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The decision of the Authority follows:
21 FLRA No. 4 NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES, LOCAL R14-87 Union and KANSAS ARMY NATIONAL GUARD Agency Case No. 0-NG-968 DECISION AND ORDER ON NEGOTIABILITY ISSUES I. Statement of the Case This case is before the Authority because of a negotiability appeal filed under section 7105(a) (2) (E) of the Federal Service Labor-Management Relations Statute (the Statute) and concerns the negotiability of two provisions of a negotiated agreement disapproved by the Agency head under section 7114(c) of the Statute. The first provision, while important, can be disposed of by application of previous Authority precedent whereas the second provision raises significant issues for which the Authority adopts a new analytical framework. II. Background The Authority's analysis of the second provision at issue in this case (cited in its entirety below), presents an opportunity for fundamental reevaluation of previous Authority precedent. This reexamination is necessitated by the holding of the U.S. Circuit Court of Appeal; for the District of Columbia in American Federation of Government Employees, AFL-CIO, Local 2782 v. Federal Labor Relations Authority, 702 F.2d 1183 (D.C. Cir. 1983), reversing and remanding American Federation of Government Employees, AFL-CIO, Local 2782 and Department of Commerce, Bureau of the Census, Washington, D.C., 7 FLRA 91 (1981). In deciding that case the Court rejected the so-called "direct interference" test previously applied by the Authority in evaluating the negotiability of matters described as "appropriate arrangements" under section 7106 (b) (3) of the statute. While that Court had previously sustained the application of that test as to "procedures" under section 7106(b) (2) /1/ it had not had an opportunity to address its applicability to appropriate arrangements." In rejecting "direct interference" as an analytical device in section 7106(b) (3) cases, the Court enunciated a standard which requires an analysis of whether "excessive interference" with a right reserved to management would result from implementation of the proposal. The Court stated that: Undoubtedly, some arrangements may be inappropriate because they impinge on management prerogatives to an excessive degree ... Beyond that, we decline to speculate as to what the word "appropriate" may lawfully be interpreted to exclude. Its precise content is for the Authority to determine in the first instance, based on its knowledgeable estimation of the competing practical needs of federal managers and union representatives. 702 F.2d at 1188 Since the date of that decision the Authority has applied the D.C. Circuit rule and rationale only to cases remanded to it by that Court. /2/ We have not as a general matter of law, embraced that reasoning in deciding pending negotiability cases. Today we adopt that test as the Authority's standard. additionally, we articulate factors to be considered in arriving at a determination of whether or not a given proposal is appropriate as an arrangement and therefore negotiable, or inappropriate as an arrangement because it excessively interferes with management prerogatives, and is therefore nonnegotiable. III. Provision 1 Section 3. When a change of work schedule or hours of work resulting from other than mission requirements is necessary, the employee agrees to notify the union and the employees at least 7 days in advance. Such notices will be given by publishing announcements in sufficient time so as to give adequate notice to all employees. With regard to employees who are absent from duty on leave, notice will be mailed to them by their supervisor at their listed emergency notification address. If an employee is not given notice of any such change and reports to duty based on the superseded schedule, he will be retained in a "work status" and assigned appropriate work for that day. A. Positions of the Parties The Agency asserts that Provision 1 is nonnegotiable because it conflicts with 5 CFR 610.121, a Government-wide regulation. The Union argues that the provision is merely a renewal of a previously approved provision and that it does not conflict with the Government wide regulation. B. Analysis Provision 1 would require the Agency to provide the Union and unit employees seven (7), days advance notice whenever a change in employee work schedules is necessary. In this respect, the provision at issue has substantially the same effect as Provision 1 in American Federation of Government Employees, AFL-CIO, Local 2484 and U.S. Army Garrison, Fort Detrick, Maryland, 17 FLRA No. 106 (1985), appeal docketed sub nom. American Federation of Government Employees, AFL-CIO, Local 2484 v. Federal Labor Relations Authority, Two. 85-1405 (D.C. Cir. July 3, 1985). The provision at issue in that case required the agency to provide two (2) weeks notice to employees of any change in work schedules. The Authority determined that the provision was outside the duty to bargain under section 7117 (a) (1) of the Statute because it was inconsistent with an applicable Government-wide regulation, 5 CFR 610.121 (b) (2). In particular, the Authority found that the proposal, by requiring at least two weeks notice to employees of a change in work schedules, would prevent the agency from complying with the mandate of the Government-wide regulation that management change such schedules as soon as it becomes aware of the need to do so. Just as in Fort Detrick, the National Guard civilian technicians covered by this provision, are covered by 5 CFR 610.121. (See 5 CFR 610.101, 550,101.) C. Conclusion For the reasons set forth in the Fort Detrick decision, Provision 1 is outside the duty to bargain under section 7117(a) (1) of the Statute because it