EXECUTIVE SUMMARY

FLRA GENERAL COUNSEL JOSEPH SWERDZEWSKI'S MEMORANDUM TO REGIONAL DIRECTORS ON "THE IMPACT OF COLLECTIVE BARGAINING AGREEMENTS ON THE DUTY TO BARGAIN AND THE EXERCISE OF OTHER STATUTORY RIGHTS"

This Executive Summary of the Federal Labor Relations Authority, General Counsel's Guidance Memorandum to the Regional Directors concerns the impact of collective bargaining agreements on the duty to bargain and the exercise of other statutory rights under the Federal Service Labor-Management Relations Statute (Statute). The Memorandum discusses the General Counsel's views on legal issues arising from the effects of collective bargaining agreements on the duty to bargain during the term, and upon the expiration, of those agreements, and on the exercise of other rights under the Statute.

The Memorandum specifically focuses on such issues as the limitation placed on mid-term and post-term bargaining by the "covered by" doctrine and the limitations placed on the exercise of other statutory rights by the "contract interpretation" doctrine. The Memorandum presents suggestions for the Regions to assist the parties in avoiding these types of disputes and also provides guidance on the right of a union to initiate bargaining during the term of an agreement ("union-initiated mid-contract bargaining"). The distinction between statutory rights and contract rights is also explored, as is the legal concept of when contract violations may constitute unfair labor practices (the "repudiation" test). The Memorandum also discusses the duty to bargain pursuant to reopener clauses contained in contracts and the duty to bargain supplemental agreements below the level of exclusive recognition. Two attachments contain a summary of significant "covered by" decisions that thus far have been decided and a decisional analysis for the duty to bargain after a contract expires. The Guidance Memorandum and this Executive Summary reflect the views of the General Counsel and do not constitute an interpretation by the three Authority Members.

Attached to this Executive Summary is a checklist of questions designed to enable the Regions to assist the parties in classifying the legal issues in their dispute when a contract is involved so that the parties can make informed decisions on what action, if any, to take. In order to determine whether "covered by", "contract interpretation" or "repudiation" is the appropriate test, and in order to decide whether the unfair labor practice procedure or the negotiated grievance procedure is the appropriate forum, the Regions and parties need to recognize the legal issues presented by their dispute.


LIMITATIONS ON THE DUTY TO BARGAIN DURING THE TERM OF A CONTRACT - THE "COVERED BY" DOCTRINE

Q. #1: What is the "covered by" doctrine?

"Covered by" is a defense to an allegation of a refusal to bargain, resulting either from an agency-initiated change or a union-initiated mid-contract bargaining request. Thus, there would be a refusal to bargain violation of the Statute, but for the "matter" in dispute being "covered by" the contract.

Q. #2: When does the doctrine apply?

It applies when an agency proposes to take a specific action concerning a condition of employment but refuses to negotiate with the union over the matter based on the agency's belief that the matter already has been the subject of negotiations and is therefore covered by the parties' agreement. It also applies when an agency refuses to negotiate over union proposals presented during the term of an agreement because the agency believes that the subject of the proposals already has been negotiated.

Q. #3: What is the purpose of the "covered by" doctrine?

The purpose of "covered by" is to prevent the requirement that the parties bargain over the same "matter" during the term of the contract if the parties had already bargained over that "matter" in formulating their collective bargaining agreement.

Q. #4: What is an example where an agency would not have to bargain because of the contract and the "covered by" doctrine?

An example would be when an agency details some employees and refuses to give notice and negotiate over the impact and implementation of the detail because the parties' contract already contains an article on details.

Q. #5: Does the agency have to correctly interpret a contract to rely on the "covered by" defense?

No. Under the "covered by" defense, a party need not establish that it has correctly interpreted the contract. Rather, the party only need establish that the "matter" in dispute is covered by the contract. Thus, even if the specific action taken by an agency may be violative of the contract, if the "covered by" doctrine applies, there would be no refusal to bargain unfair labor practice.

Q. #6: What test does the Authority apply to decide if the parties covered a matter in their contract so that there will be no duty to bargain over that matter during the term of the contract?

