American Federation of Government Employees, Afl-cio, Petitioner, v. Federal Labor Relations Authority, Respondent, 778 F.2d 850 (D.C. Cir. 1985)

The American Federation of Government Employees, AFL-CIO (AFGE or Union) seeks review of the Federal Labor Relations Authority's (FLRA or Authority) Interpretation and Guidance, 15 F.L.R.A. 564 (1984). In that decision, the FLRA held that the head of an agency has the right under the Federal Service Labor-Management Relations Act (Labor-Management Act), 5 U.S.C. §§ 7101-35, to disapprove of an agreement containing a provision that is contrary to law, rule, or regulation, even if that provision was imposed on the parties by the Federal Service Impasses Panel (FSIP). The FLRA also held that while a union may challenge the head of the agency's action by filing an unfair labor practice charge, or by pursuing an expedited review of the negotiability issue, it may not arbitrate the issue through the negotiated grievance procedure in the contract. Because we find both aspects of the Authority's decision to be reasonable constructions of the Labor-Management Act and its policies, we affirm the Authority's decision.

In enacting the Labor-Management Act, Congress sought to provide federal civilian employees with some of the rights enjoyed by employees in the private sector.¹  Specifically, Congress found that statutory protection of employees' rights to form labor unions and bargain collectively was in the public interest. 5 U.S.C. § 7101(a) (1). At the same time, Congress recognized that it could not merely transplant private employment statutes to the public employment context. Rather, it would have to "establish procedures which are designed to meet the special requirements and needs of the Government." 5 U.S.C. § 7101(b). Thus, the Act strikes a balance between the need to strengthen employees' bargaining rights, and the need not to unduly interfere with government operations.² 

Notwithstanding the broad rights the new law conferred on federal employees to engage in collective bargaining, certain subjects were excluded from the scope of bargaining. See, e.g., 5 U.S.C. §§ 7106(a) (management rights); 7117(a) (2) (agency regulation for which "compelling need" exists). To adjudicate "negotiability" disputes arising out of these provisions, Congress set up mechanisms by which a union can appeal an agency's assertion of nonnegotiability. See, e.g., Sec. 7117(c) (expedited review of negotiability issues); Sec. 7118 (unfair labor practice proceedings). Additionally, although strikes continued to be forbidden, Sec. 7116(b) (7), Congress established an Impasses Panel, whose job it is to suggest and if necessary, order terms of settlement between agencies and unions when they cannot agree. Sec. 7119.

In this case, we confront a potential conflict between an agency head's right to assert that a particular provision is not negotiable, and the Impasses Panel's right to impose terms on both parties. This case arose when the Union requested that the FLRA issue a Statement of General Policy on whether the head of an agency has the right to disapprove an agreement because of terms imposed by the Impasses Panel and, if so, whether a union can force the agency to arbitrate the negotiability issue in the parties' negotiated grievance procedure. The FLRA issued an Interpretation and Guidance on these issues holding that the head of the agency retains the power to review an agreement's legality even if some terms are imposed by the Impasses Panel, and that arbitration is not an available forum for reviewing the head of the agency's action. The Union now challenges those determinations.

The legislative history of the Labor-Management Act reveals that the scope of a government agency's duty to bargain was one of the most sensitive issues Congress had to resolve.³  The statute provides that a government agency has a duty to "negotiate in good faith" about "conditions of employment." Secs. 7114(a) (4), 7102. But the statute defines "conditions of employment" as excluding matters "relating to the classification of any position" or "specifically provided for by federal statute." Sec. 7103(a) (14) (B)-(C); see also Sec. 7117(a) (1) (duty to bargain does not include matters inconsistent with any "Federal law or any government-wide rule or regulation"). The statute further lists a variety of management prerogatives, some of which the agency may not negotiate, Sec. 7106(a), and some of which the agency may, but is not required to, negotiate, Sec. 7106(b). Moreover, the duty to bargain does not extend to any matters inconsistent with an agency rule or regulation unless the Authority determines that there is no compelling need for the rule or regulation. Sec. 7117(a) (2).

When, in the course of negotiation, the agency asserts that a union proposal is nonnegotiable, the union has the right to expedited review by the Authority. Sec. 7117(c). After the union⁴  files its petition for review, the head of the agency alleging nonnegotiability must file a statement withdrawing the allegation or setting forth the reasons supporting the allegation. Sec. 7117(c) (3) (A). The Authority then must "expedite proceedings ... to the extent practicable and shall issue ... a written decision on the allegation and specific reasons therefor at the earliest practicable date." Sec. 7117(c) (6); see generally 5 C.F.R. Secs. 2424.1-.10 (1983); H. Robinson, Negotiability in the Federal Sector 185-88 (1981).

Even after an agreement is executed between the agency and a union, issues of negotiability may still be raised. First, the head of the agency has 30 days from the time an agreement is signed within which to review the agreement⁵  and ensure that it is "in accordance with the provisions of this chapter and any other applicable law, rule, or regulation." Sec. 7114(c) (2). When the head of an agency disapproves an agreement he is making essentially an assertion of nonnegotiability⁶  which triggers the expedited review described above. See National Federation of Federal Employees, Local 1505 and Department of the Interior, National Park Service, Roosevelt-Vanderbilt National Historical Site, Hyde Park, New York, 7 F.L.R.A. 608 (1982); American Federation of Government Employees, AFL-CIO, Local 1052 and United States Army Engineer Center, Fort Belvoir, Virginia, 6 F.L.R.A. 460 (1981). At the end of the 30 days, the agreement automatically takes effect if the head of the agency has not taken action. Sec. 7114(c) (3).

