American Federation of Government Employees v. FLRA ( 2020 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 3, 2020 Decided June 9, 2020
No. 19-1069
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,
AFL-CIO, LOCAL 1929,
PETITIONER
v.
FEDERAL LABOR RELATIONS AUTHORITY,
RESPONDENT
On Petition for Review of an Order of
the Federal Labor Relations Authority
Matthew W. Milledge argued the cause for petitioner.
With him on the briefs were David A. Borer and Andres M.
Grajales.
Noah Peters, Solicitor, Federal Labor Relations Authority,
argued the cause for respondent. With him on the brief was
Rebecca J. Osborne, Deputy Solicitor.
Before: SRINIVASAN , Chief Judge, HENDERSON, Circuit
Judge, and RANDOLPH, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge HENDERSON.
2
KAREN LECRAFT HENDERSON, Circuit Judge: The Federal
Service Labor-Management Relations Statute (FSLMRS or
Statute), 5 U.S.C. §§ 7101 et seq., requires federal agencies to
notify and negotiate with unions before changing federal
employees’ conditions of employment. The U.S. Customs
and Border Protection (CBP) distributed a memorandum
(Memo) to its agents changing vehicle inspection procedures at
the El Paso border checkpoint. The American Federation of
Government Employees, Local 1929, AFL-CIO (AFGE or
Union) filed a grievance on behalf of the CBP agents claiming
that the CBP failed to notify and negotiate with it before issuing
the Memo. After an arbitrator found in favor of the AFGE, the
Federal Labor Relations Authority (Authority) set aside the
arbitrator’s award, concluding that the Memo did not constitute
a change over which the CBP must bargain. Because the
Authority failed to reasonably explain its departure from
precedent and its conclusion that the Memo was not subject to
bargaining under the Statute, we grant the Union’s petition,
concluding that the Authority’s order was arbitrary and
capricious and remanding to the Authority for further
proceedings consistent with this opinion.
I. BACKGROUND
The FSLMRS “requires a federal agency to negotiate in
good faith with the chosen representative of employees covered
by the Statute, 5 U.S.C. § 7114(a)(4), and makes it an unfair
labor practice to refuse to do so, § 7116(a)(5).” Fort Stewart
Sch. v. FLRA, 495 U.S. 641, 644 (1990). “The scope of the
negotiating obligation is set forth in § 7102, which confers
upon covered employees the right, through their chosen
representative, ‘to engage in collective bargaining with respect
to conditions of employment.’” Id. (quoting 5
U.S.C. § 7102(2)). “It is well established that before changing
conditions of employment, an agency must provide the union
3
with notice and an opportunity to bargain over those aspects of
the change that are within the duty to bargain.” U.S. Dep’t of
Homeland Sec. U.S. Citizenship & Immigration Servs., 69
F.L.R.A. 512, 515 (2016).
The Statute defines “conditions of employment” as
follows:
“conditions of employment” means personnel
policies, practices, and matters, whether
established by rule, regulation, or otherwise,
affecting working conditions, except that such
term does not include policies, practices, and
matters—
(A) relating to political activities prohibited
under subchapter III of chapter 73 of this title;
(B) relating to the classification of any
position; or
(C) to the extent such matters are specifically
provided for by Federal statute.
5 U.S.C. § 7103(a)(14).
The employing agency in this case is the CBP. The
employees are CBP agents who conduct vehicle inspections at
border checkpoints in the El Paso, Texas sector. The agents’
primary responsibility at the checkpoints is to inspect vehicles
entering the United States. The checkpoint is divided into two
areas—the primary inspection area and the secondary
inspection area. The primary area consists of lanes in which
vehicles first enter, stop and are inspected. In this area, agents
inspect the vehicle, scan the license plate number and examine
the occupants’ identifying documents. The secondary area is
designed for additional inspection. Agents in the primary area
have discretion to send a vehicle to the secondary area for a
4
more thorough inspection—where information like license
plate numbers and identifying document data can be run
through various databases. The main distinction between the
two areas is the duration of the stop and the singling out of a
vehicle for additional inspection.
