[00:00:02] Speaker 00: Case number 14-1052, United States Department of Homeland Security, U.S. [00:00:07] Speaker 00: Customs and Border Protection Scoby, Montana, Petitioner versus Federal Labor Relations Authority. [00:00:13] Speaker 00: Mr. Pinnock for the petitioner, Mr. Jacob for the respondent, and Mr. Shaw for the intervener. [00:00:34] Speaker 04: May it please the Court? [00:00:36] Speaker 04: Mark Penning for the United States Department of Justice. [00:00:38] Speaker 04: I represent the Petitioner's Department of Homeland Security in this matter. [00:00:44] Speaker 04: The issue before the Court is, of course, one, whether the Court has jurisdiction to hear this petition, and second, the merits of the authority's construction of the Back Pay Act in such a way that violates the sovereignty of the United States and the appropriations clause of the Constitution. [00:01:04] Speaker 04: Now, we have a two-fold argument on the jurisdictional point. [00:01:09] Speaker 03: By the way, am I right under your jurisdictional argument that if you're right, then the court would always have jurisdiction when the government loses and is ordered to pay back pay, but we would never have jurisdiction when the government wins. [00:01:25] Speaker 03: Is that true? [00:01:26] Speaker 04: I think you would always have jurisdiction when the government [00:01:30] Speaker 04: loses where the authority has awarded back pay. [00:01:33] Speaker 03: That's what I just said. [00:01:33] Speaker 04: Yes. [00:01:34] Speaker 04: That was my question. [00:01:39] Speaker 03: That was my question. [00:01:40] Speaker 03: So when back pay is ordered, the court would have jurisdiction. [00:01:46] Speaker 03: But when it isn't, we would not. [00:01:48] Speaker 04: And that is the very nature of sovereign immunity in the appropriations clause itself. [00:01:52] Speaker 04: The appropriations clause is not implicated where there's been no call upon the public fisc, where there is no issue as to whether or not the authority has awarded damages that Congress has not authorized. [00:02:04] Speaker 01: Congress has waived sovereign immunity in the back pay act and presumably it did it for the government to sometimes lose and have to pay back pay. [00:02:12] Speaker 01: That's part of the waiver of sovereign immunity. [00:02:15] Speaker 04: This court held in the Social Security Administration that the waiver of sovereign immunity in the Back Pay Act is limited by its terms. [00:02:21] Speaker 04: And to the extent that the authority goes beyond those terms, there is no waiver. [00:02:25] Speaker 03: So you have to look at the merits. [00:02:26] Speaker 03: Under your theory, there would never be a waiver, because the government would always argue that a back pay award violated the statute, and therefore the government's sovereign immunity. [00:02:36] Speaker 03: But to the extent that the authority... There would be nothing left of... [00:02:40] Speaker 03: Congress's provision that arbitrator decisions are not subject to appeal. [00:02:47] Speaker 04: Quite to the contrary, Your Honor. [00:02:48] Speaker 04: There would be a great deal left. [00:02:50] Speaker 03: In most cases, the authority... Not in a back pay case. [00:02:52] Speaker 04: Well, in a back pay case, that may be true. [00:02:54] Speaker 03: There wouldn't be anything left in a back pay case. [00:02:55] Speaker 04: But most cases that the authority rules upon do not involve questions of back pay. [00:03:00] Speaker 05: But the back pay act, you're pretty well eating it if you say that it violates the appropriating clause to award back pay. [00:03:07] Speaker 04: It doesn't if it's authorized by the terms of the back pay act itself. [00:03:12] Speaker 04: If it's not authorized by the terms of the back pay act, it does. [00:03:15] Speaker 05: Your argument here is not that the back pay act of a NITU doesn't authorize this award. [00:03:23] Speaker 05: Your argument seems to be that because of the [00:03:25] Speaker 05: regulation within your agency, it's not authorized. [00:03:29] Speaker 04: Isn't that correct? [00:03:30] Speaker 04: It's both, Your Honor. [00:03:32] Speaker 04: The authority here undeniably construed the Back Pay Act itself before the Back Pay Act in such a way as to, in our view, eviscerate the limitations imposed by Congress in the Back Pay Act. [00:03:45] Speaker 04: And that seems to me something that actually... Let's back up to the beginning. [00:03:50] Speaker 05: They construed the Back Pay Act as authorizing the order of back pay. [00:03:54] Speaker 05: And that's where they start. [00:03:55] Speaker 05: Now you say that the back pay act doesn't authorize it in this case because your agency's regulations. [00:04:02] Speaker 04: No, Your Honor, not quite. [00:04:03] Speaker 04: We're saying it doesn't authorize it in this case because the agency, the authority here, misconstrued the back pay act itself. [00:04:11] Speaker 04: And they have an alternative. [00:04:12] Speaker 05: What is the American screw about the back pay? [00:04:13] Speaker 05: I thought your argument was that you don't have to pay back pay because your