Second even if the parties have never asserted nonnegotiability and have allowed the agreement to take effect, either party may raise illegality of the provision as a defense to a charge that it has violated the terms of the agreement.⁷  If the defending party can show that the contract term in question is contrary to law--i.e., was nonnegotiable--then the term is declared void and unenforceable. See National Federation of Federal Employees, Local 1332 and Department of the Army Headquarters, U.S. Army Materiel Development and Readiness Command, 5 F.L.R.A. 599, 601 (1981).

A second major aspect of the Labor-Management Act was its incorporation of The Federal Service Impasses Panel.⁸  The Panel, which is made up of at least seven presidential appointees, is charged with the responsibility of settling bargaining impasses. Either party may request the Panel to conduct an inquiry into a bargaining impasse. If after the Panel makes initial recommendations to the parties they still cannot reach a settlement, "the Panel may--(i) hold hearings; (ii) administer oaths, take the testimony or deposition of any person under oath, and issue subpoenas ...; and (iii) take whatever action is necessary and not inconsistent with this chapter to resolve the impasse." Sec. 7119(c) (5) (B). See generally 5 C.F.R. Secs. 2471-.1-.12 (1983). When the Panel imposes a term on the parties it is "binding on such parties during the term of the agreement, unless the parties agree otherwise." Sec. 7119(c) (5) (C).

While the Impasses Panel has considerable power in settling disputes, it does not have the authority to pass judgments on assertions of nonnegotiability. The Act provides that " [t]he Authority shall ... resolves [sic] issues relating to the duty to bargain in good faith under section 7117(c) of this title." Sec. 7105(a) (2) (E). The Authority has held that Sec. 7105 and Sec. 7117(c), which provides for expedited review of nonnegotiability issues by the Authority, preclude the Impasses Panel from considering negotiability issues. See Interpretation and Guidance, 11 F.L.R.A. 626 (1983); see also House Committee on Post Office and Civil Service, 98th Cong., 2d Sess., Fifth Annual Report of the Federal Labor Relations Authority 96-97 (Comm. Print 1984) (panel declines jurisdiction when "threshold questions exist concerning a party's obligation to bargain over a proposal"). Thus, if any time prior to the Impasses Panel's decision, the agency raises a claim of nonnegotiability, the Impasses Panel cannot consider that issue, and the union must seek resolution of the issue before the Authority. Interpretation and Guidance, 11 F.L.R.A. at 629.

Decisions of the Impasses Panel are not directly reviewable by the courts. See Council of Prison Locals v. Brewer, 735 F.2d 1497 (D.C. Cir. 1984). A party's failure to abide by the Impasses Panel's order can, however, be challenged as an unfair labor practice. After the Authority has issued its findings and order in an unfair labor practice proceeding, the parties may seek review in the courts. See Sec. 7118(a) (7). Either the Authority or the court may decide that the agency has justifiably refused to comply with an Impasses Panel order because the subject is outside of the statutory scope of bargaining.

On May 25, 1983, the Union, alleging that a number of agencies were using the head of the agency provision in Sec. 7114(c) to disapprove agreements containing terms imposed on the parties by the FSIP, requested the Authority to issue a Statement of General Policy,⁹  pursuant to 5 C.F.R. Sec. 2427 (1983). The Union claimed (1) that this practice contravenes the statutory mandate that the Impasses Panel's decisions are "binding" on the parties, and (2) that even if the head of an agency has the right to invalidate provisions, a union should be able to arbitrate the issue in the grievance procedure established in the collective bargaining agreement.

The Authority rejected both of the Union's contentions. Interpretation and Guidance, 15 F.L.R.A. 564 (1984). It explained that the Labor-Management Act requires that action taken by the Impasses Panel not be inconsistent with the law, and that the head of the agency provision was similarly geared to ensuring that all contracts be in compliance with the law. Thus,

[r]elying on the plain words of the Statute, and in the absence of relevant legislative history, the Authority conclude [d] that, pursuant to the provisions of section 7114(c), agency heads are empowered to review all provisions of collective bargaining agreements, including those mandated by the Panel, to assure conformity with the provisions of the Statute as well as other applicable laws, rules, and regulations.

Id. at 567 (emphasis in original). The Authority explained that this interpretation was consistent with the statute's language, since the statute provides for agency head review of collective bargaining agreements, and it "is well established that the procedures of the Panel are part of the collective bargaining process." Id. (citing International Brotherhood of Electrical Workers, AFL-CIO, Local 121 and Department of the Treasury, Bureau of Engraving and Printing, Washington, D.C., 10 F.L.R.A. 198, 199 (1982); American Federation of Government Employees, Locals 225, 1504 and 3723, AFL-CIO v. FLRA, 712 F.2d 640, 646 n. 24 (D.C. Cir. 1983)).

