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Case number 20-1400 et al.

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National Treasury Employees Union Petitioner versus Federal Labor Relations Authority.

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Ms.

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Bailey for the petitioners, Ms.

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Osborne for the respondents, Mr. Busa for the intraveners.

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Thank you.

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Mr. Bailey, Ms.

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Bailey, sorry, excuse me.

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Thank you, Your Honor.

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Good morning and may it please the court.

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My name is Katherine Bailey.

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I'm with the National Treasury Employees Union and I'm here today on behalf of the three petitioner unions.

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In the two to one decision below, the Federal Labor Relations Authority stated for the first time that agencies can enforce new regulations on contracts extended by continuance provisions.

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These provisions bargained for by the parties

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excuse me, keep agreements in place pending negotiation of a new contract.

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The court should set the decision aside for three separate reasons.

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First, the decision conflicts with the plain language of Section 7114C of the Federal Labor Relations Statute, which Governance Agency had reviewed.

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Second, the decision conflicts with the plain language of section 7116A7, which prohibits the implementation of new regulations while an existing agreement is still in effect.

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Each of these statutory conflicts alone requires the court to set the decision aside.

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Third and finally, it was arbitrary and capricious for the authority to issue a policy statement at all for the reasons set forth in our briefs.

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Starting with my first point, Section 7114C, the statute provides for agency head review upon the execution of a new agreement.

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An agreement extended by a continuance provision.

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If I could ask you a question.

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So your argument is that this opinion here is invalid as a matter of law because it conflicts with the statute.

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And so, if that's the case, and if we were to rule in your favor, does that mean that the FRAs long standing rule on rollover contracts would also be invalid and inconsistent with the statute?

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Is there any way to distinguish those as a legal matter?

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Yes, our position is consistent with ARMY, the longstanding FLRA decision.

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And that's because of the differences between rollover provisions on the one hand and continuance provisions on the other hand.

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Under a rollover provision, the contract is automatically renewed.

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And under a continuance provision, the contract is extended only until renegotiations are complete for the next successor agreement.

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Why is that a matter of law?

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Well, in the continuance provision contract, looking at the statute, the

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in a rollover situation, the contract is essentially being, when it's renewed, it is executed for a new term.

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And nothing is left to be done for the new term to go into effect.

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That's why there's an, you could say there's an execution in that scenario.

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sure of a continuance as well, though, because once a party asks for renegotiation, the contract extends.

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I mean, for an indefinite period, but it still extends past the end date.

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I think what's important there is that it's the same agreement as the parties have bargained for.

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They've bargained for it to continue only until the

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new agreement is in effect and so.

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Roll over clause also has the same agreement remains in effect, just for a new term.

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While the language may be similar, I think it's important to look at what's going on in a broader context and.

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in a continuance scenario, the parties are renegotiating their agreement.

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And so they are working on a successor agreement and the continuance period lasts only until that successor agreement is in place.

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Sure.

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In one situation, the extended term is typically for a fixed duration.

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In the other, the extended term is

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an indefinite amount pending negotiations.

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But the question in both contexts, which may be a little bit metaphysical, but the question is whether the parties are still under the original agreement once the term is extended.

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Yes, and the parties have bargained in a continuance provision scenario to be, in fact, under the same agreement.

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That's what they anticipated when they included the continuance provision in their contract initially.

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Why aren't they under the same agreement in the rollover context when the agreement extends by operation of the original contract?

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It goes to the difference between renewal on the one hand and extension on the other hand, and a renewal sets up a new term, which is treated as a new agreement.

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Does any court, this court or any other court, upheld the FORA's interpretation of rollover provisions in the Army case?

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Not to my knowledge, Your Honor.

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So that's, again, that's longstanding FLRA, but it's not yet been reviewed by a court.

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And you don't challenge the consistency of the rollover rule with the statute.

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That's correct, Your Honor.

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We are not asking the court to overrule Army.

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We are explaining why this scenario is different than Army, than rollover provisions.

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So for these purposes, your take is given that the rollover provision, the rollover

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the body of law, starting with army, unroll our provisions as law.

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Yes, that's correct for the purposes of this argument here today.

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Another thing I'm curious about is the statute's been in effect a long time.

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I think these continuance provisions are nothing new, there's nothing novel about them.

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But neither brief tells me

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what the practice was before this general came into effect.

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I'm assuming the practice was that there was no agency head review.

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for continuance provisions.

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And the FLRA cites cases of inconsistency, but I think those are all rollover cases.

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So what was going on, were there cases, were they also inconsistent with continuances, or was there consistent practice beforehand, or nobody knows?

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My understanding, Your Honor, is that when a agreement included a continuance provision, all of the parties would treat that agreement as continuing, consistent with our arguments here.

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And it's important to note that continuance provisions are completely optional.

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So some agreements, the parties bargain to include them and other agreements, they don't.

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These have been included in contracts.

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I get that not every contract has them, but they've been included in contracts for a long time, a long time, or a kind of a novelty?

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For a long time, as far as I know, Your Honor, yes.

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Since sort of the beginning of the statute?

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Yes.

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There were no FLRA decisions addressing this, what the nature of a continuance provision was prior to this general rule?

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Your honor, I don't know of any FLRA decisions addressing continuance provisions specifically.

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So I guess that means you're also not aware of there being any cases where the FLRA or an agency tried to enforce new rules and regulations during a continuance period and a party challenged that.

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Yes, Your Honor.

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To our knowledge, all of the decisions related to 7116A7 and new regulations are about rollover provisions, not continuance provisions.

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What does the statute tell us about whether the agreement is the old one or a new one under these circumstances?

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And I'll give you a hint.

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I think the answer is next to nothing.

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I think that's mostly true, Your Honor.

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I think you have to incorporate this continuance provisions themselves and what you can glean about the party's contractual intent consistent with the statutory scheme.

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If the statute says very little, why wouldn't that be a strong case for deferring to the agency?

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Well, first, I think

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All of the tools of statutory interpretation are available when to to determine first whether the statute is ambiguous or not.

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Even if the court doesn't agree with us on Chevron step one, the authorities interpretation is unreasonable and the court

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doesn't, doesn't defer, excuse me, to unreasonable interpretations.

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But you just conceded I thought that the statute is silent on this question.

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So how do we then get the statute unambiguously resolves the question in your favor and in any event the agency's view is unreasonable?

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I didn't mean to say that the statute is ambiguous or that there's a gap to fill.

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I think when you look at the tools of statutory interpretation, you can look at the plain language of the provisions which state that in 7114C, you need an execution in order to have agency had review and under 7116A7,

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if an existing agreement is still in effect, which it is here, then new regulations that are in conflict cannot be unilaterally enforced.

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You need an execution.

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That's a textual clue, no doubt, but executions just happen when a contract is finalized, correct?

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So we're just back to the question of when a party does what's necessary to extend the term in the extension clause, which is register the objection and trigger the renegotiation, does that act create a new contract?

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in which case there is an execution or is all this happening under the old contract?

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We're just back to where I started.

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Well, it's all happening under the old contract, but you can use the meaning of execution, including under the FLRA's case law to understand why that is.

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Under the FLRA's case law, including the old army case, an execution occurs when there's nothing left to be done for a new agreement.

