National Treasury Employees Union v. Federal Labor Relations Authority

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 18, 2014 Decided June 17, 2014
No. 12-1199
NATIONAL TREASURY EMPLOYEES UNION,
PETITIONER
v.
FEDERAL LABOR RELATIONS AUTHORITY,
RESPONDENT
On Petition for Review of an Order and Decision
of the Federal Labor Relations Authority
Paras N. Shah argued the cause for the petitioner.
Gregory O’Duden, Larry J. Adkins and Julie M. Wilson were
on brief.
Zachary R. Henige, Attorney, Federal Labor Relations
Authority, argued the cause for the respondent. Rosa M.
Koppel, Solicitor, and David M. Shewchuk, Deputy Solicitor,
were on brief.
Howard S. Scher, Attorney, United States Department of
Justice, argued the cause for amicus curiae United States of
America. Stuart F. Delery, Principal Deputy Assistant
Attorney General, and Leonard Schaitman, Attorney, were on
brief.
2
Before: HENDERSON, ROGERS and KAVANAUGH, Circuit
Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: The
National Treasury Employees Union (NTEU or Union)
petitions the Court for review of a Federal Labor Relations
Authority (FLRA or Authority) decision finding¸ inter alia,
that the Internal Revenue Service (IRS) did not commit an
unfair labor practice when Union representatives were
excluded from “suitability” interviews of “covered” IRS
personnel conducted by Office of Personnel Management
(OPM) investigators. Under the Federal Service
Labor-Management Relations Statute (FSLMRS or Statute),
union representatives are permitted to attend “any
examination” of a federal employee the union represents if (1)
the examination is conducted by a “representative” of the
employing agency and (2) the employee requests
representation and reasonably believes that the meeting may
result in disciplinary action. 5 U.S.C. § 7114(a)(2)(B). The
FLRA determined that covered IRS personnel are not entitled
to union representation at suitability interviews conducted by
OPM investigators because OPM investigators do not act as
“representatives” of the IRS during the interviews. For the
reasons set forth below, we deny NTEU’s petition for review.
I. Background
A.
The FSLMRS “establishes a collective bargaining regime
in the federal public sector,” Nat’l Treasury Emps. Union v.
FLRA, 414 F.3d 50, 52 (D.C. Cir. 2005) (quotation marks
omitted), and codifies “various labor rights” accorded federal
employees, Am. Fed’n of Gov’t Emps., Local 3669 v. Shinseki,
3
709 F.3d 29, 30 (D.C. Cir. 2013). It expressly grants a federal
employee and his union certain rights, known as “Weingarten
rights,”1 including that
[a]n exclusive representative of an appropriate unit in an
agency shall be given the opportunity to be represented
at . . . any examination of an employee in the unit by a
representative of the agency in connection with an
investigation if . . . (i) the employee reasonably believes
that the examination may result in disciplinary action
against the employee; and (ii) the employee requests
representation.
5 U.S.C. § 7114(a)(2)(B). A federal employer’s failure to
provide an employee his statutorily conferred Weingarten
rights constitutes an unfair labor practice under the Statute.
See 5 U.S.C. § 7116(a)(1) (unfair labor practice for federal
employer “to interfere with, restrain, or coerce any employee
in the exercise by the employee of any right under this
chapter”); id. § 7116(a)(8) (unfair labor practice for federal
employer “to otherwise fail or refuse to comply with any
provision of this chapter”).
The question before us is whether the statutory
Weingarten rights of certain “covered” IRS personnel are
triggered when an OPM investigator conducts a “suitability”
interview of them. A covered position is “a position in the
1
“Weingarten rights” refers to the United States Supreme
Court’s decision in NLRB v. J. Weingarten, Inc., 420 U.S. 251
(1975). There, the Court upheld the National Labor Relations
Board’s determination that, under section 7 of the National Labor
Relations Act, 29 U.S.C. § 157, an employee represented by a union
is entitled to union representation during an interview the employee
reasonably believes will result in discipline. See Weingarten, 420
U.S. at 260-64.
4
competitive service, a position in the excepted service where
the incumbent can be noncompetitively converted to the
competitive service, and a career appointment to a position in
the Senior Executive Service.” 5 C.F.R. § 731.101(b).
Notwithstanding exceptions inapplicable here, an individual
seeking covered employment must undergo an investigation in
order to determine his “suitability for employment.” Id.
§ 731.104(a). The President, to whom the Congress has
granted broad authority to regulate entry in the civil service,
see, e.g., 5 U.S.C. §§ 3301, 3302, has delegated to OPM the
authority to conduct the suitability investigation, see Dickson
v. OPM, 828 F.2d 32, 33-34 (D.C. Cir. 1987) (“[T]he President
has delegated to OPM, inter alia, the authority . . . to
investigate and determine the suitability of persons entering or
employed in nonsensitive positions within the competitive
civil service.” (citing Exec. Order No. 10,450)); see also 5
C.F.R. § 731.104(a) (“[A]ppointments to covered positions . . .
require the person to undergo an investigation by OPM or by an
agency with delegated authority from OPM to conduct
investigations.” (emphasis added)); id. § 736.201(a) (“[T]he
investigation of persons entering or employed in the
competitive service, or by career appointment in the Senior
Executive Service, is the responsibility of OPM.”); id. § 5.2(a)
(OPM Director may investigate “the qualifications and
suitability of applicants for positions in the competitive
service”). As part of the suitability investigation, the covered
IRS personnel at issue here are required to participate in an
interview. OPM has the authority to sanction anyone who
refuses to furnish testimony during a suitability interview.