The Authority also held that the Union has two alternative routes to seek review of the head of the agency's determination. Interpretation and Guidance, 15 F.L.R.A. at 567. First, the Union may pursue its statutory right of expedited review of negotiability issues, since the head of the agency's disapproval of an agreement is the equivalent of an allegation of nonnegotiability. Id. at 567-68 (citing National Federation of Federal Employees, Local 1505 and Department of the Interior, National Park Service, Roosevelt-Vanderbilt National Historical Site, Hyde Park, New York, 7 F.L.R.A. 608 (1982); Association of Civilian Technicians, Inc., Pennsylvania State Council and the Adjutant General, Department of Military Affairs, Commonwealth of Pennsylvania, 7 F.L.R.A. 346 (1981), rev'd on other grounds sub nom. Adjutant General, Dep't of Military Affairs v. FLRA, 685 F.2d 93 (3d Cir. 1982)). Alternatively, the Union may file unfair labor practice charges against the agency. Interpretation and Guidance, 15 F.L.R.A. at 568. If the Authority finds that the Impasses Panel's provision was not in fact contrary to law, the agency head's disapproval "would constitute a failure or refusal 'to cooperate in ... impasse decisions' in violation of section 7116(a) (1) and (6) of the Statute." Id.

The Supreme Court recently explained that " [l]ike the National Labor Relations Board ... the FLRA was intended to develop specialized expertise in its field of labor relations and to use that expertise to give content to the principles and goals set forth in the Act." Bureau of Alcohol, Tobacco and Firearms v. FLRA, 464 U.S. 89, 97, 104 S. Ct. 439, 444, 78 L. Ed. 2d 195 (1983). This court as well, announced in American Federation of Government Employees, Locals 225, 1504, and 3723, AFL-CIO v. FLRA, 712 F.2d 640 (D.C. Cir. 1983):

Congress has entrusted to the FLRA primary responsibility for administering and enforcing the Federal Service Labor-Management Relations Act. An FLRA interpretation of the Act, if reasonable and coherent, commands our respect.... As a court of review ... we are not positioned to choose from plausible readings the interpretation we think best. Rather, our task is to inquire whether the FLRA's reading is sufficiently plausible and reasonable to stand as the governing law, absent alteration by Congress.

Id. at 643-44; see also National Treasury Employees Union v. FLRA, 691 F.2d 553, 558-59 (D.C. Cir. 1982) (FLRA construction of statute upheld if it is "reasonably defensible"). Since these decisions in this circuit, the concept of deference to an expert agency's statutory interpretation has been powerfully reinforced by the Supreme Court. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., --- U.S. ----, 104 S. Ct. 2778, 2782 n. 11, 2783, 81 L. Ed. 2d 694 (1984) (court is not to disturb " 'reasonable accommodation of conflicting policies that were committed to the agency's care by the statute.' ") (quoting United States v. Shimer, 367 U.S. 374, 382, 81 S. Ct. 1554, 1560, 6 L. Ed. 2d 908 (1961)).

Under Chevron, our first task is to determine "whether Congress has directly spoken to the precise question at issue." 104 S. Ct. at 2781. If it has not, "the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather ... the question is whether the agency's answer is based on a permissible construction of the statute." Id. at 2782 (footnote deleted). With this standard in mind, we now turn to the interpretations at issue.

B. The Head of the Agency and The Impasses Panel

The Union argues that the Authority's interpretation of the head of the agency's right to disapprove of an agreement containing terms imposed by the FSIP because of purported nonnegotiability contravenes both the letter and the spirit of the Labor-Management Act. To evaluate this claim we turn first to the language of the statute and then to the policies that it represents.

a. The Statutory Language

The Union's argument that the "binding" provision in Sec. 7119(c) (5) (C) automatically precludes head of the agency review is unpersuasive. It is clear from the structure of the statute that the term "binding" is not absolute. Both sides agree that the Impasses Panel's orders are subject to review first by the Authority in an unfair labor practice proceeding and later by the courts in review of any such proceeding. The terms are only binding in these reviews to the extent that they are within the Panel's statutory authority.¹⁰  For example, although the Labor-Management Act makes it an unfair labor practice "to fail or refuse to cooperate in impasse procedures and impasse decisions as required by this chapter," Sec. 7116(b) (6), an agency is not guilty of an unfair labor practice if the FLRA or a reviewing court later determines that the issue was nonnegotiable. See Decision on Request for General Statement of Policy of Guidance, 16 F.L.R.A. 549, 551 (1984); State of Nevada National Guard and National Association of Government Employees, Locals R12-130 and R12-145, 7 F.L.R.A. 245 (1981). The issue posed in this appeal then is not whether the head of the agency must follow the Impasses Panel--the Union concedes that he need not if in fact a provision is ultimately found to be nonnegotiable. Rather the issue is simply whether the head of the agency can trigger immediate review of the negotiability issue through the mechanism of Sec. 7114(c).

When the head of an agency invalidates a typical agreement, his action is treated as the equivalent of an allegation of nonnegotiability under Sec. 7117(c), so as to allow expedited review of the negotiability issue.¹¹  See supra at 853-54. Even if the head of the agency fails to raise the negotiability issue within the 30 day period set out in the statute, he still has the opportunity not to comply with a provision and to have its legality determined in the course of an unfair labor practice proceeding. See American Federation of Government Employees, AFL-CIO, Local 1625 and Fleet Command Training Center, Atlantic, United States Department of the Navy, 14 F.L.R.A. 162, 162-63 (1984); American Federation of Government Employees, AFL-CIO, Local 1858 and U.S. Army Missile Command, Redstone Arsenal, Alabama, 4 F.L.R.A. 361, 362 (1980). Given the fact then that the parties have the opportunity to seek resolution of a negotiability issue before the Authority at any time in an unfair labor practice proceeding, the term "binding" cannot be dispositive in the statutory scheme.

