Amicus Curiae Brief — Equal Employment Opportunity Commission v. Federal Labor Relations Authority

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Supreme Court, U.S, -

FILED

NOV 1 1985

JOSEPH F. SPANIOL, JR.

IN THE CLERK

Supreme Court of the United States

OCTOBER TERM, 1985

No. 84-1728

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

. Petitioner,

FEDERAL LABOR RELATIONS AUTHORITY

and

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,

AFL-CIO,

NATIONAL COUNCIL OF EEOC LOCALS,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR THE

NATIONAL TREASURY EMPLOYEES UNION

AS AMICUS CURIAE

IN SUPPORT OF RESPONDENTS

Lois G. WILLIAMS *

Director of Litigation

ELAINE D. KAPLAN

Assistant Counsel

NATIONAL TREASURY EMPLOYEES

UNION

1730 K Street, N.W. Suite 1101

Washington, D.C. 20006

(202) 785-4411

BEST AVAILABLE COPY

* Counsel of Record

——

WILSON - Eres Printing Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001

8 AB +

QUESTION PRESENTED

Whether a dispute concerning an agency’s compliance

with the laws and regulations that govern contracting

out, including OMB Circular A-76, may be submitted to

arbitration under 5 U.S.C. 7121.

(i)

TABLE OF CONTENTS

INTEREST OF THE AMICUS CURIAE .....................

DIE cass cesestececvscnsevee-ncwscacseccseenssenavercnsnesersseeeseceosees

SUMMARY OF ARGUMENT ................-.-.-------1:--e0--002+

IT ansccccecerecesncnweneceveecoccnceveccerennnnsesseccocercoesoceses

I. THE STATUTE ITSELF MAKES VIOLA-

il.

Ill.

TIONS AND MISAPPLICATIONS OF OMB

CIRCULAR A-76 AND OTHER LAWS AND

REGULATIONS CONCERNING CONTRACT-

ING OUT GRIEVABLE AND ARBITRABLE..

THE MANAGEMENT RIGHTS CLAUSE

DOES NOT PRECLUDE ARBITRAL REVIEW

OF AGENCY COMPLIANCE WITH OMB

CIRCULAR A-76 AND OTHER LAWS THAT

CONCERN CONTRACTING OUT ....00 WW...

OMB CANNOT LIMIT THE STATUTORILY

PRESCRIBED SCOPE OF THE GRIEVANCE

PROCEDURE BY REGULATION ......

i eeeereeeees

(iii)

Page

TABLE OF AUTHORITIES

Cases: Page

AFGE and Air Force Logistics Command, Wright

Patterson AFB, 2 F.L.R.A. 604 .....................2--0++- 13

AFGE, Locals 225, 1507 and 3723 v. FLRA, 712

al eeestleee iaeinia nada 8

AFGE, Local 916 and Tinker Air Force Base,

Oklahoma City, Oklahoma, 5 F.L.R.C. 604........ 14

AFGE, Local 2017 v. Brown, 680 F.2d 722, cert.

I Me TINIE sarc cecintensudaneiencttinbnidatinaiianitiohids 12

AFGE, Local 2118 and Los Alamos Area Office,

Sn I Oa - 14

AFGE, Local 2782 v. FLRA, 702 F.2d 1183............. 20

Alexander v. Gardner-Denver Co., 415 U.S. 36........ 21

Berkemer v. McCarthy, 104 S. Ct. 3138 20000000000... 8

Boys Markets Inc. v. Retail Clerks Union, 398 U.S.

ER eA EE tee ee SR Tray 20

California National Guard v. FLRA, 697 F.2d

RCE eee LONRp ee Stren INE Pe dog ster ele eee ae ee 24

Defense Language Institute v. FLRA, 767 F.2d

IT ccntsineiiniashiaieeneaita iii sasha deiaiaaiiei iia 9

Department of Defense v. FLRA, 659 F.2d 1140,

cost. denied, 455 US. O46 ............................-....... 19, 20

Devine v. White, 697 F.2d 421..............00000....0. eee 21

Fibreboard Paper Products Corporation v. NLRB,

Re Sy TINIE sac aitececadenteseistatrenieetiiaieelieiesdek cece een 10, 13

G.D. Searle & Co. v. Cohn, 455 U.S. 404 8

Hoover Vv. Ronwin, 104 S. Ct. 1989 8

Indiana Air National Guard vy. FLRA, 712 F.2d

SITY saliccncescinadeviaeideienieesdecaeitsiaes ite caddi Ri aeeee tac a 24

Local 2855, AFGE vy. United States, 602 F.2d 574.. 12

Montana “Air National Guard vy. FLRA, 730 F.2d

____ LTC O OT ee OT Ne UN ONG 9

National Treasury Employees Union v. FLRA, 712

2 ne Ree ere TREY 20

New Jersey Air National Guard v. FLRA, 677

F.2d 276, cert. denied, 459 U.S. 988 0. 24

State of Nebraska, Military Dep’t v. FLRA, 705

SPIE CUED discteaividcouseusciasablicdindeiadisanesiiaanametmtere oat 24

TABLE OF AUTHORITIES—Continued

Statutes, rules, and regulations: Page

Administrative Procedure Act, 5 U.S.C. 551 et seq... 11, 12

Budget and Accounting Act of 1921, 31 U.S.C. 1

GB DOIN nceccenenenensnvnscesnsanquincemetensomnmancsntnsnctlrneenmnennnets 2

Civil Service Reform Act of 1978, Title VII, Pub.

L. No. 95-454, 92 Stat. 1111, 5 U.S.C. 7101 et

BE, ccasennrsciansiinmrntsnnetiodptencunremepssnarescuanmanceses eral passim

DO, FI aiacescrccceesnccsnensnersvesnceresdemesmmnanens 3,7

coca ecnitenenteseninionns 5, 8, 10

ee TS . sasuseemnnnentnnannntbliaine’ 10

ET te |: en sae nacianiaatads 10

5 U.B.C. TIGRIS) CH) CC) (iB) .....cccccccconcesseccesse- 5, 8, 11, 12,13

I a ceeeenisneeisiecnnlclelll 13

I ic caciinnctettscieenetniantanittannnienninttiniiaes 16

I IID i cseiceenlncaitipsesshisnipnnntignsabiiniaieniiotn 16

5 U.S.C. 7106 (a) (2) (B) -.... PERM CRT Stee TE passim

Oe aca naatniednelel 16

oo cheieenieieenebainle 6, 19, 20

ee I ... cssaneniooneiesdenessionnegiill 6, 19, 20

Pe IED cncsciiscctsemeasicininntasininsncuninnededeatineiioatl 7, 22, 23

I ea cosdeuideeaieennieiailln 3

a passim

I einai 3,8

§ U.S.C. 7121 (b)................. kiana ssatiasdasmiaamadeaiitias 20

i RE ere 9

I a isi eupimaneand 3, 5, 8, 17, 19

a a eeeele 21

National Guard Technicians Act of 1968, 32 U.S.C.

