National Treasury Employees Union, Petitioner, v. Federal Labor Relations Authority, Respondent, 774 F.2d 1181 (D.C. Cir. 1985)

National Treasury Employees Union (NTEU) seeks reversal of a decision of the Federal Labor Relations Authority (FLRA)¹  dismissing an unfair labor practice complaint filed against the Bureau of Government Financial Operations of the Department of Treasury (the Bureau). The FLRA found that the Bureau did not commit an unfair labor practice when it failed to provide NTEU with notice and an opportunity to be present at an interview by the Bureau of a bargaining unit employee scheduled to testify on behalf of another employee at a hearing before the Merit Systems Protection Board (MSPB). For the reasons set forth herein, we find the FLRA's conclusion arbitrary, capricious and contrary to law.

NTEU's complaint arises out of the following facts. On December 20, 1980, James Lewis, an employee of the Bureau of Government Financial Operations, witnessed an altercation between Philip Murphy, a second Bureau employee, and his supervisor. Murphy lost his job as the result of this altercation and appealed this removal to the MSPB. Murphy designated NTEU to represent him at the MSPB hearing. NTEU also served as the exclusive representative of the bargaining unit to which Lewis and Murphy belonged.

In preparation for the MSPB hearing, John Maus, the attorney representing the Bureau of Government Financial Operations, interviewed Lewis, who was to appear at the MSPB hearing as a witness for Murphy. Also present at the interview were Robert Johnson and Harold Howard, two labor relations specialists who were serving as co-counsel to the Bureau at the MSPB hearing. Prior to the interview, Maus directed Johnson to contact Lewis and tell him to report to Johnson's office where Maus, Johnson and Howard had already assembled. Lewis left his work area and reported to the office of the labor relations specialist. Then, in a twenty to thirty minute interview, Maus questioned Lewis extensively about the incident between Murphy and his supervisor. Maus took notes of Lewis' responses and later typed up these notes. The Bureau did not notify NTEU of the interview or give NTEU an opportunity to be present at the interview.

NTEU filed an unfair labor practice charge²  asserting that as the exclusive representative of the bargaining unit employees, it had a statutory right under Sec. 7114(a) (2) (A) of the Federal Service Labor-Management Relations Statute to be present at the Bureau's interview of Lewis. Section 7114(a) (2) (A) provides:

An exclusive representative of an appropriate unit in an agency shall be given the opportunity to be represented at--

(A) any formal discussion between one or more representatives of the agency and one or more employees in the unit or their representatives concerning any grievance or any personnel policy or practices or other general condition of employment....

5 U.S.C. § 7114(a) (2) (A).³  The Administrative Law Judge (ALJ) concluded that the interview of Lewis constituted a formal discussion under 5 U.S.C. § 7114(a) (2) (A) because the meeting was called by management, held away from Lewis' work area in the office of a labor relations specialist, and marked by the taking of notes by a high level agency representative. Accordingly, the ALJ found that NTEU did have a statutory right to be represented at the interview. The FLRA reversed the ALJ's determination, finding that NTEU had no right to representation because the discussion was neither "formal" nor concerned "any grievance or any personnel policy or practices or other general condition of employment."

The FLRA first determined that the subject matter of the interview did not concern a "grievance" as that term is used in Sec. 7114(a) (2) (A), reasoning that the term grievance did not encompass Murphy's appeal to the MSPB. It next concluded that the interview did not concern any "personnel policy or practices" because this phrase in Sec. 7114(a) (2) (A) refers only to general rules applicable to all agency personnel, not to individualized applications of such rules. Finally, the FLRA found that the interview was not "formal" because the three interviewers were not in Lewis' chain of supervision and had no direct supervisory or managerial responsibilities over Lewis.

NTEU filed a petition for review in this court, arguing that the interview concerned both a grievance and a personnel policy or practice and that the interview was sufficiently "formal." We agree that the FLRA's interpretation of "grievance" misconstrues the statute. We also find that the FLRA's determination that the discussion was not a formal one lacks substantial evidence on the record and is contrary to the FLRA's own precedent. These conclusions mandate a reversal of the FLRA's decision not to find an unfair labor practice. Accordingly, we remand the case to the FLRA so that it may issue an appropriate remedial order directing the Bureau to cease and desist from its unfair labor practice.