regulation says you have a different remedy for back pay. [00:04:20] Speaker 04: Well, that's the construction of the Back Pay Act itself. [00:04:23] Speaker 04: Because the Back Pay Act, by its terms, says, and I think this is important, that the remedy granted under this section, 5596, shall not exceed that authorized by the applicable law regulation. [00:04:38] Speaker 05: So you're importing your regulation and saying [00:04:43] Speaker 05: We didn't import it. [00:04:45] Speaker 04: The authority did when it based its ruling upon the violation of that regulation. [00:04:51] Speaker 04: They said, because that violation was there, we get to award back pay. [00:04:57] Speaker 04: But we are not confined, the authority holds, by the limitations contained in that regulation. [00:05:03] Speaker 01: And in our view, that violation is always going to require you to import some regulation rule or applicable law, right? [00:05:11] Speaker 04: That's the very terms of the statutory language. [00:05:15] Speaker 01: Yes, it does. [00:05:16] Speaker 01: Would an award of back pay adverse to the government against the government by an arbitrator not be reviewable under the Back Pay Act? [00:05:26] Speaker 04: Well, not every provision or regulation has a limitation embodied within it. [00:05:32] Speaker 01: I'm assuming you're making some argument as to why you shouldn't have to pay back pay. [00:05:37] Speaker 01: And that's why there's a case. [00:05:38] Speaker 01: So what kind of argument would you be making in a case before the FLRA involving back pay, that if you lost that argument, there would still be the barrier to review? [00:05:53] Speaker 04: in a case where the regulation and issues such as this one imposes a limitation on the scope of the remedy. [00:06:01] Speaker 04: We would argue before the authority that you must obey that limitation. [00:06:06] Speaker 04: And in doing so, you must give due deference to the... I understand that's what you're arguing here. [00:06:09] Speaker 01: I'm trying to get some sense from you as to why Judge Tatel's suggestion might not be accurate. [00:06:18] Speaker 01: And that is, what type of back pay act case before the FLRA, when you're ordered to pay back pay, [00:06:25] Speaker 01: would not implicate sovereign immunity. [00:06:29] Speaker 04: Well, every payment from the public fisc involves the appropriations clause. [00:06:34] Speaker 04: Every award that violates the waiver, the limited waiver here, violates sovereign immunity. [00:06:41] Speaker 01: So any case where you disagree with the FLRA's decision to award back pay will be reviewable? [00:06:46] Speaker 04: No, Your Honor, not quite. [00:06:47] Speaker 04: Every case where we disagree with the agencies, the authorities' interpretation of the back pay act [00:06:54] Speaker 05: I don't understand what you say is wrong with their interpretation of the back pay. [00:06:58] Speaker 04: Well, let me lay it out for you right now. [00:06:59] Speaker 05: I've read your brief, I've heard you so far, and it seems to me that they are awarding back pay. [00:07:07] Speaker 05: You are saying that they can't do it in this case because of your regulation. [00:07:11] Speaker 05: Your regulation says the way we pay off for back pay is to give the next percent. [00:07:16] Speaker 05: Is that, am I right about that? [00:07:17] Speaker 05: You are, but what your honor may not... Because that regulation didn't exist. [00:07:24] Speaker 05: So they're not, you're not talking about the construction of their act. [00:07:28] Speaker 05: You're talking about their application of your regulation. [00:07:30] Speaker 04: We're talking about how they read that, apply that regulation within the language of B4 of the Back-Pay Act itself. [00:07:36] Speaker 03: Well, I thought when you, I thought your answer to Judge Sintel's question conceded that you're not raising a statutory question. [00:07:43] Speaker 03: We are. [00:07:43] Speaker 03: You answered yes to his question. [00:07:45] Speaker 04: Well, because the regulation is incorporated by reference. [00:07:48] Speaker 03: The answer to his question, he asked you whether or not, if there weren't a regulation, would you have a problem? [00:07:53] Speaker 03: And you said there wouldn't be one. [00:07:54] Speaker 04: If there was no regulation and there was a violation of what there has to be some regulation of law. [00:08:00] Speaker 04: Why does there have to be a regulation? [00:08:01] Speaker 04: Because the back pay itself imposes an unwanted personnel practice under a law regulation statute that would result in a reduction of pay. [00:08:10] Speaker 05: The back pay act awards back pay for violation of what the pay should have been towards back pay. [00:08:19] Speaker 05: It incorporates limitations from regulation. [00:08:22] Speaker 05: Yes. [00:08:23] Speaker 05: You would concede, or you have conceded, that the Back Pay Act by itself here would authorize back pay. [00:08:28] Speaker 04: Oh no, Your Honor, I don't concede that. [00:08:30] Speaker 04: You didn't concede that? [00:08:31] Speaker 04: No, I don't concede that. [00:08:32] Speaker 04: