American Federation of Government Employees, Small Business Administration Council of Locals (Union) and Small Business Administration (Agency) (Authority decision, August 5, 1981)

Final FLRA decision. This is a final order of the Federal Labor Relations Authority. 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

A Small Business Administration union proposed rules for employees’ outside employment and private conduct, including conflict of interest safeguards. The agency claimed conflicts with government and agency regulations. The Authority found the proposal preserved applicable government rules and that the cited agency rules did not bar bargaining in this national unit. It ordered the agency to bargain on request.

Decision snapshot

• Authority: 5 U.S.C. § 7117(a).
• Outcome: Agency nonnegotiability position rejected; bargaining ordered.
• Key point: A proposal that preserves applicable conflict rules was within the duty to bargain.

Full text (FLRA public release)

[ v06 p356 ]

06:0356(65)NG

The decision of the Authority follows:

6 FLRA No. 65

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,
SMALL BUSINESS ADMINISTRATION COUNCIL OF LOCALS
Union

and

SMALL BUSINESS ADMINISTRATION
Agency

Case No. O-NG-318

DECISION AND ORDER ON NEGOTIABILITY ISSUE

THE PETITION FOR REVIEW IN THIS CASE COMES BEFORE THE FEDERAL LABOR
RELATIONS AUTHORITY (THE AUTHORITY) PURSUANT TO SECTION 7105(A)(2)(D)
AND (E) OF THE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE (THE
STATUTE) (5 U.S.C. 7101 ET SEQ.). THE ISSUE PRESENTED IS THE
NEGOTIABILITY OF THE FOLLOWING UNION PROPOSAL.

ARTICLE-- EMPLOYEE RIGHTS AND RESPONSIBILITIES

EXCEPT AS PROVIDED BY LAW, GOVERNMENT-WIDE REGULATION OR THIS
AGREEMENT, AN EMPLOYEE IS

PRIMARILY ACCOUNTABLE FOR THE PERFORMANCE OF OFFICIAL DUTIES AND
CONDUCT. THE AGENCY AFFIRMS

THE RIGHT OF AN EMPLOYEE TO CONDUCT HIS/HER PRIVATE LIFE IN SO FAR AS
IT DOES NOT CONFLICT

WITH LAW OR PERTINENT GOVERNMENT-WIDE REGULATION.

EMPLOYEES WILL ADVISE THE AGENCY AND OBTAIN PRIOR WRITTEN
CONFIRMATION FROM THE AGENCY THAT

ANY PROPOSED OUTSIDE EMPLOYMENT DOES NOT PRESENT A POSSIBLE CONFLICT
OF INTEREST. THE AGENCY

SHALL RENDER ITS DECISION TO THE EMPLOYEE AS SOON AS PRACTICABLE, BUT
NOT MORE THAN 30 DAYS

AFTER RECEIPT OF THE REQUEST. WHEN THE AGENCY DECISION DENIES A
REQUEST, IT WILL STATE THE

REASONS THEREFOR. WHEN A REQUEST IS APPROVED, IT SHOULD INCLUDE
APPROPRIATE SAFEGUARDS

DESIGNED TO PREVENT A POSSIBLE CONFLICT OF INTEREST.

QUESTION BEFORE THE AUTHORITY

THE SPECIFIC QUESTION BEFORE THE AUTHORITY IS WHETHER THE UNION
PROPOSAL IS INCONSISTENT WITH GOVERNMENT-WIDE RULES OR REGULATIONS /1/
AND/OR AGENCY RULES OR REGULATIONS FOR WHICH A COMPELLING NEED EXISTS,
/2/ AS ALLEGED BY THE AGENCY.

OPINION

CONCLUSION AND ORDER: THE UNION PROPOSAL IS NOT INCONSISTENT WITH
GOVERNMENT-WIDE RULES OR REGULATIONS RELIED ON BY THE AGENCY AND THE
AGENCY'S RULES OR REGULATIONS ARE NOT APPLICABLE TO BAR NEGOTIATIONS ON
THE UNION PROPOSAL UNDER SECTION 7117(A) OF THE STATUTE. /3/
ACCORDINGLY, PURSUANT TO SECTION 2424.10 OF THE AUTHORITY'S RULES AND
REGULATIONS (5 CFR 2424.10(1981)), IT IS ORDERED THAT THE AGENCY SHALL
UPON REQUEST (OR AS OTHERWISE AGREED TO BY THE PARTIES) BARGAIN
CONCERNING THE UNION PROPOSAL.