A. The Meaning of "Grievance"

The Federal Service Labor-Management Relations Statute (FLMR), 5 U.S.C. §§ 7101-7135 (1982), regulates the methods by which an employee member of a bargaining unit represented by an exclusive union representative may challenge adverse personnel decisions by his federal employer. If the challenged matter falls within the coverage of a "negotiated grievance procedure" provided for by the collective bargaining agreement between the agency and the union, that grievance procedure provides the sole mechanism for resolving the disputed matter with two exceptions. See 5 U.S.C. § 7121.⁴  Where the action complained of falls within the coverage of the negotiated grievance procedure but also constitutes a complaint of discrimination on the basis of race, color, religion, sex, national origin, age, handicapping condition, marital status or political affiliation, the employee may elect to pursue the matter through either the collective grievance procedure or the statutory procedures for employment discrimination suits. See 5 U.S.C. § 7121(d). Similarly, where the employee challenges a permanent or temporary reduction in grade or removal for unacceptable performance governed by 5 U.S.C. § 4303 or 5 U.S.C. § 7512, then the matter may, in the discretion of the employee, be raised either under the procedures of 5 U.S.C. § 7701 providing for an appeal to the MSPB or under the negotiated grievance procedure. See 5 U.S.C. § 7121(e).

Philip Murphy contested his removal from his job through the appellate procedure of 5 U.S.C. § 7701. The FLRA concluded that Murphy's dispute did not constitute a "grievance" as that term is used in the FLMR because Murphy pursued the dispute under 5 U.S.C. § 7701 rather than under a negotiated grievance procedure.⁵  Thus, in the FLRA's view, the Bureau's interview of James Lewis concerned a statutory appeal rather than a "grievance" and NTEU, as the exclusive representative, had no right under Sec. 7114(a) (2) (A) to be represented at the interview.

We find the FLRA's construction of "grievance" to be contrary to the plain language of the statute. Section 7103 of the FLMR defines a grievance as follows:

(a) For the purpose of this chapter--

(9) "grievance" means any complaint--

(A) by any employee concerning any matter relating to the employment of the employee....

Nothing in this definition restricts a "grievance" to matters raised through a negotiated procedure. Murphy appealed to the MSPB contending that the Bureau improperly fired him because his conduct did not rise to a level of unacceptable job performance as required for removal of a federal employee by 5 U.S.C. § 4303. Murphy's appeal to the MSPB thus meets the statutory definition of a grievance as an employee "complaint" concerning a "matter relating to [his] employment."

Section 7114 guarantees NTEU, as the exclusive representative, the right to be represented at any formal discussion between an employee and an agency representative concerning Murphy's grievance.⁶  That Murphy's grievance challenges an individualized discharge for alleged insubordination does not alter NTEU's right of representation. While the FLRA may be correct in its assertion that the phrase "any personnel policy or practices" in Sec. 7114 is limited to those discussions which concern conditions of employment affecting unit employees generally,⁷  the term "grievance" in Sec. 7114 is not similarly restricted. In the sectional analysis of the "Udall Substitute" which eventually became the present Sec. 7114, Representative Udall explained:

By inserting the word "general" before "conditions of employment," the substitute limits the right of representation to those formal discussions (other than grievance discussions) which concern conditions of employment affecting employees in the unit generally.⁸ 

A grievance discussion, unlike a discussion of a personnel policy or practice, may involve a particularized application of a personnel policy to an employee.