I was saying, Your Honor, as hypothetical as I understood it at least, was where there was no regulation. [00:08:36] Speaker 05: Where there's no regulation, it awards back pay. [00:08:40] Speaker 05: You say they have aired here because your regulation [00:08:49] Speaker 04: Let's go back to 5596B1. [00:08:55] Speaker 04: It authorizes the back pay where there has been a reduction in pay because of a personnel action. [00:09:02] Speaker 04: Now, if that's all we had here and that's what the authority cites as the basis of its award, then that's fine. [00:09:10] Speaker 05: We wouldn't be here. [00:09:13] Speaker 05: Now, what you're saying is, because of your regulation, they cannot apply that statute [00:09:19] Speaker 04: Because of B4 of the back payout. [00:09:24] Speaker 04: B4 says there's no award under 5596B1 or anything else under that section because it's a limitation on the entire section. [00:09:34] Speaker 04: If the regulation that was violated, it's not authorizing. [00:09:42] Speaker 04: Because the language of the statute is perfectly clear on that. [00:09:46] Speaker 01: But the problem is, even if we accept that reading of B4, the agency policy here is not categorical. [00:09:56] Speaker 01: It says the remedy of assigning the next opportunity only applies if the deprivation arose from administrative error. [00:10:05] Speaker 01: And I read your brief to say, and two things, FLRA said, fine, even if you're right on everything else, this was more than administrative error. [00:10:14] Speaker 01: So the policy limitation doesn't even apply. [00:10:17] Speaker 01: If that's accurate, so they've held that as an alternative ground. [00:10:22] Speaker 01: So why isn't that by itself sufficient to foreclose your jurisdictional argument? [00:10:26] Speaker 04: because they could reach that conclusion only after committing a fundamental legal error. [00:10:33] Speaker 04: And the fundamental legal error they committed was the refusal to defer to the agency's interpretation of that regulation. [00:10:41] Speaker 01: So if that's all we're reviewing at this point, let's put their other construction, we'll table their other construction of the FLRA. [00:10:46] Speaker 01: If they say, we take your construction of the Back Pay Act, [00:10:51] Speaker 01: and how it applies to this policy. [00:10:54] Speaker 01: And we now look at this policy and it says it does not impose any limitation within the meaning of B4. [00:11:01] Speaker 01: if it's more than administrative error. [00:11:03] Speaker 01: Now you're saying the fight's about what does administrative error in that policy mean, which has nothing to do with the backpack. [00:11:12] Speaker 04: Yes, it does, Your Honor, by cross-reference to before. [00:11:15] Speaker 01: So every construction of the regulation is then going to be a sovereign immunity violation as well? [00:11:21] Speaker 01: If they misconstrue, if they don't give enough deference or whatever, your regulation, that's a sovereign immunity violation too? [00:11:27] Speaker 04: That's the construction of B4, and that's the meaning of the very language in B4, that the limitation imposed by the regulation must be adhered to. [00:11:37] Speaker 01: But you're just disagreeing about what administrative error means. [00:11:42] Speaker 04: Well, more fundamental than that, Your Honor, we're disagreeing with the authorities' refusal to apply the Supreme Court's decision. [00:11:48] Speaker 01: So what if their determination turned on a fact dispute? [00:11:52] Speaker 01: You guys said, you know, it was just some misfiled papers, we had the wrong phone number, couldn't find the guy, it was an administrative error. [00:12:00] Speaker 01: And they go, ah, ah, ah, the other side argues that you have a long-standing policy of never always having these mistakes whenever the officer is [00:12:10] Speaker 01: a minority. [00:12:12] Speaker 01: And so it's a fact dispute about whether this was an administrative error, oops we couldn't find the phone number, or this in fact is a pattern in practice. [00:12:20] Speaker 01: I'm not suggesting that's what happened here by the way, this is hypothetical obviously. [00:12:24] Speaker 01: This is a pattern in practice of always having mistakes when someone's a minority. [00:12:28] Speaker 01: So it's a pure fact dispute about whether this was administrative error or not. [00:12:32] Speaker 01: No interpretive question. [00:12:34] Speaker 01: Does that violate sovereign immunity if they disagree with your facts? [00:12:40] Speaker 04: is a wrong interpretation of that provision, legally wrong. [00:12:44] Speaker 01: Remember, this is not a factual issue. [00:12:46] Speaker 01: I'm just asking you a very narrow question. [00:12:48] Speaker 01: If they disagree with your factual argument and on that basis say, the policy doesn't limit it, you can see that has, I am asking a hypothetical, so that would have nothing to do [00:13:00] Speaker 04: I resist the hypothetical, Your Honor, because the interpretation of the policy is not a factual input. [00:13:04] Speaker 01: You don't get to, because if I'm asking you what happens