American Federation of Government Employees, Local 3295 v. Federal Labor Relations Authority, Office of Thrift Supervision, Intervenor

WALD, Circuit Judge,

dissenting.

I agree that the statute as written is ambiguous, but, unlike my colleagues, I do not believe that the legislative history definitively resolves the ambiguity in favor of the agency. Because the collective bargaining provisions of the Federal Service Labor-Management Relations Statute (“FSLMRS”), 5 U.S.C. §§ 7101 et seq. (1988), apply unless they are affirmatively disavowed, I conclude that the statutory language, even when supplemented by the legislative history cited, does not clearly grant the Director of the Office of Thrift Supervision (“Director of OTS”) complete and unfettered discretion to set compensation, and, thus, that the wage-setting process remains subject to the collective bargaining mandate of §§ 7101 et seq.

The FSLMRS requires that a federal agency negotiate in good faith with the union representing its employees over those conditions of employment not otherwise expressly provided for by law. See 5 U.S.C. §§ 7102, 7114. For the vast majority of federal employees, wages and compensation are set by statute, and are thus non-bargainable. See 5 U.S.C. § 7117. Where wages and compensation are not set by statute, however, the Supreme Court has upheld the Federal Labor Relations Authority’s (“FLRA” or “agency”) determination that they are “conditions of employment” and thus within the scope of the agency’s duty to bargain. See Fort Stewart Schools v. FLRA, 495 U.S. 641, 645-50, 110 S.Ct. 2043, 2046-49, 109 L.Ed.2d 659 (1990). Congress, of course, has the power to exempt an agency from this duty to bargain, and this court has found such an intent where Congress granted the agency head authority to “prescribe” certain conditions of employment “notwithstanding” any other law. See Illinois Nat’l Guard v. FLRA, 854 F.2d 1396, 1401-03 (D.C.Cir.1988); Colorado Nurses Ass’n v. FLRA, 851 F.2d 1486, 1489-92 (D.C.Cir.1988).

The majority concludes that here, as in those cases, Congress granted the Director of OTS complete discretion to set compensation, thus exempting him from the duty to bargain. Examination of the statutes previously found to contain such exemptions, however, instructs that the “language, structure, and history” of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) fails to “demonstrate that Congress intended that the [Director] have ex-elusive authority” to determine compensation. Colorado Nurses, 851 F.2d at 1489.

Our first duty is to look to the language of the statute itself, see Hughey v. United States, 495 U.S. 411, 415, 110 S.Ct. 1979, 1982, 109 L.Ed.2d 408 (1990), and I note initially an ambiguity that neither my colleagues in the majority, nor, admittedly, the parties themselves, discuss.¹ Section 1462a(g)(1) has two distinct clauses, providing (a) that the Director shall “fix” compensation notwithstanding § 301(f)(1) of Title 31, and (b) that “such compensation shall be paid” without regard to laws otherwise applicable to federal employees. The “without regard” clause refers to the payment of compensation, and not to the Director’s authority to fix that compensation. Thus, while the statute authorizes the Director to “fix” the compensation of OTS employees, the exemption from other laws does not clearly extend to this fixing of compensation. Rather, the exemption provides that “[s]uch compensation shall be paid without regard to the provisions of other laws applicable to officers or employees of the United States.” 12 U.S.C. § 1462a(g)(1) (emphasis added).

No party contends that a mere grant of power to “fix” compensation, by itself, constitutes a grant of unfettered discretion.² Rather, it is the “without regard to the provisions of other laws” language that is necessary to establish unfettered discretion, and it is not at all clear from the statute that the “without regard” language applies to the fixing of compensation, rather than to the payment of such compensation once it is set via the prior fixing process. Unlike the statutes in Colorado Nurses, 851 F.2d at 1489 (“notwithstanding any law, Executive order or regulation, the Administrator shall prescribe by regulation the hours and conditions of employment [of VA medical personnel]”³) and Illinois National Guard, 854 F.2d at 1401 (“Notwithstanding sections 5544(a) and 6101(a) of title 5 or any other provision of law, the Secretary concerned may ... prescribe the hours of duty for technicians.”), the language in § 1462a(g)(1) provides no clear statement that the Director has authority to fix compensation notwithstanding any other provision of law.