In 2014, the CBP division chief for the El Paso sector
discovered that some agents in the primary area were failing to
detect fraudulent documents. To address this lapse, the
division chief distributed a memorandum to agents entitled “El
Paso Sector Checkpoint Operations.” Joint Appendix (JA) at
1. The Memo directed agents to (1) “send vehicles with more
than one occupant when at least one of the occupants is a non
U.S. citizen who present[s] some form of immigration
document, to the secondary inspection area for a more thorough
immigration inspection, interview, document review, and if
needed to conduct a records check” and to (2) “request a second
form of identification from non U.S. citizens in order to further
confirm the identity of the presenter.” Id. The Memo
allowed agents to modify the Memo’s instructions at their
discretion in order to accommodate “local residents, daily
commuters, and other trusted travelers who regularly pass
through” or when “safety to the public and/or our agents may
be an issue, i.e. traffic is backed up, weather related issues, etc.”
Id.
In response to the Memo, the AFGE filed a grievance on
behalf of the agents alleging that the CBP violated the Statute
by changing a condition of employment without notifying and
negotiating with the Union. The CBP denied the grievance
and the parties submitted the matter to arbitration. The
arbitrator agreed with the AFGE, concluding that the CBP had
changed a condition of employment by issuing the Memo and
thus violated the Statute by failing to first notify and negotiate
with the Union. Specifically, the arbitrator found that the
5
Memo changed the agents’ duties by lessening the primary area
agents’ discretion to decide who to send to the secondary area,
requiring them to determine when the secondary lane was too
backed up, increasing the vehicular traffic in the secondary area
and potentially requiring them to input more data for referred
vehicles into their databases. The arbitrator also found that the
Memo raised reasonable safety concerns for secondary area
agents who must manage an increase in traffic, persons and
inspections.
The CBP filed exceptions to the arbitration award with the
Authority. The Authority issued an order setting aside the
award. U.S. Dep’t of Homeland Sec. U.S. Customs & Border
Prot. El Paso, Tex., 70 F.L.R.A. 501 (2018) (El Paso I). First,
the Authority took “the opportunity” to correct its “erroneous”
precedent by “clarify[ing] that there is a distinction between”
the terms “conditions of employment” and “working
conditions” in the Statute. Id. at 501, 503. Second, the
Authority concluded that the Memo did not constitute a change
that must be bargained over for three reasons: (1) its past
decisions had “held that mere increases or decreases in normal
duties do not constitute changes over which an agency must
bargain,” (2) the Memo “did not change the nature of or the
type of duties the officers performed,” and (3) “the directions
contained in the [Memo] did not change anything and they did
not impact a condition of employment.” Id. at 503–04.
The Union moved for reconsideration. The Authority
denied the motion, relying largely on the reasons supporting its
original order. U.S. Dep’t of Homeland Sec. U.S. Customs &
6
Border Prot. El Paso, Tex., 71 F.L.R.A. 49 (2019) (El Paso II).
The AFGE now petitions for review of the Authority’s orders. 1
II. ANALYSIS
We have jurisdiction of the AFGE’s petition for review
under 5 U.S.C. § 7123(a). “The Authority must ‘provide a
rational explanation for its decision’ but in reviewing unfair
labor practice determinations, the court ‘recogniz[es] that such
determinations are best left to the expert judgment of the
[Authority].’” Nat’l Treasury Emps. Union v. FLRA, 745 F.3d
1219, 1224 (D.C. Cir. 2014) (alterations in original).
We “will set aside an order of the Authority only if it is
‘arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.’” Id. at 1223 (quoting 5
U.S.C. § 706(2)(A)); see also 5 U.S.C. § 7123(c) (“Review of
the Authority’s order shall be on the record in accordance with
section 706 of this title.”). Under the arbitrary and capricious
standard of review, we must ensure that the Authority
“examine[d] the relevant data and articulate[d] a satisfactory
explanation for its action including a rational connection
between the facts found and the choice made.” Fred Meyer
Stores, Inc. v. NLRB, 865 F.3d 630, 638 (D.C. Cir. 2017)
(alterations in original) (citation omitted). Put differently, to
survive arbitrary and capricious review, the Authority must
show that it engaged in “reasoned decisionmaking,” id.
(quoting Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S.