Moreover, in interpreting Sec. 7119(c) (5) (C), we must take into account the need to reconcile it with the provisions for "head of the agency" review in Sec. 7114(c). Section 7114(c) (1) provides that " [a]n agreement between an agency and an exclusive representative shall be subject to approval by the head of the agency." This court and the Authority have interpreted the term "agreement" as used in the head of the agency provision, to include all terms--whether achieved by negotiation or imposed by the Impasses Panel. See American Federation of Government Employees, Locals 225, 1504, and 3723, AFL-CIO v. FLRA, 712 F.2d 640, 646 n. 24 (D.C. Cir. 1983) ("a Panel-imposed settlement, once adopted by the parties, should be regarded as part of a 'collective bargaining agreement' "); International Brotherhood of Electrical Workers, AFL-CIO, Local 121 and Department of the Treasury, Bureau of Engraving and Printing, Washington, D.C., 10 F.L.R.A. 198, 199 (1982) ("it is well established that the impasse resolution procedures of the Panel operate as one aspect of the collective bargaining process").

We conclude, therefore, that the Authority's reconciliation of the two statutory sections for Impasses Panel settlements and head of the agency approval gives adequate meaning to both Sec. 7114 and Sec. 7119. By contrast, the Union's reading of the statute would require that the approval scope of the head of the agency provision be subordinated to the authority of the Impasses Panel to impose settlements. Since neither the clear language nor the legislative history of the statute compels that result, the Authority's interpretation is a reasonable one. See Chevron, U.S.A., Inc. v. Natural Resource Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 2783, 81 L. Ed. 2d 694 (1984).

b. Policy of the Act

The head of the agency provision was fashioned to provide the agency with a final opportunity to review the terms of an agreement that the agency has signed with a union.¹²  The provision first appeared in the Senate version¹³  of the Civil Service Reform Act, and in a modified form was incorporated into the conference version of the bill. The Senate Committee explained that

" [t]he purpose of the provision is to ensure that agreements conform to applicable laws (including this subchapter), existing published agency policies and regulations. A substantially identical provision is contained in Executive Order 11491. Experience under that Executive Order in numerous negotiability disputes established that the provision was warranted to accomplish the purpose described, and that the time limit imposed was a reasonable one to expedite the review process without sacrificing the quality of such review."

S.Rep. No. 969, 95th Cong., 2d Sess. 109 (1978), reprinted in Legislative History at 769, U.S.Code Cong. & Admin.News 1978, 2723, 2831.

The head of the agency provision was obviously designed to ensure high-level review of executed agreements. Of course, Congress might have limited the head of the agency's opportunity for review to the negotiation phase, but it apparently was unwilling to impose a continuous burden on the head of the agency to review each and every proposal as it arose in the course of day-to-day bargaining. Many of the Union's and the dissent's arguments about the unfairness of the extra 30-day period, apply equally to negotiated agreements and Panel-imposed settlements. We must be cautious not to allow disenchantment with the 30-day review in general, to impact on the independent question of whether Congress intended to except Panel-imposed settlements.

The Union argues that the policy that gave rise to head of the agency review is not applicable when the Impasses Panel has imposed a term, and that the Authority's interpretation is, therefore, unreasonable. The Union has failed to demonstrate, however, why the Impasses Panel's involvement changes anything. Indeed, an argument can be made that Congress's explicit policy to allow the head of an agency to invalidate an agreement may have even stronger justifications for terms imposed by the Impasses Panel, than for those negotiated by the parties. In the latter case, the agency's own authorized representative has agreed to the terms. In the former case, however, no representative of the agency may have agreed to them at all, if the Impasses Panel imposed a settlement which was not suggested by either party. Indeed, in such a case, no earlier opportunity for raising the negotiability issue may have been presented. In any event, even if the term was originally proposed by one of the parties, there is no reason why the statutory policy of not entrusting the critical question of compliance with the law exclusively to lower-level officials differs when the Impasses Panel is involved.

AFGE argues nonetheless that in most cases the agency will be familiar with the disputed term before the Impasses Panel imposes it, and so the agency should not be allowed to await the Impasses Panel's decision before it objects. As we have already pointed out, however, the issue here is not opportunity to raise the negotiability issue--that is always available as a defense in an unfair labor practice proceeding. The sole question is whether Congress envisioned an intermediate phase of review by the head of the agency within 30 days. The policy behind such a provision would be to permit the head of the agency who usually has the broadest knowledge of agency-wide laws, procedures, rules, and concerns to decide if the term is in fact "in accordance with the provisions of this chapter and any other applicable law, rule, or regulation (unless the agency has granted an exception to the provision)." Sec. 7114(c) (2).

AFGE also argues that the participation of the Impasses Panel is, in and of itself, a sufficient safeguard against illegally imposed terms. This argument misses the mark, however, because the Impasses Panel is not expert in the laws, regulations, practices, and procedures of each governmental agency, and so is not necessarily equipped to decide issues of scope of negotiability.¹⁴  When a negotiability issue is raised in the course of its proceedings, the Impasses Panel automatically loses jurisdiction. See Interpretation and Guidance, 11 F.L.R.A. 626 (1983). Thus, the argument that the participation of the FSIP insures against terms that are nonnegotiable fails to persuade.

