D.C. Circuit: No Requirement to Bargain on CBP Performance Appraisal Changes

The National Treasury Employees Union appealed the Federal Labor Relations Authority’s denial of its negotiability petition related to changes in the number of different possible rating levels for its members at U.S. Customs and Border Protection. On December 3, 2019, the United States Court of Appeals for the D.C. Circuit denied the union’s appeal, finding instead that the FLRA’s decision was “based on a permissible and reasonable interpretation of the Statute,” and that it was “consistent with well-established precedent.”

The agency desired to overhaul the performance appraisal system, shifting away from a simple “pass-fail” system. During negotiations for a new collective bargaining agreement (CBA), the Union proposed that, in appraising employee work performance, the agency not use any “performance appraisal rating levels above the Successful rating level for purposes of the annual appraisal process.” To accomplish that, the union submitted two separate proposals. The agency did not respond, which the union took as refusal to bargain. Subsequently, the union filed its negotiability petition to the FLRA, which was rejected.

The appeals court found that the FLRA’s decision was based on its determination that an agency’s rights to “direct employees” and “assign work” must include decision-making about the number of potential rating levels. The appeals court approvingly cited the FLRA’s finding that “[d]etermining a performance evaluation system’s rating levels ‘directly affects the degree of precision with which management can establish and communicate job requirements (performance standards), the range of judgments which management can make regarding performance in the context of performance appraisals, and the range of rewards and sanctions which management can apply to such performance.’”

Previous FLRA decisions defined the right to “direct employees” as the right to “supervise and guide them in the performance of their duties,” whereas the right to “assign work” includes the right to make decisions about assignments and completion schedules. The appeals court cited “two critical features” of these rights that were relevant to this case. First, it cited FLRA decisions holding that agencies had a “nonnegotiable right to establish performance standards.” Second, it cited FLRA decisions holding that the right to direct employees and assign work included the right to determine “whether (and to what degree) its employees are meeting those standards.” This feature, the appeals court noted, ensures the rights to direct employees and assign work are not “virtually meaningless.”

The union cited NTEU 1986, 793 F.2d 371 (D.C. Cir. 1986), a case where the appeals court overturned the FLRA and found that the level of incentive pay for superior work was negotiable. The union argued that like incentive pay, ratings above successful are best understood as “another way of rewarding…superior work,” and are therefore negotiable under the same logic employed by the appeals court in NTEU 1986.

The appeals court disagreed, finding that “the Union is mistaken in suggesting that a superior rating is simply another ‘reward’ for superior performance. Rather, a superior rating is an evaluative judgment that enables management to more effectively exercise its nonnegotiable rights to (re)direct employees and (re)assign work.” The appeals court also found that “[t]he fact that this evaluative judgment might also make an employee eligible for a negotiable reward is of no consequence.”

For the above stated reasons, the United States Court of Appeals for the D.C. Circuit held that the FLRA’s decision rested on a permissible and reasonable interpretation of the law, and denied the union’s petition for review.

Read the full case: NTEU v. FLRA.

This case law update was written by Conor D. Dirks, Associate Attorney, Shaw Bransford & Roth, PC.

For thirty years, Shaw Bransford & Roth P.C. has provided superior representation on a wide range of federal employment law issues, from representing federal employees nationwide in administrative investigations, disciplinary and performance actions, and Bivens lawsuits, to handling security clearance adjudications and employment discrimination cases.

Posted in Case Law Update


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