RSE SEE rer Oar ase aa aeRO Saree 24

Office of Federal Procurement Policy Act Amend-

ments of 1979, 41 U.S. 401 et seq. -00...0000000ccn... 2,11, 12

ch aeasidanaabaaibenn 11

LE RE a a Os PR 11

Exec. Order No. 10988, 3 C.F.R. 521 (1959-1963

Oe 9

Exec. Order No. 11491, 3 C.F.R. 861 (1966-1970

comp.) Section 13

Section 14 (a)

TABLE OF AUTHORITIES—Continued

Federal Personnel Manual, Ch. 171, Subch. 2-1....... 11

Office of Management and Budget Circular A-76....passim

44 Fed. Reg. (1979) :

is TR iuihiiasictinseetinciebsisienenadiiticelatapaieiiebsinninuiinaubibeaidei 12

I nse a ceeachiit biertbitiliabiinalialiabhincbagnicbidieiiiel 12

ii: TID -ecininshioanenscipisilianbediasichiantinidntiseinhineituaeanantainios 22

i Ta ist incite eencadentigumnensiainidiblasiiiniamneatendtdilidin 22

sii icant csi deena balinasephanchinipeaidiidabds 22

ID tesicicett nhac iltahiaceidaiataaian 22

REESE A a Rs Ma RC, A ET DO 20

Miscellaneous:

H.R. Conf. Rep. 95-1717, 95th Cong., 2d Sess.

I i ghia aim le 19, 20, 23

H.R. Rep. 95-1403, 95th Cong., 2d Sess. (1978).... 8

Subcomm. on Postal Personnel and Modernization

of the House Comm. on Post Office and Civil

Service, 96th Cong., Ist Sess., Legislative His-

tory of the Federal Service Labor-Management

Relations Statute, Title VII of the Civil Service

Reform Act of 1978 (Comm. Print 1979)....... 9,18

F. Elkouri & E. Elkouri, Legal Status of Federal

Sector Arbitration (1980) 2000000. 21

IN THE

Supreme Cant of the United States

OCTOBER TERM, 1985

No. 84-1728

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,

Petitioner,

FEDERAL LABOR RELATIONS AUTHORITY

and

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,

AFL-CIO,

NATIONAL COUNCIL OF EEOC LOCALS,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR THE

NATIONAL TREASURY EMPLOYEES UNION

AS AMICUS CURIAE

IN SUPPORT OF RESPONDENTS

INTEREST OF THE AMICUS’

Amicus, the National Treasury Employees Union

(NTEU), is a federal sector labor union that is the ex-

clusive bargaining representative of over 110,000 federal

1 Pursuant to Rule 36 of the Rules of this Court, all parties have

consented to the filing of this brief. Their letters of consent are

lodged with the Clerk.

employees nationwide. NTEU represents the interests of

members of its bargaining units by, inter alia, negotiat-

ing collective bargaining agreements with agency employ-

ers and by arbitrating grievances under the agreements.

NTEU and its members have a vital interest in the

outcome of this case, which presents issues concerning

whether employees may grieve or arbitrate violations of

OMB Circular A-76, a regulation which establishes the

criteria and procedures agency employers must follow

when deciding to contract out federal employees’ jobs to

private sector employees. Because the Court must deter-

mine whether the management rights clause of Title VII

of the Civil Services Reform Act of 1978, 5 U.S.C.

7106(a) (2) (B), precludes arbitral review of agency com-

pliance with the OMB directive and other laws governing

contracting out, NTEU is submitting this brief to assist

the Court in its consideration of these questions.

STATEMENT

1. This case involves the negotiability of a union pro-

posal under The Federal Service Labor Management Rela-

tions Statute (the Statute), as amended, 5 U.S.C. 7101-

7135. The proposal states that the EEOC “agrees to

comply with OMB Circular A-76 and other applicable

laws and regulations concerning contracting out.” OMB

Circular A-76 is a directive promulgated by the Office of

Management and Budget pursuant to its statutory au-

thority under the Budget and Accounting Act of 1921,

31 U.S.C. 1 et seqg., and the Office of Federal Procurement

Policy Act Amendments of 1979, 41 U.S.C. 401 et seg.

The Circular establishes procedures agencies are required

to follow in determining whether goods and services

needed by the federal government should be obtained un-

der contract or in-house. EEOC declared the proposal

non-negotiable when it was submitted during contract

talks.

2. On review, the FLRA ruled the proposal negotiable.

Pet. App. 40a-48a. It determined that the proposal did

not interfere with EEOC’s reserved authority to make

determinations with respect to contracting out. The

FLRA explained that if the proposal were adopted, it

would not establish any substantive limitations on EEOC’s

authority, but would merely incorporate into the contract

the existing legal limitation contained in OMB Circular

A-76, and the other laws and regulations that concern

contracting out. Jd. at 41a.

The FLRA rejected the EEOC’s contention that the

terms of OMB Circular A-76 rendered the proposal non-

negotiable. The Authority noted that under 5 U.S.C. 7121,

contracting out disputes must be subject to the nego-

tiated procedure unless the parties expressly excluded

them through bargaining.* Therefore, even if the Circular

did purport to narrow the avenues of redress available to

employees, it could not limit the scepe of the grievance

procedure, because the scope is set by statute. Pet. App.

42: -43a.

3. The court of appeals (with Judge MacKinnon dis-

senting) affirmed the Authority’s decision and enforced

its order. Pet. App. la-37a. It rejected as “untenable”

the EEOC’s argument that the management rights clause

automatically renders any proposal concerning contracting

out non-negotiable, because the clause itself contemplates

2 Section 7106(a) (2)(B) of the Statute reserves to management,

among other prerogatives, “the authority . . . in accordance with

applicable laws .. . to .nake determinations with respect to con-

tracting out.”

3 Section 7121(a) of the Statute requires collective bargaining

agreements to include procedures for the settlement of “grievances,”

as broadly defined at Section 7103(a) (9). Only five matters, none

of which concern contracting out, are excluded by law from the

grievance mechanism. 5 U.S.C. 7121(c). Under 7121(a), any

matter that could be grievable is grievable unless the parties agree

to exclude it. 5 U.S.C. 7121(a) (2).

that management’s contracting out authority must be ex-

ercised “in accordance with applicable laws,” such as

A-76. 5 U.S.C. 7106(a)(2)(B). Since the union’s pro-

posal did not impose any additional substantive criteria

governing management’s decision, it did not “affect’’ man-

agement’s reserved authority to make contracting out de-

cisions, within the meaning of the Statute. Jd. at 8a-9a.

