U.S. Department of Health & Human Services v. Federal Labor Relations Authority

MURNAGHAN, Circuit Judge: The United States Department of Health and Human Services (HHS) has petitioned for review of a Federal Labor Relations Authority (“FLRA”) decision ordering HHS to bargain over a proposal by the American Federation of Government Employees (the “Union”). The proposal would require HHS to comply with OMB Circular A-761 (the “Circular”) when making “contracting-out” decisions. HHS contends that it has no duty to bargain because the proposal concerns a subject exclusively reserved to management. The FLRA has cross-petitioned for enforcement, and the union intervened on the FLRA’s behalf. We enforce the FLRA’s order because the Union’s proposal does not usurp the authority reserved to management under 5 U.S.C. § 7106. I. Facts and Proceedings Below During contract negotiations between HHS and the Union, which represents clerical employees in the office of HHS General [432] Counsel in Baltimore, the Union proposed the following provision: The decision by the employer to contract out work presently being performed by bargaining unit employees will be made in accordance with OMB Circular A-76 (unless application of the Circular is prohibited or not required by the Circular). After negotiations, an HHS agency head reviewing the proposal refused to approve it on the grounds that, if the proposed provision became part of the collective bargaining agreement, it would violate: (1) the management rights clause of the Act, which bars negotiation over proposals limiting management’s power to make determinations with respect to contracting-out work, 5 U.S.C. § 7106(a)(2)(B); and (2) 5 U.S.C. § 7117(a)(1), which precludes bargaining over proposals that would create an inconsistency with any federal law or government-wide regulation. The Union petitioned the FLRA to review HHS’s determination that the proposed provision was nonnegotiable. The FLRA determined that the proposed provision was negotiable, beeause it was not inconsistent with management’s right under section 7106 of the Act to make determinations with respect to contracting-out or with applicable law or regulations. See American Federation of Government Employees, AFL-CIO, Local 1923 and Department of Health and Human Services, 22 FLRA No. 106, at 6 (1986). HHS filed a motion for reconsideration, dated October 1, 1986, of the FLRA’s July 31, 1986 decision. In the motion HHS argued for the first time that the Circular is not an “applicable law” for purposes of section 7106(a)(2) of the Act and that it is not a “law, rule or regulation affecting conditions of employment,” the violations of which can be resolved in accordance with sections 7103(a)(9) and 7121(a), through the negotiated grievance procedure. The FLRA denied the HHS motion for reconsideration as untimely, noting that under FLRA rules (5 C.F.R. § 2429.17) a motion for reconsideration is due within ten days of the FLRA decision in a particular case. This appeal followed. We have jurisdiction pursuant to 5 U.S.C. § 71232 over the is [433] sues raised in the Union’s original petition to the FLRA and discussed in the FLRA’s July 31, 1986 decision. As discussed in part D of this opinion, however, we have no jurisdiction over the issues HHS raised for the first time in its October 1, 1986 motion for reconsideration. II. Standard of Review The Act provides that the FLRA’s decisions are reviewable in accordance with section 10(e) of the Administrative Procedure Act, 5 U.S.C. § 706 (1982). See 5 U.S.C. § 7123(c) (1982). The scope of our review “is limited to whether the agency’s [action] is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” United States Army Engineer Center v. FLRA, 762 F.2d 409, 414 (4th Cir.1985). Furthermore, [T]he authority is entitled to considerable deference when it exercises its special function of applying the general provisions of the Act____ On the other hand, the deference owed to an expert tribunal cannot be allowed to slip into a judicial inertia which results in the unauthorized assumption by an agency of major policy decisions properly made by Congress ... Accordingly, while reviewing courts should uphold reasonable and defensible constructions of an agency’s enabling Act ... they must not rubber stamp ... administrative decisions that frustrate the congressional policy underlying a statute. Bureau of Alcohol, Tobacco and Firearms v. FLRA, 464 U.S. 89, 97, 104 S.Ct. 439, 444, 78 L.Ed.2d 195 (1983). Thus, the FLRA’s decision should be upheld if it is reasonably defensible, Id., and not inconsistent with any congressional mandate or policy. EEOC v. FLRA, 744 F.2d 842, 847 (D.C.Cir.1984), cert. dismissed, — U.S. -, 106 S.Ct. 1678, 90 L.Ed.2d 19 (1986). On the other hand, enforcement of the decision should be denied if the decision is contrary to congressional intent. III. Discussion Title VII of the Civil Service Reform Act of 1978 (the Act), 5 U.S.C. §§ 7101-7135 (1982) established a collective bargaining system to govern labor-management relations in the federal sector. Under the act, federal agencies and employee unions are required to bargain in good faith over “Conditions of employment.” 