See 5 C.F.R. § 731.103(g).2
2
“Excepted service” personnel are those IRS personnel who are
not “covered.” Excepted service appointments “include all civilian
positions in the executive branch of the Government which are
specifically excepted from the requirements of the Civil Service Act
or from the competitive service by or pursuant to statute or by
5
Until 2008, the IRS used its own investigators to
investigate and interview both covered and excepted
personnel. As noted, the investigation of a covered individual
is an OPM prerogative but an agency may annually request a
delegation of authority from OPM to conduct its own
suitability investigation of an individual seeking covered
employment. See id. § 736.201(b). The IRS requested and
received such authority each year until 2008. When the IRS
conducted its own investigations and interviews (both
suitability and non-suitability), it permitted NTEU
representatives to attend suitability interviews of covered
personnel and background interviews of excepted personnel on
official time.
In 2008, the IRS did not renew its request for authority to
conduct suitability investigations and, as a result, the
delegation from OPM lapsed. Subsequently, OPM
investigators began conducting suitability investigations of
covered IRS personnel and also took over the background
investigation of excepted IRS personnel. Because OPM’s
policy prohibits NTEU representatives from attending
investigatory interviews of both covered and excepted
personnel, the IRS stopped giving Union representatives
official time to attend interviews.
Although the IRS no longer conducts suitability or
background investigations, it has retained a role in the
investigatory process. For example, the IRS initiates
OPM.” 5 C.F.R. § 1.4(a). Although an individual appointed to an
excepted service position with the IRS is not required to undergo a
suitability investigation, the IRS does require the individual to
undergo a background investigation, which includes an interview
component. OPM also conducts this background investigation and
interview.
6
investigations of all candidates for employment by requiring
them to complete certain forms and, once the forms are
complete, it authorizes OPM to proceed with an investigation.
In addition, interviews are often conducted during IRS
business hours and in IRS work space and personnel must
obtain permission from IRS supervisors before attending the
interviews. The IRS informs candidates that they are required
to participate in the investigatory interviews as a condition of
employment and are subject to discipline if they do not
cooperate. Finally, the IRS typically retains the investigation
file assembled by OPM at the end of an investigation. The
suitability and background investigations are “management’s
tool” for evaluating “character, honesty, integrity and loyalty.”
Joint Appendix (JA) 248, Nat’l Treasury Emps. Union v.
FLRA, No. 12-1199 (D.C. Cir. Dec. 14, 2012).
At the conclusion of the suitability investigation, a
covered individual receives a “suitability determination.” A
“suitability determination” is “a decision by OPM or an agency
with delegated authority that a person is suitable or is not
suitable for employment in covered positions in the Federal
Government or a specific Federal agency.” 5 C.F.R.
§ 731.101(b). Pursuant to a standing OPM delegation, the
IRS makes the suitability determinations for “applicants” for,
and “appointees” to, covered positions. See 5 C.F.R.
§ 731.103(a). An applicant is “a person who is being
considered or has been considered for employment” and an
“appointee” is “a person who has entered on duty and is in the
first year of a subject-to-investigation appointment.” Id.
§ 731.101(b). The IRS’s authority to make a suitability
determination for an applicant or appointee, however, is not
without limits, to wit: the IRS must conform to OPM policies
and standards in making suitability determinations, see id.
§ 731.103(c), and OPM reserves the right to revoke its
suitability determination delegation if the IRS fails to do so,
7
see id. § 731.103(f); OPM oversees the IRS’s exercise of its
authority to make suitability determinations, see 5 U.S.C.
§ 1104(b)(2);3 OPM retains jurisdiction of a case “where there
is evidence that there has been a material, intentional false
statement, or deception or fraud in examination or
appointment” and of a case “involving a refusal to furnish
testimony,” 5 C.F.R. § 731.103(g); the IRS must refer cases to
OPM when “Governmentwide debarment by OPM . . . may be
an appropriate action,” id. § 731.103(b); and OPM “may, in its
discretion, exercise its jurisdiction . . . in any case it deems
necessary,” id. § 731.103(g). Although the IRS makes the
suitability determination with respect to an applicant and
appointee, it does not do so with respect to another, discrete
category of IRS personnel, namely, a covered IRS
“employee.”4 See id. § 731.105(e).
B.
In response to OPM’s policy of excluding NTEU
representatives from investigatory interviews and the IRS’s
corresponding failure to give Union representatives official
time to attend the interviews, NTEU filed two grievances
against the IRS. The Union alleged, inter alia, that the failure
to allow Union representatives to attend suitability and
background investigation interviews of IRS personnel on
official time constituted an unfair labor practice under section
3
The Congress has directed OPM to “establish and maintain an
oversight program to ensure that activities under any authority
delegated [from OPM to an agency] are in accordance with the merit
system principles and the [OPM] standards.” 5 U.S.C.
§ 1104(b)(2).
4
An “employee” is “a person who has completed the first year
of a subject-to-investigation appointment.” 5 C.F.R. § 731.101(b)
(emphasis added).
8
7116(a)(1), (8) of the FSLMRS as well as a violation of the
IRS’s collective bargaining agreement (CBA) with NTEU.
The parties could not resolve the dispute and the grievances
were eventually submitted to an arbitrator.
The arbitrator denied NTEU’s grievances, concluding that
IRS personnel are not entitled to union representation at
investigatory interviews conducted by OPM investigators.
The statutory Weingarten rights of IRS personnel are not
triggered by an interview conducted by OPM investigators, he
found, because OPM investigators do not act as
“representatives” of the IRS during the interview. In the
arbitrator’s view, OPM investigators are “legally independent”
and the IRS has no authority “to tell OPM how its investigators
should go about conducting their investigatory interviews.”
