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53 FLRA No. 70

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

U.S. DEPARTMENT OF COMMERCE

PATENT AND TRADEMARK OFFICE

(Respondent)

and

PATENT OFFICE PROFESSIONAL ASSOCIATION

(Charging Party)

WA-CA-40743

_____

PARTIAL DECISION AND PROCEDURAL ORDER

November 17, 1997

_____

Before the Authority: Phyllis N. Segal, Chair; and Donald S. Wasserman, Member.

I. Statement of the Case

This case is before the Authority on exceptions to the attached decision of the Administrative Law Judge filed by the Respondent, the Charging Party (Union), and the General Counsel. The Respondent and the General Counsel also filed oppositions to one another's exceptions.⁽¹⁾

The complaint alleges that the Respondent violated section 7116(a)(1) and (5) of the Statute by implementing a decision to use term appointments to fill certain bargaining unit positions without providing the Union with an opportunity to negotiate over the decision and/or its impact and implementation. The complaint also alleges that Executive Order 12871 (the Executive Order) "requires the Respondent to negotiate over the subjects set forth in section 7106(b)(1) of the Statute." G.C. Exh. 1(b) at 12(a). The Judge concluded that the Respondent violated the Statute by failing to bargain over the impact and implementation of the decision to use term appointments, but did not violate the Statute by failing to bargain over the substance of the decision.

For reasons discussed below, we conclude, in agreement with the Judge, that the Respondent violated the Statute by failing to bargain over the impact and implementation of its decision to use term appointments. We also conclude that the Respondent's decision concerns a matter encompassed by section 7106(b)(1) of the Statute.

The remaining alleged violation of the Statute to be resolved in this case is that the Respondent violated the Statute by failing to bargain over its decision to use the term appointments. See G.C. Exh. 1(b) at 11, 12. Resolving this allegation requires examining provisions of the Statute and the Executive Order, as well as relevant precedent. The record before the Authority does not adequately address issues critical to completing the analysis required to decide this remaining allegation. In particular, the parties have not fully addressed long-established precedent regarding bargaining obligations under section 7106(b)(1) of the Statute.⁽²⁾ Accordingly, with respect to the remaining allegation concerning the Respondent's obligation to bargain over its decision to use term appointments, we describe in Sections IV.C. through E. of this partial decision applicable precedent and the questions that arise from the parties' arguments. We also: (1) direct the parties, and those seeking to participate as amicus curiae, to submit briefs on these questions; and (2) provide an opportunity for parties to request oral argument before the Authority.⁽³⁾

We believe that it is important to emphasize at the outset what this case is, and is not, about. This case is about resolving whether section 2(d) of Executive Order 12871 constitutes an agency election to bargain on section 7106(b)(1) matters, and whether such an election can be enforced in Authority unfair labor practice and subsequent court review proceedings.⁽⁴⁾ This case is not about whether the President has authority to direct agencies to negotiate over the subjects set forth in section 7106(b)(1), the availability of means other than unfair labor practice proceedings to achieve compliance with such direction, or, as a general matter, whether the current scope of bargaining under the Statute should be broadened.

Although we understand the parties' dispute over whether compliance with the Executive Order's commands can be adjudicated in this proceeding, and the importance of the legal principles at stake, we frankly are surprised that an agency would persist in disregarding the President's directive. It is clear from the record that the Respondent refused to come to the bargaining table to even begin discussions with the Union. It appears that Respondent's refusal may have been due to its belief that the decision about which the Union seeks to bargain is not a section 7106(b)(1) subject. See Judge's Decision at 6; Union's Exceptions at 4. In this regard, however, we note that, based on its submissions to the Authority, Respondent's belief persists despite Authority precedent, which the Respondent neither disputes nor cites, to the contrary.

II. Background and Judge's Decision

The facts are set forth in the Judge's decision and are briefly summarized here.

The Respondent provided the Union copies of position descriptions for new, permanent, patent examiner positions specializing in computer science that previously had been discussed with the Union. The Union did not request to bargain about the new positions. Shortly thereafter, the Union received a copy of the vacancy announcement for the new positions. As relevant here, the vacancy announcement described the positions as 2-year term appointments. The Union inquired twice about the discrepancy and whether the Respondent was establishing a new "program." Judge's Decision at 5. In its second inquiry, the Union also requested to bargain over "negotiable aspects" of the program. Id. The Union received no responses to its inquiries. Several months later, after the new computer science examiners had reported for work, the Union learned that the vacancy announcement had been correct in describing the new positions as term appointments and that, after the expiration of the 2-year terms, the new examiners would be required to compete for permanent positions in order to remain employed with the Respondent.

The Union filed an unfair labor practice charge and, as noted above, the General Counsel issued a complaint alleging that the Respondent violated the Statute by implementing its decision to use term appointments "without providing the Union with an opportunity to negotiate to the extent required by the Statute." G.C. Exh. 1(b) at 11.

As relevant here, the Judge concluded that the Respondent's decision to hire new examiners under term appointments concerned, and changed, conditions of employment of unit employees. In particular, applying the Authority's decision in Antilles Consolidated Education Association and Antilles Consolidated School System, 22 FLRA 235 (1986) (Antilles),⁽⁵⁾ the Judge found that term appointments "directly affect the employment relationship of bargaining unit employees in this instance as they involve a personnel policy affecting [the employees'] tenure and status." Judge's Decision at 11. The Judge noted, in this regard, that by the time the Respondent finally met with the Union to discuss its decision to use term appointments, the new examiners had been employees for over 3 months. In addition, the Judge found that the term appointments "gave rise to potential job retention consequences for the term employees which were reasonably foreseeable[,]" and that the Union "sought to negotiate over post-hiring procedural matters affecting those positions[.]"⁽⁶⁾ Id. at 13.

However, the Judge also concluded that the Respondent was not obligated to bargain over its decision "to hire" the new examiners under term appointments. Id. at 11. The Judge stated that the right "'to hire' is one of the exclusive management rights specifically enumerated in section 7106(a)." Id. Moreover, according to the Judge, even assuming that the Respondent' decision concerned a matter encompassed by section 7106(b)(1) of the Statute,⁽⁷⁾ the Respondent made no election to bargain under that section, and, in Executive Order 12871, "[t]he President did not exercise the [Respondent's] discretion." Id. Accordingly, the Judge concluded that the Respondent's obligation to bargain was limited to the impact and implementation of the decision to use term appointments under section 7106(b)(2) and (3).

To remedy the Respondent's failure to bargain over the impact and implementation of its decision to use term appointments, the Judge recommended a cease and desist order and a notice posting. The Judge also recommended a retroactive bargaining order, and that the Respondent be directed to make whole, "[b]ased upon agreements reached pursuant to negotiations," any unit employees who suffered losses because of its failure to bargain. Id. at 14.

III. Positions of the Parties

A. Respondent's Exceptions

The Respondent argues that it was not obligated to bargain about the impact and implementation of its decision to use term appointments to hire the new examiners because, according to the Respondent, the decision "did not represent a change in conditions of employment for anyone in the bargaining unit." Exceptions at 3. In the Respondent's view, the only individuals affected by that decision were the new examiners themselves: "persons who, at the time the [Respondent] made its hiring decisions, were not yet bargaining unit members -- or even employees -- but simply applicants for the positions." Id. at 11. The Respondent asserts, in this regard, that "the triggering event - hiring for a term appointment -- is entirely concluded before the applicant becomes a bargaining unit employee." Id. The Respondent also asserts that, once they were hired, the new examiners "had all the same duties, responsibilities, performance appraisal plans, and protections afforded the rest of the cadre of patent examiners." Id. at 11-12. The Respondent relies, in this regard, on Authority precedent concerning an agency's duty to bargain over nonunit employees and applicants for employment.⁽⁸⁾

B. General Counsel's Opposition

The General Counsel argues that the Judge correctly determined that the Respondent was obligated to bargain over the impact and implementation of its decision to use term appointments because that decision had a reasonably foreseeable effect on conditions of employment within the bargaining unit. In particular, the General Counsel notes that, as the new examiners would be required to compete for permanent positions at the end of their term appointments, the term appointments "gave rise to potential job retention consequences . . . which were not in any way speculative." Opposition at 5.

C. General Counsel's Exceptions

The General Counsel does not dispute that the Respondent's decision to use term appointments constituted an exercise of its right to hire under section 7106(a). However, the General Counsel argues that, under National Association of Government Employees, Local R5-184 and U.S. Department of Veterans Affairs, Medical Center, Lexington, Kentucky, 51 FLRA 386, 390 (1995) (VAMC, Lexington), the decision is nevertheless bargainable under section 7106(b)(1). The General Counsel cites Overseas Education Association and U.S. Department of Defense, Office of Dependents Schools, 45 FLRA 1185 (1992) (OEA), for the proposition that "the Respondent's use of term appointments, falls squarely within section 7106(b) of the Statute." Exceptions at 12.

