Association of Civilian Technicians, Puerto Rico Army Chapter (Union) and United States, Department of Defense, National Guard Bureau, Puerto Rico National Guard, San Juan, Puerto Rico (Agency)
[ v58 p318 ]
58 FLRA No. 75
ASSOCIATION OF CIVILIAN TECHNICIANS
PUERTO RICO ARMY CHAPTER
DEPARTMENT OF DEFENSE
NATIONAL GUARD BUREAU
PUERTO RICO NATIONAL GUARD
SAN JUAN, PUERTO RICO
(56 FLRA 493 (2000))
(56 FLRA 807 (2000))
DECISION AND ORDER ON REMAND
January 24, 2003
Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members [n1]
I. Statement of the Case
This case is before the Authority pursuant to a remand from the United States Court of Appeals for the District of Columbia Circuit in ACT, Puerto Rico Army Chapter v. FLRA, 269 F.3d 1112 (D.C. Cir. 2001) (Puerto Rico Army Chapter). The court vacated the Authority's decision in ACT, Puerto Rico Army Chapter, 56 FLRA 493 (2000) (Puerto Rico Nat'l Guard), reconsideration denied, 56 FLRA 807, in which the Authority had upheld the agency head disapproval of a collective bargaining agreement provision as contrary to the Travel Expenses Act. [n2] The court remanded the case to the Authority for consideration of the other arguments that had been raised regarding the Agency's disapproval of the provision.
For the reasons set forth below, we find that the provision is contrary to law under § 7117(a)(1) of the Federal Service Labor-Management Relations Statute (Statute) as it requires an expenditure of appropriated funds that is not authorized by law. In addition, we find that the provision conflicts with 5 U.S.C. § 5536. Accordingly, we dismiss the petition for review.
II. The Provision
Once leave has be[en] approved and the employer has a compelling need to cancel the previously approved leave, the employer agrees not to subject the employee to a loss of funds expended in the planning of the leave (i.e., hotel reservations, airline tickets, etc). The employee will demonstrate the unavoida[bility] of the loss of funds.
A. Authority's Decision in Puerto Rico Nat'l Guard
In Puerto Rico Nat'l Guard, the Authority stated that the provision required "the use of appropriated funds to reimburse employees for travel expenses," and that such use of appropriated funds "must be authorized by statute." Puerto Rico Nat'l Guard, 56 FLRA at 497. In this connection, the Authority found that the "payment of employee travel expenses is governed by provisions of the Travel Expenses Act and its implementing Federal Travel Regulations." Id. (citations omitted). Relying on the Travel Expenses Act, the Authority found that the provision was contrary to law because, "given the nature of the reimbursement at issue in this case, . . . no authority exists for agencies to use appropriated funds to reimburse employees for purely personal expenses involved in the planning of leave." Id. The Union subsequently filed a motion for reconsideration of the Authority's decision, which, as noted, was denied by the Authority. 56 FLRA 807 (2000).
B. D.C. Circuit's Decision
The court rejected the Authority's reasoning that the Travel Expenses Act governed the legality of the disputed provision. The court noted that the "provision does not speak in terms of travel expenses, personal, official, or otherwise." 269 F.3d at 1116. Rather, the court stated that the provision "requires the agency to pay employees' out-of-pocket losses (whether or not travel-related) when the agency -- acting for its convenience, and in its interest -- exercises its management right under § 7106(a)(2)(B) to cancel leave and assign work instead." Id. In this respect, the court found that the Travel Expenses Act, "which establishes `entitled' reimbursement or allowance `when traveling on official business,'" was not relevant to the disputed provision, "which provides compensation for unavoidable expenses resulting from canceled leave." Id. [ v58 p319 ]
The court further found that the Authority had not addressed the Union's argument that the Statute itself authorizes the expenditures contemplated by the provision and not the Travel Expenses Act. In this regard, the court found that the Authority's reliance on Comptroller General decisions was "flawed" since these decisions did not address the issue raised by the Union concerning the Statute's authorization of the expenditures under the provision. Id. at 1117. The court also noted that the decisions of the Comptroller General should have been "read narrowly" as applying only to the respective agencies involved in those decisions. Id. In addition, noting that subsequent appropriations acts would render the Comptroller General decisions "obsolete," the court found that the Authority should have addressed "the specific facts before it -- a collective bargaining agreement provision, with the DOD, in the year 2000." Id.
