USAF v. FLRA

Filing

OPINION [1653486] filed (Pages: 15) for the Court by Judge Tatel. [15-1208]

USCA Case #15-1208

Document #1653486

Filed: 12/30/2016

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 14, 2016

Decided December 30, 2016

No. 15-1208
UNITED STATES DEPARTMENT OF THE AIR FORCE, LUKE AIR
FORCE BASE, ARIZONA,
PETITIONER
v.
FEDERAL LABOR RELATIONS AUTHORITY,
RESPONDENT
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, LOCAL
1547,
INTERVENOR

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

Mark W. Pennak, Attorney, U.S. Department of Justice,
argued the cause for petitioner. With him on the brief were
Benjamin C. Mizer, Principal Deputy Assistant Attorney
General, and Leonard Schaitman and H. Thomas Byron,
Attorneys.
Zachary R. Henige, Deputy Solicitor, Federal Labor
Relations Authority, argued the cause for respondent. With
him on the brief were Fred B. Jacob, Solicitor, and Stephanie
J. Fouse, Attorney.

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David A. Borer, Andres M. Grajales, and Mark L. Vinson
were on the brief for intervenor American Federation of
Government Employees, Local 1547 in support of respondent.
Judith D. Galat entered an appearance.
Before: TATEL, Circuit Judge, and EDWARDS and
GINSBURG, Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: The Federal Labor Relations
Authority ordered the Air Force to bargain collectively with
its civilian employees over access to an on-base shoppette—a
gas station and convenience store that forms part of the
military’s network of commissaries and exchanges. The Air
Force challenges that decision, arguing, among other things,
that the issue is not a proper subject of bargaining because
Congress has given the military unfettered discretion to
determine whether civilians may patronize commissaries and
exchanges. For the reasons set forth below, we agree and
grant the Air Force’s petition for review.
I.
The Federal Service Labor-Management Relations
Statute, enacted in 1978 as Title VII of the Civil Service
Reform Act, governs collective bargaining in the federal
workplace. The statute grants federal employees the right to
collectively bargain over “conditions of employment.” 5
U.S.C. § 7102(2). Under Authority and D.C. Circuit
precedent, however, employees have no right to bargain over
matters that Congress has committed to an agency’s
“unfettered discretion.” Illinois National Guard v. FLRA, 854
F.2d 1396, 1401 (D.C. Cir. 1988); see Patent Office
Professional Association & U.S. Department of Commerce,

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59 F.L.R.A. 331, 346 (Sept. 30, 2003) (holding that the
Authority may not order an agency to bargain over matters
within the agency’s “sole and exclusive discretion” (internal
quotation marks omitted)).
The dispute here began when some 800 civilian
employees of Luke Air Force Base, Arizona, represented by
their exclusive bargaining agent, Local 1547 of the American
Federation of Government Employees, sought access to the
Base’s commissaries and exchanges—stores run by the
Defense Department that sell reduced-price food and
merchandise to members of the uniformed services, National
Guardsmen and reservists, and certain retirees, dependents,
and survivors. See 10 U.S.C. §§ 2481(a), 1061–1064.
Commissaries are similar to grocery stores. See id. § 2484(a).
Exchanges take a variety of forms, from department-store-like
retail outlets to laundromats, gas stations, flower shops, and
fast-food franchises. See Department of Defense Instruction
1330.21, Enclosure 3.1.1 (July 14, 2005). If accepted, Local
1547’s proposal would have significantly expanded shopping
privileges for civilian employees, who, under existing rules,
were allowed to buy only food and beverages from “any
exchange food activity, if consumed on post.” See id.,
Enclosure 6, Table E6.T2.6.
In response, the Air Force filed with the FLRA what is
known as a negotiability appeal, in which it argued that the
proposal was nonnegotiable because it lacked a connection to
employee working conditions. The FLRA disagreed and
ordered the Air Force to negotiate with the union. See
American Federation of Government Employees, Local 1547
& U.S. Department of the Air Force, Luke Air Force Base,
Arizona (“Local 1547 I”), 64 F.L.R.A. 642, 646–47 (Apr. 7,
2010).