The Court also rejected the EEOC’s argument that the

union’s proposal would invade management’s rights by

subjecting contracting out decisions to the negotiated

grievance procedure. The Court noted that under the

Statute, a complaint asserting that a contracting out de-

cision was not made in accordance with applicable laws,

including A-76, would be grievable even in the absence

of the proposal, given the Statute’s expansive definition

of the subjects covered under the grievance procedure.

Pet. App. 11a-16a. Such a grievance does not impose sub-

stantive limitations on management’s authority; “[r] ather,

it provides a procedure for enforcing the Act’s require-

ment that contracting out decisions be made in accordance

with applicable laws.” Jd. at 14a.

Finaliy, the Court rejected EEOC’s argument that the

language of the Circular itself, stating that its provisions

“shall not be construed to create” any right of appeal,

rendered the proposal non-negotiable. First, the Court

observed, the proposal does not “create” a right of appeal

because that right was created by the Statute’s broad

grievance provisions. Pet. App. 16a. Second, the court

said, “there is no indication in the Act or elsewhere of a

Congressional intent to allow agencies to limit by regula-

tion the statutorily defined grievance procedure.” /d.

SUMMARY OF ARGUMENT

A. Under the Federal Service Labor Management Re-

lations Statute, unlike the Executive Order regime that

preceded it, the negotiated grievance procedure and bind-

ing arbitration are the favored means for resolving a

broad range of employment related complaints. The court

of appeals correctly determined that under the Statute,

disputes concerning compliance with the laws and regula-

tions that govern contracting out, including OMB Cir-

cular A-76, are grievable because they fall within the

statutory definition of “grievance,” and because contract-

ing out disputes are not excluded from the grievance

mechanism by Section 7121(c).

First of all, complaints relating to agency compliance

with the Circular are grievances under 5 U.S.C. 71€3

(a) (9) (A). These complaints concern “matter[s] relat-

ing to. . . employment” because the Circular’s procedures

and criteria are used to determine whether an employee

will retain his job. This conclusion is consistent with the

broad language Congress employed in 7103(a) (9) (A),

and with Congressional intent to make the term grievance

“all-inclusive.”

In any event, compliance with the Circular is subject

to the grievance procedure on an entirely independent

basis because the Circular is a “law, rule, or regulation

affecting conditions of employment.” 5 U.S.C. 7103

(a) (9) (C) (ii). The Circular is a “law, rule, or regula-

tion” within the ordinary meaning of those terms because

it is a statutorily based directive, that is published for

notice and comment, and that is binding.

EEOC’s argument that OMB Circular A-76 and other

laws concerning contracting out are not sufficiently di-

rectly related to personnel matters and labor relations to

be grievable is meritless. The Circular “affects conditions

of employment” within the meaning of the Statute in its

every application, since it determines whether employees

will keep or lose their jobs to non civil service workers.

In an analogous context, in the private sector, contracting

out is considered a “condition of employment” subject to

bargaining because it can result in the termination of

employment.

B. The management rights clause does not bar applica-

tion of the statutory grievance procedure to disputes con-

cerning agency compliance with OMB Circular A-76. That

provision preserves management’s authority to make con-

tracting out determinations “in accordance with applicable

laws.” 5 U.S.C. 7106(a) (2)(B). By its own terms, the

provision merely prohibits negotiation over substantive

limitations on managerial authority beyond those imposed

by external law. Since the proposal at issue here merely

echoes the obligations already imposed upon EEOC by

external law, it does not violate that prohibition.

EEOC’s argument that arbitral review itself interferes

with the exercise of its rights, would permit the manage-

ment rights clause, which Congress intended to serve as a

narrow exception to the obligation to bargain, to negate

the grievance provision, which Congress made “all-

inclusive.” EEOC’s argument employs the concepts of

negotiability and grievability as though they were inter-

changeable, when in fact they are not. Many matters

that are clearly grievable under Section 7121(a) require

arbitrators to review the exercise of non-negotiable man-

agement rights to determine whether the agency has com-

plied with external law. Yet Congress has not made every

application of a management right non-grievable. Instead,

it has exempted only five subject matters, none of which

concern contracting out, from the grievance process.

EEOC’s arguments that arbitral review will cause de-

lay and expense are both irrelevant and unsubstantiated.

Were additional delay or expense considered an infringe-

ment of management’s rights, Congress would not have

made the exercise of those rights subject to negotiation

of “procedures” or “appropriate arrangements” (5 U.S.C.

7106(b) (2) and (b)‘3)), and would have precluded ar-

bitral review of any actions that implicate management’s

rights, not just those enumerated at 7121(c).

Contrary to EEOC’s arguments, arbitral review will

not result in “second guessing” of agency managers or

misinterpretations of the Circular’s requirements. Arbi-

trators in the federal sector are charged with, and there-

fore familiar with ensuring compliance with external law,

as well as the collective bargaining agreement. Arbitra-

tors will intrude no more into managerial discretion than

the Circular permits, and if they overstep their authority,

the FLRA will reverse their awards.

C. OMB may not limit the statutorily prescribed scope

of the grievance procedure by including a clause in its

regulations asserting that they are not subject to the

grievance process. Section 7117(a)(1) does not give

OMB that right, because Section 7121(a), which imposes

the duty to include grievance procedures in the contract,

augments the more limited general duty to bargain set out

in Section 7117(a) (1).

Nor does the fact that contracting out is the “subject”

of Circular A-76, render the union proposal non-negotiable.

Section 7117(a)(1) prohibits bargaining over matters

that are the subject of government-wide rules or regula-

tions. The union is not attempting to “bargain” or “ne-

gotiate” about the matters contained in A-76, it is only

seeking to incorporate them into the contract.

ARGUMENT

I. THE STATUTE ITSELF MAKES VIOLATIONS

AND MISAPPLICATIONS OF OMB CIRCULAR

A-76 AND OTHER LAWS AND REGULATIONS

CONCERNING CONTRACTING OUT GRIEVABLE

AND ARBITRABLE

The court of appeals correctly concluded that disputes

concerning agency compliance with Circular A-76 are

subject to the grievance procedure under 5 U.S.C. 7103

(a)(9) and 7121(a). This conclusion follows from the

clear expression of Congressional intent that, unlike the

practice under the Executive Orders, the statutory griev-

ance mechanism would cover virtually all employment re-

lated disputes in the federal sector.‘

4 Although we address the issues here, when this case was before

the court of appeals and the FLRA, the EEOC did not deny that a

A. Section 7121l(a) of the Statute requires collective

bargaining agreements in the federal sector to include

“procedures for the settlement of grievances, including

questions of arbitrability.” “Grievance” is broadly de-

fined as “any complaint by any employee concerning any

matter relating to the employment of the employee,” or

any complaint concerning “any claimed violation, misin-

terpretation, or misapplication of any law, rule or regu-

lation affecting conditions of employment.” 5 U.S.C. 7103

(a) (9) (A) and (a) (9)(C) (ii). Only those employment

related complaints specifically enumerated in the Statute

(at 7121(c)), may not be the subject of negotiated proce-

dures. Matters which could be grievable under the fore-

going provisions are grievable unless the parties ex-

pressly agree otherwise. 5 U.S.C. 7121(a) (2). See, H.R.

