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37:1423(115)CA - - Treasury, IRS, Washington, DC and IRS, Cincinnati, Ohio District Office and NTEU and NTEU Chapter 27 - - 1990 FLRAdec CA - - v37 p1423

[ v37 p1423 ]
The decision of the Authority follows:

37 FLRA No. 115















(Charging Party)



October 31, 1990

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This unfair labor practice case is before the Authority on exceptions filed by the General Counsel and the Union to the attached decision of the Administrative Law Judge. The Respondent filed an opposition to the exceptions.

The complaint alleged that the Respondent violated section 7116(a)(1) and (5) of the Federal Service Labor- Management Relations Statute (the Statute) by failing to provide the Union with notice of and an opportunity to bargain over the reassignments of Revenue Agents to Revenue Agent Coordinator positions in the Cincinnati District Office in January 1987. The Judge concluded that the Respondent did not violate the Statute.

Pursuant to section 2423.29 of the Authority's Rules and Regulations and section 7118 of the Statute, we have reviewed the rulings of the Judge made at the hearing and find that no prejudicial error was committed. The rulings

are affirmed. After consideration of the Judge's Decision, the exceptions, the opposition, and the entire record, we adopt the Judge's findings and conclusions only to the extent consistent with our decision.

II. Facts

The Union is the exclusive representative of a nationwide, consolidated bargaining unit which includes the employees of the Cincinnati District Office. The Union and the Respondent are parties to a nationwide collective bargaining agreement ("NORD II") which was in effect from May 27, 1985 to January 27, 1989.

As relevant here, Articles 13 and 15 of NORD II provided, in pertinent part:

Article 13

Promotions/Other Competitive Actions

Section 1

A. The purpose of this article is to ensure that all competitive promotions to bargaining unit positions and certain other placement actions as set forth in section 2.B. below are made on a merit basis by means of systematic and equitable procedures so that employees are given the opportunity to develop and advance to their full potential.

B. The purpose of this article is also to provide that Internal Revenue Service employees receive first consideration for all actions set forth in section 2.B. below.

C. To that end, the Employer and the Union agree to the following procedures.

Section 2

A. The terms of this article will not apply to the filling of bargaining unit vacancies by lateral reassignment except as set forth in subsection B. below.

. . . .

B. The terms of this article will apply to all other placement actions within the bargaining unit. The following are examples of such actions:

. . . .

6. filling a position by lateral reassignment if a vacancy announcement has been posted, unless

(a) unforeseen circumstances of an extraordinary nature become known subsequent to the posting of vacancy announcement; or

(b) a roster has been established.

. . . .

Article 15


Section 1

A. Reassignments will not be used in lieu of discipline. When an involuntary reassignment is necessary due to a staffing imbalance, the employee at the affected post of duty with the least IRS length of service who meets the position requirements will be reassigned.

. . . .

Section 3

The Employer agrees to give affected employees fifteen (15) working days written notification of reassignments to a different post of duty.

General Counsel's Exh. No. 2. The pertinent provisions of Articles 13 and 15 of NORD II were identical to provisions in the parties' previous agreement, NORD I. NORD II also contained the following provision:

Either party at the national level may reopen up to four (4) articles of this Agreement. Reopening shall be effected by the service of written proposals by one party upon the other at any time during November, 1986. Negotiations shall commence on all articles so opened by either party at a mutually agreed time[.]

Judge's Decision at 3.

In November 1986, the Union notified the Respondent that it intended to reopen, among other provisions, Articles 13 and 15 of NORD II. The Union also notified the Respondent that, as it had reopened those provisions, it was no longer bound by the waiver, contained in those provisions, of its right to bargain over the impact and implementation of lateral reassignments. The parties bargained, and reached impasse, over the Union's proposals concerning the reopened provisions, and the impasse was submitted to an interest arbitrator.