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The parties resumed discussions but soon reached
impasse. The union brought the matter to the Federal Service
Impasses Panel, which ordered the parties to participate in
mediation-arbitration before an arbitrator, who the Panel
empowered to issue a binding decision if the parties were
unable to reach a settlement. Before mediation began,
however, the union circulated a revised proposal seeking
shopping privileges only at the Base’s Shoppette, a 24-hour
gas station and convenience store that sells such things as
fresh and frozen food, gas, and certain health and household
items. After mediation over this more limited proposal failed,
the arbitrator sided with the union and ordered the Air Force
to give its civilian employees access to the Shoppette.
When the Air Force refused to implement the arbitrator’s
decision, the union filed a second negotiability appeal with
the FLRA. Although the Air Force again insisted that the
proposal had nothing to do with employee working
conditions, it added a second argument: that the proposal was
not a proper subject of bargaining because Title 10 of the U.S.
Code, which governs all military operations, gives the
Secretary of Defense “unfettered discretion” over
commissaries and exchanges. See, e.g., Illinois National
Guard, 854 F.2d at 1401. Unpersuaded, the FLRA ordered the
Air Force to implement the proposal. See American
Federation of Government Employees, Local 1547 & U.S.
Department of the Air Force, Luke Air Force Base, Arizona
(“Local 1547 II”), 67 F.L.R.A. 523, 525–30 (July 29, 2014).
One member dissented, reasoning that Title 10, when “read in
its entirety and in its historical context,” leaves the question of
“authoriz[ing] access to military exchanges . . . to the sole
discretion of the Secretary of Defense.” Id. at 532–33
(Member Pizzella, Dissenting). The Air Force sought
reconsideration, which the FLRA denied. American
Federation of Government Employees, Local 1547 & U.S.

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Department of the Air Force, Luke Air Force Base, Arizona,
68 F.L.R.A. 557, 558–61 (May 13, 2015).
The Air Force petitions for review. It argues, as it did
before the FLRA, that it has no duty to bargain over the
Shoppette proposal because Title 10 grants the Secretary of
Defense complete discretion to decide whether civilian
employees may shop at commissaries and exchanges. It also
argues that the Authority failed to point to any record
evidence in support of its conclusion that the proposal
concerns employee working conditions.
II.
We begin with the Air Force’s first argument, and
because it relies on a particular interpretation of several
provisions of Title 10, we think it best to proceed by first
exploring the parties’ understanding of these provisions and
then setting forth our own interpretation of the statute’s
meaning. In doing so, we owe the Authority no deference, as
we “review[] de novo the FLRA’s interpretation of a statute it
is not charged with administering.” U.S. Department of the
Air Force v. FLRA, 648 F.3d 841, 846 (D.C. Cir. 2011).
A.
The Air Force anchors its unfettered-discretion argument
in 10 U.S.C. § 2481, which provides that “[t]he Secretary of
Defense shall operate, in the manner provided by this chapter
and other provisions of law, a world-wide system of
commissary stores and a separate world-wide system of
exchange stores.” Id. § 2481(a). Both systems may “sell, at
reduced prices, food and other merchandise” to a closed set of
military and military-related patrons—i.e., “members of the
uniformed services on active duty, members of the uniformed
services entitled to retired pay, dependents of such members,