Rep. No. 1717, 95th Cong. 2d Sess. 157 (1978); AFGE,

Locals 225, 1507 and 3723 v. FLRA, 712 F.2d 640, 641-

642 (D.C. Cir. 1983).

By cresting the statutory preference for this “broad

scope” grievance procedure, Congress consciously departed

from the relatively limited scope of the grievance arbitra-

tion process under the Executive Order program. See,

Section 13, Executive Order 11491. Under the Statute,

the term grievance was intended to be an “all-inclusive”

one. H.R. Rep. No. 1403, 95th Cong. 2d Sess. 40 (1978).

violation of OMB Circular A-76 would be grievable under the Stat-

ute, nor did it deny that the Circular was an “applicable law” that

constrained management's authority to make contracting out deci-

sions under 7106(a) (2) (B). EEOC argued only that management's

right to make contracting out determinations overrides employees’

statutory rights to grieve violations of the laws that govern con-

tracting out. By failing to raise the central arguments it has pre-

sented to this Court until the eleventh hour, EEOC precluded the

tribunal Congress has charged with interpreting the Statute—the

FLRA—from considering them. Under established principles, this

Court should decline to consider EEOC’s contentions. E.g. Hoover

v. Ronwin 104 8. Ct. 1989, 1998 n.25 (1984) ; Berkemer v. McCarthy,

104 S. Ct. 3138, 3152-53 & n.7 (1984) ; G.D. Searle & Co. v. Cohn,

455 U.S. 404, 412 n. 7 (1982).

In addition to broadening the scope of grievances, Con-

gress expanded the role of arbitrators in settling employ-

ment-related complaints, and in reviewing compliance

with external law. Under Executive Order 11491 (at

Section 14(a)), binding arbitration was not required, and

under the earlier Executive Order 10988 ‘at Section

8(a)) it was not permitted at all. The Statute makes

binding arbitration mandatory. 5 U.S.C. 7121(b) (3) (C).

Congress made this change because experience under the

Executive Orders had shown arbitration to be “an expedi-

tious, credible, and cost-effective means of dispute reso-

lution.” See Subcomm. on Postal Personnel and Moderni-

zation of the House Comm. on Post Office and Civil Serv-

ice, 96th Cong. lst Sess., Legislative History of the Fed-

eral Service Labor-Management Relations Statute, Title

VII of the Civil Service Reform Act of 1978, at 856

(Comm. Print 1979) (remarks of Rep. Ford) (hereinaf-

ter cited as Leg. Hist.). See also, id. at 923 (remarks of

Udall).

B. OMB Circular A-76 is both a “matter relating to

the employment of an employee” and a “law, rule or regu-

lation affecting conditions of employment”. Therefore,

complaints concerning its application are grievable, un-

less the parties expressly agree otherwise.°

* It is a universal practice in the federal sector to include provi-

sions in the collective bargaining agreement like the one at issue

here, in which agencies “agree” to comply with the law. This prac-

tice is followed, even though violations of laws that affect conditions

of employment would be grievable in the absence of the provisions.

The legality of the practice is firmly established, and EEOC does

not challenge it. Cf. Montana Air National Guard v. FLRA, 730

F.2d 577, 579 (9th Cir. 1984).

EEOC nonetheless finds it anomalous that the union would seek

to include the disputed proposal in the contract if, as we argue,

violations of A-76 are already grievable. EEOC Br. 36, n.17. See

also, Defense Language Institute v. FLRA, 767 F.2d 1398, 1402

(9th Cir. 1985). However, using the collective bargaining agree-

ment to spell out the external laws to which the agency is subject

1. Agency compliance with the Circular, as the court

of appeals noted, is “surely” a “matter relating to the

employment of [an] employee” and therefore grievable

under 5 U.S.C. 7103(a) (9) (A). Pet App. 13a-14a, n.18.

EEOC’s conclusory statement (Br. 38, n.19) that com-

pliance with the Circular is somehow “too remote an is-

sue” to relate to the employment of an employee, is un-

persuasive. Its argument for a narrow construction of

7103(a) (9) (A) is completely at odds with the obviously

broad language Congress employed and its explicit intent

that the term grievance be “all-inclusive.” A complaint

alleging failure to comply with the standards governing

contracting out is plainly a “matter .. . relating to em-

ployment”. It is difficult to conceive of many matters

more directly related to employment than the procedure

an agency uses to determine whether it is cost effective to

retain an employee in his position or whether to contract

out his work. Cf. Fibreboard Paper Products Corporation

v. NLRB, 379 U.S. 203, 210 (1964).*

serves important practical purposes: First, it educates employees

as to their rights and managers as to their obligations. Employees

cannot be expected to comb the U.S. Code, Code of Federal Regula-

tions, and the Federal Register to secure this information. Instead,

the parties may choose to have all matters that govern their rela-

tionship encompassed in one document: the collective bargaining

agreement. Moreover, expressly including an agreement to comply

with existing law in the contract can circumvent in advance a later

challenge to the arbitrability of a matter, thereby avoiding needless

delay and expense.

* EEOC claims that assigning to subsections (a) (9) (A) and (B)

the broad construction their language obviously requires would

render subsection (C) superfluous. EEOC Br. 38, n. 19. This claim

is meritless. Subsections (A) and (B) allow only employees and

their representatives to file grievances when they have complaints

concerning a matter relating to employment. Subsection (C) also

gives the agency a right to pursue grievances, albeit only in the

narrower category of situations where laws, rules, or regulations

are implicated.

Moreover, even assuming that subsection (C) is subsumed by

(A) and (B) with respect to employees and unions, that construc-

2. In any event, compliance with OMB Circular A-76

is grievable on an entirely independent basis because the

Circular is also a “law, rule, or regulation affecting con-

ditions of employment.” 5 U.S.C. 7103(a) (9) (C) (ii).