The FLRA points to Sec. 7121 of the FLMR and to its legislative history to support its contention that the term grievance in Sec. 7114(a) (2) (A) refers only to grievances actually pursued under a negotiated grievance procedure and not to complaints pursued through other statutory procedures. The FLRA's argument, as we understand it, is as follows. In the FLMR, Congress has provided that a negotiated grievance procedure generally will be the exclusive procedure for resolving those disputes which fall within its coverage. 5 U.S.C. § 7121(a). However, in Sec. 7121(d) and (e) of the FLMR, Congress created two exceptions to this exclusive coverage. Congress thereby ensured that any employee suffering a prohibited form of discrimination under 5 U.S.C. § 2302(b) (1)⁹  or challenging serious disciplinary measures imposed for unacceptable job performance could avoid the collective grievance procedure and seek relief under certain alternative statutory procedures, including an appeal to the MSPB. While Sec. 7121(b) (3) of the FLMR requires that an employee must either be his own representative or select the union as his representative when pursuing a negotiated grievance procedure, Sec. 7114(a) (5) (A) of the FLMR guarantees that an employee seeking relief through a procedure other than the negotiated grievance procedure need not be represented by the union.¹⁰  By permitting an employee to select his own representative when pursuing relief outside the negotiated grievance procedures, Congress must have intended to exclude the union from any right of inclusion in the statutory alternatives to the negotiated grievance procedure guaranteed in Sec. 7121(d) and (e). Consequently, the union on its own behalf should have no right of representation when an employee and an agency representative discuss the subject matter of a dispute pursued through these alternative statutory procedures. To support this reading of the FLMR, the FLRA relies on a statement in the House Report that

It should be noted that, although this subsection [Sec. 7103(a) (9) ] is virtually all-inclusive in defining "grievance," section 7121 excludes certain grievances from being processed under a negotiated grievance procedure, thereby limiting the net effect of the term.¹¹ 

In light of the structure of Sec. 7121, which requires an employee to choose between two overlapping remedies, we read this sentence from the House Report not as a statement scaling back the rights of an exclusive representative to be represented at formal discussions concerning grievances but rather as a guarantee that an agency employer will not be forced to defend its challenged conduct in both a statutory procedure and a negotiated grievance procedure. Absent some more positive indication that Congress in fact meant in all circumstances to exclude the union from any formal discussion of matters raised in the alternative statutory procedures guaranteed in Sec. 7121(d) and (e), we reject the FLRA's attempt to read the distinctions drawn in Sec. 7121 back into the original definition of grievance provided in Sec. 7103(a) (9). Such a reading of "grievance" strains the language of the statute at every turn. For example, if the term "grievance" referred only to disputes pursued through negotiated grievance procedures, Sec. 7121(d) and (e) would not be worded to require an "aggrieved employee" (emphasis supplied) to elect to pursue a remedy under either a negotiated procedure or a statutory procedure. An "aggrieved employee"--i.e., one with a grievance--would by definition necessarily pursue his grievance under a negotiated procedure. Likewise, to read "grievance" as the FLRA attempts to do would render self-contradictory Sec. 7121(a) (1) which provides that "Except as provided in subsections (d) and (e) of this section, the procedures [provided by a collective bargaining agreement] shall be the exclusive procedures for resolving grievances which fall within its coverage" (emphasis supplied). Section 7121(a) (1) says that the statutory procedures referred to in Sec. 7121(d) and (e) are also procedures for resolving grievances.

Nor can the FLRA rely on legislative history to pare down the definition of grievance contained in Sec. 7103(a) (9). The only plausible reading of the sentence in the House Report quoted above is that Sec. 7121 ensures that some grievances cannot be processed under a negotiated procedure. The House Report merely indicates that the "all-inclusive" definition of "grievance" in Sec. 7103(a) (9) and Sec. 7114(a) (2) (A) is broader than the "effect" of the term under Sec. 7121. Congress was compelled to limit the "effect" of the term grievance in Sec. 7121 precisely because the broad definition of the term would otherwise include grievances brought under a statutory procedure as well as those brought under a negotiated grievance procedure.

Our interpretation of the term "grievance" may differ from that of the Ninth Circuit in Internal Revenue Service, Fresno Service Center, Fresno, California v. Federal Labor Relations Authority, 706 F.2d 1019 (9th Cir. 1983). There the Court of Appeals held that 5 U.S.C. § 7114(a) (2) (A) does not guarantee a union the right to representation at an Equal Employment Opportunity precomplaint conciliation conference. The Ninth Circuit's decision appears to us to be based primarily on its conclusion that the precomplaint conference did not constitute a "formal" discussion. See 706 F.2d at 1023-24. To the extent, however, that the Ninth Circuit may have construed the term "grievance" to include only disputes governed by a negotiated procedure, we must disagree with its interpretation for the reasons already discussed. The language and structure of the statute lead us to a different result. We also disagree with the Ninth Circuit's assumption that the union, as the exclusive bargaining representative of unit employees, has no cognizable interest in being represented when a dispute being pursued under a statutory procedure is the subject of a discussion between an employee and an agency representative. See 706 F.2d at 1024-25. The Ninth Circuit suggests that the union's only interest in being present at a formal discussion of a grievance stems from the fact that it negotiates and plays an institutional role in the collective grievance procedure. Id.

