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 29 FLRA NO. 120

NATIONAL TREASURY EMPLOYEES
UNION, CHAPTER 207

                    Union

      and

FEDERAL DEPOSIT INSURANCE
CORPORATION, WASHINGTON, D.C.

                    Agency

Case No. O-NG-446
  28 FLRA No. 80

Case No. O-NG-1293
  28 FLRA No. 92

CONSOLIDATED ORDER DENYING REQUEST FOR RECONSIDERATION. 1

I. Statement of the Case

This matter is before the Authority because of the Agency's request for reconsideration and stay of the Authority's Decision and Order on Remand in Case No. O-NG-446 (August 21, 1987) (Chairman Calhoun dissenting) and Decision and Order in Case No. O-NG-1293 (August 27, 1987) (Chairman Calhoun dissenting). The Union filed an opposition.

II. Background

A. Case No. O-NG-446

The Agency's request pertains to the Authority's decision of August 21, 1987. (Chairman Calhoun dissenting). This Decision and Order was issued after the Court of Appeals for the District of Columbia reversed and remanded an earlier decision of the Authority. NTEU v. FLRA, No. 84-1286 (D.C. Cir. March 20, 1987) reversing and remanding and FDIC, Washington, D.C., 21 FLRA 282 (1986)

In that earlier decision, the Authority concluded that a proposal relating to a pay system and salary structure for bargaining unit employees was outside FDIC's duty to bargain. because it conflicted with an agency regulation for which a compelling need existed. In reaching this conclusion, the Authority agreed with the FDIC's argument that a uniform method of setting salaries was "essential" for it to efficiently carry out its mission. The Authority found that the proposal, therefore, conflicted with an agency regulation for which a compelling need existed. See 5 C.F.R. 2424.11(a).

The Court of Appeals reversed and remanded the Authority's Decision and Order. The Court stated that "The FLRA has not rationally explained why it found that the agency met the 'compelling need' standard in this case." The Court rejected the Authority's acceptance of the Agency's assertion that "a uniform salary for bargaining unit and other employees is 'essential to achieving the agency's objective of pay equity". In addition, the Court noted that "Moreover, even if uniform treatment of (Cost of Living Adjustments) were, upon examination, shown to be essential to the efficient functioning of the agency--rather than to some self-serving intermediate 'objective'--it would still follow that absent a compelling need for a particular COLA, the agency is obligated to bargain over the union's proposal(.)" (emphasis added). In concluding, the Court raised, without resolving, the "larger issue" of whether "the federal government has any duty to bargain over wages and fringe benefits." Id. at 3-4.

Subsequently, on Remand, the Authority accepted as the law of the case the Court's opinion that the agency's regulation establishing a uniform salary system does not bar negotiation of the Union's proposal regarding salaries. We found that the Agency had not established that its regulation is essential to the accomplishment of its mission in a manner which is consistent with the requirements of an effective and efficient government.

In these most recent proceedings on Remand, the Agency raised an argument that its regulation met the compelling need criterion found at section 2424.11(b) of the Authority's regulations. In prior proceedings the Agency had not raised this argument. Therefore, we did not consider this argument.

We also declined to reconsider the Authority's previous finding that the proposal did not interfere with the Agency's right to determine its budget.

In addition, we found the proposal was negotiable notwithstanding the fact that it concerned wages. Questions regarding the negotiability of wages have been resolved by our decision in American Federation of Government Employees, AFL-CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA 377 (1986).

B. Case No. O-NG-1293

In its Decision and Order in this case the Authority (Chairman Calhoun dissenting) found negotiable a proposal establishing a contractual obligation, analogous to the existing statutory obligation, for the Agency to provide the Union with an opportunity to negotiate concerning mid-contract changes in conditions of employment. Specifically, the obligation applied to those employee benefits, including money-related benefits, which the Agency initiated at its discretion as contrasted with those which are provided for by law.

III. Request for Reconsideration

The Agency asserts that reconsideration of the two Decisions and Orders is warranted for the following reasons:

(1) The Authority erred in not reopening and reexamining the issue of compelling need in Case No. O-NG-446.

(2) The Authority erred in not reexamining the issue of the negotiability of wages and fringe benefits. It should reconsider its decision in this area because of substantial impact on other Federal agencies.

(3) The cases should be reopened to allow for consideration of the impact on the Agency of current circumstances in the banking industry.

The Office of Personnel Management petitioned for permission to file arguments as an amicus curiae in support of the Agency's request for reconsideration. The request is granted and the arguments submitted have been considered.

The Union opposes granting reconsideration. It asserts that the Agency's arguments in support of its request merely express disagreement with the Authority's decisions and are little more than an effort to restate its previous arguments as to the negotiability of the proposals involved. it contends that the Agency has failed to show with particularity any extraordinary circumstances which warrant the Authority's reconsideration of its decisions.