In December 1986, the Respondent announced eight vacant Revenue Agent Coordinator positions at the Cincinnati District Office. One position was filled through competitive procedures. In January and February 1987, the Respondent filled a number of remaining vacant positions through lateral reassignments of unit employees. Although the Respondent notified the Union of its intention to use lateral reassignments, the Respondent refused the Union's requests to bargain over the impact and implementation of the reassignments.

In March 1987, the interest arbitrator issued his decision resolving the parties' reopener impasse. As relevant here, the interest arbitrator directed the parties to adopt, for the remainder of the term of their agreement, Articles 13 and 15 as previously negotiated. The Union filed exceptions to the arbitrator's decision with the Authority. National Treasury Employees Union and Internal Revenue Service, 30 FLRA 1097 (1988) (IRS).

III. Previous Authority Decisions

In Internal Revenue Service, Denver District, Colorado, 17 FLRA 192 (1985) (IRS, Denver), the Authority considered the provisions of NORD I which, as stated previously, were identical to those disputed provisions of Articles 13 and 15 of NORD II that are involved here. The Judge concluded that because the "IRS, through negotiations, in the NORD Agreement obtained the right to make unilateral reassignment of employees within a post of duty . . . ," the agency did not violate the Statute by refusing to bargain over its decision to laterally reassign certain employees. Id. at 204. The Authority adopted the Judge's finding that the Union "waived its right to bargain over the lateral reassignment of employees within a post of duty[.]" Id. at 192 n.2.

In IRS, the Authority resolved the Union's exceptions to the interest arbitrator's award resolving the parties' reopener impasse. The Authority rejected the Union's exception that the arbitrator's award was deficient because it constituted a waiver of the Union's bargaining rights. The Authority held:

The provisions imposed by the Arbitrator relate to reassignments of bargaining-unit employees and concern the conditions of employment of unit employees. The subject of the provisions constitutes a mandatory subject of bargaining for both parties. The Union has misconstrued the provisions as constituting a waiver of its statutory rights to bargain over the implementation of future employee reassignments.

During the term of the collective bargaining agreements, both parties are obligated to act in accordance with the agreements. Thus, the rights and the obligations of the parties in reassignments of employees are a result of collective bargaining and the primacy of the collective bargaining agreements. In our view, the Arbitrator did not improperly resolve an impasse over the Union's waiver of its statutory rights. Consequently, the Union's exceptions provide no basis for finding the award deficient.

30 FLRA at 1099.

IV. Judge's Decision

The parties stipulated that "the NORD I provisions which were found by the Authority to constitute the waiver" in IRS, Denver were "carried over to NORD II." Judge's Decision at 3.(*) The General Counsel conceded, in this regard, that the Respondent did not violate the Statute if the waiver was "still in effect at the time of the Cincinnati [D]istrict's refusal to bargain." Judge's Decision at 4. The General Counsel contended, however, that "reopening was tantamount to termination." Id. at 5.

The Judge rejected the General Counsel's position and concluded that there was "no evidence that the parties intended for a reopening, by itself, to effect a premature termination of the reopened articles." Id. The Judge noted that mid-term bargaining, or impasse resolution, could result in mid-term changes in the provisions, including retroactive changes. The Judge found, however, that the parties did not contemplate "immediate relief from the existing contractual provisions . . . ." Id. (emphasis in original).

The Judge rejected the Union's argument that the Supreme Court's decision in NLRB v. Lion Oil Co., 352 U.S. 282 (1957) (Lion Oil) required a conclusion that the Respondent violated the Statute. According to the Judge, the Court in Lion Oil determined only that the term "expiration date" in section 8(d)(4) of the National Labor Relations Act (NLRA), 29 U.S.C. § 158(d)(4), encompassed any date on which a collective bargaining agreement was subject to modification. The Judge stated that "[n]either the Court's conclusion nor its analysis . . . has much to do with the contract-interpretation question of whether the reopening of a particular provision suspends the operation of that provision." Judge's Decision at 6.

