CASE BEING CONSIDERED FOR TREATMENT
PURSUANT TO RULE 34(j) OF THE GENERAL RULES
No. 98-1234
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
_______________________________
STUART E. BERNSEN,
Petitioner
v.
FEDERAL LABOR RELATIONS AUTHORITY,
Respondent
and
PENSION BENEFIT GUARANTY CORPORATION,
Intervenor
and
NATIONAL TREASURY EMPLOYEES UNION,
Intervenor
_______________________________
ON PETITION FOR REVIEW OF A DECISION AND ORDER OF
THE FEDERAL LABOR RELATIONS AUTHORITY
BRIEF FOR THE FEDERAL LABOR RELATIONS AUTHORITY
DAVID M. SMITH
Solicitor
WILLIAM R. TOBEY
Deputy Solicitor
JUDITH A. HAGLEY
Attorney
Federal Labor Relations Authority
607 14th Street, N.W.
Washington, D.C. 20424
(202) 482-6620
CASE BEING CONSIDERED FOR TREATMENT
PURSUANT TO RULE 34(j) OF THE GENERAL RULES
CERTIFICATE AS TO PARTIES, RULINGS AND RELATED CASES
A. Parties and amici
Appearing below in the administrative proceeding before the Federal
Labor Relations Authority (the Authority) were the National Treasury
Employees Union ("NTEU" or "union"); Pension Benefit Guaranty
Corporation ("PBGC" or "agency") and Stuart E. Bernsen. Stuart E.
Bernsen is the petitioner in this Court proceeding; the Authority is the
respondent; PBGC and NTEU are the intervenors.
B. Rulings under review
The Authority issued its Decision And Order in National Treasury
Employees Union and Pension Benefit Guaranty Corporation and Stuart E.
Bernsen, Case Nos. WA-CO-50300 and WA-CA-50302 on March 11, 1998.
The Authority's decision is reported at 53 FLRA (No. 138) 1541.
C. Related Cases
The case on review was not previously before this Court or any other
court. Counsel for the Authority is unaware of any cases pending before
this Court that are related to this case within the meaning of Local
Rule 28(a)(1).
TABLE OF CONTENTS
STATEMENT OF JURISDICTION 1
STATEMENT OF THE ISSUE 2
STATEMENT OF THE CASE 2
I. Nature of the Case 2
II. Statement of the Facts 3
A. Background 3
B. PBGC's Ethics Program 4
1. Management of the program 4
2. The role of ethics counselors 5
3. The recusal policy 6
C. The 1994 Union Election and Surrounding
Circumstances 6
III. Proceedings Below 8
STANDARD OF REVIEW 11
SUMMARY OF ARGUMENT 12
ARGUMENT 14
THE AUTHORITY PROPERLY DETERMINED THAT AN EMPLOYEE'S
SIMULTANEOUS SERVICE AS A UNION REPRESENTATIVE AND AN
AGENCY ETHICS COUNSELOR DOES NOT RESULT IN AN "APPARENT
CONFLICT OF INTEREST" UNDER SECTION 7120(E) 14
A. The Authority Developed an Appropriate Standard
for Determining If an Apparent Conflict of
Interest Exists under Section 7120(e) of the
Statute 15
1. The Authority's standard is compatible with
the structure of section 7120(e) 16
2. The Authority's standard is consistent with
Authority precedent 20
3. The Authority's standard is comparable to
federal conflict of interest analysis in
other areas 23
B. The Authority Properly Applied the Reasonable
Person Standard to the Totality of the
Circumstances in This Case 25
1. Under the totality of the circumstances, an
objectively reasonable person would not
question Jaffe's ability to perform both as
an ethics counselor and as a union official
or representative 25
2. Bernsen's arguments concerning potential
conflicts are based on conjecture 29
CONCLUSION 31
ADDENDUM
Relevant portions of the Federal Service Labor-Management
Relations Statute, 5 U.S.C. §§ 7101-7135 (1994 & Supp. II
1996) and pertinent regulation A-1
TABLE OF AUTHORITIES
* In re Allied-Signal, Inc., 891 F.2d 967
(1st Cir. 1989) 28
American Fed'n of Gov't Employees v. FLRA, 834 F.2d 174
(D.C. Cir. 1987) 19, 30
American Fed'n of Gov't Employees, Local 2343 v. FLRA,
144 F.3d 85 (D.C. Cir. 1998) 11
Bureau of Alcohol, Tobacco & Firearms v. FLRA,
464 U.S. 89 (1983) 12
* Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984) 12, 17
Crandon v. United States, 494 U.S. 152 (1990) 26
Department of Justice, Immigration & Naturalization
Serv. v. FLRA, 144 F.3d 90 (D.C. Cir. 1998) 15
EEOC v. FLRA, 744 F.2d 842 (D.C. Cir. 1984) 12
GSA v. FLRA, 86 F.3d 1185 (D.C. Cir. 1996) 16, 24
NLRB v. General Steel Erectors, Inc., 933 F.2d 568
(7th Cir. 1991) 19
NLRB v. Town & Country Elec., Inc., 516 U.S. 85
(1995) 19
Overseas Educ. Ass'n, Inc. v. FLRA, 858 F.2d 769
(D.C. Cir. 1988) 12
Power v. FLRA, 146 F.3d 995 (D.C. Cir. 1998) 12
United States v. Smith, 653 F.2d 126 (4th Cir. 1981) 24
DECISIONS OF THE FEDERAL LABOR RELATIONS AUTHORITY
Department of Health, Educ. & Welfare, 6 FLRA 628
(1981) 10, 11, 22, 23
Harry S. Truman Mem'l Veterans Hosp., 8 FLRA 42
(1982) 22
Local 3, Int'l Fed'n of Prof'l & Tech. Engineers
& Naval Sea Sys. Command Detachment, 25 FLRA 714
(1987) 22
DECISIONS OF THE FEDERAL LABOR RELATIONS AUTHORITY
* Merit Sys. Protection Bd. & Merit Sys. Protection
Bd. Prof'l Ass'n, 12 FLRA 137 (1983) 20, 21
* U.S. Dep't of the Treasury, Office of the Chief
Counsel, Internal Revenue Serv., Nat'l Office,
41 FLRA 402 (1991) 20, 21
FEDERAL STATUTES
Federal Service Labor-Management Relations Statute,
5 U.S.C. §§ 7101-7135 (1994 & Supp. II 1996) 1, 2
5 U.S.C. § 7102 18, 22
5 U.S.C. § 7103(a)(10) 16
5 U.S.C. § 7103(a)(11) 16
5 U.S.C. § 7103(a)(13) 16
5 U.S.C. § 7105(a)(2)(G) 1
5 U.S.C. § 7116(a)(1) 10
5 U.S.C. § 7116(a)(2) 10
5 U.S.C. § 7120 20
* 5 U.S.C. § 7120(e) passim
5 U.S.C. § 7123(a) 2
5 U.S.C. § 7123(c) 11, 12
5 U.S.C. § 7131 18
5 U.S.C. § 208 8, 27
5 U.S.C. § 706(2)(A) 12
Ethics in Government Act of 1978, 5 U.S.C. App. (1994) 4
CODE OF FEDERAL REGULATIONS
5 C.F.R. §§ 2600 et seq. 4
5 C.F.R. § 2635.101(b)(11) 5
5 C.F.R. § 2635.502 8, 23, 27
FEDERAL REGISTER
57 Fed. Reg. 35,025 23, 24
*Cases or authorities chiefly relied upon are marked by asterisks.
