Am. Fed'n of Gov't Emps. v. Fed. Labor Relations Auth.

99 F.4th 585

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,NATIONAL COUNCIL OF HUD LOCALS COUNCIL 222, AFL-CIO, Appellee v. FEDERAL LABOR RELATIONS AUTHORITY and Susan Tsui Grundmann,In her official capacity as Chairman of the Federal Labor Relations Authority, Appellants

No. 22-5308

United States Court of Appeals, District of Columbia Circuit

Argued November 6, 2023

Decided April 23, 2024

Appeal from the United States District Court for the District of Columbia (No. 1:19-cv-00998)

Thomas Tso, Solicitor, Federal Labor Relations Authority, argued the cause for appellants. With him on the briefs were Rebecca J. Osborne, Deputy Solicitor, and Nariea K. Nelson, Attorney.

Andres M. Grajales argued the cause for appellee. With him on the brief were David A. Borer and Mark L. Vinson.

Before: Wilkins and Walker, Circuit Judges, and Randolph, Senior Circuit Judge.

Opinion concurring in the result filed by Circuit Judge Wilkins.

Randolph, Senior Circuit Judge:

The salaries for most civilian federal jobs are set out in the General Schedule, a payscale that spans fifteen "grades." The higher the grade the greater the compensation.

In 2002, the Department of Housing and Urban Development advertised job openings having a promotion potential to grade thirteen. At the time, existing employees in comparable positions could be promoted only to grade twelve. The existing employees were represented by the American Federation of Government Employees, National Council of HUD Locals Council 222, AFL-CIO. The union took the position that the difference in the treatment of existing employees and those to be hired violated its collective bargaining agreement with HUD. The union filed a grievance to that effect. HUD rejected it and the union's grievance proceeded to arbitration.

Now, more than twenty years after it began, the controversy has reached our court.

I.

The Federal Service Labor-Management Relations Statute—the FSLMRS—established a framework for resolving disputes between federal agency employers and unions representing agency employees. 5 U.S.C. §§ 7101 et seq.; id. § 7121(b)(1)(C)(iii). Most grievances may be settled through arbitration, but an arbitrator generally has no authority to decide grievances involving the classification of employees' positions.¹ Id. § 7121(c)(5).

If a dispute goes to arbitration, a party dissatisfied with the result—commonly called an "award"—may contest the result by filing exceptions with the Federal Labor Relations Authority. Id. § 7122(a). If neither party files exceptions, the arbitrator's award becomes "final and binding." Id. § 7122(b). The FLRA may overturn an arbitrator's award if it finds that the award is "contrary to any law, rule, or regulation," or if the award is deficient on "grounds similar to those applied by Federal courts in private sector labor-management relations." Id. § 7122(a).

In cases not involving an arbitration, a party dissatisfied with an FLRA decision may obtain judicial review in a federal court of appeals. Id. § 7123(a).

The law treats FLRA decisions in arbitration cases differently. Excluded from judicial review are FLRA orders "involving an award by an arbitrator," "unless the order involves an unfair labor practice" as defined elsewhere in the FSLMRS. Id. § 7123(a)(1); see id. § 7116.

From the outset of this protracted dispute, the union and HUD disagreed on a fundamental issue: whether the union's grievance involved classification. U.S. Dep't of Hous. & Urb. Dev. Wash., 59 F.L.R.A. 630, 630 (2004). Was the grievance based on reclassification—the promotion potential of the employees' permanent positions—or reassignment—the employees' right to be placed in the new positions that HUD had posted? Only a request for reassignment could be potentially resolved in arbitration.

The parties submitted the question to the arbitrator, who concluded in an interim order that the dispute involved the fairness of the vacancy announcements, not classification. See id. HUD filed an interlocutory exception challenging the arbitrator's jurisdiction. Id. The FLRA declined to resolve the jurisdictional issue at that time and remanded the matter to the arbitrator for "clarification." Id. at 632.

Upon remand, the arbitrator again determined that the grievance was arbitrable. On the merits, the arbitrator, finding that HUD had violated the parties' collective bargaining agreement, ordered a retroactive "organizational upgrade of affected positions." Again, HUD filed exceptions, arguing that the "organizational upgrade" remedy required reclassification and therefore violated the FSLMRS.

The FLRA agreed with HUD. U.S. Dep't of Hous. & Urb. Dev., 65 F.L.R.A. 433, 436 (2011). So the FLRA vacated the arbitrator's remedial award and remanded for an alternative remedy. Id.

