On Petition for Review of an Order of the Federal Labor Relations Authority
Before: Henderson, Rogers and Garland, Circuit Judges.
The opinion of the court was delivered by: Rogers, Circuit Judge
This case is before the court for a second time. See Ass'n of Civilian Technicians, Puerto Rico Army Chapter v. FLRA, 269 F.3d 1112 (D.C. Cir. 2001) ("ACT I"). After the Department of Defense ("the Agency") had disapproved Provision 2 of a collective bargaining agreement as contrary to law under the Federal Service Labor- Management Relations Statute, 5 U.S.C. §§ 7101 et seq., (hereafter, "collective bargaining law"), the Association of Civilian Technicians, Puerto Rico Army Chapter ("the Union"), filed a negotiability appeal with the Federal Labor Relations Authority ("FLRA") pursuant to 5 U.S.C. § 7105(a)(2)(E). FLRA agreed with the Agency that Provision 2 was contrary to law and therefore nonnegotiable under 5 U.S.C. § 7117(a)(1), concluding that Provision 2 expenditures were not authorized by the Travel Expenses Act, 5 U.S.C. §§ 5701, et seq. See Ass'n of Civilian Technicians, Puerto Rico Army Chapter, 56 F.L.R.A. 807 (2000). The court reversed, holding that the Travel Expenses Act was irrelevant, see ACT I, 269 F.3d at 1116, and remanded the case for FLRA to address two issues presented by the Union, namely that Provision 2 expenditures are authorized (1) generally by the collective bargaining law, "and therefore by the law that generally authorizes agency expenditures," id. at 1115, 1117-18; or (2) specifically as an "appropriate arrangement[ ]" under 5 U.S.C. § 7106(b)(3) for employees injured as a result of the Agency's exercise of the management right to cancel leave and "assign work" under 5 U.S.C. § 7106(a)(2)(B). Id. at 1118. On remand, in again ruling that Provision 2 was contrary to law, FLRA addressed the first issue but not the second.
Congress has declared in the collective bargaining law that
"labor organizations and collective bargaining in the civil
service are in the public interest." 5 U.S.C. § 7101(a). The
collective bargaining law therefore protects the rights of
federal employees to form or join or refrain from joining any
labor organization, id. § 7102, and imposes on federal agencies and labor organizations a duty to bargain collectively in
good faith. Id. § 7116(a)(5), (b)(5). It also excludes certain
management rights of an agency from inclusion in negotiations, see id. § 7106(a), but requires an agency to bargain
over the procedures by which these management rights are
exercised, id. § 7106(b), including negotiating "appropriate
arrangements for employees adversely affected by the exercise of any [management] authority." Id. § 7106(b)(3). It
generally requires that federal agencies and labor organizations bargain in good faith over the terms and conditions of
employment, unless a bargaining proposal is inconsistent with
an existing federal law, rule, or regulation. See id.
§§ 7103(a), 7114, 7116, 7117(a). Thus, if a collective bargaining provision is inconsistent with federal law, see id.
§ 7117(a)(1), or excessively interferes with management's
rights, see id. § 7106, the provision is nonnegotiable.
Under Provision 2 of the proposed collective bargaining agreement, the Union seeks reimbursement for its members' out-of-pocket losses resulting from the Agency's cancellation of previously approved leave. The provision provides:
Once leave has be[en] approved and the employer has a compelling need to cancel the previously approved leave, the employer agrees not to subject the employee to a loss of funds expended in planning of the leave (i.e. hotel reservations, airline tickets, etc.). The employee will demonstrate the unavoida[bility] of the loss of funds.
ACT I, 269 F.3d at 1113-14. Because Provision 2 requires the disbursement of appropriated funds, the question before FLRA was whether such disbursement is authorized by law. See U.S. Const. Art. I., § 9, cl. 7; 31 U.S.C. § 1301(a). While acknowledging that the collective bargaining law does not "by itself" authorize the Agency to spend money, the Union again argued before FLRA on remand that "where Congress generally has authorized an agency to expend appropriated funds for agency operations, the collective bargaining law authorizes expenditures to implement contract provisions that are not otherwise contrary to law." Petitioner's Supplemental Statement on Remand at 1 & n.1, Ass'n of Civilian Technicians, Puerto Rico Army Chapter, 2003 WL 190510, 58 F.L.R.A. 318 (2003); see also ACT I, 269 F.3d at 1115. In other words, "[t]he collective bargaining law creates new agency obligations which general agency appropriations may be used to meet." Petitioner's Supplemental Statement on Remand at 1; see also ACT I, 269 F.3d at 1115. The Union also renewed its position that Provision 2 is alternatively authorized as an "appropriate arrangement[ ]" under 5 U.S.C. § 7106(b)(3), arguing that "Agency payment of employees' unavoidable out-of-pocket losses incurred in reliance on the [A]gency's grant of leave, subsequently revoked, is a narrowly-tailored remedy for harm inflicted ... by an [A]gency's exercise of its right to ... [cancel leave and assign work]." Petitioner's Supplemental Statement on Remand at 3.