Our conclusion is bolstered by the Act's general policy of facilitating review of negotiability issues as quickly as possible. Expedited review of the head of the agency's action furthers that policy.¹⁵  If the head of the agency is not allowed to veto a provision within 30 days, then he will be forced to challenge it eventually through non-compliance, by defending against unfair labor practice charges. Ultimately, his is not a choice between compliance and non-compliance with a term he believes illegal. It is a choice between triggering review of the issue within 30 days of the time the contract is signed and triggering review of the issue later, after the agency has refused to go along with the provision in question.

Essentially the head of the agency provision affects no more than the timing and the forum of review of negotiability issues.¹⁶  As for timing, there is simply nothing in the statute or its policies that supports delayed determination of the issue. As for the forum of review, it is true that a head of the agency determination is not subject to arbitration under the parties' negotiated grievance procedure.¹⁷  See infra Part II.C. But it is also true that Congress clearly preferred that these issues be taken up directly with the Authority through the expedited review of nonnegotiability assertions. Given the statute's structure and purpose, we conclude that the Authority's interpretation of the relationship between the head of the agency provision and the Impasses Panel provision was reasonable.

In reviewing the FLRA interpretation before us, we again emphasize the constraints of our judicial role. We are not members of Congress, with the power to rewrite the terms of a law which may have revealed infirmities in its implementation. Nor are we members of the FLRA, to whom Congress has delegated the primary authority to fill in interpretative voids in the Labor-Management Act. While we recognize that some of the policy arguments raised by the Union and by our dissenting colleague concerning the dynamics of head of the agency review may indeed present substantial concerns for the participants in the collective bargaining process, we stress that the alternative interpretation they advance creates an equally troublesome host of practical problems, apart from its inconclusiveness as an exercise in statutory interpretation. See supra pp. 856-861. Perhaps this fact alone illustrates the wisdom of judicial abstention from redesign of a statutory scheme. Notwithstanding disclaimer, the dissent's main theme is that the Authority's interpretation should be reversed because it is not the best, or the most reasonable one. We view our task, in contrast, as simply deciding, whether, given the existence of competing considerations that might justify either interpretation, the Authority's interpretation is clearly contrary to statute or is an unreasonable one. See Chevron, USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 2781-83, 81 L. Ed. 2d 694 (1984); supra pp. 857-858. We think not.

AFGE also challenges the Authority's holding that the head of the agency's determination of nonnegotiability is not an issue which can be arbitrated as part of the parties' negotiated grievance procedure. While it framed this argument as an alternative one in its brief, at oral argument counsel conceded that if the Authority was correct in deciding that the head of the agency has the right to invalidate the agreement within 30 days, then the negotiated grievance procedure is clearly not the proper forum for resolution. Since we hold today that the Authority was indeed correct in its determination of the first issue, the second facet of its decision is also correct.

In Part II.B. of this opinion, we concluded that the head of an agency has the right to invalidate an agreement containing terms not in compliance with the law--even those imposed by the Impasses Panel. Once this is recognized, it is clear that the grievance procedure is unavailable to challenge the head of the agency's invalidation of an agreement. The action is treated as an assertion of nonnegotiability and, therefore, must be addressed by the Authority itself. In Louis A. Johnson Veterans Administration Medical Center, Clarksburg, West Virginia ("Louis A. Johnson"), 15 F.L.R.A. 347 (1984), the FLRA explained the limits on the arbitrators' statutory authority to decide disputes that involve pure questions of negotiability:

Clearly, therefore, negotiability disputes which arise between an agency and an exclusive representative under section 7117(c) (1) [claims of nonnegotiability raised before contract takes effect] must be resolved by the Authority as required by section 7105(a) (2) (E). Consequently, such disputes may not be resolved by an arbitrator in the guise of a grievance under the negotiated grievance procedure contained in the collective bargaining agreement between the exclusive representative and the agency.

Id. at 349-50 (footnotes deleted).

Contrary to the Union's argument, the determination of the arbitrator's authority to decide issues of negotiability does not turn on an examination of the scope of arbitrators' competence. Rather, the decision in Louis A. Johnson was based on the statutory requirement that the Authority settle issues of negotiability itself. See 5 U.S.C. § 7105(a) (2) (E) ("The Authority shall ... prescribe criteria and resolve issues relating to the duty to bargain in good faith"); 5 U.S.C. 7117(c) (providing for appeal to Authority); see generally Interpretation and Guidance, 11 F.L.R.A. 626 (1983) (Impasses Panel has no jurisdiction to decide issues of negotiability). Given our holding that the head of the agency's action within 30 days triggers the expedited negotiability appeal under Sec. 7117(c), we affirm the FLRA's decision that arbitration is not a proper forum for review of a head of an agency's veto¹⁸  of a term imposed by the Impasses Panel.¹⁹ 

CONCLUSION

The language and the policies of the Labor-Management Act support the FLRA's interpretation that the head of an agency may reject a settlement term imposed by the Impasses Panel because it is violative of management prerogatives under the Act. Its decision was not "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 706(2) (A). Given this decision, it is clear that the Authority was also correct in deciding that arbitration is not the proper forum for what is, essentially, an assertion of nonnegotiability. Therefore, the Interpretation and Guidance is

Affirmed.

GINSBURG, Circuit Judge, dissenting.