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And here in a continuance provision context, the parties are renegotiating the successor agreement.

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Miss Bailey, if we were to assume that the statute is ambiguous, what are your arguments for why this is an unreasonable interpretation?

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The interpretation, sorry, I didn't mean to speak over you.

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The interpretation is unreasonable because the authority relies on the policy rationale that contracts require fixed end dates, presumably a calendar date is what I understand them to be saying.

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When a continuance provision goes into effect, it's undisputed that that continuance period itself does not have a concrete date, the date that it ends

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is when the parties execute the successor.

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So the policy rationale is inconsistent, and the authority has not addressed that aspect of their reasoning.

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I think I'm almost to my rebuttal time.

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I'm not sure if the court has any other questions at this moment.

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Do my colleagues have any more questions?

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OK, thank you very much.

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We'll hear from Ms.

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Osborne now.

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Thank you, Your Honors.

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May it please the Court, my name is Rebecca Osborne and together with Noah Peters, I represent the Federal Labor Relations Authority in this matter.

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The authority reasonably issued the policy statement because it was necessary to clarify how can agency head review and the enforcement of government wide regulations occur within the context of an agreement with a continuation period.

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And it was necessary to clarify that because the statute is silent on these two issues.

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And the issue- What had been the practice before this?

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With respect to continuance provisions?

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Continuance provisions only.

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Only.

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Your Honor, the US Department of Agriculture actually had requested this policy statement because- That's not my question.

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No, because the things that are cited in their rollover, there wasn't inconsistency as I saw it on

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on this issue, it was on rollover issues.

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But what they were saying was that arbitrators were relying on those cases to make different decisions with respect to continuance provisions.

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And that's why USDA was able to cite an arbitrator decision involving a continuance clause that was.

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They did not, Your Honor.

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They didn't cite any arbitrator decisions that were inconsistent.

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Are you aware of any arbitrator decisions that are inconsistent?

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I am not, Your Honor.

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So as far as you know, the consistent practice for decades before this general rule was that there was no agency head review when a continuance provision kicked in.

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Your Honor, I have no evidence either way on that.

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I thought it was completely ignorant of how that happened.

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Excuse me?

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I thought it was completely ignorant of how continuance provisions were being applied when agency head review kicked in.

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Um, your honor, we were told by the agencies that the way that there were, um, uh, that arbitrators were interpreting this in different ways.

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More than one agency.

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Um, I definitely know that the U S department of agriculture said that when they asked for this general rule, were you told any time before that?

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No, your honor, no one was the basis for the authority's decision.

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Um,

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And the authority's decision to issue this rule though, this policy statement was consistent with the decision that it made with respect to rollover provisions.

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And the policy goals in both cases are the same.

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The authority was attempting to balance both the need for parties to be able to rely on the terms of a contract at the same time ensuring that those

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These terms, eventually were brought into conformance with government wide regulations and actually there was a decision.

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I am sorry.

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Sorry.

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No, I was going to mention a subsequent case.

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OK, then I thought one of my colleagues had a question, so I didn't want to speak over them.

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So one of the things that the FLRA decision talks about a lot is that contracts need to have, I think in their word, unambiguous, knowable, effective dates and durations.

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Does that mean it has to be a calendar date, or can an event

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be what triggers the end of an effective period?

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An event can trigger the end of an effective period.

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So you could have a contract that would say upon, instead of saying on events on March 31st, whatever year, it would say upon exit that this contract.

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Yes, Your Honor.

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The administration or whatever, this contract.

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Yes, Your Honor.

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All righty.

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when some of the contracts I've looked at most of the times these continuance provisions are part of the definition of the duration right it will say it expires on x date but if someone is asked for negotiations in advance and they are still ongoing then it will continue until there's a new collective bargaining agreement yes so that sounds like it has a very concrete

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noble unambiguous termination date when there's a new cba.

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Well, your honor, but that that interpretation doesn't give any weight to the portion of the agreement that says.

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this will expire on X date and then we'll continue.

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That's what I'm just telling you.

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You just said that it can expire on a date or on an event.

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And what I'm telling you is now we have to do this without any contracts in front of us.

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That was the FLRA's decision to go this route.

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But there's lots of contracts as a matter of public record that show

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that these continuous provisions are part of the definition of the term of the contract.

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And so it seems like it's actually giving full effect to the term provisions and contracts if the continuous provision is part of

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termination or duration clauses.

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In fact, it seems if you say that's not, that event is not the termination date, that seems rather rewriting the provision of the original contract.

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So I'm having trouble grappling here with what the FLRA was thinking.

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In the example that you just gave, there are two termination dates.

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One is the expiration of the contract and the other one would be the end of the continuance period.

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What do you think there's two?

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There's not two, there's one.

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It's kind of as if they said it'll be March 31st or upon the conclusion of a collective bargaining agreement, whichever comes later.

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Is that two termination dates or one?

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That would be two termination dates.

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That's two termination dates if they say it's on this date or this event whichever comes later is two termination dates.

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That sounds to me like one termination date.

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But your honor, there is an expiration date and then there is the conclusion.

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So parties can't contract for this date.

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Would you agree if they said it'll be March 31st?

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Or when the agency has, when the agency, some of that happens in the agency, right?

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So when the agency finalizes a new workplace policy.

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You would say that's two termination dates with that four in there?

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Yes, yes.

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Is there any principle of contract interpretation that you can point to that says that's how we would read a provision that said it terminates on this or this whichever comes later as two terminations, one termination and then a second termination?

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Any call to your case that's ever held that?

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Your Honor, what the authority is attempting to do in this context is to reconcile.

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I'm not asking that my question is more basic about just basic contract law, federal contract law, whatever you want to point to.

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Is there any case that has said when you have a termination date that says it'll be A or B, whichever comes later, there's actually A is a termination date and B is a termination date.

[00:21:08] Speaker 02:
There's two terminations.

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If you are talking about the termination date being on an or as opposed to there is an expiration date and then it will be extended.

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I'm sorry.

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I'm agreeing with you, Your Honor.

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I'm saying that if you're talking about or where there is a termination date.

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Well, isn't that exactly what these provisions mean?

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They say it'll terminate on this date unless contract negotiations are ongoing, at which point it will continue until they're done.

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It will be either this date or, if there's continuing contract negotiations, when negotiations are done.

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It's still or.

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Well, actually, the or would be the operative term in the example that you just gave.

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A lot of these provisions talk about an effective date.

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and then the period will be extended to another date.

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If they had a but instead of an or, they had send on this date period, but if negotiations are ongoing, it will extend until this time, but would work just as well.

[00:22:14] Speaker 02:
It would depend upon the language of the specific contract.

[00:22:18] Speaker 02:
So it sounds like it's hard then to figure out whether these continuation provisions

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actually trigger a whole new contract without knowing what contracts say?

[00:22:29] Speaker 02:
Well, no, Your Honor.

[00:22:30] Speaker 02:
What the authority did was issue a general policy statement, and it actually has applied this in a specific case after briefing was done in this matter.

[00:22:41] Speaker 02:
So if you look at US Department of Veterans Affairs 72 FLRA 287, which was issued on

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May 21st, 2021.