5 U.S.C. § 7103(a)(12). The term “Conditions of employment” is defined in the Act as “personnel policies, practices, and matters, whether established by rule, regulation, or otherwise, affecting working conditions.” 5 U.S.C. § 7103(a)(14). The duty to bargain is limited by a management rights clause contained in the Act. 5 U.S.C. § 7106(a). In particular, the management rights clause provides that management has the authority “in accordance with applicable laws ... to make determinations with respect to contracting out.” 5 U.S.C. § 7106(a)(2)(B). The procedures used in exercising these rights, however, are subject to negotiation.3 HHS argues that the management’s rights clause gives management complete [434] discretion in making contracting-out decisions. HHS points to the introductory language of the clause which states that “subject to subsection (b) of this section nothing” in Title VII “shall effect the authority of any management official of any agency” to make decisions reserved to management. 5 U.S.C. § 7106(a). The FLRA itself has recognized that the Act reserves to management as nonnegotiable the substantive exercise of its authority to make contracting-out determinations. NFFE, Local 1167 and Department of the Air Force, Headquarters, 31st Combat Support Group (TAC), Homestead Air Force Base, Florida, 6 F.L.R.A. 574 (1981), aff'd sub nom. NFFE, Local 1167 v. FLRA, 681 F.2d 886 (D.C.Cir.1982). We believe the proposed provision would not establish any additional substantive limits on management’s right to make contracting-out decisions. The FLRA found that HHS is required to adhere to the provisions of the Circular regardless of whether the Union’s proposal is adopted as part of the collective bargaining agreement. The Union’s proposal simply restates HHS’s obligation to adhere to existing legal and regulatory requirements. Before this court, in fact, counsel for HHS indicated that the Department intends to comply with the Circular in making any contracting-out decisions. As a result, we agree with the FLRA’s conclusion that the Union’s proposal would not impair HHS’s statutory right to make contracting-out decisions “in accordance with applicable laws.” Incorporating the Circular into the collective bargaining agreement would subject disputes over violations of the Circular to the arbitration procedures contained in the Act. 5 U.S.C. § 7103(a)(9)(C)(i). Subjecting such disputes to arbitration does not render the Union’s proposal nonnegotiable for two reasons. First, the management rights clause exempts from its coverage any bargaining proposal concerning procedures governing agency contracting-out decisions. Second, contracting-out decisions are currently subject to grievance arbitration under section 7121 of the Act. We will discuss those issues seriatim. A. HHS asserts that adoption of the Union’s proposal would permit arbitral review of HHS’s contracting-out decisions, and that such review would adversely affect the exercise of management’s contracting-out authority.4 This argument overlooks section 7106(b) of the Act. Arbitration is a procedure, and management’s authority to contract-out under section 7106(a) of the statute is “[sjubject to” section 7106(b)(2), which provides for the negotiation of procedures which management will observe in exercising its right to contract-out. 5 U.S.C. § 7106(b)(2) HHS, while admitting that subjecting management’s contracting-out decisions to arbitral review is procedural in nature, contends that such review will have a substantive effect, because management will be forced to consider the potential impact of arbitration before making its contracting-out decisions. The Ninth Circuit adopted HHS’s position in Defense Language Institute v. FLRA, 767 F.2d 1398 (9th Cir.1985), cert. dismissed, — U.S. -, 106 S.Ct. 2004, 90 L.Ed.2d 647 (1986), and the D.C. Circuit adopted the FLRA’s view that the proposed provision is a negotiable procedure. EEOC v. FLRA, 744 F.2d 842. In Defense Language Institute, the court maintained that subjecting contracting-out disputes to arbitration would “divest management of the essence of its statutory authority to contract-out” because arbitration would allow the neutral arbitrator to second guess the business judgment of management officials. 