American Federation of Government Employees v. FLRA ( 2022 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 14, 2021 Decided January 28, 2022
No. 20-1398
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,
AFL-CIO,
PETITIONER
v.
FEDERAL LABOR RELATIONS AUTHORITY,
RESPONDENT
Consolidated with 20-1399, 20-1405
On Petitions for Review of a Decision
of the Federal Labor Relations Authority
Paras N. Shah argued the cause for petitioners. With him
on the briefs were Gregory O=Duden, Julie M. Wilson, David
A. Borer, Andres M. Grajales, Chad E. Harris, Judith E. Rivlin,
and Teague P. Paterson.
Noah Peters, Solicitor, Federal Labor Relations Authority,
argued the cause for respondent. With him on the brief were
Rebecca J. Osborne, Deputy Solicitor, and Sarah C.
Blackadar, Attorney.
2
Before: SRINIVASAN, Chief Judge, MILLETT and PILLARD,
Circuit Judges.
Opinion for the Court filed by Circuit Judge PILLARD.
PILLARD, Circuit Judge: When issues arise during the
term of a collective bargaining agreement that are not covered
by the agreement, federal employees may seek to bargain with
their agency employers over how such issues should be
handled. For its part, an agency may try to head off such
midterm bargaining by securing during term bargaining a
clause in the parties’ collective bargaining agreement that
limits or forecloses midterm bargaining. Such a clause is
commonly referred to as a zipper clause—a clause that treats
the term agreement as having zipped up, or closed off, potential
midterm bargaining. Unions, valuing the opportunity to
negotiate midterm on unforeseen matters not already covered
by the existing agreement, such as the effect of a pandemic on
the workplace, generally oppose zipper clauses.
It is not disputed that parties may negotiate over and agree
to a zipper clause. But what happens if an agency proposes a
zipper clause, and the union disagrees on whether or to what
extent to include it in the collective bargaining agreement? The
answer largely depends on whether zipper clauses are a
“mandatory” or “permissive” subject of bargaining. Federal
labor law treats some subjects of collective bargaining as
mandatory, meaning that when parties bargain to impasse over
proposals on those subjects, a dissatisfied party may seek
resolution from the Federal Service Impasses Panel. And Panel
resolution may include imposition of the clause in the
agreement over the other party’s objection. In contrast,
subjects that are permissive for one or both parties are those on
which a party may choose to, but need not, bargain. A party
may decline to negotiate on proposals on permissive subjects,
3
and its counterparty may not take disputes over such proposals
to the impasses panel for potential insertion into the agreement.
The unions here challenge a Policy Statement of the
Federal Labor Relations Authority that announced for the first
time that zipper clauses are mandatory bargaining subjects.
U.S. Off. of Pers. Mgmt. (Petitioner) (Policy Statement), 71
F.L.R.A. 977, 977 (Sept. 30, 2020). In other words, the
Authority determined that, if an agency and a union intractably
disagree over a zipper clause proposal, the agency may bring
the proposal to the impasses panel—which has the authority to
put it (or a different clause reflecting what it determines to be
a better resolution) into the parties’ term agreement. FLRA
policy statements are unusual: Before producing a spate of
them in 2020, including the one challenged here, the Authority
had not issued any Policy Statement in over thirty-five years.
Three labor unions challenge this one as arbitrary and
capricious.
We grant the petitions for review and vacate the Policy
Statement. Importantly for our analysis, the Authority chose to
structure its consideration of the zipper clause question in two
steps, casting its answer at step one as also determinative of
step two. The Authority first held that the Federal Service
Labor-Management Relations Statute (Statute) does not entitle
employees to demand midterm bargaining even when the
parties’ agreement is silent on the matter. Policy Statement, 71
F.L.R.A. at 979. The Authority then relied on that holding as
“necessary” to its conclusion that proposed contractual zipper
clauses expressly foreclosing midterm bargaining are
mandatory bargaining subjects. Id. at 979 n.35. The first
holding was arbitrary and capricious. The Authority’s errors
include miscasting Supreme Court precedent, relying on
conclusory assertions, and mischaracterizing its dramatic shift
of the bargaining baseline as allowing “the parties to resolve”
4
the issue. Id. at 979. And, because the Authority avowedly
rested its second holding on its first, we must vacate the zipper
clause holding as well. In view of these conclusions, we need
not rule on the unions’ threshold objection that the Authority
ignored its own criteria for issuance of general statements of
policy. See 5 C.F.R. § 2427.5.
