Internal Revenue Service District Office Unit and NTEU (Authority decision, June 7, 1985)

Final FLRA decision. This is a final order of the Federal Labor Relations Authority in an unfair labor practice case. An aggrieved person may seek judicial review by filing a petition in an appropriate United States court of appeals within 60 days after issuance under 5 U.S.C. § 7123(a). Filing a petition does not stay the Authority's order unless the court orders a stay under 5 U.S.C. § 7123(c).

Plain-English summary

NTEU proposed bargaining after OPM delegated recruitment and examination authority to the IRS for revenue agents. The Authority found that the IRS had not changed the procedures, methods, or criteria it used during the existing agreement. It held that the IRS had no duty to bargain over these union initiated midterm proposals and dismissed the complaint.

Decision snapshot

• Authority: Bargaining claims under 5 U.S.C. § 7116(a)(1) and (5).
• Outcome: Judge's violation finding vacated; complaint dismissed.
• Key point: Delegated authority without an actual practice change did not trigger the requested bargaining.

Full text (FLRA public release)

[ v18 p361 ]

18:0361(48)CA

The decision of the Authority follows:

18 FLRA No. 48

INTERNAL REVENUE SERVICE
(DISTRICT OFFICE UNIT)
DEPARTMENT OF THE TREASURY
Respondent

and

NATIONAL TREASURY EMPLOYEES
UNION
Charging Party

Case No. 3-CA-774

DECISION AND ORDER

The Administrative Law Judge issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in the unfair labor practice alleged in the complaint and recommending that it be ordered to cease and desist therefrom and take certain affirmative action. Thereafter, the Respondent and the General Counsel each filed exceptions to the Judge's Decision with supporting briefs, and the Charging Party filed an opposition to the Respondent's exceptions and cross-exceptions to the Judge's Decision. /1/

Pursuant to section 2423.29 of the Authority's Rules and Regulations and section 7118 of the Federal Service Labor-Management Relations Statute (the Statute), the Authority has reviewed the rulings of the Judge made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. Upon consideration of the Judge's Decision and the entire record, the Authority hereby adopts the Judge's findings, conclusions and recommendations only to the extent consistent herewith.

As more fully set forth in the attached Decision, the Judge found that, in October 1979, the Respondent, Internal Revenue Service (District Office Unit), Department of Treasury, notified the Charging Party, National Treasury Employees Union (the Union), that the Office of Personnel Management (OPM) had delegated authority to the Department of the Treasury to recruit and examine applicants for the position of Internal Revenue Agent, GS-512, at the GS-5 and GS-7 levels, and that this authority was redelegated to the Respondent effective November 1979. Further, the Judge found that, although not obligated to do so, Respondent "decided to use the same procedures, methodology and criteria previously utilized by OPM? so that "no change occurred in the manner in which the recruitment and examination was performed other than the location of the offices" where applications were to be filed.

The Judge concluded that the Respondent violated section 7116(a)(1) and (5) of the Statute by refusing to bargain with the Union concerning the latter's proposed procedures for the implementation and impact of a delegation of authority to the Respondent concerning the recruitment and examination of applicants for the above-mentioned unit positions. In reaching his conclusion that the Respondent violated the Statute as alleged, the Judge reasoned that the Respondent had been given control over matters affecting working conditions over which it previously had no control, thereby giving rise to a duty to bargain because any "past practice" which had developed when the function was under OPM "had no bearing on the practice which Respondent might now choose to utilize . .
. ." However, the Judge also found that no change in such recruitment and selection procedures had occurred.

Subsequent to the issuance of the Judge's Decision herein, the Authority issued its decision in Internal Revenue Service, 17 FLRA No. 103 (1985), stating in pertinent part:

(C)ongress intended that where parties are negotiating a basic collective bargaining agreement, the bargaining obligation shall exist with respect to negotiable proposals initiated by either agency management or the exclusive representative. However, outside this context, Congress intended the bargaining obligation to exist only with respect to changes in established conditions of employment proposed by management. This distinction indicates that other than negotiations leading to a basic collective bargaining agreement, there is no obligation to bargain over union-initiated proposals. (footnote omitted)

In the instant case, the record is clear that the parties' collective bargaining agreement was in effect when the Respondent notified the Union of the delegation of authority from OPM for the recruitment and examination of applicants for the position of Internal Revenue Agent, GS-512. Thereafter, the Union submitted its bargaining proposals and demanded negotiations. However, despite the fact that the Respondent had some flexibility as to whether it would follow OPM's practices in fulfilling its newly delegated responsibilities, the procedures, methodology and criteria utilized in the process in fact were unchanged. In these circumstances, the Authority concludes that the Respondent had no duty to bargain over proposals initiated by the Union during the term of an existing collective bargaining agreement, and that the Respondent's refusal to do so therefore did not constitute a violation of section 7116(a)(1) and (5) of the Statute. /2/ Accordingly, the Authority shall order that the complaint be dismissed.

