Natl Treas Empl v. FLRA

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 12, 2004 Decided December 17, 2004

No. 03-1423

NATIONAL TREASURY EMPLOYEES UNION,
PETITIONER

V.

FEDERAL LABOR RELATIONS AUTHORITY,
RESPONDENT

On Petition for Review of an Order of the
Federal Labor Relations Authority

Julie M. Wilson was on the brief for petitioner. With her on
the briefs were Gregory O'Duden and Barbara A. Atkin.

David M. Shewchuk, Attorney, Federal Labor Relations
Authority, argued the cause for respondent. With him on the
brief were David M. Smith, Solicitor, and William R. Tobey,
Deputy Solicitor. James F. Blandford, Attorney, entered an
appearance.

Before: SENTELLE, HENDERSON, and ROBERTS, Circuit
Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.
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SENTELLE, Circuit Judge: The National Treasury
Employees Union (“NTEU”) petitions for review of the Federal
Labor Relations Authority’s (“FLRA”) decision dismissing
NTEU’s unfair labor practice complaint as untimely.
Specifically, the FLRA found that the statutory filing period for
an unfair labor practice charge challenging the failure to comply
with an arbitrator’s award begins as soon as the award becomes
final. NTEU contends that this interpretation is contrary to the
clear language of the statute and thus is due no deference.
Because we agree with the NTEU we grant the petition for
review.

I. Background

A. Statutory Background

This case arises from the Internal Revenue Service’s
(“IRS”) alleged violation of an arbitrator’s award for an unfair
labor practice. The Federal Labor Relations Authority
(“Authority”) was created and is governed by the Federal
Service Labor-Management Relations Statute (“FSLMRS”), 5
U.S.C. §§ 7101-7135, to regulate labor-management relations
for the federal government. The FSLMRS provides procedures
governing the arbitration of labor-management disputes that
ensure that arbitration awards are subject to review and are
obeyed once upheld by the Authority.

Once an arbitrator grants an award, parties have a 30-day
window to file exceptions with the Authority. 5 U.S.C. § 7122.
If no exceptions are filed, the award becomes final and binding
at the end of that period. Id. As soon as the award is final the
agency must take actions required by the award; failure to do so
constitutes an unfair labor practice (“ULP”). Id.; 5 U.S.C. §
7116(a)(8).
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An aggrieved party may make a charge of an unfair labor
practice to the General Counsel, who may then issue a complaint
against the agency or union for the ULP. 5 U.S.C. § 7118(a)(1).
A statute of limitations applies to these charges: “no complaint
shall be issued based on any alleged unfair labor practice which
occurred more than 6 months before the filing of the charge with
the Authority.” 5 U.S.C. § 7118(a)(4)(A). This statute of
limitations may be tolled if the ULP was not discovered during
the six-month period due to concealment. 5 U.S.C. §
7118(a)(4)(B). The Authority also has permitted equitable
tolling of the period in unique circumstances where multiple
timely charges were made but dismissed or withdrawn for
various reasons. Dep’t of the Air Force, HQ 832d Combat
Support Group, DPCE Luke Air Force Base, Ariz., 24 F.L.R.A.
1021, 1025-26 (1986) (“Luke AFB”) (citing Burnett v. New York
Cent. R.R. Co., 380 U.S. 424, 428-429 (1965) (applying
equitable tolling where plaintiff had not “slept on his rights”)).

B. Factual Background

The NTEU is the exclusive representative of a nationwide
consolidated unit of IRS employees. During fiscal year 1998 the
IRS directed certain employees from the surrounding area to
report periodically to the Seattle Headquarters, resulting in
increased commuting times for these employees. NTEU filed
grievances on their behalf seeking compensation, the IRS
refused to pay, and the matter proceeded to arbitration. The
arbitrator’s award sustained the grievance, ordered the IRS to
start compensating employees for increased commuting time,
and required the IRS to compile a list of employees who had
been affected by these assignments for the purpose of assessing
the remedy (presumably an award of back-pay). The list was to
be due within 45 days of the receipt of the award.
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C. Proceedings Below

The IRS filed exceptions to the award which the Authority
denied on August 17, 2001. Dep’t of the Treasury, I.R.S., and
Nat’l Treasury Employees Union, 57 F.L.R.A. 444 (2001). It
then filed a motion for reconsideration that was denied on
November 27, 2001. Dep’t of the Treasury, I.R.S., and Nat’l
Treasury Employees Union, 57 F.L.R.A. 592 (2001). The
NTEU contacted the IRS to determine whether it intended to
comply with the award, but the IRS responded that it did not
have definite information because the matter was still being
reviewed by the Department of the Treasury. In order to obtain
a clearer answer, counsel for NTEU wrote a letter to IRS Area
Counsel on January 24, 2002 because more than 45 days had
elapsed since the motion for reconsideration was denied and the
IRS had not yet provided an employee list. The Area Counsel
responded in a letter dated January 31, 2002, stating that the
agency “does not have to take any action to implement the
Arbitrator’s award at this time.” The NTEU filed a ULP charge
on February 21, 2002, charging that the IRS had violated 5
U.S.C. § 7116(a)(1) and (8) by refusing to comply with the
award.