As the majority recognizes, this controversy entails two statutory provisions in tension; the question is which of the two prescriptions, in light of the general congressional design, is more appropriately subordinated to the other. Upon the petitioner-union's request, the Federal Labor Relations Authority (FLRA or Authority) issued the Interpretation and Guidance contested in this review proceeding. The challenged Interpretation subordinated a decision of the Federal Service Impasses Panel (Impasses Panel or Panel), which under the statute is "final and binding" on the parties, to the agency head's statutory authority to approve collective bargaining agreements. See Interpretation and Guidance, 15 F.L.R.A. 564 (1984). I conclude that the purposes and policies underlying the statute are frustrated by allowing the agency a unilateral veto over the final, impasse-resolving decision of an impartial and expert Panel. I therefore dissent from the court's affirmance of the Authority's Interpretation.

The Federal Service Labor-Management Relations Act, 5 U.S.C. § 7101 et seq. (1982) (Act), provides a framework for the negotiation of employment contracts and the resolution of bargaining disputes in the public sector. To facilitate the just and efficient termination of negotiation impasses, the Act created the Federal Service Impasses Panel. The Panel operates as a "mechanism of last resort" in cases where the parties cannot reach agreement. See Council of Prison Locals v. Brewer, 735 F.2d 1497, 1501 (D.C. Cir. 1984). The members of the Panel are appointed by the President; the statute requires that the appointees be persons "familiar with Government operations and knowledgeable in labor-management relations." 5 U.S.C. § 7119(c) (2) (1982). The Panel's first charge is to assist the parties in accommodating their differences; if inter-party accommodation fails, the Panel is empowered to "take whatever action is necessary and not inconsistent with this chapter to resolve the impasse." Id. at Sec. 7119(c) (5) (B) (iii). Panel impasse-resolving action often takes the form of ordering the parties to adopt particular contract provisions. The FLRA and the courts consider such Panel-imposed terms to be part of the collective bargaining agreement. See International Brotherhood of Electrical Workers, AFL-CIO, Local 121, 10 F.L.R.A. 198, 199 (1982); American Federation of Government Employees, AFL-CIO v. FLRA, 712 F.2d 640, 646 n. 24 (D.C. Cir. 1983). The Act mandates that any final action of the Panel "shall be binding on [the] parties during the term of the agreement, unless the parties agree otherwise." 5 U.S.C. § 7119(c) (5) (C) (1982).

The Act also provides, however, that " [a]n agreement between any agency and an exclusive representative shall be subject to approval by the head of the agency." Id. at Sec. 7114(c) (1). The agency head has thirty days in which to decide whether or not to approve the agreement, but he must approve it if it is "in accordance with the provisions of this chapter and any other applicable law, rule, or regulation." Id. at Sec. 7114(c) (2). The agency head's rejection of a contract term under this provision thus constitutes a claim by him that the term is nonnegotiable. See Interpretation, 15 F.L.R.A. at 567. The issue of negotiability may be decided only by the FLRA. See Interpretation and Guidance, 11 F.L.R.A. 626 (1983).

The language of the statute creates a tension between the final and binding character of the Panel's decision and the agency head's authority to reject contract provisions that he judges to be contrary to law. The legislative history confirms rather than resolves this tension. Congress clearly desired the Impasses Panel to be the final arbiter in these contract disputes. Indeed, the strength of this desire led Congress to take the unusual step of precluding direct review of Panel decisions by either the FLRA or the courts. See H.R.Rep. No. 1403, 95th Cong., 2d Sess. 54 (1978), reprinted in Legislative History at 700; Council of Prison Locals, 735 F.2d at 1499-1500.¹  On the other hand, it is also clear that Congress wished to maintain the boundaries of management rights as delineated in the Act. See maj. op. at 852-853 & n. 3. The agency head's approval authority is designed to secure these boundaries against incursion occasioned by the inexperience or incompetence of the lower level officers who negotiate the contract. The legislative history provides no instruction to the Authority, or the courts, on the appropriate reconciliation of these competing congressional aims.

When the language and legislative history of a statute are ambiguous, the court generally must defer to the interpretation of the agency entrusted with superintendence of the statutory scheme. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 2782-83, 81 L. Ed. 2d 694 (1984). But judicial deference cannot be blind or absolute; the courts "must not 'rubber-stamp ... administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute.' " Bureau of Alcohol, Tobacco and Firearms v. FLRA, 464 U.S. 89, 97, 104 S. Ct. 439, 444, 78 L. Ed. 2d 195 (1983) (quoting NLRB v. Brown, 380 U.S. 278, 291-92, 85 S. Ct. 980, 988, 13 L. Ed. 2d 839 (1965)); see American Federation of Government Employees v. FLRA, 750 F.2d 143, 146 (D.C. Cir. 1984). The purpose of the Labor-Management Act was to strike a sensitive balance between the rights of federal employees and the need for effective and efficient operation of the government. See 5 U.S.C. § 7101(b) (1982); 123 Cong.Rec. E5566 (daily ed. Sept. 14, 1977) (remarks of Hon. William Clay), reprinted in Legislative History at 834. The Authority's holding in this case disrupts that balance and frustrates the policy underlying the statute. It is, therefore, beyond the range of "reasonably defensible" interpretation. See Department of Defense v. FLRA, 691 F.2d 553, 558-59 (D.C. Cir. 1982).

The Authority's interpretation significantly erodes the right Congress accorded federal employees to bargain collectively. The Act prohibits recourse by federal employees to the ultimate device in labor's cabinet to impel management to reach an acceptable agreement--the strike. See 5 U.S.C. § 7116(b) (7) (1982). Having denied federal employees this arm, Congress provided a different mechanism through which a union could force a recalcitrant agency to accept a termination of the dispute. This mechanism is the Federal Service Impasses Panel.²  The employees' right to bargain would be debilitated if they were denied the secure ability to force negotiations to a conclusion binding on management and simultaneously foreclosed from refusing to work without a contract. Thus, their bargaining capacity depends, to an important extent, on the fairness and efficacy of the impasse resolution procedure.