GLOSSARY
AFGE v. FLRA American Fed'n of Gov't Employees v. FLRA,
834 F.2d 174 (D.C. Cir. 1987)
ALJ Administrative Law Judge
Bernsen Stuart Bernsen
DOL Department of Labor
Harry S. Harry S. Truman Mem'l Veterans Hosp., 8 FLRA 42
Truman (1982)
HEW Department of Health, Educ. & Welfare, 6 FLRA 628 (1981)
MSPB Merit Sys. Protection Bd. & Merit Sys. Protection
Bd. Prof'l Ass'n, 12 FLRA 137 (1983)
Naval Sea Local 3, Int'l Fed'n of Prof'l & Tech. Engineers
Systems & Naval Sea Sys. Command Detachment, 25 FLRA 714 (1987)
NLRA National Labor Relations Act
NTEU & PBGC National Treasury Employees Union and Pension Benefit
Guarantee Corp., 53 FLRA (No. 138) 1541 (March 11, 1998)
NTEU or union National Treasury Employees Union
OGC Office of the General Counsel
OGE United States Office of Government Ethics
PBGC or agency Pension Benefit Guarantee Corporation
Statute Federal Service Labor-Management Relations Statute
5 U.S.C. §§ 7101-7135 (1994 & Supp II 1996)
Treasury U.S. Dep't of the Treasury, Office of the Chief
Counsel, Internal Revenue Serv., Nat'l Office, 41 FLRA 402 (1991)
ULP unfair labor practice
CASE BEING CONSIDERED FOR TREATMENT
PURSUANT TO RULE 34(j) OF THE GENERAL RULES
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 98-1234
_______________________________
STUART E. BERNSEN,
Petitioner
v.
FEDERAL LABOR RELATIONS AUTHORITY,
Respondent
and
PENSION BENEFIT GUARANTEE CORPORATION,
Intervenor
and
NATIONAL TREASURY EMPLOYEES UNION,
Intervenor.
_______________________________
ON PETITION FOR REVIEW OF A DECISION AND ORDER OF
THE FEDERAL LABOR RELATIONS AUTHORITY
BRIEF FOR THE FEDERAL LABOR RELATIONS AUTHORITY
STATEMENT OF JURISDICTION
The final decision and order under review in this case was issued by the
Federal Labor Relations Authority (FLRA or Authority) in the consolidated
proceeding National Treasury Employees Union and Pension Benefit Guarantee
Corp., 53 FLRA (No. 138) 1541 (March 11, 1998) (NTEU & PBGC); Joint Appendix
(JA) 89-104. The Authority exercised jurisdiction over the case pursuant to
section 7105(a)(2)(G) of the Federal Service Labor-Management Relations Statute,
5 U.S.C. §§ 7101-7135 (1994 & Supp. II 1996) (Statute).[1]
This Court has jurisdiction to review the Authority's decisions and orders
pursuant to section 7123(a) of the Statute. Petitioner Stuart Bernsen (Bernsen)
filed a petition for review within the 60-day time limit provided by section
7123(a) of the Statute.
STATEMENT OF THE ISSUE
Whether the Authority properly determined that an employee's simultaneous
service as both a representative of a labor organization and an ethics
counselor for the agency does not result in an "apparent conflict of
interest" within the meaning of section 7120(e) of the Statute.
STATEMENT OF THE CASE
I. Nature of the Case
This case arose as an unfair labor practice (ULP) proceeding concerning
allegations that the National Treasury Employees Union (NTEU or union) and
the Pension Benefit Guarantee Corporation (PBGC or agency) both violated
section 7120(e) of the Statute by permitting an employee, Holli Jaffe, to
simultaneously serve as an official for the union and an ethics counselor
for the agency. The ULP complaint alleged that the union and the agency
committed unfair labor practices by failing to comply with section 7120(e)
because such dual activity by the employee results in an "apparent conflict
of interest." The case was first heard by an Administrative Law Judge (ALJ)
who concluded that the General Counsel of the FLRA failed to prove by a
preponderance of the evidence that an apparent conflict of interest was
created by Jaffe's simultaneous service as ethics counselor and union
official. The ALJ recommended that the ULP complaint be dismissed. JA 88.
The Authority dismissed the complaint based upon its finding that Jaffe's
serving simultaneously as ethics counselor and union official did not result
in an apparent conflict of interest under section 7120(e) of the Statute.
NTEU & PBGC; JA 89-104. Bernsen has petitioned this Court for review of the
Authority's Order dismissing the complaint.
II. Statement of the Facts
The facts of this case are set forth in detail in the Authority's decision,
NTEU & PBGC; JA 89-104. For ease of reference, the pertinent facts are set
out below.
A. Background
In this case, one union member, Stuart Bernsen, accuses another union
member, Holli Jaffe, of engaging in activities resulting in a conflict of
interest. They are both members of NTEU Chapter 211, the exclusive
representative of a bargaining unit of about 400 professional and
nonprofessional employees of PBGC. Jaffe is an employee in the Office of
the General Counsel (OGC) at PBGC and, collateral to her other duties,
serves as a volunteer ethics counselor. Jaffe is currently the president of
the chapter; Bernsen had been the president of the chapter before he lost
his bid for reelection to Jaffe in the fall of 1994.