Accordingly, the Judge recommended that the unfair labor practice complaint in this case be dismissed.

V. The Parties' Positions

A. The General Counsel's Exceptions

Relying on the Authority's decision in Federal Aviation Administration, 23 FLRA 209 (1986) (FAA), the General Counsel asserts that although the Union waived, in NORD II, its right to bargain over lateral reassignments, that waiver constituted a permissive subject of bargaining which terminated after the Union reopened NORD II. According to the General Counsel, the reopener provision in NORD II did not constitute sufficient evidence that the parties intended that waiver to continue after reopening.

The General Counsel also argues that public policy warrants a finding that the waiver expired when the agreement was reopened. The General Counsel notes, in this regard, that in Lion Oil, the Supreme Court found that it is "in the public interest to interpret the NLRA to achieve an outcome which promotes the resolution of disputes through the collective bargaining process, specifically reopener negotiations[.]" General Counsel's Exceptions at 15.

B. The Union's Exceptions

The Union asserts that "waivers of permissive subjects of bargaining contained in a term agreement . . . may be terminated at the expiration of an agreement." Union's Exceptions at 3. The Union asserts further that the "legal rights and responsibilities of the parties are identical in term negotiations following the expiration of a contract and mid-term negotiations concerning reopener of certain contract provisions." Id. at 4-5. According to the Union, Lion Oil stands for the proposition that the term "expiration date" applies not only to the date an entire agreement expires but also to any agreed-upon mid-term reopener date.

C. The Respondent's Opposition

The Respondent contends that there is no basis in NORD II on which to conclude that the provisions reopened by the Union were, thereby, terminated. Accordingly, the Respondent contends that the waiver of the Union's bargaining rights was in effect at the time of the disputed lateral reassignments. The Respondent maintains, in this regard, that Lion Oil concerns only the right to strike under the NLRA, not the right to terminate a permissive subject of bargaining during reopener negotiations.

In addition, the Respondent raises an issue which was not considered by the Judge. The Respondent asserts that the disputed lateral reassignments were consistent with a separate, mid-term agreement between the parties. According to the Respondent, this mid-term agreement was not affected by the reopening of NORD II.

VI. Analysis and Conclusions

We conclude that the Respondent did not violate section 7116(a)(1) and (5) of the Statute in this case. We reach this conclusion, however, for reasons which differ from those of the Judge. In particular, we find, consistent with the Authority's decision in IRS, that the disputed, reopened provisions did not result from bargaining over permissive subjects and did not constitute waivers of the Union's bargaining rights.

The disputed provisions relate to, and constitute procedures governing, employee reassignments. It is clear, in this regard, that in negotiating over the provisions, the parties agreed that in return for giving unit employees first consideration for certain positions, the Respondent would be free to effect lateral reassignments within a post of duty without regard to agreed-upon procedures applicable to other reassignments. See IRS, Denver, 17 FLRA at 205-06. That is, consistent with its contractual authority, the Respondent would be free to effect these lateral reassignments unilaterally. Id. at 206. The fact that the parties agreed that, for certain actions, the Respondent could act unilaterally does not support a conclusion that the provision constituted a permissive subject of bargaining, however. Instead, the subject matter of the provisions, employee reassignments, was and remained a mandatory subject of bargaining.

We note, in this regard, that, in the absence of a collective bargaining agreement, a union is entitled to bargain over the substance or the impact and implementation of all conditions of employment. By agreeing to a contract term involving such a matter, a union can be said to have waived its right to bargain over separate exercises of management's rights or separate changes in conditions of employment. When the subject matter of the provision constitutes a mandatory subject of bargaining, however, the parties' agreement to contract terms, including terms which enable an employer to act unilaterally with respect to certain aspects of that mandatory subject, does not convert the mandatory subject to a permissive one. Stated otherwise, the Union's agreement not to bind the Respondent to contract procedures when the Respondent effected certain reassignments and to, in effect, allow the Respondent to determine the procedures by which those certain reassignments would be affected, did not change the subject matter of the agreement from mandatory to permissive.

