FLRA FUBAR: ARBITRATING PROBATIONARY TERMINATIONS
In December 2011 the Authority had a chance in NTEU, 66 FLRA 416 to fix an error it made decades ago that denied unions and agencies the right to consolidate the numerous appeal options of a terminated probationary employee. As a result, well-represented probationers can continue to appeal dismissals to MSPB, EEOC, FLRA, and the Special Counsel alleging violations of nearly two dozen statutory rights. There is no doubt that the appeal procedures and legal reasoning in this area are fouled up beyond all recognition—despite the Supreme Court’s oft-repeated strong indication that it would overturn FLRA if given the opportunity.
In 1982 the Authority held that unions could negotiate to extend grievance and arbitration rights to dismissed probationers. AFGE, 8 FLRA 347. It reasoned that the statute (7103(a)(9)) clearly and unambiguously stated that “ANY matter relating to the employment of the employee” or “ANY claimed violation, misinterpretation or misapplication of law, rule or regulation” could be grieved and arbitrated by “ANY employee of an agency.” [Emphasis added] Moreover, it pointed out that Congress had specifically excluded certain matters from the grievance/arbitration process—including a suspension or removal under 5 USC 7532, but not the dismissal of probationers. Finally, it went on not only to rule out any conflict between its statutory reading and the legislative history, but also to point to legislative history that supported its reading of the statute. Normally, when those three rules of statutory construction are on one’s side, it is a sucker’s bet to anticipate that a court would overturn the decision.
But, then in 1983 the D.C Circuit overturned the Authority in what may be one of the sloppiest and most poorly reasoned cases we have read. Rather than push back, Reagan-appointed FLRA submissively surrendered its policy leadership (13 FLRA No. 109) role to the courts on this issue and accepted as its own a very FUBAR rationale and policy.
While little has changed at FLRA since then, much has changed at the Supreme Court. Starting with Gilmer (1991) and again in Circuit City (2001) and Waffle House (2002), the Court addressed a very similar policy question under a very similar law, namely The Federal Arbitration Act , and held that employees could arbitrate virtually any employment law issue that the courts or administrative bodies would otherwise handle. In fact, the Court appears to be enthusiastic about pushing employment law issues to arbitrators. It said, for example, there is a “liberal federal policy favoring arbitration agreements” and that “generalized attacks on arbitration ‘res[t] on suspicion of arbitration as a method of weakening the protections afforded in the substantive law to would-be complainants,’ and as such, they are ‘far out of step with our current strong endorsement of the federal statutes favoring this method of resolving disputes.’ (Gilmer, 1991)
When you align the Court’s rulings with the D.C. Circuit’s 1983 decision opposing arbitration of probationary terminations–and mix in some obvious rebuttal arguments to the circuit court’s rational, it appears the time is ripe for FLRA to return to its original 1982 position. FEDSMILL.com has identified below the components of the circuit court’s reasoning and linked them to Supreme Court rationale in similar cases as well as obvious rebuttal arguments. We hope it clarifies the issue for you.
Agency Right to Summary Dismissal— The core of the D.C. circuit court’s objection was its conclusion that if probationers could arbitrate dismissals agencies would lose the right to summarily dismiss them: “. . . the crucial issue is whether Congress intended to allow any shackles whatever to be placed on agency decisions concerning termination of probationary employees for unacceptable work performance or conduct. We think that Congress affirmatively preserved the agencies’ right to discharge summarily a probationary employee for unacceptable work performance.”
The circuit court saw summary terminations as essential to an effective and efficient service, and it has repeatedly acted to preserve the agencies’ discretion summarily to remove probationary employees. The following excerpt is from another of its cases where the union attempted to provide probationers access to arbitration only when alleging civil rights discrimination: “To allow the mere allegation of discrimination to give a discharged probationary employee access to the grievance procedure, with the concomitant power of the arbitrator to order reinstatement, would substantially thwart Congress’s intention to allow summary termination of probationary employees.” NTEU, D.C.Cir. 1988 [Editorial note: We at FEDSMILL.com find it shocking that the court would suggest that an allegation of civil rights discrimination is trivial and cannot merit reinstatement by an arbitrator if found to be true.]