The Interpretation upheld by the majority opens the way for agency abuse of that impasse resolution process. As counsel for the union pointed out at oral argument, the Panel often functions as a kind of "final offer" arbitrator. Accord Department of Defense, Army-Air Force Exchange Service v. FLRA, 659 F.2d 1140, 1146 n. 32 (D.C. Cir. 1981). The parties present their proposed contracts and the Panel, rather than designing new terms itself, picks and chooses from among the provisions suggested by the parties to design a contract that is fair as a package. Allowing the agency to withhold an objection to the negotiability of a term until after the Panel issues its decision undermines the fairness of this procedure. The agreement that the Panel constructs is intended to be balanced; if the agency can wait and reject a term after the Panel has included it, that balance will be upset.³ 

For example, in the dispute that led to the Interpretation in this case, the provision that the agency head rejected was one that the agency itself suggested to the Panel. See Department of Justice, Bureau of Prisons, Washington, D.C., No. 79 F.S.I.P. 120 (Oct. 29, 1980) (Factfinder's Report), reprinted in Brief for Petitioner, Addendum B at B-51. The Panel might have seen the term as a generous concession--it provided that " [p]ersonnel actions made the subject of formal grievances will be stayed, if the grievant so requests, unless the employer has a good faith reason to go ahead with the actions." See Letter from Kenneth T. Blaylock, President of AFGE, to Barbara Mahone, Chairperson of the FLRA, at 2 (May 25, 1983) (requesting an Interpretation and Guidance), reprinted in Joint Appendix at 4. In exchange for this term, the Panel might have given the agency a more favorable provision elsewhere in the contract. Allowing the agency head to veto the provision after the Panel has ordered its inclusion permits the agency to misemploy the system by suggesting generous terms and then repudiating them.⁴ 

A further, intensely practical concern, adds weight to my misgivings about the majority's denigration of the Panel's position in the statutory scheme, and the extra card the majority deals to the agency. The FLRA's disposition, which the court so strenuously labors to affirm,⁵  undermines the employees' rights in this additional and conspicuous way: it delays the decision on the validity of the Panel-imposed term for so long that the term may not be worth anything to the union when it is finally upheld. I agree with the majority that the second issue in this case hinges on the first: if the agency head has the authority to reject a Panel-imposed provision then the union may challenge that action only through an "expedited" negotiability appeal or an unfair labor practice charge. See maj. op. at 857, 861-62. Both of these paths lead to the Authority, and the road, as experience reveals, is a long one.

The union estimates that a decision by the Authority may be delayed some three years by the backlog from which that agency suffers. See Brief for Petitioner at 15. By contrast, the grievance/arbitration procedure established by every contract, see 5 U.S.C. § 7121(a) (1982), may be accomplished in a matter of months. See F. Elkouri & E.A. Elkouri, How Arbitration Works 9 n. 36, 277 & n. 235 (4th ed. 1985).

This difference may mean a great deal to the union. The term of a public sector labor contract is typically only two or three years, see Brief for Petitioner at 16 n. 9; by the time the Authority addresses the issue it might lose its immediate, practical vitality even if the union's appeal could survive a mootness challenge. See, e.g., FLRA v. Office of Personnel Management, 778 F.2d 844 (D.C. Cir. 1985) (union filed expedited negotiability appeal in February 1980, collective bargaining agreement relevant to union's proposals expired June 1983, FLRA announced its decision February 1984; agency unsuccessfully contended that union's negotiability appeal became moot upon expiration of the particular agreement's term). Moreover, the time lapse itself generates losses that cannot always be compensated by retroactive relief: for example, the loss of procedural protections or beneficial working conditions during the years when the contract should have been in force.⁶ 

The majority argues that this factual--and therefore changeable--difference in the time required for the various resolution procedures cannot be the basis for an interpretation of congressional intent. See maj. op. at 860 n. 17. It is true, of course, that our interpretation of the statutory procedure cannot vary depending on the size of the backlog from which the FLRA suffers; but the slowness of the FLRA's nonnegotiability procedure is nonetheless relevant because it is, in part, symptomatic of the lack of fit between that procedure and the union's concerns.

The negotiability appeal minimizes the time span between the Panel order imposing agreement terms and the request for review, but places no limit on the amount of time the Authority may take in rendering a final decision. See 5 U.S.C. § 7117(c) (6) (1982). From the union's point of view, however, the relevant time period is not the one between the Panel's decision and the request for Authority review; that time may be so brief that scant, if any, loss is sustained. Instead, the lapse critical to the employees' interests is the time between the agency's violation of the agreement and the resolution of the dispute. This latter time, it should be apparent, represents the measure of lost benefits--benefits due under the contract. And it is this crucial period that the availability of arbitration shortens. Thus, the negotiability appeal route requires the union to expend its resources before the issue becomes vital, i.e., when the agency asserts nonnegotiability but is not yet chargeable with breach of contract. Furthermore, no clock limits the time that the union must suffer the adverse consequences of the agency's refusal to follow the Panel-imposed term. Arbitration, on the other hand, is triggered only when the union is positioned to charge the agency with violation of its contractual responsibility. Moreover, the parties have substantial assurances concerning--and sometimes even control over--the time within which a decision will be issued.⁷ 

Thus, the Interpretation at issue in this case may lead to a substantial delay and severe erosion of the employees' rights. Nor is this erosion of employee bargaining rights counterbalanced by any overriding consideration relating to efficiency or effectiveness in government. Indeed, the Interpretation adopted by the Authority and affirmed by the majority hinders rather than furthers the statutory policy in favor of the smooth operation of government.