I. BACKGROUND
In July 2019, the Office of Personnel Management (OPM)
petitioned the Authority for a policy statement on the question
whether zipper clauses are mandatory or permissive bargaining
subjects. See 5 U.S.C. § 7105(a)(1) (statutory basis for FLRA
policy statements); 5 C.F.R. §§ 2427.1-.5 (governing
regulations). The Authority solicited comments on that
question, and ten commenters timely responded.
Some commenters supportive of the proposed policy
thought that zipper clauses must be mandatory because “all
conditions of employment are presumed to be mandatory
subjects of bargaining” unless the Statute “explicitly or by
unambiguous implication” defines them as permissive, which
they argued it does not. See, e.g., U.S. Dep’t of Agric.,
Comment Letter on Proposed General Statement of Policy
(Apr. 29, 2020) (quoting Nat’l Treasury Emps. Union v. FLRA
(NTEU 2005), 399 F.3d 334, 340 (D.C. Cir. 2005)), J.A. 67-68.
Commenters reasoned that zipper clauses should be viewed as
mandatory based on the Authority’s mandatory
characterization of reopener clauses, which expressly allow
midterm bargaining that would otherwise be foreclosed as to
subjects already “covered by” a term agreement. See Nat’l
Treasury Emps. Union & U.S. Customs Serv., 64 F.L.R.A. 156,
157-58 (2009). Agencies also commented that restricting
midterm bargaining would promote efficiency by encouraging
5
parties to predict their needs during initial, term bargaining so
prevent “piecemeal” negotiation. 1
Opponents of the proposed policy argued that the Statute
establishes a unilateral statutory right to bargain midterm,
equal to the right to bargain at term. Noting that the Authority
recognizes midterm bargaining over the impact and
implementation of certain management-initiated changes as a
unilateral right subject to waiver only on a permissive basis,
commenters applied the same reasoning to midterm bargaining
on other subjects. Comments distinguished zipper clauses
from reopeners, pointing out that reopeners address already-
bargained issues whereas zippers “alter[] the scope of the duty
to bargain mid-term with respect to virtually all contract terms
. . . not resolved by the agreement”—including those never
negotiated or anticipated. 2 Empowering the impasses panel to
impose zipper clauses and long duration provisions,
commenters predicted, “would adversely affect and prolong
term bargaining” because, “[w]ithout the ability to bargain
midterm, a union would feel compelled to bargain over and
address every possible scenario, no matter how unlikely, that
might come up during the term of the agreement.” Nat’l
Treasury Emps. Union, Comment Letter on Proposed General
Statement of Policy (Apr. 30, 2020), J.A. 47.
1
U.S. Dep’t of Veterans Affs., Comment Letter on Proposed General
Statement of Policy (Apr. 29, 2020), J.A. 22; see U.S. Immigr. &
Customs Enf’t, Comment Letter on Proposed General Statement of
Policy (Apr. 30, 2020), J.A. 57.
2
Ass’n of Admin. L. Judges, Comment Letter on Proposed General
Statement of Policy (Apr. 29, 2020) (quoting NTEU 2005, 399 F.3d
at 343), J.A. 20; see also Nat’l Air Traffic Controllers Ass’n,
Comment Letter on Proposed General Statement of Policy (Apr. 30,
2020), J.A. 37-38; Nat’l Treasury Emps. Union, Comment Letter on
Proposed General Statement of Policy (Apr. 30, 2020), J.A. 45-50.