JA 90.
B. PBGC's Ethics Program
1. Management of the program
As required by the Ethics in Government Act of 1978,
5 U.S.C. App. (1994), and government-wide ethics regulations promulgated by the
United States Office of Government Ethics (OGE) at 5 C.F.R. §§ 2600 et seq.
(1998), PBGC maintains an ethics program to advise and educate agency employees
regarding their responsibilities under the Standards of Ethical Conduct for
Government Employees in the Executive Branch. The PBGC ethics program is
supervised by the agency's General Counsel and two other attorneys in the
General Counsel's office, not otherwise involved in this case. JA 90. These
three designated individuals are the only persons to whom PBGC has delegated
authority to make ethics determinations concerning actions permitted or required
of other agency employees. JA 90-91. These designated ethics officials are
assisted in maintaining the agency's ethics program by a number of volunteer
ethics counselors who are trained and thereafter assigned ethics duties
collateral to their other work. JA 91.
Disciplinary actions based on ethical violations rarely occur at PBGC. JA
102. However, when it has been necessary to discipline an employee at PBGC
for failure to adhere to the prescribed standards of ethical conduct, ethics
counselors have not been involved in the disciplinary investigations or
actions. JA 92.
2. The role of ethics counselors
Unlike the officials who manage the agency's ethics program, ethics
counselors are not authorized to make ethics determinations under the
Standards of Conduct. JA 91. Their role is generally advisory in nature.
Ethics counselors do not investigate possible ethics violations, become
involved with the discipline of employees, or take corrective action for
ethics violations because these matters are outside of their purview.
Rather, ethics counselors' duties include training agency employees on
ethics standards, responding to employee inquiries concerning ethics
regulations, reviewing financial disclosure forms of agency employees, and
assisting agency employees in drafting outside employment requests. JA
91-92. Counselors, however, like all federal employees, have a duty to
disclose waste, fraud, abuse, and corruption to appropriate authorities.
See 5 C.F.R. § 2635.101(b)(11).
Jaffe, in addition to her other duties as a GS-14 attorney in the OGC, has
been an agency ethics counselor since April 1991. JA 90-91. Jaffe's work
in the ethics area is limited to reviewing employee-provided facts about
proposed conduct, analyzing the facts under applicable ethics rules, and
formulating a response that the designated agency ethics officials must
ultimately approve. In her role as an ethics counselor, Jaffe advises,
trains, and deals with both nonbargaining unit and bargaining unit
employees. JA 91.
3. The recusal policy
Jaffe, along with several other union representatives for Chapter 211, has
simultaneously served as an ethics counselor. As a result, the practice has
been that if ethics counselor and representational responsibilities overlap,
certain procedures are followed. When an ethics counselor is assigned an
ethics task or is contacted by an agency employee concerning a matter that
the ethics counselor has previously worked on in a representational
capacity, the ethics counselor will advise the official making the
assignment or the employee seeking advice to contact another counselor. JA
91.
Similarly, if an ethics counselor is asked by a bargaining unit employee to
handle a matter as a union representative that the representative has
already worked on as an ethics counselor, the counselor/representative will
recuse herself and refer the requester to another Chapter 211 officer or
steward. Id. When approached by a bargaining unit employee on an ethical
issue, Jaffe routinely determines the capacity in which she is being
consulted. JA 92.
C. The 1994 Union Election and Surrounding Circumstances
Prior to being elected president in 1994, and while she served as an ethics
counselor for PBGC, Jaffe served Chapter 211 in various official capacities.
She was a steward, an appointed vice-president, and in October 1992 was
elected vice-president of the chapter. Bernsen was elected president in
this 1992 election. As president, he appointed Jaffe chief negotiator for
the chapter. During this period, President Bernsen directed Jaffe, and
other ethics counselors who were also union officials, to handle ethics-
related cases for the union. Neither Bernsen nor any other employee raised
any conflict of interest complaints concerning Jaffe's ethics counselor
duties while she acted as a steward, vice-president, or chief negotiator for
the chapter.
JA 91-92, 97-98.
In October 1994, Jaffe was elected president of NTEU, Chapter 211, defeating
the incumbent president, Bernsen. During the election in the fall of 1994,
there were no complaints that Jaffe's dual service resulted in an apparent
conflict of interest. After the election, however, Bernsen began to
complain about Jaffe's ability to perform as both an ethics counselor and a
chapter official. JA 90.
Bernsen attacked Jaffe's election in three different ways. He filed an
appeal with NTEU. He filed a complaint with the Department of Labor (DOL).
He also filed ULP charges against the union and the agency with the General
Counsel of the FLRA. Each of these complaints alleged, inter alia, that
Jaffe's simultaneous service as an ethics counselor and as a union
representative resulted in a real or apparent conflict of interest under
section 7120(e) of the Statute. NTEU denied Bernsen's election appeal and
DOL deferred to the Authority's determination of whether Jaffe's activity
resulted in an actual or apparent conflict of interest. The General
Counsel, on the other hand, issued a consolidated complaint against NTEU and
PBGC. JA 32-39.
As a result of the ULP complaint, one of PBGC's designated ethics officials
and Jaffe sought guidance from OGE as to the propriety of Jaffe's dual
status. OGE opined that Jaffe's service as both chapter president and
ethics counselor did not result in an appearance problem violating 5 C.F.R.
§ 2635.502 or constitute a conflict of interest in violation of 5 U.S.C. §
208. JA 91. OGE's conclusion was consistent with its prior audits of
PBGC's ethics program. JA 93.
As explained more fully below, both the ALJ and the Authority rejected
Bernsen's claim of apparent conflict of interest. After examining Jaffe's
role as union president, PBGC's ethics program, Jaffe's responsibilities as
an ethics counselor, and other relevant factors, both the ALJ and the
Authority determined that an "objectively reasonable person" would not view
Jaffe's dual roles as resulting in an apparent conflict of interest. JA
99-102.
III. Proceedings Below
Construing its own statute, the Authority developed a standard for
determining whether an "apparent conflict of interest" under section 7120(e)
has resulted from the activities of an employee. As the Authority described
this standard, the existence of an apparent conflict of interest would hinge
on "whether an objectively reasonable person, with knowledge of all the
facts and procedures, would question an employee's ability to perform their
official duties and act as a manager and/or representative of a labor
organization." JA 97.