The serious bargaining imbalance created by this extension of the agency head's authority undermines both the reality and the appearance of fairness on which the amicable and expeditious resolution of labor disputes depends. By creating an opening for abuse on management's side and an impression of unfairness to the union, the Interpretation invites suspicion and distrust on the part of the union and intransigence, even guile, on the part of the agency. The stable labor relations that the Act was intended to promote will therefore be disserved rather than advanced by this Interpretation.⁸ 

No discernible government interest supports the bargaining power imbalance that the court affirms today. The purpose served by the agency head's approval authority does not warrant extension of that authority to cover Panel-imposed agreements. That purpose, as the majority points out, was to insure high level review of federal labor agreements. See maj. op. at 858. The approval power is designed to prevent the intrusion on management rights that sometimes results from the inexperience or incompetence of the lower level officials who negotiate the contracts. This functional interpretation is confirmed by the explicit statutory exception for contracts negotiated at a higher level, as part of a national agreement. See 5 U.S.C. § 7114(c) (4) (1982). Congress evidently assumed that national officials are experienced and knowledgeable, and therefore found no need for the agency head to review and approve a contract negotiated by such officials.

No doubt Congress also anticipated that the Impasses Panel would be far more experienced and knowledgeable than the agency head when it comes to the consistency of contract terms with the applicable laws. Congress instructed the President to choose Panel members "solely on the basis of fitness to perform the duties and functions involved, from among individuals who are familiar with Government operations and knowledgeable in labor-management relations." 5 U.S.C. § 7119(c) (2) (1982).⁹  Panel members obviously are more analogous to the national officers in the statutory exception than to the subordinate negotiators whose deficiencies the agency head's approval power was designed to check.

The majority suggests that the Panel's knowledge may nonetheless be inadequate because the Panel is not aware of all the rules and regulations concerning each agency--rules and regulations with which the agreement must also be consistent. See id. at Sec. 7114(c) (2) (head of agency shall approve if agreement is consistent with applicable laws, rules, and regulations). The approval power is functional with respect to Panel-imposed terms, the argument goes, because it allows the agency head to insure that the agreement is compatible with all applicable agency regulations. See maj. op. at 859. However, this argument proves too much. The national officers who are exempted from agency head review, as well as the FLRA and the courts, are surely less familiar with such regulations than the agency head or, indeed, the agency's representatives in negotiations. Rulings by such superior authorities, prescribing or upholding contract terms, are, nonetheless, not subject to subsequent oversight by the agency head. Clearly then, closeness to local regulations is neither sufficient nor necessary for exemption from review by the agency head.

There is a very good reason why this should be so. The Panel, like the Authority and the courts, has the agency as a party before it and, therefore, has easy access to any information it might need regarding potential conflicts between the agreement and agency regulations.¹⁰  The Panel also has the expertise in government operations and labor-management relations that equips it to make the appropriate inquiries before imposing terms. See supra. If there is a question of conflict, which raises an attendant issue of negotiability, the Panel's own procedures call for it to decline jurisdiction and allow resolution of the question by the Authority. See International Brotherhood of Electrical Workers, 10 F.L.R.A. 198, 198 n. 1 (1982). Thus, the Panel's composition, its procedures, and the administrative process provide ample protection from overreaching Panel decisions without undermining the other purposes of the statute.

The Authority's Interpretation, in sum, is inconsistent with the policies underlying the statutory scheme. It disrupts the delicate balance between labor and management, weakens employees' rights, erodes stable negotiation practices, and serves no significant government interest. It is therefore an unacceptable interpretation.III.

As the majority recognizes, once the question whether the agency head may disapprove a Panel-imposed term is resolved, the issue of where the union may go to challenge the disapproval is essentially answered. See maj. op. at 861. If, as I conclude, the agency head had no authority to disapprove the term in the first place, then his rejection of it becomes a simple contract violation. A dispute over the meaning or application of the collective bargaining agreement is properly challenged through the grievance procedure and arbitration. See Louis A. Johnson Veterans Administration Medical Center, Clarksburg, West Virginia, 15 F.L.R.A. 347 (1984). In the course of resolving such a dispute, the arbitrator must consider whether the provision at issue violates the applicable laws, rules or regulations. See id. at 350-51.¹¹  Either party may request FLRA review of the arbitrator's decision. See 5 U.S.C. § 7122 (1982); see also supra note 6.

The FLRA's interpretations merit substantial deference when they present reasonable and defensible constructions of the Act. The Interpretation at issue here involves scant reasoning on the FLRA's part, see supra note 5, and is incompatible with the policies underlying the statutory scheme. The Federal Service Labor-Management Relations Act, 5 U.S.C. § 7101 et seq. (1982), does not authorize an agency head to undermine the crucial role of the Federal Service Impasses Panel by unilaterally rejecting a term that Panel imposed. The agency's refusal to comply with such a provision is, as I comprehend the legislators' dominant intent, a simple contract violation, subject to the usual grievance and arbitration procedures. I therefore dissent from the majority opinion.