John Stewart
Tue, 10/03/2023
On September 26, 2023, the FLRA issued a decision laying out a revised standard for determining whether an arbitrator’s award impermissibly interferes with management rights, CFPB & NTEU, Chapter 355, 73 FLRA 670 (Sept. 26, 2023). The decision—issued by a bipartisan FLRA that is currently comprised of two members—overturns a Trump-era decision that had been in place since 2018.
Under the new standard, the FLRA—when presented with a management rights exception to an award in a CBA-violation case—will consider the following questions. First, it will consider whether the excepting party can demonstrate that the decision “affects the cited management right(s).” If yes, second, the FLRA will consider whether the arbitrator correctly found that the CBA provision was enforceable under § 7106(b). If yes, third, the FLRA will ask whether the excepting party has challenged the remedy “separate and apart from the underlying CBA violation.” If not, then the exception is denied. If the remedy is challenged separately and apart from the CBA violation, then fourth, the FLRA will ask whether the excepting party can demonstrate that the remedy “fails to reasonably correlate to the enforced provision, as interpreted and applied by the arbitrator.”
This new test departs from the 2018 standard for determining whether a CBA-violation decision interferes with management rights, which required consideration of (1) whether the arbitrator had determined there had been a contract violation, (2) if the remedy “reasonably and proportionally” related to that contract violation, and (3) if the contract clause “excessively interferes” with management rights.
The new test, as explained in depth by the FLRA in the CFPB decision, hews more closely to the governing statute and “will not assess whether the arbitrator misinterpreted the CBA.” It will be important to observe how the FLRA applies this new standard in the months and years ahead.
The decision concerned an arbitrator’s conclusion that the Consumer Financial Protection Bureau violated its agreement with NTEU Chapter 35 when it issued a letter of reprimand to a bargaining unit employee without cause. CFPB argued that the decision exceeded the arbitrator’s authority, failed to draw its essence from the collective bargaining agreement, was contrary to public policy, violated the Due Process Clause of the Fifth Amendment, and conflicted with management’s right to discipline employees pursuant to 5 U.S.C. § 7106(a)(2)(A). The FLRA invited the parties to submit additional briefing explaining how the revised test should apply to their case, or whether there was a need to remand the case for additional testimony and evidence.
If you have questions about your rights as a federal employee—or otherwise—or believe you have been denied any other protected rights or employment benefits, please reach out to MSE at info@mselaborlaw.com.