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and persons authorized to use the system under chapter 54 of
this title.” Id.; see id. § 101(a)(5) (defining “uniformed
services”). Chapter 54 extends shopping privileges to
members of the Guard and Reserve, along with certain
retirees, dependents, and survivors. See id. §§ 1061–1064.
Section 2481 also sets forth Congress’s reasons for creating
these stores, explaining that they are “intended to enhance the
quality of life of members of the uniformed services, retired
members, and dependents of such members, and to support
military readiness, recruitment, and retention.” Id. § 2481(b).
As the Air Force points out, missing from section 2481’s list
of authorized patrons and beneficiaries is any mention of
civilian employees of the Defense Department.
The Air Force then moves to a more specific provision of
Title 10, section 2484, which prescribes in subsection (b) an
exacting list of goods that may be sold in commissaries:
“[m]eat, poultry, seafood, and fresh-water fish,” etcetera. Id.
§ 2484(b). Subsection (c)(1) provides that the Secretary may
add additional items to that list, so long as he notifies
Congress, see id. § 2484(c)(1), and subsection (c)(2) then
explains that “[n]otwithstanding [subsection (c)](1), the
Department of Defense military resale system shall continue
to maintain the exclusive right to operate convenience stores,
shopettes, and troop stores . . . [,]” id. § 2484(c)(2) (emphases
added).
The Air Force argues that the phrase “exclusive right to
operate . . . shopettes,” id., means what it says: that the
military has unfettered discretion to operate “shopettes” like
the one at Luke AFB. And because, in its view, “common
usage [of] the term ‘operate’ includes access determinations,”
Petitioner’s Br. 33, Congress conferred “unfettered
discretion” on the military to determine who may patronize
commissaries and exchanges, thereby exempting the Air

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Force from bargaining over the union’s proposal, see Illinois
National Guard, 854 F.2d at 1402.
For its part, the Authority argues that section 2484(c)(2)’s
reference to the Secretary’s “exclusive right to operate . . .
shopettes” relates not to who can patronize them, but rather
only to the selection of merchandise and the setting of prices.
The Authority also points out that the commissary-andexchange provisions nowhere state that the Secretary has
authority to control access “‘notwithstanding’ other
provisions of law”—language that, according to the
Authority, this court has found signals congressional intent to
exempt an agency from the duty to bargain. See Respondent’s
Br. 38 (quoting Colorado Nurses Association v. FLRA, 851
F.2d 1486, 1488 (D.C. Cir. 1988), superseded by statute,
Department of Veterans Affairs Labor Relations Improvement
Act of 1991, Pub. L. No. 102–40, title II, § 202, 105 Stat. 187,
200, as recognized in National Federation of Federal
Employees Local 589 v. FLRA, 73 F.3d 390, 390–91 (D.C.
Cir. 1996).
B.
We agree that Congress has given the military unfettered
discretion to determine whether civilians may patronize
commissaries and exchanges, though for reasons that are slightly
different from those offered by the Air Force. Our starting point
is section 113(b) of Title 10, which gives the Secretary of
Defense “the authority, direction, and control over the
Department of Defense.” 10 U.S.C. § 113(b). Sections 3013,
5013, and 8013, in turn, grant the Secretaries of the Army,
Navy, and Air Force “the authority necessary to conduct[] all
affairs of the[ir respective] Department[s],” including the
“functions [of] . . . Recruiting[,] . . . Administering (including
the morale and welfare of personnel)[,] . . . and Maintaining”
Department personnel. Id. §§ 3013(b); 5013(b); 8013(b).

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Those sections also authorize the Branch Secretaries to
“prescribe regulations to carry out [their] functions, powers,
and duties under this title,” subject only to “the authority,
direction, and control of the Secretary of Defense.” Id.
§§ 3013(b), (g); 5013(b), (g); 8013(b), (g).
These
three
enumerated
duties—recruiting,
administering, and maintaining—appear in almost identical
form in section 2481, in which Congress explained that it
“intended [commissaries and exchanges] . . . to support
military readiness, recruitment, and retention.” Id. § 2481(b)
(emphasis added). The symmetry between these purposes and
the functions delineated in sections 3013, 5013, and 8013 is
unmistakable, and we draw from it two basic conclusions.
First, Congress intended commissaries and exchanges to
advance the objectives of recruiting, administering, and
maintaining the armed forces. Second, Congress gave the
Branch Secretaries authority to decide how best to achieve
those objectives, subject only to direction by the Secretary of
Defense. See 10 U.S.C. §§ 3013(b), (g); 5013(b), (g); 8013(b),
(g).
Given these legislative directives, we cannot imagine that
Congress intended to empower a civilian agency like the
Federal Labor Relations Authority to second-guess the
military’s judgment about non-military access to
commissaries and exchanges. As the Supreme Court has made
clear, “[i]n construing a statute that touches on” matters of
internal military governance, like troop morale or discipline,
“courts must be careful not to circumscribe the authority of
military commanders to an extent never intended by
Congress.” Brown v. Glines, 444 U.S. 348, 360 (1980)
(citation and internal quotation marks omitted). We have
taken this concern seriously in the federal-labor-relations
context, declining to require bargaining over proposals that

