Antilles Consolidated Education Association v. FLRA

 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued February 24, 2020           Decided October 13, 2020

                        No. 19-1111


    ANTILLES CONSOLIDATED EDUCATION ASSOCIATION,
                     PETITIONER

                              v.

          FEDERAL LABOR RELATIONS AUTHORITY,
                     RESPONDENT


             On Petition for Review of an Order
          of the Federal Labor Relations Authority


     Richard J. Hirn argued the cause and filed the briefs for
petitioner.

    Sarah Blackadar, Attorney, Federal Labor Relations
Authority, argued the cause for respondent. On the brief were
Noah B. Peters, Solicitor, Rebecca J. Osborne, Deputy
Solicitor, and Joshua D. Brown, Attorney.

   BEFORE: PILLARD and KATSAS, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge KATSAS.
                              2
     KATSAS, Circuit Judge: This case arises from a bargaining
dispute between a federal agency that runs military-base
schools and a union representing teachers at the schools. The
Federal Service Impasses Panel ordered the parties to adopt an
entire collective-bargaining agreement, including a disputed
provision about the daily workday and several other provisions
on which the parties themselves had reached tentative
agreement before the Panel was consulted. The Federal Labor
Relations Authority held that the Impasses Panel lacked
authority to impose the workday and agreed-to provisions. We
uphold those rulings, but we set aside the FLRA’s further
ruling that the workday provision imposed by the Panel
infringed the agency’s statutory right to assign work.

                               I

                              A

     The Federal Service Labor-Management Relations Statute
gives federal employees the right to engage in collective
bargaining over their conditions of employment through a
union of their choice. 5 U.S.C. § 7102. The employing agency
must bargain in good faith with the union.

Id. § 7114(a)(4). The

agency commits an unfair labor practice if it refuses to do
so

, id. § 7116(a)(5), or

if it refuses without justification to
follow mandatory “impasse procedures and impasse
decisions,”

id. § 7116(a)(6). The

Statute makes certain employment conditions
nonnegotiable. Among other things, it preserves the right of
federal agencies “to assign work.” 5 U.S.C § 7106(a)(2)(B). It
also exempts from collective bargaining any matters
“specifically provided for by Federal Statute,”

id. § 7103(a)(14)(C), including

the wages and benefits of most
federal employees. But because the Secretary of Defense has
discretion to set the compensation of teachers in military-base
                               3
schools, 10 U.S.C. § 2164(e)(2)(C), the teachers may bargain
over it. Fort Stewart Schs. v. FLRA, 

495 U.S. 641

, 649 (1990).

     The Federal Labor Relations Authority implements the
Statute. 5 U.S.C. § 7105(a). The Federal Service Impasses
Panel, an entity within the FLRA, helps to resolve negotiation
impasses between agencies and unions.

Id. § 7119(c)(1). If

the
parties are at impasse, either one may ask the Impasses Panel
for assistance.

Id. § 7119(b)(1). The

Panel then may make
recommendations or find facts.

Id. § 7119(c)(5)(A). As

a last
resort, the Panel also may “take whatever action is necessary
and not inconsistent with this chapter to resolve the impasse,”

id. § 7119(c)(5)(B)(iii), which

includes imposing contract
terms on the parties, see Nat’l Fed’n of Fed. Emps. v. FLRA,

789 F.2d 944

, 945 (D.C. Cir. 1986).

     Orders of the Impasses Panel are not directly reviewable
in court. Instead, an aggrieved party may obtain judicial review
by violating a Panel order and then seeking review of any
ensuing FLRA order finding an unfair labor practice. See 5
U.S.C. § 7123(a); Council of Prison Locs. v. Brewer, 

735 F.2d 1497

, 1500 (D.C. Cir. 1984).