The General Counsel also argues that the Respondent was required to bargain over its decision to use term appointments by virtue of Executive Order 12871. In particular, the General Counsel argues that the Authority should find "[a]s a matter of public policy" that section 2(d) constitutes "an irrevocable election to bargain over the subjects contained in section 7106(b)(1) of the Statute." Id. at 6. In addition, according to the General Counsel, an agency head cannot disapprove under section 7114(c) a decision to bargain over a section 7106(b)(1) matter at the local level, and "if agency heads cannot reverse elections to negotiate which are made at the level of recognition, then it stands to reason that they should not be allowed to reverse the President's determination to negotiate over section 7106(b)(1) matters at the level of recognition." Id. at 7.

The General Counsel states that the Respondent has not been charged "with failing to comply with the Executive Order[,]" and that the General Counsel "is not seeking to enforce the Executive Order." Id. at 8. The General Counsel asserts:

Section 3 of the Executive Order provides that the Order was intended only to improve the internal management of the executive branch and was not intended to create any right to administrative or judicial review. [⁽⁹⁾] Therefore, by its explicit terms, the Order itself cannot be enforced. Any enforcement of its mandates must be derived from other sources, such as through enforcement of the Statute. By directing that executive branch agencies shall negotiate over section 7106(b)(1) subjects, the President has usurped the agencies' ability to exercise discretion under the Statute and has exercised it for them. It is this election which the General Counsel seeks to enforce in this case.

Id. at 8-9.

To remedy the Respondent's unfair labor practice, the General Counsel requests that the Judges's order be modified to require the Respondent to "bargain substantively over its use of term appointments." Id. at 13.

D. Union's Exceptions

The Union adopts the arguments in the General Counsel's exceptions. The Union also provides an "additional theory" for finding that the Respondent violated the Statute by failing to bargain over its decision to use term appointments. Union's Exceptions at 3. In particular, the Union asserts that the Authority should find that Executive Order 12871 "creates a presumption" that agencies have elected to bargain over section 7106(b) subjects "in the absence of specific evidence to the contrary." Id. Evidence to the contrary, according to the Union, would consist of a responsible agency official's declaration that the agency had "declined to make the election specified in the Executive Order." Id. Because no such declaration was made in this case, the Union asks the Authority to find that the Respondent had an obligation to bargain substantively over its use of term appointments.

The Union agrees with the General Counsel's request that the Judge's order be modified to require the Respondent to bargain over its decision to use term appointments. The Union also requests "retroactive conversion of the term employees to permanent status . . . ." Id. at 5.

E. Respondent's Opposition

The Respondent agrees with the Judge that its decision to use term appointments constituted an exercise of its right to hire under section 7106(a) of the Statute. According to the Respondent, the argument that the decision concerns a section 7106(b)(1) matter ignores "the clear statutory distinction between an agency's exclusive right under § 7106(a) to hire employees, and an agency's permissible right under § 7106(b)(1) to elect to bargain over staffing decisions." Exceptions at 16.

The Respondent also contends that the Judge correctly concluded that Executive Order 12871 did not exercise its discretion "so that it was required to negotiate pursuant to section 7106(b)(1)." Id. The Respondent asserts, in this regard, that because it is clear that the Respondent "itself has not exercised its option to bargain over the hiring of the term appointments," the "only issue" is:

whether, if the [Respondent] were wrong and the matter were a § 7106(b)(1) matter so that Executive Order [12871] would require the [Respondent] to negotiate, the Authority has jurisdiction to enforce the Executive Order.

Id. at 17-18. Relying on Section 3 of the Executive Order, the Respondent claims that the Executive Order "does not provide any enforcement rights to a third party such as the Authority." Id. at 18. It also claims that "[g]enerally speaking, there is no private right of action to enforce obligations imposed on executive branch officials by executive orders." Id. at 18 (citations omitted).

IV. Analysis and Conclusions

A. The Respondent Violated the Statute By Failing to Provide the Union with Notice of, and an Opportunity to Request Bargaining About, Its Decision to Use Term Appointments in the Bargaining Unit

We reject the Respondent's contention that its decision to use term appointments did not concern conditions of employment in the bargaining unit because, according to the Respondent, at the time it made its decision the only individuals affected by that decision were applicants for employment, rather than unit employees.

The Respondent's characterization of its decision to use term appointments as a decision directed at "applicants" rather than "employees," ignores the fact that the decision concerned the method for filling bargaining unit positions. It is undisputed that, as a result of the decision, the unit would for the first time include employees -- bargaining unit employees -- who would be required to compete for permanent employment at the expiration of their 2-year appointments. See Judge's Decision at 13. Thus, the Respondent's decision changed not only the composition of the bargaining unit but also had significant consequences for the new examiners after they were hired, and were indisputably members of the bargaining unit. Moreover, as the Judge noted, by the time the parties met to discuss the Union's request to bargain, the new examiners had been actual employees for over 3 months. In these circumstances, the record supports the Judge's conclusion that the decision to use term appointments pertained to unit employees and, thus, his decision satisfies the first prong of the Antilles standard. For the same reason, the cases relied on by the Respondent, where it was neither argued nor apparent that the specific proposals at issue pertained in any respect to unit employees, are inapplicable.

As to the second prong of the Antilles standard (whether term appointments directly affected the employment relationship of unit employees), the Respondent acknowledges that, at the end of a term appointment, "[t]he only way a term employee can continue his or her employment is to apply for another available position at the Agency." Respondent's Exceptions at 11. Indeed, according to the Respondent, "[t]here can be no change in hiring authority after the individual is appoint[ed]" and that "[e]ven in instances where an agency wants to extend the term, it cannot." Id. Thus, it is clear that the nature of the term appointments had direct effects on working conditions of unit employees and, as a result, the Judge's conclusion that the appointments "directly affect the employment relationship of bargaining unit employees . . . as they involve a personnel policy affecting their tenure and status" is consistent with the established precedent upon which he relied. Judge's Decision at 11. See Mare Island, 25 FLRA at 465; Portsmouth, 11 FLRA at 125. We conclude, based on these findings, that the second prong of the Antilles standard is satisfied. Cf. American Federation of Government Employees, Local 1923 and U.S. Department of Health and Human Services, Health Care Financing Administration, Baltimore, Maryland, 44 FLRA 1405, 1415-22 (1992) (proposal that agency provide equal employment opportunities for applicants as well as current employees vitally affected conditions of employment in bargaining unit).

As the record demonstrates that both prongs of the Antilles standard are satisfied in this case, we conclude that the Respondent's decision to use term appointments concerned conditions of employment within the bargaining unit.

We also reject the Respondent's contention that its decision to use term appointments did not change conditions of employment in the bargaining unit. As noted above, it is undisputed that "[t]erm appointments had never previously been used to fill positions in the . . . bargaining unit." Judge's Decision at 13. By using term appointments, the Respondent not only introduced a new condition of employment -- the requirement to compete for permanent employment after expiration of the 2-year term -- but also changed the composition of positions in the bargaining unit to include term appointment positions. We agree with the Judge that, by doing so, the Respondent changed conditions of employment.⁽¹⁰⁾

It is well settled that, with exceptions not asserted to apply here, an agency desiring to make changes in conditions of employment of bargaining unit employees is obligated to inform the exclusive representative of the changes, in advance, and afford that representative an opportunity to bargain to the extent consistent with the Statute. See, e.g., U.S. Army Corps of Engineers, Memphis District, Memphis, Tennessee, 53 FLRA 79, 81 (1997). Thus, whether or not the Respondent's decision to hire new examiners under term appointments constituted an exercise of a right under section 7106(a) (as the Respondent argues) or under section 7106(b)(1) (as the General Counsel argues), the Respondent's undisputed failure to notify the Union of that decision prior to hiring the new examiners violated section 7116(a)(1) and (5) of the Statute.

B. The Respondent's Decision to Use Term Appointments Concerned Matters Encompassed By Section 7106(b)(1) of the Statute

As noted above, the Judge concluded that the decision to use term appointments constituted the exercise of the Respondent's right to hire under section 7106(a) of the Statute, and the Judge did not determine whether the Respondent's decision concerned a matter encompassed by section 7106(b)(1). As the General Counsel points out, the Authority held in VAMC, Lexington that a proposal concerning a section 7106(b)(1) matter is bargainable at the election of an agency without regard to whether the proposal also concerns a section 7106(a) matter. VAMC, Lexington, 51 FLRA at 390. Consequently, the Judge's determination that the Respondent's decision constituted the exercise of a section 7106(a) right is not dispositive of whether it concerns a matter encompassed by section 7106(b)(1).

In National Association of Government Employees, Local R5-184 and U.S. Department of Veterans Affairs, Medical Center, Lexington, Kentucky, 52 FLRA 1024 (1997) (VAMC, Lexington II), the Authority concluded that the phrase "numbers, types and grades" of employees in section 7106(b)(1) means "the establishment of staffing patterns, or allocation of staff, for the purpose of an agency's organization and the accomplishment of its work[,]" and that the term "types," in particular, refers to "distinguishable classes, kinds, groups or categories of employees or positions that are relevant to the establishment of staffing patterns." Id. at 1030-31. The Authority expressly found in that case that "temporary employees constitute a type [of employee] within the meaning of section 7106(b)(1)." Id. at 1034 (proposal 5). No basis on which to conclude that the term appointments at issue in this case differ from a temporary employees referred to in VAMC, Lexington II is asserted or apparent.

