National Treasury Employees Union (Union) and United States, Department of the Treasury, Internal Revenue Service, Wage and Investment Division, Washington, D.C. (Agency)

[ v60 p219 ]

60 FLRA No. 46

NATIONAL TREASURY
EMPLOYEES UNION
(Union)

and

UNITED STATES
DEPARTMENT OF THE TREASURY,
INTERNAL REVENUE SERVICE
WAGE AND INVESTMENT DIVISION
WASHINGTON, D.C.
(Agency)

0-NG-2764

_____

DECISION AND ORDER
ON NEGOTIABILITY ISSUES

September 3, 2004

_____

Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members

I.     Statement of the Case

      This case is before the Authority on a negotiability appeal filed by the Union under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute), and concerns the negotiability of two proposals. The Agency filed a statement of position to which the Union did not file a response. For the reasons which follow, we find that Proposal 1 is negotiable only at the election of the Agency and dismiss the petition with regards to Proposal 2 because it is not within the Agency's duty to bargain.

II.     Background

      The Agency has a Wage and Investment Division which contains seven Field Submission Processing Centers where employees process all individual tax returns. Statement of Position (SOP) at 4. Congress stated in the Internal Revenue Service Restructuring and Reform Act of 1998 that paperless filing should be the preferred method of filing federal tax returns and directed the Agency to establish a plan to meet the goal that at least 80% of returns should be filed electronically by 2007. Id. As a result of the Agency's implementation of a plan to increase electronic filing, paper returns have decreased and the Agency's processing needs have been reduced. Id. at 5. The Agency began a consolidation of its processing centers in anticipation of a continued increase in electronic filing. Id. As part of the consolidation, the Agency intends to conduct a reduction-in-force (RIF) in the Wage and Investment Division at its Memphis Submission Processing Center. Id. at 3, 4.

      The Agency has established a competitive area for RIF purposes as the Memphis Submission Processing Center within the Agency's Wage and Investment Division. Id. at 5.

III.     Proposal 1

The competitive area will be defined as any operating division within the local commuting area. The local commuting area is defined as the geographic area that usually constitutes one area for employment purposes. It includes any population center (or two or more neighboring ones) and the surrounding localities in which people live and can reasonably be expected to travel back and forth daily to their usual employment.

IV.     Positions of the Parties

A.     Agency

1.     Meaning of Proposal

      The Agency did not object to the Union's explanation of the meaning and operation of Proposal 1. The Agency explains that the Memphis commuting area contains other Agency organizations in addition to the Memphis Submission Processing Center. SOP at 5. Further, the Agency contends that Proposal 1 is intended to change the established competitive area from the Memphis Submission Processing Center to a "competitive area that would encompass all Agency organizations and employees located in the Memphis commuting area[,]" specifically the Small Business/Self Employed, Taxpayer Advocate, and Modernization and Information Technology Services. Id.

2.     Motion for Dismissal of Proposal 1

      The Agency submitted a Motion for Partial Dismissal requesting dismissal of the Union's Petition with regard to Proposal 1. Motion for Partial Dismissal (Motion) at 1. The Agency argues that it is currently engaged in negotiations over the impact and implementation of the RIF at the Memphis Submission Processing Center and that the proposals at issue in this petition were submitted in the Union's "first set of proposals." See id. According to the Agency, the Union submitted a "second set of proposals" and the Union changed Proposal 1 to state, "[t]he competitive area will be defined as any operating division within the MSC campus, including but not limited to MITS, SBSE, TAS, etc., excluding all non-unit employees." [n1]  See id. at 2. The [ v60 p220 ] Agency contends that Proposal 1 should not be considered by the Authority because the Union modified it by submitting the second set of proposals and thereby effectively withdrew Proposal 1 as it appears before the Authority. Id. To the contrary, the Agency states that when the Union representative was asked whether the Union intended to withdraw the negotiability petition with regard to Proposal 1, the Union representative declared that the Union did not intend to withdraw its petition with respect to Proposal 1. Id. at 2-3.

