and thus negotiable only at the election of the agency. /2/ Thus, in the circumstances of this case, the Authority finds that the Department of Transportation's alleged interference with the bargaining relationship between the Third Coast Guard District and the Union, by preventing bargaining concerning the change of paycheck delivery, did not constitute a violation of section 7116(a)(1) and (5) of the Statute. /3/ Similarly, the Authority finds that there is no Agency obligation to bargain over its decision to change the method of distributing savings bonds. In this regard, the Authority finds that inasmuch as an agency's distribution of savings bonds is part of the method by which the agency fulfills its payroll obligation, as would be other things such as paycheck distribution, accounting for leave, overtime, compensatory time and tax deductions, it too concerns the methods and means of performing work within the meaning of section 7106(b)(1) of the Statute and is negotiable only at the election of the Agency. See Federal Employees Metal Trades Council, AFL-CIO, supra. Accordingly, the Authority finds that the Respondent's refusal to bargain concerning a change in the method of distributing savings bonds did not constitute a violation of section 7116(a)(1) and (5) of the Statute. Therefore, the complaint shall be dismissed in its entirety. ORDER IT IS ORDERED that the complaint in Case No. 2-CA-20217 be, and it hereby is, dismissed. Issued, Washington, D.C., July 11, 1985 Henry B. Frazier III, Acting Chairman William J. McGinnis, Jr., Member FEDERAL LABOR RELATIONS AUTHORITY Case No. 2-CA-20217 -------------------- ALJ$ DECISION FOLLOWS -------------------- William J. Hufnell and Marilyn Marton, Esq. For the Respondent Richard A. Gomez and Robert D. Jensen For the Charging Party Alfred R. Johnson, Jr., Esq. For the General Counsel Before: SALVATORE J. ARRIGO Administrative Law Judge DECISION Statement of the Case This is a proceeding under the Federal Service Labor-Management Relations Statute, Chapter 71 of Title 5 of the U.S. Code, 5 U.S.C. 7101 et seq. Upon an unfair labor practice charge filed by Local 2747, American Federation of Government Employees, AFL-CIO (herein referred to as the Union) on January 27, 1982, as amended on March 10, 1982 and August 30, 1982, against the Department of Transportation (herein sometimes referred to as Respondent or DOT), the General Counsel of the Authority, by the Regional Director for Region II, issued a Complaint and Notice of Hearing on September 22, 1982. The Complaint alleged that Respondent refused to negotiate with the Union on the substance of a change in the method of delivering paychecks to employees of the Third Coast Guard District and thereafter unilaterally implemented the change in violation of section 7116(a)(1) and (5) of the Statute. A hearing on the Complaint was conducted on January 11, 1983 and September 21, 1983 at which all parties were represented and afforded full opportunity to adduce evidence, call, examine and cross-examine witnesses and argue orally. Briefs, including supplemental briefs, were filed by Respondent and the General Counsel and have been carefully considered. Upon the entire record in this matter, my observation of the witnesses and their demeanor and from my evaluation of the evidence, I make the following: Findings of Fact and Conclusions of Law Background At all times material herein the Union has been the exclusive collective bargaining representative of various employees of the Third Coast Guard District of the U.S. Coast Guard located in New York, New York (the Third District herein). The U.S. Coast Guard (the Coast Guard herein) is an organizational entity within the Department of Transportation. Sometime prior to January 1983 Barry Lang, Labor Relations Specialist for the Third District, received a notice from Virgil Jackson, Civilian Personnel Specialist with Coast Guard Headquarters in Washington, D.C., that the Department of Transportation was going to promulgate an order which would end the distribution of paychecks and savings bonds at employees' worksites. At that time the majority of the approximately 380 Third District bargaining unit employees had been receiving their checks and bonds at the worksite for some time. Jackson suggested the Lang inform the Union of the pending issuance. Jackson and Lang agreed that no negotiations with any union was required since the Agency had a meritorious "compelling need" argument. Lang based his opinion on his recollection of a Coast Guard Commandant "instruction" which, in his view, indicated that any DOT order should be regarded as having compelling need attached to it. In early January 1983 Lang contacted Union President Richard Gomez and informed him that an order was going to be issued by DOT which would end the distribution of employee paychecks at the worksite. Gomez inquired as to what management's position would be if the Union submitted a bargaining proposal that pay procedures remain "as is." Lang replied that management would take the position that such a proposal was nonnegotiable since it