359, 374 (1998)), and that its decision was “reasonable and
reasonably explained,” Cytori Therapeutics, Inc. v. FDA, 715
1
In the proceedings before the arbitrator and the Authority, the
AFGE also challenged the Memo as violating the parties’ collective
bargaining agreement but, on appeal, does not challenge the
Authority’s order with respect to the collective bargaining
agreement.
7
F.3d 922, 926 (D.C. Cir. 2013). Finally, although “the
Authority may depart from its precedent,” we have explained
that “[a]n agency changing its course must supply a reasoned
analysis indicating that prior policies and standards are being
deliberately changed, not casually ignored.” Nat’l Fed’n of
Fed. Emps. v. FLRA, 369 F.3d 548, 553 (D.C. Cir. 2004)
(alteration in original) (citation omitted); see also FedEx Home
Delivery v. NLRB, 849 F.3d 1123, 1127 (D.C. Cir. 2017)
(“[O]n matters to which courts accord administrative
deference, agencies may change their interpretation and
implementation of the law if doing so is reasonable, within the
scope of the statutory delegation, and the departure from past
precedent is sensibly explained.” (citing Nat’l Cable &
Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967,
1001–02 (2005))).
Here, the Authority’s El Paso I order failed to reasonably
explain its departure from precedent and its decision denying
the AFGE’s bargaining request. Specifically, it failed to
explain how its decision comports with the express language of
5 U.S.C. § 7103(a)(14). The Authority characterizes its
decision as clarifying the terms of the Statute but its rationale
provides more questions than answers. Its order, then, is
arbitrary and capricious.
A. THE STATUTE AND AUTHORITY PRECEDENT
We begin with the Statute itself. “Conditions,” on its
own, is subject to “two common meanings”—(1) “matters
‘established or agreed upon as a requisite to the doing . . . of
something else’”; or (2) “‘attendant circumstances,’ or an
‘existing state of affairs.’” Fort Stewart, 495 U.S. at 645
(citation omitted). Thus, “conditions,” as used in the statutory
phrases “conditions of employment” and “working
conditions,” is ambiguous. See id. But unlike the phrase
8
“working conditions,” which is undefined by the Statute,
“conditions of employment” is expressly defined
in § 7103(a)(14) as “personnel policies, practices, and matters,
whether established by rule or otherwise, affecting working
conditions.” Therefore, no matter what ambiguity exists in
“conditions” generally, the Statute’s definition of “conditions
of employment” requires an agency to bargain over changes in
personnel policies, practices and matters that affect working
conditions.
For that reason, the Authority’s claim in El Paso I that “the
issuance of a memorandum which affects working conditions,
but not conditions of employment, does not constitute a change
over which CBP must bargain,” El Paso I, 70 FLRA at 501,
would appear, at first blush, to contradict the Statute. If the
relevant inquiry under § 7103(a)(14) is whether an agency’s
action constitutes a change in “personnel policies, practices,
and matters . . . affecting working conditions,” it would seem
that a memo that affects working conditions is, by definition, a
condition of employment over which the agency must bargain.
The only way this would not be accurate is if the memo is not
a personnel policy, practice or matter. The Authority
understands this point on appeal. See Resp. Br. at 21 (“The
more natural reading of term ‘conditions of employment’ is
that an agency is not obligated to bargain over ‘working
conditions’ as such, but only a more limited subset of
‘personnel policies, practices, and matters . . . that ‘affect[]
working conditions’” (alteration in original)
(quoting § 7103(a)(14)). But that understanding and
explanation are wholly lacking in El Paso I, where it counts.
See Temple Univ. Hosp., Inc. v. NLRB, 929 F.3d 729, 734 (D.C.
Cir. 2019) (“[C]ourts may not accept appellate counsel’s post
hoc rationalization for agency action; Chenery requires that an
agency’s discretionary order be upheld, if at all, on the same
basis articulated in the order by the agency itself.” (quoting
9
Erie Brush & Mfg. Corp. v. NLRB, 700 F.3d 17, 23 (D.C. Cir.
2012)) (citing SEC v. Chenery Corp., 332 U.S. 194, 196
(1947))).