3.      The proposal is only negotiable at the election of the Agency.

      The Agency argues that Proposal 1 is not within its duty to bargain because it is meant to cover all employees, including supervisors, and the Agency does not have any mandatory obligation to bargain over supervisors' conditions of employment. SOP at 7 (citing AFGE, Local 32, 51 FLRA 491 (1995), aff'd AFGE, Local 32 v. FLRA, 110 F.3d 810 (D.C. Cir. 1997) (Local 32). The Agency contends that it notified the Union that the proposal was a permissive matter of bargaining and that the Agency would not negotiate over the proposal during the RIF negotiations. Id.

B.      Union

      The Union states that the Proposal would enlarge the competitive area to "enable impacted employees to exercise any seniority, performance and other preference rankings for the purposes of bumping and retreating." Petition at 4. The Union explains that the Agency has limited the competitive area for the RIF to the organizational area impacted by the RIF and that Proposal 1 is intended to enlarge the competitive area for the RIF to include the primary and two secondary locations within the Memphis commuting area. Record of Post-Petition Conference (Record) at 1; Petition at 4. The Union asserts that under the Agency's plan, a qualified employee with twenty-five years of service would not be able to bump "an employee assigned outside of the competitive area with one day of service." Petition at 4. According to the Union, all employees, regardless of bargaining unit status and including supervisors, would be affected by the Proposal. Record at 2. The Union does not make any argument that the proposal is within the duty to bargain and did not file a response to the Agency's SOP.

V.     Analysis and Conclusions

A.      Meaning of the Proposal

      We find that Proposal 1 is intended to expand the established competitive area to all of the Agency organizations within the Memphis commuting area. In addition, the proposal would include all employees, regardless of unit status, including supervisors.

B.     Agency's Motion for Partial Dismissal is denied.

      The Agency requested that the Authority dismiss the Union's petition with regard to Proposal 1 because the Union submitted two sets of proposals with different language for Proposal 1. The Agency does not offer any evidence that the second set of proposals was intended to replace the first and admits that the Union told an Agency representative that it did not intend to withdraw the petition with regard to Proposal 1. Because there is no evidence that the second set of proposals was meant to replace the first and due to the Agency's admission that the Union stated it did not intend to withdraw Proposal 1, we deny the Motion for Partial Dismissal requesting dismissal of Proposal 1 and consider both Proposal 1 and 2 as they appear before the Authority.

C.     Proposal 1 is negotiable only at the election of the Agency because it pertains to supervisors.

      Proposal 1 would create a competitive area that would include supervisors. As set forth above, the Union does not provide any arguments that this proposal is negotiable and does not respond to or oppose the Agency's arguments that the proposal is negotiable only at the election of the Agency because it directly determines the conditions of employment of supervisors. According to Authority Regulations, a union has the "burden of raising and supporting arguments that the proposal . . . is within the duty to bargain" and a "[f]ailure to respond to an argument or assertion raised by the other party will, where appropriate, be deemed a concession to such argument or assertion." 5 C.F.R. § 2424.32(a) and (c); AFGE, Local 1858, 56 FLRA 115, 1117 (2001). The Authority has held that a union's lack of response constituted a concession to an agency's arguments where the record was silent with respect to the union's position and the agency's argument was supported by Authority precedent. Id. (citing IFPTE, Local 96, 56 FLRA 1033, 1034-35 (2000)).

      The Agency's argument that Proposal 1 is negotiable only at the election of the Agency because it pertains to supervisors is supported by Authority and judicial precedent. Fraternal Order of Police, Lodge #1F, 57 FLRA 373, 380 (2001) (stating that an agency does not have a duty to bargain over proposals that directly implicate conditions of employment of supervisors) (citing Nat'l Air Traffic Controllers Assoc., Rochester Local, 56 FLRA 288, 291 (2000)). The D.C. Circuit Court has reasoned that requiring an agency to bargain over proposals that directly implicate the working conditions of supervisors would "violate the basic principle of labor law that a union represents employees who are members of its bargaining unit, and those employees only." See AFGE, Local 32, 110 F.3d at 812 (citing United States Dep't of the Navy, Naval Aviation Depot, Cherry Point, N.C. v. FLRA, 952 F.2d 1434, 1442 (D.C. Cir. 1992) (Cherry Point)). Therefore, an agency cannot [ v60 p221 ] be compelled to bargain over such a proposal. However, proposals pertaining to the working conditions of supervisors are permissive subjects of bargaining and an agency may choose to bargain over such proposals as long as the proposal was otherwise within the duty to bargain. Prof'l Airways Sys. Specialists, Dist. No. 6, PASS/NMEBA, 54 FLRA 1130, 1136 (1998) (citing AFGE, Local 3302, 52 FLRA 677, 682 (1996)).