would conflict with the DOT regulation for which a compelling need existed. Lang further informed Gomez that the Union could appeal the determination to the Authority but, in any event, management would be glad to entertain any proposal he had to negotiate on the impact and implementation of the order. At some time subsequent to the meeting with Lang described above, Gomez told Lang he did not wish to bargain on the impact and implementation aspects of the matter. On January 7, 1982 the Department of Transportation issued DOT Order 2730.3 entitled: "Distribution of Paychecks and U.S. Savings Bonds." The Order, applicable to all civilian employees in the Department of Transportation stated as its purpose: "This order prescribes departmental policy for distributing paychecks and U.S. Savings Bonds and ADVISES EMPLOYEES WHO ARE NOT ALREADY COMPLYING WITH PROVISIONS OF THIS ORDER THAT CORRECTIVE ACTION IS REQUIRED BY FEBRUARY 26, 1982." In addition to requiring all entities of Respondent, including all Districts of the United States Coast Guard, to discontinue the practice of delivering employee paychecks and bonds to the employee's office or post of duty, the Order also provided that future delivery would be accomplished by either: (a) direct mail delivery to an address or post office box (other than the office or post of duty) designated by the employee in writing or; (b) to a financial institution that was designated by the employee. The Order concluded with a paragraph entitled "Waiver," which stated: "Requests for waivers to the provisions of this order shall be addressed to the Office of Financial Management, M-80." DOT is comprised of various components such as the Coast Guard, the Federal Aviation Administration, the Federal Highway Administration and the Maritime Administration. At the time DOT Order 2730.3 issued, all but around 5,000 of the approximately 60,000 employees within the DOT organization were already in compliance with the requirements of the Order. Thus, full compliance with DOT's Order would result in virtually all employees under DOT's jurisdiction receiving paychecks and bonds at non-worksite locations. On January 22, 1982 the Coast Guard Commandant notified by teletype all its constituent organizations, including the Third District, that they were to comply with the requirements of DOT Order 2730.3 by February 19, 1982. The Union received a copy of the Commandant's teletype on January 22 and, on that same day, submitted to the Third District Commander a written request that the parties negotiated on the matter. The Union's request also contained its bargaining proposal that paychecks continue to be distributed to employees at the worksite as they had been in the past. The Union further contended that no compelling need existed for the DOT action. By memorandum to the Union dated January 25, 1982 the Third District refused to negotiate on the Union's proposal contending that the proposal was not negotiable "because it conflicts with DOT Order 2730.23 of January 7, 1982 for which a compelling need exists." On January 28, 1982 the Third District issued a notice to employees which stated that the delivery of Third District paychecks to the jobsite would cease by February 15, 1982, and, by that date, all employees must designate their home address, a post office box or a financial institution for the receipt of paychecks. By February 16, 1982 all employees of the Third District complied with this notice and therefore direct distribution of paychecks and bonds at the worksite ceased. Respondent's Contentions Recognition for representational purposes herein runs between the Union and the Third District. Accordingly, Respondent contends that no bargaining obligation exists between DOT, the named Respondent, and the Union and therefore, no failure or refusal to bargain within the meaning of the Statute can be found in these circumstances. /4/ Respondent further contends that the proper forum to resolve this matter is through the negotiability appeal procedure as a "compelling need" case and, in any event, a "compelling need" exists for the issuance of DOT Order 2730.3. /5/ The Proper Respondent In 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), the Authority held: " . . . under the Statute, when the obligation to negotiate is breached by the acts and conduct of agency management, such a breach may provide the basis for a section 7116(a)(1) and (5) violation regardless of the location of that agency management in the agency chain of command. In the instant case, where agency management at the Regional level directed the immediate implementation of a policy which altered an established condition of employment in the Galveston District, such act was properly found to have violated section 7116(a)(1) and (5) of the Statute." (Footnotes omitted). In Department of Health and Human Services, et al., the Authority reached the conclusion cited above holding Region IV violated section 7116(a)(1) and (5), notwithstanding the fact that the union therein was the bargaining representative for Galveston District employees and not