Instead, in El Paso I, the Authority took “the opportunity”
to alter its precedent “to clarify that there is a distinction
between” conditions of employment and working conditions
but failed to explain its departure from precedent. El Paso I,
70 F.L.R.A. at 501, 503. Before El Paso I, the Authority
defined “working conditions” in § 7103(a)(14) broadly,
maintaining that “there is no substantive difference between
[the terms] ‘conditions of employment’ and ‘working
conditions’ as those terms are practically applied.” U.S. Dep’t
of the Air Force 355th MSG/CC Davis-Monthan Air Force
Base, 64 F.L.R.A. 85, 90 (2009); see also U.S. Dep’t of
Homeland Sec. v. FLRA, 647 F.3d 359, 365 (D.C. Cir. 2011)
(“[B]oth courts and the Authority have accorded [working
conditions] a broad interpretation that encapsulates a wide
range of subjects that is effectively synonymous with
conditions of employment.” (second alteration in original)
(citation and internal quotation marks omitted)). 2 In El Paso
I, the Authority concluded that its earlier view was “erroneous”
because it violated the “canon of statutory interpretation that
‘Congress acts intentionally’ when it ‘inclu[des] or exclu[des]’
2
We have upheld the Authority’s earlier interpretation of
conditions of employment and working conditions as reasonable.
See U.S. Dep’t of Homeland Sec., 647 F.3d at 364–65. But that
holding does not necessarily prevent the Authority from changing its
interpretation so long as the change is within the Authority’s
discretion and is reasonably explained. See Brand X, 545 U.S. at
982 (“A court’s prior judicial construction of a statute trumps an
agency construction otherwise entitled to Chevron deference only if
the prior court decision holds that its construction follows from the
unambiguous terms of the statute and thus leaves no room for agency
discretion.”); FedEx Home Delivery, 849 F.3d at 1127.
10
particular words in a statute” and amounted to “circular
reasoning.” 70 F.L.R.A. at 503 (alterations in original). The
Authority then concluded that “[i]t is . . . imperative that we
respect that distinction and define the differences for the labor-
management relationships community.” Id.
Beyond stating that “[t]he terms are related, but they are
not synonymous,” id., however, the Authority fails to explain
the differences between the terms or how the alleged
differences matter under the language of § 7103(a)(14). First,
the Authority has misread United States Supreme Court
precedent. It quotes the High Court’s Fort Stewart decision
for the proposition that “while the term ‘conditions of
employment’ is susceptible to multiple interpretations, the term
‘working conditions,’ as used in § 7103(a)(14), ‘more naturally
refers . . . only to the “circumstances” or “state of affairs”
attendant to one’s performance of a job.’” Id. (quoting Fort
Stewart, 495 U.S. at 645). But the Supreme Court, in deciding
whether an employer was required to bargain over wages and
benefits in Fort Stewart, explained that “working conditions”
in § 7103(a)(14) “more naturally refers, in isolation, only to the
‘circumstances’ or ‘state of affairs’ attendant” to one’s job
performance. 495 U.S. at 645 (emphasis added) (citation
omitted). But the Court clarified that “here it is not in
isolation, but forms part of a paragraph whose structure, as a
whole, lends support to the Authority’s broader reading.” Id.
at 646. By omitting the phrase “in isolation” and the High
Court’s subsequent clarification, the Authority misreads Fort
Stewart to imply that “working conditions” has a free-standing
definition when, in fact, the point being made in Fort Stewart
is the opposite.
Second, the Authority fails to explain how its definition of
“working conditions” differs from the statutory definition of
“conditions of employment.” It concludes the terms are not
11
synonymous but then defines working conditions based on a
misreading of Fort Stewart. It goes no further, leaving a gap
in its reasoning. It does not explain how to tell the difference
between what constitutes a condition of employment versus a
working condition. More importantly, it does not explain how
its revised interpretation substantively changes what aspects of
employment are bargainable under § 7103(a)(14).