REASONS: THE AGENCY'S POSITION THAT THE UNION PROPOSAL IS OUTSIDE
THE DUTY TO BARGAIN BECAUSE IT FAILS TO ADDRESS CERTAIN RESTRICTIONS ON
OUTSIDE ACTIVITIES AND APPEARANCES OF CONFLICTS OF INTEREST CONTAINED IN
GOVERNMENT-WIDE RULES OR REGULATIONS CANNOT BE SUSTAINED. NOTHING IN
THE LANGUAGE OF THE UNION PROPOSAL WOULD REQUIRE THAT THE PROPOSAL BE
APPLIED IN A MANNER INCONSISTENT WITH ANY RULES OR REGULATIONS. TO THE
CONTRARY, THE FIRST SENTENCE OF THE UNION PROPOSAL ADDRESSES THE
QUESTION OF CONSISTENCY WITH SUCH RULES OR REGULATIONS, STATING, IN
RELEVANT PART, THAT THE PROPOSAL WOULD APPLY "(E)XCEPT AS PROVIDED BY
LAW, GOVERNMENT-WIDE REGULATION OR THIS AGREEMENT. . . . " THUS, BY ITS
EXPRESS LANGUAGE, THE PROPOSAL WOULD REQUIRE APPLICATION IN A MANNER
CONSISTENT WITH LAW AND GOVERNMENT-WIDE RULES OR REGULATIONS.
THEREFORE, ITS LANGUAGE DOES NOT, AS THE AGENCY CONTENDS, FAIL TO
ADDRESS GOVERNMENT-WIDE RESTRICTIONS ON OUTSIDE ACTIVITIES AND
APPEARANCES OF CONFLICTS OF INTEREST. HENCE, THE PROPOSAL IS NOT
INCONSISTENT WITH GOVERNMENT-WIDE RULES OR REGULATIONS.

LIKEWISE, THERE IS NO BASIS ON WHICH TO SUSTAIN THE AGENCY'S POSITION
THAT THE PROPOSAL IS BARRED FROM NEGOTIATIONS BECAUSE IT CONFLICTS WITH
AGENCY RULES OR REGULATIONS FOR WHICH A COMPELLING NEED EXISTS UNDER
SECTION 7117(A) OF THE STATUTE. IN THIS CONNECTION, THE RECORD SHOWS
THAT THE UNION REPRESENTS A CONSOLIDATED UNIT WITH RECOGNITION AT THE
NATIONAL LEVEL OF THE AGENCY AND THAT IT REPRESENTS A MAJORITY OF THE
EMPLOYEES OF THE AGENCY. IN THESE CIRCUMSTANCES, IN THE ABSENCE OF A
SHOWING THAT THE UNION DOES NOT, LIKEWISE, REPRESENT A MAJORITY OF THE
EMPLOYEES TO WHOM THE CITED AGENCY RULES OR REGULATIONS ARE APPLICABLE,
THOSE RULES OR REGULATIONS CANNOT CONSTITUTE A BAR TO NEGOTIATIONS ON
THE UNION PROPOSAL UNDER THE PORTION OF SECTION 7117(A) OF THE STATUTE
UNDERSCORED IN NOTE THREE, SUPRA.

RELEVANT LEGISLATIVE HISTORY COMPELS ON THE SAME CONCLUSION.
CONGRESSMAN FORD EXPLAINED, IN REMARKS ON THE FINAL VERSION OF THE BILL
(H. R. 11280) WHICH WAS PASSED BY THE HOUSE (THE "UDALL SUBSTITUTE"),
AND AS RELEVANT HEREIN SUBSEQUENTLY ENACTED AND SIGNED INTO LAW, THAT:

THE COMPROMISE POSITION IN SECTION 7117 WAS ACCEPTED WITH THE
UNDERSTANDING THAT THE

PROVISION IN SUBSECTION (A)(3) WILL BE BROADLY CONSTRUED SUCH THAT
THE COMPELLING NEED TEST

WILL BE PERMITTED TO BE RAISED IN ONLY A LIMITED NUMBER OF CASES. IF
AN EXCLUSIVE

REPRESENTATIVE REPRESENTS A UNIT INCLUDING AT LEAST A MAJORITY OF THE
EMPLOYEES AFFECTED BY

THE ISSUANCE OF A REGULATION, THE COMPELLING NEED TEST COULD NOT BE
RAISED. THIS WOULD

PERMIT, FOR INSTANCE, OVERSEAS SCHOOLTEACHERS TO NEGOTIATE ALL AGENCY
REGULATIONS (THAT AT

LEAST SPECIFICALLY APPLY ONLY TO THEM), WITHOUT THE POSSIBILITY OF
HAVING THE COMPELLING NEED

TEST RAISED BY MANAGEMENT. . . . /4/

CONGRESSMAN UDALL EXPLAINED FURTHER IN THE SECTIONAL ANALYSIS
ACCOMPANYING HIS SUBSTITUTE, THAT:

