Union, Trump Administration Trade Barbs in Impasse Panel Lawsuit Hearing

A federal judge on Wednesday heard arguments by a federal employee union and the Trump administration about whether members of a federal panel that resolves collective bargaining disputes are constitutionally appointed to their positions as well as whether the judge has jurisdiction to even consider the case.

The American Federation of Government Employees’ National Veterans Affairs Council is suing the Federal Service Impasses Panel, alleging that since there is no direct way to challenge the panel’s decisions and the panel lacks direct supervisors, members should be subject to Senate confirmation. The panel's decisions can only receive further review if a union refuses to abide by them and an agency files an unfair labor practice complaint.

But the Trump administration has argued the law clearly requires the union to exhaust all administrative remedies, including triggering an unfair labor practice complaint through noncompliance if need be, before taking its case to federal courts. Even if that were not the case, members of the impasses panel do not require Senate confirmation because the Federal Labor Relations Authority sets policies by which the impasses panel must abide, and President Trump last year delegated his authority to remove panel members to the labor authority, the administration said.

U.S. District Court Judge Carl Nichols, a Trump appointee, heard arguments between Matthew Collette, an attorney representing AFGE, and Kyla Snow, a Justice Department lawyer. Although Nichols appeared to offer roughly equal skepticism to both parties, the hearing was overshadowed by the fact that on Monday, District Court Judge Richard Leon denied the Trump administration’s motion to dismiss a similar case brought by AFGE’s Housing and Urban Development Council on jurisdictional grounds.

Nichols asked Collette how a favorable decision by the impasses panel might affect the union’s legal challenge.

“What if the impasses panel ultimately agreed with the union on whatever issues were presented?” he asked. “What would the harm be even if the panel, though improperly constituted, decides in your favor?”

“Well we do think that is unlikely,” Collette quipped. “But this is not a situation where once the decision is out the case is over. This is an ongoing relationship . . . This is a situation where, even if the union wins, we’ll be back before the panel when this contract expires and there’s another negotiations impasse.”

Nichols also prodded Collette on the administration’s argument that although a union cannot directly appeal an impasses panel decision, there are still avenues in which to seek judicial review, like inviting an agency to file an unfair labor practice complaint by refusing to abide by the panel’s decision.

“The problem of course is that there’s no direct route to judicial review of a panel decision,” Collette said. “The problem with invoking an unfair labor practice complaint is that it’s not in the control of the union, and [Free Enterprise Fund v. Public Company Accounting Oversight Board] mentioned that you shouldn’t have to ‘bet the farm’ and violate the law to provoke someone bringing an action against you.”

But Snow said the union’s concern about taking on undue risk to seek judicial review, specifically the fear mentioned in legal briefs that a union could be decertified, is overblown, noting that the FLRA likely would only issue a “remedial” penalty against the union.

“In Free Enterprise the court did not indicate that for a statutory review scheme to be meaningful, the party was not placed at any risk,” she said. “And in [Thunder Basin Coal Co. v. Reich], for the mine operators to avail themselves of judicial review, they were required to wait for the Labor secretary to enforce a rule against them and file proceedings, and if they were found to have violated regulations, they could have incurred a substantial fine.”

Nichols pressed Snow on what actions could be taken against the union if forced to pursue its legal challenge through the administrative review process envisioned by the Trump administration, but she demurred.

“Is the [FLRA] prepared to commit that if I hold that there isn’t jurisdiction because there is a statutorily created review mechanism up to and through the D.C. Circuit Court and require the union to commit an unfair labor practice, that the most the authority would do is issue a cease and desist order?” Nichols asked.

“I don’t think I’m prepared to represent that specifically,” Snow said. “But the important thing is that under the statute, the authority is not able to take punitive action to cure an unfair labor practice violation.”

On the question of whether impasses panel members are constitutionally appointed, Snow said that they are already inferior officers that do not require Senate confirmation, because the FLRA issues policy statements that the panel must follow in its decision-making process. And because they are inferior officers, it was lawful for President Trump to delegate his removal authority to the FLRA.

“Congress could have made them principal officers or inferior officers, and in doing so, could have structured panel members’ offices in any way necessary to ensure that they’re sufficiently supervised,” Snow said. “Here they could have done that in the first instance, but it’s lawful as well for Congress to instead give the president removal power and at the same time allow him to delegate that removal power . . . In fact, in delegating removal power, it ensures that panel members are inferior officers, so that should be not only permissible but required, because it ensures the constitutionality of the scheme Congress established.”

“If the president rescinded his delegation tomorrow, would they be inferior officers any longer?” Nichols asked.

“Yes, they would still be inferior officers even without the delegation of removal authority, because the statute provides sufficient additional supervisory tools for FLRA to supervise them at some level,” Snow said. “That includes the ability to issue policy statements, and in issuing those statements, the authority can set limits on jurisdiction and provide substantive guidance about how different statutory provisions must be applied.”

Collette said that argument is based in a misreading of Congress’ actions in establishing the FLRA and the impasses panel.

“It seems that the government is saying that it’s OK to delegate removability because Congress could have established panel members as inferior officers by vesting the removal authority in the FLRA, but it didn’t,” he said. “What that actually shows is that the government is saying that the president can rewrite the statute. Congress could make the panel’s decisions directly reviewable or directly supervised, but it didn’t.”

“Isn’t it relevant that the general counsel and members of the [FLRA] are subject to confirmation by statute and the panel members are not?” Nichols asked.

“I think that helps us, your honor,” Collette said. “If you look at the FLRA organizational chart, you see three boxes going across [for the general counsel, the FLRA and the impasses panel], and the authority constantly talks about the panel as an independent entity. Now, Congress may have not thought they weren’t creating principal officers, just as they thought in [SEC v. Lucia] that they weren’t creating officers at all, but the fact is Congress created a structure in which they are principal officers.”

Nichols said he plans to move quickly to issue a decision on both the government’s motion to dismiss the case and the union’s request for a preliminary injunction within the next few weeks, but said he could not guarantee it would be ready in time for the impasses panel’s July 5 deadline for the Veterans Affairs Department and AFGE to submit justifications for their contract proposals.