An Appeals Court Has Once Again Overruled a Trump-era FLRA Policy

A federal appeals court on Tuesday once again overturned a controversial Trump-era change in precedent from the Federal Labor Relations Authority, this time regarding when agencies may institute new governmentwide rules upon the expiration of a union contract.

For decades, if the federal government issued a new rule that made changes to working conditions at agencies, those agencies would have to wait until it was time to negotiate a new contract with their organized bargaining units in order to implement the regulations. That’s because although unions cannot negotiate over a governmentwide rule, they can negotiate over the impact of that rule on the workforce.

But in September 2020, the then-Republican majority on the FLRA upended that precedent in a general statement of policy, requested by the Agriculture Department. Instead, the FLRA said that when an agency and a union agree to extend an expiring collective bargaining agreement in perpetuity for the purposes of negotiating a successor contract, that agreement constitutes the execution of a new agreement, at which point it can undergo agency head review and new governmentwide rules can be implemented.

The National Treasury Employees Union appealed the decision in federal court. A three-judge panel on the U.S. Court of Appeals for the D.C. Circuit heard oral arguments for the case last September, and spent much of their time focused on the basic tenets of contract law.

Writing for the court on Tuesday, U.S. Circuit Judge Gregory Katsas, an appointee of former President Trump, ruled in favor of NTEU, finding that triggering a continuance provision of a union contract does not constitute executing a new agreement that would be subject to agency head review.

Katsas wrote that the idea that the continuance of an existing contract triggers the execution of a new agreement is problematic, particularly since it is frequently only triggered because the parties are in a state of disagreement.

“The [FLRA] guidance posits the execution of a new agreement—and thus a second round of agency-head review—whenever an existing agreement is extended under a continuance clause,” he wrote. “But a continuance clause takes effect when either party seeks unilaterally to renegotiate the terms of an expiring agreement. It manifests the parties’ intent to be bound by the terms of their original agreement pending further negotiations. And it remains in effect only while the parties continue to disagree over the terms of any successor agreement.”

The court also criticized the idea that a continuance provision triggers a new term of the original contract.

“As shown above, contract extensions preserve an existing agreement rather than supplant it with a new one,” Katsas wrote. “Thus, an extended contract is the same ‘agreement’ that was ‘in effect before the extension. And so long it remains in effect, the employing agency may not enforce new regulations that conflict with it.”

With Tuesday’s decision, all three of the FLRA’s precedent-changing decisions issued together in September 2020 have been overturned in court. In a statement, NTEU National President Tony Reardon applauded the ruling.

“This is the third time in the past year that NTEU and its fellow unions have successfully challenged unreasoned, erroneous FLRA policy statements in court,” he said. “Because of this victory, agencies are once again prohibited from prematurely implementing conflicting rules and regulations upon the automatic extension of a contract. Agencies and unions will continue to benefit from the stability they bargain for when they agree on these automatic extensions, and federal employees and their unions will be better positioned to bargain on new regulations as part of more comprehensive negotiations.”