April 12, 1999
DO-99-014
MEMORANDUM
TO: Designated Agency Ethics Officials
FROM: Stephen D. Potts
Director
SUBJECT: OGE Regulations and an Agency's Duty to Engage in
Collective Bargaining
More and more frequently, agencies have sought the advice of
the Office of Government Ethics (OGE) where the executive
branchwide ethics regulations issued by OGE in chapter XVI of
title 5 of the Code of Federal Regulations are the subject of union
proposals during the collective bargaining process. In addition,
OGE recently has become aware of some troubling applications of its
regulations in this context.(1) We are issuing this memorandum to
address these concerns.
An agency's duty to bargain in good faith with its exclusive
bargaining representative (union) under the Federal Service Labor-
Management Relations Statute (FSLMRS), 5 U.S.C. chapter 71, does
not extend to union proposals that are "inconsistent with . . . any
Governmentwide rule or regulation." See 5 U.S.C. § 7117(a).
(2)Various provisions in the executive branchwide ethics regulations
issued by OGE in 5 C.F.R. chapter XVI call for the agency to make
some determination, to come to some conclusion, to grant or deny
approval, or otherwise to exercise judgment (all of which are
referred to collectively herein as agency determinations) in
implementing the regulations.(3) Those provisions are intended to
confer sole and exclusive authority on the agency with regard to
those agency determinations, even though some of the regulations do
not use phrases such as "sole" or "exclusive" or similar language.
Union proposals that seek to prescribe those agency determinations,
or to provide for their review outside the agency (e.g., through
arbitration), are inconsistent with those regulations and therefore
are not subject to the duty to bargain. Those agency
determinations are final and unreviewable (except pursuant to the
exercise of OGE's oversight responsibilities for the executive
branch ethics program).
For example, criteria for agencies to apply in identifying
which of their employees must file confidential financial
disclosure reports are listed at 5 C.F.R. §§ 2634.904 and 2634.905.
The regulations at 5 C.F.R. § 2634.904(a)(1) state that "the
agency" is responsible for concluding who is a confidential filer
based on the requirements set forth in § 2634.904. In 5 C.F.R.
§ 2634.905, "the agency head or designee" determines exclusions
from the filing requirements. No one else may make these
determinations. Any proposal to the contrary would, therefore, be
nonnegotiable because the agency's authority is sole and exclusive.
Other examples concern financial interests prohibited under
the authority of 5 C.F.R. § 2635.403. Under 5 C.F.R.
§ 2635.403(a), the issuance of a supplemental agency regulation
prohibiting or restricting the acquisition or holding of a
financial interest or a class of financial interests is to be based
on "the agency's" determination (with OGE's concurrence) that the
acquisition or holding of such financial interests would cause a
reasonable person to question the impartiality and objectivity with
which agency programs are administered. Likewise, agency
determinations of substantial conflict under 5 C.F.R.
§ 2635.403(b), prohibiting or restricting an employee from
acquiring or holding a financial interest or a class of financial
interests, are to be made by the "agency designee." Union
proposals that seek to prescribe those agency determinations or
provide for their review outside the agency are contrary to the
executive branchwide regulations at 5 C.F.R. § 2635.403(a) and (b).
In addition, a union proposal seeking to exceed the 90 days set by
5 C.F.R. § 2635.403(d) as a reasonable period to divest a financial
interest would be nonnegotiable. It is "the agency" that has sole
and exclusive authority to determine whether a longer period should
be allowed "in cases of unusual hardship."
It would be inconsistent with OGE executive branchwide
regulations for an agency to negotiate agency determinations that
are within its sole and exclusive authority. This understanding
and application of the regulations are critical because they serve
the important purpose of finality and avoid protracting matters
that must be resolved expeditiously and uniformly in conformance
with the mandate of Executive Order 12674.
Agency ethics officials should contact OGE's Office of General
Counsel as soon as possible when any provision in OGE's executive
branchwide ethics regulations in 5 C.F.R. chapter XVI is the
subject of a union proposal. In this way, OGE can answer any
questions about the provision and thereby assist in assessing any
unresolved negotiability issues. In appropriate cases, where the
negotiability of a proposal concerning the regulations is before
the Federal Labor Relations Authority, OGE may seek to participate
as amicus curiae.
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1. See, e.g., the decision by the Federal Labor Relations Authority in
Patent Office Professional Ass'n and Patent and Trademark Office, 53
F.L.R.A. 625 (1997), finding a duty to bargain over proposals
concerning agency determinations to require divestiture of prohibited
financial interests under 5§C.F.R. §§2635.403.
2. It is clear from both the legislative history of the FSLMRS and
FSLMRS case law that OGE's executive branchwide ethics regulations in
chapter XVI of title 5 of the Code of Federal Regulations are
"Governmentwide" for purposes of the FSLMRS. See H.R.§Conf. Rep. No.
95-1717, at 158 (1978), reprinted in 1978§U.S.C.C.A.N. 2860, 2893;
U.S. Department of Health and Human Services v. Federal Labor
Relations Authority, 844 F.2d 1087 (4th Cir. 1988); Overseas Education
Association v. Federal Labor Relations Authority, 827 F.2d 814 (D.C.
Cir. 1987); U.S. Department of Treasury, I.R.S. v. Federal Labor
Relations Authority, 996 F.2d 1246 (D.C. Cir. 1993).
3. In conferring this sole and exclusive authority to the agency, the
regulations may refer to "the agency" or may specify an individual,
e.g., "Secretary," "head of the agency," "agency head," "agency head's
designee," "agency designee," "designee," "designated agency ethics
official," "alternate designated agency ethics official," "agency
ethics official," "ethics official," "designated ethics official,"
"deputy ethics official," "agency official," "Government official,"
"official specified," "reviewing official," "official to whom
authority has been delegated," "delegate," "responsible official,"
"person responsible," "supervisor," or "officer designated."