jurisdictionally in a case where the dispute is only factual. [00:13:11] Speaker 04: Well, there's probably no legal error here that we could bring to the Court's attention. [00:13:16] Speaker 01: And there'd be no sovereign immunity problem, even though you would fervently believe money was being paid that shouldn't have been paid. [00:13:23] Speaker 01: Yeah? [00:13:23] Speaker 04: Yes. [00:13:24] Speaker 01: OK. [00:13:24] Speaker 01: And then so when it's a fine line between application of facts to law and deciding whether something is on this side or that side of the administrative error line, it suddenly becomes a constitutional question? [00:13:37] Speaker 04: Your Honor, it never gets there in this case, because it's a legal question, purely legal question, interpretation of a legal policy. [00:13:44] Speaker 01: It's not on their alternative ground that this was not administrative error. [00:13:48] Speaker 01: That's not a legal question. [00:13:49] Speaker 04: Yes, it is, Your Honor, because it's an interpretation of a legal document. [00:13:52] Speaker 01: It's necessarily an application of law to facts question. [00:13:55] Speaker 04: There's no dispute on the facts of this case. [00:13:58] Speaker 04: No one is disputing what the chief officer did. [00:14:00] Speaker 04: No one is disputing. [00:14:02] Speaker 04: It's a matter of whether or not that constitutes a legal error. [00:14:04] Speaker 04: And that's a legal conclusion. [00:14:06] Speaker 04: That's nothing other than a legal conclusion. [00:14:09] Speaker 04: I see my time has expired. [00:14:10] Speaker 04: I would ask the court to reverse. [00:14:24] Speaker 06: Good morning, Your Honors. [00:14:25] Speaker 06: May it please the Court. [00:14:26] Speaker 06: My name is Fred Jacob. [00:14:27] Speaker 06: I'm a Solicitor at the Federal Labor Relations Authority, and with me are Zachary Hennigie and Stephanie Spera Stone. [00:14:35] Speaker 06: Together, we ask this Court to dismiss the vision for review. [00:14:38] Speaker 06: As Your Honors have discussed, the [00:14:41] Speaker 06: The agency puts no limiting principle whatsoever on its proposal that arbitration cases... Well, what is yours? [00:14:48] Speaker 01: What if the agency, again, just speaking hypothetically for now, just completely misconstrued this part of the Backpay Act and said it only applies in February? [00:15:00] Speaker 01: Something crazy, totally wrong as a legal matter interpretation of the Backpay Act. [00:15:05] Speaker 01: How would that get reviewed? [00:15:07] Speaker 06: That would get reviewed the way this court said it should be reviewed in Griffith. [00:15:10] Speaker 06: We believe Griffith struck the proper balance. [00:15:13] Speaker 06: So that would be a suit under Ledum v. Kine that could be brought in the district court to review. [00:15:16] Speaker 01: Well, we've got more recent precedent. [00:15:17] Speaker 01: How is that going to satisfy the Nant case? [00:15:20] Speaker 01: We've got more recent precedent that says multiple factors for having a Ledum v. Kine, and one of which is that there's an implicit, not explicit, limitation on jurisdiction, which I don't know how you'd get past that. [00:15:32] Speaker 06: Well, certainly, I mean, there is an explicit limitation of jurisdiction here. [00:15:35] Speaker 01: So how are we going to have a Liedem versus Kine suit to address that legal problem? [00:15:39] Speaker 06: Well, I assume you're speaking about the Department of Justice case is the one. [00:15:42] Speaker 01: I'm just asking you how. [00:15:44] Speaker 01: You said that they have a crazy wrong interpretation of the Backpay Act that can bring suit under Liedem versus Kine. [00:15:50] Speaker 01: And I said, I'm not so sure about that, given the explicit review. [00:15:54] Speaker 01: And you agreed. [00:15:55] Speaker 01: So it seems to me that kills the Liedem versus Kine theory. [00:15:58] Speaker 01: So then how do we get that legal error reviewed? [00:16:01] Speaker 06: Well, Your Honor, I wouldn't necessarily concede that that would necessarily kill the lead and be kind theory. [00:16:06] Speaker 06: That is what the court said would be the appropriate, in Griffith, said would be the appropriate avenue. [00:16:11] Speaker 06: I mean, obviously there is an explicit review, there is an explicit bar in our statute to judicial review, which is exactly what Congress intended for the arbitration cases, that they should end at the authority. [00:16:25] Speaker 06: The court in Department of Justice was dealing with a very different fact situation, was applying, I believe it was a personnel matter involving supervisors. [00:16:37] Speaker 01: I guess I'm just back to my question. [00:16:40] Speaker 01: not to go through the cases, but simply to go, how do you think they could get it reviewed? [00:16:45] Speaker 01: Because they're and, it's a conjunctive list in the Niant case. [00:16:49] Speaker 01: And so I'm not sure, I think it's certainly at least a debatable point, whether they could bring a lead-in versus kind. [00:16:56] Speaker 01: Is it your position, could they just not pay this judgment and raise