767 F.2d at 1401-02. The Ninth Circuit’s position, whatever its surface appeal, is ultimately unpersuasive. An arbitrator’s ability to substitute his [435] judgment for that of management is determined by the substantive standards for review and not by the mere fact that management’s decision is subject to review. The arbitrator is not entitled to substitute his judgment for that of management when management’s decision is a matter of discretion. AFGE, Local 1968 v. FLRA, 691 F.2d 565 (D.C.Cir.1982), cert. denied, 461 U.S. 926, 103 S.Ct. 2085, 77 L.Ed.2d 297 (1983); NTEU v. FLRA, 767 F.2d 1315, 1317-18 (9th Cir.1985). In addition, if the Executive Department does not like the substantive limits imposed by arbitrators interpreting the Circular, it may change those limits by amending its own Circular. Also, in the event an arbitrator exceeds his authority, management may take exception to the arbitrator’s decision to the FLRA for review. 5 U.S.C. § 7122. See, e.g., Blytheville Air Force Base, 22 FLRA No. 72 (1986). Finally, judicial review is available in the event an arbitrator imposes a limitation on management authority which is not “in accordance with applicable laws.” 5 U.S.C. § 7123.5 Our holding that a Union’s proposal which would authorize arbitration of disputes over the Circular is negotiable under section 7106(b)(2) of the Act is consistent with Congress’ intention in adopting Title VII of the Civil Service Reform Act. The Act was adopted with the twin goals of expanding the right of collective bargaining and preserving the ability of the federal government to operate in an efficient manner. Defense Language Institute v. FLRA, 767 F.2d at 1401. The Ninth Circuit found that subjecting management rights to the decision of a neutral arbitrator would unduly interfere with the efficient operation of government. The Ninth Circuit’s interpretation of Title VII of the Act ignores the delicate compromise which allowed the Act to be passed by Congress. The final version of the management rights provision of Title VII was added to the Act on the floor of the House through a compromise measure offered by Representative Udall, the floor manager of the bill, as a result of the demands of promanagement forces.6 Labor sympathizers acceded to the demand for inclusion of the measure in return for the understanding that the rights “were a narrow exception to the general obligation to bargain in good faith.” 124 Cong.Rec. H 9638 (1978), reprinted in Legislative History at 1059 (Statement of Rep. Udall).7 Congress intended Title VII to remedy the past problem of the Federal Labor Relations Council’s (Council) overbroad interpretation of management rights.8 [436] Congress expressed this intention in the Act by enumerating the management rights protected by the Act as exceptions to the general duty to bargain and by providing that Title VII and decisions of the new FLRA would supersede the Council’s decisions which were anathema to organized labor. 5 U.S.C. §§ 7106 and 7135.9 Representative Udall who forged the compromise measure, and the prolabor forces which supported the bill, emphasized that without acceptance of a canon of construction narrowly interpreting the scope of management rights, the bill would not be acceptable to a majority of Congress. The whole structure and approach of title VII is in large part a repudiation of past Council practice. If we could not have been assured that identical language for management rights would be handled differently under the narrow construction mandated by title VII, the Udall compromise would never have been possible. Legislative History, at 1060 (Statement of Rep. Udall).10 The canon of construction which must guide resolution of the instant case, therefore, is that the management rights clause must be “treated narrowly as an exception to the general obligation to bargain over conditions of employment.” 124 Cong. Rec. H9634 (1978) (Statement of Rep. Udall) reprinted in Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978, 96th Cong., 1st Sess., 924 (Subcomm. Print November, 1979) (hereinafter cited as Subcomm. Legislative History). Therefore, only bargaining proposals which [are] directly related to the actual exercise of the enumerated management rights are to be ruled nonnegotiable. An indirect or secondary impact on a management right is insufficient to make a proposal nonnegotiable ... That the conference committee adopted this approach is reflected in the statement of managers that, in negotiations, “the parties may indirectly do what the (management rights) section prohibits them from doing directly.” Legislative History, at 2008 (Statement of Rep. Ford).11 Management was unable to change this aspect of federal labor relations through the legislative process. This court will not grant to management the protection that management was unable to secure from Congress.12 Under the applicable canon of construction, arbitration of a management right [437] according to the substantive standards established by management is clearly a procedural proposal under Title VII. Any effect arbitration may have on management rights is only indirect. Thus, the FLRA is correct in its “conclusion that the proposal does not affect management’s reserved authority, within the meaning of the statutory language, to make contracting-out decisions.” EEOC v. FLRA, 744 F.2d at 848. B. We agree with the FLRA’s finding that arbitration of disputes involving application of the Circular would be in accordance with applicable laws because section 7121 of the Act already subjects disputes over contracting-out work to the Act’s grievance procedures. That provision states: “Except as provided in paragraph (2) of this subsection, any collective bargaining agreement shall provide procedures for the settlement of grievances ...” 