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could potentially undermine military judgment even where
the relevant statute never expressly shields the military from
bargaining. In National Federation of Federal Employees,
Local 1623 v. FLRA, 852 F.2d 1349 (D.C. Cir. 1988), for
example, we found “unbargainable” a proposal by dual-status
guard technicians that would have required civilian
supervisors to attempt to “convince military officials to assign
personnel in some manner other than the one they originally
thought best.” Id. at 1352. Although the proposal would not
have led to civilians directly interfering with militarymanagement choices, and although the Technician Act “d[id]
not specifically countermand the Local’s proposal,” we
concluded that it fell outside the duty to bargain because it
would “subject [military personnel decisions] to civilian
influence.” Id. at 1352–53 (second emphasis added); see also
American Federation of Government Employees, Local 2953
v. FLRA, 730 F.2d 1534, 1544–46 (D.C. Cir. 1984) (rejecting
a proposal requiring military leaders to disregard National
Guard technicians’ military evaluations in favor of civilian
evaluations when conducting layoffs, where the statute’s
purpose was “to assure that the military mission of the Guard
would be carried out effectively and efficiently”).
In this case, by requiring negotiation over the Shoppette
proposal, the Authority has similarly second-guessed the
Secretary’s judgment in deciding how best to use a military
benefit to achieve military purposes. The panel arbitrator
required civilian access to the Shoppette because, in her view,
“it is illogical that it is acceptable to have civilians enter a
store to buy hot dogs, but damaging to [troop] morale if they
are allowed to purchase aspirin, batteries, or tissues.” Panel
Arbitrator’s Decision, at Joint Appendix 23. Agreeing with
the arbitrator, the Authority reasoned that nothing in Title 10
“suggests that the incremental extension of benefits . . . from
hot dogs to aspirin, batteries, [and] tissues . . . is unlawful.”

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Local 1547 II, 67 F.L.R.A. at 530 (internal quotations marks
omitted) (alteration in original). But the Air Force Secretary,
exercising his delegated “authority . . . to conduct[] all affairs
of the Department” subject only to review by the Defense
Secretary, 10 U.S.C. § 8013(b), decided otherwise. Contrary
to both the arbitrator and the Authority, this case is not about
hot dogs and aspirin, but rather whether the military retains its
unfettered authority to determine if and under what
circumstances non-military persons may enjoy access to
commissaries and exchanges.
To be sure, in American Federation of Government
Employees, Local 2761 v. FLRA, 866 F.2d 1443 (D.C. Cir.
1989), we concluded that access to a military exchange fell
within the duty to bargain. Id. at 1447. But that decision
predated by fifteen years Congress’s enactment of Title 10’s
commissary-and-exchange provisions which, as we have
explained, vest the Secretary with sole discretion over
civilian-employee access to commissaries and exchanges. See
Ronald W. Reagan National Defense Authorization Act for
Fiscal Year 2005, Pub. L. No. 108–375, § 651, 118 Stat.
1811, 1964–73 (2004).
The Authority nonetheless argues that the Shoppette
proposal is negotiable because nothing in Title 10 expressly
precludes civilian employees from bargaining over access to
commissaries and exchanges. In support, it points to Illinois
National Guard, in which we held that the Technician Act
gives the Army Secretary unfettered discretion to determine
National Guard technicians’ work schedules because the
statute provides that, “[n]otwithstanding [the scheduling and
overtime provisions] of title 5 or any other provision of law,
the Secretary concerned may . . . prescribe the hours of duty
for technicians.” 854 F.2d at 1401 (quoting 33 U.S.C.
§ 709(g)(2) (1988) (emphasis omitted)); see, e.g., National