The Authority found that its precedent supported this standard. In
addition, the Authority noted that this standard was comparable to those
utilized in other areas where there are requirements involving the
"appearance" of impropriety. This objective standard is not triggered by
the subjective beliefs of those who do not understand the circumstances and
the processes involved. JA 96.
Applying this reasonable, objective standard to the facts of this case, the
Authority determined that, under the totality of the circumstances, there
was no "apparent conflict of interest" within the meaning of section
7120(e). First, the Authority found that none of the relevant parties has
complained about Jaffe's dual functions. Despite the fact that union
representatives have served as ethics counselors for years at the agency,
there have been no complaints. JA 97-98. Neither the union nor the agency,
having full knowledge of the facts and circumstances, took the position that
the dual responsibilities result in an apparent conflict of interest. JA
97. No employee, other than Bernsen, has complained about an employee
serving the dual roles. JA 97-98. Indeed, Bernsen, when he was president
of the union, actually assigned ethics cases to ethics counselors who were
also union officials -- including Jaffe -- because of their ethics expertise
developed as an ethics counselor. JA 91. Finally, the Authority noted that
OGE had concluded that Jaffe's dual roles did not result in an apparent
conflict of interest under the ethics regulations. JA 102. The Authority
recognized that OGE's opinion regarding what constitutes a conflict of
interest under section 7120(e) is not entitled to deference; however, the
Authority determined that the ALJ only deferred to OGE's opinion regarding
the regulations it administers. JA 101-102.
Second, the Authority found no evidence that Jaffe's dual role as ethics
counselor and union representative had the appearance of compromising her
ability to be effective in both positions or that the two positions were
incompatible. Her role as ethics counselor is advisory: she does not
investigate possible ethical violations; she does not discipline employees;
she does not make ethical determinations or grant waivers.
JA 99. In the remote event that an ethics counselor/union representative
encountered the same case in her dual capacity, a recusal policy would be
utilized to prevent any potential conflict. JA 98-99. In light of the recusal
policy and Jaffe's practice of determining the capacity in which she is being
consulted, the Authority found that the chance of a conflict arising was
unlikely. JA 102. After considering all of these factors, the Authority
concluded that under the totality of the circumstances an objectively reasonable
person would not view Jaffe's dual roles as resulting in an apparent conflict of
interest. JA 99.
Examining its own precedent, the Authority determined that its decision was
consistent with Department of Health, Educ. and Welfare, 6 FLRA 628 (1981)
(HEW), a case finding no violation of section 7116(a)(1) and (2) where the
agency terminated the appointment of an employee as EEO counselor upon the
employee's election to the position of Chapter Vice President. The
Authority observed that, in that case, the agency believed that such dual
office-holding would result in a conflict of interest. In addition, the
Authority noted, the agency in HEW had a policy that actually prohibited
such concurrent office-holding, thereby fostering the appearance of a
conflict of interest if a particular employee in violation of this agency
policy were to hold the position of EEO counselor and union official. JA
100.
The Authority determined that HEW was distinguishable. First, the Authority
found that it is undisputed that PBGC does not have such a policy.
Moreover, the Authority stated, the practice at PBGC of having ethics
counselors who were also union officials had been an unchallenged custom for
years. Id. Further, the Authority noted, the EEO counselor and ethics
advisor positions were different for purposes of apparent conflict of
interest analysis. Id.
Having established and applied an appropriate standard, and ensured that its
actions were consistent with precedent, the Authority concluded that there
was no apparent conflict of interest. Accordingly, the Authority dismissed
the complaint.
STANDARD OF REVIEW
The standard of review of Authority decisions is "narrow." American Fed'n of
Gov't Employees, Local 2343 v. FLRA,
144 F.3d 85, 88 (D.C. Cir. 1998). Authority action shall be set aside only if
"arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law." 5 U.S.C. § 7123(c), incorporating 5 U.S.C. § 706(2)(A); Overseas
Educ. Ass'n, Inc. v. FLRA, 858 F.2d 769, 771-72 (D.C. Cir. 1988); EEOC v. FLRA,
744 F.2d 842, 847 (D.C. Cir. 1984). Under this standard, unless it appears from
the Statute or its legislative history that the Authority's construction of its
enabling act is not one that Congress would have sanctioned, the Authority's
construction should be upheld. See Chevron, U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 844 (1984). A court should defer to the
Authority's construction as long as it is reasonable. See id. at 845.
Factual findings of the Authority that are supported by substantial evidence
on the record as a whole are conclusive. See 5 U.S.C. § 7123(c); Power v.
FLRA, 146 F.3d 995, 1000 (D.C. Cir. 1998). The Authority is entitled to
have reasonable inferences it draws from its findings of fact not be
displaced, even if the court might have reached a different view had the
matter been before it de novo. Id. at 1001.
Finally, as the Supreme Court has stated, the Authority is entitled to
"considerable deference" when it exercises its "special function of applying
the general provisions of the [Statute] to the complexities of Federal labor
relations." Bureau of Alcohol, Tobacco & Firearms v. FLRA, 464 U.S. 89, 97
(1983).
SUMMARY OF ARGUMENT
This case required the Authority to interpret its own organic statute.
Section 7120(e) states that the Statute does not authorize an employee to
participate in the management of or represent a union if the participation
or activity would result in an "apparent conflict of interest." The
specific issue here is whether an employee's simultaneous service as both an
agency ethics counselor and a union official results in an "apparent
conflict of interest," a term that is undefined. The Authority determined
that the proper test is whether, under the totality of the circumstances, an
objectively reasonable person, with knowledge of all the facts and
procedures, would question an employee's ability to perform their official
duties and act as a union official.
The standard the Authority developed for section 7120(e) is reasonable and
correct. This test is compatible with section 7120(e)'s structure,
consistent with relevant Authority precedent, and comparable to federal
conflict of interest analysis in other areas. In view of the deference an
agency is due when administering its own organic statute, this Court should
defer to the Authority's interpretation of 7120(e).