                               B

    The Department of Defense Domestic Dependent
Elementary and Secondary Schools is a federal agency that
runs schools on United States military bases. The Antilles
Consolidated Education Association is a union representing
teachers and other professional employees at such schools in
Puerto Rico. In 2015, the agency and the union began
negotiating a collective bargaining agreement to succeed an
expired 2011 agreement. The parties tentatively agreed on
most proposed articles for the new agreement, but they
deadlocked on various issues involving, as relevant here, two
proposed articles and one proposed appendix.
                               4
    The dispute before us largely centers on the workday
provisions of the proposed agreement. In the 2011 agreement,
those provisions were set forth in section 1 of Article 19, which
began as follows:

                        ARTICLE 19

        HOURS OF WORK AND SCHEDULING

    Section 1. Workday.

    a. The workday for full-time bargaining unit members
    shall consist of eight (8) hours. Unit members must
    be physically present at the work site for a seven and
    one-half (7½) hour duty day which includes a 30-
    minute non-paid duty-free lunch period.

    b. Salaries in this contract were negotiated with the
    realization and expectation that bargaining unit
    members will perform one (1) hour per workday of
    preparation and professional tasks for completion of
    their assigned eight (8) hour workday. While this one
    (1) hour of preparation and professional tasks may
    typically be performed at or away from the work site
    at the election of the unit member, the Agency
    reserves the right to require that this eighth hour on a
    particular workday be accomplished at the school site
    for activities such as training, staff development, or
    faculty meetings. Not more than ten (10) general
    faculty meetings which extend the duty day should be
    scheduled during the school year. * * *

J.A. 64. The parties also disagreed over teacher compensation,
which was addressed in Article 26 and Appendix F of the 2011
agreement.
                              5
     During the 2015 negotiations, the union sought to carry
forward the workday provisions from the 2011 agreement. The
agency sought to eliminate the dedicated hour for preparatory
and professional tasks and to require teachers to be at school
for that hour. The agency took the position that these terms
implicated its right to assign work and thus were
nonnegotiable.

     The union sought help from the Impasses Panel, which
referred the matter to a factfinder. He concluded that the
workday provisions from the 2011 agreement were negotiable
and recommended that the successor agreement maintain them.
The factfinder further recommended terms to resolve the
various other disputes presented to the Panel, including new
compensation terms for Article 26 and Appendix F. Finally,
he recommended that the successor agreement incorporate all
provisions on which the parties had already tentatively agreed.

     The Impasses Panel adopted these recommendations.
Dep’t of Def. Domestic Dependent Elementary & Secondary
Schs. (DDESS) Fort Buchanan & Ramey Annex, No. 16-FSIP-
52, 

2017 WL 393617

(Jan. 25, 2017). It ordered the parties to
adopt an entire successor agreement, as recommended by the
factfinder, including the disputed workday provisions and the
provisions on which the parties had tentatively agreed.

Id. at *9–10. C

    After the agency refused to implement the successor
agreement as ordered, the union filed an unfair labor practice
charge with the FLRA. An administrative law judge
recommended ruling for the union.

    The Authority rejected the ALJ’s recommendation and
ruled substantially for the agency. Dep’t of Def. Domestic
                               6
Dependent Elementary & Secondary Schs. Fort Buchanan, 71
F.L.R.A. 127 (2019). The FLRA reached five key conclusions.
First, the Impasses Panel lacked authority to decide whether the
disputed workday provisions infringed the agency’s right to
assign work.

Id. at 133.

Second, those provisions did infringe
the agency’s right to assign work.

Id. Third, as a

result, the
parties should resume bargaining over workday and
compensation issues.

Id. at 133–34.

Fourth, the Impasses
Panel lacked authority to order the parties to adopt the
provisions on which the parties had tentatively agreed before
the union sought the Panel’s help.

Id. at 134.

Fifth, the
Impasses Panel did have authority to impose terms resolving
other disputed issues besides the workday and compensation
provisions.

Id. As a result,

the FLRA held that the agency
committed an unfair labor practice only insofar as it refused to
implement that final category of terms.

Id. at 135.

    Member DuBester dissented. He argued that the Impasses
Panel had authority to impose the entire collective-bargaining
agreement, including both the workday provisions and the
provisions about which the parties had tentatively agreed. 71
F.L.R.A. at 137–38.

    On review, the union challenges the first four rulings noted
above. The agency does not challenge the fifth ruling.

                               II

       We review FLRA orders under the standards of the
Administrative Procedure Act. 5 U.S.C. § 7123(c). Thus, we
consider whether the decision here is “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.”

Id. § 706(2)(A). An

agency decision is arbitrary and capricious
if it is not reasonably explained. See, e.g., FERC v. Elec. Power
Supply Ass’n, 

136 S. Ct. 760

, 782 (2016).
                              7
                              III

   We begin with the FLRA’s three rulings related to the
workday provisions of Article 19, section 1.