JA 199-200. According to the arbitrator, “[t]here is nothing
IRS or NTEU can do about” OPM’s decision “not to permit
union representatives to participate in” the interviews. JA
200. Based on these determinations, the arbitrator concluded
that the exclusion of NTEU representatives from interviews of
IRS personnel does not constitute a violation of the Statute or
the CBA.
The Union filed exceptions to the arbitrator’s decision
with the FLRA, making the same argument it had made to the
arbitrator. In the alternative, it argued that OPM investigators
act as IRS representatives at least when they investigate
excepted personnel (that is, personnel who are excepted under
5 C.F.R. § 1.4(a), see supra note 2) and that the failure to allow
union representation for them violates the Statute and the CBA.
On February 22, 2012, the FLRA granted in part and
denied in part the Union’s exceptions. It denied the Union’s
exceptions with respect to covered personnel, finding that
OPM investigators do not act as IRS representatives when they
interview them in the course of a suitability investigation.
9
The FLRA interpreted “representative of the agency” as used
in section 7114 of the Statute to require the same “function”
and “control” analysis it had used in the past in cases involving
an outside contractor as a representative of an agency. See
Nat’l Treasury Emps. Union, 66 F.L.R.A. 506, 509-10 (2012)
(citing Pension Benefit Guar. Corp. (PBGC), 62 F.L.R.A. 219
(2007) (citing Social Security Admin. (SSA), 59 F.L.R.A. 875
(2004))). Under its function and control test, an individual is a
representative of an agency if he (1) performs an agency
function and (2) operates under agency control. Applying the
test, the Authority first concluded that OPM investigators
“were performing an OPM function” (and not any IRS
function) when “interviewing and investigating covered
[individuals] . . . subject to OPM suitability determinations.”
Id. at 510 (quotation marks omitted). The Authority also
determined that OPM investigators do not operate under IRS
control during interviews of covered personnel because, as the
arbitrator found, OPM investigators are “legally independent”
of the IRS and the IRS has “no basis or authority . . . to tell
OPM how its investigators should go about conducting their
investigatory interviews.” Id. (quotation marks omitted).
The Authority noted that NTEU did not challenge the
arbitrator’s determinations as “nonfacts (or on any other
ground).” Id. In denying the Union’s exceptions with
respect to covered personnel, the Authority necessarily
concluded that the IRS had not committed an unfair labor
practice or violated the CBA by failing to ensure union
representation during OPM interviews of covered personnel.
The Authority, however, granted NTEU’s exceptions with
respect to excepted personnel. It concluded that OPM
investigators do perform an IRS function when they interview
excepted individuals in conjunction with a background
investigation because the IRS, not OPM, is “primarily
responsible for the conduct of background investigations” of
10
excepted personnel. Id. (quotation marks omitted).
Moreover, the Authority determined that OPM investigators
operate under the “ultimate control” of the IRS when
investigating excepted personnel because the IRS has “the
authority to remove excepted employees based on information
collected during the investigations.” Id. at 510-11 (citation,
quotation marks, brackets and ellipses omitted). In light of
these determinations, the Authority held that excepted
individuals are entitled to union representation at their OPM
background investigation interviews pursuant to 5 U.S.C.
§ 7114(a)(2)(B) and that the IRS committed an unfair labor
practice and violated the CBA by not ensuring such
representation. It remanded the award “to the parties for
resubmission to the Arbitrator, absent settlement, to determine
an appropriate remedy.” Id. at 511.
The Union timely petitioned for review of the Authority’s
decision, but only in part. It limits its requested review to the
Authority’s determination that the exclusion of Union
representatives from suitability interviews of covered IRS
appointees––i.e., covered personnel who have “entered on
duty and [are] in the first year of a subject-to-investigation
appointment,” 5 C.F.R. § 731.101(b)––is not an unfair labor
practice under the Statute. Br. for Pet’r 10, Nat’l Treasury
Emps. Union v. FLRA, No. 12-1199 (D.C. Cir. Dec. 14, 2012)
(describing question presented as whether FLRA erred in
concluding that “[OPM] investigators are not acting as
‘representatives’ of the [IRS], within the meaning of 5 U.S.C.
§ 7114, when they conduct suitability investigation interviews
of ‘covered’ employees in their first year of employment”).
II. Jurisdiction
The “first and fundamental question” we are “bound to ask
and answer” is whether we have jurisdiction to decide NTEU’s
petition for review. Bancoult v. McNamara, 445 F.3d 427,
11
432 (D.C. Cir. 2006) (quoting Steel Co. v. Citizens for a Better
Env’t, 523 U.S. 83, 94 (1998)). The requirement that we
address jurisdiction “as a threshold matter springs from the
nature and limits of the judicial power of the United States and
is inflexible and without exception.” Steel Co., 523 U.S. at
94-95 (quotation marks and brackets omitted); see also Khadr
v. United States, 529 F.3d 1112, 1115 (D.C. Cir. 2008) (noting
“we must examine” question of statutory jurisdiction “before
we can determine the merits” (quotation marks omitted)).
The first jurisdictional matter we address is whether the
Authority’s February 22, 2012 decision is final and reviewable.
The FSLMRS provides that
(a) Any person aggrieved by any final order of the
Authority other than an order under––
(1) section 7122 of this title (involving an award by an
arbitrator), unless the order involves an unfair labor
practice under section 7118 of this title . . .
may, during the 60-day period beginning on the date on
which the order was issued, institute an action for judicial
review of the Authority’s order . . . in the United States
Court of Appeals for the District of Columbia.
5 U.S.C. § 7123(a) (emphasis added). Given that the
Authority’s decision on review of the arbitrator’s award plainly
involves an unfair labor practice allegedly committed by the
IRS, see Overseas Educ. Ass’n v. FLRA, 824 F.2d 61, 71 (D.C.
