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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 violations of the Circular were inconsistent with the provisions of the Statute pertaining to negotiated grievance procedures. As relevant here, the Authority concluded that the court "specifically rejected the argument . . . that OMB is not authorized to promulgate a Government-wide regulation that limits the scope of grievance procedures by precluding grievances concerning an agency's compliance with that same Government-wide regulation." Whidbey Island, 52 FLRA at 720-21.

In denying the union's exception in Whidbey Island, the Authority effectively rejected the premise of the Union's constitutional argument in this case, which is that the Circular is inconsistent with the Statute. Specifically, because section 7117(a)(1) of the Statute recognizes the authority of an Executive branch agency such as OMB to promulgate Government-wide regulations and to limit the method of enforcement of those regulations, it cannot be said that such limitations are contrary to the Statute. For this reason, the determination that the provisions of the Circular bar grievances under section 7121 of the Statute does not violate the constitutional principle of the separation of powers as argued by the Union. Consistent with Whidbey Island, therefore, the award in this case is not deficient under section 7122(a)(1) of the Statute.

V. Decision

The Union's exception is denied.

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

1. The Union did not request permission to file its response to the Agency's opposition, as required by section 2429.26 of the Authority's Regulations. Consequently, we do not consider that document. See, e.g., U.S. Department of the Treasury, Internal Revenue Service, Memphis Service Center and National Treasury Employees Union, 34 FLRA 355 (1990).

2. The provisions of the Circular at issue in this case are contained in the Supplemental Handbook to the Circular, rather than in the Circular itself. As noted in American Federation of Government Employees, Local 1513 and U.S. Department of the Navy, Naval Air Station, Whidbey Island, Washington, 52 FLRA 717, 722 n.4 (1996) (Whidbey Island), effective March 27, 1996, OMB revised the Supplemental Handbook. The events giving rise to the Union's grievance took place, and the grievance was filed, prior to the effective date of the revised Supplemental Handbook. Although the Arbitrator's award issued after this effective date, the Arbitrator relied on the provisions of the Supplemental Handbook that were in effect prior to the effective date of the revisions. The Union's exception is also based on the provisions in effect prior to the revision of the Supplemental Handbook. Because the revisions were not in effect at the time of the events giving rise to the grievance in this case, we do not apply them in this case and, instead, apply the Supplemental Handbook as it existed prior to the revisions and as it was relied on by the Arbitrator.

3. In IRS, the D.C. Circuit considered a proposal requiring that the parties' negotiated grievance procedure constitute the appeals process for all disputes concerning implementation of the Circular. The court held that the proposal was outside the duty to bargain under section 7117(a)(1) of the Statute because it was inconsistent with the provisions of the Circular, a Government-wide regulation that precluded arbitration of such disputes. In Fort Carson, the Authority adopted the position of the court in IRS.