their [00:17:00] Speaker 01: statutory construction objections in a unfair labor practice proceeding, or is it your view that that would be the same arguments would be foreclosed there that are foreclosed here? [00:17:10] Speaker 06: I mean, to our view, the same arguments would be foreclosed. [00:17:12] Speaker 01: So they can't do it through an unfair labor practice proceeding. [00:17:14] Speaker 01: They can't do it under Liedem versus Kine. [00:17:16] Speaker 01: What do we do? [00:17:17] Speaker 01: Because then, collectively, over time, imagine, again, the FLRA, if it just completely had the back pay wrong, act wrong as a matter of law, that would [00:17:26] Speaker 01: That would just have to go on in perpetuity? [00:17:29] Speaker 06: No capacity for review? [00:17:35] Speaker 06: certainly I think we could discuss further. [00:17:38] Speaker 06: And obviously the Department of Justice does talk about the explicit waiver, which I presume didn't exist at the time of Griffith. [00:17:49] Speaker 06: But that said, what I would argue is that, yes, it can't be raised in the unfair labor practice proceeding, but there's also been no history of the authority [00:17:58] Speaker 01: What is your authority for why it couldn't be raised in an unfair labor practice proceeding? [00:18:02] Speaker 06: I'm sorry. [00:18:03] Speaker 01: What is your authority for why it couldn't be raised in an unfair labor practice proceeding? [00:18:07] Speaker 06: Well, the authority is that the case law is very clear, that you cannot collaterally attack an arbitration proceeding. [00:18:15] Speaker 06: Which case? [00:18:16] Speaker 06: I believe you cited some cases in our brief and I can provide that to you afterwards because that particular issue wasn't engaged directly in the briefing, but the case law is very clear that you can't collaterally attack an arbitration proceeding on the grounds that [00:18:32] Speaker 06: could have been raised or were issued in the arbitration proceeding in the unfair labor practice. [00:18:36] Speaker 01: Well, it may be that you couldn't raise something new, but they tried to argue it there. [00:18:39] Speaker 01: They told you that's not what the Back Pay Act says. [00:18:41] Speaker 01: And you've just completely, hypothetically, completely misconstrued the Back Pay Act in a way that's going to apply again and again and again and result in potentially an enormous expenditure of federal funds. [00:18:57] Speaker 06: potentially. [00:18:58] Speaker 06: I mean, here obviously we're talking about one overtime shift. [00:19:01] Speaker 06: But that said, I mean, that's what this case is about. [00:19:03] Speaker 01: I think they're not here because it's one overtime shift. [00:19:05] Speaker 06: This case is, we're not here. [00:19:07] Speaker 06: That's correct. [00:19:08] Speaker 06: But the point being that [00:19:12] Speaker 06: There are several ways that, first, there are several ways that these issues could receive review. [00:19:20] Speaker 06: One is that these cases, the Back Pay Act applies in unfair labor practice context as well. [00:19:26] Speaker 06: And if there is an issue that's arising over and over again, then presumably that would arise in an unfair labor practice case, just as it did in Social Security Administration, which was a Back Pay Act case that arose properly in the unfair labor practice context. [00:19:39] Speaker 06: Second, what I would suggest is that Congress was fully aware that the authority would be interpreting and applying the Backpay Act. [00:19:47] Speaker 06: in arbitration cases. [00:19:49] Speaker 06: And when it passed the Civil Service Reform Act of 1978, it did a whole bunch of things all at once in a single title in that act. [00:19:57] Speaker 06: It empowered the authority to decide these cases. [00:19:59] Speaker 06: It empowered arbitrators to decide these cases. [00:20:01] Speaker 06: It empowered the authority to decide these cases. [00:20:04] Speaker 06: It amended the Backpay Act to give the arbitrators and the authority the power to... What happens in... [00:20:11] Speaker 01: private sector labor cases where you have an arbitrator considering a collective bargaining agreement. [00:20:18] Speaker 01: I take it Congress did not give them similarly unreviewable authority to also adopt interpretations of federal statutes? [00:20:27] Speaker 06: Well, in the private sector collective bargaining context, there are, it's obviously the law under the NLRA is that the NLRA has the authority to then review the, to review the arbitration proceeding to determine whether it was consistent with the NLRA. [00:20:47] Speaker 01: And then if the NLRA, if the board got a federal statute wrong, for example, someone argued that [00:20:54] Speaker 01: a federal statute limited the terms of the, the operation of it had to limit the terms of the collective bargaining agreement. [00:21:00] Speaker 01: And the board said, no, that's not how we read that federal statute. [00:21:03] Speaker 01: It doesn't apply in this context. [00:21:06] Speaker 01: that would be reviewable by federal courts? [00:21:08] Speaker 06: Presumably, and there