On appeal, the Authority argues that it did explain the
difference by relying on concurrences of former FLRA
Chairman Dale Cabaniss in earlier cases. But the Authority
cites those concurrences only to support the proposition that
conditions of employment and working conditions are not
synonymous, see 70 F.L.R.A. at 503 n.33; it does not elaborate
on Cabaniss’s view of the distinction between the terms. And
if we look to Cabaniss’s explanation of how conditions of
employment and working conditions are different, that
explanation does not help the Authority on the facts of this
case. In the cited concurrences, Cabaniss articulated the
distinction between the two terms:
As reflected in our Statute, “conditions of
employment” is a term of art expressly defined
at § 7103(a)(14) that means “personnel policies,
practices, and matters, whether established by
rule, regulation, or otherwise, affecting working
conditions.” Clearly, “conditions of
employment” and “working conditions” are
related, but they are not the same thing. For
example, “working conditions” would be an
employee’s work starting and stopping times, or
whether the employee has the ability to take
home a government owned vehicle (GOV):
“conditions of employment” would be the
“rules, regulations, or otherwise” that define the
12
hours of work for the bargaining unit, or
determine whether or what employees have the
right to take that GOV home.
U.S. Dep’t of Veterans Affairs Med. Ctr. Sheridan, Wyo., 59
F.L.R.A. 93, 95 (2003) (Cabaniss, Chairman, concurring). 3
Under this reasoning, a memo setting forth procedures for
where and how agents conduct inspections would seem to meet
Cabaniss’s definition of conditions of employment. In other
words, had the Authority in El Paso I used Cabaniss’s
formulation to explain the distinction between working
conditions and conditions of employment under the Statute, it
still would not provide sufficient support for the Authority’s
conclusion—without further explanation—that the CBP was
not required to bargain over the Memo.
In sum, the Authority departed from precedent based on a
misreading of case law and without explaining the departure.
Such a change is not “sensibly explained.” FedEx Home
Delivery, 849 F.3d at 1127.
B. THE MEMO
The Authority also fails to explain its determination that
the Memo is not a change over which the CBP must bargain.
First, the Authority turns to precedent concluding that an
agency need not bargain over “mere increases or decreases in
normal duties.” El Paso I, 70 F.L.R.A. at 503 (citing Nat’l
Treasury Emps. Union (NTEU), 66 F.L.R.A. 577, 579 (2012)).
But the Authority fails to mention that NTEU applies only if
the increase or decrease is “not attributable to any change in the
agency’s policies, practices, or procedures affecting working
3
See also U.S. Dep’t of Labor Occup. Safety & Health Admin.
Region 1 Bos., Mass., 58 F.L.R.A. 213, 216 (2002) (Cabaniss,
Chairman, concurring) (same).
13
conditions.” NTEU, 66 F.L.R.A. at 579. Increases or
decreases “‘[s]tanding alone’ do not trigger notice-and-
bargaining obligations.” Id. (alteration in original) (citation
omitted). Granted, in a case involving changes in the
location of the processing of immigrants in response to an
unusual influx of immigration at the U.S. border, the Authority
determined that “[e]ven if we were to consider that increase to
be attributable to the Respondent, we would find, based on our
precedent, that dismissal of the complaint is warranted because
there was no change in unit employees’ conditions of
employment.” U.S. Dep’t of Homeland Sec. Border &
Transp. Sec. Directorate U.S. Customs & Border Prot. Border
Patrol, Tucson Sector Tucson, Az. (CBP Tucson), 60 F.L.R.A.
169, 174 (2004). But in that decision the Authority went on to
say that “nothing in the record establishes that the Respondent
changed the ‘type’ of aliens that were being processed, the type
of work that bargaining unit employees performed or, in any
manner, the processing of alien apprehensions.” Id.
(emphasis added). Here, on the other hand, to the extent the
duties of the secondary area agents increased, that increase was
caused by the change in procedure dictated by the Memo.
Moreover, unlike CBP Tucson, the Memo changed the
inspection procedure in the primary and secondary areas—as
noted earlier, agents were required to conduct inspections in
the primary and secondary areas in ways different from those
used before the Memo’s issuance.4
4
On appeal, the Authority also relies on U.S. Dep’t of the Air
Force, Headquarters, 96th Air Base Wing, Eglin Air Force Base,
Fla. (Eglin), 58 F.L.R.A. 626 (2003), where the Authority concluded
that an instruction letter changing crew chief assignments at a U.S.