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Is that cited in your brief?

[00:22:52] Speaker 00:
It is not.

[00:22:53] Speaker 02:
It is not cited in the brief because it was issued after briefing was done in this matter.

[00:22:57] Speaker 02:
You didn't do a 28-day letter?

[00:22:59] Speaker 02:
Do I know that your opponent knows about this case?

[00:23:01] Speaker 02:
I haven't.

[00:23:02] Speaker 02:
My colleagues do, but I don't know anything about this case.

[00:23:06] Speaker 02:
No, Your Honor, we did not.

[00:23:08] Speaker 02:
But in that case, the authority said that a continuance period, there was a contract with a continuance period following the start of the continuance period

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government-wide regulation had come into effect, the authority said that the agency could not enforce that regulation because it came after the start of the continuance period.

[00:23:31] Speaker 03:
Isn't that inconsistent with the policy statement?

[00:23:35] Speaker 02:
No, Your Honor, because if

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The policy statement says that if a government-wide regulation comes into effect before the execution or beginning of the continuance period, then it can be enforced.

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But if it comes into effect after, it can be enforced.

[00:23:57] Speaker 03:
Can I ask you a question, Ms.

[00:23:58] Speaker 03:
Osborne?

[00:23:58] Speaker 03:
Sure.

[00:23:59] Speaker 03:
Most of the briefing treats the two provisions

[00:24:03] Speaker 03:
7116 a seven and 7114 kind of together, and I was just wondering if there is, or if the FL array has thought that.

[00:24:15] Speaker 03:
might apply in a different way to continuance contracts.

[00:24:19] Speaker 03:
For instance, maybe a continuing contract is not executed when the continuing period starts, but the original contract is no longer in effect.

[00:24:31] Speaker 03:
So maybe there's some space.

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Maybe you don't get agency head review at the start of a continuing period, but an agency could enforce rules and regulations that have come

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into effect during the contract's term.

[00:24:45] Speaker 03:
I just wonder if there's like any space between the two provisions or how they could be understood or if they must be understood in tandem.

[00:24:53] Speaker 02:
I think that the authority considered those two provisions in tandem, whether or not it had to be that way.

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The standard under Chevron is not whether or not this is the best decision, but rather whether this is a reasonable one.

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And I think that execution is when nothing further needs to be done to set the terms.

[00:25:17] Speaker 02:
And in a continuance period, you are talking about a universe of terms.

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There is no negotiation concerning the terms during a continuance period.

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The negotiations are happening as to the successor agreement, not to the contract that is the successor period.

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And so that,

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And as far as in effect, the terms of the successor period would be in effect during that time.

[00:25:47] Speaker 07:
Let me ask you a slight variation on Judge Millett's theme, which is your position is that in the period of extension, the parties are under a new contract.

[00:26:07] Speaker 07:
But as a matter of basic contract law, you can't have a contract without agreement.

[00:26:20] Speaker 07:
And the only agreement I can see is the original agreement in the first collective bargaining agreement.

[00:26:32] Speaker 07:
Because what triggers the extension in the continuance context is the unilateral action of one of the parties, which gives notice and says, we don't like the contract and we want a new one going forward.

[00:26:50] Speaker 07:
There's no second agreement there.

[00:26:53] Speaker 07:
So how can there be a different contract?

[00:26:57] Speaker 07:
Well, again, this is similar to the rollover context where there is a unilateral... I'll get there in a second, but just try to help me in the continuance context, which is what's before us.

[00:27:13] Speaker 02:
Yes.

[00:27:13] Speaker 02:
Well, the terms of the agreement during the continuance period are set and those terms had been agreed to and they are also implicitly agreed to

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going forward when the parties fail to conclude negotiations on a successor agreement by the time that the termination of the initial agreement happens.

[00:27:38] Speaker 07:
I'm sorry, what's the second agreement?

[00:27:43] Speaker 07:
What creates the second agreement?

[00:27:45] Speaker 07:
Just the fact that they

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have failed to conclude negotiations.

[00:27:52] Speaker 07:
That sounds to me like the absence of agreement, not a second agreement.

[00:27:56] Speaker 02:
Well, but there has already been an agreement that those terms of the initial agreement will continue until the parties finish the successor agreement.

[00:28:07] Speaker 02:
So those terms are already set.

[00:28:10] Speaker 02:
And by failing to conclude negotiations, the parties have agreed that they're going to abide by these terms that are predefined until they've reached a successor agreement.

[00:28:24] Speaker 02:
And that agreement can take place over the course of years.

[00:28:28] Speaker 02:
And part of this, go ahead, I'm sorry, Ron.

[00:28:31] Speaker 07:
I think I understand.

[00:28:34] Speaker 07:
I'm not sure I heard a second agreement because you said, well, everything was preset, which is right, but it was preset in the original contract.

[00:28:48] Speaker 02:
But we're talking about a new term of the agreement.

[00:28:51] Speaker 02:
So there has been you've passed the express term of the initial agreement.

[00:28:57] Speaker 02:
And so we're talking about a new term of the agreement, which is the continuance period.

[00:29:02] Speaker 07:
And then I suppose that loops us back to Judge Millett's point, which is that may just be the later of the two possible expiration dates.

[00:29:16] Speaker 02:
It depends upon the terms of the contract, Your Honor.

[00:29:19] Speaker 07:
But part of... If it depends on the terms of the contract, that's not a great answer for you in the context of

[00:29:26] Speaker 07:
generalized guidance with no contract provisions before us?

[00:29:31] Speaker 02:
Well, I think, Your Honor, though, that it is a broad principle that can be applied when you are talking about contracts where there is an expiration date and this hinges, the decision hinges on there being an expiration date in a contract with a continuance provision that then is extended.

[00:29:51] Speaker 02:
And you're talking about a new term of the agreement.

[00:29:54] Speaker 02:
You have

[00:29:55] Speaker 02:
The thing is that you have to give meaning to the term expiration.

[00:29:59] Speaker 02:
Just to be clear though, you said if the natural reading of the contract language is that the expiration date was A or B, whichever occurs later, this rule wouldn't apply.

[00:30:13] Speaker 02:
So it's only in some situation where the fair reading of the contract provision does not have a sort of A or B, whichever comes later.

[00:30:23] Speaker 02:
reading.

[00:30:23] Speaker 02:
That's you're only talking about that subset of cases with this general.

[00:30:27] Speaker 02:
That's correct, Your Honor.

[00:30:31] Speaker 02:
Can I ask you?

[00:30:33] Speaker 02:
Go ahead.

[00:30:34] Speaker 07:
Sorry, no, but I'm sorry.

[00:30:37] Speaker 07:
I missed something earlier.

[00:30:38] Speaker 07:
Your position is that this guidance does not apply to the category of contracts that are described by

[00:30:52] Speaker 07:
the duration of the first contract is until A or B, whichever is later?

[00:31:00] Speaker 02:
What?

[00:31:00] Speaker 02:
Yes, because there has to be an expiration in a contract in order for a new term of the contract.

[00:31:08] Speaker 07:
I'm sorry.

[00:31:08] Speaker 07:
Yes.

[00:31:09] Speaker 07:
So your guidance does cover?