Ignoring the actual language of section 7120(e), Bernsen argues that anyone
who is an "agent of management" should be prohibited from representing the
union because an agent cannot serve two principals. His claim must be
rejected for several reasons. First, Bernsen's broad claim is not supported
by the statute; section 7120(e) does not include the term "agent of
management." Second, every employee is an agent of management whenever that
employee performs official duties; thus, Bernsen's claim would prohibit any
employee from being a union official. Third, the Supreme Court has already
held that, within the context of labor law, an employee can serve both the
employer and the union. Therefore, the Authority properly analyzed under
its objective test whether an employee's dual roles resulted in an apparent
conflict of interest.
Examining the totality of the circumstances, the Authority reasonably
determined that there is no apparent conflict of interest. First, the
ethics counselors' role in PBGC's ethics program is limited -- they do not
make ethics determinations, investigate potential violations, or discipline
employees for ethical violations. And even with that limited role, a
recusal policy exists. Second, union officials have been ethics counselors
at PBGC for years without objection. OGE, when asked to give an opinion
about the activities of ethics counselors who are also union officials,
determined that under its regulations there is no apparent conflict of
interest. Neither the agency nor the union believes that there is an
apparent conflict of interest. And finally, the agency's employees have not
complained about ethics counselors who are also union officials. Because
the Authority's findings, amply supported by the record as a whole, are
reasonable, Bernsen's petition for review should be dismissed.
ARGUMENT
THE AUTHORITY PROPERLY DETERMINED THAT AN EMPLOYEE'S SIMULTANEOUS SERVICE AS A
UNION REPRESENTATIVE AND AN AGENCY ETHICS COUNSELOR DOES NOT RESULT IN AN
"APPARENT CONFLICT OF INTEREST" UNDER SECTION 7120(E)
The specific issue this case raises is whether the Authority properly
construed and applied the phrase "apparent conflict of interest" in section
7120(e) of the Statute when it dismissed ULP complaints against the union
and the agency. As discussed previously, the Authority determined that
simultaneous service by an agency employee as a local union official and a
collateral duty ethics counselor did not result in an "apparent conflict of
interest" under section 7120(e).
In deciding this case, the Authority properly developed an objective test
for resolving apparent conflict of interest claims under section 7120(e) of
the Statute and, considering the totality of the circumstances, properly
applied that test to the case's facts. Because the Authority's construction
and application of this aspect of its enabling statute was reasonable, the
Court should uphold the Authority's decision. See, e.g., Department of
Justice, Immigration & Naturalization Serv. v. FLRA, 144 F.3d 90, 93 (D.C.
Cir. 1998) (Court will "defer to the Authority's interpretation, so long as
that interpretation is reasonable.").
A. The Authority Developed an Appropriate Standard for Determining If an
Apparent Conflict of Interest Exists under Section 7120(e) of the Statute
The standard the Authority used for applying section 7120(e) to the facts of
this case was reasonable and correct. To determine whether Jaffe's
activities resulted in an apparent conflict of interest, the Authority held
that the proper question to ask under section 7120(e) is "whether an
objectively reasonable person, with knowledge of all the facts and
procedures, would question an employee's ability to perform their official
duties and act as a manager and/or representative of a labor organization."
JA 97.[2]
Although there is little Authority precedent involving section 7120(e) of
the Statute, this test is compatible with section 7120(e)'s structure,
consistent with relevant Authority precedent, and comparable to federal
conflict of interest analysis in other areas. In view of the deference an
agency is due in its interpretation of its own organic statute, this Court
should defer to the Authority's interpretation of 7120(e). See GSA v. FLRA,
86 F.3d 1185, 1187-88 (D.C. Cir. 1996).
1. The Authority's standard is compatible with the
structure of section 7120(e)
Development of a standard such as that used by the Authority in this case is
necessitated by section 7120(e)'s structure. A portion of section 7120(e)
-- not implicated in this case -- specifies, categorically, types of
individuals "not authorize[d]" to participate in or represent a labor
organization. These categorical exclusions include "management official,"
"supervisor," and "confidential employee." These three categories are
defined in the Statute. See 5 U.S.C.
§ 7103(a)(10), (11), and (13).
In contrast, there is no clearly defined, categorical exclusion in section
7120(e) applicable to most employees. Their service as a union official is
"not authorize[d]" only if there is, as pertinent here, an "apparent
conflict of interest." Because the Statute and its legislative history are
silent as to the term's meaning, it was necessary for the Authority to
construe the phrase to decide this case. See Chevron, 467 U.S. at 843-44.
This it did when it developed the "objectively reasonable person" standard
noted above.
Bernsen argues that the Authority's standard is incompatible with section
7120(e) because that section "establishes a strict, per se rule . . . that
prohibits all agents of management" from serving as a union official. Brief
at 23. Relying on National Labor Relations Act (NLRA) case law, he asserts
in this connection that employees are entitled to representatives who have
"single-minded loyalty" to the employees' interests, broadly defining
"single-minded loyalty" as serving only one principal. Brief at 25.
Bernsen's argument should be rejected for several reasons.
First, Bernsen's argument is inconsistent with the language of section
7120(e). Second, it is undermined by the overall structure and underlying
policy of the Statute. Third, the Supreme Court has rejected Bernsen's
position that, as a matter of labor law, an agent can serve only one
principal. Finally, the NLRA case law that he relies on is inapposite.
First, Bernsen's broad claim that section 7120(e) contains a "strict, per se
rule" that prohibits all "agents of management from serving as Federal union
representatives" (Brief at 23) is inconsistent with the Statute's language.
Section 7120(e) does not use the phrase "agents of management." Therefore,
Bernsen's claim is an attempt to graft upon the Statute a provision Congress
did not choose to include.
Second, Bernsen's claim is also undermined by the overall structure and
underlying policy of the Statute. Every employee, by definition, serves the
agency in some capacity. And every employee is guaranteed the right under
section 7102 to also "act for a labor organization in the capacity of a
representative" -- unless it results in a conflict under section 7120(e).
In addition, section 7131 of the Statute provides for official time.[3]
Thus, the Statute expressly sanctions employees having dual roles -- acting
as an agent for the employer on duty time and as an agent for the union on
official time.
Bernsen's argument concerning section 7120(e) was also properly rejected by
the Authority as a matter of policy. Since every federal employee is an
agent of management whenever that employee is performing his or her official
duties, under Bernsen's theory of section 7120(e), no federal employee could
be a union representative -- an impracticable result. As the Authority
noted (JA 97), if this broad "single-minded loyalty" standard were adopted,
federal sector unions could only be serviced by full-time paid union staff.