the parent Region IV employees. The complaint against the Galveston District was dismissed since the Authority found their conduct in implementing the directive was merely the ministerial action of complying with instructions of higher agency management " . . . because it had no choice except to do so . . . " See also Department of the Interior Water and Power Resources Service, Grand Coulee Project, Grand Coulee, Washington, 9 FLRA No. 46 (1982). In a subsequent case, Defense Logistics Agency (Cameron Station Virginia), et al., 12 FLRA No. 86, 12 FLRA 412, (1983), the Authority similarly dismissed that portion of a complaint against an activity because the record failed to establish that the parent organization " . . . prevented the subordinate levels of agency management from fulfilling their respective statutory obligations . . . " (Id. at 418). Thus it would appear from an analysis of the cases cited above that an unfair labor practice of refusing to bargain may be established against a parent organization where the parent organization (higher agency management) directs a subordinate activity that has a bargaining obligation with a union to alter an established condition of employment and no opportunity to negotiate is afforded the union. On the other hand, no unfair labor practice lies against a subordinate activity where the subordinate has no choice but to comply with the instruction of higher management or is prevented by higher management from fulfilling its bargaining obligations. In the case herein recognition runs between the Third District and the Union. However, DOT is the Third District's "top" management and its regulations are binding on the Third District. By its terms DOT Order 2730.3 required compliance by all employees within approximately seven weeks from the date of the Order. Indeed, recognizing its obligation to follow the dictates of higher management in dealing with the Union on the matter at issue, the Third District clearly took the position that the Union's proposal on distributing employee paychecks was not negotiable as to its substance since it conflicted with the DOT regulation which it was required to follow. While the Order indicated that a waiver to its provisions could be requested, no standards for requesting a waiver were set forth in the Order. Nor was there any indication in the Order that the waiver language was applicable to only individual employees or the waiver could be obtained by an entire organizational entity within the Department or whether a bargaining obligation on the part of a subordinate activity would be an acceptable reason for granting such a waiver. Indeed, quite obviously the Third District did not interpret the waiver language to apply to it as an organization because of its outstanding bargaining obligation with the Union, as evidenced by the lack of its having made any request for a waiver. Accordingly, in the circumstances herein I conclude that DOT Order 2730.3 provided no discretion on the part of the Third District as to whether the substance of the Order could be ignored, modified or implemented. Thus, the Third District had no choice but to comply with the requirements of the Order and thereby alter an established condition of employment without negotiating with the Union on the matter. Compelling Need Respondent contends that a compelling need within the meaning of section 7117 of the Statute existed for the Order. /6/ To support its position Respondent elicited testimony which revealed that the Order was promulgated at a time when its budget and resources were reduced and the Order was seen as a means of saving money and jobs. By reducing the work of "designated agents" in distributing paychecks, the overall savings to the Department by using the direct mailing process was established to have been in excess of 100,000 a year. /7/ Testimony was adduced which indicated that direct mailing of checks improved the security of paycheck distribution and delivery since less individuals handled the checks. Thus, worksite distribution of checks involved mailing the checks from Kansas City to the payroll offices and the transfer to designated agents for distribution. An employee would occasionally not be available to receive a paycheck and a designated agent would sometimes not follow the "formal" procedure of returning the check to the payroll office for safekeeping but keep the check in a desk drawer instead of awaiting the return of the employee. However, no specific testimony was adduced as to the frequency of such desk drawer retention nor is there any evidence that checks were, in fact, lost or stolen while using this procedure. Respondent further argues that since there exists 120 bargaining units covering over 23,000 employees under DOT's jurisdiction, if a compelling need was not found to exist herein, Respondent could be faced with bargaining demands and negotiations which could produce many different paycheck distribution systems resulting in costs far exceeding those involved in the previous distribution system. Section 2424.11(a) of the Authority's Rules and