5 U.S.C. § 7121(a)(1). A grievance is elsewhere defined as “any complaint” by any employee or labor organization “concerning any matter relating to the employment of the employee” or by any employee, labor organization, or agency concerning “any claimed violation, misinterpretation, or misapplication of any law, rule, or regulation, affecting conditions of employment” 5 U.S.C. § 7103(a)(9). Moreover, contracting-out is not enumerated in the five specific exemptions that Congress granted from the permissible scope of the grievance procedure. Id., at § 7121(c). In light of the expansive coverage of this section, the FLRA found that the proposed collective bargaining provision did not infringe on contracting-out decisions because such decisions were already subject to arbitration. There is a problem with the FLRA’s view. The management rights provision and the grievance provision of the Act contradict each other. Section 7106 states that “nothing in this chapter shall affect the authority of any management official ... in accordance with applicable laws ... to make determinations with respect to contracting out.” 5 U.S.C. § 7106(a). If applicable law includes section 7121, then section 7106 in effect reads: “nothing in this chapter [71] except all the other provisions of Chapter 71, including § 7121 ... shall affect the authority of any management official of any agency ... to make determinations with respect to contracting out.” See EEOC v. FLRA, supra, 744 F.2d at 857 (MacKinnon, J., dissenting). Thus, under the FLRA’s view of the statute, the clause of section 7106 stating “nothing in this chapter” becomes essentially meaningless because it is modified by the phrase in accordance with applicable laws which includes the provisions of “this chapter.” A similar problem is encountered, however, if the nonnegotiability provisions of section 7106 are found to restrict the grievance provisions contained in section 7121. Section 7121 states: “Except as provided in paragraph (2) of this subsection, any collective bargaining agreement shall provide procedures for the settlement of grievances.” If section 7106 restricts the scope of section 7121 by excluding grievances relating to management’s exercise of its reserved rights from the section’s coverage, then section 7121 in effect reads: “Except as provided in paragraph (2) of this subsection and in section 7106 of this chapter____” Thus, under the Ninth Circuit and HHS view of the statute, the clause of section 7121 stating “except as provided in paragraph (2)” cannot be given its plain meaning because section 7121 is limited not only by paragraph (2) but by section 7106 as well. When Congress’ plain language does not convey its intention, the court “must not be guided by a single sentence or member of a sentence, but [must] look to the provisions of the whole law and to its object and policy.” Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 285, 76 S.Ct. 349, 359, 100 L.Ed. 309 (1956).13 The Civil Service Reform Act of 1978 was enacted by Congress at a time when federal labor policy had [438] established a preference for arbitration of labor disputes.14 Federal labor law had declared that arbitration of provisions restricting or regulating the exercise of management functions was not to be considered a forbidden infringement on management rights unless the parties presented “the most forceful evidence” that they intended to exclude a specific management function from arbitration. United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 584-85, 80 S.Ct. 1347, 1353-54, 4 L.Ed.2d 1409 (1960). If Congress expected to reverse this fundamental tenet of federal labor policy, it was obligated to set forth its intention explicitly within the new Act. Congress’ failure to do so impliedly accepts the preference for arbitration. Indeed, Title VII of the Act was adopted against a background not of unbounded management rights, but of collective bargaining rights which were previously established by Executive Order 11491. Sub-comm. Legislative History, at 1244-57. Under the Executive Order 11491 employee grievances involving disputes over employment conditions were subject to arbitration even if they involved nonnegotiable areas of management