The Authority has established a three-prong test. A matter is covered by the contract if it meets any one of the three prongs. Basically, prong 1, referred to as "expressly contained", provides that if the matter is expressly contained in the contract, it is covered. The language of the union's proposals or the agency's action do not have to be identical to meet this prong of the test. Rather, the test is whether a reasonable reader of the contract would conclude that the contract settles the matter in dispute. The second prong, "inseparably bound up with", means that the matter in dispute, although not expressly contained in the contract, is commonly considered to be an aspect of the matter in the contract. The third prong, "reasonably should have contemplated",is used when the parties reasonably should have contemplated that the agreement would foreclose further bargaining over the matter in dispute, even though not expressly contained in the contract or an aspect of a matter in the contract.

Q. #7: How do we apply these tests to day-to-day bargaining disputes?

Based on Authority cases applying the test thus far, the General Counsel has interpreted the test to mean that if the contract contains an article that deals with the general subject matter of the dispute, absent a contrary past practice or bargaining history to show otherwise, the matter would be covered by the contract. In other words, the Authority thus far has defined the "matter" as the general topic of the dispute, rather than the more limited topic which was the subject of the union's concerns over an agency action or the union's particular mid-contract proposals.

Q. #8: Does the agency have to tell the union that it is relying on the "covered by" doctrine when it refuses to bargain?

No. The Authority has held that if a matter is covered by a collective bargaining agreement, an agency may act unilaterally without providing any reason for so doing.

Q. #9: Do the Regions examine contracts even if the agency has not raised the "covered by" defense to the union?

Yes. In refusal to bargain cases, the Regions have to examine applicable contract articles to decide whether the matter is covered by the contract whether or not the agency raises "covered by" as a defense to the union.

Q. #10: How do unions and agencies avoid fighting over whether a "matter" is covered by the contract?

One suggestion is for the parties to maintain current collective bargaining agreements. Agreements which were negotiated prior to the Authority's "covered by" doctrine in June 1993 are still subject to that doctrine even though the parties may not have intended to foreclose bargaining over all matters covered by the agreement during the term of that agreement. When renegotiating contracts, the parties should reflect their intent and understanding as to which topics should be considered "covered by" the contract for purposes of bargaining during the term of the contract.

Q. #11: Should the parties have a mutual understanding when negotiating contracts about what matters are bargainable during the term of the agreement?

Generally, yes. Although it is not possible for the parties to contemplate all of the management actions that may occur during the term of the agreement, the parties should have a general, mutual understanding that certain topics or matters addressed by the contract are to be considered within the "covered by" doctrine. Thus any disputes over those matters would be resolved under the parties' negotiated grievance procedure and would not constitute unfair labor practice refusals to bargain.

Q. #12: How can I simply explain the "covered by" doctrine?

If the parties negotiate over a subject matter and include that matter in their contract, usually there will be no duty to negotiate over that subject matter during the term of the agreement. That means that if an agency takes an action concerning that topic, the agency would not have to give notice and bargain before taking that action and, during the term of that agreement, the agency would not have to bargain over union proposals that concern that matter. If the parties have a dispute over whether an action was consistent with the contract, either party can file a grievance to determine whether that action violated the contract.

Q. #13: Does the "covered by" doctrine apply when the contract expires?

The General Counsel has taken the position that "covered by" does not survive the expiration of a contract.

Q. #14: So what is the duty to bargain when the contract expires?

Terms of the contract which are mandatorily negotiable remain in effect. The General Counsel is of the view that, in essence, those terms become past practices. Both parties must adhere to those contract terms unless changed by agreement or in accordance with the bargaining obligations under the Statute. If a party takes an action which changes any of those past practices, it would be an unfair labor practice.

Q. #15: What if the action would have been covered by the contract had the contract been in effect?

If the challenged action is not expressly contained in the expired contract, that is, if it is not an established past practice, that action must be negotiated under the Statute before it is implemented. Thus, even though had the contract been in effect it would have been covered by under either prong 2 or 3 of the "covered by" test, because the contract is not in effect, it would be a new condition of employment which must be negotiated.

Q. #16: Can a union request to bargain over any matters in the expired contract or any other matters even if not contained in the expired contract?

Yes. Both a union and an agency may request to bargain over any mandatorily negotiable matters, whether they would have been covered by the expired contract under any prong of the "covered by" test. If a party wants to change a condition of employment which was expressly contained in the expired contract (that is, a past practice), that term remains in effect until the bargaining process is completed. If the topic was not expressly contained in the expired contract (that is, is not a past practice), it is just like any other bargaining situation, the parties must bargain in good faith before any action is taken on that topic.

Q. #17: What if after a contract expires one party wants to bargain only over one or a few matters, and the other party wants to negotiate a new agreement?