Cir. 1987) (case “involves” unfair labor practice if unfair labor
practice is “either an explicit ground for or [is] necessarily
implicated by the Authority’s decision”); see also Ass’n of
Civilian Technicians, N.Y. State Council v. FLRA, 507 F.3d
697, 700 (D.C. Cir. 2007) (suggesting case “involves” unfair
labor practice if Authority engages in “substantive discussion
12
of an unfair labor practice claim”), we may review the decision
so long as it constitutes a “final order.” If the Authority
decision is not final, however, we are without jurisdiction to
entertain NTEU’s challenge. See Turgeon v. FLRA, 677 F.2d
937, 938-40 (D.C. Cir. 1982) (court has no jurisdiction to
review FLRA decision that does not constitute final agency
action).
The United States Supreme Court has set forth a two-part
test to determine the finality of an agency decision:
First, the action under review must mark the
consummation of the agency’s decisionmaking process––
it must not be of a merely tentative or interlocutory nature.
Second, the action must be one by which rights or
obligations have been determined, or from which legal
consequences will flow.
Nat’l Ass’n of Home Builders v. Norton, 415 F.3d 8, 13 (D.C.
Cir. 2005) (quoting Bennett v. Spear, 520 U.S. 154, 177-78
(1997)) (quotation marks and citations omitted). An agency
remand order is generally considered non-final for the purpose
of judicial review. See Meredith v. Fed. Mine Safety & Health
Review Comm’n, 177 F.3d 1042, 1047 (D.C. Cir. 1999); Wash.
Metro. Area Transit Auth. v. Dir., Office of Workers’ Comp.
Programs, 824 F.2d 94, 95-96 (D.C. Cir. 1987) (per curiam)
(collecting cases); see also Pueblo of Sandia v. Babbitt, 231
F.3d 878, 881 (D.C. Cir. 2000) (district court order remanding
case to agency “for significant further proceedings” is not
final).
We are satisfied that the Authority’s order is final and
reviewable. Although the Authority’s decision plainly
“mark[ed] the consummation of the [Authority’s]
decisionmaking process” with respect to covered personnel,
Nat’l Ass’n of Home Builders, 415 F.3d at 13 (quoting Bennett,
13
520 U.S. at 177-78), we twice ordered the parties to brief
finality in light of the Authority’s remand regarding excepted
personnel. The remand for a remedy determination
undoubtedly rendered the portions of the Authority’s decision
regarding excepted personnel non-final, see Meredith, 177
F.3d at 1047; see also Pueblo of Sandia, 231 F.3d at 881-82,
and our concern at the time was that the lack of finality as to
them prevented us from reviewing any part of the Authority’s
decision, including its final determination regarding covered
personnel. Cf. Wash. Metro. Area Transit Auth., 824 F.2d at
95-96 (benefits review board’s remand to administrative law
judge for “further fact-finding and a determination of
damages” precluded court from reviewing legal question
“conclusively determined” by board). But we need not decide
the effect of the remand because, as amicus counsel from the
Department of Justice discussed at oral argument, the remedy
issue with respect to excepted personnel has settled.
Recording of Oral Argument at 22:58 (Feb. 18, 2014). The
only non-final portion of the Authority’s decision has now
been fully resolved and, accordingly, lack of finality is not an
obstacle to our review.
We next consider the Authority’s claim that the Court
lacks jurisdiction over NTEU’s petition because “the issue on
which [NTEU] now seeks judicial review––whether OPM’s
investigators are representatives of the IRS when interviewing
covered employees in their first year of service”––was not
presented to the Authority. Br. for Resp’t 9, Nat’l Treasury
Emps. Union v. FLRA, No. 12-1199 (D.C. Cir. Jan. 14, 2013).
Section 7123(c) of the FSLMRS provides that “[n]o objection
that has not been urged before the Authority, or its designee,
shall be considered by the court, unless the failure or neglect to
urge the objection is excused because of extraordinary
circumstances.” 5 U.S.C. § 7123(c); see also Am. Fed’n of
State, Cnty. & Mun. Emps. Capital Area Council 26 v. FLRA,
14
395 F.3d 443, 451 (D.C. Cir. 2005). We have enforced
section 7123(c) strictly, recognizing that if a party were
permitted to raise an argument for the first time in its petition
for review, “the initial adjudicatory role Congress gave to the
Authority would be transferred in large measure to this court,
in plain departure from the statutory plan.” Dep’t of Treasury
v. FLRA, 707 F.2d 574, 580 (D.C. Cir. 1983).
A party is not required to invoke “magic words” in order to
adequately raise an argument before the Authority. U.S.
Dep’t of Commerce v. FLRA, 672 F.3d 1095, 1102 (D.C. Cir.
2012). Instead, an argument is preserved if the party has
“fairly brought” the argument “to the Authority’s attention.”
U.S. Dep’t of Commerce v. FLRA, 7 F.3d 243, 245 (D.C. Cir.
1993). The Union advanced two primary arguments before
the Authority. First, it argued that the denial of Weingarten
rights for all covered and excepted IRS personnel constitutes a
violation of the Statute and the CBA because OPM
investigators act as IRS representatives during all interviews of
IRS personnel. In support of this argument, NTEU reasoned
that, because “[i]t is IRS’[s] responsibility to make suitability
determinations of applicants and individuals in their first year
of employment,” OPM investigators conduct interviews of all
personnel on behalf of the IRS and therefore act as IRS
representatives during the interviews. Union’s Exceptions to
Arbitrator’s Award 27-28, Nat’l Treasury Emps. Union, No.