Moreover, in OEA, on which the General Counsel relies for its assertion that term appointments fall within section 7106(b)(1), the Authority considered two proposals that would have required the agency to convert to permanent status certain employees hired under temporary appointments. The Authority concluded that these proposals "would restrict management's decision as to the mix of specific types of employees, namely, temporary and permanent" and, consequently, affected "management's right to determine the numbers, types, and grades of employees or positions . . . under section 7106(b)(1) of the Statute." OEA, 45 FLRA at 1198. As in OEA, the Respondent's decision in this case to hire new examiners under term appointments clearly constituted a "decision as to the mix of specific types of employees" in its organization. Id.

Other than its argument that the decision to use term appointments constituted an exercise of its right to hire under section 7106(a), the Respondent presents no grounds for concluding that its decision to use term appointments was not a matter subject to section 7106(b)(1). The Respondent also does not assert that VAMC, Lexington, VAMC, Lexington II, or OEA were wrongly decided. Accordingly, consistent with that precedent, we conclude that the Respondent's decision to hire new examiners under term appointments was covered by section 7106(b)(1).

C. Are There Any Circumstances in Which an Election to Bargain Under Section 7106(b)(1) Is Enforceable Under the Statute?

The parties vigorously dispute whether the President, by virtue of issuing Executive Order 12871, has exercised the Respondent's discretion to bargain over the decision to use term appointments. However, neither party addresses long-standing Authority precedent concerning the effect under the Statute of such an election, even if it is determined that an election has been made.

Authority precedent describes matters covered by section 7106(b)(1) as "permissive" subjects of bargaining. See, e.g., Federal Aviation Administration, Northwest Mountain Region, Seattle, Washington and Federal Aviation Administration, Washington, D.C., 14 FLRA 644, 648 (1984). This description is appropriate because an agency may elect to, but absent an election is not required to, bargain about section 7106(b)(1) subjects: "It is well-established that a party is not required to bargain over a permissive subject of bargaining." Federal Deposit Insurance Corporation, Headquarters, 18 FLRA 768, 771 (1985) (FDIC). Consistent with this principle, Authority precedent clearly states that an agency that elects to bargain over section 7106(b)(1) matters may withdraw from bargaining at any time before reaching agreement:

Clearly, if parties are not required to bargain over permissive subjects of bargaining, it follows that parties cannot insist on bargaining to impasse with respect to such matters . . . . Where a matter falls outside the required scope of bargaining or is negotiable only at the election of an agency, there is no mutual obligation to bargain at all. If parties do bargain over such matters either may withdraw at any time prior to reaching agreement.

Id. at 771-72. See also Division of Military and Naval Affairs, State of New York, Albany, New York, 15 FLRA 288, 294-95 (1984) (respondent did not violate the Statute by refusing to cooperate in a final decision of the Federal Service Impasses Panel that imposed a provision concerning a section 7106(b)(1) matter).

Thus, the Authority has not previously found that an agency acted unlawfully in refusing to bargain over a section 7106(b)(1) subject.⁽¹¹⁾ Indeed, the Authority has held that it is an unfair labor practice for a party to insist to impasse on bargaining over a permissive subject of bargaining. See Sport Air Traffic Controllers Organization, 52 FLRA 339 (1996); FDIC, 18 FLRA at 771-72. With specific regard to section 7106(b)(1) matters, this construction of the Statute is consistent with the only legislative history that addresses this point. See 124 Cong. Rec. H9646 (1978), reprinted in Subcommittee on Postal Personnel and Modernization of the Committee on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978, at 1075 (Legislative History).⁽¹²⁾

Although the Authority has held that an election to bargain over a permissive subject of bargaining is not enforceable under the Statute, it has enforced an agreement on such a subject. Once such an agreement has been reached, that agreement is enforceable, during its lifetime, under the same terms as any other negotiated agreement. In particular, once agreement concerning a section 7106(b)(1) subject is reached, neither that agreement nor the election that resulted in the agreement is subject to disapproval on section 7106(b)(1) grounds by an agency head under section 7114(c) of the Statute.⁽¹³⁾ See National Association of Government Employees, Local R4-75 and U.S. Department of the Interior, National Park Service, Blue Ridge Parkway, 24 FLRA 56, 62 (1986) (Blue Ridge Parkway). Similarly, such agreed-upon provision is enforceable in arbitration. See United States Department of Labor (OSHA) and National Council of Field Labor Locals, 34 FLRA 573, 577 (1990).

The General Counsel cites precedent applying the principle that an agreed-upon provision concerning a section 7106(b)(1) subject may not be disapproved as support for its argument that the Respondent is obligated to bargain with the Union. In particular, the General Counsel states that:

It is well settled that an agency at the exclusive level of recognition can exercise its discretion to bargain over section 7106(b)(1) matters, and the agency head cannot overturn that discretion on agency-head review under section 7114(c) of the Statute. See [Blue Ridge Parkway]. Here, the General Counsel asserts that the President has made an election at the level of exclusive recognition to bargain over section 7106(b)(1) matters. Thus, if agency heads cannot reverse elections to negotiate which are made at the level of recognition, then it stands to reason that they should not be allowed to reverse the President's determination to negotiate over section 7106(b)(1) matters at the level of recognition.

General Counsel's Exceptions at 7. This assertion fails to recognize that, in the case cited, the agency had not only elected to bargain over a section 7106(b)(1) matter but also had reached agreement with the union and the parties had executed an agreement on that matter. In fact, although the Authority stated in Blue Ridge Parkway, 24 FLRA at 61, that "[n]egotiations on permissive subjects may begin and later cease[,]" the Authority emphasized that "bargaining on the [disputed] provision [had] occurred at the local level and an agreement was executed." Thus, by its terms, the constraint imposed on agency head action in Blue Ridge Parkway does not concern elections to bargain under section 7106(b)(1) matters; rather, the constraint applies only after agreement is reached as a result of such bargaining.

In sum, Authority precedent indicates that an agency official who elects to bargain with a union about permissive subjects but later withdraws that election prior to reaching agreement does not commit an unfair labor practice. The parties have not addressed how the precedent establishing this principle should be applied in this case. The General Counsel's assertion that Executive Order 12871 constitutes "an irrevocable election to bargain over the subjects contained in section 7106(b)(1)[,]" General Counsel's Exceptions at 6 (emphasis added), suggests that this asserted blanket election cannot be revoked at any time. According to the General Counsel, "public policy" provides the basis for finding that Section 2(d) of the Executive Order constitutes an irrevocable election binding on all agencies. General Counsel Exception at 6. As support, the General Counsel points to the purpose of the Executive Order and the absence of any language that the mandate to expand the scope of bargaining is discretionary. Id. at 7. However, the basis for construing this asserted election as "irrevocable," and the meaning of the term "irrevocable" in this context, is not explained. In addition, the General Counsel has pointed to no support in the Statute, legislative history or precedent for finding that an election to bargain under section 7106(b)(1) can be made in an irrevocable manner. Such irrevocable election would, it appears, transform permissive subjects of bargaining into mandatory subjects, thereby making the election subject to enforcement through unfair labor practice proceedings in the same manner that bargaining over a mandatory subject is enforceable.

The Union, in its exceptions, offers an alternative theory under which the asserted blanket election to bargain may be revoked, but only by "an official of the agency, with the authority to act on behalf of the agency, who states that the agency has declined to make the election specified in the Executive Order." Union's Exceptions at 3. However, the Union has provided no support for this alternative theory, nor has it provided a basis on which to find it compatible with the legislative history quoted above.

D. Assuming That There Are Circumstances When an Election to Bargain On Section 7106(b)(1) Subjects is Enforceable Under the Statute, Does Section 3 of Executive Order 12871 Preclude Finding that Section 2(d) of the Executive Order Constitutes Such An Election?

As set forth above, the parties dispute whether the allegation -- that Respondent acted unlawfully when it failed to bargain on section 7106(b)(1) subjects -- seeks to enforce the Statute or the Executive Order. The General Counsel expressly acknowledges that "by its explicit terms, the Order itself cannot be enforced." General Counsel's Exceptions at 8. This statement is consistent with the Executive Order which, in Section 3, entitled "No Administrative or Judicial Review," states that it is "not intended to, and does not, create any right to administrative or judicial review, or any other right, substantive or procedural, enforceable by a party against the United States, its agencies or instrumentalities, its officers of employees, or any other person." It is also consistent with the ample precedent holding that Executive Order requirements are not judicially enforceable.⁽¹⁴⁾

In contending that the complaint seeks to enforce the Statute, not the Executive Order, the General Counsel insists on a distinction that appears to address the threshold question whether the Authority has jurisdiction to determine the unfair labor practice allegation.⁽¹⁵⁾ Compare, e.g., Stevens v. Carey, 483 F.2d 188 (7th Cir. 1973)(case dismissed because court has no subject matter jurisdiction to resolve claim about compliance with Executive Order 10988, a predecessor to the Statute). The fact that the Authority properly asserts jurisdiction in this proceeding does not, however, necessarily render irrelevant the wording in Section 3 of the Executive Order stating that it "does not, create any right to administrative or judicial review, or any other right . . . enforceable by a party against the United States [or] its agencies . . . ."