The FLRA General Counsel issued a complaint and filed a
motion for summary judgment; the IRS cross-moved for
summary judgment arguing that the charge was untimely filed
under § 7118(a)(4)(A). The Administrative Law Judge (“ALJ”)
held that the six-month period for filing had begun when the
award was final, on August 17, 2001, and therefore had expired
on February 17, 2002. Dep’t of the Treasury, I.R.S., and Nat’l
Treasury Employees Union, 59 F.L.R.A. 282, 295 (2003).
Because the charge was filed on February 21, 2002 and he found
no reason to equitably toll the period, the ALJ held that the
charge was untimely filed and dismissed the matter. The
Authority affirmed the ALJ’s conclusions. Id. at 288-89. NTEU
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filed this petition for review.

II. Analysis

Review of the FLRA's interpretation of its own enabling
statute is governed by the familiar two-step test of Chevron
USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S.
837 (1984). Dep't of the Air Force v. FLRA, 294 F.3d 192, 196
(D.C. Cir. 2002). When Congress has spoken, we are bound by
that pronouncement and that ends this Court's inquiry. Chevron,
467 U.S. at 842-43. Where “the statute is silent or ambiguous
with respect to the specific issue, the question for the court is
whether the agency's answer is based on a permissible
construction of the statute.” Id. at 843. In this case the
Authority’s interpretation of the statutory filing period for ULP
charges runs contrary to the clearly expressed intent of Congress
and fails Chevron at its first step.

Under § 7118(a)(4), the six-month filing period for ULP
charges starts at the time the “alleged unfair labor practice . . .
occurred.” In this case the alleged ULP consisted of the failure
to comply with the arbitrator’s award. See 5 U.S.C. §§
7116(a)(8), 7118(a)(4)(A). The plain language of the statute
thus requires that the filing period cannot begin at least until
there has been a failure to comply with an arbitration award.

The Authority argues that, because the agency has an
obligation to comply with an award as soon as it becomes final,
5 U.S.C. § 7122(b), and because the IRS never took the actions
mandated by the award, the failure to comply occurred when the
award became final on August 17, 2001. This reading confuses
the onset of the obligation with the onset of the failure to fulfill
that obligation. If an award orders an action that will take place
in the future, a party may fail to comply with the award in two
ways. First, it may expressly reject its obligation under the
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award at any time. Second, it may simply not take the steps
ordered by the award, but it cannot be said to have done this at
least until the deadline for taking action has passed.

In the case before us, the arbitrator’s award imposed two
major obligations on the IRS. First, it enjoined the IRS from
“failing or refusing to implement [commuting compensation
under the collective bargaining agreement] as to covered
employees.” Nothing on the record indicates whether the IRS
complied with this section of the agreement. The second
obligation thus forms the basis for the ULP charge: the IRS was
required to submit a list of employees affected by the location
transfers so that they could be compensated. This list was due
on October 1, 2001, 45 days after the award became final. Thus
the first opportunity for the IRS to fail to comply with the award
was on October 1, when it missed the deadline to submit names
to NTEU. It is impossible to find an unfair labor practice
occurring before this point because there cannot have been a
failure to comply with the award before then. While the IRS
arguably could have triggered the limitations period earlier by
affirmatively rejecting its obligations under the award, it did not
do so until IRS Area Counsel wrote as much to NTEU’s counsel
on January 31, 2002.

Given the facts of this case, then, the earliest possible date
that a ULP can be said to have occurred is October 1, 2001.
Because NTEU’s charge was filed on February 21, 2002, it was
well within the six-month filing period and was timely.

The Authority characterizes NTEU’s interpretation of the
filing period as a “discovery rule.” Under a discovery rule, “a
cause of action accrues when the injured party discovers--or in
the exercise of due diligence should have discovered--that it has
been injured.” Sprint Comm. Co., L.P. v. FCC, 76 F.3d 1221,
1228 (D.C. Cir. 1996). NTEU’s interpretation is not such a rule.
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The period begins running in October not because that is the
first time NTEU could have known that the IRS was failing to
comply with the award, but because that was the first time the
IRS could have failed to comply by inaction.

If we were to accept the Authority’s interpretation, we
would be left with the absurd situation of charges that could
never be filed because the limitations period would expire
before they became ripe. If, for example, an arbitrator’s award
on January 1 required the agency to take action within seven
months after the award became final, a charge of inaction would
not be ripe until seven months later on August 1. But under the
Authority’s interpretation the limitations period would start
running as soon as the award became final, making the period
expire six months later on July 1 – before the claim became
ripe. This is neither supported by the statutory language that
requires that a ULP actually occur before the limitations period
can begin to run, nor is it a workable policy.

III. Conclusion

For the reasons given above we grant the petition for
review, vacate the decision below, and remand for further
proceedings.