However, the court’s conclusion was unquestionably wrong on the facts. Agencies did not have a right to summary dismissal, which is limited to situations where there are no disputes about the facts and law entitles one party to a victory. The Civil Rights Acts of the mid-60s gave probationers the right to challenge allegations of poor performance or misconduct by alleging they were a pre-text for discrimination based on gender, race, national origin, or religion. OPM’s predecessor, the Civil Service Commission, also allowed probationers to challenge dismissal based on marital or political bias as well as on sophisticated procedural grounds. Each of these allowed employees to challenge the core facts of the agency decision, which makes summary dismissal judgment virtually impossible.
But, the Supreme Court seems to have made the alleged right to summary dismissal moot anyway. It held that, “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than judicial forum.” (Gilmer, citing Mitsubishi, 1985) If the Court believes that arbitration does not extinguish either parties’ substantive rights, the “summary dismissal” objection is irrelevant. Arbitration is merely a procedural option and procedures are negotiable under 5 USC 7106(b).
OPM Regulatory Authority— Another circuit court concern was that Congress gave OPM the power to regulate probationary periods; consequently, permitting arbitration would amount to allowing FLRA to intrude on OPM’s jurisdiction. “Furthermore, we think Congress instructed OPM, not FLRA, to implement the probationary program and to provide whatever procedural protections were necessary for probationary employees. . . . In short, FLRA usurps the authority Congress conferred on OPM when it orders INS to bargain over a subject inconsistent with OPM regulations.” (AFGE, D.C.Cir. 1983. See also NTEU, D.C.Cir.1988)
Here is the Supreme Court response in Gilmer, 1991 to an argument that allowing arbitration of matters within EEOC’s regulatory jurisdiction would undermine its role, “We also are unpersuaded by the argument that arbitration will undermine the role of the EEOC in enforcing the ADEA. An individual ADEA claimant subject to an arbitration agreement will still be free to file a charge with the EEOC, even though the claimant is not able to institute a private judicial action.” It specifically dismissed the idea that there is “any inherent inconsistency” between statutory policies and arbitration.
Beyond the words of the Supreme Court, the D.C. Circuit never explained why OPM’s unquestioned power to regulate probationary periods was different than its unquestioned power to regulate RIF’s, appraisals, promotions, step increases, leave, and over a dozen other HR matters. If employees can take any dispute over them to the grievance/arbitration process, why not disputes over probationary dismissals? After all, if an arbitrator reverses a RIF, especially a mass RIF, that would be far, far more disruptive and costly to management than having to reinstate a single probationer.
Finally, the D.C. Circuit has held that the CSRA took away all judiciary rights to decide employee claims about violation, misinterpretation or misapplication of law, rule or regulation and turned over exclusive jurisdiction to arbitrators, with limited FLRA review, for those employees covered by a grievance/arbitration process. If the Act was powerful enough to extinguish judicial review of an Executive Branch decision, why would one think it was not powerful enough to take away OPM’s power to limit review by another Executive Branch actor?
Arbitration of Probationary Terminations Would Violate Government-wide Regulation— The circuit court said, “Since LMRA mandates that all negotiated grievance procedures provide for binding arbitration, the employee would then have the right to contest the agency’s reasons before an arbitrator. The arbitrator, in turn, could reject the agency’s reasons and order the employee reinstated. Such a procedure, with its concomitant second-guessing of the agency’s decision, is flatly inconsistent with OPM’s regulations.” (AFGE, D.C.Cir 1983).
There are several things wrong with that conclusion. First, the arbitrator would only have the power to do whatever FLRA, MSPB, EEOC, or any other reviewing authority could do if the contract provision was, “The union may appeal to arbitration the dismissal of a probationary employee only on the grounds allowed by statute or regulation.” That would limit whatever second-guessing there was to what already is done by other agencies irrespective of OPM regulations. (In the circuit court’s defense, the contract proposal before it was ambiguous about what standard would be used.)