The sole basis relied on by the General Counsel to establish the asserted election to bargain is the Executive Order itself, specifically Section 2(d), which directs the head of each agency to bargain over section 7106(b)(1) subjects and to "instruct subordinate officials to do the same[.]" As described above, the General Counsel contends that the Authority should construe Section 2(d) of the Executive Order to create an irrevocable, blanket election under the Statute as a "matter of public policy." General Counsel Exceptions at 6. In support, the General Counsel asserts, among other things, that "the goal of expanding the scope of Federal sector bargaining will never be accomplished if agencies . . . are allowed to escape liability by simply asserting that they have not elected to bargain within the meaning of section 7106(b)(1) of the Statute[,]" and that, "if no finding is made that Executive Order 12871 constitutes an election under section 7106(b), then section 2(d) of the Executive Order is rendered meaningless." Id. at 7. Although the General Counsel does not explicitly urge this construction as effectuating the "intent" of the Executive Order, in order to find that the directive in Section 2(d) constitutes an election under the Statute, it may be necessary to find this result was intended.

It is unclear how Section 2(d) of the Executive Order can be so emphasized, without addressing whether Section 3 of the Executive Order plays any role in considering the enforceability of Section 2(d) in Authority unfair labor practice proceedings. However, the General Counsel appears to view the fact that this proceeding concerns enforcement of the Statute, not the Executive Order, sufficient to render Section 3 of the Executive Order inapplicable, despite the Respondent's view that Section 3 is dispositive in interpreting Section 2(d). Neither the General Counsel nor the Union address how, if Section 3 were to be considered applicable, it should be interpreted and applied to either the "enforceable election" theory or alternative theory that issuance of the Executive Order provides a basis for creating a rebuttable presumption that Respondent has exercised its discretion to bargain over Section 7106(b)(1) subjects.⁽¹⁶⁾

E. If it is Determined that an Election to Bargain on Section 7106(b)(1) Subjects is Enforceable, and that such an Election has Been Made in this Case, Then What is the Appropriate Remedy For this Violation?

In view of the fact that the Authority has not previously found unlawful an agency's refusal to bargain over section 7106(b)(1) subjects, a finding in this case that an enforceable election has been made would raise questions about retroactive application of changes in decisional law. See Social Security Administration, 52 FLRA 1159, 1189 n.25 (1997), petition for review filed sub nom. National Treasury Employees Union v. FLRA, No. 97-1204 (D.C. Cir. argued Sept. 18, 1997) (Member Wasserman concurring as to other matters) (Authority stated that, even if it had found that the respondent acted unlawfully, it would not find a violation of the Statute). See also, e.g., Retail, Wholesale & Department Store Union AFL-CIO v. NLRB, 466 F.2d 380, 390 (D.C. Cir. 1972) (in determining whether to give retroactive effect to rules adopted in the course of agency adjudication, it is appropriate to consider, inter alia, the extent to which the party against whom the new rule is to be applied relied on the former); New England Telephone and Telegraph Co. v. FCC, 826 F.2d 1101, 1110 (D.C. Cir. 1987), cert. denied 490 U.S. 1039 (1989) ("under certain circumstances, an agency may be prevented from applying a new policy retroactively to parties who detrimentally relied on the previous policy."). The parties have not addressed this matter.

If a violation is found, the General Counsel and the Union request that the Judge's recommended order be modified to require the Respondent to bargain over its decision to use term appointments. Neither specifies the extent of bargaining that the order should direct -- whether it extends to impasse, or requires a different "amount" of, or indeed any, bargaining. The Union also requests that the employees hired under the term appointments be converted retroactively to permanent employees. In requesting these remedies, the parties do not address why they are appropriate, consistent with relevant precedent.

The following order provides an opportunity for the parties to address these issues.

V. Order

The parties are directed to provide written responses to the following questions, and to address any other matters deemed relevant to resolving the questions raised in this and the companion cases concerning the Respondent's obligation to bargain under section 7106(b)(1) of the Statute.⁽¹⁷⁾ Responses should address, at a minimum, the Statute, legislative history, Executive Order 12871, Authority and judicial precedent, as discussed in this decision. If it is contended that this precedent is distinguishable or was wrongly decided, the responses should provide the basis for this contention.

1. Under what circumstances, if any, does an election to bargain under section 7106(b)(1) of the Statute create rights and obligations that are enforceable through unfair labor practice proceedings?

2. If there are circumstances when an election to bargain is enforceable under the Statute, are those circumstances present here? For example, if an "irrevocable" election can be made, has such an election been made here?

3. Does section 2(d) of Executive Order 12871 constitute an agency election, within the meaning of section 7106(b)(1) of the Statute, to bargain on proposals on matters set out in section 7106(b)(1)?

4. If an election to bargain creates rights and obligations that are enforceable under any circumstances, what is the extent of the bargaining required to satisfy the obligations? For example, does the obligation to bargain extend to impasse, or is it satisfied by some other "amount" of bargaining?

5. In view of the fact that the President's issuance of Executive Order 12871 is the only basis asserted for finding that an election to bargain has been made that is binding on the Agency, is enforcing the election barred by Section 3 of the Executive Order?

6. If the Authority were to find that there are circumstances when an election to bargain is enforceable under the Statute, and that such circumstances are present here, should a violation be found in this case? If so, what is the appropriate remedy to enforce the election?

The parties' responses must be received in the Authority's Office of Case Control by close of business on Thursday, December 18, 1997. Extensions of time will not be granted.

The Authority will entertain a request from any party for oral argument on the foregoing, or related, questions. Any requests for oral argument also must be received in the Authority's Office of Case Control by the close of business on December 18, 1997.

The parties' responses should be submitted to the Case Control Office, Federal Labor Relations Authority, 607 14th Street, N.W., Suite 415, Washington, D.C., 20424-0001. The briefs must include a signed and dated statement of service that complies with the Authority's regulations showing that the responses have been served on all counsel of record or other designated representatives. 5 C.F.R. § 2429.27(a) and (c). In particular, parties are required to serve counsel of record in each of the cases identified in note 2, supra. Those counsel are identified on the attached certificate of service.

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UNITED STATES OF AMERICA

FEDERAL LABOR RELATIONS AUTHORITY

Office of Administrative Law Judges

WASHINGTON, D.C. 20424-0001

U.S. DEPARTMENT OF COMMERCE, PATENT AND TRADEMARK OFFICE, Respondent and PATENT OFFICE PROFESSIONAL ASSOCIATION Charging Party	Case No. WA-CA-40743

Barbara S. Mintz
Counsel for the Respondent

Pamela R. Schwartz
Counsel for the Charging Party

Marilyn Blandford
Counsel for the General Counsel, FLRA

Before: GARVIN LEE OLIVER
Administrative Law Judge

DECISION

I. Statement of the Case

The unfair labor practice complaint alleges that the U.S. Department of Commerce, Patent and Trademark Office (Respondent or Agency) violated section 7116(a)(1) and (5) of the Federal Service Labor-Management Relations Statute (the Statute), 5 U.S.C. §§ 7116(a)(1) and (5), by using two-year term appointments to fill patent examiner (computer science) positions without providing the Charging Party (Union) with an opportunity to negotiate to the extent required by the Statute. In support of this allegation, the complaint also alleges that by issuing Executive Order 12,871, the President exercised the Respondent's discretion to negotiate over section 7106(b)(1) subjects. The complaint alleges that "[s]ince on or about June 20, 1994, the Respondent has refused to negotiate with the Charging Party over the use of two-year appointments to fill the subject positions."

The Respondent claims that the General Counsel and the Charging Party have failed to meet the burden of establishing that the Agency committed an unfair labor practice. The Respondent contends that (1) the Union never requested that the Agency negotiate over the use of term appointments, (2) there was no change in the conditions of employment of any bargaining unit members that would have triggered an impact and implementation bargaining obligation on the Agency's part; (3) the Agency's hiring decision fell within section 7106(a) as a management right, thus taking the matter outside the duty to bargain, (4) even if the Agency's actions were found to constitute a staffing decision within section 7106(b)(1), the Agency's inadvertent failure to adhere to Executive Order 12,871 does not provide the Authority with enforcement rights concerning compliance with the Order, and (5) throughout the events that gave rise to the charge, the Agency held the good faith belief that its hiring decisions were outside the duty to bargain and were not affected by Executive Order 12,871.

For the reasons set out below, I conclude that the Respondent violated section 7116(a)(1) and (5) of the Statute by failing to bargain with the Union on the impact and implementation of its decision to use two-year term appointments to fill patent examiner (computer science) positions in the bargaining unit. I also conclude that Respondent did not violate the Statute by refusing to negotiate pursuant to section 7106(b)(1) of the Statute. The Respondent has not exercised its discretion to negotiate pursuant to section 7106(b)(1), and the President's directive to the heads of agencies in Executive Order 12,871 did not exercise that discretion.

A hearing was held in Washington, D.C. The Respondent, Charging Party, and the General Counsel were represented by counsel and afforded full opportunity to be heard, adduce relevant evidence, examine and cross-examine witnesses, and file post-hearing briefs. Each of the parties filed an excellent brief.