      Further, proposals creating competitive areas that would include supervisors have been found specifically to determine the working conditions of supervisors. AFGE, Local 32, 110 F.3d at 815-16 (court explained that the Union's proposal, which would create fewer competitive areas "govern[ed] the competitive area not only for members of the [U]nion's bargaining unit, but also for supervisory personnel" and that such a proposal is outside the duty to bargain). See also NAGE, Local R4-45, 52 FLRA 354 (1996) (finding a proposal that would establish a competitive area for the purposes of a RIF was not within the duty to bargain because it would determine competitive areas for supervisors).

      Finally, the Authority has stated that any proposal that establishes competitive areas for supervisors and managers is a permissive subject of bargaining. United States Dep't of Def., Def. Logistics Agency, Def. Distribution Ctr., New Cumberland, Pa., 55 FLRA 1303, 1306 (2000) ("Authority decisions issued subsequent to Local 32 have established that: (1) competitive areas are permissive subjects of bargaining, notwithstanding the fact that they would include supervisors and managers, provided that they are otherwise consistent with law . . . .")

      In accordance with Authority and judicial precedent set forth above, Proposal 1 is only negotiable at the election of the Agency.

VI.     Proposal 2

The Employer has determined that the competitive area shall not be defined so as to have a disproportionate adverse impact upon employees on the basis of gender, race, religion, national origin, handicapping condition or marital status of those employees.

VII.     Positions of the Parties

A.     Agency

1.     Meaning of the Proposal

      The Agency argues that although it did not object to the Union's explanation of the proposal during the Post Petition Conference, it never agreed that the Union's meaning was consistent with the plain wording of the proposal. SOP at 8-9. The Agency contends that the Union's explanation of the proposal is inconsistent with the plain wording of the proposal. Id.

      According to the Agency, the Union stated during the Post Petition Conference that the proposal would not prohibit the Agency from conducting a RIF as long as the competitive area included the entire Memphis campus, even if the RIF had a disparate impact on protected classes of employees. Id. at 14 n.ii. The Agency argues that the language in the proposal does not excuse the Agency from its obligations under Title VII of the Civil Rights Act even if the competitive area is increased to include the entire Memphis campus. Id. at 9. The Agency interprets the proposal to be an absolute prohibition on establishing any competitive area that has a "disparate impact on protected classes of employees or on employees based on their marital status." Id.

      The Agency also asserts that the proposal applies to supervisors. Id. at 10.

2.     The Proposal affects management's right to layoff.

      The Agency also alleges that the proposal interferes with its management right to layoff employees under 5 U.S.C. § 7106(a)(2)(A). SOP at 11. The Agency contends that the proposal would prohibit it from conducting a RIF if the competitive area has an adverse impact on any protected class or on employees based on marital status or would cause delays in conducting a RIF while attempting to create a competitive area that would not have a disparate impact on protected classes of employees. Id. According to the Agency, many RIFs have a disparate impact on women and minorities because the "last employees hired are the first employees to be separated by a RIF[,]" and it is "women and minorities who came into the work force last, so it is they who will be the first to be separated." Id. The Agency states that proposals that prohibit an agency from acting are not within the duty to bargain. Id. (citing NAGE, Local R1-109, 53 FLRA 403 (1997); cf. NAGE, Local R1-203, 55 FLRA 1081 (1999) (proposal prohibiting management from contracting out its functions for one year after a RIF interfered with right to contract out and therefore was nonnegotiable)).