are very limited grounds that the federal courts can directly review arbitration case, labor arbitration in the federal sector, even outside of the question of whether there's an unfair labor practice context in the private sector. [00:21:25] Speaker 06: Presumably, there may be, and those grounds are very similar to what the authority reviews [00:21:31] Speaker 06: labor arbitrations in the federal sector to the grounds under which the authority reviews federal sector labor arbitration. [00:21:41] Speaker 06: And those are extremely limited. [00:21:43] Speaker 06: I don't have off the top of my head whether there would be direct review if there was an inconsistent application. [00:21:49] Speaker 06: I suppose it determines whether, how much inconsistent application of federal law in labor arbitration in the private sector. [00:21:57] Speaker 06: what the grounds for review and federal court are. [00:22:00] Speaker 06: Again, that issue was not joined specifically in the briefing, but we can provide that to you afterwards. [00:22:06] Speaker 06: I think my sense is that the question is whether the finding is drawing a set is about whether the finding draws it just from the agreement, whether the parties have waived their rights to [00:22:18] Speaker 06: pursue certain federal remedies outside of the arbitration agreement. [00:22:23] Speaker 06: And so there are probably a myriad of factors that would apply to determine whether federal courts would have supervisory jurisdiction over a private sector arbitration. [00:22:32] Speaker 06: That said, [00:22:34] Speaker 06: What is clear is that a lot of it turns, and of course a lot of it turns on the Supreme Court's Steelworkers Trilogy, which was very explicit that we have to respect labor arbitration. [00:22:42] Speaker 06: And Congress imported that trilogy, essentially the principles of that trilogy, that labor arbitration is a fundamental part of the collective bargaining process into the federal sector that allows the parties to resolve their disputes very quickly and in our purpose, for our purposes, get back to the business of government. [00:22:59] Speaker 01: And then, I'm sorry, go ahead. [00:23:01] Speaker 01: No, go ahead. [00:23:02] Speaker 01: Can you tell me why the Back Pay Act applies to this policy at all? [00:23:07] Speaker 01: Do you consider it to be a mandatory, non-discretionary personnel policy? [00:23:14] Speaker 06: The Backpack applies because it's an internal agency regulation with sort of lowercase r regulation. [00:23:22] Speaker 01: Okay, is there a definition of regulation? [00:23:24] Speaker 01: This doesn't look like an ordinary regulation to me. [00:23:27] Speaker 06: I don't believe the Backpack defines regulation. [00:23:29] Speaker 06: So the authority has interpreted workplace rules like this to be regulations for the purposes of the Backpack. [00:23:36] Speaker 06: I don't think the agency has contested that. [00:23:38] Speaker 06: particular finding here. [00:23:40] Speaker 06: In fact, the agency is only contesting the definition of administrative error, as Your Honor suggested during opposing counsel's presentation. [00:23:50] Speaker 03: I thank you. [00:23:52] Speaker 03: You gave a couple minutes to the intervener. [00:23:54] Speaker 06: And I apologize for going over my time. [00:23:55] Speaker 06: Thank you, Your Honor. [00:24:01] Speaker 04: Your Honor, may I have one more? [00:24:03] Speaker 03: Yes. [00:24:08] Speaker 04: No, I'm sorry. [00:24:09] Speaker 02: We're going to hear from the intervener. [00:24:12] Speaker 02: May I please record? [00:24:13] Speaker 02: Good morning. [00:24:14] Speaker 02: Barshoffer, intervener, National Treasury Employees Union. [00:24:17] Speaker 02: With me at Council of State is Larry Atkins, Deputy General Counsel. [00:24:21] Speaker 02: I'd like to cover three points during my time today. [00:24:23] Speaker 02: The Section 71.23 jurisdictional issue, CBP's interpretation of the Back Bay Act, and last, the administrative error issue that's been discussed today. [00:24:34] Speaker 02: Our position is this case should begin and end with the plain language of 7123, which clearly and explicitly forecloses review of this type of action. [00:24:43] Speaker 01: What's the answer when you have just completely erroneous [00:24:49] Speaker 01: legal error in interpreting the backpack that everyone could look at, excuse me, and go, that's not what it means. [00:24:55] Speaker 01: How would that get reviewed? [00:24:56] Speaker 01: Would it go through an unfair labor practice proceeding or what? [00:25:00] Speaker 02: Well, there are a few options that, you know, there was the leader of the United Discussion that just occurred. [00:25:05] Speaker 02: But at bottom, Congress presumably was aware of the risk of foreclosing judicial review of these types of actions, and one of those risks would be that a potentially erroneous backed by act ruling could stand. [00:25:18] Speaker 02: That was the decision that Congress made, and it made it for two reasons. [00:25:22] Speaker 02: One was the strong congressional policy favoring arbitration of labor disputes, and the