Based on the entire record, including my observation of the witnesses and their demeanor, I make the following findings of fact, conclusions of law, and recommendations.

II. Findings of Fact

The Union represents a bargaining unit of approximately 2,200 patent examiners at the Respondent. Patent examiners analyze applications for patents for new inventions.

Examiners are categorized into different examining groups and subgroups (called "art units") according to the specific type of technology with which they deal. Prior to the Agency's actions that resulted in the instant unfair labor practice charge, the Agency's patent corps did not have a specific computer science specialty within the various examiner specialties.

For some time prior to the events that gave rise to this complaint, the Agency had desired to expand the scope of computer science knowledge in the patent corps. However, Agency management was concerned that computer scientists might have problems performing the duties of patent examiners. As one option, the Agency considered the possibility of an apprentice program, with the computer scientists hired on an assistant level with limited duties. These discussions eventually led to the actual preparation of a vacancy announcement and package concerning the assistant-type position; however, the apprentice program was ultimately not accepted by management.

Instead, the Agency decided to expand the categories of examiner specialties to include computer science and to hire the computer science specialists as full examiners -- but on two-year term appointments so that management could reevaluate whether the expansion of the examiner disciplines to include computer science had been a good decision.

The Agency discussed with the Union the creation of a computer science specialty, and the Union supported the idea. However, the Agency did not notify the Union that the new specialty would be implemented on a two-year trial basis.

The Agency had not previously used term appointments for new examiners. It had only used such appointments for positions outside the bargaining unit.

On December 27, 1993, the Agency provided the Union with the required notification that it was creating a new position description for the position of Patent Examiner (Computer Science). Due to an oversight by an Office of Human Resources (OHR) staffperson, the copies of the position description that were delivered to the Union were erroneously coded as permanent, rather than term, positions.

Consistent with the information supplied previously by the Respondent, the position description indicated that the patent examiner (computer science) position was to be a permanent position located in the Charging Party's bargaining unit, with a target grade of GS-13. The Respondent also informed the Charging Party that it would shortly issue a vacancy announcement for the new position.

When the Charging Party received the position description for the new examiner specialty, it appeared to be consistent with the information provided by the Respondent up to that point. Consequently, the Charging Party did not request bargaining.

Respondent issued a vacancy announcement on January 18, 1994 seeking candidates for up to 10 patent examiner (computer science) positions. The positions were for the GS-5 level with promotion potential to GS-9 and at the GS-7 and GS-9 level with promotion potential to GS-11. The announcement correctly indicated that the position would be filled by term appointments. However, it erroneously described the new positions as performing "portions of patent research assignments to assist Patent Examiners."⁽¹⁾ The announcement opened on January 18, 1994, and was to remain open until April 29, 1994.

The Union learned of the vacancy announcement on February 24, 1994 and immediately wrote a memorandum to Lawrence J. Goffney, then Assistant Commissioner for Patents Designate, questioning the duties and use of term appointments for the positions. Mr. Stern wrote, in pertinent part:

Today, a member showed me the attached vacancy announcement for what looks like a new twist on team examination. Our concern is based upon the description of the job as performing "portions of patent research assignments to assist patent examiner in the Computer Systems and Applications area" and that the job is a two-year temporary position.

I hope we're not being overly paranoid about this, but no one has ever suggested that the new computer science positions would be anything less than full fledged patent examiners.

We would appreciate an explanation of what is really intended.

A few days after sending that memorandum, Mr. Stern also called Mr. Goffney to discuss the inconsistent duties and the use of term appointments. Mr. Goffney informed Mr. Stern that he "would have someone get back to" the Charging Party. It is undisputed that Mr. Goffney never got back in touch with Mr. Stern regarding these positions.⁽²⁾

At the same time, the Agency was receiving applications for these positions. The vacancy announcement closed on April 29, 1994, and within the next two months, all the applicants were screened to determine which ten would be selected.

On June 20, 1994, Mr. Stern again wrote to Mr. Goffney, reminding him of his earlier inquiry and again requesting clarification or an explanation of the discrepancies surrounding the patent examiner (computer science) positions. Mr. Stern's memorandum, captioned, "Vacancy Announcements for Temporary Examining Positions in Computer Science," provided, in part, as follows:

The information that I had received for computer science positions showed positions that were permanent, positions that had promotion potential to grade 13, and positions having the duties of full fledged patent examiners (which include the drafting of actions). As we discussed previously, this information differs from the positions identified in the vacancy announcement.

If the Office is not setting up a new program and only intends to establish computer science as an additional examiner specialty, please let us know.

If, on the other hand, the Office is setting up a new program, we would like formal notification and an opportunity to bargain on the negotiable aspects of the program.

Again, there was no immediate response from the Respondent.⁽³⁾

Ten applicants were appointed to the patent examiner (computer science) positions on a two-year term basis effective June 27, 1994.

At about the same time, Respondent issued a press release announcing that it had hired ten examiners with two-year appointments. The release repeated the erroneous information from the vacancy announcement, that the new examiners would assist other patent examiners.

During a scheduled orientation session for new employees on June 27, 1994, the Union discovered that the Respondent had hired 10 employees on a two-year term basis to fill the patent examiner (computer science) vacancies.

The Union filed the unfair labor practice charge in this case on July 18, 1994. The charge alleged that Respondent violated the Statute "by hiring patent examiners having only limited terms and by denying these examiners the training and responsibility necessary for advancement previously available to all examiners, without providing the union with advance notice and an opportunity to negotiate." The charge referred to the diminished employment security and limited duties of the term employees and the effect on experienced employees of the junior examiners. The charge stated, "Negotiable aspects of impact and implementation of these changes include: items related to training and performance evaluation for both the term and experienced employees and procedures for reporting and accounting for the work of the term employees and the time spent by the experienced employees training the term employees and evaluating their search results. In addition, pursuant to a recent Executive Order, the numbers and types of employees assigned to any particular work project has become a negotiable item."

Representatives of the Respondent and the Charging Party met the following day, on July 19, 1994, to discuss the matter. At that meeting, the Respondent's representatives explained to the Charging Party's satisfaction that the duties of the patent examiner (computer science) positions were those of a regular patent examiner and not that of an assistant, as described erroneously in the vacancy announcement.

The parties also discussed Respondent's decision to make the positions term appointments. The Charging Party informed the Respondent that it believed the decision to use term appointments for the positions was substantively negotiable under section 7106(b)(1) of the Statute and that impact and implementation issues flowing from that decision were also negotiable. The Charging Party claimed that the term appointments were an evasion of the probationary period afforded other employees, and the new employees should have the same notice of deficiencies in their work and an opportunity to defend themselves as anyone else in the bargaining unit. Respondent's representatives replied that they had no obligation to negotiate over the use of term appointments because the decision to use those appointments involved the exercise of management rights and there was no effect on employees in the bargaining unit.

On August 10, 1994, Respondent sent the Union a memorandum responding to the Union's inquiries of February 24, 1994 and June 20, 1994 and information requests made by the Union at the July 19, 1994 meeting. The memorandum expressly did not address the unfair labor practice charge filed by the Union.

The record reflects that the patent examiners (computer science) were appointed to two-year terms, with only GS-9 or GS-11 promotion potential, but with the same type of duties and responsibilities as other examiners. The new examiners were also hired under the same performance appraisal plan that was used at that time for all other examiners. The new examiners did not affect the duties and responsibilities of the existing examiners, who continued to handle their own dockets.

The record does not reflect the current status of the patent examiner (computer science) discipline. Respondent intended to recruit for the positions on a permanent basis at the end of the two-year terms if satisfied with the long-term value of the discipline. In that event, the current term employees could compete for permanent positions. As of the date of the hearing, five term examiners had left the employ of the Agency, and the Union had received a report that one examiner was informed she would not be rehired when her two-year period was up on June 27, 1996.

III. Applicable Statutory Provisions

Section 7106 of the Statute provides, in pertinent part:

§ 7106. Management rights

(a) Subject to subsection (b) of this section, nothing in this chapter shall affect the authority of any management official of any agency--

. . .

(2) in accordance with applicable laws--

(A) to hire . . . ;

. . .

(C) with respect to filling positions, to make selections for appointments . . . .

(b) Nothing in this section shall preclude any agency and any labor organization from negotiating--

(1) at the election of the agency, on the numbers, types, and grades of employees or positions assigned to any organizational subdivision, work project, or tour of duty, or on the technology, methods, and means of performing work;

(2) procedures which management officials of the agency will observe in exercising any authority under this section; or

(3) appropriate arrangements for employees adversely affected by the exercise of any authority under this section by such management officials.

Section 7116(a)(1) and (5) provides:

§ 7116. Unfair labor practices

(a) For the purpose of this chapter, it shall be an unfair labor practice for an agency --

(1) to interfere with, restrain, or coerce any employee in the exercise by the employee of any right under this chapter;

. . .

(5) to refuse to consult or negotiate in good faith with a labor organization as required by this chapter[.]

IV. Issues Presented

Whether the Union made a valid request to bargain over Respondent's use of term appointments to fill patent examiner (computer science) positions.