The General Counsel has taken the position that either party can insist on negotiating a new agreement.

Q. #18: At what level does the duty to bargain exist after a contract expires?

The duty to bargaining always lies at the level of exclusive recognition, unless the parties have agreed to delegate to a lower level. Thus, there would be no duty to bargain below the level of exclusive recognition to negotiate a change in an expired contract.


II.
LIMITATIONS CONTAINED IN COLLECTIVE BARGAINING AGREEMENTS ON THE EXERCISE OF STATUTORY RIGHTS -- THE "CONTRACT INTERPRETATION" DOCTRINE

Q. #1: What is the "contract interpretation" doctrine?

"Contract interpretation" is a defense used when a party charged with committing an unfair labor practice claims that its conduct was allowed by the contract. Thus, there would be a violation of the Statute, but for the contractual limitations or conditions established on the exercise of the particular statutory right in dispute.

Q. #2: When does the doctrine apply?

The "contract interpretation" defense is usually raised in two distinct instances. One is when an agency defends what would otherwise be a failure to perform a statutory obligation under the Statute based on its belief that the contract permitted the agency's challenged conduct. The second involves the situation where an agency defends its refusal to bargain mid-contract over union proposals based on its belief that the union's right to initiate bargaining was given up in the contract.

Q. #3: What is the purpose of the "contract interpretation" doctrine?

If a party acts in accordance with its legal contract, it cannot be found to have violated the Statute.

Q. #4: What is an example where an agency would have committed an unfair labor practice by denying a statutory right except for the fact that the contract permitted its conduct?

An example is when an agency refuses to recognize a steward from a particular facility as a representative of a unit employee from another facility, based upon its belief that the contract limits employees to representatives from their own facility. Absent the "contract interpretation" defense, this normally would be a violation of the Statute because a union has a statutory right to select its own stewards. However, if the agency's interpretation is correct and the agency's action was consistent with the contract, there would be no violation based on the "contract interpretation" defense.

Q. #5: What is an example where an agency would have committed a refusal to bargain unfair labor practice except for the fact that the contract permitted its conduct?

An example is when an agency refuses to bargain over union-initiated mid-contract proposals on the basis that the underlying duty to bargain mid-contract in general is addressed in the contract and that the agency's refusal to bargain is consistent with the contract.

Q. #6: Does the agency commit an unfair labor practice if it incorrectly interprets the contract?

Yes. Unlike the "covered by" defense, under the "contract interpretation" doctrine, the party denying a statutory right or refusing to bargain mid-contract must establish that it has correctly interpreted the contract.

Q. #7: What test does the Authority apply to decide if a contract is a defense to a party's conduct which otherwise would have been violative of the Statute?

The Authority will determine the meaning of collective bargaining agreements, in the same manner as an arbitrator, to the extent necessary to resolve an unfair labor practice case. Thus, the Authority will determine the effect of contract rights on statutory rights by determining the meaning of any contract provision raised as an affirmative defense to an alleged violation of the Statute

Q. #8: How do unions and agencies avoid fighting over whether their contract has placed limitations on statutory rights?

One suggestion is for the parties to have a mutual understanding concerning any limits their contract places on the union's right to initiate mid-contract bargaining in general, and on the exercise of any other statutory rights. The parties can clearly state what they have agreed to in their contract and acknowledge the effect of that agreement on how the parties will deal with each other during its term.

Q. #9: Should the parties have a mutual understanding when negotiating contracts about what rights have been limited by the terms of the contract?

Yes. The parties should acknowledge any limitations they have mutually placed upon the exercise of any statutory rights. For example, if the contract places a time limit for the presentation of union proposals, the parties should be aware that the submission of union proposals outside that time limit (even if the proposals were submitted within a reasonable period under statutory standards) renders the proposals untimely and allows the agency to implement without negotiations.

Q. #10: How can I simply explain the "contract interpretation" doctrine?

If an agency's or a union's conduct is challenged as an unfair labor practice and the charged agency or union defends on the basis that the contract permitted the challenged conduct, and if there would have been a statutory violation if the contract had not been in existence, the Authority must and will interpret the contract to decide if the charged agency or union properly relied on the contract and thus did not commit an unfair labor practice. The test is whether the acting party properly interpreted and applied the contract provision.