Rejecting this position as both unworkable and inconsistent with the
Statute, the Authority concluded that there was nothing inherently improper
about Jaffe's simultaneous service as union official and ethics counselor.
Third, the Supreme Court has rejected Bernsen's position that, as a matter
of labor law, an agent can serve only one principal. See NLRB v. Town &
Country Elec., Inc., 516 U.S. 85 (1995). In that case, the Supreme Court
stated that so long as service to one master does not amount to abandonment
of the service owed to the other, an employee could serve two masters.[4]
Finally, the NLRA precedent on which Bernsen relies is inapplicable.[5]
Bernsen cites several cases (Brief at 23-26) that stand for the proposition
that under the NLRA, supervisors may not serve as union officials because
participation by supervisors in union affairs is illegal employer
interference.[6] This precedent, though correct, is inapposite because
Jaffe is not a supervisor. The proposition that agents must be loyal to
their principals is sound, but -- as Bernsen concedes (Brief at 28) -- only
on matters that relate to that agency. The NLRA cases on which Bernsen
relies, and from which Bernsen borrows the concept of "single minded
loyalty," merely recognize the fact that supervisors are agents for their
employers in the area of labor relations.[7] Indeed, section 7120(e) also
recognizes this fact by specifically not authorizing management officials,
supervisors, and confidential employees to act as union representatives.
Jaffe is not a "supervisor," "management official," or "confidential
employee," within the meaning of the Statute. She is an employee. Section
7120(e) applies to employees only insofar as their activities would result
in a conflict or apparent conflict of interest. Because the Statute does
not define "apparent conflict of interest," it was necessary and appropriate
for the Authority to develop a test to determine whether Jaffe's activities
fell within the coverage of section 7120(e).
2. The Authority's standard is consistent with Authority precedent
The test developed by the Authority in this case is consistent with its
decisions that have considered the issue of conflict of interest, under
section 7120 and otherwise. See U.S. Dep't of the Treasury, Office of the
Chief Counsel, Internal Revenue Serv., Nat'l Office, 41 FLRA 402, 414 (1991)
("Treasury"); Merit Sys. Protection Bd. & Merit Sys. Protection Bd. Prof'l
Ass'n, 12 FLRA 137, 141 n.7 (1983) (MSPB). In Treasury, the Authority
explained that "in order to determine whether the proscription in section
7120(e) applies in a given case, a respondent's 'conduct must be judged by
the reasonableness of its actions in all circumstances.'"
41 FLRA at 414 (citations omitted).[8] The test employed by the Authority in
this case, positing an "objectively reasonable person, with knowledge of all the
facts and procedures" (JA 97), is a natural elaboration of the Authority's
holding in Treasury.
As the Authority in this case further explained, the standard is not
triggered by those who might have mistaken impressions as to either the
nature of the duties involved or the governing laws or rules. JA 96. On
the contrary, "[t]he objectively reasonable person is presumed to know the
duties in question and related policies and procedures." Id. The Authority
noted that it had similarly recognized in a representation case that an
"appearance of a conflict of interest [is] . . . dispelled by knowledge of
the process by which Agency management reviews the work product of [the
employee involved]." MSPB, 12 FLRA at 141 n.7. This consistency of the
standard used by the Authority in the instant case with Authority precedent
is another indication that the standard is reasonable and merits the Court's
deference.
Bernsen misconstrues Authority precedent when he states that the Authority
has "held that section 7120(e) strictly bans dual agents from serving as
union representatives." Brief at 36-37 (citing Local 3, Int'l Fed'n of
Prof'l & Tech. Engineers & Naval Sea Sys. Command Detachment, 25 FLRA 714
(1987) (Naval Sea Systems); Harry S. Truman Mem'l Veterans Hosp., 8 FLRA 42
(1982) (Harry S. Truman); and Department of Health, Educ. & Welfare,
6 FLRA 628 (1981) (HEW)). None of these cases supports Bernsen's claim.
In Naval Sea Systems, the Authority found negotiable -- and therefore not in
violation of section 7120(e) -- a proposal to recuse, in any discrimination
complaint proceeding, a union official who was also an EEO counselor.
Consistent with its decision in the instant case, in Naval Sea Systems the
Authority explicitly stated that "an employee is not automatically barred
from serving as an EEO counselor because that employee is currently a Union
officer or steward." 25 FLRA at 724 (emphasis added).
In Harry S. Truman, the Authority did not consider whether simultaneous
service as an EEO counselor and a union official was in compliance with
section 7120(e). Rather, the Authority found that, because there was no
evidence of anti-union animus, an agency did not interfere with, restrain or
coerce an employee in the exercise of section 7102 rights when the agency
"attempted to act consonant with the 'conflict of interest' provision of
section 7120(e)." 8 FLRA at 44.
Finally, HEW, discussed at length in the Authority's decision (JA 99-100),
is also not inconsistent. In HEW, the Authority adopted without discussion
the ALJ's determination that an agency had not committed a ULP when it
terminated an employee's role as a part-time EEO counselor upon the
employee's election to the union's vice-presidency. Although the ALJ did
not cite section 7120(e) in HEW, he did, however, conclude that under the
facts of that case "the dual role of EEO Counselor and Union Vice-President
presents at least an apparent conflict of interest." 6 FLRA at 638.
Contrary to Bernsen's allegation that HEW dictates a similar determination
in this case, HEW is distinguishable. In HEW, the agency had a "policy
prohibiting such concurrent office-holding." 6 FLRA at 637. As the
Authority indicated in the instant case, the existence of such an agency
policy could be a significant factor in establishing an apparent conflict of
interest for an employee who occupied dual positions in violation of such a
policy. However, here there was no such policy, and dual service as a union
official and an ethics counselor was an unchallenged custom. JA 100. The
agency's acceptance of Jaffe's -- and other ethics counselors' -- dual role
in this case, and the different position (ethics counselor, not EEO
counselor) in which she served, also distinguish the two cases.
3. The Authority's standard is comparable to federal conflict
of interest analysis in other areas
Standards involving appearance requirements in other legal areas are
comparable with the test adopted by the Authority. For example, in
describing the requirement of impartiality in performing official duties,
set out in 5 C.F.R. § 2635.502, the Office of Government Ethics explained
that the test was "whether a reasonable person with knowledge of the
relevant facts would question" an employee's impartiality. 57 Fed. Reg.