second was the accordance of substantial finality to those arbitration results. [00:25:31] Speaker 01: Don't you want to be clear? [00:25:32] Speaker 01: Because you said there would be lots of ways, but then the only one you said was the Liedem vs. Kind one. [00:25:36] Speaker 01: There is actually no review if they completely get the Backpay Act wrong? [00:25:42] Speaker 02: No, we believe the only possibility for review within the courts if that would happen would be under Liedem v. Kind. [00:25:47] Speaker 05: Are you familiar with the status of the law in the private sector? [00:25:57] Speaker 05: the line of questioning that was pursued with revenue. [00:26:00] Speaker 05: Are you familiar with the status of the law in that subject? [00:26:04] Speaker 02: I'm not, Your Honor. [00:26:05] Speaker 05: OK, so never mind. [00:26:09] Speaker 05: I guess it's not fair to ask you any further about it then. [00:26:14] Speaker 02: Even assuming jurisdiction last year, looking at CBP's interpretation of the Back Bay Act, it is simply not tenable. [00:26:21] Speaker 02: It reads Back Bay as the Back Bay Act, subsection B1 of the Back Bay Act, [00:26:26] Speaker 02: effectuates the purpose of the act, the sole purpose of the act, which is to provide an avenue for back pay where the back pay requirements are satisfied. [00:26:34] Speaker 02: There is no dispute here that there was an unwarranted or unjustified personnel action that led to a lost overtime shift that in turn led to a loss of pay. [00:26:45] Speaker 02: CBP's interpretation would allow an agency to nullify the congressional waiver of sovereign immunity embodied in the back pay act through an internal issue, it's an internal overtime policy. [00:26:56] Speaker 02: And that simply can't be right. [00:26:58] Speaker 01: Isn't that exactly what B4 says? [00:27:00] Speaker 01: It says if the applicable regulation, and if the FLRA tells me this is a regulation, and no one disputes that, if the regulation here instead of said, another chance said, but payment for a missed overtime will be capped at 1.25 of salary rather than the ordinary back pay amount. [00:27:19] Speaker 01: You're saying that wouldn't fall within the square language of B4? [00:27:24] Speaker 02: The violation of the policy gives rise to the Back Pay Act entitlement, but subsection B1 governs that entitlement. [00:27:32] Speaker 02: It clearly says the affected employee is entitled to the pay he normally would have earned. [00:27:38] Speaker 01: But B4 pretty clearly says that the pay you get cannot exceed that authorized by the applicable regulation. [00:27:45] Speaker 01: If this is a regulation, if my hypothetical regulation just set a limitation on the dollar amount, what else would Congress have meant? [00:27:54] Speaker 02: And the way we interpret that clause is this, that [00:27:58] Speaker 02: In calculating the recovery, in calculating what the employee normally would have earned under B1, that calculation must be consistent with applicable statutes and regulations implementing those statutes. [00:28:11] Speaker 02: While B4 also mentions rules and collective bargaining agreements, those authorities cannot provide for a lesser or different recovery than, say, Title V. So you're saying applicable law rule regulations in B4 means something different than what it means in B1? [00:28:26] Speaker 02: We're saying that [00:28:28] Speaker 02: the way it is used, read in context in B4, it simply makes clear that the way recovery is calculated under B1 is simply consistent with the law, consistent with statute, consistent with regulation. [00:28:40] Speaker 02: Again, it mentions other authorities like rules and collective bargaining agreements, but you can't in a CBA, for example, provide for a different rate of pay than Title V would provide, for example. [00:28:55] Speaker 03: Okay, thank you. [00:28:56] Speaker 03: Did Mr. Panek have any time left? [00:28:59] Speaker 03: You have none? [00:29:01] Speaker 03: You can take one minute. [00:29:06] Speaker 04: I'd like to pick up on judgment that's a hypothetical of a totally outrageous back pay award that's utterly clearly violates the back pay act. [00:29:16] Speaker 04: And if the authority is right, there is no judicial review of that ever. [00:29:20] Speaker 04: Do you know if there would be in the private sector? [00:29:23] Speaker 04: The private sector doesn't have the back pay act. [00:29:26] Speaker 05: I know that, but they do have arbitration and they do have great limitation on the reviewability of the arbitration to see. [00:29:34] Speaker 04: Yes, but the arbitrator gets controlling deference with respect to his interpretation of the collective bargaining agreement. [00:29:40] Speaker 04: He doesn't get controlling deference with respect to a federal statute that involves questions of sovereignty. [00:29:44] Speaker 05: Are you sure of that? [00:29:46] Speaker 05: Yes, Your Honor. [00:29:46] Speaker 05: Do you have any citation for that? [00:29:53] Speaker 05: that determination, then it is unreviewable in the private sector. [00:29:58] Speaker 05: I had not anticipated it coming up, and I haven't