Q. #11: What happened to the "clear and unmistakable waiver" test?

The "contract interpretation" test has replaced the "clear and unmistakable waiver" test. When a contract is asserted as a defense to an action challenged as an unfair labor practice, the Authority no longer inquires whether a party clearly and unmistakably waived a statutory right.

Q. #12: What are the similarities between "covered by" and "contract interpretation?"

Both are legal doctrines which rely upon the terms of a contract to excuse conduct which, absent the contract, would have been an unfair labor practice.

Q. #12:What are the basic differences between "covered by" and "contract interpretation?"

"Covered by" is a defense to the refusal to bargain over a specific matter. This could occur when a union initiates bargaining mid-contract over a specific matter or when an agency proposes to implement a specific action. The charged party need not prove that it correctly interpreted the contract, only that the matter was covered by the contract and thus the matter had already been negotiated.

"Contract interpretation" does not concern the refusal to bargain over a specific matter. Rather, it concerns the failure to perform a statutory obligation, including the general obligation to negotiate mid-contract over union-initiated proposals, where there would be a violation of the Statute except that the contract permitted the challenged action. The charged party must establish that it correctly interpreted and applied the contract, or else an unfair labor practice would have occurred.


III.
THE DUTY TO BARGAIN OVER UNION-INITIATED REQUESTS TO BARGAIN DURING THE TERM OF AN AGREEMENT -- "UNION-INITIATED MID-CONTRACT BARGAINING"

Q. #1: Can a union initiate bargaining mid-contract even though an agency has not proposed a change?

Yes. If the specific matter the union wishes to negotiate is not covered by the contract, the Authority has found a statutory right for a union to initiate mid-contract bargaining even though an agency has not proposed a change in that area.

Q. #2: Can the parties place limitations on a union's right to initiate mid-contract bargaining?

Yes. The parties can agree in their contract to eliminate or place limitations on a union's right to initiate bargaining mid-contract over matters not contained in the contract.

Q. #3: At what level within an agency-union relationship does the duty to bargain mid-contract exist?

The statutory duty to bargain exists only at the level of exclusive recognition. Although the parties can agree to negotiate below the level of exclusive recognition, disputes over the meaning and application of any such delegation concern contract matters and not statutory rights. Thus, absent a repudiation (see Part IV, Question #3), these types of disputes should be resolved through the negotiated grievance procedure.

Q. #4: Can a party at the level of exclusive recognition delegate its authority to bargain?

Yes. A party at the level of exclusive recognition can delegate its authority to bargain. When that occurs, the level of bargaining remains at the level of exclusive recognition. The only thing that has occurred is that another entity or person is representing the party at the exclusive representative level. But when that party acts, its actions are the actions of the party at the exclusive representative level.

Q. #5: What is the test if an agency claims that a union has given up its right to initiate bargaining mid-contract?

The "contract interpretation" test is applicable. The agency must establish that the contract, as properly interpreted and applied, excuses the agency from negotiating mid-contract over union-initiated proposals.

Q. #6: What test applies if an agency defends its refusal to bargain mid-contract on the basis that it has no duty to bargain over the specific subject matter the union is proposing to negotiate?

The "covered by" test is applicable. The agency must establish that the specific matter over which the union has requested to negotiate is covered by the contract.


IV.
DIFFERENCES BETWEEN VIOLATIONS OF CONTRACT RIGHTS AND VIOLATIONS OF STATUTORY RIGHTS

Q. #1: What is the difference between contract rights and statutory rights?

Rights granted under the Statute are enforceable through the unfair labor practice procedure. Conditions of employment and rights established through collective bargaining and evidenced in contracts are enforceable only through the parties' negotiated grievance procedure, unless there is a repudiation (see Question #3). Absent a repudiation of a contractual obligation, the parties are left with the process they have negotiated to resolve these types of disputes -- their negotiated grievance procedure.

Q. #2: How can I distinguish between a contract right and a statutory right?

One test which the parties may find useful is to ask themselves whether the asserted right would exist even if the parties did not have a contract. For example, even without a contract, parties have the statutory right to notice and bargaining prior to the implementation of a change in a condition of employment. In contrast, there is no duty to bargain below the level of exclusive recognition or to bargain supplemental agreements (see Part VI, Question #2) unless established in a contract.

Q. #3: When does the violation of contract rights constitute an unfair labor practice?

Plainly stated, most contract violations do not constitute unfair labor practices. A contract violation only constitutes an unfair labor practice when it amounts to a repudiation.