Section 2429.17 of the Authority's Rules and Regulations provides that a party which can establish "extraordinary circumstances" may move for reconsideration of an Authority decision. Here, the Agency has not established "extraordinary circumstances" within the meaning of section 2429.17. Rather, the Agency's arguments constitute nothing more than its disagreement with the Authority's decisions that certain matters are within the duty to bargain under the Statute and an attempt to relitigate the merits of the issues involved, as explained below.

First, the Agency's claim that the Authority must grant reconsideration because it was error not to reopen and reexamine the issue of compelling need in O-NG-446 does not present extraordinary circumstances. In our Decision on Remand, we accepted the Court's reasoning that, even if the Agency demonstrated a need for uniformity in its salary system for bargaining unit and other employees, such a need would not of itself provide a basis for allowing the Agency's regulation to bar negotiations over the Union's proposal "which could potentially be applied uniformly to union and non-union employees." NTEU v. FLRA at 3. The Agency here merely states its disagreement with our conclusion and seeks to relitigate the question of compelling need for the fourth time by raising matters which either were or could have been raised in earlier proceedings in the case.

Second, the Agency's claim that reconsideration is warranted because the Authority erred in not reexamining the issue of the negotiability of wages and fringe benefits does not present extraordinary circumstances. The Court specifically noted that the issue was beyond the facts of O-NG-446 even though it had a bearing on its disposition. Of course, if the Authority were to change its decision that such matters are negotiable in some limited circumstances, there would be no need to even reach the question of compelling need.

We have not changed that decision, however. In our decision in American Federation of Government Employees. AFL-CIO, Local 1899 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986) we reaffirmed that nothing in the Statute or its legislative history bars negotiation of proposals concerning employee compensation insofar as (1) the matters proposed are not specifically provided for by law and are within the discretion of the agency and (2) the proposals are not otherwise inconsistent with law, government-wide rule or regulation or an agency regulation for which a compelling need exists. The facts of the present cases in which the Agency is requesting reconsideration fit precisely into the criteria articulated in Eglin Air Force Base. As we noted in our most recent Decision on Remand, the appeal of Eglin Air Force Base to the U.S. Court of Appeals for the Eleventh Circuit was withdrawn. There are, however, appeals of other decisions which rely on Eglin Air Force Base which are pending before various courts.

Finally, The Agency's claim that reconsideration is warranted because of economic considerations related to current circumstances in the banking industry clearly do not present extraordinary circumstances. It is by now well established that an agency is not released from its duty to bargain under the Statute whenever it suffers economic hardship. For example, in AFGE v. FLRA, 785 F.2d 333 at 338 (D.C. Cir. 1986), the Court stated:

(E)conomic hardship is a fact of life in employment, the public sector as well as the private. Such monetary considerations often necessitate substantial changes. If an employer was released from its duty to bargain whenever it had suffered economic hardship, the employer's duty to bargain would practically be non-existent in a large proportion of cases.

Consequently, we conclude that the Agency has failed to establish the existence of extraordinary circumstances. Accordingly, the Agency's request for reconsideration is denied.

Issued, Washington, D.C.,November 6, 1987.

Henry B. Frazier III. Member

Jean McKee, Member

FEDERAL LABOR RELATIONS AUTHORITY

Separate Opinion of Chairman Calhoun

My colleagues conclude that the Agency has failed to demonstrate "extraordinary circumstances" within the meaning of section 2429.17 of the Authority's Regulations and, as a result, they deny the Agency's request for reconsideration. I disagree with their conclusion and would grant the request.

In my opinion in American Federation of Government Employees, AFL-CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base. Florida, 24 FLRA No. 41 (1986), I stated my belief that the issue in that case--the negotiability of a union proposal concerning the portion of employee health insurance premiums to be absorbed by the agency--could and should have been resolved on the basis of compelling need. As I stated in my separate opinion in FDIC, 28 FLRA 625, I do not view the court's opinion in this case as foreclosing further inquiry into the compelling need issue. I also stated my concern that the Authority should not interpret the criteria for compelling need so narrowly so as to deprive those criteria of meaning.

The issue presented by the Union's proposals in these cases--the extent to which a Federal agency is obligated to bargain over proposals relating to wages and monetary fringe benefits in the absence of a specific statutory provision authorizing such bargaining--is a significant one for the entire Federal labor relations community. In view of this significance, as well as the unique procedural posture of this case (in 21 FLRA 282 the Agency prevailed in its compelling need argument and the Authority's decision in that case was reversed and remanded), I believe that the Authority should facilitate the parties' submission of as complete a record as possible on this issue. To that end, I would grant the Agency's request for reconsideration and receive further submissions from the parties on the issues in these cases.

Issued, Washington, D.C., November 6, 1987.

Jerry L. Calhoun, Chairman

FEDERAL LABOR RELATIONS AUTHORITY

Footnotes:

Footnote 1: Chairman Calhoun's separate opinion immediately follows this Order.

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