The Circular, in addition to being a “presidential policy

directive” (EEOC Br. 24-26), is a mandatory statutorily

based directive, that agencies may not disregard as merely

advisory, and that is published for notice and comment in

the Federal Register. See Office of Federal Procurement

Policy Amendments of 1979, 41 U.S.C. 401 et seq., par-

ticularly Sections 402 and 405 (giving OF PP authority to

establish procurement policies that “shall” be followed by

agencies).

The fact that the Circular effectuates executive policy

and may be characterized as a “managerial tool” (EEOC

Br. 24) does not remove it from the scope of the griev-

ance procedure. The grievability of violations of a simi-

lar executive directive, the Federal Personnel Manual, is

well established. The FPM is an official publication of the

Office of Personnel Management, containing instructions,

guidance, advice and policy statements to agencies on mat-

ters of personnel management. Federal Personnel Manual,

Ch. 171, Subch. 2-1. Circular A-76 is an official publi-

cation of OMB, that serves a similar purpose with re-

spect to budgetary matters. Both directives may be con-

sidered laws, rules, or regulations within the meaning of

the Statute, because both are mandatory directives issued

by agencies with statutory authority to oversee and es-

tabi..h uniform policy for all agencies in areas of govern-

ment wide concern.

Contrary to EEOC’s argument (Br. 24-26), whether or

not APA review of an agency’s compliance with the Cir-

tion is still preferable to the construction EEOC suggests. Under

EEOC’s interpretation, the broad language of subsections (A) and

(B) has no significance, and Congress’ intent that the term griev-

ance be “all inclusive” is frustrated.

cular is available is not relevant to whether the Circu-

lar’s requirements may be considered “laws, rules or regu-

lations” under Section 7103(a) (9) (C) (ii). There is noth-

ing in the Statute or its legislative history to even sug-

gest that Congress intended arbitral review to be co-

extensive with APA review; it did not define grievability

by reference to the APA. Thus, regardless of the pro-

priety of denial of APA review, compliance with the Cir-

cular’s requirements may be subject to arbitral review

under the Statute.’

7In support of its argument that A-76 is not a “law, rule, or

regulation,” EEOC cites Local 2855, AFGE v. United States, 602

F.2d 574 (34 Cir. 1979) and AFGE Local 2017 v. Brown, 680 F.2d

722 (11th Cir. 1982), cert. denied, 459 U.S. 1184 (1983) (declining

to consider specific APA challenges to agency failures to comply

with contracting out regulations). EEOC Br. 25-26.

But these cases do not even establish that violations of the Cir-

cular issued in 1979 are not subject to APA review, much less that

they are not grievable. The Local 2855 case concerned the old ver-

sion of Circular A-76, rather than the 1979 issuance. The latter,

of course, unlike the prior directive, was based on a specific delega-

tion of Congressional Authority, the Office of Federal Procurement

Policy Amendments of 1979, 41 U.S.C. 401 et seq. The 1979 Cir-

cular moreover, was far more detailed than the pre-1979 version.

See, 44 Fed. Reg. 20556-57 (1979), (describing former Circular as

“rather general” in comparison and describing changes). The

AFGE Local 2017 decision did not hold Circular A-76 was not law;

indeed it noted that parts of A-76 had the status of law, by virtue

of the Department of Defense Authorization Act. 680 F.2d at 724.

The court declined review because it believed the particular ques-

tion the plaintiffs raised was committed to agency discretion.

The cases do not hold compliance with A-76 is non-reviewable no

matter what violation is alleged. In ruling the matters involved

were “committed to agency discretion by law”, the courts were

merely responding to the types of challenges mounted in those cases.

In fact, the Local 2855 court noted that even where matters are

committed to agency discretion by law, judicial review is still avail-

able if a specific regulatory command is violated. 602 F.2d at 580.

As we describe infra at page 22, n.12, Circular A-76 contains many

requirements that leave no discretion to agencies and for which

review might be appropriate by an arbitrator, just as it would be

by a court.

3. EEOC’s contention (Br. 29-34, 37-38) that OMB

Cireular A-76 and other laws concerning contracting out

are not sufficiently directly related to personnel matters

and labor relations te be covered under 7193(a) (9) (C)

(ii} is baseless. The grievance mechanism covers laws,

rules, or regulations that affect “conditions of employ-

ment.” Conditions of employment is in turn defined as

“personnel policies, practices and matters affecting work-

ing conditions.” 5 U.S.C. 7103(a) (14).

OMB Circular A-76 is a law that affects conditions

of employment for the same reasons it concerns a “mat-

ter relating to . . . employment.” See, supra at 10.

Clearly, a law governing contracting out decisions con-

cerns personnel policies and affects working conditions in

the most direct and immediate sense possible, and in its

every application, for it determines whether employees

will keep their jobs. Thus, in Fibreboard Paper Products,

this Court ruled that in the private sector, contracting out

is a “condition of employment,” because those words

“plainly cover termination of employment which . . . nec-

essarily results from the contracting out of work per-

formed by members of the established bargaining unit.”

379 U.S. at 210. The same result obtains in the federal

sector. Cf. AFGE and Air Force Logistics Command,

Wright-Patterson AFB, 2 F.L.R.A. 604, 606 (1980) en-

forced as to other matters, 659 F.2d 1140 (D.C. Cir.

1981) (availability of day care facilities is a condition of

employment because it affects whether individual will ac-

cept and continue employment) .*

5S EEOC also argues (Br. 37) that if the grievance provision

covers laws that concern contracting out, then “every federal stat-

ute that arguably affects a unionized federal employee” will be

subject to arbitration. For example, EEOC says (Br. 34), an em-

ployee could pursue a grievance alleging that he would not have

been reassigned had an agency employer complied with the National

Environmental Policy Act, or the Atomic Energy Act.

EEOC’s statutory examples are obviously distinguishable from

laws governing contracting out. Those Acts at most may affect an

4. EEOC contends (Br. 29-34) that precedent of the

Federal Labor Relations Council supports its argument

that A-76 is not sufficiently related to conditions of em-

ployment to be within the scope of the grievance proce-

dure permitted by the Statute. It claims that under

FLRC decisions, contracts could not incorporate agency

regulations bearing on the types of employees that would

be assigned to different projects, and speculates that the

FLRC so held “apparently because such decisions relate

less to the individual employee than to the manner in

which the agency wishes to conduct its business.” EEOC

Br. 31.

EEOC’s reliance on this precedent is misplaced. The

two FLRC cases EEOC cites (Br. 31-32) ruled that

proposals requiring the employer to comply with certain

internal agency directives (concerning assignment of em-

ployees) were not negotiable. AFGE Local 916 and Tinker

Air Force Base, Oklahoma City, Oklahoma, 5 F.L.R.C.