0-AR-4765 (F.L.RA. June 13, 2011) (JA 174-75); see also id.
at 28 (“Thus, while OPM has the regulatory authority to
conduct the investigations, it does so in order to permit [the]
IRS to make the suitability adjudications required of it by
regulation.”). In the alternative, NTEU asserted before the
Authority that the IRS’s failure to ensure representational
rights for excepted personnel violates both the Statute and the
CBA because OPM investigators act as IRS representatives at
least when they interview them.
15
In its brief to us, the Union has narrowed its argument,
asserting that the IRS committed an unfair labor practice when
it failed to ensure representational rights during suitability
interviews of covered individuals “in their first year of
employment,” i.e., covered appointees. Br. for Pet’r 21. In
support, the Union uses the same reasoning it argued to the
Authority, claiming that, because “suitability determinations of
appointees in covered positions are an IRS function,” OPM
investigators conduct interviews of covered appointees for the
IRS and therefore act as IRS representatives. Id. at 26-28. In
response, the Authority argues that the phrase, “ ‘in their first
year of employment,’ introduces a new concept not previously
argued to the Authority” and therefore prevents us from
adjudicating NTEU’s petition. Br. for Resp’t 10-11
(describing argument in Union’s brief as “more than a new
‘twist’ ” on argument made to FLRA and “a new argument
altogether”).
We disagree. NTEU’s brief asserts a narrower version of
the argument it made to the Authority. As explained above,
the Union argued to the FLRA that, because the IRS has
authority to make suitability determinations for applicants and
appointees to covered positions, OPM investigators conduct
interviews of all IRS personnel for the IRS and therefore act as
IRS representatives during all interviews. Given that covered
appointees are a subclass of all IRS personnel, the first
argument presented to the Authority “necessarily include[d]”
NTEU’s claim here that OPM investigators conduct interviews
of covered appointees for the IRS and thus act as IRS
representatives during such interviews. Trump Plaza Assocs.
v. NLRB, 679 F.3d 822, 830 (D.C. Cir. 2012) (argument that
statements were “adequately disseminated to affect [a union]
election necessarily includes the argument that” statements
were “adequately disseminated under [NLRB] precedent”).
16
In fact, the reasoning set forth in the Union’s brief is virtually
identical to the reasoning the Union presented to the Authority;
it has simply used that reasoning here to support a more limited
claim.5
III. Merits Analysis
We review Authority decisions in accordance with section
10(e) of the Administrative Procedure Act, “uphold[ing] [the
Authority’s] determinations unless they are ‘arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.’ ” Am. Fed’n of Gov’t Emps., Local
2343 v. FLRA, 144 F.3d 85, 88 (D.C. Cir. 1998) (quoting 5
U.S.C. § 706(2)(A)); see 5 U.S.C. § 7123(c) (incorporating
APA standards of review). Because the “Congress has clearly
delegated to the Authority the responsibility in the first
instance to construe the [Statute],” Library of Cong. v. FLRA,
699 F.2d 1280, 1284 (D.C. Cir. 1983), we review the
Authority’s interpretation of the FSLMRS under the two-step
framework announced in Chevron: “If the Congress ‘has
directly spoken to the precise question at issue,’ the court
‘give[s] effect to [its] unambiguously expressed intent,’ but if
the statute is silent or ambiguous the court defers to the
Authority’s interpretation so long as it is ‘based on a
permissible construction of the statute,’ ” Nat’l Treasury
Emps. Union, 414 F.3d at 57 (quoting Chevron USA Inc. v.
Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984));
5
To put it differently, the Union raises the same argument in its
brief that it presented to the Authority but directs that argument to
only a portion of the Authority decision––the portion pertaining to
covered appointees. This, of course, the Statute permits the Union
to do. See 5 U.S.C. § 551(13) (reviewable “ ‘agency action’
includes the whole or a part of an agency rule, order, license,
sanction, relief, or the equivalent or denial thereof, or failure to act”
(emphasis added)); see also 5 U.S.C. § 7123(c) (incorporating APA).
17
accord NASA v. FLRA, 527 U.S. 229, 234 (1999). In short,
our review of an FLRA decision is “narrow,” Am. Fed’n of
Gov’t Emps., Local 2343, 144 F.3d at 88 (quotation marks
omitted), and the standards of review are “deferential ones”
because “the Authority––not this court––is the expert on
federal labor relations,” Nat’l Treasury Emps. Union, 414 F.3d
at 57.
As explained above, the Statute provides that
[a]n exclusive representative of an appropriate unit in an
agency shall be given the opportunity to be represented
at . . . any examination of an employee in the unit by a
representative of the agency in connection with an
investigation if . . . (i) the employee reasonably believes
that the examination may result in disciplinary action
against the employee; and (ii) the employee requests
representation.
5 U.S.C. § 7114(a)(2)(B). The parties stipulated before the
arbitrator that some IRS personnel reasonably fear discipline
resulting from the suitability interviews conducted by OPM
investigators and it is clear that some have requested union
representation at the interviews. Thus, the applicability of
section 7114(a)(2)(B)––and, consequently, whether the IRS
committed an unfair labor practice––turns on whether OPM
investigators act as “representatives” of the IRS when they
conduct interviews of individuals appointed to covered
positions with the IRS.
The Authority concluded that an individual who is not an
agency employee may nonetheless act as a “representative” of
the agency if he (1) performs an agency function and (2) is
subject to agency control. Applying this interpretation of the
Statute, the Authority then concluded that OPM investigators
do not act as IRS representatives when they interview covered
18
personnel as part of a suitability investigation because they do
not perform an IRS function or operate under IRS control.
We first review the Authority’s reading of the Statute and then
consider whether the Authority properly applied its reading to
the facts.
A.
