Cornelius v. Nutt, 472 U.S. 648 (1985)

JUSTICE MARSHALL, with whom JUSTICE BRENNAN joins, dissenting.

Today the Court holds that the Civil Service Reform Act of 1978 requires that an arbitrator, when reviewing an agency disciplinary action taken in violation of collectively bargained procedures, must ignore the possibility that sustaining the adverse action would be injurious to the legitimate interests of the union and to the integrity of the collective bargaining process. Following Congress’ finding that healthy collective bargaining serves the effective conduct of Government business, I agree with the Court of Appeals that an arbitrator may properly take into account in reviewing an adverse action a procedural error that substantially injures the union’s collective bargaining role. Accordingly, I dissent.

I

In passing the Civil Service Reform Act of 1978, Pub.L. 95-454, 92 Stat. 1111, Congress declared that "labor organizations and collective bargaining in the civil service are in the public interest." 5 U.S.C. § 7101(a). This finding was based on Congress’ study of "experience in both public and private employment," ibid., and on its conclusion that employees’ right to

bargain collectively, and participate through labor organizations . . . in decisions which affect them . . . contributes to the effective conduct of public business.

Ibid. One of the major goals of the Act was to effectuate this policy by establishing the framework for a system of labor organization and collective bargaining in the federal civil service. See 5 U.S.C. § 7101 et seq. One of the principal spheres where collective bargaining rights were guaranteed to federal unions was the negotiation of "procedures which management officials of the agency will observe" in taking disciplinary actions against employees. § 7106(b)(2) (emphasis added). Congress also required that collective bargaining agreements covering federal employees must provide for grievance procedures that include union-invoked "binding arbitration." § 7121(b)(3)(C).

This case involves the arbitration of agency decisions to remove from Government service two Federal Protective Service officers. Both officers were accused of serious acts of misconduct. The arbitrator determined that they "committed the acts enumerated" and that "under normal circumstances [those acts would] justify their removal from government service." App. to Pet. for Cert. 32a. But the arbitrator also found that the agency’s behavior in reaching its decision to remove the grievants was plagued by a "pervasive failure to comply with the due process requirements of the [collective bargaining] agreement." Id. at 38a. Among other violations of the contractual procedures, the agency had repeatedly failed to inform either grievant of his right to have a union representative present during all investigatory interviews. The officers’ collective bargaining agreement and a prior arbitration decision unambiguously established both the right to union representation and the right to be informed by the employer of the availability of union representation. Although the arbitrator concluded that it would be "unrealistic to pretend that the Grievants . . . were entirely unaware of their right to representation," id. at 34a-35a, he also concluded that some modification of the agency action was necessary to avoid denigration of the collectively bargained procedural requirements.

In the Court’s view, this decision violated the Act’s requirement that an employee complaining of procedural errors associated with an adverse action decision must "sho[w] harmful error in the application of the agency’s procedures in arriving at such decision." § 7701(c)(2)(A). The Court rejects the position of the Court of Appeals for the Federal Circuit, under which an arbitrator’s finding of a significant injury to the union stemming from the agency’s "[v]iolations of explicit and important procedural rights contained in a contract," 718 F.2d 1048, 1055 (1983), constitutes "harmful error." Instead, the Court holds that the harmful error standard prohibits consideration of any violation that did not affect "the result of the agency’s decision to take the disciplinary action against the individual employee." Ante at 659. But neither the wording of the standard offered by the Court today, nor the statutory language and history, require that arbitrators ignore the possibility that sustaining an agency action may -- because of an agency’s refusal to honor contractual obligations in reaching its disciplinary decisions -- result in substantial injury to the continued stability of union-agency collective bargaining relations. By requiring the arbitrator to ignore this factor, the Court undermines the clear congressional intent to gain for the federal sector the benefits derived from a system of stable collective bargaining.

II

The Court analyzes the concept of "harmful error" in an adverse action case as it would in the context of a criminal trial.{1} Similarly, it narrowly defines the issue before the arbitrator as whether the grievants had in fact committed the acts of misconduct of which they were accused. But by statutory mandate the issue before an arbitrator in an adverse action case is not simply whether the grievants have committed the alleged acts of misconduct; it is rather whether the grievants’ removal from the service was for "such cause as will promote the efficiency of the service." § 7513(a). This flexible statutory standard easily encompasses Congress’ desire to assure that stable collective bargaining relationships be established in agencies,{2} and accordingly, the concern for stable collective bargaining relationships is relevant to the statutory concept of harmful error.{3}

The statutory phrase "such cause as will promote the efficiency of the service" predates the Civil Service Reform Act’s recognition of federal sector collective bargaining. See Arnett v. Kennedy, 416 U.S. 134, 158-164 (1974) (plurality opinion) (discussing history of phrase). Nonetheless it has always been understood as an "admittedly general standard," id. at 159, adaptable to the situations faced by "myriad different federal employees performing widely disparate tasks." Ibid. It was certainly meant to leave room for Congress’ evolving conceptions of what constitutes efficient public management. A plurality of this Court has previously explained that

longstanding principles of employer-employee relationships, like those developed in the private sector, should be followed in interpreting the [standard],

id. at 160, and this point takes on special importance in light of Congress’ decision that success of collective bargaining in the private sector should to some extent serve as an example for the federal workplace. But whether one looks to the concept of "just cause" that has developed in the unionized private sector or confines the inquiry to the findings made by Congress upon passage of the Civil Service Reform Act, the arbitrator’s consideration of collective bargaining concerns in his evaluation of "cause" was proper.{4}

