Appellate Court: FLRA Cannot Override Arbitrators Just Because It Disagrees With Them

A three-judge panel last week overturned a Federal Labor Relations Authority decision, ruling that the federal labor-management agency did not provide enough deference to neutral arbitrators.

A federal appellate court last week dealt another blow to the Federal Labor Relations Authority, ruling that the agency failed to meet its burden for overruling a third-party arbitrator in considering a dispute between the National Weather Service and its union.

At the crux of the case is the question of whether the National Weather Service met the criteria laid out in its contract with the National Weather Service Employees Organization when it terminated the collective bargaining agreement in July 2017. According to the contract, either party can elect to terminate the agreement 90 days after the start of formal negotiations on a new contract unless a new agreement has been reached or if a party has requested the aid of the Federal Mediation and Conciliation Service or the Federal Service Impasses Panel.

The union said that formal negotiations began in 2015, when the agency asked to renegotiate the contract and ground rules negotiations began. The parties eventually sought assistance from the Federal Mediation and Conciliation Service and reached consensus on ground rules in October 2016. But the agency, which declined to join in a union request for further mediation assistance in 2017, argued that “formal” negotiations did not begin until the first face-to-face negotiations on the substance of the new contract in April 2017.

A neutral arbitrator ruled that formal negotiations began with the discussion of ground rules in 2015, and that even if “formal negotiations” as described in the original union contract excluded ground rules negotiations, the fact that the agency submitted its first proposals in January 2017 and the union requested mediation assistance that February meant the agency could not terminate the agreement.

But the FLRA overruled that decision by a 2-1 vote, stating that the arbitrator’s interpretation was “unconnected with the [contract provision’s] wording and purposes” to encourage the parties to reach a “quick agreement” on a new contract.

A three-judge panel on the U.S. Court of Appeals for the D.C. Circuit unanimously found that the FLRA failed to provide the arbitrator the deference required in American jurisprudence. Writing for the court, Judge Judith Rogers noted that the FLRA must provide the same “deferential standard review” that federal district courts provide arbitrators in private sector labor-management cases, meaning it can only overrule an arbitrator if their decision was “contrary to any law, rule or regulation” or failed to “draw its essence from the collective bargaining agreement.”

“Here, the authority’s sole inquiry under the standard of review should have been whether the arbitrator was even arguably construing or applying the CBA,” Rogers wrote. “Whether the arbitrator correctly interpreted the CBA was beyond the scope of the authority’s review. Yet the authority engaged in a much more searching review of the arbitrator’s decision than permitted by law.”

The court noted that the arbitrator, in its decision, engaged in several pages of discussion of the wording of the union contract’s termination clause and the term “formal renegotiations.” And by contrast, the FLRA’s review was far more abbreviated.

“In concluding that the arbitrator’s award ‘fails to draw its essence’ from the CBA, the authority offered no analysis other than to explain that the arbitrator’s interpretation of ‘formal renegotiations’ was incorrect,” Rogers wrote. “The authority’s view that the arbitrator erred in his interpretation of the CBA is inadequate to warrant vacatur of the arbitrator’s award. Because the authority failed to apply the correct standard of review, it acted contrary to law.”

The decision marks the second time in as many months that the D.C. circuit court has overturned an FLRA decision. In June, a three-judge panel found that a case in which the agency sought to limit the matters over which agencies and unions are required to negotiate—by creating a distinction between the phrases “conditions of employment” and “working conditions”—was based on a misreading of Supreme Court precedent and “provides more questions than answers.”

Last year, FLRA Chairwoman Colleen Kiko Duffy justified her agency’s high rate of overturning neutral arbitrators in testimony before Congress by stating that she believes arbitrators have been “[going] outside their authority.”