We view the interest of unions under the FLMR as potentially far broader. Section 7121 recognizes that employee complaints challenging alleged discrimination or a permanent or temporary removal for allegedly unacceptable performance will often be covered by a collective bargaining agreement as well as by statutory procedures. Double coverage is to be expected: resolution of such episodes can potentially affect all bargaining unit employees in important ways. Decisions about what constitutes an unjust dismissal or an unacceptable basis for preferring or rejecting a single employee spills over to the rights and expectations of all unit employees. Remedies for improper employer conduct, such as reinstatement or retroactive seniority, also may affect other bargaining unit employees, since a benefit or opportunity granted to one employee can mean the loss of the same benefit or opportunity for another employee. The impact of these individual complaints on the bargaining unit will be felt regardless of whether the aggrieved employee opts to pursue a negotiated grievance procedure or an alternative statutory procedure. We are therefore reluctant to follow the Ninth Circuit's suggestion in IRS, Fresno Service Center that the union's role in protecting the interest of the bargaining unit is inherently restricted to those situations in which an employee pursues a grievance through a negotiated grievance procedure.

Of course, recognition of a union's interest, as the representative of the bargaining unit, in the alternative statutory procedures guaranteed in Sec. 7121(d) and (e) does not answer the question of the union's statutory role in such procedures. Under the FLMR, the union's institutional role in these statutory grievance procedures is obviously more restricted than its role in a negotiated grievance procedure. The FLMR provides that only the union may represent an employee in a negotiated grievance procedure if the employee elects not to present the grievance himself; the statute does not similarly restrict an employee's choice of a representative outside the negotiated grievance procedure. See 5 U.S.C. § 7114(a) (5). Nonetheless, although the union's institutional role may be restricted, we do not think it necessarily is nonexistent. In the absence of congressional intent to the contrary or any plausible alternative interpretation of the statute by the FLRA, we find that the words of Sec. 7114(a) (2) (A), which provide that an exclusive representative has the right to be present at any formal discussion of a grievance between management and a bargaining unit employee, assure the union a role in the alternative procedures so long as the statutory criteria of Sec. 7114(a) (2) (A) are met.¹² 

1. Lack of Substantial Evidence on the Record

Because we find that the interview of Lewis concerned a grievance, the only remaining question is the formality of the discussion. In determining whether a discussion should be considered formal, the FLRA examines the totality of facts and circumstances presented. We find that in the present case, the FLRA's reversal of the ALJ's finding that the interview was formal is not supported by substantial evidence on the record and constitutes an unexplained departure from agency precedent.

The FLRA's conclusion that the interview was not formal runs counter to the undisputed evidence. The ALJ found, and the FLRA does not dispute, that the meeting was initiated by management; it was held away from Lewis' normal work area, lasted twenty to thirty minutes, and was marked by the taking of notes by a "high level" management representative. The FLRA concluded that these undisputed indicia of formality were outweighed by the fact that none of the interviewers were in Lewis' chain of supervision.¹³  The FLRA also cites as support for its conclusion the lack of a "clear" finding that Lewis' presence was mandatory and the lack of evidence on the record of any advance notice of the meeting or any formal agenda distributed in advance of the meeting.