      The Agency argues that the proposal is intended to exceed the requirements of Title VII and interferes with management's right to layoff employees despite the Union's explanation that the proposal is meant to operate consistently with Title VII. SOP at 12. The Agency argues that Title VII permits an agency to adopt a facially neutral employment practice that has a disparate impact on a protected class if: "(1) the agency can establish that the employment practice is job related and consistent with business necessity; and (2) the employee fails to demonstrate that an alternative employment practices would serve the employer's purpose without having an adverse effect on the protected group of [ v60 p222 ] employees." See id. at 11 (citing 42 U.S.C. § 2000e-2(k)). The Agency contends that the Union's proposal does not take into account the appropriate Title VII analysis. Id. Finally, the Agency states that Title VII does not prohibit discrimination based on marital status. Id. at 12 (citing 42 U.S.C. § 2000e-2; Willett v. Emory & Henry College, 569 F.2d 212 (4th Cir. 1978); Wong v. Dep't of Health & Human Serv., EEOC No. 05931190 (May 19, 1994); Benson v. Dep't of the Army, EEOC No. 05910427 (May 16, 1991)).

3.     Proposal 2 is only negotiable at the election of the Agency because it pertains to supervisors.

      The Agency also argues that the proposal is not within the duty to bargain because, as with Proposal 1, Proposal 2 concerns the "working conditions" of supervisors. SOP at 11. The Agency asserts, therefore, that the proposal is permissively negotiable and that it informed the Union that it did not intend to negotiate over the proposal. Id.

B.     Union

      The Union explains that the competitive area, as defined by the Agency, has a significant number of minorities, women, employees with disabilities and employees over the age of forty. Petition at 6. The Union asserts that Proposal 2 is meant to remind the Agency of its moral and legal obligation "to refrain from taking personnel actions that will have an adverse disparate impact on protected clas[s]es of its workforce." Id. According to the Union, the proposal is intended to be consistent with Title VII of the Civil Rights Act and to redefine the competitive area as including the entire Memphis campus. Record at 2. The Union did not specify that the proposal was limited to bargaining unit employees. The Union does not make any argument that the proposal is within the duty to bargain and did not file a response to the Agency's SOP.

VIII.       Analysis and Conclusions

A.     Meaning of the Proposal

      We find that Proposal 2 is intended to require the Agency to define competitive areas in a manner that will not have a disproportionate impact on protected classes of employees.

      We note that the Union did not respond to the Agency's allegations that the proposal intends to exceed the requirements of Title VII or whether the proposal concerns supervisors. Whether the proposal incorporates the Title VII standards or something more and whether it concerns supervisors is not dispositive in this case. Based on the following analysis, we find it unnecessary to address the parties' dispute concerning the meaning of Proposal 2.

B.     Proposal 2 is not within the duty to bargain because it affects the right to layoff employees.

      The Agency argues that this proposal affects its right to layoff employees. The Union does not respond to the Agency's assertion or provide any arguments that this proposal does not affect the right to layoff employees or that the proposal constitutes a negotiable procedure under § 7106(b)(2) or an appropriate arrangement under § 7106(b)(3). As stated above, a union has the "burden of raising and supporting arguments that the proposal . . . is within the duty to bargain" and a "failure to respond to an argument or assertion raised by the other party will, where appropriate, be deemed a concession to such argument or assertion." 5 C.F.R. § 2424.32(a) and (c); AFGE, Local 1858, 56 FLRA at 1117. The Authority has held that a union's lack of response constituted a concession to an agency's arguments where the record was silent with respect to the union's position and the agency's argument was supported by Authority precedent. Id. (citing IFPTE, Local 96, 56 FLRA at 1034-35).

      According to Authority precedent, management's right to layoff employees includes the right to conduct a RIF and to exercise its discretion in determining which positions will be abolished and retained in a RIF. AFGE, Local 1827, 58 FLRA 344, 345 (2003) (citing AFGE, Local 2004, 56 FLRA 660, 661 (2000); NFFE, Council of Veterans Admin. Locals, 31 FLRA 360, 434-37 (1988); Fed. Union of Scientists & Eng'rs, 22 FLRA 731, 732-33 (1986)). Because the proposal affects management's right to layoff employees under § 7106(a)(2)(A) of the Statute, it is outside the duty to bargain. Int'l Ass'n of Machinists & Aerospace Workers, 59 FLRA 830, 831 (2004); Tidewater Va. Fed. Employees Metal Trades Council, 58 FLRA 561, 563 (2003) (citing NFFE, Local 1904, 57 FLRA 28, 29 (2001)).

      In accordance with Authority