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Treasury Employees Union (NTEU) v. FLRA, 435 F.3d 1049,
1051 (2006) (holding that Comptroller of the Currency had
sole and exclusive discretion over bank-examiner salaries
where Congress provided that the “‘employment and
compensation of examiners . . . shall be without regard to the
provisions of other laws applicable to officers or employees
of the United States’” (quoting 12 U.S.C. § 481 (2006))).
Since Title 10 contains no similar carve-out for commissaries
and exchanges, the FLRA reasons, Congress must have
intended them to be a proper subject of collective bargaining.
The Authority’s argument suffers from two flaws. First,
although it is true that the Authority “consider[s] the absence
of such preemptive language . . . to be a strong indication that
Congress did not intend [an agency] to have unfettered
discretion” over a given matter, Department of Veterans
Affairs Veterans Administration Medical Center, Veterans
Canteen Service, 44 F.L.R.A. 162, 164–65 (Feb. 28, 1992),
neither it—nor for that matter this Court—has ever held that a
statute must contain phrases like “notwithstanding any law” to
place a subject outside an agency’s duty to bargain.
Second, in each of the cases cited by the Authority, the
agency argued that the statute it administered—a statute that
expressly addressed employment matters, such as hours, pay,
and benefits, for a defined category of federal employees—
exempted it from Title 5’s broadly applicable civil-service
rules, including collective-bargaining requirements. See
National Treasury, 435 F.3d at 1051 (interpreting statute
giving the Treasury Secretary authority to employ and
compensate bank examiners); Illinois National Guard, 854
F.2d at 1403 (interpreting statute giving the Army Secretary
authority to set work schedules for dual-status guard
technicians); Colorado Nurses Association, 851 F.2d at 1488
(interpreting statute giving the Secretary of Veterans Affairs

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authority to control hours and working conditions of medical
personnel). In this case, however, the Air Force is not seeking
to exempt itself from collective bargaining; it merely seeks to
limit the scope of bargaining with respect to a matter that it
believes Congress has committed to its unfettered discretion.
Moreover,
Title
10’s
commissary-and-exchange
provisions differ significantly from the statutes at issue in the
case cited by the Authority. Those statutes all directly
addressed an agency’s employment-related authority, so it
makes sense that the FLRA would describe its interpretive
task as “ascertain[ing] whether Congress has clearly
expressed an intent to deprive employees of their rights under
the [FSLMRS].” Respondent’s Br. 31 (emphasis added); see
Colorado Nurses, 851 F.2d at 1489 (court must determine
whether Congress intended to “exempt [a federal employer]
from all laws governing the terms and conditions of federal
employment”).
Title
10’s
commissary-and-exchange
provisions stand on wholly different footing, as they have
absolutely nothing to do with civilian employment and
everything to do with creating a military benefit designed to
“support military readiness, recruitment, and retention.” 10
U.S.C. § 2481(b). Given Congress’s focus on defining a
military benefit, which has nothing at all to do with terms and
conditions of civilian employment, it would have had no
reason to include a “notwithstanding” clause exempting that
benefit from “‘other laws applicable to [civilian] officers or
employees of the United States.’” National Treasury, 435 F.3d
at 1051 (quoting 12 U.S.C. § 481).
For all of these reasons, we hold that civilian access to
commissaries and exchanges is not a proper subject of
collective bargaining because Congress has vested the
military with “unfettered discretion” over the matter. See
Illinois National Guard, 854 F.2d at 1401. Although this is