On remand, the court instructed the Authority to "consider whether the expenditures required by the disputed provision are `authorized by the collective bargaining law,' 5 U.S.C. § 7101, et seq., or are specifically authorized as an `appropriate arrangement for employees adversely affected by the exercise of [agency management] authority' in canceling leave and `assign[ing] work,' 5 U.S.C. § 7106(a)(2)(B), (b)(3), as argued by the Union." Id. at 1118. The court found that these questions were not properly before the court because the Authority had based its decision solely on the Travel Expenses Act. Similarly, the court noted that "whether the Union failed to, or even needed to cite[,] a general agency appropriations bill in the FLRA proceedings is also not before us." Id.
Following the court's remand, we directed the parties to file supplemental submissions addressing the Union's argument that the expenditures required by the provision are authorized. The parties were directed to provide specific authorities as to whether the Statute or other laws or regulations provide authorization for the expenditures at issue. Both parties filed supplemental submissions.
IV. Positions of the Parties
The Union maintains that the Statute is the "specific authorization for the agency to expend funds generally appropriated for agency expenditures." Union's Supplemental Statement at 1 n.1. Citing Nat'l Treasury Employees Union, 26 FLRA 497 (1987) (BATF) and Nat'l Federation of Federal Employees, 24 FLRA 430 (1986) (GSA), the Union contends that the Statute "creates new agency obligations which general agency appropriations may be used to meet." Id. at 1. According to the Union, "[a] statute that authorizes expenditure of appropriated funds authorizes any expenditure `reasonably related' to the stated purpose of the law." Id. (citing 42 Comp. Gen. 226 (1962)). The Union maintains that an "expenditure necessary to comply with [a collective bargaining] agreement establishing negotiable conditions of employment is reasonably related to the purpose of the [Statute], and therefore to agency obligations for which general agency appropriations may be spent." Id.
The Union asserts that the Authority "should presume that an agency has appropriated funds for general agency operations, as the Authority did in BATF and GSA, unless the agency expressly claims the opposite and makes an adequate demonstration overcoming the presumption." Id. at 4. The Union notes that the Agency has never denied that it receives an appropriation to cover expenditures for general agency operations. In this respect, the Union cites the Department of Defense Appropriations Acts for fiscal years 1999 through 2002, without pointing to any specific part of any of these laws. The Union contends it should not be required to cite any specific portion of the Appropriations Acts as to do so would place an "onerous burden on the union." Id.
The Union maintains that under the Statute, the Authority, not the Comptroller General, is responsible for determining whether collective bargaining provisions are inconsistent with law, and notes that the Comptroller General defers to determinations rendered in the grievance and arbitration procedure. Id. at 2.
The Union also maintains that a provision that requires the agency to expend funds can be rendered nonnegotiable on this ground only if the provision affects management's right to determine its budget under § 7106(a)(1) and there is no applicable exception under § 7106(b). Although the Union acknowledges that the Agency has not asserted that the provision conflicts with management's right to determine its budget, the Union nevertheless maintains that any such claim should be denied. Moreover, the Union contends that even if the provision does affect management's right to determine its budget, the provision would still be negotiable as an appropriate arrangement under § 7106(b)(3) "for employees adversely affected by management's exercise of its right to cancel leave and assign work." Id. The Union maintains that reimbursement of "unavoidable out-of-pocket losses incurred in reliance on the agency's grant of leave, [which is] subsequently revoked, is a narrowly tailored remedy for harm inflicted on blameless employees." Id. [ v58 p320 ]
The Agency maintains that the provision is inconsistent with federal law and government-wide rules and regulations. The Agency contends that federal appropriations are governed by federal law, notably, 31 U.S.C. § 1301(a), which provides that "[a]ppropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law." According to the Agency, § 1301(a) prohibits officials from charging authorized expenditures to the wrong appropriation and unauthorized expenditures to any appropriation. Citing United States v. MacCollom, 426 U.S. 317, 321 (1976), the Agency contends that "there must be positive legal authority in order to spend federal funds." Agency's Supplemental Statement at 4. In other words, according to the Agency, expenditures must be specifically authorized. Id. at 8.
Furthermore, the Agency asserts that this requirement for statutory authorization is reflected in the Congressional enactment of statutes authorizing agencies to pay for expenses that have been regarded as personal expenses. Specifically, in an analogous situation to the instant case, the Agency notes that in 10 U.S.C. § 1053a, enacted in 2000, Congress authorized DOD to reimburse members of active duty military for certain personal expenses incurred as a result of the cancellation of previously approved leave in connection with the member's participation in a contingency operation if the cancellation occurs within 48 hours. [n3] The Agency maintains that these statutes demonstrate that the Union's remedy lies with Congress, and not the Authority, in seeking authorization for reimbursement for personal expenses covered by the provision.
