Department of Labor, Washington, D.C. and American Federation of Government Employees, Local 12, AFL-CIO, WA-CA-0816, June 30, 2004, 60 FLRA No. 18.

A properly implemented "final offer" MOU proposal dealing with a child care subsidy program, which states the conditions under which it can be reopened, is a legally enforceable part of the agreement. The union did not have the right to reopen the MOU because its request to reopen was not in accord with the MOU's reopener provision.

The parties had been bargaining over a pilot child care subsidy program. On May 1, 2000, the agency presented the union with its final proposal in the form of an MOU containing the terms of the pilot program. The penultimate paragraph of the MOU, which is critical to this case, reads as follows:

This MOU will remain in effect through FY 2000 in accordance with the legislation. If Congress and/or OPM reauthorizes the pilot program or makes the program permanent, within 30 days of such occurrence either party may notify the other in writing of the desire to reopen this matter for renegotiation. If neither party serves such notice, the MOU will remain in effect consistent with the term of the master Agreement.

On May 17, 2000, when the agency told the union that it appeared that they were at impasse and indicated that it intended to implement its final proposal, which contained the above provision, the union neither responded to the letter nor sought FSIP assistance. So the agency implemented the pilot program.

On November 12, 2001, Congress made the pilot program permanent. On December 12, 2001, the agency implemented a permanent program that mirrored the pilot program. It didn't give the union notice of its intent to make the program permanent or offer to bargain.

On March 5, 2002, the union proposed revisions of the child care subsidy program, which was to be retroactive to November 12, 2001. The agency refused to bargain, saying the union had waived its right to bargain by not acting within the 30-day reopener period provided by the MOU.

A ULP followed in which the ALJ found, among other things, that because the union never signed the implemented MOU it didn't become part of the parties' CBA and therefore the "covered by" doctrine did not apply. Consequently the agency committed a ULP by not engaging in midterm bargaining on the union's March 5, 2002, proposed revisions.

In dismissing the complaint, FLRA made a number of rulings.

1. The agency didn't violate the Statute when it implemented the pilot child care subsidy program in accordance with its proposed MOU. FLRA said that "the Authority has recognized that a union may waive its right to bargain over a proposed change in conditions of employment, either explicitly through agreement or implicitly through inaction." It continued as follows:

   [A]n agency may implement changes in conditions of employment when a union fails to request bargaining within a reasonable period of time after being notified of proposed changes, fails to submit bargaining proposals within a contractual or other agreed upon time, or fails to timely invoke the services of the Panel after the parties have reached impasse. . . . Under Authority precedent, a union is considered to have consented to proposed changes in conditions of employment when it fails to timely invoke the services of the Panel. [Bold added.]

2. The properly-implemented final proposal is enforceable as part of the agreement. Noting that FLRA has never addressed the status of proposals implemented as above, the Authority likened proposals thus implemented to FSIP orders, which are recognized to be part of the CBA.

[W]e conclude that, as a matter of policy, contract terms implemented in situations such as this one should be treated as binding agreements. In this regard, finding that the terms are not binding could provide unions an incentive to not seek the Panel's assistance and, instead, attempt to require additional bargaining on issues over which impasse had previously been reached. This would hinder, not further, the purposes of the Statute. [Bold added.]

3. Nor was the agency obliged to give the union notice of, and an opportunity to bargain over, the implementation of the permanent child care subsidy program. "When an agency acts in accordance with an agreement, the agency is not required to provide notice to the union of its actions because the union, as party to the agreement, is presumed to know its terms." (Bold added.) FLRA noted that the MOU provision quoted above didn't require the agency to notify the union of any legislation extending the program.
4. Finally, the "covered by" doctrine relieved the agency of any duty to bargain midterm over the permanent program. "The Authority has held that, absent a reopener clause, parties are not permitted to demand mid-term bargaining over matters that are covered by an agreement. . . . There is no dispute that the Union did not serve notice to the Respondent of its desire to bargain within the allotted time. Therefore, the Union did not have the right to demand to bargain mid-term over the issue . . ."

This case is unusual in that it involved the final offer implementation of an MOU with a conditional reopener that in effect required the parties to keep close tabs on OPM and/or Congressional actions relating to child care programs in order to know whether and when the 30-day reopener was triggered by these external events.