III

The Court’s discussion of harmful error leaves unanalyzed the public interest in collective bargaining and thus fails to consider whether that interest should be taken into account in the analysis of what constitutes "such cause as will promote the efficiency of the service." § 7513(a). Instead it principally rests on the fact that "one of the `central tasks’ of the Act was to `[a]llow civil servants to be able to be hired and fired more easily.’" Ante at 662 (quoting S.Rep. No. 95-969, p. 4 (1978)).

The Court reasons that, because the grievants in this case had "concededly committed improper acts that justified their removal from the federal service," ibid., it would defeat a major purpose of the Act to force their reinstatement because of procedural errors that "do not cast doubt upon the reliability of the agency’s factfinding or decision."Ibid. But the agency’s decision that removal of these employees would serve the "efficiency of the service" included no consideration of the possible injuries to collective bargaining caused by the serious procedural errors committed by the agency. Given Congress’ determination that stable collective bargaining relationships would serve "the effective conduct of public business," § 7101(a), it cannot be so quickly said that the errors involved in this case "do not cast doubt upon the reliability of the agency’s . . . decision." If one takes Congress’ determination seriously, then the agency’s decision is indeed called into question.{5}

It is true that facilitating collective bargaining was not the only goal of the Act, and that Congress also intended to "preserv[e] the ability of federal managers to maintain `an effective and efficient Government,’" Bureau of Alcohol, Tobacco and Firearms v. FLRA, 464 U.S. 89, 92 (1983) (quoting 5 U.S.C. § 7101(b)), and to "`[a]llow civil servants to be able to be hired and fired more easily.’" Ante at 662 (quoting S.Rep. No. 95-969, p. 4 (1978)). These concerns certainly influenced many aspects of Congress’ detailed statutory scheme for the governance of the civil service. Indeed, Congress explicitly reserved as "management rights" the authority "to suspend, remove, reduce in grade or pay, or take other disciplinary action against . . . employees." § 7106(a)(2)(A). But Congress also explicitly provided for collective bargaining to establish procedures that "the agency will observe in exercising [its] authority" in this area, § 7106(b)(2), and the legislative history of this provision makes clear that Congress well understood that bargained-for procedures could severely limit management’s freedom of action over discipline.{6}

While the Court underemphasizes the importance of collective bargaining, it overemphasizes the harm to the service of allowing the arbitrator’s decision to stand. The issue is not whether common and trivial procedural errors will be a reason for putting clearly unfit people back in positions where they will do harm; this case involves neither a common nor a trivial procedural error, and the arbitrator established no requirement that an employee be returned to a position where he will do harm.

The arbitrator found the violations of the agreement "pervasive," App. to Pet. for Cert. 38a, and it was only on that basis that the Court of Appeals affirmed. The concept of harmful error was not written out of the statute in this case, for the Court of Appeals concluded that

violations of explicit and important procedural rights contained in a contract, such as these, could fairly be said to be tantamount to "harmful error" to the union.

718 F.2d at 1055. Under this standard, an arbitrator would certainly be prohibited from reversing an agency’s adverse actions because of technical contract violations not serious enough to injure the collective bargaining process. See Devine v. Brisco, 733 F.2d 867 (CA Fed.1984) (reversing an arbitrator’s refusal to sustain an agency determination because of procedural errors that were not shown seriously to compromise the union’s position).

Moreover, Government agencies will, it is hoped, not frequently commit flagrant violations of their collective bargaining agreements. Thus, the burden of decisions like that of arbitrator Nutt will not be great. To the extent that a Government agency perceives a need for greater flexibility, it can seek that freedom through the congressionally sanctioned means -- the collective bargaining process. See Devine v. White, 225 U.S.App.D.C. 179, 201, 697 F.2d 421, 443 (1983) ("Within the areas in which bargaining is permissible, we believe, as did Congress, that government managers are competent to look out for the government’s interests").

Lastly, the arbitrator here did not simply ignore the agency’s interest by ordering the return of an unqualified grievant to his old position. Instead, because the arbitrator agreed that one of the grieving employees could not be trusted to perform adequately at his old position, he gave the agency substantial flexibility in determining the capacity to which the employee would be reinstated. App. to Pet. for Cert. 38a-39a (allowing agency to reinstate grievant Wilson to any nonclerical position in which "he can reasonably be expected to perform satisfactorily" even if that position would be at the entrance level).

