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A panel of appeals court judges heard arguments Monday over the legality of the Defense Department's proposed labor relations system for civilian employees.

After losing in a lower court in February -- and following two losses for the Homeland Security Department's similar system -- government lawyers continued to argue that Congress gave the Pentagon authority to make far-reaching changes to collective bargaining.

In the 2004 Defense authorization bill, Congress granted the department authority to create a new human resources system, based on the notion that the current system was too rigid and outdated to allow the department to respond with agility to modern threats of terrorism.

Pentagon officials said they have the authority to override collective bargaining agreements after they are reached and the ability to narrow the items that can be bargained over as much as they want. But a coalition of federal labor unions sued the department to say the rules effectively eliminate collective bargaining.

Judges Brett Kavanaugh, David Tatel and Stephen Williams of the U.S. Court of Appeals for the District of Columbia heard an hour and a half of arguments Monday, but they could take until the summer to issue an opinion. Either side could then appeal to the full court of appeals, the Supreme Court or both.

Justice Department lawyer William Kanter, representing the Defense Department, argued that Congress included a sunset provision -- all labor relations changes revert to the old system in 2009 unless Congress actively votes to make them permanent -- to allow experimentation.

"It tells you that Congress knew it was charting a new course," Kanter said.

Tatel, a Clinton appointee and the lone Democrat on the panel, said, however, that there are many time-limited statutes that are decided on by the courts, and the sunset clause might not supersede the need for a system that is legal.

Congress said in its legislation that the Pentagon could remake labor relations rules, but had to ensure collective bargaining. Kanter argued that the Pentagon could define collective bargaining as it sees fit, but union lawyers asked the judges to look to the decision in the Homeland Security Department's case for a definition.

In that decision, appellate judge Harry Edwards said the proposed rules "effectively eliminate all meaningful bargaining over fundamental working conditions. In no sense can such a limited scope of bargaining be viewed as consistent with [Congress'] mandate that DHS 'ensure' collective bargaining rights for its employees."

Kavanaugh -- who President Bush appointed in May 2006 and who served in the White House as legal counsel and then staff secretary for Bush from 2001 until the president appointed him to his current position -- pushed union lawyer Joe Goldberg on the Pentagon's authority to create a new labor system.

Kavanaugh pointed out that Congress included a qualifier in the language that ensured collective bargaining: "subject to the provisions of this chapter and any exclusion from coverage or limitation on negotiability established pursuant to law." There is no qualifying language in the part of the law giving the secretary authority to create a new system to fit Defense's national security mission.

The judges also pressed Kanter on the department's proposal to create a new internal labor relations board, which would investigate and decide on labor-management disputes in place of the governmentwide Federal Labor Relations Authority.

The judges questioned whether the National Security Labor Relations Board, whose members would be appointed by the Defense secretary, would be sufficiently independent, as Congress required.

The third judge on the appeals panel, Williams, is a Reagan appointee who became a senior judge in 2001.

COMMENTS

• What does it take for the President, OPM, DHS, and the Defense Department to realize they are trying to reinvent the wheel? DHS official is surprised at the resistance at the new personnel system? The new personnel system has been touted as a cure for all ailments and crammed down our throats. The "GS pay schedule is for 1950." Beware! The Bill of Rights and the Constitution are over 200 years old and that could be thrown out the door behind the General Schedule pay system. How did our forefathers compose the Constitution with such intelligence, foresight, and common sense with a document for all people that has been the rulebook and backbone of our great nation for over 200 years? In the 2004 Defense authorization bill, Congress granted the department authority to create a new human resources system, based on the notion that the current system was too rigid and outdated to allow the department to respond with agility to modern threats of terrorism. Too rigid? The huge salaried DHS is paid did not fit within the GS schedule and the DHS employees did not want to lose money so they want to change the pay system for their benefit. The GS Schedule has been in effect for many years and has worked well. Civilians know what is expected of them and of the GS Pay Schedule, but uncertainty and possible loss of pay and jobs is a threat under the MAX-HR. Who will take care of the employees who lose their jobs? Unemployment? Welfare? Outdated? It’s worked for years. Respond to threats of terrorism? Americans have always stood up to any challenge so this statement is totally false. During Hurricane Katrina all the blame cannot be pushed onto FEMA because FEMA falls under the DHS umbrella. Do we need another failure with the MAXHR system? GovExec.com reader Posted December 18, 2006 4:00 PM