On the first remanded issue, FLRA concluded that neither the text of the collective bargaining law, see 5 U.S.C. § 7101(a), nor its legislative history provides express or implied authorization for the Agency's expenditure of appropriated funds for Provision 2 reimbursements. In finding no express authority, it relied on Bureau of Alcohol, Tobacco & Firearms v. FLRA, 464 U.S. 89, 104 (1983) (" BATF "), in which the Supreme Court stated that "there is no reference in the statute or the legislative history to travel expenses and per diem allowances." In finding that the collective bargaining law also does not provide implicit authorization for such reimbursements, FLRA relied on this court's statement in ACT I that Provision 2 reimbursements do not concern employees "traveling on official business," 269 F.3d at 1116, and concluded that, unlike the disputed provisions in National Treasury Employees Union and Bureau of Alcohol, Tobacco & Firearms, 26 F.L.R.A. 497, 498 (1987) (" NTEU "), and National Federation of Federal Employees and General Services Administration, 24 F.L.R.A. 430, 432-33 (1986) (" GSA "), Provision 2 does not involve "official business." FLRA thus rejected the Union's argument that under NTEU and GSA, the Agency has discretion to use funds appropriated for general operations for Provision 2 reimbursements.
Then, instead of turning to the second remanded issue, whether Provision 2 is authorized under 5 U.S.C. § 7106(b)(3) as an "appropriate arrangement[ ]," FLRA examined whether there was other statutory authorization for Provision 2 reimbursements by looking to the Department of Defense Appropriations Act for Fiscal Year 2000, Pub. L. No. 106-79, 113 Stat. 1212, 1216-17 (1999) ("2000 Appropriations Act"). Cf. ACT I, 269 F.3d at 1116-17. FLRA concluded that the 2000 Appropriations Act does not expressly authorize Provision 2 reimbursements. Further, assuming the applicability of the "necessary expense doctrine," which requires that an expenditure be reasonably necessary or reasonably related to or make a direct contribution to carrying out an authorized function, see United States General Accounting Office, Office of the General Counsel, 1 Principles of Federal Appropriations Law 4-14 to 4-22 (2d ed. 1991) (" Principles "); 71 Comp. Gen. 527, 528 (1992); 63 Comp. Gen. 422, 427-28 (1984); 42 Comp. Gen. 226, 226 (1962), FLRA concluded that the appropriation for "Operation and Maintenance" for the Army National Guard in the 2000 Appropriations Act does not implicitly authorize Provision 2 reimbursements, because the Union had failed to show that such reimbursements would make "any contribution to the Agency's authorized purpose...." Alternatively, FLRA concluded that Provision 2 reimbursements are prohibited by 5 U.S.C. § 5536, which bars payment to a federal employee of "additional pay or allowance" beyond that fixed by law for the service or duty.
On appeal, the Union's overarching contention is that FLRA failed to consider Congress's general authorization of appropriations for the Agency in the context of the collective bargaining law. According to the Union, because Congress requires the Agency to conduct its operations in accordance with the collective bargaining law, reasonably necessary expenses, which are authorized by general appropriations such as in the 2000 Appropriations Act, include expenditures to carry out negotiated contract terms that are negotiable under the collective bargaining law. FLRA responds that neither the collective bargaining law nor the 2000 Appropriations Act authorizes the expenditure of funds to reimburse civilian employees for travel and recreational expenses forfeited when the Agency cancels previously approved leave, and regardless, such expenditures are prohibited by 5 U.S.C. § 5536.
A few preliminary observations guide our analysis. The Union has not argued that express authorization exists for Provision 2 reimbursements under federal law. Rather, it contends that implicit authorization for Provision 2 reimbursements may be found either pursuant to the collective bargaining law in conjunction with the 2000 Appropriations Act or pursuant to the 2000 Appropriations Act. As the collective bargaining law is FLRA's own enabling statute and the court would owe "considerable deference" to FLRA's interpretation of it, see BATF, 464 U.S. at 97, the court in ACT I remanded the case for FLRA to determine whether implicit authorization for Provision 2 reimbursements could be found either (1) through the "official business" test recognized by the Supreme Court in BATF, 464 U.S. at 107 n.17, and by FLRA in NTEU, 26 F.L.R.A. at 498 and GSA, 24 F.L.R.A. at 432-33, because Provision 2 reimbursements are sufficiently within the interest of the Agency to constitute "official business" and as such, such reimbursements are implicitly authorized under the 2000 Appropriations Act; or (2) through 5 U.S.C. § 7106(b)(3), because Provision 2 is an "appropriate arrangement[ ] for employees adversely affected by the exercise of ... [management's] authority" to cancel leave and "assign work" and as such, the reimbursements are implicitly authorized under the 2000 Appropriations Act. See ACT I, 269 F.3d at 1118. Another approach for finding implicit authorization of Provision 2 reimbursements not addressed in the court's remand, but which FLRA ...