ORDER

IT IS ORDERED that the complaint in Case No. 3-CA-774 be, and it hereby is, dismissed.

Issued, Washington, D.C., June 7, 1985

Henry B. Frazier III, Acting
Chairman
William J. McGinnis, Jr., Member
FEDERAL LABOR RELATIONS AUTHORITY

-------------------- ALJ$ DECISION FOLLOWS --------------------

Michael S. Sussman, Esq.
For the Respondent

Joseph V. Kaplan, Esq.
For the Charging Party

Peter A. Sutton, Esq.
For the General Counsel

Before: SALVATORE J. ARRIGO, Administrative Law Judge

DECISION

Statement of the Case

This is a proceeding under the Federal Labor-Management Relations Statute, Chapter 71 of Title 5 of the U.S. Code, 5 U.S.C. 7101, et seq. (herein referred to as the Statute).

Upon an unfair labor practice charge filed by the National Treasury Employees Union (herein referred to as the Union), against the Internal Revenue Service (District Office Unit), Department of the Treasury (herein referred to as Respondent or IRS), on December 26, 1979, as amended on January 30, 1980, /3/ the General Counsel of the Federal Labor Relations Authority (herein referred to as the Authority), by the Regional Director for Region 3, issued a Complaint and Notice of Hearing on October 30, 1981. The Complaint alleged that Respondent violated section 7116(a)(1) and (5) of the Statute by refusing to bargain with the Union "over the procedures leading to implementation and the impact" of a delegation of authority to Respondent concerning the establishment of employment registers for Internal Revenue Agents, classification GS-512. Respondent acknowledges it refused to bargain with the Union but contends that it had no obligation to bargain on the matter.

A hearing on the Complaint was conducted on January 5, 1982 at which time the parties were represented by counsel and afforded full opportunity to adduce evidence, call, examine and cross-examine witnesses and argue orally. /4/ Briefs were filed by all parties.

Upon the entire record in this matter, my observation of the witnesses and their demeanor, and my evaluation of the evidence, I make the following:

Findings of Fact

At all times material herein Respondent has recognized the Union as the exclusive collective bargaining representative for various IRS employees including Internal Revenue Agents in the GS-512 classification. Approximately 15,000 employees are employed in the Internal Revenue Agent GS-512 classification and pay levels GS-5 and GS-7 appear to be entrance level jobs for that classification. /5/

Prior to October 1979 the Office of Personnel Management (OPM) was fully authorized and responsible for the recruitment and examination of applicants for the GS-512 classification concerned herein. When recruiting, OPM issued a nationwide announcement of vacancies for Internal Revenue Agent positions which went to all OPM area offices, State employment offices, Federal Job Information Centers and all "agency user offices." The announcement also designated which OPM office would receive applications of interested persons. Upon receipt of applications OPM personnel, using its own guidelines, rated the applicants by score and placed them on a register in order of score achieved. The candidates were issued a notice of rating and advised to submit their applications to the IRS along with a copy of the notice of rating. A Special Examining Unit of IRS, under the delegated authority from OPM and operating "as an arm of OPM," /6/ listed the eligible candidate on a certificate in order of rating scores from which a candidate would be selected for employment by IRS.

By letter dated October 23, 1979 Respondent notified the Union that OPM had delegated to the Department of the Treasury authority to recruit and examine applicants nationwide for the position of Internal Revenue Agent GS-512 at the GS-5 and GS-7 levels and that the Department of the Treasury redelegated this authority to IRS. The Union was informed that the delegation to IRS would be effective November 1, 1979. The delegation from OPM, a copy of which was provided to the Union, instructed IRS to comply with law, OPM regulations and Federal Personnel Manual instructions, but IRS was not obligated to follow OPM work processing procedures and was accorded a substantial degree of flexibility to depart from OPM's practices in fulfilling its newly delegated recruitment and examination responsibilities. /7/ However, IRS decided to use the same procedures, methodology and criteria previously utilized by OPM in the recruitment and examination of GS-512 applicants. Accordingly, no change occurred in the manner in which the recruitment and examination was performed other than the location of the offices where individuals would file their applications was altered.