At Chevron step one, the Court must determine whether
the statute is ambiguous with respect “to the precise question at
issue”––that is, the meaning of “representative of the agency.”
Chevron, 467 U.S. at 842–43. The Court applies “traditional
tools of statutory construction.” Vill. of Barrington, Ill. v.
Surface Transp. Bd., 636 F.3d 650, 659 (D.C. Cir. 2011)
(quoting Chevron, 467 U.S. at 843 n.9). The Congress may
foreclose an agency’s interpretation in one of two ways:
“[E]ither by prescribing a precise course of conduct other than
the one chosen by the agency, or by granting the agency a
range of interpretive discretion that the agency has clearly
exceeded.” Id.
We believe the meaning of “representative of the agency”
is ambiguous as there is nothing in the text of the Statute that
gives precision to the broad phrase or otherwise evinces a clear
congressional intent to foreclose the Authority’s interpretation.
Cf. Dep’t of the Air Force v. FLRA, 316 F.3d 280, 285-86 (D.C.
Cir. 2003) (“The language of section 7114(a)(2)(A) is quite
broad. Because it does not yield a clear and unambiguous
interpretation, we move past step one to step two of the
Chevron inquiry.”).6 Accordingly, we move to step two of the
Chevron inquiry.
6
Section 7114(a)(2)(A) also uses “representative[ ] of the
agency.” The Authority has recognized that the phrase has the same
meaning and scope in both section 7114(a)(2)(A) and 7114(a)(2)(B)
19
At Chevron step two, “the question for the court is whether
the agency’s interpretation is based on a permissible
construction of the statute in light of its language, structure,
and purpose.” Am. Fed’n of Labor v. Chao, 409 F.3d 377, 384
(D.C. Cir. 2005) (quotation marks and citation omitted). We
need not conclude that the Authority’s interpretation of the
Statute is “the only one it permissibly could have adopted,”
Chevron, 467 U.S. at 843 n.11, or “even the interpretation
deemed most reasonable by the courts,” Entergy Corp. v.
Riverkeeper, Inc., 556 U.S. 208, 218 (2009); accord Am.
Forest & Paper Ass’n v. FERC, 550 F.3d 1179, 1183 (D.C.
Cir. 2008) (“Step two of Chevron does not require the best
interpretation, only a reasonable one.”). On the contrary, we
defer to an agency’s interpretation of a statute so long as it is
reasonable. See Chevron, 467 U.S. at 844; Loving v. IRS, 742
F.3d 1013, 1016 (D.C. Cir. 2014).
Before this case, the Authority had not addressed the issue
of when an employee of one agency acts as a “representative”
of a different agency. The Union urged the Authority to look
to NASA v. FLRA, 527 U.S. 229 (1999), for guidance. In
NASA, the Supreme Court upheld the Authority’s
determination that investigators employed in the National
Aeronautics and Space Administration’s Office of Inspector
General (NASA-OIG) are “representatives” of NASA. Id. at
237-43. Although NASA-OIG investigators enjoy
considerable autonomy, the Court concluded that “the
investigators employed in NASA’s OIG are unquestionably
‘representatives’ of NASA when acting within the scope of
their employment” because OIG investigations are “performed
with regard to, and on behalf of, the particular agency in which
it is stationed.” Id. at 240. In concluding that the
and that precedent interpreting one section is applicable to cases
interpreting the other. See, e.g., PBGC, 62 F.L.R.A. at 223.
20
investigations were conducted on behalf of NASA, the Court
relied in part on the fact that section 3 of the Inspector General
Act (IGA) requires OIG investigators to “report to and be
under the general supervision of the head of the [agency]
involved or, to the extent such authority is delegated, the
officer next in rank below such head.” Id. at 239 (quotation
marks omitted); see also id. at 240 (excepting congressional
committees and the President, “each Inspector General has no
supervising authority––except the head of the agency of which
the OIG is a part”); Dep’t of Justice v. FLRA, 266 F.3d 1228,
1230 (D.C. Cir. 2001) (“The NASA Court relied at least in part
on [section 3 of the IGA] in holding that OIG agents are
‘representatives’ of their respective agencies.”). As part of his
supervision of the NASA-OIG, the NASA Administrator had
“the ability to require its Inspector General to comply with,
inter alia, equal employment opportunity regulations.”
NASA, 527 U.S. at 240 n.4. Significantly, the Court made
clear that its decision was limited to interpreting section 7114
in relation to the Weingarten rights of agency personnel
investigated by that agency’s OIG. See id. at 244 (“To resolve
the question presented in this case, we need not agree or
disagree with the Authority’s various rulings regarding the
scope of § 7114(a)(2)(B) . . . .”); id. at 244 n.8 (“The process by
which the scope of § 7114(a)(2)(B) may properly be
determined, and the application of that section to law
enforcement officials with a broader charge, present distinct
questions not now before us.”); Dep’t of Justice, 266 F.3d at
1232 (applying NASA to DOJ OIG investigators but noting,
“[a]s was true for the Court in NASA,” there was no need to
address application of section 7114(a)(2)(B) to joint OIG/FBI
investigators); see also U.S. Dep’t of Homeland Sec. (USDHS)
v. FLRA, No. 12-1457, slip op. at 10-13 (D.C. Cir. June 3,
2014).