Regulations, entitled "Illustrative Criteria," provides: "A compelling need exists for an agency rule or regulation concerning any condition of employment when the agency demonstrates that the rule or regulation meets one or more of the following illustrative criteria: "(a) The rule or regulation is essential, as distinguished from helpful or desirable, to the accomplishment of the mission or the execution of functions of the agency or primary national subdivision in a manner which is consistent with the requirements of an effective and efficient government." Respondent suggests that an examination of the illustrative criteria contained in section 2424.11 of the Authority's Interim Regulations (Federal Register, Vol. 44, No. 147, July 30, 1979), would be helpful in determining compelling need herein. The relevant criteria in the Interim Regulations provided: "(a) The rule or regulation is essential, as distinguished from helpful or desirable, to the accomplishment of the mission of the agency or primary national subdivision; "(b) The rule or regulation is essential, as distinguished from helpful or desirable, to the management of the agency or the primary national subdivision; . . . . "(e) The rule or regulation establishes uniformity for all or a substantial segment of the employees of the agency or primary national subdivision where this is essential to the effectuation of the public interest." When the Final Rules and Regulations were published (Federal Register, Vol. 45, No. 12, January 7, 1980), the Authority, in the Part-by-Part Analysis of Comments and Changes portion of the publication, explained certain revisions in section 2424.11 as follows: "The Authority also has considered the illustrative criteria. Criterion (a), namely, the rule or regulation is essential to the accomplishment of the mission of the agency or primary national subdivision, has been amended to cover, also, the execution of agency functions. In addition, this criterion has been clarified to emphasize that it must be applied consistent with the finding and purpose of Congress stated in 5 U.S.C. 7101 that the provisions of the Statute should be interpreted in a manner consistent with the requirement of an effective and efficient Government. "As to criteria (b) and (e) of the interim rules and regulations, they were determined to be unnecessary and therefore this section has been amended to delete them. It was determined that the essence of these criteria is subsumed in amended criterion (a)." Accordingly, Respondent takes the position that DOT Order 2730.3, when viewed in the context of its purpose, i.e., financial savings, improved security of paycheck delivery, and uniformity of paycheck delivery, meets the requirements set forth in section 2424.11 of the Regulations. Respondent contends the Order: (1) is essential to the execution of functions of the agency in a manner which is consistent with the requirement of an effective and efficient government; (2) is essential to the management of the agency; and, (3) establishes uniformity for a substantial segment of the employees of the agency where this is essential to the effectuation of the public interest. To support its contention Respondent relies on American Federation of Government Employees, Local 2875, and Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service, Southeast Fisheries Center, Miami Laboratory, Florida, 5 FLRA 441 (1981) wherein the Authority in finding no compelling need for an agency regulation, stated: "The Agency does not demonstrate that the policy reflected in the subject regulation requiring leave charges to be made in increments of one hour was established because operation of its payroll and leave administration functions would be less costly if leave was charged to employees in hourly, as opposed to quarter-hour, increments. That is, the Agency does not show that modification of its present payroll data system to accommodate leave charges in quarter hour increments would preclude the Agency from administering its payroll functions efficiently and effectively . . . . " (Id. at 448, 449). By citing this language Respondent seems to urge that a showing of a less costly payroll operation would support a finding that a rule in furtherance thereof would meet the requirement of section 2424.11 of the Regulations since cost savings would be " . . . consistent with the requirements of an effective and efficient government." However, in the above quoted language, the Authority, in finding no compelling need, merely pointed out that the modification sought by the Union would not "preclude the Agency from administering its payroll functions efficiently and effectively." Moreover, the Authority held that the obligation to bargain does not require an agency to agree to a proposal. In this latter regard the Authority further stated: " . . . after bargaining over the Union's proposal, should the Agency's estimate of the cost of implementing the Union's proposal remain an obstacle to agreement, those considerations as to cost may be presented to the Federal Service Impasses Panel in a proceeding to resolve