                              A

     The FLRA first held that the Impasses Panel lacked
authority to decide whether the disputed workday provisions
were negotiable, and thus lacked authority to order the parties
to adopt them in the successor agreement. The Statute
authorizes the Impasses Panel to resolve bargaining impasses.
5 U.S.C. § 7119(b)(1), (c)(1). This does not include authority
to resolve antecedent legal questions about whether the
disputed provisions are negotiable. Those questions turn on the
scope of the duty to bargain in good faith, which the FLRA
itself must determine.

Id. § 7105(a)(2)(E). Thus,

“issues of
negotiability are to be resolved by the Authority, not the
Panel.” Commander Carswell Air Force Base, 31 F.L.R.A.
620, 624 (1988); see also Am. Fed’n Gov’t Emps. v. FLRA, 

778 F.2d 850

, 854 (D.C. Cir. 1985). Nonetheless, if the Impasses
Panel faces a proposal that is “substantively identical” to one
that the FLRA already has found to be negotiable, the Panel
may itself make the negotiability determination. Commander
Carswell Air Force Base, 31 F.L.R.A. at 624–25.

    The union contends that Article 19, section 1 is
substantively identical to provisions that the FLRA found
negotiable in United States Department of Defense Fort Bragg
Dependents School, 49 F.L.R.A. 333 (1994), and National
Education Association Overseas Education Association Laurel
Bay Teachers Association, 51 F.L.R.A. 733 (1996). The FLRA
reasonably rejected that contention.

    This case involves several interrelated provisions. Section
1(a) of Article 19 establishes an eight-hour workday and
                                8
requires teachers to be at school for seven hours of work and a
30-minute lunch break. Section 1(b) requires teachers to spend
their eighth working hour on preparation and professional
tasks, which they may elect to do at home. It then reserves to
the agency the right to require the eighth hour of work to be
done at school for activities such as training, staff development,
or a limited number of faculty meetings. The agency contends
that these provisions interfere with its right to assign work by
effectively preventing it from determining when teachers must
perform their eighth hour of work. The union responds that
section 1(b) gives the teachers some latitude over where to
perform their eighth hour of work, but does not prevent the
agency from dictating when they must perform that work.

     The provisions held negotiable in Fort Bragg and Laurel
Bay were far different from the ones at issue here. In Fort
Bragg, the provision required employees to be at work “at the
scheduled time” and further required them to report “[c]hanges
or variations” as soon as practicable. 49 F.L.R.A. at 334. The
FLRA construed the latter provision to require employees to
report any inability to arrive at work on-time, not to permit
employees unilaterally to change their workday.

Id. at 335.

The disputed provision in Laurel Bay simply provided that the
“normal duty day for all professional employees will be 7:45
to 3:15,” 51 F.L.R.A. at 734, which the FLRA construed not to
prevent the agency from changing the work hours on any
specific day

, id. at 738.

Neither case involved anything like
what is at issue here—a provision that arguably limits the
agency’s ability to assign specific tasks at specific times during
one of the hours of a normal workday.

    For these reasons, the FLRA permissibly concluded that
the Impasses Panel lacked authority to determine the
negotiability of the disputed provisions in Article 19, section 1.
                              9
Accordingly, the Panel could not order the parties to adopt
those provisions.

                              B

     The FLRA went further and held that section 1(b) was
nonnegotiable because it interferes with the agency’s right to
assign work. Under prior FLRA precedent, agencies may be
compelled to bargain over where employees will work, HHS,
Ctrs. for Medicaid Servs., 57 F.L.R.A. 704, 707 (2002), but
may not be compelled to bargain over when employees will
work, Nat’l Treasury Emps. Union, 66 F.L.R.A. 584, 585
(2012). Because neither party challenges that seemingly fine
distinction, we accept it for purposes of this case.

     The FLRA concluded that section 1(b) gives teachers
“discretion to decide when to perform their paid hour of
preparation and professional tasks.” 71 F.L.R.A. at 133. The
FLRA did not explain how the language of section 1(b)
supports that conclusion. Instead, the FLRA asserted that the
union had conceded the point before the Impasses Panel. See

id. at 132.