Whether there was a change in conditions of employment of bargaining unit employees.

Whether the Respondent's decision to use two-year term appointments fell within section 7106(a), thus placing its decision outside the duty to bargain.

Whether Executive Order 12,871 exercised the Respondent's discretion so that it was required to negotiate pursuant to section 7106(b)(1).

Whether the use of term appointments had a reasonably foreseeable effect on bargaining unit employees which gave rise to a duty to bargain pursuant to section 7106(b)(2) and (3).

Whether the Respondent's belief as to the propriety of its actions precludes the finding of a violation for failure to bargain in good faith.

V. Discussion and Conclusions

A. The Union Made A Valid Request To Bargain

In order to meet its burden of proving the commission of an unfair labor practice based on failure to bargain in good faith, a charging party must initially demonstrate that the agency refused a clearly communicated request to bargain from the union. Department of the Air Force, Air Force Logistics Command, 22 FLRA 15, 18 (1986).

Respondent claims that because the term appointments did not meet the criteria for a "new program" specified by the Union in Mr. Stern's June 20, 1994 request to bargain, the Respondent did not refuse a clearly communicated request to bargain from the Union. Respondent claims that the Union's concern had focused only on the possibility of team examination and that is what the Union meant by a "new program."

The June 20, 1994 request to bargain was as clear as it could be under the circumstances and encompassed a request to bargain on term appointments. The Respondent was responsible for the Union's confusion until July 19, 1994 over just what was being implemented for the new examiners, whether permanent or term appointments or limited or full duties. At that time, the Union made a clear request to negotiate over the use of term appointments.

The Union's February 24, 1994 inquiry identified the Union's concern with the vacancy announcement as involving both the limited duties and the two-year temporary positions. The Union's June 20, 1994 memorandum reiterated the request for clarification between the initial information provided it regarding permanent positions with full duties or the positions identified in the vacancy announcement with limited duties and two-year appointments. Thus, the Union's request--"If the Office is not setting up a new program and only intends to establish computer science as an additional examiner specialty, please let us know. If, on the other hand, the Office is setting up a new program, we would like formal notification and an opportunity to bargain on the negotiable aspects of the program." -- encompassed a request to bargain on the term appointments. As noted, when the errors were explained to the Union at the July 19, 1994 meeting and the Union was clearly informed that the computer science examiners, hired for two-year terms, would not be assisting the other examiners, the Union made a request to bargain over its remaining concern, the term appointments.⁽⁴⁾

B. There Was A Change In Conditions Of Employment

Section 7103(a)(14) of the Statute defines conditions of employment, with exceptions not relevant here, as "personnel policies, practices and matters, whether established by rule, regulation, or otherwise, affecting working conditions[.]" An agency's bargaining obligation is limited to such matters affecting bargaining unit employees. 5 U.S.C. § 7103(a)(12).

In deciding whether a matter involves a condition of employment of bargaining unit employees, the Authority considers whether: (1) the matter pertains to bargaining unit employees; and (2) the record establishes that there is a direct connection between the matter and the work situation or employment relationship of bargaining unit employees. Antilles Consolidated Education Association and Antilles Consolidated School System, 22 FLRA 235, 236-38 (1986) (Antilles).

In Federal Employees Metal Trades Council, AFL-CIO and Department of the Navy, Mare Island Naval Shipyard, Vallejo, California, 25 FLRA 465 (1987), the Authority held that where a proposal relating to pay distribution referred to new hires, but related solely to individuals designated for employment in bargaining unit positions, and had relevance specifically to employment in those positions, and became operative only after an individual had been employed, the matter pertained to bargaining unit employees under the first factor stated in Antilles. See also Overseas Education Association, Inc. and Department of Defense, Office of Dependents Schools, 22 FLRA 351, 352 (1986) (proposal one, orientation information mailing to selectees for bargaining unit positions negotiable), appealed on other grounds, 827 F.2d 814 (D.C. Cir., 1987).

Similarly, in American Federation of Government Employees, AFL-CIO, Local 2024 and Department of the Navy, Portsmouth Naval Shipyard, Portsmouth, New Hampshire, 11 FLRA 125, 126 (1983), the union proposed, among other things, that the basic rate of pay for new employees who previously worked as Federal employees would be established through the exercise of sound and reasonable managerial discretion. In finding the proposal negotiable, the Authority rejected the agency's argument that the proposal did not concern conditions of employment because it pertained to nonbargaining unit members. Instead, the Authority found that the proposal would benefit former employees only "if and when they are reemployed in bargaining unit positions." Consequently, the Authority concluded that the proposal involved conditions of employment and was within the duty to bargain under the Statute.

The same reasoning of these cases is applicable here. In this case, the record clearly establishes that, as a result of Respondent's decision to use term appointments to fill the positions, the Charging Party sought to negotiate over post-hiring matters affecting those positions, such as notice of termination of appointment, notice of any performance deficiencies, training and performance evaluation. (Tr. 66-67; G.C. Exh. 1(a) at page 4). No benefit would have been derived from the subject of the requested negotiations until after applicants were employed in bargaining unit positions.

Moreover, on June 20, 1994, the Charging Party requested negotiations with the Respondent over the use of term appointments. At that point, and unknown to the Charging Party, the Respondent was one week away from bringing on-board the 10 people it had hired for the patent examiner (computer science) vacancies. By the time the Respondent finally met with the Charging Party to discuss this matter, the incumbents of the positions had been employees for approximately three weeks. Thus, the Charging Party initially sought to bargain over conditions of employment of unit positions, and then over conditions of employment pertaining to actual employees. Thus, the Union's request to bargain about the Respondent's use of term appointments to fill patent examiner (computer science) positions pertains to bargaining unit employees under the first factor stated in Antilles.

The record clearly establishes the second factor in Antilles, a direct connection between the matter, term appointments, and the employment relationship of bargaining unit employees. Term appointments directly affect the employment relationship of bargaining unit employees in this instance as they involve a personnel policy affecting their tenure and status.

Accordingly, contrary to the position of the Respondent, the matter involved a condition of employment of bargaining unit employees.

C. The Respondent's Actions In Hiring Examiners For Term Appointments Is Not Substantively Negotiable

The Respondent was not required to bargain over its decision to hire approximately 10 employees for two-year term appointments in the newly created patent examiner (computer science) positions. An agency has statutorily reserved discretion to make hiring decisions. The right "to hire" is one of the exclusive management rights specifically enumerated in section 7106(a). National Association of Government Employees, Local R1-109, AFL-CIO and Veterans Administration Medical Center, Newington, Connecticut, 26 FLRA 532, 533-34 (1987).

D. The Agency Did Not Violate The Statute By Refusing To Negotiate Pursuant To Section 7106(b)(1)

Section 7106(b)(1) makes it clear that matters concerning "numbers, types, and grades of employees or positions assigned to any organizational subdivision, work project, or tour of duty" are negotiable only at an agency's election. The General Counsel contends that the President exercised the Agency's discretion by issuing Executive Order 12,871 and, therefore, the Respondent violated section 7116(a)(1) and (5) by refusing to negotiate over the use of term appointments to fill the patent examiner (computer science) positions, a matter encompassed within section 7106(b)(1).

The President did not exercise the Agency's discretion. Executive Order 12,871, "Labor-Management Partnerships", issued October 1, 1993 (58 Fed. Reg. 52201-52203, Oct. 6, 1993), at Sec. 2.(d) directs the head of each agency to "negotiate over the subjects set forth in 5 U.S.C. 7106(b)(1), and instruct subordinate officials to do the same[.]" Nevertheless, the Respondent has not exercised its discretion to negotiate pursuant to section 7106(b)(1) in this case. Therefore, the Respondent did not violate section 7116(a)(1) and (5) of the Statute in this respect, as alleged, assuming that the matter falls within section 7106(b)(1).⁽²²⁾

E. The Use Of Term Appointments Had A Reasonably Foreseeable Effect On Bargaining Unit Employees Which Gave Rise To A Duty To Bargain

"[A]n agency's authority to exercise the rights enumerated in section 7106(a) is expressly made 'subject to' section 7106(b)." National Association of Government Employees, Local R5-184 and U.S. Department of Veterans Affairs, Medical Center, Lexington, Kentucky, 51 FLRA 386, 390 (1995). Therefore, Respondent's right "to hire" and "with respect to filling positions, to make selections for appointments" does not preclude it from negotiating, pursuant to section 7106(b) "(2) procedures which management officials of the agency will observe in exercising any authority under this section; or (3) appropriate arrangements for employees adversely affected by the exercise of any authority under this section by such management officials."

The test established by the Authority in Department of Health and Human Services, Social Security Administration, 24 FLRA 403, 408 (1986) to determine whether a change has more than a de minimis impact on unit employees and requires impact and implementation bargaining involves consideration of "the nature and extent of the effect or reasonably foreseeable effect of the change on conditions of employment of bargaining unit employees." U.S. Equal Employment Opportunity Commission, 40 FLRA 1147, 1156 (1991).