THE NET EFFECT OF THE SUBSTITUTE'S SUBSECTION (A)(3) IS TO MAKE RULES
OR REGULATIONS OF

AGENCIES, OR OF PRIMARY NATIONAL SUBDIVISIONS OF AGENCIES, BARS TO
NEGOTIATION, SUBJECT TO THE

"COMPELLING NEED" TEST, EXCEPT IN CASES IN WHICH AN EXCLUSIVE
REPRESENTATIVE REPRESENTS A

BARGAINING UNIT WHICH INCLUDES A MAJORITY OF THE EMPLOYEES IN THE
ISSUING AGENCY OR PRIMARY

NATIONAL SUBDIVISION TO WHOM THE RULE OR REGULATION IS APPLICABLE.
IN THOSE LATTER CASES, THE

AGENCY OR PRIMARY NATIONAL

SUBDIVISION RULE OR REGULATION IS NOT, FOR PURPOSES OF THAT UNIT, A
BAR TO NEGOTIATIONS ON THE

SUBJECT MATTER OF THE RULE OR REGULATION.

IF, FOR EXAMPLE, THE DEPARTMENT OF THE TREASURY ISSUES A REGULATION
WHICH APPLIES TO

EMPLOYEES OF THE DEPARTMENT, AND AN EXCLUSIVE REPRESENTATIVE
REPRESENTS A UNIT WHICH INCLUDES

A MAJORITY OF THE EMPLOYEES TO WHOM THE REGULATION APPLIES, THE
REGULATION WILL NOT BE A BAR

TO NEGOTIATIONS FOR PURPOSES OF THAT UNIT. . . . /5/

FOR THE ABOVE STATED REASONS, THE AGENCY'S RULES OR REGULATIONS
CANNOT BAR NEGOTIATIONS ON THE UNION PROPOSAL; THEREFORE, IT IS
UNNECESSARY TO RULE ON THE AGENCY'S CONTENTION THAT THERE IS A
COMPELLING NEED FOR THE RULES OR REGULATIONS.

ISSUED, WASHINGTON, D.C. AUGUST 5, 1981

RONALD W. HAUGHTON, CHAIRMAN

HENRY B. FRAZIER III, MEMBER

LEON B. APPLEWHAITE, MEMBER

FEDERAL LABOR RELATIONS AUTHORITY

--------------- FOOTNOTES: ---------------

/1/ THE AGENCY CITES CERTAIN GOVERNMENT-WIDE RULES OR REGULATIONS NOW
CONTAINED IN OFFICE OF PERSONNEL MANAGEMENT RULES OR REGULATIONS,
EMPLOYEE RESPONSIBILITIES AND CONDUCT, 5 CFR 735.101 ET SEQ. (1981).

/2/ THE AGENCY CITES ITS RULES OR REGULATIONS, STANDARDS OF CONDUCT,
13 CFR 105.101 ET SEQ. (1980).

/3/ SECTION 7117(A) PROVIDES, IN RELEVANT PART, AS FOLLOWS:

SEC. 7117. DUTY TO BARGAIN IN GOOD FAITH; COMPELLING NEED; DUTY TO
CONSULT

. . . .

(2) THE DUTY TO BARGAIN IN GOOD FAITH SHALL, TO THE EXTENT NOT
INCONSISTENT WITH FEDERAL

LAW OR ANY GOVERNMENT-WIDE RULE OR REGULATION, EXTEND TO MATTERS
WHICH ARE THE SUBJECT OF ANY

AGENCY RULE OR REGULATION REFERRED TO IN PARAGRAPH (3) OF THIS
SUBSECTION ONLY IF THE

AUTHORITY HAS DETERMINED UNDER SUBSECTION (B) OF THIS SECTION THAT NO
COMPELLING NEED (AS

DETERMINED UNDER REGULATIONS PRESCRIBED BY THE AUTHORITY) EXISTS FOR
THE RULE OR REGULATION.

(3) PARAGRAPH (2) OF THIS SUBSECTION APPLIES TO ANY RULE OR
REGULATION ISSUED BY ANY AGENCY

OR ISSUED BY ANY PRIMARY NATIONAL SUBDIVISION OF SUCH AGENCY, UNLESS
AN EXCLUSIVE

REPRESENTATIVE REPRESENTS AN APPROPRIATE UNIT INCLUDING NOT LESS THAN
A MAJORITY OF THE

EMPLOYEES IN THE ISSUING AGENCY OR PRIMARY NATIONAL SUBDIVISION, AS
THE CASE MAY BE, TO WHOM

THE RULE OR REGULATION IS APPLICABLE.

/4/ SEE 124 CONG.REC. H9651 (DAILY ED. SEPT. 13, 1978).

/5/ SEE 124 CONG.REC. H9636 (DAILY ED. SEPT. 13, 1978).