rights. Report of the Federal Labor Relations Council, Subcomm. Legislative History, at 1260-61. Title VII incorporated most of the provisions of Executive Order 11491 into law, but with several substantive changes. These changes resulted through delicate negotiations between the competing labor and management interests which are affected by the Act. The changes did not include a provision altering the practice of subjecting nonnegotiable management rights to arbitration procedures. If those interests were unable to incorporate explicitly a change in the Executive Order which formed the foundation of the Act, then such a change should not be implied into the deal that was struck within the legislative process. The legislative history of Title VII of the Act also explicitly indicates that arbitration of nonnegotiable management rights was possible under § 7121. The broad definition of grievance in § 7103(a)(9) was put into the Act by the Conference members so that So long as a rule or regulation “affects conditions of employment”, infractions of that rule or regulation are fully grievable, even if the rule or regulation implicates some management right. This interpretation of the definition is required both by the express language of the section and by the greater priority given the negotiability of procedures over the right of management to bar negotiations because of a retained management right. 124 Cong.Rec. H 13609, reprinted in Legislative History at 2012 (Statements of Rep. Ford) (emphasis supplied). In addition, during the house debates on the Udall compromise amendment to the Act, it was explained that the management rights provisions of the Act would “in no way affect the employee’s right to appeal the decision[s of management] through statutory procedures or, if applicable, through procedures set forth in a collective bargaining agreement,” because such decisions were to be made in accordance with applicable laws. Id. at 1050 (Statement of Rep. Udall).15 Representative Udall further stated that the management rights section was: still to be treated narrowly as an exception to the general obligation to bargain over conditions of employment ... [This [439] amendment] preserves management’s right to make the final decisions in these additional areas in accordance with applicable laws, including other provisions of chapter 71 of title 5.16 For example, management has the reserved right to make the final decision to ‘remove’ an employee; but that decision ... would in no way affect the employee’s right to appeal the decision through ... the procedures set forth in a collective bargaining agreement. 124 Cong.Rec. H 9634 (1978) reprinted in Subcomm. Legislative History at 924. There is nothing in the legislative history indicating that Congress intended that the reserved management rights listed in section 7106(a) be beyond the Act’s grievance procedure. In fact, as shown above, the Act’s legislative history clearly demonstrates Congress’s intention that any contradiction between sections 7121 and 7106 be resolved in favor of the employee’s right to grieve issues affecting management rights. Thus, we hold that a designated management right which is nonnegotiable is grievable under the Act’s negotiated grievance procedure.17 C. The duty to bargain exists only “to the extent not inconsistent with any Federal law or any Government-wide rule or regulation.” 5 U.S.C. § 7117(a)(1). The Circular provides that its provisions “shall not be construed to create” any right of appeal except as provided in the Circular itself. HHS argues that the FLRA’s ruling, that the Union’s proposal is negotiable, is in conflict with the Circular because the ruling subjects agency contracting-out decisions to the Act’s grievance procedures. We disagree. HHS’s argument can be rejected for two reasons. First, the Union’s proposal does not create any new right of appeal, because, as discussed above, the right to file grievances regarding contracting-out decisions is created by the Act. 5 U.S.C. §§ 7103(a)(9) and 7121(a).18 Second, even assuming there is an inconsistency between the Act’s grievance procedures and the Circular’s appeal procedures, there is no indication that Congress intended agencies to limit by regulation the statutorily defined grievance procedure of section 7121. EEOC v. FLRA, 744 F.2d at 851. The Act’s legislative history makes clear that Congress intended that section 7117(a)(1) only bar negotiation over proposals that would bring about inconsistencies with law, rule, and regulation. H.R.Conf. Rep. 95-1717, 95th Cong., 2d Sess. 158 (1978), U.S.Code Cong. & Admin.News 1978, p. 2723, reprinted in Subcomm. Legislative History at 826. Thus, if a proposal’s only inconsistency with a rule or regulation concerns grievance procedures, then section 7117(a)(1) would not bar negotiation of the proposal. The primary concern of the “not