21
The Authority rejected the Union’s suggestion to follow
NASA, choosing instead to rely on its precedent involving
outside contractors. In its contractor cases, the Authority
assessed whether contractors hired to perform agency
investigations acted as representatives of the hiring agency by
examining whether the contractors were performing a
“function” of the agency and operating under the agency’s
“control.” PBGC, 62 F.L.R.A. at 223-24 (asking “whether the
contractor was performing a function that otherwise would
have been performed by the agency, and whether the [agency]
exercised any control over the contractor”); SSA, 59 F.L.R.A.
at 880 (contractor acted as representative of agency during
investigation because investigation was “an official
obligation” of agency and contractor performed investigation
under agency’s “control and direction”). The Authority
reasoned that, “[b]ecause this matter involves investigators
who are not employed by the Agency,” the “most relevant”
precedent is the outside contractor cases, not NASA. Nat’l
Treasury Emps. Union, 66 F.L.R.A. at 509-10. Accordingly,
the Authority used the “function and control” analysis to
determine whether OPM investigators act as representatives of
the IRS during suitability interviews of IRS personnel.
The Union argues that the standard employed by the
FLRA is “unreasonably at odds with NASA” and “the purpose
of Section 7114 itself.” Br. for Pet’r 31-32. According to the
Union, the Authority’s “function and control” test is
inconsistent with both the NASA and the Department of Justice
v. FLRA holdings because they “make clear that investigators
can be ‘representatives’ of an agency even when they are
operating under their own legal authority and insulated from
agency interference or control.” Id. at 30. The Union further
contends that the Authority’s interpretation frustrates the
Congress’s goal, furthered by NASA’s interpretation of
“representative,” of providing fair treatment to federal
22
employees under investigation. Specifically, the Union
asserts that in NASA, the Court adopted a broad reading of
“representative” both to ensure that an agency cannot side-step
its statutory representational duties by outsourcing
investigatory tasks and in recognition of the fact that “the
participation of a union representative will facilitate a
factfinding process and a fair resolution of an agency
investigation.” Id. at 32 (quoting NASA, 527 U.S. at 245).
NTEU contends that, by reading the Statute in an “unduly
narrow” way, the Authority encourages outsourcing and
prevents the valuable participation of union representatives.
Id. at 31-33.
The Authority’s interpretation of section 7114 seems
eminently reasonable to us. As an initial matter, we note that
NASA does not mandate a particular reading of “representative
of the agency” here. As the Supreme Court made plain in
NASA, see 527 U.S. at 244 & n.8, and as we ourselves have
recognized, NASA is not to be severed from its factual
moorings, see Dep’t of Justice, 266 F.3d at 1232; see also
USDHS, No. 12-1457, slip op. at 10-13.
Nor was it unreasonable for the Authority to draw on its
own outside contractor cases––and not NASA––in construing
section 7114. Despite the considerable autonomy enjoyed by
the NASA-OIG investigators, they were nonetheless employed
by NASA and supervised by the NASA Administrator. See
527 U.S. at 239-42. In Department of Justice v. FLRA, we
concluded that it was the relationship between the OIG
investigators and the NASA Administrator that the Supreme
Court had relied on, at least in part, in finding that they were
acting as NASA representatives. See 266 F.3d at 1230.
Here, the OPM investigators are not IRS employees and are not
supervised by the IRS Commissioner. In addition, the
23
Commissioner has no authority to require them to comply with
particular statutory provisions.7
Moreover, we easily reject the Union’s claim that the
Authority’s interpretation of section 7114 enables the IRS to
evade covered appointees’ Weingarten rights through
outsourcing.8 Because it is OPM that ultimately decides who
7
There are similarities between NASA and this case. For
example, the level of cooperation between OPM investigators, who
conduct the suitability investigations of covered appointees, and the
IRS, which initiates the investigations and makes suitability
determinations for at least covered appointees, mirrors the
cooperation between OIG investigators and NASA that the Supreme
Court found significant in NASA. Specifically, the Supreme Court
noted that “limitations on OIG authority [to sanction NASA
employees] enhance the likelihood and importance of cooperation
between the agency and its OIG.” NASA, 527 U.S. at 242; see Dep’t
of Justice, 266 F.3d at 1231 (“[I]t was the likelihood of . . .
cooperation [by OIG and agency management] that the NASA Court
saw as militating in favor of treating OIG interrogators as
‘representatives of the agency.’ ”). On the other hand, the OIG’s
lack of authority to sanction employees under investigation is
another reason to distinguish NASA, as OPM investigators have
independent authority to sanction employees for failing to cooperate.
See 5 C.F.R. § 731.103(g) (OPM retains jurisdiction over “all
suitability cases involving a refusal to furnish testimony”). There
are often multiple reasonable interpretations of a statute but Chevron
requires that we defer to the agency’s selection. See Riverkeeper,
Inc., 556 U.S. at 218; Am. Forest & Paper Ass’n, 550 F.3d at 1183.
8
The Union mistakenly argues that the Supreme Court’s
interpretation of “representative” in NASA is premised on the Court’s
concern that a narrow reading would encourage an agency to
outsource investigations. The portion of NASA cited by the Union
manifests that it was the Authority, not the Court, that was concerned
with outsourcing. See 527 U.S. at 234 (“The Authority reasoned
that adopting their proposal might erode the right by encouraging the
24
conducts suitability investigations and, hence, suitability
interviews of covered appointees, there can be no claim that the
Authority’s interpretation of “representative” will encourage
the IRS to outsource suitability interviews of covered
appointees––the investigative authority is simply not the IRS’s
to delegate. See, e.g., 5 C.F.R. § 731.104; id.
§ 736.201(a),(b); id. § 5.2(a). In fact, we think the Authority’s
interpretation more than adequately addresses any potential
outsourcing concerns by ensuring that outside investigators
hired to perform agency functions and operating under agency
control would nonetheless be considered “representatives” of
the agency under section 7114(a)(2)(B).