604 (1977); AFGE Local 2118 and Los Alamos Area

Office, ERDA, 3 F.L.R.A. 296 (1975). The FLRC stated

that the proposals would constrain management rights,

and that it was “without significance” that management

used internal regulations to establish the policies that

guided the exercise of its rights. AFGE Local 916, 5

F.L.R.C. at 607. The FLRC did not explain this conclu-

sion—it certainly did not, as the EEOC suggests, pur-

port to rule that the regulations were not “applicable

laws” within the meaning of the Executive Order’s man-

agement rights clause.

EEOC’s suggested interpretation of the FLRC’s deci-

sions is pure speculation. It is more likely that the FLRC

employee’s employment indirectly. By contrast, every application

of the laws that govern contracting out concern personnel policies

and potentially affect federal employees’ jobs. Circular A-76, unlike

NEPA or the Atomic Energy Act, is a law designed to effectuate

the government’s personnel policies and to affect conditions of

employment.

found the proposals non-negotiable because the regula-

tions at issue were internal agency directives, rather

than regulations imposed by an external authority like

OMB. By incorporating internal regulations into the con-

tract, the agency’s right to change its policies at will

would be constrained. OMB Circular A-76, by contrast,

is an external law with which agencies must comply, re-

gardless of the contract.

Il. THE MANAGEMENT RIGHTS CLAUSE DOES NOT

PRECLUDE ARBITRAL REVIEW OF AGENCY

COMPLANCE WITH OMB CIRCULAR A-76 AND

OTHER LAWS THAT CONCERN CONTRACTING

OUT

As we explained above, Section 7121(a) permits the

parties to negotiate procedures for grieving and arbitrat-

ing any employment related complaints or any violation of

laws, rules, or regulations that affect working conditions,

except in those subject areas specifically enumerated at

subsection (c). Although complaints or violations of the

laws governing contracting out are not among those ex-

cluded matters, EEOC’s central contention here is that

the management rights clause, 5 U.S.C. 7106(a) (2)(B),

bars use of the grievance procedure to resolve any con-

tracting out dispute.

A. The management rights provision states that: “sub-

ject to subsection (b) of this section, nothing in the chap-

ter shall affect the authority of any management official

of any agency ... in accordance with applicable laws...

to make determinations with respect to contracting out.”

5 U.S.C. 7106(a)(2)(B). As the court of appeals dis-

cerned, by use of the phrase “in accordance with appli-

cable laws,”’ Congress made it clear that the management

rights clause merely prohibits negotiation over substan-

tive limitations on managerial authority beyond those al-

ready imposed by external law. Pet. App. 8a-9a. The

union’s proposal that EEOC comply with the rules by

which it is undeniably governed does not work an imper-

missible constraint on management’s reserved authority.’

B. EEOC contends nonetheless (Br. 17-22, 22-29) that

arbitral review itself, even if only for compliance with

external law, would impermissibly affect its authority to

make decisions with respect to contracting out. This con-

tention, however, would permit the management rights

clause, which Congress intended to serve as a narrow ex-

ception to the general rule of negotiability, to negate the

grievance provision, which Congress intended would be

“all-inclusive.” Under the EEOC’s approach, employees

could not grieve any matter that implicates a management

right. The EEOC’s proposed rule would entirely abnegate

the principle of broad scope grievance procedures.

In fact, many matters that are clearly grievable under

7121(a) require arbitrators to review agency actions that

implicate managerial rights for compliance with law. For

example, the management rights provision preserves man-

agement’s authority, in accordance with law, to direct,

assign, layoff, and discipline employees. 5 U.S.C. 7106

(a) (1) (A). Under EEOC’s view, violations of the laws

applicable to these decisions would—contrary to accepted

practice—not be subject to arbitral review. Indeed, under

EEOC’s view it is difficult to imagine any challenges at

all that could be pursued under the negotiated procedure,

since most management actions involve determinations

made under the authority preserved in 7106(a) and

(b) (1).

The fundamental flaw in EEOC’s argument is that it

consistently employs the concepts of grievability and nego-

tiability interchangeably, although they are distinct.

® EEOC argues (Br. 34-35) that even if the regulation is an

“applicable law” it only constrains management’s authority to the

extent that contracting out decisions can be challenged within the

agency. As we explain more fully infra, at 22-25, OMB is without

authority to limit the scope of the grievance procedure the Statute

prescribes.

There are many matters a union may not negotiate—

such as the subject matter of statutes and government-

wide regulations, or management rights—whose applica-

tion employees may nonetheless grieve. By blending the

two concepts, EEOC is attempting to expand the number

of matters that are non-grievable.

But Congress clearly declared which matters are non-

grievable—in Section 7121(c). When Congress wished to

make any aspect of a non-negotiable management right

non-grievable as well, it did so there. Congress could have

said that every application of a management right is non-

grievable, but it did not. Instead, in Section 7121l(c), it

made five specific matters non-grievable, and contracting

out decisions are not among them.

The legislative history of the Statute, contrary to

EEOC’s argument, shows that Congress never interded

the management rights clause to be interpreted to negate

the broad grievability provision. It clearly shows that

Congress perceived that arbitral review was entirely con-

sistent with management’s exercise of its preserved au-

thority.

The exact language of Section 7106 originated in a

floor amendment offered by Representative Udall. In an

accompanying sectional analysis he explained that al-

though his amendment added several management rights,

the management rights section “is still to be treated nar-

rowly as an exception to the general obligation to bargain

over conditions of employment.” He stated that the pro-

vision would have no effect upon employees’ rights to file

grievances. Representative Udall explained that, for ex-

ample:

“{M]anagement has reserved the right to make the

final decision to “remove” an employee but that de-

cision must be made in accordance with the appli-

cable laws and procedures, and the provisions of any

applicable collective bargaining agreement. The re-

served management right to ‘remove’ would in no

way affect the employee’s right to appeal the decision

through statutory procedures or, if applicable,

through the procedures set forth in the collective

bargaining agreement.”

Leg. Hist. at 924.

Representative Ford, one of the chief House conferees

on the bill, made a similar statement on the floor of Con-

gress. Describing the relationship of the grievance provi-

sions to management's rights be explained:

Under the definition [of grievance] adopted by the

conferees, so long as a rule or regulation ‘affects con-

ditions of employment,’ infractions of that rule or

regulation are grievable even if the rule or regula-

tion implicates some management right. This in-

terpretation of the definition is required both by the

express language of the section and by the greater

priority given the negotiability of procedures over

the right of management to bar negotiations because

of a retained management right. Leg. Hist. at 998."

% See also, Leg. Hist. at 994 (remarks of Rep. Ford) (“Only

bargaining proposals which directly relate to the actual exercise

of the enumerated management rights are to be ruled non-negotiable.