Air Force base did not change any established practice (and thus the
conditions of employment) because it found the agency had an
established practice of modifying work assignments based on
mission and workflow fluctuations. Id. at 630; see also CBP
Tucson, 60 F.L.R.A. at 174 (citing Eglin, 58 F.L.R.A. at 626).
14
Second, the Authority maintains that the Memo “did not
change the nature of or the type of duties the officers
performed.” El Paso I, 70 F.L.R.A. at 503. Relying on 5
U.S.C. § 7106(a)(2)(A), (B), the Authority noted that
supervisors have the responsibility and prerogative to direct
how employees perform their jobs, concluding that “[a]
supervisor does not have to negotiate with the union every time
she adjusts or alters how employees will perform their duties.”
Id. What is missing from this analysis is any connection to the
definition of conditions of employment in § 7103(a)(14). In
other words, the Authority does not explain how the nature of
or type of duties performed is relevant under the statutory
definition of conditions of employment.5 After spending the
bulk of its discussion emphasizing the importance of
distinguishing conditions of employment from working
conditions, the Authority fails to tie its analysis back to those
terms under the Statute. Moreover, although the Authority
cites 5 U.S.C. § 7106(a)(2)(A), (B) for the proposition that
“management has the right to ‘direct . . . employees,’ ‘assign
work,’ and ‘determine the personnel by which agency
operations shall be conducted,’” El Paso I, 70 F.L.R.A. at 503
n.38 (quoting § 7106(a)(2)(A), (B)), the very next subsection
Unlike Eglin, where the agency changed the aircraft that engineers
were assigned to work on, the Memo changed how agents conduct
border inspections—i.e. their practice—in the primary and
secondary areas, including how and where agents direct certain
vehicles. Assuming arguendo the changes do not constitute changes
in personnel policies, practices or matters that affect agents’ working
conditions, El Paso I fails to explain why they do not.
5
And to the extent that the Authority relies on CBP Tucson for
this proposition, see El Paso II, 71 F.L.R.A. at 51, as explained
above, that case is distinguishable and the Authority fails to explain
how the Memo in this case does not change “in any manner” the
inspection procedures performed at border checkpoints. See CBP
Tucson, 60 F.L.R.A. at 174.
15
says that “[n]othing in this section shall preclude any agency
and any labor organization from negotiating . . . procedures
which management officials of the agency will observe in
exercising any authority under this section,” § 7106(b)(2).
The Memo in this case arguably goes beyond merely assigning
work in that it changes the inspection procedures at border
checkpoints, at least slightly, but to the extent it does involve
assigning work and determining personnel, it would constitute
the procedure which CBP management observe in making
those decisions. As such, neither § 7106(a)(2)(A) or (B)
appear to help the Authority here.
Third, the Authority concludes that “the directions
contained in the memorandum did not change anything and
they did not impact a condition of employment.” El Paso I,
70 F.L.R.A. at 504. But the Memo plainly changed
something. What the Authority must make clear—and has
not—is whether the change was a change in a personnel policy,
practice or matter that affected working conditions. On its
face, the Memo changes how and where certain inspections are
performed at border checkpoints, which results in different
instructions for agents in the primary area, more cars in the
secondary area and the potential of increased risk to secondary
area agents. The Authority fails to explain why these changes
do not constitute a change in conditions of employment under
§ 7103(a)(14).
* * *
Agencies reading El Paso I are left wondering how the
Authority reached its decision that the CBP was free to issue
the Memo without bargaining in light of § 7103(a)(14)’s
language and so are we. Was it because the Memo did not
affect working conditions? Was it because the Memo was not
a personnel policy, practice or matter? Was it because of
16
some other rule or exception? An agency decision that fails to
answer such basic questions is not the product of “reasoned
decisionmaking.” See Tramont Mfg., LLC v. NLRB, 890 F.3d
1114, 1119 (D.C. Cir. 2018). Nor does it “sensibly explain[]”
a departure from contrary precedent. See FedEx Home
Delivery., 849 F.3d at 1127.
For the foregoing reasons, we grant the AFGE’s petition
for review, vacate El Paso I and remand to the Authority for
further proceedings consistent with this opinion. 6
So ordered.
6
The AFGE’s petition for review of the denial of
reconsideration in El Paso II is dismissed as moot.