We are also unconvinced that the Authority’s
interpretation is unreasonable merely because union
participation is not as robust as a broader reading of section
7114 would allow. Although it is true that the NASA Court
recognized the potential benefits of union participation in the
OIG investigatory process, OPM believes “the presence of a
third party during a subject interview serves as a potential
distraction, reduces the usefulness of the subject interview, and
thus reduces the ability of the investigation to get to the most
complete and accurate results.” JA 101. Given OPM’s view,
the line drawn by the Authority in interpreting the Statute does
not unreasonably restrict union participation in contravention
of congressional intent.
B.
Having concluded that the Authority’s interpretation of
“representative of the agency” is reasonable, we must decide
whether the Authority’s determination that OPM investigators
do not perform an IRS function or operate under IRS control
use of investigative conduits outside the employee’s bargaining unit .
. . .”).
25
during interviews of covered IRS appointees was “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” Am. Fed’n of Gov’t Employees, Local
2343, 144 F.3d at 88 (quoting 5 U.S.C. § 706(2)(A)).
In challenging the Authority’s application of the function
and control standard, the Union argues that, because the IRS
has the authority delegated from OPM to perform suitability
determinations of covered appointees, see 5 C.F.R.
§ 731.103(a), the investigation of them (which includes the
interview) is also an IRS function. According to the Union,
“OPM investigators act as representatives of IRS by
performing a function necessary for IRS to make suitability
determinations that it is obligated to make.” Br. for Pet’r 26;
see also id. at 27 (“OPM is . . . performing the function of
gathering information needed for IRS to make its
determinations.”). NTEU also argues that “OPM
investigators are simply acting under IRS control by
facilitating IRS’s suitability determinations of appointees.”
Id. at 27. To support its claim that the IRS controls the
investigation of covered appointees, the Union points to, inter
alia, the following evidence: (1) the IRS tells personnel the
suitability investigation is “management’s tool for evaluating
their character,” (2) interviews are held in IRS offices during
work time, (3) individuals must receive permission from IRS
supervisors before attending the interviews, (4) the IRS
requires individuals to attend the interviews and can discipline
them if they fail to cooperate and (5) OPM investigators turn
over completed investigation files to the IRS.
It is plain, however, that OPM investigators do not
perform an IRS function or operate under IRS control during
suitability interviews of covered IRS appointees. First, there
is little question that the investigation of covered appointees is
an OPM function as the regulatory scheme expressly entrusts
26
to OPM the role of conducting suitability investigations of
covered personnel. See 5 C.F.R. § 731.104(a); id.
§ 736.201(a),(b); id. § 5.2(a). Indeed, this case is different
from other FLRA cases that use the function and control test.
In those cases, the Authority concluded that outside contractors
were representatives of an agency because they were
“performing a function that otherwise would have been
performed by the [agency].” PBGC, 62 F.L.R.A. at 224; see
also SSA, 59 F.L.R.A. at 880 (contractor is agency
representative where function being performed is one agency
“had an official obligation” to perform). Here, it is OPM’s
“official obligation” to investigate covered personnel. SSA,
59 F.L.R.A. at 880.
Second, it is clear that the IRS does not exercise control
over OPM investigators during suitability interviews. The
arbitrator determined that there was “no basis or authority for
[the] IRS to tell OPM how its investigators should go about
conducting their investigatory interviews,” and that the IRS
could not alter OPM’s decision to not “permit [U]nion
representatives to participate in” the interviews. JA 200.
The Union did not challenge these determinations before the
Authority, nor could it, as no statute or regulation permits the
IRS to intrude upon an OPM investigation. Thus, although
the Union is correct that the IRS has some role in the
investigatory process, we conclude, consistent with the
arbitrator’s uncontested determinations, that the IRS does not
control OPM investigators during suitability investigations of
covered personnel.
That the IRS has limited authority to make suitability
determinations for covered appointees does not, as NTEU
argues, lead to a different result. The Union’s claim that the
investigation of covered appointees is an IRS function is based
on the notion that, because the IRS makes the suitability
27
determination, the suitability investigation is performed for the
IRS. But the limited nature of OPM’s delegation to the IRS to
make suitability determinations for covered appointees belies
the notion that making suitability determinations is really an
IRS prerogative and that investigations are done for the IRS.
Among other limits on the IRS’s authority, the agency must
adhere to OPM policies and standards in making suitability
determinations or risk revocation of the delegation, see 5
C.F.R. § 731.103(c),(f); OPM oversees the IRS’s exercise of its
authority to make suitability determinations, see 5 U.S.C.
§ 1104(b)(2); OPM retains jurisdiction of a case “where there
is evidence that there has been a material, intentional false
statement, or deception or fraud in examination or
appointment” and of a case “involving a refusal to furnish
testimony,” 5 C.F.R. § 731.103(g); the IRS must refer cases to
OPM when “Governmentwide debarment by OPM . . . may be
an appropriate action,” id. § 731.103(b); and OPM “may, in its
discretion, exercise its jurisdiction . . . in any case it deems
necessary,” id. § 731.103(g). We are unconvinced that OPM
has in any way ceded to the IRS the separate and distinct
function of conducting a suitability investigation––which it has
not delegated to the IRS since 2008––by granting the IRS such
limited authority to make a suitability determination.
In sum, we conclude that the Authority reasonably
construed the “representative of the agency” language in 5
U.S.C. § 7114(a)(2)(B) to support a function and control
analysis in determining its applicability vel non, see Nat’l
Treasury Emps. Union, 414 F.3d at 57 (quoting Chevron, 467
U.S. at 842-43), and that the Authority’s application of its
interpretation to OPM-conducted suitability interviews of
covered IRS personnel is not “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” Am.
Fed’n of Gov’t Employees, Local 2343, 144 F.3d at 88 (quoting
28
5 U.S.C. § 706(2)(A)). Accordingly, we deny NTEU’s
petition for review.
So ordered.