a negotiation impasse pursuant to section 7119 of the Statute." (Id. at 449). An agency which raises compelling need as an affirmative defense in an unfair labor practice proceeding is obligated to affirmatively support that assertion. Defense Logistics Agency, (Cameron Station, Virginia), 12 FLRA No. 86 (1983). Thus, Respondent must show that DOT Order 2730.3 is . . . essential as distinguished from helpful or desirable to the accomplishment of its mission. National Federation of Federal Employees, Local 1332 and Headquarters, U.S. Army Material Development and Readiness Command, Alexandria, Virginia, 6 FLRA 361 (1981) at 371. Financial savings to the Agency alone is not sufficient to demonstrate the essentiability of the Order within the meaning of section 2424.11(a) of the Regulations. American Federation of Government Employees, AFL-CIO, Local 2875, supra, at 220. Indeed, if savings and security were viewed by Respondent as being essential to the accomplishment of its mission, Respondent nevertheless has now shown why these objectives could not be achieved through means other than requiring all employees to use the system of direct deposit of paychecks and bonds. Cf. American Federation of Government Employees, AFL-CIO, Local 3804 and Federal Deposit Insurance Corporation, Chicago Region, Illinois, 7 FLRA 217 (1981), at 220 and American Federation of Government Employees, AFL-CIO, Local 3385 and Federal Home Loan Bank Board, District 7, Chicago, Illinois, 7 FLRA 398 (1981), at 407-408. Further, the Authority has held that an agency's desire to have a uniform policy does not in itself demonstrate that a regulation meets the compelling need criteria of section 2424.11(a) of the Regulations. American Federation of Government Employees, AFL-CIO, Local 2670, et al., 10 FLRA No. 19 (1982). Rather, an agency must demonstrate and justify, under the Authority's criteria, an "overriding need" that the policy reflected in the rule be uniformly applied throughout the agency. Id. at 74. Whether other unions will seek to negotiate on this matter is speculative at best. In any event Respondent's concern, if it should materialize and is deemed significant, could be presented to the Federal Service Impasses Panel for resolution. Cf. American Federation of Government Employees, Local 2875, supra, at 449. Accordingly, I find Respondent has not shown an "overriding need" for a uniform policy of direct deposit of paychecks and bonds as opposed to worksite distribution to those employees who would opt for this type of delivery. In the circumstances herein I conclude that Respondent has not met its burden of demonstrating that Order 2730.3 is essential, as distinguished from helpful or desirable, to the execution of its functions in a manner which is consistent with the requirement of an effective and efficient government. Accordingly, I conclude that the Department of Transportation, by requiring the Third Coast Guard District to implement DOT Order 2730.3 discontinuing the distribution of unit employees' paychecks and bonds, a condition of employment within the meaning of the Statute, /8/ violated section 7116(a)(1) and (5) of the Statute and recommend the Authority issue the following: 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 Department of Transportation shall: 1. Cease and desist from: (a) Unilaterally changing established conditions of employment at the Third Coast Guard District of the U.S. Coast Guard concerning the manner of distributing paychecks and savings bonds of employees represented by Local 2747, American Federation of Government Employees, AFL-CIO, the employees exclusive collective bargaining representative. (b) In any like or related manner interfering with, restraining or coercing its employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute. 2. Take the following affirmative action: (a) Withdraw and rescind Order 2730.3 concerning the manner of distribution of paychecks and savings bonds as applicable to employees of the Third Coast Guard District represented by Local 2747, American Federation of Government Employees, AFL-CIO, and reinstate the procedures and policies in effect prior to its issuance. (b) Notify Local 2747, American Federation of Government Employees, AFL-CIO, the exclusive representative of the employees of the Third Coast Guard District, of any intended change in the manner of distributing bargaining unit employees' paychecks and savings bonds and provide such exclusive representative an opportunity to request negotiations with the Third Coast Guard District, or other appropriate management representative, and bargain in good faith on any such proposed change in an established condition of employment. (c) Post at its Office of the Secretary, Department of Transportation, Washington, D.C. facility and its Third Coast Guard District, U.S. Coast Guard, New York, New York facility, copies of the attached Notice on forms to be furnished by the Federal Labor Relations Authority. Upon receiving such forms, they shall be signed by the Secretary, Department of Transportation, Washington, D.C., and shall be