6
We have had few occasions to address the distinction
between mandatory and permissive subjects of bargaining. In
American Federation of Government Employees v. FLRA
(AFGE 1983), 712 F.2d 640 (D.C. Cir. 1983), we held that
matters relating to conditions of employment are
presumptively mandatory bargaining subjects unless the
Statute “explicitly or by unambiguous implication” provides a
party with a “unilateral right[]” regarding the matter under
consideration. AFGE 1983, 712 F.2d at 646 & n.27 (formatting
modified). If the Statute clearly confers a right on a party, in
other words, the party may refuse to bargain over proposals on
that matter. Agencies, for instance, need not bargain over their
right “to determine the mission, budget, organization, number
of employees, and internal security practices of the agency.” 5
U.S.C. § 7106(a)(1). And employees need not bargain over
their right “to engage in collective bargaining with respect to
conditions of employment.” 5 U.S.C. § 7102. But a party must
bargain in good faith over any lawful proposal that does not
trench on its unilateral rights.
We reaffirmed and elaborated that standard in National
Treasury Employees Union v. FLRA (NTEU 2005), 399 F.3d
334 (D.C. Cir. 2005). We explained that not all rights provided
by the Statute are necessarily unilateral rights and so
permissive subjects of bargaining: Only rights which the
Statute “explicitly or by unambiguous implication vests in a
party” rise to the level of unilateral rights over which a party
may but need not negotiate. NTEU 2005, 399 F.3d at 340(quoting AFGE 1983, 712 F.2d at 646 n.27).
As OPM recognized in its request for the Policy Statement,
whether zipper clauses are mandatory or permissive bargaining
subjects was an open question. No court had squarely decided
whether unions have a unilateral right to bargain midterm, nor
had the Authority. The Authority expressly declined to decide
7
the point in U.S. Department of the Interior, Washington, D.C.
(Interior), 56 F.L.R.A. 45 (2000), on remand from the Supreme
Court.
The Supreme Court had held in National Federation of
Federal Employees, Local 1309 v. Interior (Local 1309), 526
U.S. 86 (1999), that the Statute’s text is ambiguous as to
whether it confers a general right to midterm as well as term
bargaining. Local 1309, 526 U.S. at 92. The key provision
simply requires that parties “meet and negotiate in good faith
for the purposes of arriving at a collective bargaining
agreement.” Id. at 88 (quoting 5 U.S.C. § 7114(a)(4)). As the
Court noted, “[o]ne can easily read ‘arriving at a collective
bargaining agreement’ as including an agreement reached at
the conclusion of midterm bargaining” just as it includes one
resulting from term bargaining. Id. at 93 (second emphasis
added). The Court acknowledged agencies’ concerns that
midterm bargaining could incentivize piecemeal negotiation,
but also recognized policy reasons that the Statute might
require midterm bargaining: “Without midterm bargaining,”
the Court wondered, “will it prove possible to find a collective
solution to a workplace problem, say, a health or safety hazard,
that first appeared midterm?” Id. at 94. Indeed, the Court
reasoned, “[t]he Statute’s emphasis upon collective bargaining
as ‘contribut[ing] to the effective conduct of public business’
suggests that it would favor joint, not unilateral, solutions to
such midterm problems.” Id. (second alteration in original)
(quoting 5 U.S.C. § 7101(a)(1)(B)). The Court accordingly
remanded for the Authority, informed by its “expertise in its
field of labor relations,” to decide whether the Statute requires
midterm bargaining. Id. at 99 (quoting Bureau of Alcohol,
Tobacco & Firearms v. FLRA, 464 U.S. 89, 97 (1983)).
The Authority took up that question in Interior and held
that “under the Statute, agencies are obligated to bargain during
8
the term of a collective bargaining agreement on negotiable
union proposals concerning matters that are not ‘contained in
or covered by’ the term agreement, unless the union has waived
its right.” Interior, 56 F.L.R.A. at 54. Quoting Congress’s
statutory findings supportive of public-sector collective
bargaining, the Authority underscored that nothing in the
Statute suggests those findings are any less applicable to
midterm than term bargaining. Id. at 51 (quoting 5 U.S.C.