is inconsistent with an applicable Government-wide regulation. In this connection, the Union's argument that the provision is a renewal of previous contract language is not relevant. IV. Provision 2 Section 7. a. When the specific position, in an activity, from which an employee has been demoted through reduction in force (RIF) becomes vacant and is being filled, the demoted employee will be considered for repromotion noncompetitively to the position subject to paragraph b., below. b. A basis for nonpromotion will be an unsatisfactory performance rating which is documented in the employee's OPF, or that his work either before or after demotion by reduction in force was not at an acceptable level of competence. c. If more than one employee meets the criteria contained in a and b above the employee who possessed the highest retention standing at the time he/she was changed to a lower grade will be promoted. d. All employees previously demoted without personal cause, misconduct or in efficiency, will receive special consideration for repromotion. (Only the underlined portion of the provision is indispute.) By its terms and as interpreted by both the Union and the Agency, which interpretation is adopted by the Authority, Provision 2 would provide that when management decides to fill a vacant position from which employees have been demoted in a reduction-in-force (RIF) and there are two or more such demoted employees who are candidates for the position, management would select the candidate who has the highest retention standing. National Guard RIF regulations provide for employees to be released from their tenure group based upon their relative retention standing. Thus, the employee who has the highest relative retention standing among competing employees would be released, if he or she is reached for release, after employees with lower standing. The effect of the provision, therefore, would be to require the repromotion of the employee with the highest relative retention standing before employees with lower standing. /3/ The parties apparently agree that the provision would not require the selection of an employee who is not qualified or does not possess the compatible military grade for the position. Since the position for which the employee with the highest retention standing would be selected is the same position from which he or she had been demoted through no fault of the employee, that person would obviously be qualified and possess the requisite military grade for the vacancy. This distinguishes Provision 2 from Union Proposals 3 and 6 in Association of Civilian Technicians, Montana Air Chapter and Department of the Air Force, Montana Air National Guard, Headquarters 120th Fighter Interceptor Group (ADTAC), 20 FLRA No. 85 (1985). In that case, the Authority held that Union Proposals 3 and 6 were contrary to law, 32 U.S.C. 709(b), because they required management to place civilian technicians in positions without regard to compatibility of military grade. A. Positions of the Parties, The Agency contends that the provision, by mandating the selection of the repromotion eligible employee with the highest retention standing, violates its right under section 7106(a) (2) (C) to fill positions by making selections from any appropriate source. The Union argues to the contrary, citing the decision of the U.S. Court of Appeals for the District of Columbia Circuit in AFGE, Local 2782, that the provision constitutes an "appropriate arrangement" within the meaning of section 7106(b) (3) of the Statute, for employees adversely affected by the exercise of management's rights. /4/ The Agency's response to that argument is that only proposal; which "indirectly affect" management rights are negotiable as appropriate arrangements under section 7106(b) (3) of the Statute. B. Analysis 1. Adoption of the Excessive Interference Test The issue before the Authority in determining the negotiability of the second provision is whether the locally agreed-upon arrangement for employees demoted without fault interferes with the exercise of management's rights under section 7106(a) so as to be rendered inappropriate for negotiation under section 7106(b) (3) of the Statute. As stated at the outset of this decision, the Authority finds the considerations addressed by the District of Columbia Circuit in AFGE, Local 2782 to be applicable here and the Authority will apply the excessive interference test enunciated therein both in this decision and in future decisions analyzing appropriate arrangement issues. /5/ By so doing, we reject the Agency' s argument that only proposals which indirectly affect management rights are negotiable. In its decision in that case the Court reasoned: (t)hat an arrangement proposed under paragraph (b) (3) of 7186 is not if so factor invalidated by conflicting with paragraph (a) (2) (C) (a "management right") is evident from the prologue of subsection (b), which states that" (n)othing in this section shall preclude any agency and any labor organization from negotiating" over the specified items. The prologue of subsection (a) makes the same point, declaring that all management prerogatives it contains (including those in paragraph (a) (2) (C)) are "(s)ubject to subsection (b) of this section." ... The conclusion is inavoidable that what was intended was an exception to the otherwise governing management prerogative requirements of subsection (a) ... The portions of legislative history most precisely directed to the point at issue here support the interpretation we live adopted ... Undoubtedly, some arrangements may be inappropriate because they impinge upon management prerogatives to an excessive degree. .. (T)he Authority is free to determine whether the union' s proposal, albeit not invalid simply because it contravenes ... management rights, is nonetheless inappropriate. 