inconsistent with any ... law ... rule or regulation” clause of section 7117(a)(1) is with inconsistencies which would interfere with management’s substantive rights. The Circular’s appeals procedure does not affect the guidelines management must follow when making a contracting-out decision. Therefore, section 7117(a)(1) is not a bar to negotiation of the Union’s proposal. D. HHS next argues that the Circular is not a law, rule, or regulation within the [440] meaning of section 7103(a)(9) and is not an applicable law within the meaning of section 7106. In EEOC v. FLRA, 476 U.S. 19, 106 S.Ct. 1678, 1680, 90 L.Ed.2d 19 (1986), the Supreme Court refused to reach or resolve the identical issue, because the issue had not been argued before the FLRA or the Court of Appeals. The Court stated that the Act “expressly provides that when an aggrieved party seeks judicial review of a final order of the FLRA ‘[n]o objection that has not been argued before the Authority, or its designee, shall be considered by the court, unless the failure or neglect to urge the objection is excused because of extraordinary circumstances.’ 5 U.S.C. § 7123(c).” EEOC v. FLRA, 106 S.Ct. at 1680. This court will not now consider the issue for the same reasons. HHS filed its Statement of Position with the FLRA on January 17, 1986 and did not raise the above argument. The Supreme Court’s decision in EEOC v. FLRA was issued on April 29, 1986. Three months later on July 31, 1986 the FLRA rendered its decision in the instant matter. It was not until October 1, 1986 that HHS filed a “Motion to Reconsider” in light of EEOC v. FLRA. The “Motion to Reconsider” was denied as untimely because such motions are required to be filed within 10 days after service of an FLRA order. 5 C.F.R. § 2429.17. There are no extraordinary circumstances warranting this court’s consideration of the above issue. HHS had three months after the Supreme Court’s EEOC decision to supplement its statement of position, but failed to do so. Furthermore, after the FLRA decision, HHS waited two months to file for reconsideration. Since the above argument was not timely presented to the FLRA, according to section 7123(c) of the Act, it is not within the jurisdiction of this court to consider the argument now.19 IV. Conclusion For the reasons stated herein, we conclude that the FLRA’s decision that the Union’s proposal is negotiable, should be upheld and its order should be enforced. ENFORCED. Footnotes [1] OMB Circular A-76 sets guidelines for determining whether necessary goods and services should be obtained from the private sector or acquired "in house” from government facilities and personnel. Generally, government agencies acquire goods from the private sector when comparative cost analysis indicates that it would be cost effective to do so. The Circular is supplemented by a Cost Comparison Handbook outlining procedures to be used in making the decision whether or not to contract out. 44 Fed.Reg. 20556 (1979) as amended by 45 Fed. Reg. 69322 (1980); 47 Fed.Reg. 6511 (1982); id. at 46783; 48 Fed.Reg. 37110 (1983); 50 Fed.Reg. 32812 (1985). [2] 5 U.S.C. § 7123(a) provides that “[a]ny person aggrieved by any final order of the Authority ... may ... institute an action for judicial review of the Authority’s order ... in the United States court of appeals in the circuit in which the person resides or transacts business.” The Authority may petition any appropriate United States court of appeals for enforcement of any of its orders. 5 U.S.C. § 7123(b). At first blush, it appears that there is no case or controversy. HHS has indicated that it will adhere to the guidelines of the Circular whether or not the Union’s proposal is adopted as part of the collective bargaining agreement between HHS and the Union. HHS and the FLRA do argue over the proposal's negotiability, however. HHS contends that adoption of the Union’s proposal would, for the first time, subject disputes relating to management's decisions to contract-out work to the Act’s grievance procedures and is therefore nonnegotiable as an infringement on management’s reserved authority. The FLRA, on the other hand, contends that such grievances have always1 been subject to the Act’s grievance procedures. One of the purposes of the Act is to encourage negotiation over prospective as well as current problems. Agreement as to how particular problems will be handled prior to their occurrence greatly reduces conflict in the event such problems do arise. The fact that there is no current controversy concerning a specific contracting-out decision does not mean this court lacks jurisdiction to determine the proposal’s negotiability. Whether management has a duty to bargain under the Act over a particular proposal is a controversy in and of itself over which this court has jurisdiction. The cases which have found that jurisdiction exists to determine