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sufficient to resolve this case, we think it nonetheless helpful
to consider the Air Force’s alternative argument—that the
Authority failed to make any factual findings in support of its
conclusion that the proposal concerns unit employee’s
conditions of employment—since that issue is likely to arise
again in cases where collective bargaining is not barred by
legislation giving the agency unfettered discretion over the
subject of negotiations.
III.
As the Authority has itself explained, in evaluating
whether a proposal concerns conditions of employment, it
must, among other things, determine if “the record
establishes . . . a direct connection between the proposal and
the work situation or employment relationship of bargaining
unit employees.” Antilles Consolidated Education Association
& Antilles Consolidated School System, 22 F.L.R.A. 235, 237
(June 24, 1986). The Authority must also, as this Court has
held, “point to evidence in the record establishing this link.”
U.S. Department of the Air Force, Griffis Air Force Base v.
FLRA, 949 F.2d 1169, 1174 (D.C. Cir. 1991). And as with all
Authority fact-finding, our role is limited to ensuring that its
“findings of fact [are] supported by substantial evidence on
the record considered as a whole.” Pension Benefit Guarantee
Corp. v. FLRA, 967 F.2d 658, 665 (D.C. Cir. 1992).
Consider a few examples. In one case, we upheld an
Authority decision that declined to require the Department of
Defense Dependents Schools to bargain over a proposal that
would have extended into retirement a benefit allowing
teachers to travel for free aboard military aircraft. Overseas
Education Association, Inc. v. FLRA, 858 F.2d 769, 770, 772
(D.C. Cir. 1988). Although we recognized the clear link
between free travel and working conditions for active
employees, who were “called upon . . . to situate

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themselves . . . abroad,” we agreed with the Authority that
nothing in the record showed that extending the free-travel
benefit into “the golden years of retirement” would have had a
“direct impact on an employee’s day-to-day allegiance to his
or her job.” Id. at 772–73. In another case, civilian employees
sought to bargain over an Air Force decision requiring them
to challenge disciplinary actions, not on base, as they had
been permitted to do for years, but rather before a magistrate
court forty-two miles away. Griffis Air Force Base, 949 F.2d
at 1171. Ruling for the employees, the Authority found a
direct connection between the change in policy and the
employee’s working conditions, citing record evidence
showing “that the [new] policy would cause employees to
expend annual leave time to travel . . . , appear before the
Magistrate, and prepare for trial.” Id. at 1172. Given those
findings, we had little difficulty deciding that the Authority’s
direct-connection conclusion rested “on firm ground.” Id. at
1174.
In its brief on appeal here, the Authority acknowledges
that its obligation to “ascertain whether there is a direct
connection . . . is a factual determination, dependent on the
record evidence in each individual case, and reviewed for
substantial
evidence
supporting
[its]
conclusion.”
Respondent’s Br. at 21–22. Surprisingly, however, the
Authority engaged in no such fact-finding in this case. Instead
of pointing to the circumstances at Luke AFB that tie
Shoppette access to employee working conditions, the
Authority simply cited its earlier decision in this case for the
proposition that “access to military exchange and exchangerelated facilities . . . concerns employees’ conditions of
employment.” Local 1547 II, 67 F.L.R.A. at 525.
Of course, this would not be a problem had the earlier
decision established the required factual link between

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Shoppette access and employee working conditions. But it did
no such thing. Even though the Air Force insisted that
conditions at Luke AFB did not justify civilian access, the
Authority made no contrary findings, instead rejecting the Air
Force’s arguments by simply citing its own precedent. For
instance, the Air Force argued that nothing in the record
supported allowing civilians to purchase groceries
“not . . . ready for consumption.” Local 1547 I, 64 F.L.R.A. at
646. In response, instead of describing the circumstances that,
in its judgment, made it necessary for civilian employees to
purchase such groceries, the Authority simply stated that its
“precedent does not support finding that only proposals
involving prepared foodstuffs concern conditions of
employment.” Id. The Air Force also argued that civilian
employees had no need to shop during non-duty hours. Id. But
rather than identifying the conditions on base that warranted
off-duty access to the Shoppette, the Authority simply
declared that “no decisions . . . support [the Air Force’s]
assertion.” Id.
We could go on and on with more examples, but we think
the point is clear: the Authority has entirely failed to establish
a factual link between Shoppette access and base-employee
working conditions. Although our role in reviewing
negotiability determinations is limited, the Authority must
find facts to give us something to review. Because it failed to
do so in this case, we would grant the Air Force’s petition for
review on this ground were we not granting it on the
antecedent ground that access to commissaries and exchanges
falls outside the scope of collective bargaining.
IV.
We grant the petition for review and vacate the
Authority’s order.
So ordered.

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