Robert O. Mudge v. United States, No. 02-5024 (Fed. Cir., Oct. 17, 2002).

Relying on the "plain language" of § 7121(a)(1), as amended in 1994, the Federal Circuit abandons the position it took in Carter v. Gibbs, 909 F.2d 1452 (Fed. Cir. 1990), where it had interpreted § 7121(a)(1) as precluding judicial remedies for matters (except for certain specified statutory options) that have not been explicitly excluded from the negotiated grievance procedure.

In January 1990, Mr. Mudge, an FAA maintenance mechanic, transferred from Nevada to Alaska, where he worked until March 1992, at which time he returned to Nevada. He filed a grievance for back pay under the CBA, seeking, among other things, a 12% pay differential for the time he worked in Alaska. When the agency rejected his claim the union refused to invoke arbitration.

Mr. Mudge consequently sought relief from the GAO and the MSPB, both of which found that they lacked authority to hear his case. He then filed his pay differential claim in the Court of Federal Claims (CFC), which dismissed his complaint on the ground that 5 U.S.C. § 7121(a)(1) deprived it of jurisdiction. That decision was appealed to the Federal Circuit.

In 1994 Congress amended § 7121 by, among other things, adding the word "administrative" to § 7121(a)(1). That section, which initially stated that collective bargaining agreement grievance procedures were the "exclusive procedures" for resolving grievances that fell within its coverage, was amended, in part, to read "exclusive administrative procedures." (Emphasis added.) The issue before the court was whether the insertion of the word "administrative" undermined the position that had been taken by the Federal Circuit in Carter v. Gibbs, 909 F.2d 1452 (Fed. Cir. 1990), where had it interpreted § 7121(a)(1) as precluding judicial remedies for matters that have not been explicitly excluded from the negotiated grievance procedure.

The court noted that Congress characterized its amendments of section 7121(a)(1) as "Technical and Conforming Amendments."

Nothing else in the direct legislative history of the 1994 amendments informs the meaning of the term "administrative" or Congress's intent in adding the word to § 7121(a)(1). H.R. 2970, the bill that ultimately amended § 7121(a)(1), passed the House without the term "administrative," and the word was only added later as a floor amendment in the Senate. See 140 Cong. Rec. 27,361 and 28,823-28 (1994). While the House subsequently adopted the Senate's amendment to the bill, see id 29,350, neither the House nor the Senate provided a discussion or an explanation of the disputed term.

The court also noted that there was some indirect history on the matter. Two NTEU officials testified, during subcommittee hearings on H.R. 2970, that Congress should overrule Carter by clarifying that while the NGP was a Federal employee's exclusive administrative remedy, it didn't foreclose access to judicial remedies. Also, a House committee report accompanying a different bill that failed to pass stated that the addition of "administrative" to § 7121 would clarify that "[t]he grievance procedure was never intended to deprive employees of access to the courts" and thereby "correct" the decision in Carter.

The court further noted that the CFC, in Mudge v. United States, 50 Fed. Cl. 500 (2001), rejected the aforementioned indirect history and had concluded that the word "administrative" merely made clear that the NGP constituted the only avenue of redress except where § 7121 explicitly offers a choice of administrative remedies, as it does in subsections (d), (e), and (g).

There had been five other decisions by the CFC:  in two of them the CFC reached the same conclusion as it did in Mudge. But in the other three cases CFC concluded that the 1994 amendments overruled Carter. After summarizing the arguments in those cases, the court reached the following conclusion, based on the "plain language" of the statute (aided by the distinction made between "administrative" and "judicial" in Black's Law Dictionary):

We conclude that Congress's addition of the word "administrative" to § 7121(a) established a federal employee's right to seek a judicial remedy for employment grievances subject to the negotiated procedures contained in his or her CBA. To the extent that Carter held otherwise, the court based its decision on the language of the statute as it read prior to the 1994 amendments and that decision is therefore no longer applicable. Accordingly, we reverse the Court of Federal Claim's dismissal of Mr. Mudge's claim for lack of jurisdiction and remand for further proceedings.

The rest of the Federal Circuit's decision gives its reasons for rejecting various Government arguments in support of Carter.

We agree that "[a] leading purpose of the CSRA was to replace the haphazard arrangements for administrative and judicial review of personnel action, part of the outdated patchwork of statutes and rules built up over almost a century that was the civil service system. . . . We cannot agree, however, with an interpretation of § 7121(a)(1) that privileges these policy concerns to the exclusion of the plain language of the statute.

As for the argument that this interpretation privileges employees whose claims are not covered by these subsections by allowing them to obtain both administrative and judicial relief, we note that the Court of Federal Claims never addressed this question and that it is not properly before us on appeal. While the issue may or may not be dispositive on remand, we explicitly do not decide whether the addition of the word "administrative" to subsection (a)(1) permits a federal employee to pursue both arbitration and a judicial remedy under
§ 7121(a)(1).

Finally, the court declined to address the Government's non-statutory argument--viz., that the CBA that applied to Mr. Mudge had waived his right to go to court on his grievance. (The CBA stated that its NGP "shall be the exclusive procedure [not exclusive administrative procedure] available to the Parties and the employees in the unit for resolving grievances.") "As the government conceded, however, the Mudge court did not decide this issue, and for that reason, we decline to resolve the question on appeal."

Of the Government's arguments, it seems to us that its "imbalance" argument is the most cogent. In providing for the exceptions, under subsections § 7121(d), (e), and (g), to the exclusivity of the negotiated grievance procedure, Congress was at pains to make clear that the grievant would not be given "two bites at the apple." It is hard to believe that Congress would want to override Carter without at the same time making clear that the employee had to choose between arbitration and whatever judicial forum that would be available once Carter is overruled. It seems to us that both subsections (d), (e), and (g) of § 7121 and § 7123(a)(1), which permits court review of arbitration awards only when the award involves an unfair labor practice, favor an interpretation barring "two bites at the apple." But we'll have to wait and see how the CFC (and, thereafter, the Federal Circuit) will handle this issue.

Regarding the waiver-of-statutory-rights argument, it should be pointed out that the Federal Labor Relations Authority, in INS, 10 FLRA No. 40, held that an unknown statutory right cannot be "clearly and unmistakably" waived. Whether the Court of Federal Claims, on remand, takes a similar position, also remains to be seen.