the negotiability of a specific proposal are legion. See, e.g., Defense Language Institute v. FLRA, 767 F.2d 1398 (9th Cir.1985), cert. dismissed, — U.S. -, 106 S.Ct. 2004, 90 L.Ed.2d 647 (1986) (proposal requiring adherence to OMB Circular A-76 held nonnegotiable); EEOC v. FLRA, 744 F.2d 842 (D.C.Cir.1984), cert. dismissed, — U.S. -, 106 S.Ct. 1678, 90 L.Ed.2d 19 (1986) (proposal requiring adherence to OMB Circular A-76 held negotiable); see also, American Federation of Government Employees, Local 1931 v. FLRA, 802 F.2d 1159 (9th Cir.1986) (management’s policy of expeditious suspension of driving privileges held to be a nonnegotiable internal security practice); Department of Health and Human Services, Social Security Administration v. FLRA, 791 F.2d 324 (4th Cir.1986) (union proposal held nonnegotiable because it would violate SSA’s right to assign work); Association of Civilian Technicians v. FLRA, 780 F.2d 12 (7th Cir.1985) (proposal relating to requirement that civilian technicians wear military uniforms while performing their nonmilitary [433] duties is nonnegotiable); United States Department of Justice, Immigration and Naturalization Service v. FLRA, 709 F.2d 724 (D.C.Cir.1983) (proposal to bring probationary employees within mandatory grievance procedure held nonnegotiable); State of Nebraska Military Dept., Office of the Adjutant General v. FLRA, 705 F.2d 945 (8th Cir.1983) (proposals for grievance procedures culminating in binding arbitration found nonnegotiable because in conflict with the National Guard Technicians Act). [3] Section 7106 provides in pertinent part: (a) Subject to subsection (b) of this section, nothing in this chapter shall affect the authority of any management official of any agency— (2) In accordance with applicable laws— (B) to assign work, to make determinations with respect to contracting out, and to determine the personnel by which agency operations shall be conducted: (b) Nothing in this section shall preclude any agency and any labor organization from negotiating— (2) procedures which management officials of the agency will observe in exercising any authority under this section; 5 U.S.C. §§ 7106(a)(2)(B), (b)(2). [4] HHS assumes that if the Union’s proposal is not adopted then arbitral review under the Act of management’s compliance with the Circular would be unavailable. As shown in Part B infra, however, HHS’s contracting-out decisions are subject to arbitral review regardless of whether the Union’s proposal is adopted. [5] Our dissenting brother suggests that "an arbitral decision that applied Circular A-76 erroneously would not be subject to judicial review” because no unfair labor practice would be involved, as required by § 7123(a)(1). (Dissent, op. at 445-446). The dissent has overlooked the impact of decisions to contract out. The practical effect of such decisions is the shifting of work to the nonunion sector from union employees. As a result, challenges to contracting out decisions will typically be accompanied by unfair labor practice charges of antiunion discrimination. See 5 U.S.C. §§ 7116(a)(1), (2) and 7123(a)(1). Therefore, arbitral decisions erroneously applying Circular A-76 will almost always be subject to judicial review. [6] The management rights clause which appears in the Act was adopted as an amendment on the House floor to the clause reported by the House Committee on Post Office and Civil Service. The Udall compromise rejected the version of the bill reported by the Senate which simply codified the existing practices and decisions under existing Executive Order 11491. S.Rep. No. 95-969, 95th Cong., 2d Sess. (1978), U.S.Code Cong. & Admin.News 1978, p. 2723, reprinted in House of Representatives Committee on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the Civil Service Reform Act of 1978 (hereinafter cited as Legislative History) at 1476. The amendment adopted on the House floor was adopted by the House-Senate Conference Committee without change. H.R. Rep. No. 95-1717, 95th Cong., 2d Sess. 153-54 (1978) (Conference Report), U.S.Code Cong. & Admin.News 1978, p. 2723, reprinted in Legislative History at 1995, 96. [7] The Federal Labor Relations Council, which interpreted the Executive Order previously governing federal labor management relations, had broadly construed the management rights protected by that order. See 124 Cong.Rec. H-9638 (1978), reprinted in Legislative History at 1058-59 (Statement of Rep. Udall) (Council has departed from the canon of construction that management rights should be interpreted narrowly); Id., at 1078-79 (Statement of Rep. Ford) (Council has interpreted the management rights clause too broadly). [8] Id. at 1058 (Statement of Rep. Udall) ("Title VII is remedial legislation designed to cure the [436] problems caused primarily by the Council’s misinterpretation of the Executive Order”); Id., at 1081 (Statement