Previous FLRA cases have relied on lack of advance notice and distributed agenda as indications that a meeting was spontaneous and therefore unlikely to be "formal."¹⁴  These factors, however, do not always correlate with spontaneity and thus mere absence of notice or an agenda will not necessarily indicate that a meeting is not "formal." In fact, the available evidence in this record indicates the contrary conclusion: that the interview of Lewis was planned in advance. For an attorney and two labor relations specialists to meet at the office of one of the labor relations specialists and in a single day interview all of the witnesses to be called at an MSPB hearing surely indicates some advance preparation. Cf. Office of Program Operations, Field Operations, Social Security Administration, 9 F.L.R.A. at 50 (refusing to find formal meeting where district manager was at the office on other business and not as a consequence of any advance arrangements). Lack of notice and formal agenda, therefore, offer negligible evidence of informality, since the inference that these factors are sufficient to support, i.e., that the interview might have been an impromptu gathering, is directly contradicted by more powerful evidence.

The lack of a clear finding that Lewis' continued presence at the interview was mandatory is similarly not controlling as to informality. The evidence concerning what the interviewers told Lewis at the start of the interview is contradictory, and the ALJ never resolved the question of the compulsory nature of the interview. Cf. 13 F.L.R.A. 27, 31 n. 1. Where an employee interview is characterized by strong indicators of formality, such as the fact that an employee was summoned to a meeting initiated by three management representatives and held on management's terrain, an asserted lack of clear evidence on a single disputed point such as whether the "continued" presence of the employee was compulsory cannot carry the day for the agency. This is especially true where the FLRA has declined to offer its own assessment of the credibility of the witnesses or to find that Lewis' presence was in fact not compulsory.¹⁵ 

Finally, the FLRA does not explain why the fact that the interviewers were not in Lewis' direct chain of supervision outweighs the fact that the interviewers were nonetheless management representatives. The focus of prior FLRA decisions has been on whether management representatives attended a discussion. Thus, personnel specialists who addressed employees at an orientation session were considered representatives of the agency and the FLRA found the meeting to be a formal one. See Department of HEW, Region IV, Atlanta, Ga. and National Treasury Employees Union, 5 F.L.R.A. 458, 460 (1981). Prior FLRA cases have not required a showing that the agency representatives were within the employee's chain of supervision. See Internal Revenue Service and National Treasury Employees Union, 11 F.L.R.A. 69, 71 (1983) (finding a formal discussion between employees and members of a task force composed of managerial and supervisory officials where "No task force member interviewed any employee from his own district."), aff'd mem. sub nom. National Treasury Employees Union v. Federal Labor Relations Authority, 725 F.2d 126 (D.C. Cir. 1984).

The Authority considered the totality of facts and circumstances and concluded that the interview of Lewis was not formal in nature. We find this conclusion unsupported by substantial evidence on the record as a whole. Where a discussion to which management summoned an employee is attended by three management representatives, at least one of whom has some responsibilities in the disciplinary process,¹⁶  is held away from the employee's work station in the office of that management representative, lasts for twenty to thirty minutes, and is marked by the taking of notes, the fact that the management representatives are not in an employee's direct chain of supervision does not outweigh or sufficiently negate the other evidence of formality. Therefore, we find the record as a whole does not support the FLRA's conclusion to the contrary.

The FLRA's conclusion that the Bureau's interview of Lewis was not a formal discussion is also contrary to decisions of the Assistant Secretary for Labor-Management Relations interpreting Section 10(e) of Executive Order 11491, the predecessor to Sec. 7114(a) (2) (A). Section 10(e) of Executive Order 11491 was carried over into Sec. 7114(a) (2) (A) with no significant changes.¹⁷  In United States Air Force, McClellan Air Force Base, California, A/SLMR No. 830, 7 A/SLMR 350 (1977), and again in Internal Revenue Service, South Carolina District, A/SLMR No. 1172, 8 A/SLMR 1370 (1978), the Assistant Secretary for Labor-Management Relations concluded that an interview by the agency of bargaining unit employees expected to appear as witnesses for a grievant at an arbitration hearing constituted a formal discussion at which the union had a right to be represented under Sec. 10(e). Both decisions turned on a determination that an interview of a witness was a "formal" discussion.¹⁸  The other indicia of formality in these two cases also resembled those of the present case, except that only in the present case did more than one management representative attend the interview. In McClellan, the attorney representing the agency asked the personnel office to request the employee witnesses to come to his office the next morning. The attorney interviewed the employees at 8 a.m., a few hours before the scheduled arbitration hearing. In IRS, South Carolina District, the employee witness was told by his group manager that the attorney representing the agency would like to talk with him; the interview between the employee and the attorney took place later in the month.