The majority noted that the interpretations pressed by both the FLRA and by AFGE posed a redundancy problem by rendering either § 1462a(g)(1) or (g)(2) superfluous. See ante at 77. A plausible reading, which avoids statutory redundancy by giving an independent meaning to both subsections, is that the “without regard” clause of § 1462a(g)(1) is designed to exempt OTS employee compensation from payment regulations other than those expressly disclaimed in § 1462a(g)(2). This would include a range of provisions in chapter 55 of Title 5, Pay Administration, see, e.g., 5 U.S.C. § 5504 (establishing biweekly pay periods for Executive agency employees); 5 U.S.C. § 5542 (establishing eligibility for and rates of overtime payment); 5 U.S.C. § 5545 (mandating specific rates of premium pay for nightwork); 5 U.S.C. § 5546 (same for Sunday or holiday work), and in chapter 45 of Title 5, establishing criteria for and caps on incentive awards, see 5 U.S.C. §§ 4502, 4503, as well as any restrictions on employing and paying non-U.S. citizens as federal employees, restrictions which Congress expressed a clear intent to avoid with respect to transferred employees elsewhere in the statute, see FIRREA § 722(a), Pub.L. No. 101-73, 103 Stat. 426 (providing for the transfer of employees of the abolished Federal Home Loan Banks to the new agencies “including employees who otherwise would be ineligible for employment by the United States because of their citizenship”).

On its own terms, then, § 1462a(g)(1) is not clear as to whether it grants the OTS authority to set compensation notwithstanding any other law, or simply authorizes the payment of compensation levels — however set — without regard to other laws. Nor, in my view, does the legislative history establish a clear intent to grant the Director of OTS complete discretion to fix pay. The majority relies on passages from the House Report on the bill stating that the Director of OTS is to have the same degree of autonomy as the Comptroller of the Currency, who, in turn, has the authority to determine compensation notwithstanding any other provision of law. These passages, however, are from the report on the House bill, which unequivocally granted both the Director of OTS and the Comptroller of the Currency complete discretion to set compensation. As the language in the Act itself has changed materially since then, the accompanying House Report commands far less authority than it otherwise would.

As the majority notes, the House Report states that the “Director shall perform the duties of the office and exercise the powers of the office with the degree of autonomy equal to that of the Comptroller of the Currency.” H.R.Rep. No. 54(1), 101st Cong., 1st Sess. 340, U.S.Code Cong. & Admin.News 1989, p. 136. With regard to the authority of the Comptroller of the Currency to set compensation, the House Report states that “such compensation shall be determined by the Comptroller without regard to the provisions of any other law, including any provision of Title 5 of the United States Code.” Id. at 409, U.S.Code Cong. & Admin.News 1989, p. 204.

In the bill on which the House reported, however, there was no syntactical doubt that file “without regard” clause modified the Director’s power to determine compensation. Nor was there any doubt that the Comptroller of the Currency had a similar grant of authority in that bill. After giving the Director the power to “fix” compensation, the bill continued:

The compensation of employees, attorneys, and agents of the Office shall be determined without regard to the provisions of any law or regulation (including title 5, United States Code) relating to Federal employee and officer compensation.

H.R. 1278, 101st Cong., 1st Sess. Sec. 301 § 2A(i)(2) (1989), reprinted in H.R.Rep. No. 54(1) at 83 (emphasis added). With respect to the Comptroller of the Currency, the bill provided that “[sjuch compensation shall be determined by the Comptroller without regard to the provisions of any law or regulation (including title 5, United States Code) relating to Federal employee and officer compensation.” Id. at § 1203, reprinted in H.R.Rep. No. 54(1) at 279. Thus, the parallel the majority draws from the legislative history was, in fact, explicit in the text of the bill: both the Director and the Comptroller were expressly exempted from “the provisions of any law or regulation ... relating to Federal employee and officer compensation.”

The parallel remains in the enacted versions of these provisions, but in this case, neither the Director nor the Comptroller is clearly exempted from all other laws in setting compensation. The enacted version of the provision establishing the Comptroller’s authority to set compensation exempts the Comptroller not from “any law,” but only from enumerated laws. Like § 1462a(g)(2), the enacted language regarding the Office of the Comptroller of Currency provides that, “[rjates of basic pay for all employees of the Office may be set and adjusted by the Comptroller without regard to the provisions of chapter 51 or subehapter III of chapter 53 of title 5, United States Code.” 12 U.S.C. § 482.⁴

There is no explanation in the Conference Report for the change in language. See H.R.Conf.Rep. 222, 101st Cong., 1st Sess., U.S.Code Cong. & Admin.News 1989, p. 86.⁵ But it could as easily suggest a change in the intended scope of wage-setting authority as inadvertence.