35025 (August 7, 1992). Similarly, an "objective member of the public at
large" standard is applied in evaluating compliance with Canon 9 of the Code
of Professional Responsibility for Attorneys, which requires that "[a]
lawyer should avoid even the appearance of professional impropriety."
United States v. Smith, 653 F.2d 126, 128 & n.3 (4th Cir. 1981). "[A]
fanciful, unrealistic or purely subjective suspicion of impropriety" does
not implicate the Canon. Id. at 128.
Bernsen states that the Authority's test is an "incorrect statement of
Federal conflict of interest law." Brief at 38.[9] This assertion misses
the mark. First, Bernsen does not claim that the law discussed above and
cited by the Authority is inapposite. Second, the fundamental issue in this
case is whether the Authority's interpretation and application of section
7120(e) was reasonable. As demonstrated above, the Authority's actions find
support in the Statute's language, Authority precedent, and analogous law.
The Authority's actions should therefore be affirmed by this Court. See GSA
v. FLRA, 86 F.3d 1185, 1187 (D.C. Cir. 1996).
In sum, the standard adopted by the Authority -- whether an objectively
reasonable person, with knowledge of all the facts and procedures, would
question an employee's ability to perform their official duties and act as a
manager and/or representative of a labor organization -- is a reasonable and
appropriate standard for analyzing the applicability of section 7120(e) to a
case such as this. Accordingly, under the deferential standard of review
that applies, it should be upheld by the Court.
B. The Authority Properly Applied the Reasonable Person Standard to
the Totality of the Circumstances in This Case
The Authority properly analyzed under its objective test whether Jaffe's
dual roles result in an apparent conflict of interest. Examining the
totality of the circumstances, the Authority reasonably determined that
there is no apparent conflict of interest. First, ethics counselors have
only a limited role in PBGC's ethics program, and even with that limited
role, a recusal policy exists. Moreover, OGE, the agency, the union, and
the agency's employees have not complained about the activities of ethics
counselors who are also union officials. Bernsen's arguments concerning
potential conflicts are too speculative to displace the Authority's
reasonable determination that there is no apparent conflict of interest on
the facts of this case.
1. Under the totality of the circumstances, an objectively
reasonable person would not question Jaffe's ability to
perform both as an ethics counselor and as a union official or
representative
The test developed by the Authority for determining apparent conflicts of
interest posits an "objectively reasonable person" with full knowledge of
all of the facts and procedures. A variety of pertinent considerations
support the Authority's conclusion that no apparent conflict of interest
exists.
Supporting this conclusion, for example, is the fact that the agency limited
the role of agency ethics counselors to reviewing financial disclosure
reports, ethics training, and offering prospective ethics-related advice.
JA 91. Counselors like Jaffe have no program responsibilities and, unlike
the ethics program managers, do not make ethics determinations or grant
waivers. Id. They do not investigate possible ethics violations and do not
discipline employees for those violations. Id. Although Bernsen speculates
otherwise (Brief at 32), ethics counselors are not "involved in labor-
relations and personnel-type activity" as representatives for the agency.
JA 80.
The recusal policy also weighs against a finding of an apparent conflict of
interest in this case. Although, as the Authority noted, the recusal policy
appears designed to deal with actual rather than apparent conflicts, the
existence of a recusal policy serves to assuage concerns over potential
conflicts and, reasonably considered, is a device designed to dispel
appearance of conflict problems.
Contrary to Bernsen's argument (Brief at 48), there is nothing about the
presence of the recusal policy that implies that an apparent conflict of
interest exists. In fact, the presence of such a procedure alleviates
concerns about such apparent conflicts. A case relied upon by Bernsen
recognizes this principle. See Crandon v. United States, 494 U.S. 152, 166
(1990) (finding that payments to government employees from former private
sector employer did not create apparent conflict of interest, in part,
because the employee was disqualified "from participating in any matter
involving a former employer.").
In addition, OGE has interposed no objection to the arrangement that Bernsen
challenges. As the agency charged with administering the Government's
ethics program, OGE has an interest in avoiding the appearance of such
conflicts and is uniquely qualified to offer an opinion concerning where
conflicts might exist. When asked about the propriety of Jaffe's dual
status, OGE opined that Jaffe's serving as both chapter president and an
ethics counselor did not create an appearance problem violating 5 C.F.R. §
2635.502 or constitute a conflict of interest in violation of 5 U.S.C. §
208.
Furthermore, neither PBGC nor NTEU questions Jaffe's ability to perform as
an ethics counselor and a union official or representative. PBGC -- unlike
the employer in HEW, which had a policy against EEO counselors
simultaneously holding union office -- does not have a policy against
ethics counselors holding union office. Indeed, it has been the practice
over the years for union officials to be ethics counselors.
The Authority did not, as Bernsen asserts (Brief at 42), "defer[] to the
interests of interested parties" in deciding that no apparent conflict of
interest existed. The Authority only found that PBGC's and NTEU's views
were "pertinent" to the issue of whether there is in fact an apparent
conflict of interest.
JA 97. The views of these organizations were pertinent because the agency and
the union represent an important part of the community of reasonable persons who
might perceive a conflict in an employee's simultaneous service as both a union
official and an ethics counselor. Id.
Finally, the employees at PBGC did not question the ability of Jaffe -- or
any of the other union officials who have been ethics counselors at PBGC --
to perform as an ethics counselor and a union official or representative.
This silence by PBGC employees, also important members of the relevant
reasonable person community, is evidence of a lack of an apparent conflict
of interest.
Contrary to Bernsen's allegations (Brief at 42), it was not error for the
Authority to consider the opinion of OGE, the views of the agency and the
union, and the lack of complaints from PBGC employees in applying its
objective "reasonable person" standard. That some of this evidence is
subjective does not mean that it must be ignored in applying an objective
standard. "[T]he parties' own words and deeds may help determine the extent
to which a knowledgeable observer would see, in a particular circumstance, a
sign of partiality." In re Allied-Signal, Inc., 891 F.2d 967, 972 (1st Cir.
1989) (now-Justice Breyer dismissing under an objective test a claim of
appearance of partiality, in part because the actual parties in the case had
not objected).