Term appointments had never previously been used to fill positions in the Charging Party's bargaining unit. After two years, the examiners appointed for two-year terms would be

summarily released, or, if Respondent decided to make the temporary program permanent, as was possible, they would have to compete for the permanent positions. Job performance as temporary employees would obviously be of some significance to management in making selections for permanent positions. Consequently, the use of term appointments gave rise to potential job retention consequences for the term employees which were reasonably foreseeable. As noted, the Charging Party sought to negotiate over post-hiring procedural matters affecting those positions, such as notice of, and an opportunity to reply to, performance deficiencies.

Accordingly, the impact of Respondent's decision to use term appointments in the bargaining unit was more than de minimis, and Respondent violated section 7116(a)(1) and (5) by refusing to negotiate with the Union over the impact and implementation of its decision. Cf. Federal Deposit Insurance Corporation, Washington,D.C., 48 FLRA 313 (1993)(FDIC), petition for review denied sub. nom. FDIC v. FLRA, No. 93-1694 (D.C. Cir., December 12, 1994)(unpublished opinion)(bargaining required regarding procedures and appropriate arrangements concerning the nonrenewal of temporary liquidation graded employees).

F. Respondent's Good Faith Belief As To The Propriety Of Its Action Does Not Preclude The Finding Of An Unfair Labor Practice

Respondent contends that it cannot be found to have refused to negotiate in good faith with the Union because it believed in good faith that its decision to hire new examiners for term appointments was a matter that did not affect bargaining unit members, was within its exclusive management rights under section 7106(a), and that no bargaining was being requested by the Union's June 20 memorandum.

Specific evidence of an intent by Respondent to evade or frustrate its bargaining obligation is not required since intent is not an element of a section 7116(a)(5) violation. Marine Corps Logistics Base, Barstow, California, 33 FLRA 196, 202 (1988); Internal Revenue Service, 16 FLRA 904, 922 (1984). Respondent's "belief" is, therefore, irrelevant. The legal consequences of its conduct have been treated herein.

Based on the above findings and conclusions, it is recommended that the Authority issue the following Order, modeled after the remedy discussed and afforded by the Authority in FDIC, 48 FLRA at 329-31, and which will effectuate the purposes of the Statute under the circumstances:

ORDER

Pursuant to section 2423.29 of the Federal Labor Relations Authority's Rules and Regulations and section 7118 of the Statute, it is hereby ordered that the U.S. Department of Commerce, Patent and Trademark Office, shall:

1. Cease and desist from:

(a) Failing and refusing to bargain with the Patent Office Professional Association, the exclusive representative of an appropriate unit of employees, over the impact and implementation of the decision of the Patent and Trademark Office to use term appointments in hiring patent examiners in the bargaining unit represented by such exclusive representative.

(b) In any like or related manner interfering with, restraining or coercing its employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute.

2. Take the following affirmative action in order to effectuate the purposes and policies of the Federal Service Labor-Management Relations Statute:

(a) Bargain with the Patent Office Professional Association to the extent consistent with the Statute over the impact and implementation of the decision of the Patent and Trademark Office to use term appointments in hiring patent examiners and apply agreements reached pursuant to such negotiations retroactively to February 24, 1994.

(b) Based upon agreements reached pursuant to negotiations, make whole any bargaining unit employee for any losses suffered by such employee because of the failure to provide the Patent Office Professional Association prior notice and an opportunity to bargain over procedures to be observed in connection with the decision to use term appointments in hiring patent examiners and appropriate arrangements for affected employees.

(c) Post at the U.S. Department of Commerce, Patent and Trademark Office in Crystal City, Virginia, copies of the attached Notice on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the Assistant Commissioner for Patents and shall be posted and maintained for 60 consecutive days thereafter, in conspicuous places, including all bulletin boards and other placed where notices to employees are customarily posted. Reasonable steps shall be taken to insure that such Notices are not altered, defaced, or covered by any other material.

(d) Pursuant to section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director of the Washington Region, Federal Labor Relations Authority in writing, within 30 days from the date of this Order, as to what steps have been taken to comply herewith.

Issued, Washington, DC, July 9, 1996

____________________________

GARVIN LEE OLIVER
Administrative Law Judge

NOTICE TO ALL EMPLOYEES

POSTED BY ORDER OF THE

FEDERAL LABOR RELATIONS AUTHORITY

The Federal Labor Relations Authority has found that the the U.S. Department of Commerce, Patent and Trademark Office violated the Federal Service Labor-Management Relations Statute and has ordered us to post and abide by this notice.

We hereby notify our employees that:

WE WILL NOT fail and refuse to bargain with the Patent Office Professional Association, the exclusive representative of an appropriate unit of our employees, over the impact and implementation of our decision to use term appointments to hire certain patent examiners in the bargaining unit represented by such exclusive representative.

WE WILL NOT in any like or related manner interfere with, restrain or coerce our employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute.

WE WILL bargain with the Patent Office Professional Association over the impact and implementation of our decision to use term appointments in hiring patent examiners to the extent consistent with the Statute, and we will apply agreements reached pursuant to such negotiations retroactively to February 24, 1994.

WE WILL, based upon agreements reached pursuant to negotiations, make whole any bargaining unit employee for any losses suffered by such employee because of our failure to provide the Patent Office Professional Association prior notice and an opportunity to bargain over procedures to be observed in connection with our decision to use term appointments in hiring patent examiners and appropriate arrangements for affected employees.

___________________________
(Activity)

Date:________By:_________________________

(Signature) (Title)

This Notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced or covered by any other material.

If employees have any questions concerning this Notice or compliance with any of its provisions, they may communicate directly with the Regional Director of the Federal Labor Relations Authority, Washington Region, 1255 22nd Street, NW, Suite 400, Washington, DC 20037-1206, and whose telephone number is: (202) 653-8500.

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FOOTNOTES:
(If blank, the decision does not have footnotes.)

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Authority's Footnotes Follow:

1. The Respondent filed a single submission containing both its exceptions and its opposition. We refer herein to the arguments in this submission disputing the Judge's decision as the Respondent's exceptions, and the arguments supporting the Judge as the Respondent's opposition. We note that the General Counsel interpreted the Respondent's submission in the same way, and responded in its opposition only to those arguments disputing the Judge's decision. See General Counsel's Opposition at 1 n.2.

2. This precedent also is not fully addressed by parties in other pending cases where the General Counsel has similarly alleged that the respondents violated the Statute by refusing to bargain over matters encompassed by section 7106(b)(1). These cases are: Department of the Air Force, 647th Air Base Group, Hanscom Air Force Base, Massachusetts (and National Association of Government Employees, SEIU, AFL-CIO, Local R1-8), Case No. BN-CA-41011; U.S. Department of Justice, Immigration and Naturalization Service (and American Federation of Government Employees, National Border Patrol Council, AFL-CIO), Case No. WA-CA-50048; Social Security Administration, Santa Rosa District Office, Santa Rosa, California (and American Federation of Government Employees, Council 147, AFL-CIO), Case No. SF-CA-50155; and U.S. Department of Veterans Affairs, Medical Center, Lexington, Kentucky (and National Association of Government Employees), Case No. CH-CA-50399.

3. Parties in the cases referred to in note 2, supra, are being served with this Decision and are directed to submit briefs on these issues; these parties also may request oral argument. By notice published in the Federal Register, other interested persons are invited to file briefs as amicus curiae on the questions. However, participation in any oral argument will be confined to the parties to pending cases in the absence of a demonstration that the interests of a person desiring to participate in the oral argument will not adequately be represented by these parties.

4. Section 2(d) of Executive Order 12871 provides, in relevant part:

Sec. 2. IMPLEMENTATION OF LABOR-MANAGEMENT PARTNERSHIPS THROUGHOUT THE EXECUTIVE BRANCH. The head of each agency subject to the provisions of chapter 71 of title 5, United States Code shall:

. . . .

(d) negotiate over the subjects set forth in 5 U.S.C. 7106(b)(1), and instruct subordinate officials to do the same[.]

5. In determining whether a matter concerns conditions of employment of unit employees, Antilles requires that the Authority consider whether: (1) the matter pertains to bargaining unit employees; and (2) the record establishes a direct connection between the matter and the work situation or employment relationship of unit employees. 22 FLRA at 236-37. In concluding that the Respondent's use of term appointments concerned conditions of employment, the Judge relied on the Authority's decisions in Federal Employees Metal Trades Council, AFL-CIO and Department of the Navy, Mare Island Naval Shipyard, Vallejo, California, 25 FLRA 465, 468 (1987) (Mare Island) (proposal for distributing paychecks of newly hired employees would become operative only after new employees had joined the bargaining unit and thus directly affected conditions of employment in the unit) and American Federation of Government Employees, AFL-CIO, Local 2024 and Department of the Navy, Portsmouth Naval Shipyard, Portsmouth, New Hampshire, 11 FLRA 125, 126 (1983) (Portsmouth) (proposal for setting pay of new employees who had previously worked for the Federal government would benefit those employees "only if and when they are reemployed" in unit and, therefore, concerned conditions of employment) (emphasis in original).

6. The Judge found, based on hearing testimony, that the Union sought to bargain about such matters as "notice of termination of appointment, notice of any performance deficiencies, training and performance evaluation." Judge's Decision at 10.