The Agency also asserts that Comptroller General decisions support the conclusion that the provision is contrary to law. The Agency notes that although Comptroller General decisions are not binding on the Authority, the Authority has recognized their precedential value in making determinations concerning agency expenditures. In this regard, the Agency emphasizes that the Comptroller General has consistently held that "purely personal expenses such as forfeited hotel room deposits, dependents' travel costs, and increased costs for alternate flight reservations, do not become a government obligation upon cancellation of approved annual leave and may not be reimbursed." Agency's Supplemental Submission at 6 (citing Matter of Earl Barlow, B-241249 (Feb. 15, 1991)). The Agency asserts that in other negotiability appeals, the Authority has consistently followed Comptroller General precedent relating to this prohibition to reimburse employees for personal expenses. Id. at 7-8 (citing United Power Trades Org., 48 FLRA 291 (1993) (UPTO)) (proposal requiring agency to pay for job related permits not negotiable), aff'd mem., No. 93-70827 (9th Cir. May 23, 1995); and American Federation of Government Employees, Council 214, AFL-CIO, 30 FLRA 1025, 1032-33 (1988) (proposal requiring agency to cover the cost of personal protective equipment not negotiable).
The Agency maintains that the Statute does not provide any independent basis for the expenditure of public funds. In this regard, the Agency maintains that the Statute requires agencies to bargain "within the scope of their existing authority" under law and regulation. Id. at 12. The Agency maintains that "[g]iven the narrow grant of authority provided by the Statute, it is inconceivable that Congress intended for the Statute to provide authority for any and all expenditures not otherwise authorized." Id. In this respect, the Agency contends that under Comptroller General and Authority precedent, "a personal expense is not a necessary expense because the benefit from its payment flows directly to the employee and not to the [G]overnment." Id.
The Agency also maintains that the provision is contrary to 5 U.S.C. § 5536, which prohibits bargaining unit employees whose pay is fixed by statute or regulation from receiving additional pay or allowance that is not specifically authorized by law. Finally, the Agency maintains that the provision is not an appropriate arrangement under § 7106(b)(3) of the Statute. The Agency notes that its response to the appropriate arrangement argument made by the Union is made only "out of an abundance of caution," as the Agency did not make any claim that the provision interfered with management's rights under the Statute. Id. at 16.
V. Analysis and Conclusions
For the following reasons, we find that the provision requires an expenditure of appropriated funds that is not authorized by law, and, therefore, the provision is contrary to law.
The Statute requires unions and agencies to "discuss and negotiate on any condition of employment." 5 U.S.C. § 7114(b)(2). The Statute also provides that bargaining must take place within the limitations imposed by other federal laws. In particular, § 7117(a)(1) provides that the duty to bargain in good [ v58 p321 ] faith does not extend to matters that are "inconsistent with any Federal law." The Authority has summarized these principles as establishing that "matters concerning conditions of employment are subject to collective bargaining when they are within the discretion of an agency and are not otherwise inconsistent with law." Patent Office Professional Ass'n, 53 FLRA 625, 648 (1997); Nat'l Treasury Employees Union, 21 FLRA 6, 10 (1986) (NTEU), aff'd sub nom. Dep't of Treasury, United States Customs Service v. FLRA, 836 F.2d 1381 (D.C. Cir. 1988). Thus, the Statute requires an agency to bargain over matters over which it otherwise has discretion under law as long as those matters are not otherwise contrary to law.
In this case, the provision requires the disbursement of funds in order to reimburse employees for losses incurred as a result of cancelled leave. In determining the legality of an agency's disbursement of funds, it is well established that any disbursement of appropriated funds must be authorized by statute. The Constitution specifically provides that "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law. . . ." U.S. Const. Art. I, § 9, cl. 7. See also OPM v. Richmond, 496 U.S. 414, 416 (1990) ("payments of money from the Federal Treasury are limited to those authorized by statute"); Nat'l Ass'n of Reg'l Councils v. Costle, 564 F.2d 583, 586 (D.C. Cir. 1977) ("[g]overnment agencies may only enter into obligations to pay money if they have been granted such authority by Congress"); Downs v. Office of Personnel Management, 69 F.3d 1141, 1143 (Fed. Cir. 1995) ("[t]he United States Constitution limits payments of monies from the Federal Treasury to those authorized by statute").