§ 7101(a)(1)). The Authority’s own judgment, informed by its
experience, was that midterm bargaining leads to “more
focused negotiations,” neither prompting kitchen-sink term
bargaining over issues that might never arise, nor delaying
resolution of important concerns that arise midterm until term
negotiations recommence. Id. at 52. The Authority rejected as
“unsupported and speculative” arguments that union-initiated
midterm bargaining was harmful to federal sector labor
relations. Id. at 54. In its experience, midterm bargaining was
appropriately limited by the doctrine barring renegotiation of
matters covered by the term agreement, gave rise to few
disputed cases, and had not led to piecemeal or “continuous”
bargaining as critics feared. Id. at 53.
But Interior decided only the default rule that parties have
a “statutory right” to bargain midterm if the contract is
otherwise silent. The Authority disclaimed any view on
whether proposals for contractual zipper clauses are mandatory
or permissive bargaining subjects. See Interior, 56 F.L.R.A. at
54 (“[W]e will not consider” here the question “whether
‘zipper clauses’ are a mandatory subject of negotiation.”). In
deciding that the Statute requires midterm bargaining, then,
Interior left open whether it does so “by unambiguous
implication” so confers a “unilateral right” of the sort AFGE
1983 and NTEU 2005 described. That state of affairs prevailed
for two decades.
9
The Authority in November 2019 rejected a request to
revisit Interior, describing the case as its “seminal” precedent
recognizing the statutory right to midterm bargaining. See
OPM, 71 F.L.R.A. 423, 423 (2019). But just ten months later,
in the Policy Statement before us, the Authority reversed
course. Before addressing the question expressly left open by
Interior, the Authority circled back to repudiate the core
holding of Interior that it had reaffirmed just months earlier.
Deeming reconsideration of that issue “necessary” to its
decision of the question OPM presented—whether zipper
clauses are mandatory or permissive—the Authority revisited
Interior’s holding that the Statute requires midterm bargaining
at all, even as a default rule. See Policy Statement, 71 F.L.R.A.
at 979 n.35.
In a paragraph, the Authority jettisoned Interior. Contrary
to its reasoning in Interior, the Authority’s Policy Statement
deemed it “more appropriate” to conclude that the Statute does
not require midterm bargaining. See Policy Statement, 71
F.L.R.A. at 979. The Authority declared that the Statute
“clearly established” an obligation to bargain at term, but it saw
“indeterminacy in the Statute’s text” as to whether it requires
midterm bargaining. Id. The entirety of its analysis of the
distinction it drew is terse:
As previously mentioned, the Supreme Court [in
Local 1309] held that the Statute does not clearly
require or prohibit midterm bargaining. In its decision
on remand from the Supreme Court, the Authority
decided that the Statute requires midterm bargaining.
However, the Authority’s first consideration to
support that conclusion is flawed. In particular, the
Authority found that the Statute does not distinguish
between obligations for midterm and term bargaining.
But in one important respect, those obligations are
10
distinguishable: The parties’ mutual obligation to
bargain in term negotiations is clearly established in
the Statute, whereas a mutual obligation to bargain
midterm is not. Indeed, that indeterminacy in the
Statute’s text was the driving force behind the
Supreme Court’s ruling. Although the Court
recognized that the Authority could resolve that
ambiguity, and the Authority did so, we find it more
appropriate to recognize that the Statute neither
requires nor prohibits midterm bargaining. Instead,
the Statute leaves midterm-bargaining obligations to
the parties to resolve as part of their term negotiations.
Id. (footnotes omitted).
Having erased Interior by holding that the Statute simply
does not obligate agencies to bargain midterm, the Authority
then addressed the question OPM had posed: whether zipper
clauses are mandatory or permissive bargaining subjects.
Basing its conclusion on its reversal of Interior, the Authority
held that zipper clauses are mandatory bargaining subjects.
Immediately after the above-quoted paragraph regarding
Interior, the Authority dispatched the zipper clause issue as
follows:
Thus, we now hold that proposals that concern
midterm-bargaining obligations—whether they
resemble reopener or zipper clauses, or take some
other form—are mandatory subjects of bargaining
under the Statute.