[00:31:11] Speaker 02:
The guidance covers

[00:31:14] Speaker 02:
contracts where there is an express expiration of the agreement.

[00:31:19] Speaker 07:
Where does the guidance cover a contract which says this remains in effect until December 31st, 2021.

[00:31:30] Speaker 02:
And then after is extended.

[00:31:35] Speaker 07:
Unless by June 30, 2021.

[00:31:39] Speaker 07:
a party gives notice of a desire to renegotiate, in which case the term, in which case the contract will remain in effect pending negotiations.

[00:31:51] Speaker 07:
Does your guidance cover that or not?

[00:31:57] Speaker 02:
Your Honor, I think what the guidance covers is when there is an identifiable expiration date and then the

[00:32:08] Speaker 02:
contract will extend beyond that expiration date.

[00:32:12] Speaker 03:
Why does that matter for your position?

[00:32:15] Speaker 03:
I guess I don't understand why that would make any difference.

[00:32:18] Speaker 03:
Like whether it was an A or B type of expiration clause and then a continuing period began, or it was just a date certain.

[00:32:27] Speaker 03:
In either event, there is a term of the contract and then there is a new continuing period.

[00:32:33] Speaker 03:
So I'm not sure why there would be any difference.

[00:32:37] Speaker 03:
under all the other reasons you stated for your argument.

[00:32:45] Speaker 02:
Yes, Your Honor, we are talking about the term of the agreement and following the term of the agreement, there would be a agency head review and the enforcement of

[00:32:59] Speaker 02:
government-wide regulation.

[00:33:01] Speaker 03:
So in your position, would it matter what brought about the end of the term?

[00:33:05] Speaker 03:
I mean, that would just be a particular contract.

[00:33:09] Speaker 02:
It would not matter what brings about the end of the term.

[00:33:14] Speaker 02:
There would be an expiration of the term and the beginning of a new term of the agreement.

[00:33:20] Speaker 02:
It doesn't matter which of the A or B causes it, but if the provision is fairly read as A,

[00:33:28] Speaker 02:
or be whichever comes later, then only the later date would be the expiration date.

[00:33:36] Speaker 02:
I think, Your Honor, if it sets the term, when you set the term of the initial agreement and then you begin a new term of the agreement.

[00:33:46] Speaker 02:
I don't understand what that means.

[00:33:47] Speaker 02:
I'm asking you exactly what that means.

[00:33:49] Speaker 02:
If we set the original expiration date, the original term, it expires on

[00:33:55] Speaker 02:
They pay or event B, whichever comes later.

[00:34:04] Speaker 02:
In that case, it doesn't end.

[00:34:08] Speaker 02:
You don't care if it's A or B, but either A or B, whichever is later, is going to be the end of that contract.

[00:34:13] Speaker 02:
Nothing new can start until that point.

[00:34:16] Speaker 02:
It would end at the term of the initial contract and then would begin a new term.

[00:34:21] Speaker 02:
The term initial contract in an A or B, whichever comes later, is whichever comes later.

[00:34:26] Speaker 02:
Is a new term.

[00:34:28] Speaker 02:
Yeah.

[00:34:28] Speaker 02:
Whichever comes later is not a new term.

[00:34:30] Speaker 02:
Whichever comes later is the end of the first contract.

[00:34:35] Speaker 02:
I think, Your Honor, that we're talking about two different

[00:34:39] Speaker 02:
terms of the agreement one is the initial no no i'm telling you i'm giving you exactly what the term of my contract is i look at a contract and i say what its duration provision means is it expires on calendar date a or on event b whichever comes later that's how the contract is read

[00:35:00] Speaker 02:
That's what the party's intended.

[00:35:01] Speaker 02:
That's how the contract is read under basic contract principles for reading contracts.

[00:35:06] Speaker 02:
That's what I'm giving.

[00:35:08] Speaker 02:
I'm just trying to clarify, because I'm getting, I thought you reconfirmed that position to Judge Katz's, but now I'm concerned that maybe I misunderstood something.

[00:35:17] Speaker 02:
So it's when you have an A or B, whichever comes later, and that's how we know when the contract ends, contracts term ends, it's going to be whichever comes later.

[00:35:31] Speaker 02:
It would depend upon when the expiration date is and how.

[00:35:36] Speaker 02:
I told you the expiration date is whichever comes later.

[00:35:39] Speaker 02:
I'm just trying to get you to agree that if the expiration date is whichever comes later, then the expiration date is whichever comes later.

[00:35:45] Speaker 02:
That would be correct, Your Honor.

[00:35:49] Speaker 07:
I mean, that's fine.

[00:35:52] Speaker 07:
I mean, that is going to make your guidance apply to almost nothing.

[00:35:57] Speaker 07:
I mean, I've looked at a handful of these

[00:36:00] Speaker 07:
agreements, which I don't know for sure, but I assume they're representative.

[00:36:05] Speaker 07:
So let's just take one to be concrete.

[00:36:08] Speaker 07:
All right, so this is a CDC agreement.

[00:36:11] Speaker 07:
It says it gives the term of the agreement, and then it says if either party gives notice of an intent to terminate or renegotiate, it has a time date for that, and then the provision says

[00:36:30] Speaker 07:
If renegotiation of the agreement is in process, but not completed upon the expiration date of this agreement, this agreement will be extended until the renegotiations have been completed.

[00:36:50] Speaker 07:
Does your guidance cover this CDC provision?

[00:36:56] Speaker 02:
Yes, Your Honor, it would, because under the terms of that agreement, you're talking about an expiration date and then an extension of that so that you're talking about one term of the agreement followed by a second term of the agreement because it has to give effect to the expiration, the fact that there is an expiration date in that agreement.

[00:37:19] Speaker 07:
And you think that the specific contract provision that I just read you is dispositively different from Judge Millett's hypothetical contract provision of A or B, whichever is later.

[00:37:38] Speaker 02:
Yes.

[00:37:39] Speaker 02:
Yes, Your Honor, because the terms are different.

[00:37:41] Speaker 02:
In the contract that you just talked about, you have an expiration date of that agreement

[00:37:50] Speaker 02:
And then there is a new term when you're talking about an extension beyond that.

[00:37:56] Speaker 02:
That is fundamentally different.

[00:37:59] Speaker 02:
It's different words.

[00:38:01] Speaker 02:
Is it any different in meaning?

[00:38:03] Speaker 02:
Yes, it is, Your Honor.

[00:38:04] Speaker 02:
It is different in meaning.

[00:38:05] Speaker 02:
What evidence do you have that both parties agree when writing a provision like that, that the contract actually ends and a whole new contract begins?

[00:38:14] Speaker 02:
Because they use words like remain,

[00:38:18] Speaker 02:
in effect or continue in effect.

[00:38:22] Speaker 02:
That's the language that I've seen, which sounds very much like the old one keeps going and not a new contract is so.

[00:38:30] Speaker 02:
The same language is used in the context of rollover provision.

[00:38:33] Speaker 02:
I don't want, I don't, we haven't upheld your rollover provision interpretation.

[00:38:37] Speaker 02:
So I don't, I don't know where that's getting you.

[00:38:39] Speaker 02:
We don't have briefing on that here.