reviewed it, but it's a very narrow review. [00:30:03] Speaker 04: Your Honor, this is not a collective bargaining agreement. [00:30:04] Speaker 04: The policy is not a collective bargaining agreement. [00:30:07] Speaker 04: I know that. [00:30:07] Speaker 05: Do you really think I don't know that? [00:30:09] Speaker 03: Well, I just want to make a point, because that's where the... Going back to your question, Starvel, I mean, [00:30:15] Speaker 03: Why would that be such a surprising result? [00:30:17] Speaker 03: I mean, Congress waived sovereign immunity when it passed the act, and it provided for no judicial review. [00:30:23] Speaker 03: Don't you think Congress made a judgment that, yeah, maybe there'll be some bad awards here, but we don't really care? [00:30:30] Speaker 03: Well, I think that... We want to honor the arbitration system. [00:30:33] Speaker 04: Well, then the question then becomes... Isn't that right? [00:30:35] Speaker 03: What's the matter with that? [00:30:36] Speaker 03: Because... Don't just... That's my question. [00:30:40] Speaker 03: Why would that be inconsistent with what seems to be... Because it violates the appropriations clause. [00:30:44] Speaker 04: There's no such thing as a minor violation of the appropriations clause or a minor violation of the arbitration clause. [00:30:48] Speaker 05: The other agencies that don't have your regulation, if they award back pay against them, that violates the appropriations clause? [00:30:54] Speaker 05: If they don't have a regulation, then they don't have the same issue. [00:30:57] Speaker 01: But wait, what if Congress... Whoa, whoa, whoa, whoa, whoa. [00:30:59] Speaker 05: The regulation, is that what creates the appropriation clause problem? [00:31:04] Speaker 05: Your regulation? [00:31:05] Speaker 05: No. [00:31:05] Speaker 05: I thought you were saying that awarding this back pay violates the appropriations act. [00:31:10] Speaker 04: Your Honor, the back pay act incorporates regulation by reference. [00:31:14] Speaker 04: Forget that for a moment. [00:31:17] Speaker 04: Forget that for a moment. [00:31:18] Speaker 04: I can't forget that. [00:31:19] Speaker 05: Just forget that for a moment. [00:31:22] Speaker 05: How is there a violation of the appropriations [00:31:25] Speaker 05: rule if congress says you can award back pay. [00:31:30] Speaker 04: I said an appropriations act by the way. [00:31:31] Speaker 04: Because the waiver of sovereign immunity is limited, the right to hit the public fisc is limited by the very scope of the waiver itself. [00:31:39] Speaker 05: Okay, now we get that far. [00:31:40] Speaker 05: Then we get to the question after your moment. [00:31:42] Speaker 05: There's some other agency that doesn't have your regulation. [00:31:45] Speaker 05: When they award back labor to them, that's not a violation of the appropriation. [00:31:51] Speaker 04: If I understand your honors hypothetically correctly, if it didn't have a limitation in the regulation, then no, they don't have the same issue. [00:31:57] Speaker 05: So your real quarrel is with the interpretation of the statute, not that it's a violation. [00:32:03] Speaker 04: Oh, but the statute itself is a limitation on the right to hit the public fisc. [00:32:08] Speaker 04: Hypothesize this. [00:32:09] Speaker 04: An outrageous award by the authority. [00:32:12] Speaker 04: They then seek to enforce that award upon refusal of the agency to pay it. [00:32:18] Speaker 04: by coming to this court seeking, as they're entitled to do, an unfair labor practice charge, can this court say, pay the money, we don't care how outrageous it is? [00:32:30] Speaker 01: Well, what if Congress passed a statute that was written this way? [00:32:32] Speaker 01: Here's a back pay act, and it authorizes back pay on these exact same terms, and determinations will be made by arbitrators under the FLRA with no judicial review. [00:32:49] Speaker 01: That certainly doesn't violate the appropriations clause for Congress to pass that statute. [00:32:54] Speaker 04: This court held it in proof that the questions of constitutional law are... Put aside constitutional law. [00:32:59] Speaker 01: You don't have a constitutional claim here. [00:33:00] Speaker 01: Would it be a violation of the appropriations clause if Congress itself has set up the procedural mechanism for enforcing the statute? [00:33:07] Speaker 04: Yes. [00:33:08] Speaker 04: It becomes circular at that point. [00:33:10] Speaker 04: Because the point on this is that Congress sets limits on what can be drawn from the public fist. [00:33:15] Speaker 01: But it also decides who gets to decide what those limits mean. [00:33:18] Speaker 01: And it said, knowing what it did, that here's a limit. [00:33:22] Speaker 01: And when they get it wrong, [00:33:24] Speaker 01: That's our choice. [00:33:26] Speaker 04: Fundamentally, we do not believe that 7123 can be reasonably construed to bar judicial review of that appropriations clause constitutional question, just as it was not reasonably construed to bar the due process clause issue and Griffith itself. [00:33:44] Speaker 04: Okay, thank you.