The arbitrator then issued new remedies. During implementation of these remedies, the parties raised various exceptions to the arbitrator's written progress summaries, resulting in five more FLRA decisions.² Those FLRA decisions did not reconsider the arbitrator's threshold decision that the dispute was arbitrable.

In 2018, the FLRA rendered its eighth decision in this matter. On review of exceptions to the arbitrator's tenth written summary, the FLRA held that "the essential nature of this grievance . . . concerned classification." U.S. Dep't of Hous. & Urb. Dev., 70 F.L.R.A. 605, 608 (2018) ("HUD VIII"). This meant that "the [a]rbitrator has always lacked jurisdiction over the grievance, as a matter of law." Id. The FLRA therefore vacated all of the arbitrator's pronouncements and its own prior decisions. Id. One Member dissented. Id. at 609-10. The FLRA denied the union's motion for reconsideration. U.S. Dep't of Hous. & Urb. Dev., 71 F.L.R.A. 17, 20 (2019).

The union then filed a four-count complaint in district court claiming that the FLRA's decision was "ultra vires." The complaint invoked § 7122(b) of the FSLMRS, a provision stating that an arbitrator's award becomes "final and binding" if no exceptions are filed within thirty days.³ The union claimed that in vacating awards that had become final and binding, the FLRA had violated the Administrative Procedure Act, 5 U.S.C. § 706. The district court rejected the union's APA claim but denied the FLRA's motion to dismiss the entire complaint for lack of subject matter jurisdiction, holding that it had jurisdiction because "the [FLRA] exceeded its delegated powers." The court concluded that "the Union has stated a claim as to Count I, which alleges that the [FLRA's] decision to vacate final and binding arbitration awards was ultra vires." The court later granted the union's motion for summary judgment on that count.

The issues on appeal concern the district court's denial of the FLRA's motion to dismiss for lack of jurisdiction and the court's grant of summary judgment.

II.

Section 7123(a) of the FSLMRS provides for judicial review of some FLRA decisions. The provision establishes that:

(a) Any person aggrieved by any final order of the Authority other than an order under--

(1) section 7122 of this title (involving an award by an arbitrator), unless the order involves an unfair labor practice under section 7118 of this title, or

(2) section 7112 of this title (involving an appropriate unit determination),

may, during the 60-day period beginning on the date on which the order was issued, institute an action for judicial review of the Authority's order in the United States court of appeals in the circuit in which the person resides or transacts business or in the United States Court of Appeals for the District of Columbia.

5 U.S.C. § 7123(a).

Neither the grievance nor the FLRA's decision in this case involves an "unfair labor practice." Section 7123(a)(1) therefore "flatly" foreclosed the jurisdiction of this court to conduct direct judicial review of the FLRA's order vacating the arbitration awards. U.S. Dep't of Just. v. FLRA, 981 F.2d 1339, 1342 (D.C. Cir. 1993).⁴ Even so, the union contends that as a matter of statutory interpretation § 7123(a) prohibits only court of appeals direct review of FLRA arbitration decisions, not district court review of agency actions when the agency exceeds its statutory authority. On this theory, the union claimed that its suit in the district court circumvented the § 7123(a) bar against judicial review of arbitration decisions. Our court has already answered the union's argument: "We cannot imagine that Congress, having vested in courts of appeals exclusive jurisdiction to review all [FLRA] decisions except those relating to appropriate unit determinations [and arbitration orders], would have intended that such determinations could nevertheless be reviewed by district courts." Ass'n of Civilian Technicians v. FLRA, 283 F.3d 339, 341-42 (D.C. Cir. 2002).

This brings us to the union's argument from Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958), a case dealing with the National Labor Relations Act. That Act foreclosed direct judicial review in the courts of appeals of the National Labor Relations Board's collective bargaining unit certifications.⁵ Even so, Kyne upheld district court review of a particular Board unit certification. Id. at 190-91, 79 S.Ct. 180. As Judge Friendly explained, the "conflict" between the Act's prohibition and the NLRB's action was "plain": "[The National Labor Relations Act] declared that the Board 'shall not' decide that any unit including professional and non-professional employees is appropriate for collective bargaining unless a majority of the professionals vote for inclusion. The Board conceded it had done exactly what it was forbidden to do." Local 1545, United Brotherhood of Carpenters & Joiners of Am. v. Vincent, 286 F.2d 127, 132 (2d Cir. 1960).

Kyne treated the jurisdictional issue as one of statutory interpretation: did the relevant legislation bar judicial review in the district court? 358 U.S. at 188-90, 79 S.Ct. 180. The Court answered the question by declaring that Congress could not...