Even Bernsen did not question Jaffe's ability to perform as an ethics
counselor and a union official.[10] Jaffe was an ethics counselor and union
official during the period that Bernsen was president of the union. Indeed
Bernsen evidently found Jaffe's ethics counselor experience valuable to the
union. As union president, Bernsen assigned Jaffe and other union officials
who were ethics counselors ethics-related cases to handle. JA 91. In sum,
the Authority reasonably considered the views of those in the community
involved in analyzing whether an objectively reasonable person, with
knowledge of all the facts and circumstances, would question Jaffe's ability
to simultaneously serve in both positions, and reached a reasonable
conclusion.
2. Bernsen's arguments concerning potential conflicts are
based on conjecture
Bernsen suggests that an employee who has both ethics counselor duties and
union official duties results in the "possibility and potential" of
conflicts of interest. Brief at 43-47. The Authority considered this
potential and found that this is at most a remote possibility and did not
substantiate an apparent conflict of interest under section 7120(e).
The Authority specifically determined that the chance of conflicts
developing was remote. As noted earlier, first, Jaffe routinely clarifies
the capacity in which her advice or assistance is sought. Second, PBGC
ethics counselors have only a limited role. They do not investigate
possible ethics violations nor do they discipline employees for those
violations. Third, there have been relatively few ethics-related
disciplinary actions at PBGC, and, in any event, those actions are not
handled by the ethics counselors. It is undisputed that Jaffe has never
provided ethics advice that resulted in a grievance.
Bernsen thus errs when he states that the Authority "denied that an apparent
conflict of interest involves the potential or possibility of opposing
temptations" (Brief at 42); rather the FLRA found that the potential or
possibility was so remote that it did "not equate to an apparent conflict in
this case." JA 102 (emphasis added). That finding, supported by the record
as a whole, is entitled to deference.
This Court has held that purely speculative arguments cannot sustain a claim
under 7120(e). See American Fed'n of Gov't Employees v. FLRA, 834 F.2d 174,
181 (D.C. Cir. 1987)(rejecting finding under 7120(e) that was based "wholly
on conjecture"). Because Bernsen's arguments concerning potential conflicts
are based solely on conjecture, they should be rejected.
CONCLUSION
Bernsen's petition for review should be denied.
Respectfully submitted,
DAVID M. SMITH
Solicitor
WILLIAM R. TOBEY
Deputy Solicitor
JUDITH A. HAGLEY
Attorney
Federal Labor Relations
Authority
607 14th Street, N.W.
Washington, D.C. 20424
(202) 482-6620
September 1998
IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
_______________________________
STUART E. BERNSEN,
Petitioner
v. No. 98-1234
FEDERAL LABOR RELATIONS AUTHORITY,
Respondent
and
PENSION BENEFIT GUARANTEE CORPORATION
and NATIONAL TREASURY EMPLOYEES UNION,
Intervenors
_______________________________
CERTIFICATE OF SERVICE
I certify that copies of the Brief for the Federal Labor Relations
Authority, have been served this day, by mail, upon the following:
Stuart E. Bernsen Gregory O'Duden, Esq.
10719 Kings Riding Way #102 Barbara A. Atkin, Esq.
Rockville, MD 20852 L. Pat Wynns, Esq.
Robert H. Shriver, III, Esq.
National Treasury Employees Union
901 E Street, N.W., Suite 600
Washington, D.C. 20004
Philip R. Hertz, Esq.
Jay A. Resnick, Esq.
Raymond M. Forster, Esq.
Pension Benefit Guaranty Corp.
1200 K Street, N.W., Room 340
Washington, D.C. 20005-4026
Thelma Brown
Paralegal Specialist
September 9, 1998
I certify that the Brief for the Federal Labor Relations Authority does not
exceed 12,500 words, the maximum amount allowed under Circuit Rule 28(d).
Judith A. Hagley
Atttorney
September 9, 1998
[1] Pertinent statutory and regulatory provisions are set forth in Addendum
A to this brief.
[2] Thus, Bernsen is wrong when he argues that "the FLRA failed to define an
objective standard to determine whether there is an apparent conflict of
interest when the employees' agent also has a role on behalf of management."
Petitioner's Brief (Brief) at 21.
[3] The statutory provision of "official time" permits an employee to engage
in negotiations and representation on the union's behalf during the time the
employee would otherwise be on duty status. 5 U.S.C. § 7131.
[4] Bernsen's claim that Town & Country is inapposite to analysis under
section 7120(e)(Brief at 30) misconstrues the Authority's decision. The
Authority expressly stated that Town & Country "does not resolve the apparent
conflict of interest issue here" but that it "does offer guidance on agency
law." JA 96.
[5] This Court has stated that section 7120(e) is a provision unique to public
sector labor law, and that, therefore, "reliance on private sector precedent is
inappropriate." American Fed'n of Gov't Employees v. FLRA, 834 F.2d 174, 180
(D.C. Cir. 1987) (AFGE v. FLRA).
[6] For example, NLRB v. General Steel Erectors, Inc., 933 F.2d 568 (7th Cir.
1991).
[7] Bernsen's assertion that the FLRA requires federal employees "to be loyal
to management in the realm of labor relations" (Brief at 25) is incorrect. As
the ALJ found (JA 80), the record does not support the suggestion (Brief at 26,
32) that Jaffe performs labor and personnel type work for the agency. Thus, in
the area of labor relations, Jaffe is loyal only to unit employees, and does not
serve as an agent of management.
[8] The Authority concluded in that case that section 7120(e) did not
automatically preclude an agency attorney, who was also a union official, from
acting as an employee's union representative in an EEO dispute against the
agency. Id.
[9] Bernsen cites several cases, none of which involve section 7120(e), for
general statements regarding conflicts. Brief at 38-40. None of these cases
rejects the standard developed and applied by the Authority under its Statute in
this case. The standard's reasonableness is further demonstrated by its
unchallenged comparability to the tests developed in the area of ethics and
professional responsibility, noted above and in the Authority's decision.
[10] The Authority properly rejected the fact that, after the election in the
fall of 1994, Bernsen thought there was a conflict. The standard that the
Authority applied to determine whether there was a conflict of interest is an
objective one and Bernsen's views were not those of an objective, reasonable
person. JA 103.