[00:38:41] Speaker 02:
So I don't know that that adds anything to this dialogue, although

[00:38:45] Speaker 02:
think, as Judge Katz has pointed out, contract law has long drawn a distinction between evergreen provisions and status quo provisions.

[00:38:52] Speaker 02:
So just put that aside and answer me on, as a matter of plain contract, ordinary contract principles.

[00:38:58] Speaker 02:
How it is that you can say, when parties say the contract will expire here or upon X event, it will remain in effect until X. That means an entirely new contract is started.

[00:39:15] Speaker 02:
It means that an entirely new contract is starting because you've had one term of the agreement, and then you're going to have another term of the agreement.

[00:39:23] Speaker 02:
That all depends on you reading that provision as it expires X. Well, it can matter.

[00:39:29] Speaker 02:
Negotiations are going, we'll start a new contract that begins on X plus one.

[00:39:33] Speaker 02:
But if those provisions are fairly read, as Judge Katz has indicated, as it will expire on X calendar date or

[00:39:42] Speaker 02:
on if negotiations are ongoing on this event completion of a new cba whichever comes later eludes well the thing is your honor that the expiration date and the fact that there is an expiration date in that agreement has to be given meaning if you ignore the expiration no it doesn't know because i think i think that that's a whole question here you're assuming that the first calendar date is the is the expiration date

[00:40:09] Speaker 02:
And my question to you is, if the provision is read as instead that the expiration date is A or B, whichever comes later, then you can't say there's one expiration date we have to give effect to.

[00:40:23] Speaker 02:
You have to give effect to there at the contract expiration date, which is A or B, whichever comes later.

[00:40:33] Speaker 02:
Well, but in the example that Judge Katz gave,

[00:40:36] Speaker 02:
we are talking about an expiration date and then an extension afterwards, which indicates a new term of the agreement.

[00:40:43] Speaker 02:
And that new term of the agreement could go on for years.

[00:40:47] Speaker 02:
There also is the policy consideration.

[00:40:51] Speaker 02:
Sorry, before you get to that, but do you know how, I just haven't been able to find out.

[00:40:57] Speaker 02:
This is not the only labor law statute in the federal domain.

[00:41:01] Speaker 02:
Do you know whether under the NLRA,

[00:41:06] Speaker 02:
contract collective bargaining agreements can have these type of continuation provisions or government contracts like military contracts or spending contracts, any of that.

[00:41:16] Speaker 02:
Do you know how these interpret, is your, is the FLRA's interpretation consistent with, different from, or you have no idea how it's interpreted in those contexts?

[00:41:28] Speaker 02:
Your honor, I am not certain and I don't want to give an opinion because I can't think of anything off the top of my head.

[00:41:35] Speaker 00:
I apologize.

[00:41:36] Speaker 02:
You know, if the FLRA's interpretation here is just consistent with general basic contract principles, like our contracts 101 from law school?

[00:41:45] Speaker 02:
Yes, your honor, but it's also consistent with the statute and one of the purposes of the statute.

[00:41:51] Speaker 02:
I asked you about general contract principles.

[00:41:54] Speaker 02:
Do you have

[00:41:55] Speaker 02:
case that you can cite or a treatise you can cite that tells me that what the FLRA did here is consistent with how contract law is interpreted just generically in the common law?

[00:42:08] Speaker 02:
I can provide you with additional case law on that.

[00:42:14] Speaker 02:
But you're confident that it's consistent with what you said it is?

[00:42:18] Speaker 02:
I believe it is consistent, Your Honor.

[00:42:23] Speaker 03:
I'm wondering what the, I mean, a lot of these hypotheticals get to, you know, there could be obviously a range of different types of continuance clauses.

[00:42:32] Speaker 03:
And I'm wondering, I mean, presumably the FLRA in any particular case when, you know, an agency tries to enforce rules and regulations during a continuing period, you know, if those are charged as unfair labor practices, those would be each considered the individual facts and circumstances of those contracts.

[00:42:52] Speaker 02:
That is true, Your Honor.

[00:42:54] Speaker 02:
In each one of these cases, for enforcement of this policy statement to happen, the case would need to be assessed on the facts of the case.

[00:43:05] Speaker 02:
Thank you.

[00:43:07] Speaker 02:
Any further questions?

[00:43:10] Speaker 02:
OK.

[00:43:10] Speaker 02:
Thank you.

[00:43:11] Speaker 02:
It kept you a long time, Ms.

[00:43:12] Speaker 02:
Osborne.

[00:43:12] Speaker 02:
Thank you for your assistance.

[00:43:13] Speaker 02:
Thank you, Your Honor.

[00:43:15] Speaker 02:
Ms.

[00:43:15] Speaker 02:
Cousa?

[00:43:17] Speaker 05:
Good morning and may it please the courts job is on behalf of the intervenors.

[00:43:21] Speaker 02:
I say right.

[00:43:22] Speaker 05:
You say you said you did your honor.

[00:43:24] Speaker 05:
Yeah, that's exactly right.

[00:43:25] Speaker 05:
It's pretty rare to get it right, but you nailed it.

[00:43:28] Speaker 05:
So I hope I don't do that this morning.

[00:43:34] Speaker 05:
I'm on.

[00:43:35] Speaker 05:
I'm here on behalf of the interveners.

[00:43:37] Speaker 05:
As you know, that's the US Department of Agriculture and the Office of Personnel Management.

[00:43:41] Speaker 05:
I think it would be most fruitful to step right in on what's occupied most of the discussion this morning.

[00:43:46] Speaker 05:
And that is the question of the relevance of the specific contract language to the authority's determination here.

[00:43:52] Speaker 05:
And I just want to emphasize that the common law of contract really has nothing to say about the statutory effect of the beginning of a new term after the prior end date of the prior term was reached.

[00:44:04] Speaker 05:
the parties can set.

[00:44:05] Speaker 07:
So let's start with background contract law principles because I didn't research this extensively but I did find contract law 101 provisions suggesting that renewal and extension are both terms of art

[00:44:30] Speaker 07:
in contract law and the difference between them is precisely that an extension extends the original contract and a renewal creates a new contract.

[00:44:48] Speaker 05:
I believe that's the normal usage of those terms in the common law of contract, your honor.

[00:44:54] Speaker 05:
However, here what we're dealing with is a special statutory understanding of that term.

[00:45:00] Speaker 05:
We're dealing with the effect of, I'm sorry.

[00:45:03] Speaker 07:
Why is that?

[00:45:05] Speaker 07:
Because you're right that the reason everyone cares about this question

[00:45:15] Speaker 07:
whether we are in a situation like this, whether we're operating under the first contract or under a second, a new one, is because two legal consequences specified in the statute flow from how you answer that question, right?

[00:45:33] Speaker 07:
Agency Ed review and the effect of intervening regulations.

[00:45:42] Speaker 07:
But the statutory question of what legal consequences flow from how you answer that question is different from the antecedent question of whether or not it's a new agreement.

[00:45:56] Speaker 07:
And on that question, statute seems to me

[00:46:02] Speaker 07:
completely silent and the case really boils down to whether that means the FLRA can give a, well, whether agreement means agreement as understood at common law.