That treatment is consistent with the Authority’s
previous recognition that matters relating to the
parties’ midterm-bargaining relationship plainly
relate to conditions of employment. Further, the
Statute presumes that all matters relating to conditions
11
of employment are mandatory subjects of bargaining
unless the text explicitly or by unambiguous
implication vests in a party an unqualified, or
“unilateral,” right. As explained above, the Statute
does not, on its own, explicitly or by unambiguous
implication vest either party with a unilateral right to
engage in midterm bargaining. In other words,
because neither party would be required to waive a
statutory right, any proposal concerning midterm
bargaining would come within the default rule that all
matters relating to conditions of employment are
mandatory subjects of bargaining.
Policy Statement, 71 F.L.R.A. at 979-80 (footnotes omitted).
The core of the Authority’s reasoning is that, “[a]s
explained above” in the prior paragraph regarding Interior, the
Statute does not require midterm bargaining at all, even as a
default matter, so necessarily fails to establish any unilateral
right to midterm bargaining that would make it permissive, not
mandatory, for unions to negotiate whether to retain that right
to bargain. Id. at 980. The Authority held that the Statute
consequently treats zipper clauses as mandatory bargaining
subjects that, upon impasse, may be imposed on unions against
their will by action of the impasses panel. In a footnote, the
Authority added that it was “necessary” to decide whether the
Statute requires midterm bargaining “in order to properly
evaluate” the zipper clause question. Id. at 979 n.35. The
Authority also asserted that other statutory language, which
allows parties to determine appropriate techniques to aid their
negotiations, offered “further support” for its position. Id. at
980.
Three federal employee labor unions timely petitioned for
review, and we consolidated those cases. The unions contend
12
that the Authority violated its regulations providing criteria for
issuance of Policy Statements, abrogated its precedent without
reasoned explanation and in contravention of the Statute’s text
and purpose, and relied on unreasoned bases for concluding
that zipper clauses are mandatory subjects of bargaining. We
have jurisdiction, 5 U.S.C. § 7123(a), and the unions have
standing, see AFGE v. FLRA, 750 F.2d 143, 144-45 (D.C. Cir.
1984).
II. ANALYSIS
We evaluate the Authority’s Policy Statement under the
arbitrary and capricious standard of review. 5 U.S.C.
§ 7123(c); see Motor Vehicle Mfrs. Ass’n v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 34 (1983). Under that standard,
“we must ensure that the Authority examined the relevant data
and articulated a satisfactory explanation for its action
including a rational connection between the facts found and the
choice made.” AFGE v. FLRA (AFGE 2020), 961 F.3d 452,
456 (D.C. Cir. 2020) (formatting modified). Put another way,
the Authority must show that its decision “was the product of
reasoned decisionmaking.” State Farm, 463 U.S. at 52; accord
AFGE 2020, 961 F.3d at 456-57 (quoting Allentown Mack
Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998)).
We “must judge the propriety of [an agency’s] action
solely by the grounds invoked by the agency.” SEC v. Chenery
Corp. (Chenery II), 332 U.S. 194, 196 (1947). “[C]ourts may
not accept appellate counsel’s post hoc rationalizations for
agency action.” State Farm, 463 U.S. at 50 (citing Burlington
Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).
We may limit invalidation to defective portions of an agency’s
action and leave others standing when “they operate entirely
independently of one another,” Davis Cnty. Solid Waste Mgmt.
v. EPA, 108 F.3d 1454, 1459 (D.C. Cir. 1997), but will
13
invalidate the action as a whole if we are not “sure” the
provisions are “wholly independent,” Am. Petroleum Inst. v.
EPA, 862 F.3d 50, 71 (D.C. Cir. 2017).
We begin where the Authority did, with its holding that the
Statute does not require midterm bargaining. We vacate that
holding as arbitrary and capricious. We then consider the
Agency’s ultimate holding that zipper clauses are mandatory
bargaining subjects. Because the Authority treated its first,
invalid holding as the “necessary” predicate to its second, we
must vacate the latter as well.
A. The Authority’s First Holding Was Arbitrary and
Capricious.
