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The decision of the Authority follows:
26 FLRA No. 7 NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES, LOCAL R14-62 Union and U.S. ARMY DUGWAY PROVING GROUND, DUGWAY, UTAH Agency Case No. 0-NG-727 0-NG-912 18 FLRA No. 38 CONSOLIDATED DECISION AND ORDER ON REMAND I. Statement of the Case The Authority's previous decision in these cases held that two identical proposals conflicted with an agency regulation for which a compelling need existed. 18 FLRA No. 38 (1985). While that decision was pending before the U.S. Court of Appeals for the Tenth Circuit, we reconsidered and overruled the previous decision in Lexington-Blue Grass Army Depot, Lexington, Kentucky and American Federation of Government Employees, AFL-CIO, Local 894, 24 FLRA No. 6 (1986). We therefore requested and the Court granted remand of the decision. The proposals involved, which were presented in response to the Agency's announcement of its intention to partially close its facilities during the Christmas -- New Year holiday period, stated as follows: Affected employees (shall) be placed on administrative leave without charge to annual leave for the period of partial closure. For the reasons which follow we find that the proposals are negotiable. Accordingly, we reverse the Authority's previous decision. II. Analysis and Conclusion on Remand A. Relationship of Monetary Savings to Compelling Need As we stated in Lexington-Blue Grass Army Depot, 24 FLRA No. 6, a demonstration of monetary savings alone is not sufficient to establish that a regulation is essential, as distinguished from helpful or desirable, to the accomplishment of the mission or the execution of the functions of an agency in a manner which is consistent with the requirements of an efficient and effective Government. We do not believe that effectiveness and efficiency are to be measured solely in monetary terms. Financial considerations, of course, can be relevant to a determination on whether an agency regulation satisfies the compelling need criterion set forth in section 2424.11(a) of the Authority's regulations. See National Treasury Employees Union, Chapter 207 and FDIC, Washington, D.C., 21 FLRA No. 36 (1986) (finding a compelling need under section 2424.11(a) for agency regulations establishing a uniform system for determining employee salaries). However, in determining whether an agency's regulation is essential, as distinguished from helpful or desirable to effective and efficient agency operations, other considerations are also pertinent. Compare, for example, American Federation of Government Employees, AFL-CIO and Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604, 608 (1980), aff'd on other grounds, 659 F.2d 1140 (D.C. Cir. 1981), cert. denied, 455 U.S. 945 (1982) ("Only where an agency makes a substantial demonstration that an increase in costs is significant and unavoidable and is not offset by compensating benefits can an otherwise negotiable proposal be found to violate the agency's right to determine its budget under section 7106(a) of the Statute."). The language and legislative history of the Statute supports our conclusion that a broad balancing of factors is appropriate in evaluating compelling need assertions such as the Agency makes here. In enacting the Statute, Congress found that collective bargaining in the Federal sector is in the public interest because, among other things, it facilitates and improves employees' performance and the efficient accomplishment of the operations of the Government. See section 7101(a) of the Statute. Moreover, with respect to compelling need, it is clear from the legislative history of the Statute that Congress intended a regulation to bar negotiations only on narrow grounds. In this regard, Congressman Ford, addressing this section of the Statute, stated: The compromise position in section 7117 was accepted with the understanding that the . . . compelling need test will be permitted to be raised in only a limited number of cases. /1/ Our conclusion is also consistent with a recent holding of the U.S. Court of Appeals for the District of Columbia Circuit, affirming a decision by the General Counsel in the context of an unfair labor practice case that an informal settlement agreement effectuated the purposes of the Statute. The Court stated: (E)conomic hardship is a fact of life in employment, for the public sector as well as the private. Such monetary considerations often necessitate substantial changes. If an employer was released from its duty to bargain whenever it had suffered economic hardship, the employer's duty to bargain would practically be non-existent in a large proportion of cases. American Federation of Government Employees v. FLRA, 785 F.2d 333 at 338 (D.C. Cir. 1986). B. Application of This Principle to These Cases In these cases the Agency indicated that because of high absenteeism during the holiday period continuation of full operations would be inefficient. In the face of such inefficiency, it decided to curtail operations to reduce expenditures during the relatively unproductive period. The Union proposed that employees who would otherwise be compelled to take leave be granted administrative leave during the partial closure. The Agency contended that the proposals conflicted with agency regulations which prohibited it from granting administrative leave where suspension of operations was anticipated sufficiently in advance to permit scheduling of annual leave. Its sole assertion in support of its argument that its regulation met the Authority's compelling need criteria was that the regulation was essential to the monetary savings afforded by the partial closure. Those savings were, in turn, essential to enabling it to perform its mission in an effective and efficient manner. The Agency has relied on monetary savings alone to support its contention that a compelling need exists for its regulations. As explained above and in the circumstances involved this is not enough. /2/ We find that the Agency has failed to provide an adequate basis for finding that a compelling need exists for its regulations. See also, Federal Employees Metal Trade Council, AFL-CIO and Department of the Navy, Mare Island Naval Shipyard, Vallejo, California, 25 FLRA No. 31 (1987). As noted in our earlier decision in these cases the proposal would not prevent the Agency from deciding to shut down its facilities. Consequently, it does not interfere with the Agency's right to lay off employees under section 7106(a)(1). For the foregoing reasons, as stated in Lexington-Blue Grass Army Depot, 24 FLRA No. 6, the proposals presented in these two cases are within the duty to bargain. III. Order The Agency shall upon request (or as otherwise agreed to by the parties) bargain concerning these proposals. /3/ Issued, Washington, D.C., March 6, 1987. /s/ Jerry L. Calhoun, Chairman /s/ Henry B. Frazier III, Member /s/ Jean McKee, Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- (1) 124 Cong. Rec. 29,199 (1978) (statement of Rep. Ford), reprinted in Sub-comm. on Postal Poersonnel and Modernization of the House Comm. on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978, at 956 (Comm. print No. 96-7). (2) As noted in Lexington-Blue Grass Army Depot, 24 FLRA No. 6, an agency may be compelled to furlough employees, i.e., place them in nonpay status in certain circumstances. An example of this could be where the agency lacks appropriated funds. (3) In finding these proposals to be within the duty to bargain, we make no judgment as to their merits.