[00:46:24] Speaker 07:
which case you lose or whether agreement because it's not defined in the statute the FLRA can adopt an anti-common law understanding in which case you win.

[00:46:42] Speaker 07:
That's how I understand the question.

[00:46:46] Speaker 05:
I think that's

[00:46:48] Speaker 05:
A correct way of understanding the question, and I would point you to some specific textual indications in the statute that actually the statute contemplates treating an agreement as being co terminus with a term.

[00:47:00] Speaker 05:
So, specifically, I think the best example of that is in 7119 C5C says that the impasses panels imposed settlements.

[00:47:08] Speaker 05:
shall last, quote, during the term of the agreement.

[00:47:12] Speaker 05:
And so I do think that what we're dealing with here is a specific species.

[00:47:16] Speaker 02:
Doesn't that beg the question of what the term is?

[00:47:20] Speaker 02:
If the parties contract for an A or B, whichever comes later term, that statutory language would give effect to that contract, correct?

[00:47:32] Speaker 02:
Whichever later comes.

[00:47:34] Speaker 05:
So I think it raises the question of the term.

[00:47:37] Speaker 02:
Stop.

[00:47:37] Speaker 02:
Hang on.

[00:47:38] Speaker 02:
I want to make sure we're clear and we're talking about the same thing here, OK?

[00:47:41] Speaker 02:
So my hypothetical is what the parties have come to a meeting of minds on is that the duration of this, the defined term of our agreement is A or B, whichever comes later.

[00:47:59] Speaker 02:
You would agree then that use of the term, use of the word term there,

[00:48:04] Speaker 02:
in C, 719, sorry, what did you say?

[00:48:07] Speaker 02:
It's AC, no, C, whatever the provision you're talking about.

[00:48:11] Speaker 07:
I didn't get the slide.

[00:48:13] Speaker 07:
Could you just repeat the slide?

[00:48:14] Speaker 07:
7119.

[00:48:14] Speaker 07:
C5C, I believe.

[00:48:19] Speaker 07:
Okay, thank you.

[00:48:21] Speaker 02:
My bad vision won't go back fast enough on all these numbers.

[00:48:25] Speaker 02:
The use of the word term there would be the term as defined by the parties in the contract, your collective bargaining agreement.

[00:48:34] Speaker 05:
So I guess one clarifying question about that hypothetical is the A or B, which refers later, is B another specific date or is it an event whose date can't be known?

[00:48:46] Speaker 02:
Does that matter?

[00:48:48] Speaker 05:
I think it actually might.

[00:48:49] Speaker 05:
And for the following reason, there's very strong practical incentives for parties to have fixed calendar date end dates for their terms.

[00:49:00] Speaker 05:
That's because under 7111F, there's a procedure, I believe, for challenging whether a specific union should be the exclusive representative for a bargaining unit, but there's a safe harbor provision.

[00:49:11] Speaker 05:
If you have an agreement in place with a specific fixed end date, that creates a calendar by which you can then seek to challenge.

[00:49:19] Speaker 02:
I guess this is all the same language.

[00:49:22] Speaker 02:
I see you're pointing to language, but I don't know why that's an issue, whether it's a specific event or a calendar date.

[00:49:30] Speaker 02:
Well, I think it's a concrete it's a concrete termination date that they have agreed to is there anything in contract law that says that says if the termination date of a contract is a concrete predefined event that's a disfavored term for agreement, rather than a calendar date.

[00:49:51] Speaker 05:
I don't think there's a principle of the common law.

[00:49:54] Speaker 02:
Are you aware of any case, though, under the NLRA, under government contracts, under general contract law that is said if you have an A or B, A calendar date, B event, whichever comes later, that the A calendar date is favored, even if it's a later one?

[00:50:13] Speaker 05:
I'm not aware of a case in the general common law of contracts, Your Honor, but again, I don't think that's just positive here at all.

[00:50:20] Speaker 02:
Well, they just use the word term there, which we assume Congress is carrying, is not throwing away sort of established subtle meanings of language.

[00:50:30] Speaker 05:
Well, there's also a number of other structural, I'm sorry to speak over, Your Honor.

[00:50:34] Speaker 04:
No, go ahead.

[00:50:35] Speaker 05:
There's a number of other structural textual indications in the statute as well, speaking to the importance of government wide rules and the ability of our democratically accountable officials in Congress or the President to promulgate rules that will bind federal employees.

[00:50:50] Speaker 02:
The Congress itself has said, and that principle of those things turn upon

[00:50:58] Speaker 02:
but they don't kick in.

[00:50:59] Speaker 02:
This is another policy judgment that Congress made is that principle is balanced against the importance of allowing people to adhere to mutual importance in labor law, allowing people to have the effect of what they've mutually negotiated between workers and employers.

[00:51:18] Speaker 02:
And so that's why the statute also says that if an agreement is in effect,

[00:51:25] Speaker 02:
those policies don't kick in.

[00:51:26] Speaker 02:
So I don't know how saying there's policies matter.

[00:51:30] Speaker 02:
There's policies both way, and Congress has drawn the line on whether or not the changes kick in when an agreement is still in effect or not, which is why we talk about the term.

[00:51:40] Speaker 05:
The FLRA ever since the beginning of this statute has interpreted that time limited grandfathering provision quote unquote narrowly specifically because of the other important policy interests here, the rest of the CSRA which delegates important policymaking to OPM and to others.

[00:51:57] Speaker 05:
the president's policy-making power, Congress's other statutes.

[00:52:00] Speaker 05:
These are all very important sources of authority.

[00:52:03] Speaker 05:
And for that reason, the FLRA has made clear there needs to be an express term that expires in order for new government-wide rules to go into effect in a timely manner.

[00:52:14] Speaker 02:
It has to be a calendar date, not an event.

[00:52:18] Speaker 02:
Well, a calendar date is by far the most common way of delineating terms across... Well, I think that may be debatable given how common these continuous provisions are, but I mean, the new contract that the FLRA assumes kicks in here does not have a calendar date ending.

[00:52:36] Speaker 02:
It ends upon the conclusion of a new collective bargaining agreement.

[00:52:38] Speaker 02:
So you got the same issue either way, your same policy arguments either way.

[00:52:42] Speaker 02:
So

[00:52:44] Speaker 02:
Either one way or the other, you're not going to have a calendar date for the end of these continuance provisions.

[00:52:51] Speaker 05:
Your Honor, we're not here to say that an agreement of indefinite duration is impossible under this statute.

[00:53:00] Speaker 05:
We think continuance clauses are a permissible type of agreement under this statute.

[00:53:05] Speaker 05:
But I think it's important.

[00:53:06] Speaker 05:
I think the authority would be well within its power under this statute to say,

[00:53:11] Speaker 05:
Well, if the parties have said that the agreement runs until a date certain, and then if there's still ongoing negotiations and nothing left in place, then something new has happened.

[00:53:20] Speaker 05:
The parties have already agreed that those are the conditions under which a new term will come into effect, and the authority is free to interpret the statutory term agreement to be coterminous with those terms, in part because of the extreme importance of allowing

[00:53:36] Speaker 05:
Congress to regulate the conduct of federal employees rather than arbitrators in the impasses panel.

