52:1348(125)AR - - AFGE Local 1770 and Army Headquarters, XVIII Airborne Corps and Fort Bragg, Fort Bragg, NC - - 1997 FLRAdec AR - - v52 p1348

[ v52 p1348 ]
The decision of the Authority follows:

52 FLRA No. 125





LOCAL 1770










April 29, 1997


Before the Authority: Phyllis N. Segal, Chair; and Donald S. Wasserman, Member.

I. Statement of the Case

This matter is before the Authority on an exception to an award of Arbitrator Nancy Connolly Fibish filed by the Union under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Agency filed an opposition to the Union's exception and the Union filed a response to the Agency's opposition.(1)

The Arbitrator found that the Union's grievance challenging the Agency's decision to contract out certain services was not substantively arbitrable and denied the grievance.

For the following reasons, we conclude that the Union has failed to establish that the award is deficient under section 7122(a) of the Statute. Accordingly, we deny the Union's exception.

II. Background and Arbitrator's Award

After conducting a preliminary study in accordance with Office of Management and Budget (OMB) Circular A-76 (the Circular), the Agency decided to contract out its language instructor function.(2) The Union appealed this decision to the Agency's Administrative Appeals Board, claiming that the Agency had not complied with the requirements of the Circular in reaching its decision to contract out. The Union's administrative appeal was denied and the Union thereupon filed the instant grievance, contending again that the decision to contract out did not comply with the requirements of the Circular. The Agency denied the grievance on the ground that the Circular precludes arbitration of Appeal Board decisions. The grievance was submitted to arbitration and the parties agreed that the "sole issue" before the Arbitrator was "the arbitrability of the grievance." Award at 2.

As relevant here, the Arbitrator found that "the [U]nion's grievance, to the extent it alleges a violation of the requirements of OMB Circular A-76, is nonarbitrable." Id. at 8. In making this finding, the Arbitrator relied on the court's decision in U.S. Department of the Treasury, Internal Revenue Service v. FLRA, 996 F.2d 1246 (D.C. Cir. 1993) (IRS) and the Authority's decision in American Federation of Government Employees, Local 1345 and U.S. Department of the Army Headquarters, Fort Carson and Headquarters, 4th Infantry Division, Fort Carson, Colorado, 48 FLRA 168, 206 (1993) (Fort Carson).(3) Specifically, the Arbitrator concluded that "any award enforcing the requirements of the Circular would be deficient because [it would be] inconsistent with the Circular." Award at 8. In so doing, the Arbitrator rejected the Union's claim that IRS amounted to "'an abuse of the separations of power under the U.S. Constitution[,]'" stating that nothing in IRS suggests such a "judicial restructuring" of the Statute. Id.

III. Exception

1. Union's Contentions

The Union contends that the Arbitrator erred by failing to properly analyze its argument that the holdings in IRS and Fort Carson amount to a violation of the Constitutional principle of the separation of powers.

According to the Union, Congress provided in the Statute for arbitration of claimed violations of Government-wide regulations such as the Circular. The Union claims that the Director of OMB is "not empowered to promulgate, alter, change and/or act in any manner inconsistent with any Statute or any provision thereof without specific grant of authority by the legislative branch of the U.S. Government, the Congress." Exception at 6. Consequently, the Union concludes that "[t]he provisions of [the Circular] which purport to prohibit . . . arbitration over its application, implementation and/or arbitration of issues and/or decisions arising under [the Circular] are 'unconstitutional'" and that IRS and Fort Carson were wrongly decided. Id. at 7.

2. Agency's Opposition

The Agency asserts that the Union's exception "centers on OMB's authority for issuing" the Circular. Opposition at 4. Quoting from the Authority's decision in National Treasury Employees Union and U.S. Department of the Treasury, Internal Revenue Service, 42 FLRA 377, 397 (1991), the Agency contends that the Circular "'was issued pursuant to express statutory authorization from Congress.'" Opposition at 4. The Agency concludes that because "Congress authorized the promulgation of the Circular, the [U]nion's exception concerning its constitutionality is without merit" and "must be dismissed in its entirety." Id. at 5.

IV. Analysis

Because the Union's exception concerns a question of law, we review the exception de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)).

In Whidbey Island, 52 FLRA at 721-22, the Authority denied a union's exceptions to an arbitrator's award dismissing a grievance concerning an agency's decision to contract out certain of its functions. The arbitrator in that case held, based on IRS and Fort Carson, that the grievance was not substantively arbitrable. Based on the D.C. Circuit's rationale in IRS, the Authority rejected the union's exception that the provisions of the Circular precluding arbitration of claimed violat