posted and maintained by him for sixty consecutive days thereafter, in conspicuous places, including bulletin boards and all other places where notices to employees in the Office of the Secretary, Department of Transportation, Washington, D.C., and the Third Coast Guard District, U.S. Coast Guard, New York, New York are customarily posted. The Secretary, Department of Transportation, shall take reasonable steps to insure that such Notices are not altered, defaced, or covered by other material. (c) Notify the Regional Director, Region II, in writing, within 30 days from the date of this Order, as to what steps have been taken to comply with this Order. SALVATORE J. ARRIGO Administrative Law Judge Dated: January 16, 1984 Washington, D.C. APPENDIX NOTICE TO ALL EMPLOYEES PURSUANT TO A DECISION AND ORDER OF THE FEDERAL LABOR RELATIONS AUTHORITY AND IN ORDER TO EFFECTUATE THE POLICIES OF CHAPTER 71 OF TITLE 5 OF THE UNITED STATES CODE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS WE HEREBY NOTIFY OUR EMPLOYEES THAT: WE WILL NOT unilaterally change established conditions of employment at the Third Coast Guard District of the U.S. Coast Guard concerning the manner of distributing paychecks and savings bonds of employees represented by Local 2747, American Federation of Government Employees, AFL-CIO, the employees exclusive collective bargaining representative. 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 Statute. WE WILL withdraw and rescind Order 2730.3 concerning the manner of distribution of paychecks and savings bonds as applicable to employees of the Third Coast Guard District represented by Local 2747, American Federation of Government Employees, AFL-CIO, and reinstate the procedures and policies in effect prior to its issuance. WE WILL notify Local 2747, American Federation of Government Employees, AFL-CIO, the exclusive representative of the employees of the Third Coast Guard District, of any intended change in the manner of distributing bargaining unit employees' paychecks and savings bonds and provide such exclusive representative an opportunity to request negotiations with the Third Coast Guard District, or other appropriate management representative, and bargain in good faith on any such proposed change in an established condition of employment. . . . (Activity or Agency) 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 its provisions, they may communicate directly with the Regional Director, Region II, Federal Labor Relations Authority, whose address is: 26 Federal Plaza, Room 24-102, New York, New York 10278, and whose telephone number is: (212) 264-4934. --------------- FOOTNOTES$ --------------- /1/ Section 7106(b)(1) provides in pertinent part: Sec. 7106. Management rights . . . . (b) Nothing in this section shall preclude any agency and any labor organization from negotiating-- (1) at the election of the agency, . . . on the technology, methods, and means of performing work(.) /2/ The record does not indicate, nor does the General Counsel argue, that the parties' collective bargaining agreement included provisions constituting an exercise by the Respondent or the Third Coast Guard District of the option under section 7106(b)(1) of the Statute to negotiate with regard to pay practices. /3/ In view of the decision herein, it is unnecessary to address the Respondent's assertion that a compelling need exists under section 7117 of the Statute for the Agency regulation involved herein. /4/ On February 9, 1982 the Union filed a negotiability appeal in this matter to the Authority. DOT responded to the appeal on March 17, contending that a compelling need within the meaning of section 7117 of the Statute existed for the Order, supplying arguments in support thereof. On April 28 the Union elected, pursuant to section 2424.5 of the Rules and Regulations, to suspend action on the negotiability appeal and proceed with the unfair labor practice charge filed on January 27, 1982, supra. /5/ At the opening of the hearing on January 11, 1983 Respondent moved to dismiss the Complaint based upon the above contention. I reserved ruling on the motion. After issuance of Defense Logistics Center, (Cameron Station, Virginia), et al., 12 FLRA No. 86 on July 29, 1983, infra, I ordered the hearing be reopened to take evidence on the "compelling need" issue. In view of my disposition of this matter, the motion is denied. /6/ Section 7117(a) of the Statute provides: "(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, extend to matters which are the subject of any 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. /7/ There are 266 designated agents in the DOT and the distribution of paychecks is but one of their numerous functions. While the testimony is not clear on this point, it appears that the Third District has one or two designated agents involved in the distribution of paychecks. The record does not disclose what portion of this saving was attributable to changing the paycheck distribution system at the Third District. /8/ Respondent does not contend that paycheck and bond distribution is not a condition of employment.