782 F.2d 1155-1188. (Emphasis in original.) In this and future cases where the Authority addresses a management allegation that a union proposal of appropriate arrangements is nonnegotiable because it conflicts with management rights described in section 7106(a) or (b) (1), the Authority will consider whether such an arrangement is appropriate for negotiation within the meaning of section 7106(a) (3) or, whether it is inappropriate because it excessively interferes with the exercise of management's rights. In making that determination, the Authority will first examine the record in each case to ascertain as a threshold question whether a proposal is in fact intended to be an arrangement for employees adversely affected by management's exercise of its rights. In order to address this threshold question, the union should identify the management right or rights claimed to produce the alleged adverse effects, the effects or foreseeable effects on employees which flow from the exercise of those rights, and how, those effects are adverse. In other words, a union must articulate how employees will be detrimentally affected by management's actions and how the matter proposed for bargaining is intended to address or compensate for the actual or anticipated adverse effects of the exercise of the management right or rights. Once the Authority has concluded that a proposal is in fact intended as an arrangement, the Authority will then determine whether the arrangement is appropriate or whether it is inappropriate because it excessively interferes. This will be accomplished, as suggested by the D.C. Circuit, by weighing the competing practical needs of employees and managers. In balancing these needs, the Authority will consider such factors as: (1) What is the nature and extent of the impact experienced by the adversely affected employees, that is, what conditions of employment are affected and to what degree? (2) To what extent are the circumstances giving rise to the adverse affects within an employee's control? For example, compare AFGE, Local 2782 and Bureau of the Census, Decision and Order on Remand, 14 FLRA 801 (1984), (proposal applies to employees demoted through no fault of their own) with National Labor Relations Board Union and National Labor Relations Board, Office of the General Counsel, 18 FLRA No. 42 (1985) (proposal concerned employees management proposed to demote or terminate due to demonstrated inability or unwillingness to perform acceptably). (3) What is the nature and extent of the impact on management's ability to deliberate and act pursuant to its statutory rights, that is, what management right is affected; is more than one right affected; what is the precise limitation imposed by the proposed arrangement on management's exercise of its reserved discretion or to what extent is managerial judgment preserved? See, for example, Association of Civilian Technicians, Montana Air Chapter and Department of the Air Force, Montana Air National Guard, Headquarters 120th Fighter Interceptor Group (ADTAC), 20 FLRA No. 85 (1985) (Proposal 1) (proposal which would have precluded management, regardless of circumstances, from obtaining additional personnel with skills unavailable in the unit held to excessively interfere with management rights). (4) Is the negative impact on management's rights disproportionate to the benefits to be derived from the proposed arrangement? See, for example, Montana Air National Guard, supra, (Proposal 1) (harm to agency's mission balanced against uncertain benefits of the proposal to employees). (5) What is the effect of the proposal on effective and efficient government operations, that is, what are the benefits or burdens involved? These considerations are not intended to constitute an all-inclusive list. As frequently noted in the opinions of various judicial and quasi-judicial entities, an adjudicative body must consider the totality of facts and circumstances in each case before it. Additional considerations will be applied where relevant and appropriate. Inasmuch as a ritualistic or mechanistic approach is neither suggested, nor contemplated, the Authority will expect the parties to cases of this nature filed in the future to address any and all relevant considerations as specifically as possible. 2. The Test As Applied to The Provision at Issue The provision relates solely to employees who have been demoted through reduction-in-force. Such actions have extremely significant negative impact on affected employees. Demotion, even though no fault of one's own, causes eventual loss of grade, pay, and attendant benefits. Demotion through RIF frequently results in the employee being placed in a position which requires skills, knowledges, and abilities less than those required in his or her previous position with concomitant lack of job satisfaction. Next to removal from the Federal service, it is difficult to imagine any action with more severe impact than a demotion. Such actions with respect to Federal employees generally are considered of a magnitude sufficient to trigger the limited subject matter jurisdiction of the Merit Systems protection Board. See 5 CFR 351.901. By its very definition a reduction-in-force cannot legally be based on matters personal to the employee and hence within his control. See, generally, Technician Personnel Manual (TPM) 351. Compare as to Federal employees generally, 5 CFR 351.2a1(a) (2); See especially, Losure v. Interstate Commerce Commission, 2 MSPB 361 (1981). The management right affected by the provision (to fill positions by making selections from any appropriate source) is an important one. However, it must be remembered that the qualifications of the employee to be placed in the position under the provision are unquestioned. Indeed, the