National Treasury Employees Union, Chapter 161 v. Federal Labor Relations Authority, No. 02-1153 (D.C. Cir. April 25, 2003.)

The D.C. Circuit upheld the Authority's decision in Customs Service, 57 FLRA No. 151, where FLRA set aside an arbitration award and held, contrary to the arbitrator, that the union received adequate notice of a proposed change in working conditions and waived its right to bargain over the change when it failed to request negotiations. Although the court found "compelling" the union's contention that FLRA erred in finding a bargaining waiver where the union had filed a grievance protesting the agency's action, the court said it had no authority to consider that argument because it never was raised before the Authority.

The agency had sent a letter to the union's president on April 1, 1999, indicating that, due to financial problems, the routine boarding of vessels during overtime hours would stop, effective April 15, and would last until the end of the fiscal year. Although the union didn't request negotiations, it filed a grievance when the agency implemented the change.

The matter was referred to arbitration where the arbitrator found, among other things, that the agency's notice to the union wasn't adequate and that the agency committed an unfair labor practice when it implemented the change without bargaining.

The agency filed exceptions and the Authority set aside the award because the arbitrator had misapplied the statutory notice requirements as set forth in Corps of Engineers, 53 FLRA at 82, by replacing an objective standard of adequacy with a subjective standard. The Authority also found that the union had waived its bargaining rights by failing to request negotiations after having received adequate notice.

In its arguments before the court, the union argued that it didn't receive adequate notice and therefore it didn't waive its right to bargain. The court, however, found no error in the Authority's judgment.

The union also advanced a new theory, claiming that it did not waive its right to bargain because it had filed a grievance and noted that in 1989 the court, in Patent Office Professional Ass'n v. FLRA, 872 F.2d 451 (D.C. Cir. 1989), had found that the union hadn't waived its right to bargain when it protested a proposed change in working conditions and filed an unfair labor practice. The court responded as follows:

The Union here contends that, when it filed a grievance challenging Custom's unilateral action as a breach of the duty to bargain, this was no different than the union's filing of an unfair labor practice charge in POPA. In other words, in each case, "[t]he union's protest against the change and its inquiry into legal remedies did not waive its right to bargain, as much as initiate it." This is a compelling claim. It fails, however, because this theory of the case was never advanced before the FLRA. The claim is therefore waived and the court has no authority to consider it

The court also held that it had no authority to consider the union's claim that any bargaining request would have been futile. "Petitioner never pressed this argument either in the proceedings before the arbitrator or on review before the Authority. And even if the issue were properly before us, we find no record evidence suggesting that Customs would have declined an opportunity to bargain had the Union made such a request." Nor did the court find any "extraordinary circumstances" in the case that justified the union's failure to raise the POPA issue or the futility issue before the Authority. The court was accordingly barred to considering those issues.

Courts normally don't review FLRA decisions on exceptions to arbitration awards. However, the court had jurisdiction in this case because the arbitrator had found that the agency committed an unfair labor practice. See 5 U.S.C. § 7123(a)(1).

The implication of the court's remark that the union's POPA argument--i.e., there was no bargaining waiver because the union had filed a grievance--was a "compelling claim" is unclear. Although the filing of a grievance would, under the POPA rationale, preclude the finding of a bargaining waiver, such a finding may not be necessary to find that the agency didn't commit a ULP because it gave adequate notice and the union failed to make a timely request to bargain. If such a bargaining waiver finding is necessary, the court's remarks could be very troublesome for agencies whose agreements don't require the union to make bargaining requests within X days after receiving notice of the proposed change.