Q. #4: What is the "repudiation" test?

The Authority will find a repudiation when: (1) the nature and scope of the alleged breach of an agreement establishes that the breach was "clear and patent"; and (2) the nature of the agreement provision allegedly breached goes to the "heart" of the parties' agreement.

Q. #5: When is a contract breach "clear and patent?"

If the meaning of the contract term at issue is unclear, and a party acts in accordance with a reasonable interpretation of that term, there would be no "clear and patent breach." Even if the conduct might be found by an arbitrator to violate the contract, that violation does not constitute a repudiation because the breach was not "clear and patent."

Q. #6: What type of factors are analyzed to determine if a breach was "clear and patent?"

The Authority has examined such factors as whether: the agency's interpretation of the agreement, even if a breach of that agreement, was a mistake; the agreement was ambiguous; the agency had disowned, rejected, or refused to recognize the validity of the agreement; and the agency's interpretation of the agreement was reasonable.

Q. #7: When does a "clear and patent" breach involve the "heart" of a contract?

The Authority has relied upon such factors as whether the breach was contrary to the agreement's purpose and whether the matter at issue was a significant concern to unit employees.

Q. #8: Why is it important for a party to evaluate whether a contract breach is a repudiation before filing an unfair labor practice charge?

The vast majority of disputes over breaches of contracts will not be able to satisfy the repudiation test and thus would not constitute unfair labor practices, even though they may be contract violations. It is critical that, before filing an unfair labor practice charge, the charging party evaluates whether the dispute is a contract matter or a repudiation. Under the second sentence in section 7116(d) of the Statute, the charging party must make an election to pursue the dispute either under the unfair labor practice procedure or under the negotiated grievance procedure.


V.
THE DUTY TO BARGAIN PURSUANT TO REOPENER CLAUSES CONTAINED IN COLLECTIVE BARGAINING AGREEMENTS

Q. #1: What is a reopener clause?

A reopener provision is a contract clause which provides for renegotiations during the term of the agreement. Such clauses often are limited to certain time periods during the term of the agreement and sometimes limit the number of topics or clauses that can be reopened, or may even specify which particular topics or clauses may be reopened. Reopener clauses, however, could also provide for no limits on what matters could be raised.

Q. #2: Is there a duty to bargain over including a reopener clause in a contract?

Reopener provisions are a mandatory subject of bargaining because they deal with the duration of certain agreed upon conditions of employment. Like all other mandatory subjects of bargaining, the parties may insist to impasse if agreement over whether the contract will be reopened during its term is not reached.

Q. #3: How should disputes over the meaning and application of reopener clauses in contracts be resolved?

Once the parties have reached agreement on a reopener clause, the parties have created a contractual right and obligation, and not a statutory right and obligation. As with all other contractual rights, the breach of that right does not constitute an unfair labor practice unless it amounts to a repudiation. Similarly, disputes over what matters are subject to a reopener provision raise contractual matters and not statutory rights.


VI.
THE DUTY TO BARGAIN SUPPLEMENTAL AGREEMENTS BELOW THE LEVEL OF EXCLUSIVE RECOGNITION

Q. #1: What is a supplemental agreement?

A supplemental agreement is an agreement at the level of exclusive recognition which provides for parties below that level to negotiate an agreement in addition to the contract at the exclusive recognition level.

Q. #2: Is there a duty to bargain over allowing supplemental agreements at the local level?

The statutory duty to bargain exists only at the level of exclusive recognition. There is no statutory duty at the level of exclusive recognition to bargain over proposals allowing for supplemental agreements which seek to create an obligation to negotiate below the level of exclusive recognition. Thus, the topic of supplemental agreements is a permissive, not mandatory, subject of bargaining. As such, neither party can lawfully insist to impasse over an agreement at the level of exclusive recognition to negotiate supplemental agreements.

Q. #3: How should disputes over the meaning and application of supplemental agreement clauses in contracts be resolved?

If the parties at the level of exclusive recognition agree to negotiate supplemental agreements, they have created a contractual right and obligation and not a statutory right and obligation. Thus, any dispute over whether a party has failed to enter into negotiations over a supplemental agreement at a local level presents a dispute over what the parties intended at the level of exclusive recognition when they agreed to supplemental contract bargaining. Similarly, disputes over what matters would be bargained as part of any supplemental agreement raise disputes over contract matters and do not raise a statutory issue, absent the establishment of a repudiation.

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