employee must have previously performed the duties of the position acceptably in order for the provision to apply. No other management right is affected by the provision, and it is significant that the provision in no way attempts to intrude on management's underlying decision concerning whether or not to fill a vacancy. Nor can it be construed to require management to take any affirmative act concerning the organization, management, or assignment of its workforce in order to carry out its mission and determine how work shall be performed. Reductions-in-force for National Guard technicians under the National Guard regulations, like reductions-in-force for Federal employees generally, are not premised solely on seniority as that concept has emerged in private sector labor relations. To the contrary, reductions-in-force of National Guard technicians are governed by an intricate regulatory scheme which recognizes and quantifies the performance of employee; in both their civilian and military capacities as well as their length of service. /6/ Thus, in requiring that "the employee who possessed the highest retention standing ... be promoted," the provision on its face will further, rather than impede, the purposes of effective and efficient government operation. Accordingly, to require selection of the employee with the highest retention standing is to do nothing more than to require selection of the person who but for the depth of the RIF would have been, and would still be, encumbering the position. any "burden" on management in these circumstances is insubstantial in comparison to the detriment originally suffered, and benefit later obtained, by the affected employee(s). C. Conclusion The Authority finds, therefore, that Provision 2 would not excessively interfere with management's rights under section 7106(a) (2) (C) and that the provision constitutes and appropriate arrangement for employees adversely affected by the exercise of management's rights within the meaning of section 7106(b) (3) of the Statute. See Decision and Order on Remand in AFGE, Local 2782 and Bureau of the Census, 14 FLRA Bal (1984), affirmed in Decision and Order on Motion for Reconsideration (July 11, 1985). V. Order Accordingly, pursuant to section 2424.10 of the Authority's Rules and Regulations, IT IS ORDERED that the Union's petition for review as to Provision 1 be, and it hereby is, dismissed. IT IS FURTHER ORDERED that the Agency shall rescind its disapproval of Provision 2, which was bargained on and agreed to by the parties at the local level. /7/ Issued, Washington, D.C., February 7, 1986 (s)--- Jerry L. Calhoun, Chairman (s)--- Henry B. Frazier III, Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- /1/ Department of Defense v. Federal Labor Relations Authority, 659 F.2d 1140, 1159 (D.C. Cir. 1981), cert. denied sub nom. AFGE v. FLRA, 455 U.S. 945, 102 S. Ct. 1443 (1982). /2/ Association of Civilian Technicians, Montana Air Chapter and Department of the Air Force, Montana Air National Guard, Headquarters 120th Fighter Interceptor Group (ADTAC), 20 FLRA No. 85 (1985); National Labor Relations Board Union and National Labor Relations Board, Office of the General Counsel, 18 FLRA Milo. 42 (1985); and American Federation of Government Employees, AFL-CIO, Local 2782 and Department of Commerce, Bureau of the Census, Washington, D.C., Decision and Order on Remand, 11 FLRA Bill (1984). /3/ For a detailed analysis of retention standing for National Guard employees, see Association of Civilian Technicians, Pennsylvania State Council and the Adjutant General, Department of Military Affairs, Commonwealth of Pennsylvania, 3 FLRA 50 (1980); American Federation of Government Employees, AFL-CIO, Local 2953 and National Guard Bureau, Office of the Adjutant General, Nebraska, 7 FLRA 87 (1981), affirmed sub nom. American Federation of Government Employees, AFL-CIO, Local 2953 v. Federal Labor Relation; Authority, 73d F.2d 1534 (D.C. Cir. 1984). /4/ In its Decision and Order on Remand in AFGE, Local 2782 and Bureau of the Census, 14 FLRA 801 (19841, the Authority held that, even though the proposal at issue constituted an appropriate arrangement under section 7106(b) (3), it nevertheless was outside the duty to bargain because it was inconsistent with certain provisions of the Federal Personnel Manual which were applicable Government-wide regulations. The Authority reaffirmed that conclusion in its Decision and Order on Motion for Reconsideration (July 11, 1985). However, those Provisions of the Federal Personnel Manual are not applicable to National Guard civilian technicians and, thus, are not at issue in the instant case. /5/ In adopting the D.C. Circuit's rationale, the Authority notes the analysis applied in United States Air Force, Headquarters, Warner Robins Air Force Logistics Command, Robins Air Force Base, Georgia v. Federal Labor Relations Authority, 727 F.2d 1582 (11th Cir. 1984), reversing American Federation of Government Employees, AFL-CIO, Local 987 and Headquarters, Warner Robins Air Force Logistics Command, Robins Air Force Base, Georgia, 8 FLRA 667 (1982), wherein the 11th Circuit cited with approval the District of Columbia Circuit test enunciated in AFGE, Local 2782, but held that the proposal at issue in that case did not constitute an appropriate arrangement under section 7106(b) (3) because it "substantively infringed" on the exercise of management's rights. /6/ National Guard Bureau regulation, Technician Personnel Manual (TPM) 351. See also Association of Civilian Technicians, Pennsylvania State Council and Pennsylvania Army and Air National Guard, 14 FLRA 3B (1984) (Proposal 21, and the cases cited in note 3, supra. /7/ In deciding that Provision 2 is within the duty to bargain, the Authority makes no judgment as to the merits of the provision.