Finally, the more general purposes articulated by Congress with respect to the Director’s authority do not suggest a clear resolution to the ambiguity of the statute. As the majority notes, the statute and legislative history reveal two concerns in this regard— (1) that the Director of OTS be independent of the Treasury, see 12 U.S.C. § 1462a(b)(3) (“The Secretary of the Treasury may not intervene in any matter or proceeding before the Director unless otherwise provided by law.”), and (2) that compensation at OTS be competitive with the other financial agencies and unconstrained by compensation caps in order to attract highly-qualified financial officers, see H.R.Conf.Rep. 222, 101st Cong., 1st Sess. 434, U.S.Code Cong. & Admin.News 1989, p. 473 (explaining that provisions regarding maintenance of previous salary for employees transferred from the private sector reflect legislative concern that FIRREA’s goals “not be compromised by the loss of necessary staff, especially the most senior and experienced employees”). These concerns do not point clearly in one direction as to whether the Director has exclusive authority to set the compensation levels of all employees, particularly the nonsupervisory, union-eligible employees. Absent a clearer sign that the statute provides for this exclusive authority, I must conclude that it does not, and that the collective bargaining mandate of §§ 7102 and 7114 of Title 5 applies.

1 . See Tataranowicz v. Sullivan, 959 F.2d 268 (D.C.Cir.1992) (Buckley, J., dissenting) ("[W]e are not bound, when interpreting a statute, to rely on the arguments put before us by the parties.”).

2 . The FLRA has consistently held that authority to "set” or “fix” working conditions, absent a "notwithstanding” clause, does not render those working conditions nonnegotiable, and no party has challenged that rule. See, e.g., Dept. of Veterans Affairs, 44 F.L.R.A. 162 (1992) (statute providing that "the Secretary shall ... fix the prices of merchandise ... in canteens” does not "prohibit[] the [Secretary] from setting those prices through negotiation with the Union”; "[T]he statute simply grants the Secretary ... the discretion to fix the prices. Under established Authority law, that discretion may be exercised through negotiations.").

3 . Colorado Nurses interpreted a section of a statute since repealed, then codified at 38 U.S.C. § 4108(a). The full text of that section is cited in the FLRA’s decision on review in that case. See Colorado Nurses Ass’n, 25 F.L.R.A. 803, 805 (1987).

4 . The FIRREA also preserves, with some modification not relevant here, a separate and earlier enacted provision on "Appointment of examiners” to the Office of the Comptroller of the Currency. See 12 U.S.C. § 481. This section provides that "the employment and compensation of examiners ... and of the other employees of the office of the Comptroller of the Currency whose compensation is and shall be paid from assessments on banks or affiliates thereof or from other fees or charges imposed pursuant to this section shall be without regard to the provisions of other laws applicable to officers or employees of the United States." 12 U.S.C. § 481 (emphasis added). If this provision does suffice to place "employment and compensation” matters within the complete discretion of the Comptroller, then the majority's assumption that the Comptroller and Director have equal degrees of discretion must fail. There is simply no statutory basis to conclude that employment and compensation, rather than compensation alone, are within the complete discretion of the Director, as the majority has recognized. See ante at lb-11. ("The Director ... has not argued that Title 5 is wholly inapplicable.... [T]he key question in this case ... is whether the Director’s obligation to follow the collective bargaining procedures of the FSLMRS applies to the specific action of setting of wages and compensation. Only this particular subset of management decisions, after all, is covered by the exemption of § 1462a(g)(1).”).

5 . The Senate version of the bill also clearly granted complete discretion to the Director of OTS to fix compensation. See S.774, 101st Cong., 1st Sess. Sec. 301, § 4(c)(1) (1989), reprinted in S.Rep. No. 19, 101st Cong., 1st Sess. 133 ("Such compensation shall be determined solely by the Chairman and without regard to the provisions of any law or regulation, including the provisions of title 5, United States Code, relating to the compensation of Federal officers and employees.”). The change, then, cannot be explained as the mere adoption of Senate language.