Second, while OPM regulations may address the appeal rights of a probationer, just like they address those of a RIF victim (5 CFR 351.901) and employee denied a step increase (5 CFR 531.410), are they not subservient to the 5 USC 7103(a)(9) statutory language permitting ANY employee to grieve and arbitrate Any matter related to employment?
The Contrast with Chapters 43 and 75 Appeal Rights— The D.C. Circuit said it was moved by the contrast between the rights of these statutory chapters versus those of a probationer: “The substantial protections that Congress made available only to tenured employees indicate that Congress recognized and approved of the inextricable link between the effective operation of the probationary period and the agency’s right to summary termination. See S.Rep. No. 95-969, supra, at 45.”
In rebuttal, we would point out that the Senate bill was rejected in favor of the House bill, making the S.Rep. irrelevant to this inquiry. Second, even Evel Knievel would not have attempted to make the leap the court did of citing chapter 75 and 43 procedures as evidence that Congress was saying anything about probationers. Probationers’ rights exist in other sections of law and no matter what happened in 75 and 43 they remained unaffected, particularly, as the FLRA pointed out in 1982, given that Congress chose not to list their dismissals among the statutory exceptions to the grievance procedure.
In the face of a similar assertion, the Supreme Court has made it quite clear that “[h]aving made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.” Under CSRA, the question of whether probationary terminations go to arbitration would be negotiable because agreement would be required.
Arbitrators Would Not be Bound to Apply Precedent— This did not come from the 1983 D.C. Circuit case, but was raised in a related D.C Circuit opinion involving the right to excepted service employees to challenge their dismissals through arbitration (NTEU, 1989 ), “If NEES employees could contest adverse personnel actions through arbitration, which they cannot appeal to the MSPB, arbitrators would not be statutorily bound to apply MSPB precedent to those proceedings.”
Again, the D.C. Circuit appears wrong on the facts. The CSRA calls for arbitration decisions to be overturned if they do not conform to law or government-wide regulation. If they tried to change EEOC’s definition of gender discrimination or ignore MSPB prohibited personnel practice law or even deviate from the FLRA test for “restraint and coercion,” that would be reversible error that we can expect FLRA to enforce.
Conclusion— For those who still believe that legislative history overrides the clear and unambiguous statutory language, we suggest you focus on what the current Supreme Court did with legislative history assertions in their arbitration cases: “As the conclusion we reach today is directed by the text of §1, we need not assess the legislative history of the exclusion provision. . . .(“[W]e do not resort to legislative history to cloud a statutory text that is clear”). (Circuit City, 2001)
For those who still doubt the strength of the Supreme Court’s intent to have arbitration substitute for judicial hearings, read Compucredit Corp. v. Greenwood, 2012. It was an 8 to 1 judgment, with only Justice Ginsberg dissenting, in which the majority allowed arbitration agreements to replace lawsuits in credit contracts disputes. Writing for the majority, Justice Scalia stated, “Had Congress meant to prohibit these very common provisions [arbitration] in the CROA, it would have done so in a manner less obtuse than what respondents suggest. When it has restricted the use of arbitration in other contexts, it has done so with a clarity that far exceeds the claimed indication in the CROA” The Justice rejected silence as reason to bar arbitration of statutory and regulatory claims, thereby voiding most of the circuit court and FLRA’s rationale for barring arbitration.
Writing a concurrent opinion, Justice Sotomayor noted that the party opposing arbitration “bears the burden of showing that Congress disallowed arbitration of their claims, and because we resolve doubts in favor or arbitration.
As for next steps, some union will have to set up a negotiability dispute over a proposal such as, “The union may appeal to arbitration the dismissal of a probationary employee only on the grounds allowed by statute or regulation.” That will give the Authority a fair chance to review current precedent and the courts an opportunity to settle any appeals.
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