The Court is wrong to fear that it will undermine Government’s efficiency to follow the unionized private sector and incorporate concerns for the stability of collective bargaining into the evaluation of agency disciplinary actions. Giving force to Congress’ view that healthy collective bargaining relationships serve the effective conduct of public business does not displace the importance of maintaining the "efficiency of the service." To the extent that an arbitrator’s decision ignores efficiency concerns, I do not doubt that it would be invalid. In formulating the "harmful error" standard, Congress understood that there would be instances where adverse actions would not serve the public interest even if in the abstract the misconduct rendered the employees deserving of the disciplinary action.{7}

IV

By determining that collective bargaining in the federal workforce was in the public interest, Congress may have made the concept of "cause as will promote the efficiency of the service" slightly more complex. But it understood that this complexity has long been a part of the successful operation of collective bargaining.

Accordingly, I dissent.

1. See ante at 657, n. 9 ("assum[ing] that Congress intended the term `harmful error’ . . . to have the same meaning that it has in the judicial context" and citing two criminal cases, United States v. Hasting, 461 U.S. 499, 507-509 (1983) and Kotteakos v. United States, 328 U.S. 750, 760-762 (1946), for the proper standard). But seen. 2, infra.

2. Cf. Kotteakos v. United States, supra, at 760-762 (in evaluating what is harmful error, "[w]hat may be technical for one is substantial for another; what minor and unimportant in one setting crucial in another").

3. The court below was not alone in recognizing the relevance to the "harmful error" standard of Congress’ concern for healthy and stable collective bargaining. This recognition was also at the heart of the Court of Appeals for the District of Columbia Circuit opinion in Devine v. White, 225 U.S.App.D.C. 179, 697 F.2d 421 (1983). Writing for that court, Judge Edwards concluded that

a violation of a clear provision of a collective bargaining agreement could constitute "harmful error" under the theory that some bargained-for procedural rights are, by definition, substantial rights of an employee.

Id. at 201, 697 F.2d at 443. Judge Edwards argued that employees’ participation in the collective bargaining process to obtain certain rights reflects that those employees have "attached considerable importance" to those rights. To allow agency decisions to stand, even if they are made in clear violation of these "substantial rights of an employee,"

would . . . be inconsistent with Congress’ desire to ensure that the federal government, as well as the private sector, receiv[e] the benefits that flow from collective bargaining.

Ibid.

4. Arbitrator Nutt rested his decision to modify the adverse actions on the accepted practice of arbitrators interpreting the "just cause" standard. See App. to Pet. for Cert. 36a. ("This approach has been taken by most arbitrators and will most likely assure the Agency’s making certain that the contract is followed in the future"). It is clear that his approach does conform to generally accepted arbitration practice. See, e.g., General Telephone Co., 78 Lab.Arb. 793 (1982); City of Sterling Heights, 80 Lab.Arb. 825 (1983) (local government public sector arbitration); Fort Wayne Community Schools, 78 Lab.Arb. 928 (1982) (same). See generally F. Elkouri & E. Elkouri, How Arbitration Works 633, and n. 110 (3d ed.1973) (collecting citations to published opinions of labor arbitrators).

Although arbitrators have sustained disciplinary actions in spite of management’s failure to follow bargained-for procedures, these cases usually rested not only on the absence of prejudice to the grievant, but also on the principle that "compliance with the spirit of . . . procedural requirements [may be] held to suffice." Id. at 634. The instant case, however, involves an agency that made little effort to comply with either the letter or the spirit of the agreement.

5. Given the fact that an agency’s decision is supposed to reflect a determination that an adverse action serves the "efficiency of the service," I do not believe that the definition of "harmful error" actually offered by the Court or at various times by the Merit Systems Protections Board, see ante at 659, necessarily demands that an arbitrator ignore injuries to the collective bargaining process. The issue is whether those injuries can be taken into account in determining "cause."

Moreover, it is not surprising that the MSPB’s definition does not explicitly mention concerns regarding collective bargaining, because unlike arbitration cases, MSPB cases are brought by individual employees rather than by unions. The MSPB’s definition reflects a failure to have considered issues of collective bargaining more than it reflects a considered determination of the issues presented here. It is thus not surprising that the Court chooses not to rest its decision primarily on grounds other than deference to the MSPB. Ante at 662-665.

6. The legislative language and history makes clear that Congress took quite seriously the rights of unions to negotiate procedures binding on agencies regarding those agencies’ exercise of management authority. One of the floor managers of the bill, explaining this provision as it emerged from the Conference Committee, stressed that under

the clear language of the bill itself, any exercise of the enumerated management rights [such as the right to discipline employees] is conditioned upon the full negotiation of arrangements regarding adverse effects and procedures.

124 Cong.Rec. 38715 (1978) (comments of Rep. Ford). He stressed that contract proposals were fully valid even if they had "[a]n indirect or secondary impact on a management right," ibid., and that

procedures and arrangements are to be negotiated with regard to both the decisionmaking and implementation phases of any exercise of management authority.

Ibid. The Conference Report went so far as to acknowledge that the right to negotiate on procedures regarding the exercise of management rights gives the parties the ability to "indirectly do what the [management rights] section prohibits them from doing directly." H.R. Conf Rep. No. 95-1717, P. 158 (1978).

7. Seen. 6, supra, and accompanying text.