We reject the Union's contention that the Statute provides the necessary authorization for the Agency's expenditure of funds to reimburse employees for losses incurred as a result of cancelled leave. There is no express or implied authorization in the Statute or its legislative history for agencies to expend funds in the manner required by the provision in this case.
In this regard, we note that in Bureau of Alcohol, Tobacco and Firearms v. FLRA, 464 U.S. 89 (1983) (BATF v. FLRA), the Supreme Court rejected the Authority's interpretation that the Statute's grant of official time under § 7131(a) provided authorization for employee negotiators to a per diem allowance and reimbursement for travel expenses incurred in connection with collective bargaining. The Court found that the Statute's provision for collective bargaining did not provide authorization for the reimbursement of travel expenses related to such bargaining. See id. at 107. As the Court stated, "there is no reference in the [S]tatute or the legislative history to travel expenses." Id. at 104.
Similarly, consistent with the Court's reasoning, the Statute's provision for collective bargaining does not provide statutory authorization for the expenditures at issue here. Cf. INS, Los Angeles District, Los Angeles, Cal., 52 FLRA 103, 106 (1996) (Authority denied General Counsel's request for reimbursement of parking expenses incurred as a result of agency's unfair labor practice; Authority adopted D.C. Circuit's holding in Dep't of the Army, United States Army Commissary, Fort Benjamin Harrison, Indianapolis, et al. v. FLRA, 56 F.3d 273 (D.C. Cir. 1995) that the Statute does not waive sovereign immunity to an award of money damages not related to an unlawful reduction in pay, allowances or differentials).
In the same vein, the Union's reliance on BATF and GSA for the proposition that the Agency has discretion to use appropriated funds to reimburse employees for losses incurred as a result of cancellation of leave is misplaced. As the Authority noted in 56 FLRA at 808 n.5 (citations omitted):
BATF and GSA concerned substantially similar proposals that required the agency to allow the union to use a government telephone for labor-management activities . . . . The Authority ruled the subject matter negotiable when the Agency failed to cite to `any statutory or regulatory provision which would prohibit it from exercising through negotiations its discretion to determine that telephone installation and service for union offices relating to labor-management relations activities is sufficiently within the interest of the United States so as to constitute official business.'
Thus, in BATF and GSA, the Authority held that the agency could through negotiations determine that union use of government telephones constituted "official business." [n4] Conversely, in this case, the Union has acknowledged that the expenditures required by the provision, such as nonrefundable hotel reservations, airline tickets, and tickets for local theater, sports events and banquets, are personal expenses and "do not concern employees `traveling on official business.'" Union's [ v58 p322 ] Motion for Reconsideration at 2. Also, in this respect, in finding that the Travel Expenses Act governing travel expenses related to official business does not apply, the D.C. Circuit confirmed that the provision "certainly does not address official business." ACT, Puerto Rico Army Chapter, 269 F.3d at 1116. Accordingly, BATF and GSA are inapposite and do not establish the governing standard in this case since this provision does not involve the Agency's exercise of discretion in determining whether these expenses concern "official business."
The Authority has consistently looked beyond its enabling Statute for statutory authorization for the expenditure of money by agencies. In this respect, the Authority has held that when a proposal or provision requires payment for items beyond the limits of the particular statute authorizing payment, the proposal is inconsistent with federal law and therefore outside the duty to bargain or the provision is contrary to law under § 7117(a) of the Statute. See, e.g., UPTO, 48 FLRA at 292 (proposal requiring the payment of fees for obtaining job-related licenses was nonnegotiable in the absence of specific statutory authorization), aff'd mem., No.93-70827 (9th Cir. May 23, 1995); Dep't of the Navy, United States Marine Corps, 34 FLRA 635, 638 (1990) (provision for safety vests to be used for commuting to work was inconsistent with laws regarding purchase of safety equipment); cf. United States Dep't of Defense, Education Activity, Arlington, VA, 56 FLRA 119 (2000) (DOD) (Authority set aside arbitration award implementing a provision that required an expenditure of federal money that was not authorized by law).
The Union argues that the Agency's appropriations for general operating expenses provide it with the discretion to make the expenditures authorized by the provision. In this case, the determination of whether the Agency has any discretion to use its appropriated funds for operations to reimburse employees for the expenses covered under the provision in this case is primarily an issue of appropriations law. In applying the principles governing the use of appropriated funds, we reject the Union's argument that the Agency has discretion to use appropriations for general operating expenses to implement the contract provision in this case.
