Judges to Labor Authority: When Does a Contract End, Anyway?

A trio of federal judges this month grilled attorneys for the Federal Labor Relations Authority and the Biden administration on “Contracts 101,” following a controversial policy statement issued last year that allows federal agencies to implement rules and regulations unilaterally in some circumstances.

Last September, the FLRA issued a statement of policy requested by the Agriculture Department stating that if a federal employee union and an agency are still engaged in negotiations on a new agreement when the existing one expires, which typically triggers a temporary extension of the existing union contract, that is effectively a new contract and is subject to the agency head review process.

As a result, the agency can then unilaterally implement regulations that were imposed during that agreement, sidestepping the requirement that agencies must negotiate how those new rules impact federal workers.

The lone Democrat at the FLRA, Ernest DuBester, who now serves as chairman of the agency, dissented from the decision, arguing that the policy statement conflicts with federal labor law.

“This provision states that, with a limited exception, an agency may not ‘enforce any rule or regulation . . . which is in conflict with any applicable collective bargaining agreement if the agreement was in effect before the date the rule or regulation was prescribed,’” DuBester wrote last year. “[The majority’s] conclusion cannot be squared with the plain language of [the statute] because—as noted—the parties to a continuance provision have mutually agreed that their existing agreement shall remain in full force and effect until such time as a new agreement is approved.”

A three-judge panel for the D.C. Circuit Court heard oral arguments on the matter earlier this month, after the National Treasury Employees Union sought review of the FLRA’s decision. The judges spent most of their time questioning attorneys for the FLRA and the Agriculture Department on the basics of centuries-old contract law, specifically whether continuance provisions push back the original expiration date of a contract or mark the start of a new contract.

Judge Patricia Millett asked how continuance provisions in union contracts are different from any contract that establishes a compound expiration date, in which an agreement expires at the later of the two events.

“If the [continuance] provision is fairly read as Date A or Event B, whichever comes later, then only the later date would be the expiration date,” she said.

“It would end at the term of the of the initial contract,” said Rachel Osborne, a Justice Department attorney representing the FLRA.

“Is it the first date or is it whichever comes later?” Millett asked.

“I think we’re talking about two different terms of agreement,” Osborne said.

“No, I’m giving you exactly what a term was when I looked at a contract,” Millett said. “I say that its duration is Date A or Event B, whichever is later. That’s how the contract is read, that’s what the parties intended, this is basic contract principles.”

Joseph Busa, a Justice Department attorney representing the Agriculture Department and the Office of Personnel Management, argued that the calendar date in a contract’s compound “whichever comes later” has particular value in federal labor law, because it allows unions to fend off efforts by other labor groups trying to usurp their position as the exclusive representative for a workforce and because it allows agencies to implement rules that arise during the course of a collective bargaining agreement’s term.

“The FLRA since the beginning of the statute has interpreted the time-limited grandfather provision narrowly specifically because of the other important policy interests here, like the rest of the [Civil Service Reform Act], which delegates to OPM, presidential power and other statutes and sources of authority,” Busa said. “The FLRA made clear that there needs to be an express term that expires in order for new governmentwide rules to go into effect in a timely manner.”

But Judge Gregory Katsas continued to press Busa on idea that the automatic triggering of a continuance provision because an agency and a union have failed to agree to a new contract therefore triggers a new agreement that is subject to agency head review. To Katsas, the fact that the continuance provision was triggered in the first place indicates a fundamental lack of agreement.

“You can take it either way, either Judge Millett’s formulation that we’re still under the original expiration term of the contract, or my formulation that there has been no second ‘meeting of the minds’ to produce a second [temporary continuance] agreement, so you can take either one, but I haven’t heard a great answer to either of those concerns,” Katsas said.

“It is common ground between everyone here that if you have an agreement, let’s say ground rules on how negotiations are conducted, the provisions of the ground rules set the conditions upon which there will be an execution of the new agreement,” Busa said. “It’s a common ground provision of the prior agreement that can set conditions upon which parties act to execute a new agreement.”

“But that’s if, and only if, there’s a new agreement though, so what’s the new agreement?” Katsas asked. “Why does a new agreement arise when the triggering event is one party unilaterally saying, ‘I don’t like this contract and want to renegotiate it?’”

A decision in this case is expected some time in the coming months.