The decisions of the Assistant Secretary construing Sec. 10(e) were incorporated into the Federal Service Labor-Management Relations Statute by the grandfather provision of Sec. 7135(b). Section 7135(b) of the FLMR provides that

Policies, regulations, and procedures established under and decisions issued under Executive Order [ ] 11491 ... shall remain in full force and effect until revised or revoked by the President, or unless superseded by specific provisions of this chapter or by regulations or decisions issued pursuant to this chapter.

While Sec. 7135(b) does not bar the FLRA from reevaluating the decisions of the Assistant Secretary, Sec. 7135(b) requires the FLRA to treat those decisions as being in full force until it undertakes such a reevaluation. Where, as here, the Congress adopted the provision in the Executive Order in virtually unchanged form and nothing in the legislative history suggests any congressional dissatisfaction with the prior application or interpretation of the provision, we would assume Sec. 7135(b) requires the FLRA to treat the administrative precedent with the same deference as it would treat its own prior FLRA decisions. At a minimum, the FLRA must acknowledge the precedent and provide a reason for departure, just as it must when it reappraises its own precedent. Cf. Baltimore and Annapolis Railroad Co. v. Washington Metropolitan Area Transit Commission, 642 F.2d 1365, 1370 (D.C. Cir. 1980) (agency must justify a departure from its prior determinations); Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir. 1970) ("agency changing its course must supply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored"), cert. denied, 403 U.S. 923, 91 S. Ct. 2233, 29 L. Ed. 2d 701 (1971).

The reference in the FLRA's decision to Internal Revenue Service and Brookhaven Service Center and National Treasury Employees Union, Chapter 99 (Brookhaven), 9 F.L.R.A. 930 (1982), does not constitute the reasoned analysis which the law requires for the FLRA's departure from the policy set forth in the Assistant Secretary's decisions in McClellan Air Force Base and IRS, South Carolina District. In the first place, Brookhaven never discusses McClellan Air Force Base or IRS, South Carolina District or provides any reason for departing from them. More importantly, however, we do not find Brookhaven inconsistent with these two prior cases. In Brookhaven, the FLRA found that an agency interview of two bargaining unit employees whom the agency intended to call as its own "major witnesses" in an upcoming arbitration hearing was not a "formal" discussion. The FLRA also determined that the agency's interview of a bargaining unit employee in preparation for an upcoming unfair labor practice proceeding where that employee was not to appear as a witness did not constitute a "formal" discussion. Brookhaven, when read in conjunction with McClellan and IRS, South Carolina District, suggests that a formal discussion is more likely to be found where an agency interviews the witnesses of its opponent than when it interviews its own witnesses or conducts background fact gathering, even if other indicia of formality are similar.

When an employer interviews an adverse witness rather than his own or even a neutral witness, common sense suggests that the situation carries a greater potential for intimidation or coercion. In assessing formality under Sec. 7114(a) (2) (A), the FLRA has always considered the potential coerciveness of the encounter. Factors frequently cited by the FLRA as militating toward a finding of formality, such as mandatory attendance or the number of supervisors present, focus on the confrontational potential of the interview, or at least the perception thereof. Brookhaven, along with McClellan Air Force Base and IRS, South Carolina District, are thus relevant in assessing the coerciveness component of formality. In the present case, the FLRA disregarded its own precedent bearing on the important element of formality supplied by the fact that the Bureau interviewed an adverse witness. Such a departure from precedent, and apparent refusal to consider a relevant factor, requires some word of justification.

We conclude that an appeal to the MSPB challenging a dismissal for unacceptable job performance constitutes a grievance as that term is used in the Federal Service Labor-Management Relations Statute. We also find that the FLRA's determination that the interview of Lewis was not formal represents an unexplained departure from administrative precedent and is not supported by substantial evidence on the record as a whole. We therefore reverse the FLRA's decision to dismiss NTEU's unfair labor practice complaint and remand this case to the FLRA so that it may issue an appropriate order directing the Bureau of Government Financial Operations of the Department of Treasury to cease and desist from its unfair labor practice.

Reversed and Remanded.