Generally, the disbursement of appropriated funds is governed by 31 U.S.C. § 1301(a), which provides that "[a]ppropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law." One of the categories or "objects" in the 2000 DOD Appropriations Act for which funds were appropriated was what are generally referred to as operations and maintenance activities by the Army National Guard, the appropriations entitlement referenced by the Union as being proper to cover the payments provided for by the contract provision at issue here. [n5] See P.L. 106-79, 113 Stat. 1212, 1216-17 (October 25, 1999). As is generally the case, several specific categories or types of Army National Guard activity to be funded are identified, as well as more general activities. Appropriations statutes may also contain express limitations on the amounts of funds to be expended on listed operations and maintenance activities, as noted, for example in the Act's discussion of operations and maintenance funds for the Navy and Marine Corps. Id. at 1215. Additionally, appropriations provided by an appropriations statute may also be limited by other statutory limitation, such as the congressional limitation on the expenditure of funds by DOD components to prohibit the payment of employees otherwise on paid duty time while engaged in official time activities to lobby Congress. See, e.g., Ass'n of Civilian Technicians, Old Hickory Chapter, 55 FLRA 811, 812-13 (1999) (Member Wasserman dissenting) (proposal granting official time for lobbying activities involving pending legislation held inconsistent with § 8012 of the 1998 Department of Defense Appropriations Act).
Thus, the first possible consideration regarding the permissible expenditure of appropriated funds to be considered, although certainly not the only possible consideration, is based upon the language of the relevant appropriations statute. We find nothing in the express language of this appropriations statute or its legislative history that indicates that Congress intended these funds to be expended for the purpose of reimbursing employees for personal expense losses (such as nonrefundable hotel reservations, airline tickets, and tickets for local theater, sports events, and banquets) incurred in connection with the Agency's cancellation of previously approved leave. See National Defense Authorization Act for Fiscal Year 2000, 113 Stat. 512; Conference House Rept. 106-371 (October 13, 1999). [n6] [ v58 p 323 ]
In addition, although not central to our analysis, we note that in applying and interpreting 31 U.S.C. § 1301(a), the Comptroller General has recognized that § 1301(a) does not require that every item of expenditure be specified in an appropriation act. See United States General Accounting Office, Office of the General Counsel, 1 Principles of Federal Appropriations Law (PFAL) 4-15 (2nd ed. 1991). The Comptroller General has noted that to require an explicit or specific appropriation for every expense would be clearly impractical given the relative levels of generality that Congress uses to provide funding for the various agency programs and activities. B-270446, February 11, 1997. In this regard, the Comptroller General has applied the "necessary expense doctrine" in determining whether expenditures not specifically or explicitly authorized in an appropriation act are nonetheless lawful. Under this doctrine, "expenditures must bear a logical relationship to the appropriation sought to be charged[, that is,] it must make a direct contribution to carrying out either a specific appropriation or an authorized agency function for which more general appropriations are available." 1 PFAL at 4-16 (citing 63 Comp. Gen. 422, 427-28 (1984)); B-230304 (1988). Otherwise stated, under the doctrine, the expenditure must be reasonably necessary to carrying out an authorized function. 71 Comp. Gen. 527, 528 (1992).
Even assuming, without deciding, that the necessary expense doctrine applies, the provision would not satisfy application of that doctrine. The Union has not demonstrated that, and it is not apparent to us how, the Agency's reimbursement of such personal expenses for planned activities while on leave, including hotel reservations, airline tickets, and tickets for local theater, sports events and banquets, would make any contribution to the Agency's authorized purpose in maintaining the Agency's operations that necessitated the cancellation of leave. For instance, the reimbursement of the entertainment expenses specifically mentioned by the Union for sporting events is neither reasonably necessary nor relevant to maintaining the Agency's operations that necessitated the cancellation of leave. The fact that employees will incur personal losses as a result of the cancellation of leave does not change the essentially personal nature of these expenses nor does this fact overcome the lack of any material connection to the Agency's operations. See 68 Comp. Gen. 502, 505 (1989) (personal expenses require specific statutory authorization unless expense primarily benefits government). Indeed, if reimbursement of these personal items satisfied the doctrine, it is difficult to imagine circumstances under which an agency could not be required to reimburse any other personal expenses under the doctrine.
In addition, we find that Congress' enactment of 10 U.S.C. § 1053a, which provides statutory authorization for reimbursement of travel and related expenses incurred by members of the armed forces as a result of cancellation of previously approved leave under certain circumstances, is particularly instructive here. [n7] The enactment of § 1053a strongly suggests that specific statutory authorization is required in order for individuals (military personnel, in this instance) to receive reimbursement for personal losses incurred as a result of an agency's cancellation of leave. Similar