Consistent with IRS, therefore, we conclude that the disputed, reopened provisions resulted from bargaining over mandatory, not permissive, subjects of bargaining. Compare FAA, 23 FLRA at 211, 217 (portion of agreement specifying particular union officials to receive notices of, and bargain over, proposed changes in conditions of employment constituted permissive subjects of bargaining); Federal Deposit Insurance Corporation, Headquarters, 18 FLRA 768, 774 (1985) (proposal limiting union's right to insist on maintenance of the status quo during proceedings before the Federal Service Impasses Panel constituted permissive subject of bargaining); Federal Aviation Administration, Northwest Mountain Region, Seattle, Washington and Federal Aviation Administration, Washington, D.C., 14 FLRA 644, 647-49 (1984) (FAA, Northwest) (portion of agreement providing that parties would consult, not bargain, over certain changes in conditions of employment constituted a permissive subject of bargaining).

As noted by the Authority in the above-cited cases, a party may, but is not required to, bargain over permissive subjects of bargaining. See, for example, FAA, Northwest, 14 FLRA at 648 (Authority defined "permissive" subjects of bargaining as "those matters which are excepted from the obligation to negotiate by section 7106(b)(1) of the Statute and . . . those matters which are outside the required scope of bargaining under the Statute") (citation omitted). Further, if the parties reach agreement on a permissive subject, "either party may elect not to be bound thereby upon the expiration of that agreement." Id. (citation omitted). As explained by the Authority, "either party may reassert its right not to negotiate with regard to the 'permissive' subject . . . once the applicable agreement has expired." Id.

On the other hand, once agreement is reached on mandatory subjects of bargaining, the agreements are binding on the parties for the terms of the agreements, unless, of course, the parties agree otherwise. Moreover, such provisions continue, to the maximum extent possible, following the expiration of an agreement, in the absence of an express agreement to the contrary or the modification of those provisions in a manner consistent with the Statute. See, for example, id. at 647.

The parties do not argue here, and there is no other basis on which to conclude, that portions of NORD II relating to mandatory subjects of bargaining terminated upon reopening. In fact, the General Counsel and the Union do not assert that matters relating to employee reassignments are permissive subjects of bargaining. See also IRS, 30 FLRA at 1098 ("The Union acknowledges that the assignment of employees is a mandatory subject of bargaining."). Instead, it appears that the General Counsel's and the Union's assertions that the disputed provisions resulted from bargaining over permissive subjects, and constituted waivers of the Union's statutory rights to bargain, stem from the Authority's statement in IRS, Denver.

The Authority's reference to the provisions as constituting waivers may have been misleading to the parties. However, consistent with the Authority's decision in IRS, we find that the disputed provisions did not result from bargaining over permissive subjects. Instead, the provisions resulted from bargaining over mandatory subjects and, as a "result of collective bargaining and the primacy of collective bargaining agreements[,]" parties are obligated to act in accordance with those agreements. IRS, 30 FLRA at 1099. To the extent that IRS, Denver is inconsistent with our decision here, it will no longer be followed.

As the disputed, reopened provisions did not result from bargaining over permissive subjects, the reliance of the General Counsel and the Union on such cases as FAA and FAA, Northwest is misplaced. Moreover, as the provisions were not permissive subjects of bargaining, we need not, and do not, address the effect of reopener provisions on the viability of provisions that resulted from bargaining over permissive subjects.

VII. Order

The complaint is dismissed.

(If blank, the decision does not have footnotes.)

*/ The parties stipulated also that the reassignments effected by the Respondent in January and February 1987, had more than a de minimis impact on affected employees. General Counsel's Post-Hearing Brief at 7.