The Union had a substantial interest in the recruitment and examination procedures in that unit employees may compete for a vacancy within the organization by using internal promotion procedures or obtaining an appointment to the position by responding to a vacancy announcement and competing with other applicants for a favorable position on a register. In a letter dated November 7, 1979 to IRS the Union invoked its ". . . right to negotiate over the changes wrought by the OPM-DOT delegation of authority to IRS . . . ." In the letter the Union indicated its desire for a meeting to discuss the matter further before submitting proposals. On November 20, 1979 the Union submitted 16 bargaining proposals relative to this subject. The proposals included, inter alia, such matters as announcements to employees; contents of the announcement; assistance to employees in assembling and presenting qualifications; informing employees found ineligible, unsuitable or passed over as to the reasons therefor; waiving time-in-grade restrictions; the location for employee submissions; payment of costs for employee interviews; recruiting efforts among minority or women employees; informing the Union as to areas IRS believes an adverse impact on employees exists; selection factors being uniform throughout the country; Union receipt of quarterly reports sent to OPM, and; the right to grieve.

On or about December 12, 1979 IRS met with the Union and informed them that it did not have an obligation to and would not enter into negotiations over the Union's proposals. IRS thereafter continued to recruit and examine applicants for GS-512 vacancies as set forth above.

Discussion and Conclusions

The General Counsel contends that the Union's proposals of November 20, 1979 were related to terms and conditions of employment, negotiable under the Statute, not contrary to the provisions of the OPM delegations nor inconsistent with any law or regulation. Respondent does not challenge General Counsel's contentions other than that its refusal to bargain with the Union violated the Statute. Respondent takes the position that since after the delegation from OPM it continued to perform the recruitment and selection in a manner virtually identical to the way it was performed when OPM was responsible for these functions, no change in working conditions occurred and, if no change occurred, there could be no adverse effect or substantial impact upon unit employees.

I reject Respondent's contentions. In my view a very substantial and essential change occurred: Respondent was given control over matters affecting work conditions that it heretofore had no control. When control over recruitment and selection procedures resided with OPM, the Union could not demand to bargain on these matters since there was no privity between the Union and OPM. After the delegation, recruitment and selection came under the control of Respondent and the subject became an area open to negotiation, to the extent such matters are negotiable under the Statute. Thus, any "past practice" which developed under OPM has no bearing on the practice which Respondent might now choose to utilize, be it to continue the OPM practice or modify the procedures to the degree allowed under the delegation. Accordingly, since recruitment and selection proposals relate to conditions of employment and no issue exists as to their negotiability under the Statute, their conformance to the provisions of the OPM delegation nor inconsistency with law or regulation, I conclude that Respondent's refusal to bargain on the Union's proposals of November 20, 1979 violated section 7116(a)(1) and (5) of the Statute. /8/

Remedy

The Union and the General Counsel request that in addition to ordering Respondent to negotiate with the Union on its proposals, the order should provide that any agreement negotiated by the parties should have a retroactive effect. No cases have been cited where the Authority has previously granted such an order. However, when dealing with status quo ante remedies, which subject is somewhat analogous to the relief requested herein, the Authority indicated that the appropriateness of such a remedy would be determined on a case-by-case basis. Federal Correctional Institution, 8 FLRA 604 (1982), at 606. The Authority stated in Federal Correctional Institution that among the factors to be considered in cases involving a violation of the duty to bargain over impact and implementation, as herein, would include:

"(1) whether, and when, notice was given to the Union by the agency concerning the action or change decided upon; (2) whether, and when, the union requested bargaining on the procedures to be observed by the agency in implementing such action or change and/or concerning appropriate arrangements for employees adversely affected by such action or change; (3) the willfulness of the agency's conduct in failing to discharge its bargaining obligations under the Statute; (4) the nature and extent of the impact experienced by adversely affected employees; and (5) whether, and to what degree, a status quo ante remedy would disrupt or impair the efficiency and effectiveness of the agency's operations."

Assuming arguendo that the Authority is empowered to grant the relief sought and considering all the facts and circumstances related to the case herein, and taking into consideration the various factors set forth in Federal Correctional Institution, and noting that approximately 15,000 individuals are employed in the GS-512 classification of which I assume a substantial number of GS-5 and GS-7 vacancies have been filled since November 1, 1979, I do not conclude that the relief sought is warranted herein. The request is therefore denied. /9/

Accordingly, in view of the entire foregoing and having concluded that Respondent has violated section 7116(a)(1) and (5) of the Statute, I recommend the Authority issue the following:

Order

Pursuant to section 2430.20 of the Federal Labor Relations Authority's regulations and section 7118 of the Statute, it is hereby ordered that the Internal Revenue Service shall:

1. Cease and desist:

(a) Failing and refusing to negotiate in good faith with the National Treasury Employees Union, the employees' exclusive collective bargaining representative, regarding proposals concerning the procedures to be observed in establishing employment registers for GS-512 classification Internal Revenue Agents and appropriate arrangements for employees adversely affected by the establishment of such registers.