An indirect or secondary impact on a management right is insuffi-

cient to make a proposal non-negotiable”’) .

EEOC contends (Br. 39-40) that under the Executive Order, em-

ployees could not grieve matters that implicated management's

rights. This is inaccurate; the very cases EEOC cites at page 31

of its brief involved arbitral review of actions taken under manage-

ment's preserved authority to promote or discipline.

EEOC also says that the Senate bill “plainly did not envision

that management rights would be grievable” because it permitted

the negotiated procedure to “cover any matter .. . if not incon-

sistent with the provisions of this chapter” and because it made

tne scope of the procedure negotiable, while at the same time stating

that management rights are not negotiable. EEOC Br. 39-40.

First of all, it is not “inconsistent” with the preservation of

management rights to permit arbitra! review for compliance with

law. Second of all, the Conference Committee rejected the Senate's

approach of making grievance scope negotiable. It mandated broad

C. EEOC argues that in the context of OMB Circular

A-76, arbitral review will inevitably affect substantive

decisionmaking. It contends that such review will cause

delay and expense, and that arbitrators are bound to in-

terfere with legitimate exercises of agency authority un-

der the Circular. EEOC Br. 16-12.

1. First of all, even if arbitral review caused added

delay and expense, that result could not be considered an

interference with management’s rights. Management has,

after all, no right to violate the law, nor to go unques-

tioned. If Congress were concerned with delay or ex-

pense, it would not have made the exercise of management

rights subject to negotiation concerning “procedures” and

“appropriate arrangements,” (5 U.S.C. 7106(b) (2) and

(b) (3)) and it would have precluded arbitral review of

any actions that implicate management rights, not just

those actions described in 7121(c). Congress enacted the

management rights provision to protect management’s au-

thority to establish substantive criteria, not to preclude

proposals that would permit review of the application of

the criteria in a particular case. EEOC’s delay and ex-

pense arguments involve questions of policy, more prop-

erly addressed to Congress."

scope procedures unless the parties agreed otherwise. Mandating

broad scope procedures while at the same time guaranteeing man-

agement rights clearly shows that Congress concluded the two were

not inconsistent, and that management rights would not be “af-

fected” by arbitral review.

In many instances, the procedures and appropriate arrange-

ments created at the bargaining table under 5 U.S.C. 7106(b) (2)

and (b)(3) wili delay the execution of management's decisions.

Nonetheless, only if the procedure would prevent management from

“acting at all’ did Congress envision a violation of management's

rights—it specifically rejected a provision that would have made a

procedural proposal non-negotiable because of delay even where

the delay the proposal engendered was “unreasonable”. H.R. Rep.

No. 1717, 95th Cong. 2d Sess. 158 (1978); Department of Defense,

Army Air-Force Exchange Service v. FLRA, 659 F.2d 1140, 1155-

2. Further, EEOC’s fears of delay are belied by the

efficacy of the arbitral process. As this Court has noted,

arbitration tends to promote the expeditious resolution of

disputes and not, as the EEOC argues, protracted delay.

Boys Markets Inc. v. Retail Clerks Union, 398 U.S. 235,

240 (1970). “It is for this reason,” the D.C. Circuit has

explained, “that arbitration is so widely favored in both

public and private sector labor relations.” Department of

Defense Vv. FLRA, supra, 659 F.2d at 1158, n.98.

EEOC’s assertion (Br. 19-21 & n.10) that delays will

be caused by arbitral review and that these delays will

cost the government $142 million in the years 1986-1989,

moreover, has no support in the record. OMB cannot pre-

dict the extent to which review will cause delay or the

cost of that delay, unless it also factors in the cost sav-

ings achieved because arbitral review will foster com-

pliance with the Circular.

Moreover, employees as well as agencies have an in-

terest in the speedy resolution of contracting out dis-

putes. Thus, Congress has required negotiated procedures

to be “fair and simple” and to provide for “expeditious

processing.” 5 U.S.C. 7121(b). The FLRA moreover, has

provided for stays of arbitral awards pending review, so

that arbitrators’ decisions need not delay agency action

that is permissable under law. 5 C.F.R. 2429.8. Of course,

if the arbitrator’s finding of non-compliance with the Cir-

cular is upheld on review, the agency must blame only

itself and not the arbitral process for added delay and

expense.

3. EEOC also protests that arbitral review will in-

evitably result in “second guessing” the agency's discre-

57 (D.C. Cir. 1981) cert. denied, 455 U.S. 945 (1982); NTEU v.

FLRA, 712 F.2d 669 673-674 (D.C. Cir. 1983). As The Conference

Report explained, under subsections (b)(2) and (b)(3), “the

parties may indirectly do what [subsection (a)| prohibits them

from doing directly.” H.R. Rep. No. 1717, supra at 158. Cf. AFGE,

Lecal 2782 v. FLRA, 702 F.2d 1183, 1187-1188 (D.C. Cir. 1983).

tion or misinterpreting the Circular’s requirements, and

that arbitral rulings on A-76 “will be grounded on con-

siderations other than simple fidelity to the requirements

of the Circular.” EEOC Br. 21-22, 29. Like its “delay”

and “expense” argument, however, this sort of objection

could be posed to every form of arbitral review of agency

compliance with external law. The objection has no merit

because Congress has chosen, in the federal] sector, to give

arbitrators a significant role in interpreting the law. And

it has put a check on their decisions by providing for

review by the FLRA where the arbitral award is con-

trary to “law, rule, or regulation.” 5 U.S.C. 7122.

EEOC’s observation that arbitrators’ competence “per-

tains primarily to the law of the shop, not the law of the

land,” and that arbitrators “effectuate the intent of the

parties rather than the requirements of enacted legisla-

tion,” Br. at 21, 29, quoting Alexander v. Gardner Denver

Co., 415 U.S. 36, 56-57 (1974), is particularly inappro-

priate in the context of federal sector arbitration. In the

federal sector, where binding arbitration is required, the

law of the shop and the law of the land are one and the

same, because the employment relationship is governed

by statute, and violations of law are grievable. As the

D.C. Cireuit has noted, “in the federal sector . . . arbi-

tration is intended not only to ensure compliance with

collective bargaining agreements, but also ‘to review or

police compliance with controlling laws, rules, and regu-

lations by federal agency employers and employees alike’.”

Devine Vv. White, 697 F.2d 421, 438 & n.94 (D.C. Cir.

1982), quoting F. Elkouri & E. Elkouri, Legal Status of

Federal-Sector Arbitration, 6-7 (1980).