The Authority failed to offer a reasoned explanation for its
decision that the Statute does not require midterm bargaining.
The Policy Statement simply deemed it “more appropriate” to
read the Statute to not require midterm bargaining. Policy
Statement, 71 F.L.R.A. at 979. But it offered no non-arbitrary
reason why.
The only explanation the Authority offered was what it
saw as a negative implication of the statutory text: The Statute
“clearly established” term bargaining but was
“indetermina[te]” as to midterm bargaining, it reasoned,
implying the exclusion of the latter. Id. But the statutory text
does not separately define term and midterm bargaining. The
text the Authority leans on as showing the “one important
respect” in which the Statute differentiates the two bargaining
stages, id., in fact makes no distinction at all. It says only that
the parties must “meet and negotiate in good faith for the
purposes of arriving at a collective bargaining agreement”—
whether in term or midterm negotiations. 5 U.S.C.
§ 7114(a)(4).
14
Indeed, the Supreme Court in Local 1309 held that the very
phrase on which the Authority here relies does not differentiate
the two bargaining stages, so that text cannot alone impart the
meaning the Policy Statement ascribes to it. The Court stressed
that the operative provision simply refers to collective
bargaining, and that “[o]ne can easily read ‘arriving at a
collective bargaining agreement’ as including an agreement
reached at the conclusion of midterm bargaining.” 526 U.S. at
93 (quoting 5 U.S.C. § 7114(a)(4)); see also Policy Statement,
71 F.L.R.A. at 983 (Member DuBester, dissenting) (observing
that “Local 1309 rejected this very premise” that the Policy
Statement relies on). In fact, as discussed above, the Court
suggested that the Statute’s text, structure, history, and
objectives taken together might imply a duty to bargain
midterm as well as at term, see 526 U.S. at 94—perhaps even
by unambiguous implication, see Interior, 56 F.L.R.A. at 54
(leaving the point open). As manifest by the Court’s remand,
the textual ambiguity of the identified phrase does not itself
mean that midterm bargaining is not required.
The Authority’s contrary view cannot stand. Its parsing of
the same few words that the Court considered in Local 1309
was the only reason the Authority gave for the first analytic
step of its Policy Statement. In the absence of any other
support, that first conclusion is arbitrary and capricious.
That flaw alone requires vacatur. But the Authority’s
holding was unreasoned in three further ways.
First, the Authority rested its policy decision on a basic
mischaracterization of the Supreme Court’s holding in Local
1309 that wrongly equated not expressly requiring midterm
bargaining with prohibiting it. The Policy Statement declares
that “the Supreme Court held that the Statute does not clearly
require or prohibit midterm bargaining.” Policy Statement, 71
15
F.L.R.A. at 979. But the Supreme Court rejected the Fourth
Circuit’s view that the Statute prohibits midterm bargaining.
See Local 1309, 526 U.S. at 91-92. The only question on
remand to the Authority following the Court’s Local 1309
decision was whether the Statute recognizes a right to midterm
bargaining or instead simply does not address it. See id. at 88.
In miscasting Local 1309 as leaving open whether the Statute
“requires []or prohibits” midterm bargaining, 71 F.L.R.A. at
979, the Authority incorrectly suggested its decision struck a
middle position on the issue.
Second, the Authority based its holding on an unsupported
premise that its Policy Statement increased choice among the
parties. It reasoned that “the Statute leaves midterm-
bargaining obligations to the parties to resolve.” Policy
Statement, 71 F.L.R.A. at 979. But reversing Interior affected
the default rule, which applies if the parties have not otherwise
decided whether and how they will bargain midterm. The
Authority did not explain how altering that default to empower
the impasses panel to intervene and forbid or limit midterm
bargaining increases party choice.
Third, even as it acted without advance notice or
justification to abrogate its decades-old precedent in Interior,
the Authority in the same breath described itself as taking no
position on the issue Interior resolved. The Policy Statement
commented that, following Local 1309, the Authority “could
resolve” the textual ambiguity and “did so” in Interior, but that
it now deemed it “more appropriate” to leave that question “to
the parties.” 71 F.L.R.A. at 979. But it did nothing of the sort.
