Department of Treasury, Internal Revenue Service v. Federal Labor Relations Authority/Dissent Brennan

by William J. Brennan, Jr.

Justice BRENNAN, with whom Justice MARSHALL joins, dissenting.

Because the Court remands for further proceedings I believe are unnecessary, I respectfully dissent. As I read the opinion below, the agency found OMB Circular A-76 to be an "applicable law" within the meaning of the Civil Service Reform Act of 1978's management rights provision, 5 U.S.C. § 7106(a)(2), and therefore determined that the Union's proposal would not infringe management's reserved rights. ^[1] Since the Federal Labor Relations Authority (FLRA or Authority) could permissibly interpret the statutory term to include regulations having the "force of law" and could permissibly find that the Circular is such a regulation, as the Court acknowledges, see ante, at 932, I would affirm the judgment below. ^[2] The FLRA's decision that the Circular is an "applicable law" is entirely reasonable. The Circular was promulgated as a formal regulation, with notice published in the Federal Register and public comment invited. See Executive Office of the President, OMB Circular A-76, 44 Fed.Reg. 20556 (1979), as amended, 48 Fed.Reg. 37110 (1983), 50 Fed.Reg. 32812 (1985). It is referenced by, and its terms generally restated, in the Federal Acquisition Regulations, codified at 48 CFR pt. 7, subpt. 7.3 (1988). By its terms, agency compliance is mandatory and enforced. OMB Circular A-76, Supp.Intro. and I-14, I-15 (rev. Aug. 4, 1983). Hence, I would uphold the FLRA's conclusion that the Circular is an "applicable law" within the meaning of § 7106(a)(2). ^[3]

The Court finds the FLRA's interpretation of "applicable laws" unreasonable, not because it is an implausible reading in itself, but because it is indistinguishable from the Authority's interpretation of the phrase "law, rule, or regulation" which is contained in a different section of the Civil Service Reform Act of 1978. See ante, at 931-932. I suspect the Court reads too much into the difference in language between "applicable laws" in § 7106(a)(2) and "law, rule, or regulation" in § 7103(a)(9)(C)(ii). But, in any event, I understand the Court's decision to say only that the two phrases are not synonymous. Ibid. If the FLRA, in fact, has employed the same definition for the two phrases, which is arguable, the Authority's error most likely was to embrace too restrictive a view of the scope of "law, rule, or regulation." ^[4] Thus on remand the FLRA is free to interpret "applicable laws" to cover not only statutes, but also regulations and rules that are binding on the agency exercising its reserved rights. See n. 2, supra. The Authority is also free to interpret "law, rule, or regulation" to cover these and more-for instance, nonbinding policy statements and unpublished internal agency guidelines.

Finally, I take issue with the Court's expansive view of the management rights provision as abrogating any union rights vis-a-vis decisions such as contracting out, so long as agency decisions are made consistently with applicable laws. See ante, at 931. Section 7106(a) does not purport to make other provisions of the Act wholly inapplicable to the enumerated subject areas. It says only that nothing in the statute "shall affect the authority of any management official of any agency" to make certain types of decisions. (Emphasis added.) An exercise of union rights that does not affect management's existing authority is fully consistent with this provision. Insofar as the Union proposal would require merely what is already required by OMB Circular A-76, it would not affect the Internal Revenue Service's authority to make contracting out decisions. Therefore it would not infringe the agency's reserved rights. Because I do not read the Authority's decision as clearly relying on this ground, I do not think it necessary for the Court to have reached it.

Notes

1. See 27 F.L.R.A. 976, 979 (1987) (the Union proposal "require[s] nothing that is not required by section 7106(a)(2) of the Statute itself, namely, that determinations as to contracting-out must be made 'in accordance with applicable laws' ").
2. I am inclined to agree with the position taken by the Deputy Solicitor General at oral argument, see Tr. of Oral Arg. 14, that "applicable laws" include not only statutes but also regulations having the force of law, and that the Administrative Procedure Act (APA) provides the relevant measure. See id., at 47 ("[I]f a private party could bring an APA action, that would be very strong, if not conclusive, evidence that . . . you are dealing with an applicable law"). Under the APA, an agency action inconsistent with any valid and binding rule or regulation is actionable by anyone "aggrieved" by it. See 5 U.S.C. §§ 702, 706(2)(A); Center for Auto Safety v. Dole, 264 U.S.App.D.C. 219, 223, 235, 828 F.2d 799, 803, 815 (1987); Padula v. Webster, 261 U.S.App.D.C. 365, 368, 822 F.2d 97, 100 (1987).
3. I do not agree with Justice STEVENS that, even if OMB Circular A-76 is an applicable law, § 7117(a)(1) precludes bargaining over the Union proposal because the Circular is also a " 'Government-wide rule or regulation.' " See post, at 938. Section 7117(a)(1) provides:
4. That the Authority found below that OMB Circular A-76 is a "law, rule, or regulation" under § 7103(a)(9)(C)(ii), see 27 F.L.R.A., at 978, does not undermine the validity of its decision even if its definition of "law, rule, or regulation" was too narrow. If the Circular fit within an overly restrictive definition of the phrase, a fortiori, it must fit within an appropriately broad definition. Moreover, the FLRA's finding that the Union's proposal did not interfere with reserved management rights because OMB Circular A-76 is encompassed by the term "applicable laws" is sufficient ground in itself for the decision and was relied on as such by the Authority. See 27 F.L.R.A., at 979.