[00:53:43] Speaker 02:
Sorry, Judge Casas, did I step on a question you had?

[00:53:47] Speaker 07:
No, I was just on that point.

[00:53:51] Speaker 07:
As to calendar date or event, I was just going to say it's every one of these clauses that I've looked at seems to be of the general form

[00:54:05] Speaker 07:
shall end on a date certain, which is a calendar, or the end of negotiations if a party has given timely notice, which is an event.

[00:54:19] Speaker 07:
So the heartland of what we're talking about is the contract term of the form, the term of the contract is calendar event,

[00:54:32] Speaker 07:
calendar date or completion of negotiations, whichever is later.

[00:54:39] Speaker 05:
So, Your Honor, I think in that circumstance, I heard my colleague from the FLRA say that the guidance here would apply.

[00:54:45] Speaker 05:
The reason the parties chose that calendar date is because it has important significance.

[00:54:50] Speaker 02:
I'm sorry, I thought you said it would not apply.

[00:54:53] Speaker 02:
I thought you repeatedly said if it said A or B, whichever comes later, then it wouldn't jump in until the later date.

[00:55:03] Speaker 05:
I think I heard her say in response to Judge Katz's specific hypothetical from the seating C that the guidance would apply.

[00:55:09] Speaker 02:
But in any event, she was assuming that was not an A or B, whichever comes later.

[00:55:14] Speaker 05:
Right.

[00:55:14] Speaker 05:
In our view, I don't think or would be dispositive on that question at all.

[00:55:18] Speaker 05:
The reason the parties chose a specific calendar date is because it has meaning for them and it has meaning for us.

[00:55:25] Speaker 05:
For them, it triggers the preclusion of certain decertification challenges, which is very important for them.

[00:55:31] Speaker 05:
If they were to lose that, I don't think they would be happy.

[00:55:33] Speaker 05:
Second, for us, it creates a date certain by which Congress and the president and OPM can create new rules through democratically legitimate means to govern our federal employees.

[00:55:44] Speaker 05:
That's what Congress wanted in this statute.

[00:55:46] Speaker 05:
And again, just pointing to, I'm sorry.

[00:55:49] Speaker 07:
What is the difference between the hypothetical A or B, whichever is later formulation, and the CDC provision, which I read?

[00:56:04] Speaker 07:
They seem to me, substantively identical.

[00:56:08] Speaker 07:
I can give it to you again, if you don't have it handy.

[00:56:10] Speaker 05:
No, so I thought you said the specific language was if renegotiation is in process, but not completed upon expiration of this agreement.

[00:56:17] Speaker 05:
That's just the a date.

[00:56:18] Speaker 05:
So I think that that specific language is talking about a definitely being an expiration.

[00:56:24] Speaker 05:
I think in our view, the party's view as to whether it's an expiration or not.

[00:56:28] Speaker 05:
is metaphysical and not important under the statutory interpretation question presented here.

[00:56:33] Speaker 05:
That statutory interpretation question doesn't give the parties the power to indefinitely forestall implementation of new government-wide rules.

[00:56:41] Speaker 07:
Sorry, hang on a sec.

[00:56:43] Speaker 07:
I'm having a little trouble tracking this.

[00:56:45] Speaker 07:
I thought the authority's position was the guidance covers this actual Article 40, which I read, but does not cover

[00:56:59] Speaker 07:
the hypothetical A or B, whichever is later.

[00:57:03] Speaker 07:
And if that's true, there has to be some meaningful difference between the hypothetical formulation and this actual formulation.

[00:57:12] Speaker 07:
So I guess that's what I'm, and I don't see it.

[00:57:17] Speaker 07:
Those two seem to me just a variation on the same question.

[00:57:21] Speaker 07:
But if you wanna defend, and if you wanna say there's no difference and the guidance covers both,

[00:57:28] Speaker 07:
I understand that position, but I thought you were defending the distinction.

[00:57:32] Speaker 05:
No, Your Honor, I don't mean to be defending that distinction.

[00:57:35] Speaker 05:
We don't think there is.

[00:57:36] Speaker 05:
And more importantly, I don't think there's a guidance on its face.

[00:57:40] Speaker 07:
Sorry.

[00:57:40] Speaker 07:
So civil appellate's position, to be clear, is that the guidance does cover the hypothetical A or B, whichever is later formulation.

[00:57:55] Speaker 05:
That's correct, Your Honor.

[00:57:56] Speaker 05:
And that's because this is a matter of statutory interpretation regarding the boundaries of agreements and terms.

[00:58:01] Speaker 05:
That's something the FLRA gets to have a say about.

[00:58:04] Speaker 07:
And so how do you justify that?

[00:58:08] Speaker 07:
How do you square that with background contract principles?

[00:58:17] Speaker 05:
So I think you had an earlier question about whether there was a meeting of the minds and an agreement here and I, you might be going back to that and so just to have it.

[00:58:25] Speaker 07:
You take it, take it either way, Judge Millett's formulation was that.

[00:58:30] Speaker 07:
were under the original expiration term of the original contract.

[00:58:37] Speaker 07:
My formulation was there's no second meeting of the minds to produce a second agreement.

[00:58:44] Speaker 07:
So you can take either one, but I haven't heard a great answer to either of those concerns.

[00:58:52] Speaker 05:
or the meeting of the minds I'll take first, it is common ground between everyone here that if you have an agreement, say it's a ground rules agreement about how negotiations will be conducted for a new term agreement, the provisions of the ground rules set the conditions upon which there will be execution of the new agreement.

[00:59:14] Speaker 05:
So it's just common ground, the provision of a prior agreement,

[00:59:18] Speaker 05:
can set the conditions against which the parties act to execute a new agreement.

[00:59:23] Speaker 05:
That's the rule in that situation.

[00:59:25] Speaker 05:
That's also the rule in the case of rollover clauses, where, again, the parties do nothing by a specific date, triggering a new agreement.

[00:59:32] Speaker 05:
And I'm sorry, Your Honor.

[00:59:33] Speaker 07:
And only if there's a new agreement, though.

[00:59:36] Speaker 05:
Right?

[00:59:37] Speaker 05:
Yes, Your Honor.

[00:59:37] Speaker 05:
Exactly.

[00:59:38] Speaker 07:
What's the new agreement?

[00:59:40] Speaker 07:
Why does a new agreement arise when the

[00:59:45] Speaker 07:
The triggering event is one party unilaterally says, I don't like this contract anymore and I want to renegotiate it.

[00:59:55] Speaker 05:
So the new agreement is the failure of both parties to then reach a new agreement during the bargaining period before the expiration of the prior term.

[01:00:08] Speaker 05:
that conduct read against the background rule established by the continuance provision is the execution.

[01:00:15] Speaker 05:
That's actually identical to the rollover circumstance where parties do nothing by a specific date.

[01:00:23] Speaker 05:
And that is there.

[01:00:26] Speaker 05:
I saw you trying to ask another question.

[01:00:27] Speaker 05:
I'm sorry.

[01:00:28] Speaker 07:
Sorry, I keep I keep interrupting you with my facial.

[01:00:31] Speaker 07:
No, please.

[01:00:33] Speaker 07:
I mean, in the rollover context,

[01:00:40] Speaker 07:
The rule is the contract will renew if neither party makes an objection and neither party makes an objection.