There is no reason to suppose that an arbitrator will

interfere with agency discretion or expertise, or misinter-

pret the Circular, any more than he would do so with

any other law. Acknowledging the availability of arbitral

review in contracting out disputes does not ipso facto

sanction intrusion or second guessing, nor does it suggest

that every allegation that A-76 was violated will be ar-

bitrable. Section 7121(a) requires collective bargaining

agreements to include procedures for determining ‘“ques-

tions of arbitrability,” and Section 7122 provides for

FLRA review. It would be most inappropriate for this

Court to rule, as EEOC urges, that because some aspects

of A-76 reserve discretion to managers, every agency vio-

lation of A-76, or any other law and regulation concern-

ing contracting out, is non-reviewable."”

Ill. OMB CANNOT LIMIT THE STATUTORILY PRE-

SCRIBED SCOPE OF THE GRIEVANCE PROCE-

DURE BY REGULATION

EEOC contends finally (Br. 42-47) that the union pro-

posal at issue here is non-negotiable because 5 U.S.C.

7117(a) (1) states that the duty to bargain only exists

“to the extent not inconsistent with any Federal law or

any government-wide rule or regulation” and does not

“extend to matters which are the subject of . . . a Gov-

ernment-wide rule or regulation.” It claims that the

union proposal is inconsistent with A-76, which is a gov-

ernment-wide rule or regulation and that in any event

‘In fact, A-76 contains a number of mandatory directives that

leave agencies no discretion and under which there are clear guide-

lines and criteria to which an arbitrator could refer. The Circular

cites specific examples of governmental functions that may not be

contracted out under any circumstarces (for example tax collec-

tion), 44 Fed. Reg. 20558; it requires agencies to review activities

periodically and to conduct cost comparisons, id. at 20560-20561;

and it mandates in detail the factors an agency must consider in

conducting a cost analysis, id. at 20564-20591. The factors include

specific percentages the agencies must employ in deriving the cost

of fringe benefits or the value of assets. Jd. An agency has no

discretion to fail to perform these mechanical procedures in the

manner the Circular requires, and there is no reason an arbitrator

cannot determine whether they have done so, without invading the

prerogatives, if any, the Circular reserves to management.

the proposal is non-negotiable because it concerns the sub-

ject of such a rule or regulation—contracting-out.”

A. To the extent that Circular A-76 purports to pre

scribe that its violation is non-grievable, it is inconsistent

with Section 7121(a) of the Statute (see supra at 7-15)

and therefore invalid. As the court of appeals stated:

“(t}here is no indication in the Act or elsewhere of a

congressional intent to allow agencies to limit the statu-

tory right to file grievances asserting a violation of con-

tracting-out regulations.” Pet. App. 16a.

Indeed, the clear statutory duty to bargain over the

scope of the grievance procedure belies EEOC’s argument

that Section 7117(a) (1) gives agencies the right to limit

the scope by regulation. The legislative history of the

provision creating that duty ‘Section 7121) shows that

Congress intended that the only matters that could be ex-

cluded from the grievance procedures were those the par-

ties agreed to exclude, or those enumerated in the law

under 7121(c). See, H.R. Rep. No. 1717, supra at 157.

Read in light of 7121 and its history, Section 7117/a) (1)

plainly does not give agencies the authority to limit by

regulation the statutorily prescribed scope of the griev-

ance procedure. Instead, Section 7117(a)(1) was in-

tended to preclude an agency from negotiating proposals

that are substantively inconsistent with a government-

wide rule or regulation.

Two courts of appeals have adopted this reasoning.

They have concluded that Section 7121/a), which imposes

% We find it ironic that EEOC can assert Circular A-76 is

a government-wide rule or regulation within the meaning of

7117(a)(1) because it is a binding policy imposed upon agencies

by OMB, but that it also repeatedly disclaims that the directive

is a law, rule, or regulation for any other purpose. EEOC's ex-

planation of that anomaly (Br. 43, n.23) merely begs the question.

It does not explain why Congress used the same “rule” or “regula-

tion” language in defining a grievance, as it did under 7117.

the duty to include grievance procedures in the contract,

_engmente Ge us Quant Sy ee

7117(a) (1), and therefore may be interpreted to apply

even in circumstances where 7117(a) (1) would not other-

wise require bargaining.” N.J. Air National Guard Vv.

FLRA, 677 F.2d 276, 283 n.7 (3d Cir.), cert. denied, 459

U.S. 988 (1982). Accord, State of Nebraska, Military

Dep’t v. FLRA, 705 F.2d 945, 950, n.8 ‘8th Cir. 1983).

As the two courts of appeals concluded, the purpose of

7117(a) (1) is to limit the negotiability of proposals, not

to limit the grievability of the violation of laws, rules or

regulations. Obviously, Congress did not create Section

7117(a) (1) to permit agencies to nullify broad scope

grievance procedures."*

% Thus, the NJ. Air National Guard and State of Nebraska cases

cited by EEOC (Br. 45-46) do not support its interpretation of

7117(a) (1), they support the court of appeals’ decision below. Those

eee ee

upon 7117(a)(1). This case, on the other hand, involves not a

statute, but a regulation, which obviously cannot override

the

California National Guard v. FLRA, 697 F (9th

1983), also cited by EEOC, involved the same issue as NJ.

National Guard and State of Nebraska—whether the exclusive

peal mechanism of the National Guard Technicians Act of

32 U.S.C. 709(e) (5), precluded grievances under Section

court of appeals in California National Guard, unlike

courts, placed some reliance on 7117(a) (1). But that court

Section 7117(a)(1) was “designed specifically for situations

other federal statutes.” To the extent that the California

;

‘

aur

<§ i

pile &

See also Indians Air National Guard V. FLRA, Ti2

Cir. 1983) (adopting reasoning of Third, Eighth and Ninth

cuits).

B. EEOC’s second argument, under 7117(a) (1), por-

tends even greater danger to the statutory scheme. It

claims that since contracting out is the “subject” of Cir-

cular A-76, which is a government-wide rule or regula-

tion, “the duty to bargain” does not extend to the union’s

proposal. EEOC Br. 46-47.

But the union is not seeking to “bargain” or negotiate

over A-76; it will merely incorporate the regulation into

the contract. There would be no “discussion” of A-76 at

the bargaining table. See, EEOC Br. 47. The purpose of

precluding “bargaining” over matters that are already

the subject of government wide rules was clearly to pre-

vent individual agencies from adding new substantive

requirements at the bargaining table. Under EEOC’s

argument—contrary to uniform practice—contracts could

never incorporate any provision in which an agency agrees

to comply with an existing statute, rule or regulation.

Plainly, that is not what Congress had in mind when it

precluded “negotiation” over matters which are covered

by a government-wide rule or regulation.

CONCLUSION

The decision of the court of appeals should be affirmed.

Respectfully submitted,

Lots G. WILLIAMS