(b) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute.

2. Take the following affirmative action in order to effectuate the
   purposes and policies of the Federal Service Labor-Management Relations Statute:

(a) Upon request of National Treasury Employees Union, the employees' exclusive collective bargaining representative, negotiate, to the extent consonant with law and regulations, concerning procedures to be observed in establishing employment registers for GS-512 classification Internal Revenue Agents and appropriate arrangements for employees adversely affected by the establishment of such registers.

(b) Post at its National Office, Regional Offices and District Offices copies of the attached Notice marked "Appendix", on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms they shall be signed by the Commissioners, Internal Revenue Service, and shall be posted and maintained by him for 60 consecutive days thereafter, in conspicuous places, including bulletin boards and all other places where notices to employees are customarily posted. The Commissioner shall take reasonable steps to insure that such notices are not altered, defaced, or covered by any other material.

(c) Pursuant to section 2423.30 of the Federal Labor Relations Authority's Rules and Regulations, notify the Regional Director of Region 3, Federal Labor Relations Authority, 1111 18th Street, NW., Suite 700, Washington, D.C. 20036, in writing within 30 days from the date of the Order as to what steps have been taken to comply herewith.

SALVATORE J. ARRIGO
Administrative Law Judge

Dated: June 30, 1982
Washington, D.C.

APPENDIX

PURSUANT TO A DECISION AND ORDER OF THE FEDERAL LABOR RELATIONS AUTHORITY AND IN ORDER TO EFFECTUATE THE POLICIES OF CHAPTER 71 OF TITLE 5 OF THE UNITED STATES CODE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS WE HEREBY NOTIFY OUR EMPLOYEES THAT:

WE WILL NOT fail and refuse to negotiate in good faith with National Treasury Employees Union, the employees' exclusive collective bargaining representative, regarding proposals concerning the procedures to be observed in establishing employment registers for GS-512 classification Internal Revenue Agents and appropriate arrangements for employees adversely affected by the establishment of such registers.

WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute.

WE WILL, upon request of the National Treasury Employees Union, negotiate, to the extent consonant with law and regulations, concerning procedures to be observed in establishing employment registers for GS-512 classification Internal Revenue Agents and appropriate arrangements for employees adversely affected by the establishment of such registers. (Agency or Activity)

Dated: By: (Signature)

This Notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material.

If employees have any questions concerning this Notice or compliance with any of its provisions, they may communicate directly with the Regional Director, Federal Labor Relations Authority, Region 3, 1111 18th Street, NW., Suite 700, Washington, D.C. 20036 and whose telephone number is (202) 653-8452.

--------------- FOOTNOTES$ ---------------

/1/ The General Counsel thereafter submitted a Motion to File a Supplemental Brief. In view of our disposition herein, such motion is denied pursuant to section 2429.26 of the Authority's Rules and Regulations.

/2/ See also U.S. Army Corps of Engineers, Kansas City District, Kansas City, Missouri, 18 FLRA No. 47 (1985), wherein the Authority found that a union's bargaining proposals submitted in anticipation of certain changes mandated by law did not raise an obligation to bargain on the part of agency management in the circumstances of the case.

/3/ On June 4, 1980 the Regional Director for Region 3 declined to issue a complaint regarding the unfair labor practice charge. The Regional Director's decision was appealed by the Union and, on April 20, 1981, the General Counsel remanded the case to Region 3 ". . . for further investigation and appropriate action."

/4/ Counsel for the General Counsel's unopposed motion to correct the transcript is hereby granted.

/5/ Due to the large number of employees in the GS-512 classification, I find it reasonable to infer that the number of GS-5's and GS-7's recruited each year for these positions is substantial.

/6/ The IRS Special Examining Unit participated in this procedure for at least a year prior to November 1979.

/7/ The delegation in the form of an agreement between OPM and the Department of the Treasury, is a five page document setting out, inter alia, various general and specific responsibilities of the parties.

/8/ I also reject Respondent's claim that a change in working conditions is the predicate for an obligation to bargain for the reasons enunciated in Judge Burton S. Sternburg's recent decision in Internal Revenue Service, Case No. 3-CA-20156, issued June 15, 1982, OALJ-82-92, concerning the obligation to bargain over a union's mid-term bargaining proposal.

/9/ See U.S. Customs Service, Region V, New Orleans, Louisiana, 9 FLRA No. 15 (1982).