7. The Judge made no finding on whether the Respondent's decision concerned a matter encompassed by section 7106(b)(1).

8. The Respondent cites American Federation of Government Employees, Local 2761 and U.S. Army Adjutant General, Publication Center, St. Louis, Missouri, 17 FLRA 899, 902 (1985) (an agency's duty to bargain "does not include individuals who are applicants for employment with an agency") and Laborers' International Union of North America, AFL-CIO-CLC, Local 1267, and Defense Logistics Agency, Defense Depot Tracy, Tracy, California, 14 FLRA 686, 690 (1984) ("under section 7117 of the Statute, an agency may, but is not obligated to, bargain on proposals concerning nonbargaining unit employees")

9. Section 3 of Executive Order 12871 provides as follows:

NO ADMINISTRATIVE OR JUDICIAL REVIEW. This order is intended only to improve the internal management of the executive branch and is not intended to, and does not, create any right to administrative or judicial review, or any other right, substantive or procedural, enforceable by a party against the United States, its agencies or instrumentalities, its officers or employees, or any other person.

10. The Respondent does not dispute the Judge's finding that the effects of the decision to use term appointments on conditions of employment were more than de minimis. See Judge's Decision at 12-13. Accordingly, we adopt the Judge's finding.

11. We note, however, that the Authority has not previously determined the effect of section 2(d) of the Executive Order on an agency's obligation to bargain under section 7106(b)(1). In particular, contrary to the judge's conclusion in Department of the Air Force, 647th Air Base Group, Hanscom Air Force Base, Massachusetts, Case No. BN-CA-41011, cited supra note 2, the Authority did not "inferentially" determine in VAMC, Lexington, that agencies are not obligated to bargain under section 7106(b)(1) despite the Executive Order. In VAMC, Lexington, the Authority established an analytical framework for determining whether proposals claimed to affect rights under both section 7106(a) and 7106(b)(1) are within the duty to bargain. Although the Authority determined that certain of the union's proposals were bargainable at the agency's election under section 7106(b)(1), the Authority explained that it was required by virtue of existing regulations, 5 C.F.R. § 2424.10(b), to dismiss the union's petition for review with regard to those proposals. The Authority made no determination in VAMC, Lexington, "inferential" or otherwise, about the effect of the Executive Order on an agency's duty to bargain under section 7106(b)(1).

12. The following exchange, in pertinent part, occurred during the floor debate on the final version of section 7106:

Mr. EDWARDS of Alabama. The Executive order says that there shall be no obligation to meet and confer on "numbers, types, and grades of positions or employees assigned to an organizational unit, work project, or tour of duty," and so forth . . . . Yet, in the Udall substitute it says they are not "precluded" from meeting and conferring . . . . Is the Defense Department or any other Federal agency, for that matter, required to bargain on those particular subjects?

. . . .

Mr. FORD of Michigan. It is permissible, and it is in exactly the same status as the existing law. I might say that not only are they under no obligation to bargain, but they can start bargaining and change their minds and decide they do not want to talk about it any more, and pull it off the table. It is completely within the control of the agency to begin discussing the matter or terminate the discussion at any point they wish without a conclusion, and there is no appeal or reaction possible from the parties on the other side of the table.

It is completely, if you will, at the pleasure and the will of the agency. Where an agency wants to resolve a particular problem with an organization and come to some agreement, it can choose to do so. . . .

Mr. EDWARDS of Alabama. So . . . there is no way that they can be forced to negotiate on those subjects?

Mr. FORD of Michigan. That is correct.

. . . .

Mr. EDWARDS of Alabama. And if they in fact start negotiating on those subjects and conclude at some point that they should not negotiate further, there is no way to force them to negotiate further?

Mr. FORD of Michigan. That is correct. It is completely within the discretion of one side of the table, and there is no appeal from their decision.

Legislative History at 1075.

13. Upon expiration of the agreement, however, either party may notify the other than it is no longer bound by any provisions on permissive matters that the agreement may have contained. This is in contrast to the general rule that expired provisions relating to mandatory subjects of bargaining continue until changed by the parties in accordance with the Statute. See, e.g., Federal Aviation Administration, 23 FLRA 209 (1986).

14. See, e.g., Chen v. Immigration and Naturalization Service, 95 F.3d 801, 805-06 (9th Cir. 1996) (Executive Order 12711, providing for enhanced consideration under immigration laws of certain individual's claims by Federal, not judicially enforceable in habeas corpus proceeding); Facchiano Construction Co. Inc. v. United States Department of Labor, 987 F.2d 206 (3rd Cir. 1993), cert. denied, 510 U.S. 822 (1993)(Executive Order 12549, providing for debarment of participants in federally funded programs, not judicially enforceable); Acevedo v. Nassau County, New York, 500 F.2d 1078, n.7 (2d Cir. 1974) (Executive Order 11512, establishing policy guidance for the General Services Administration in selecting federal building sites, not judicially enforceable); In re Surface Mining Regulation Litigation, 627 F.2d 1346, 1357 (D.C. Cir. 1980) (Surface Mining) (Executive Order 11821, requiring "inflationary impact statements" for major executive branch rules and regulations, not judicially enforceable); Local 1498, American Federation of Government Employees v. American Federation of Government Employees, AFL-CIO, 522 F.2d 486, 490-91 (3d Cir. 1975) (Executive Order 11491, the immediate predecessor to the Statute, not enforceable); Manhattan-Bronx Postal Union v. Gronouski, 350 F.2d 451, 456-57 (D.C. Cir. 1965), cert. denied, 382 U.S. 978 (1966) (Executive Order 10988, one of the precursors to the Statute, not judicially enforceable). One exception to the general rule that internal directives of the executive branch are not judicially enforceable has been recognized for "Presidential proclamations and orders that have the force and effect of law when issued pursuant to a statutory mandate or delegation of authority from Congress." Independent Meat Packers Association v. Butz, 526 F.2d 228 (8th Cir. 1975), cert. denied 424 U.S. 966 (1976). See also Surface Mining, 627 F.2d at 1357 (executive orders having "specific foundation in Congressional action" may be enforced in private civil suits). There is no claim, however, that Executive Order 12871 is encompassed by this exception.

15. We note, in this regard, the judge's finding in U.S. Department of Veterans Affairs Medical Center, Lexington, Kentucky, Case No. CH-CA-50399, cited supra note 2, that the Authority's "assertion of jurisdiction and resolution of [the] complaint of unfair labor practices under section 7118 of the Statute does not violate section 3 of the Executive Order." Judge's Decision at 7.

16. The Judge in U.S. Department of Justice, Immigration and Naturalization Service, Case No. WA-CA-50048, cited supra note 2, stated the following regarding this point:

[The Executive Order] is a directive to the agency to negotiate. It is not a statement that the President "elects" to negotiate, on behalf of the agency, for section 7106(b)(1) purposes. . . . It is sufficient to note . . . that section 3 of E.O. 12871 specifically negates the inference that the Order creates "any right to administrative or judicial review" enforceable against an agency. Who would argue that this means something other than what it appears to mean -- that the Authority, among others, lacks jurisdiction to enforce the duty to negotiate over section 7106(b)(1) subjects -- must at least explain what other purpose section 3 serves.

Judge's Decision at 14 (emphasis added).

17. Parties in the companion cases cited in note 2, supra, are also directed to address whether there are facts or issues in their cases that are distinguishable from those in this case on the particular allegation that the respondent was obligated to bargain under section 7106(b)(1).

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ALJ's Footnotes Follow:

1. The erroneous personnel documents were apparently the ones that had been drafted during consideration of the apprentice program that was not adopted by management.

2. Colleen Woodward, then Respondent's Director of Human Resources, testified that she may have contacted Mr. Stern or someone else in the Union to explain the vacancy announcement error, but could not recall when. Ms. Woodward's memorandum to the Union of August 20, 1994 does not specify any such discussions prior to early July 1994. Mr. Stern did not recall ever receiving an explanation prior to July 19, 1994. I credit Mr. Stern's testimony in this respect.

3. Ms. Woodward testified that a "new program" was something that was "very different from something that had occurred before" and that this was not a "new program." But she also testified that from her dealings with Mr. Stern, she believed Mr. Stern would have considered the hiring of examiners under term appointments to be "very different." (Tr. 107-108).

4. As noted, the complaint alleges in paragraph 10(h), "Since on or about June 20, 1994, the Respondent has refused to negotiate with the Charging Party over the use of two-year, term appointments to fill the subject position." Issues relating to events subsequent to June 20, 1994 were fully litigated at the hearing.

5. The General Counsel claims that it has charged the Respondent "with failing to execute its statutory duty to bargain over 7106(b)(1) subjects" but "is not attempting to enforce any right which may or may not be created in the Executive Order." In this regard, the Respondent notes that, according to Section 3 of the Executive Order, it is "intended only to improve the internal management of the executive branch" and does not provide any enforcement rights to a third party. According to Respondent, "Should an agency inadver-tently fail to follow the President's instructions in Executive Order 12,871, it would be up to the President himself -- not the Authority or any other administrative or judicial body -- to enforce the Executive Order by whatever means available to him."

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