of Rep. Ford) ("Title VII itself is remedial legislation and those supporting the Udall change in the management rights clause continue to fully intend Title VII to be broadly construed to achieve these remedial objectives of favoring collective bargaining”). [9] See Id. at 1085 (Statement of Rep. Ford) (§ 7135's "superseded language is intentionally included to make clear that the new authority, acting under its own statutory charter, is not to repeat past mistakes in the area of labor management relations. Title VII, as a whole, and the management rights clause in particular, mandates (sic) a new approach to labor relations in the Federal government”). [10] See also Id. at 1080 (Statement of Rep. Ford) (Adoption of a narrow construction of the management rights provision "is an essenFal element in our working out the Udall compromise"). [11] The remarks of Representative Ford, a member of the conference committee, explaining the final bill were endorsed by several other members of the conference committee. 124 Cong. Rec. E 5724 reprinted in Legislative History, at 2015 (statement of Rep. Clay); Id., at 2016 (statement of Rep. Schroeder). [12] Judges must be honest agents of the political branches. They carry out decisions they do not make ... [G]ood judges make it easier for the political branches to strike compromises, to enact new laws ... Judges’ claim to authority rests on a plausible demonstration that they are faithfully executing decisions made by others. The consequence of honest and capable discharge of that function may be more rent-seeking legislation, or it may be more general interest legislation ... which occurs is not the judges’ affair. Easterbrook, The Supreme Court, 1983 Term-Forward: The Court and the Economic System, 98 Harv.L.Rev. 4, 60 (1984). [13] The only way to resolve the conflict between sections 7106 and 7121 of the Act, while at the same time preserving the entire statute, is to classify arbitration as a section 7106(b)(2) negotiable procedure. [14] AT & T Technologies v. Communication Workers of America, 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986); Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); Textile Workers Union v. Lincoln Mills, 353 U.3. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). [15] Court decisions interpreting the Act have consistently concluded that management functions which are nonnegotiable under the Act may be subject to arbitration under § 7121. See Cornelius v. Nutt, 472 U.S. 648, 105 S.Ct. 2882, 86 L.Ed.2d 515 (1985) (nonnegotiable disciplinary actions are subject to statutory grievance procedures); Andrade v. Lauer, 729 F.2d 1475, 1484-89 (D.C.Cir.1984) (nonnegotiable reduction-in-force rules and regulations are subject to statutory grievance procedures). [16] "Other provisions" includes section 7121 which established the Act’s grievance mechanism. [17] The Act itself shows that Congress intended disputes concerning the exercise of management rights to be grieved under the provisions of the Act. The authority to take disciplinary action is a reserved management right listed in section 7106(a)(2)(A) which was excluded from the Act’s grievance procedure by section 7121(c)(3). The exemption for complaints concerning disciplinary action would have been unnecessary if Congress believed that complaints concerning the exercise of a nonnegotiable management right were not subject to the Act’s grievance procedures. [18] The Circular itself indicates that it will not apply when it is in conflict with a statute: "This Circular and its Supplement shall not: (1) Be applicable when contrary to law____” 48 Fed. Reg. 37110 at ¶ 7(c)(1) (1983). [19] Our dissenting brother suggests that we should adhere strictly to the language of § 7106 regarding contracting out decisions but ignore the command of § 7123(c) that we may not consider on appeal an issue not raised before the FLRA. (Dissent op. at 443, n. 2). Section 7123(c) unambiguously forbids us from considering the issue of whether Circular A-76 is an applicable law within the meaning of § 7106 because HHS failed to raise the issue before the FLRA in a timely fashion. Nonetheless the dissent suggests that the FLRA should have rendered an advisory opinion on the subject because of the Supreme Court’s concern over the issue or because it is entitled to waive its timeliness requirements in exceptional circumstances pursuant to 5 C.F.R. § 2429.23(b). The FLRA declined to render such an opinion because no party before it suggested that the issue should be considered and because there were no exceptional circumstances justifying the agency’s failure to raise it. Even if the FLRA’s decision to leave the issue for another day was ill considered, the dissent still fails to explain how we may reach the issue when there is no suggestion that the FLRA exceeded its legal authority in declining to consider it.