In fact, as discussed above, it flipped the baseline that the
Authority, pursuant to the Supreme Court’s remand, had set in
Interior to hold instead that the Statute does not require
midterm bargaining. Under the guise of neutrally declining to
exercise the policy authority it wielded, the Authority answered
16
the precise question that it simultaneously said it “could” but
did not resolve. See id.
The Authority also gave no hint in its public notice that it
viewed the zipper clause question as opening the door to
reconsidering its longstanding holding in Interior. It thus
issued its Policy Statement without the benefit of public
comment on Interior’s continued vitality. See Policy
Statement, 71 F.L.R.A. at 984 & n.34 (Member DuBester,
dissenting) (describing how commenters assumed Interior’s
“well-established principle” was not up for reconsideration).
But because we hold that the Authority’s reasoning was
deficient, we need not reach whether the rule might be
procedurally defective on that ground.
The drive-by procedure and conclusory reasoning that
produced the challenged Policy Statement is little match for the
full process and detailed analysis that supported the Authority’s
determination in Interior. There, the Authority had deployed
subject matter expertise to analyze the Statute and assess how
best to structure the bargaining relationship. Here, the
Authority did nothing of the sort. It dispensed with Interior in
one paragraph of flawed textual analysis, devoid of any
reasoned application of its labor relations expertise. Because
the Policy Statement does not pass muster under State Farm,
we need not reach the unions’ contention that the Authority’s
change from its previously established position imposed any
distinct burden of justification, see Pet’rs’ Br. at 35-38,
particularly whether the Authority implicitly contravened
factual findings from Interior or unsettled strong reliance
interests, see FCC v. Fox Television Stations, Inc., 556 U.S.
502, 515-16 (2009).
The Authority’s holding on the first step by which it
structured its decision thus fails as unreasoned, so we vacate it.
17
B. The Authority’s Second Holding, Which It Expressly
Rested on the First, Was Also Arbitrary and
Capricious.
The Authority next held that zipper clauses are mandatory
bargaining subjects. Because the Authority rested this holding
critically on the first, we must vacate it as well.
The Authority expressly framed its second, zipper-clause
holding as dependent on and flowing from its reconsideration
of Interior. The Authority found it “necessary” to reach its first
holding in order to “properly evaluate” the zipper clause
question. Policy Statement, 71 F.L.R.A. at 979 n.35. Then,
after stating what counts as a unilateral right, the Authority
made its second holding by cross reference: “As explained
above,” it wrote, zipper clauses must be mandatory bargaining
subjects. Id. at 980. The Authority offered no other,
independent rationale for its zipper clause holding.
Under the Authority’s own decisional architecture, then,
its second conclusion rests on its first. Bound as we are by the
Authority’s actual justification, see Chenery II, 332 U.S. at
196, we hold that the collapse of the first step brings the second
down with it. See also Am. Petroleum Inst., 862 F.3d at 71;
Davis, 108 F.3d at 1459.
In a rationale offered as “further support” for its zipper
clause holding—not as an alternative basis that could bear the
holding’s full weight absent the Authority’s first holding—the
Authority pointed to section 7114(a)(4). Nothing about that
provision helps to distinguish mandatory bargaining subjects
from permissive ones. The Statute there says that parties “may
determine appropriate techniques . . . to assist in any
negotiation.” 5 U.S.C. § 7114(a)(4). The Authority reasoned
that zipper clauses could constitute one such technique because
they clarify the scope and timing of negotiations. Policy
18
Statement, 71 F.L.R.A. at 980. That reasoning is a non
sequitur. The relevant question is whether the Statute
explicitly or by unambiguous implication gives either party a
right. If it does, that right is a unilateral right—even if doing
away with it might simplify negotiations. In any event, the
Authority did not present this “further support” for its Policy
Statement as an alternative basis that could bear the full weight
of its zipper-clause decision absent its first holding, so we
cannot now view it that way. See Chenery II, 332 U.S. at 196.
***
We grant the unions’ petitions for review and vacate the
Authority’s decision in full.
So ordered.