An Appeals Court Has Overturned Another Decision That Made Life Harder for Federal Employee Unions

A federal appeals court on Tuesday struck down a controversial Federal Labor Relations Authority decision to raise the threshold of a change in working conditions that requires agency management to negotiate with its unions, citing faulty reasoning employed to justify upending decades of federal labor law precedent.

Since the 1980s, the FLRA has held that agencies must bargain with their union counterparts whenever they make a change to working conditions that is “greater than de minimis.” But in a policy statement in October 2020, the Republican majority on the FLRA board abandoned that precedent in favor of the “substantial impact” metric used by the National Labor Relations Board.

The decision, coupled with two other policy changes, spurred outcry from federal employee unions, which challenged each of them in court, the first of which was decided in the labor groups’ favor last week. Another three-judge panel on the U.S. Court of Appeals for the D.C. Circuit, this time led by Judge Ketanji Brown Jackson, found that this second policy statement was arbitrary and capricious because the FLRA provided only a “cursory” rationale that did not stand up to scrutiny.

Jackson, who has been named as a contender for the Supreme Court, started with the FLRA’s “inconsistent” reasoning for abandoning the “de minimis” standard, which argued that the old standard was too unpredictable for agencies and led to unions forcing bargaining on any policy change, no matter how trivial. She said that both arguments cannot simultaneously be true.

“It is not at all clear how the de minimis standard could both lead inexorably to the conclusion that all management decisions ‘no matter how small or trivial’ must be subject to bargaining and at the same time yield unpredictable results, including, by the FLRA's own telling, many instances in which the duty to bargain was not triggered,” she wrote. “Yet that is how the FLRA’s policy statement reads: the existing standard both purportedly subjects every minor decision to review and is unworkable because it is impossible to predict.”

In adopting the “substantial impact” standard for determining when a change in working conditions necessitates bargaining with unions, the FLRA argued that the new rule would reduce the number of labor-management conflicts on the subject. But Jackson found that idea wanting.

“It is especially striking that the FLRA does not provide a comparative analysis of the two standards or in its policy statement even argue that the substantial-impact standard used by the NLRB in the private-sector context has in fact led to more predictable results, since, as noted above, the FLRA frames inconsistent application as the principal problem the new standard is designed to fix,” Jackson wrote. “There is no obvious reason to expect that labor unions and employers will disagree less frequently about whether any given management decision has a ‘substantial impact’ on conditions of employment than they previously did over whether such a decision had a more than de minimis effect.”

Jackson said that the FLRA’s reliance on the rules of collective bargaining as governed by the National Labor Relations Board fails to account for the differences in the power balance between parties in the private sector, specifically the ability to negotiate over pay and for workers to go on strike.

“The FLRA’s decision to adopt the NLRB’s substantial-impact test also fails to account for the agency’s own past assessments of how the differences between the public-sector and private-sector bargaining contexts inform the appropriate bargaining threshold,” Jackson wrote. “Critically, [the agency previously] highlighted ‘the limited scope of federal sector bargaining caused by external laws, rules and regulations,’ and observed that this context ‘demands that the FLRA not impose further limitations unless they are based on clear statutory authority and are buttressed by sound policy considerations.’”

In a statement, National Treasury Employees Union National President Tony Reardon applauded the latest ruling to restore longstanding labor precedent.

“The court’s ruling in favor of NTEU and two other unions restores the longstanding status quo that the FLRA tried to jettison and means that agencies must bargain over any management-initiated change that has more than a minor, ‘de minimis’ impact on a condition of employment,” he said. “NTEU hopes that the FLRA will heed the D.C. Circuit’s admonition, which it has now delivered repeatedly, that it must issue reasoned decisions.”

American Federation of Government Employees National President Everett Kelley on Tuesday celebrated the two recent decisions in a statement.

"These two decisions are a victory for all federal workers," Kelley said. "They highlight the extreme lengths to which the holdover majority on the Federal Labor Relations Authority will go in its attempts to bust unions, limit collective bargaining, and run roughshod over the law."