But as the Panel itself made clear, the union
vigorously contested that point. See DDESS Fort Buchanan &
Ramey Annex, 

2017 WL 393617

at *3 (“The Union argues that
… under the existing contract language, the Agency is free to
require teachers to perform any duty as scheduled by
management.” (emphasis added)). The FLRA thus erred in
treating as conceded the position advanced here by the union.

    On the merits, there appear to be plausible arguments on
both sides of the question whether section 1(b) allows teachers
to decide when to perform their eighth hour of work. On the
one hand, that provision allows teachers to perform preparation
work at home, where the agency cannot easily control when
they prepare. J.A. 64. Moreover, while the agency may require
preparation work to be done at school (presumably during the
                              10
normal school-day) on “a particular workday,”

id., that does not

naturally mean “every workday.” On the other hand, in
giving teachers some control over whether to perform their
eighth hour of work “at or away from the worksite,”

id., section 1(b) by

its terms addresses where but not when that work is
performed. Moreover, the agency’s reserved right to require
the eighth hour of work to be performed at school is “for
activities such as training, staff development, or faculty
meetings,” which are seemingly group activities to be
scheduled by the agency.

Id. Furthermore, the limitation

of
ten meetings per year applies only to faculty meetings, which
suggests that other “activities such as” training or staff
development may be scheduled as frequently as the agency
wishes.

Id. And another provision

of Article 19 permits the
agency “to assign additional work hours” beyond the normal
workday at its discretion (for additional pay), J.A. 65, which
suggests that the agency likewise may assign specific hours
throughout the normal workday. We need not, and do not,
choose between these competing interpretations. Instead, we
note only that the FLRA has given no reasonable explanation
for adopting the interpretation that would give teachers control
over when as well as where to prepare for school, thus making
section 1(b) nonnegotiable. We therefore set aside its
negotiability ruling as arbitrary and capricious.

                               C

    After finding that the disputed workday provisions were
unenforceable by the Impasses Panel and nonnegotiable, the
FLRA ordered the parties to resume negotiations over both the
workday provisions addressed in Article 19, section 1 and the
compensation provisions addressed in Article 26 and Appendix
F. The union, which supports the compensation provisions
ordered by the Impasses Panel, contends that the FLRA
unreasonably reopened the compensation issues.
                                  11
     The FLRA’s decision to link workday and compensation
issues in this way was eminently reasonable. For one thing, the
compensation of a worker is obviously and inherently linked to
the length and other features of his or her workday. Indeed, the
union itself took this position. Before the FLRA, it argued that
“duty hours and pay rates are not severable,” and it thus asked
the FLRA “not to direct the parties to implement the pay rates
recommended by the Factfinder” if it were to hold that “the
language of Article 19, concerning the length of the at-school
duty day, is not enforceable.” J.A. 268–69. The FLRA
sensibly afforded the remedy requested by the union.

     The union contends that the FLRA misunderstood its
request, which it now says was to reopen compensation issues
only if section 1(a) were found unenforceable insofar as it set
an eight-hour workday. But the workday specified in Article
19 consisted of seven hours at school, as required by section
1(a), and one additional hour of “preparation and professional
tasks,” as set forth in section 1(b). Because the union did not
fairly present its current position to the FLRA, we cannot
consider it. 5 U.S.C. § 7123(c); see Nat’l Treasury Emps.
Union v. FLRA, 

754 F.3d 1031

, 1040 (D.C. Cir. 2014).

    Though we find that the FLRA’s choice of remedy was
reasonable, our holding is confined to the circumstances
presently before us. Nothing we say here prejudges the options
available to the FLRA if it were to conclude on remand that the
disputed workday provisions are negotiable.1


     1
        Because the FLRA permissibly ordered the parties to resume
bargaining over the compensation provisions, we uphold its denial of
the union’s request for interest on back pay. Until the parties agree
to specific compensation provisions, the agency does not owe the
teachers a specific amount of back pay, so there is no way to calculate
interest.
                               12
                               IV

     The FLRA further held that the Impasses Panel exceeded
its authority by ordering the parties to adopt an entire
collective-bargaining agreement, including scores of
provisions that the parties had tentatively agreed to before the
union sought help from the Panel. The union contends that the
agency failed to preserve this issue before the Impasses Panel
and that the FLRA decided it incorrectly on the merits.

     On the forfeiture point, we hold that the FLRA permissibly
considered the agency’s objection. No statute or regulation
prohibits the FLRA from considering issues that were not
raised before the Impasses Panel. Moreover, the dispute here
implicates the power of the Impasses Panel, which Congress
authorized to act only in the event of a “negotiation impasse.”
5 U.S.C. § 7119(b). And the Statute constitutes the Impasses
Panel as a subordinate entity within the FLRA

, id. § 7119(c), which

has “leadership in establishing policies and guidance
relating to matters” involving federal-sector collective
bargaining

, id. § 7105(a)(1). The

union notes that parties
generally must preserve arguments before agencies in order to
raise them in court. See, e.g., United States v. L.A. Tucker
Truck Lines, Inc., 

344 U.S. 33

, 36–38 (1952). True enough,
but that rule helps channel issues to the agencies entrusted with
primary responsibility for the subject at issue. It does not
restrict agencies in deciding how to manage their own
components.

    On the merits, we deferentially review the Authority’s
decision that the Impasses Panel lacked authority to order
compliance with previously reached agreements. See Nat’l
Ass’n of Gov’t Emps., Local R7-23 v. FLRA, 

893 F.2d 380

, 382
(D.C. Cir. 1990); Nat’l Treasury Emps. Union v. FLRA, 848
                               

13 F.2d 1273

, 1278 (D.C. Cir. 1988). We conclude that the
Authority’s determination in this case was reasonable.

     The Statute established the Impasses Panel “to provide
assistance in resolving negotiation impasses.” 5 U.S.C.
§ 7119(c)(1). Implementing regulations define an “impasse”
as the “point in the negotiation of conditions of employment at
which the parties are unable to reach agreement” despite efforts
to do so voluntarily. 5 C.F.R. § 2470.2(e). The regulations
require the Impasses Panel to “[d]ecline to assert jurisdiction in
the event that it finds that no impasse exists.”

Id. § 2471.6(a)(1). In

this case, the FLRA defined the relevant impasse as
limited to the specific provisions on which the parties could not
agree. 71 F.L.R.A. at 134. That was consistent with how the
union itself had framed the dispute. In seeking assistance from
the Impasses Panel, the union did not suggest any overarching
impasse encompassing the many provisions that the parties had
already tentatively agreed to. To the contrary, it claimed that
the parties had “reached impasse on 26 sections of 14 articles”
of the 36-article agreement, S.A. 3, and it identified those
specific provisions by article and section number

, id. at 3–20.

We note that the Impasses Panel could have considered the
agreed-upon provisions if the parties had presented them as
part of the impasse. See 5 U.S.C. § 7119(c)(5)(A) (Impasses
Panel “shall promptly investigate any impasse presented to it”);
Int’l Org. of Masters, Mates & Pilots, 36 F.L.R.A. 555, 561–
62 (1990). But given the case as presented to it, the FLRA
reasonably concluded that the Impasses Panel lacked
jurisdiction over the tentatively agreed-to provisions.

    The union contends that the Impasses Panel permissibly
resolved an overall impasse encompassing the entire
agreement. But neither case cited by the union supports its
                               14
position. In National Aeronautics & Space Administration, 12
F.L.R.A. 480 (1983), the disputed matter involved a specific
grievance procedure that the parties had presented to the panel
for resolution. See

id. at 497.

In Masters, Mates & Pilots, both
parties described the impasse as encompassing the entire
agreement, including provisions tentatively agreed to. See 36
F.L.R.A. at 561–62. Here, in contrast, the union asked the
Impasses Panel for help to address specific provisions only, and
the agency never suggested that the impasse extended to the
entire agreement.

     Finally, the union contends that even if the Impasses Panel
could not address the provisions to which the parties had
tentatively agreed, the parties’ ground rules nonetheless
prohibited their renegotiation. Because the union failed to raise
this argument before the FLRA, it is not properly before us.
5 U.S.C. § 7123(c).

                               V

     For these reasons, we set aside the FLRA’s determination
that Article 19, section 1(b) of the parties’ agreement is
nonnegotiable. In all other respects, we deny the petition for
review. We remand the case for further proceedings consistent
with this opinion.

                                                    So ordered.
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