[01:00:54] Speaker 07:
And I can understand

[01:00:58] Speaker 07:
an argument that if that's the way the contract works and the deadline is approaching and party A says to itself, I have no objection.

[01:01:11] Speaker 07:
Party B says to itself, I have no objection.

[01:01:16] Speaker 07:
You can sort of think of that as an agreement by conduct.

[01:01:23] Speaker 07:
And if you can sort of think of that as a second agreement, you can maybe think of the extended term as a second agreement rather than the first.

[01:01:34] Speaker 07:
I just don't see how that works with extension where it's not both parties say to them, say the same thing, which is I'm fine with this continuing.

[01:01:46] Speaker 07:
It's one party says, I don't like this.

[01:01:51] Speaker 07:
And then there is a failure to reach a second agreement.

[01:01:57] Speaker 06:
The negotiation.

[01:01:58] Speaker 06:
The failure to reach a second.

[01:02:02] Speaker 05:
So the failure to reach a second agreement before the end of the prior term, Your Honor, really is the result of both parties' conduct.

[01:02:09] Speaker 05:
It is possible to negotiate a new agreement before expiration.

[01:02:14] Speaker 05:
And even if the other side doesn't want that to happen, it's possible to advance

[01:02:18] Speaker 05:
impasses to the impasses panel and get a resolution.

[01:02:21] Speaker 05:
These are not impossibilities.

[01:02:24] Speaker 05:
And so it really is the course of conduct of both parties that leads to the continuance term being triggered.

[01:02:32] Speaker 05:
And to go back to this.

[01:02:34] Speaker 07:
So it's sorry.

[01:02:35] Speaker 07:
So it's the second agreement arises because the parties agree to disagree.

[01:02:45] Speaker 05:
I think that's right, Your Honor.

[01:02:48] Speaker 05:
But I also think that really is materially indistinguishable from the rollover context where literally the parties do nothing.

[01:02:54] Speaker 05:
That could be because they decide they want to have a new rollover term.

[01:02:58] Speaker 05:
It could be because everyone just forgot.

[01:03:00] Speaker 05:
But we still have a rollover term.

[01:03:02] Speaker 05:
And under longstanding precedent for 30 years that no one is questioned, including petitioners here, that's a new agreement.

[01:03:09] Speaker 05:
And it's that course of conduct read against

[01:03:12] Speaker 07:
Yeah, which is, which is consistent with hundreds of years of common law which deems it a new agreement in the rollover context, but not a new agreement in the continuance context.

[01:03:26] Speaker 05:
So just to drill down further on that specific point, as we point out on page 31 of our briefs, the rollover rule doesn't depend on the parties using magic words about renewal versus continuation or remain in force.

[01:03:41] Speaker 05:
Either way, even if the rollover clause says this agreement will remain in force instead of this agreement shall be renewed,

[01:03:49] Speaker 05:
the rollover term is effective.

[01:03:52] Speaker 05:
It's a new term.

[01:03:53] Speaker 05:
There was a prior expiration date.

[01:03:56] Speaker 02:
What triggers rollover provisions is both parties independently, including that I'm not going to ask for renegotiations.

[01:04:06] Speaker 02:
I guess I'm just going to assume it's not that nobody's paying attention to these things.

[01:04:09] Speaker 02:
I think people pay attention to these things.

[01:04:11] Speaker 02:
So they make a conscious decision

[01:04:14] Speaker 02:
I'm good with doing this again.

[01:04:16] Speaker 02:
And the other side, by not asking for negotiations, makes that same conclusion.

[01:04:22] Speaker 02:
And when a continuance provision is triggered by very different, it's not inaction, it is actually by very vigorous action.

[01:04:31] Speaker 02:
Negotiations in advance, as you said, they usually set different terms for what deadline you have to ask for the spy before the designated A calendar date.

[01:04:42] Speaker 02:
and then you're in negotiations and it's the FLRA itself says that these things are stopgap measures that don't have the confidence of either party when these things continue.

[01:04:55] Speaker 02:
It's just maintaining the status quo and so that seems to me quite materially different between the two.

[01:05:04] Speaker 02:
I mean you don't dispute the FLRA's

[01:05:08] Speaker 02:
description of these as stopgap measures in which neither party has full confidence because they're negotiating, or at least one of the parties doesn't.

[01:05:17] Speaker 02:
Maybe one wants to keep it, but at least one of them doesn't.

[01:05:20] Speaker 02:
And we also know that if there have been intervening changes in statutes or regulations, the new CBA is going to have to take account of those.

[01:05:30] Speaker 02:
So there's going to be some recognition.

[01:05:32] Speaker 02:
There's going to be some change, presumably, unless nothing has changed, at which point who cares?

[01:05:37] Speaker 02:
Right?

[01:05:38] Speaker 02:
So that's very different.

[01:05:40] Speaker 02:
It's the entire premise for why you're in this temporary stopgap time period.

[01:05:47] Speaker 05:
So you've described it as temporary, as we point out.

[01:05:49] Speaker 02:
No, the FLRA, to be clear, I'm quoting the FLRA, temporary stopgap.

[01:05:54] Speaker 02:
That's their term.

[01:05:56] Speaker 02:
It's the party's lack of confidence.

[01:05:58] Speaker 02:
That's their term.

[01:05:59] Speaker 05:
Sure.

[01:06:00] Speaker 05:
Well, for one, clearly, the continuance term is finalized and has the confidence of the parties.

[01:06:06] Speaker 05:
Otherwise, it's not really

[01:06:07] Speaker 05:
agreements, right?

[01:06:09] Speaker 05:
So it has force and no one disputes that the continuance clause itself has force.

[01:06:14] Speaker 05:
In that sense, it does have the party's confidence.

[01:06:15] Speaker 05:
They agreed to it at the very outset in the first agreement that led to the first term.

[01:06:20] Speaker 05:
And that in conjunction with the party's mutual failure to reach a new agreement before the expiration date, that's the execution.

[01:06:28] Speaker 05:
Execution here really is a term of art.

[01:06:30] Speaker 05:
Everyone recognizes that when the impasses panel imposes a settlement that neither party asked for, neither party wants, both hate them, and maybe even they don't want to sign them.

[01:06:38] Speaker 05:
That's execution.

[01:06:39] Speaker 05:
No one disputes that.

[01:06:40] Speaker 05:
It's a statutory term of R that takes into account the special context here of the government's specialized needs, as recognized under 7.101b of the statute, and the need to interpret this statute consistent with an effective and efficient government.

[01:06:54] Speaker 05:
And that includes our ability to create and implement new government-wide rules.

[01:06:59] Speaker 05:
Yes, a continuous term is indefinite.

[01:07:02] Speaker 02:
Am I right that these continuance provisions have been in effect for?

[01:07:07] Speaker 02:
decades before this policy was issued?

[01:07:11] Speaker 05:
To my recollection, I've seen what I deemed, I think, our continuance provisions in quoted contracts from FLRA cases dating back to the early 90s.

[01:07:23] Speaker 02:
And it's pretty, it's just Judge Katz has said, pretty establishing contract law generally.

[01:07:32] Speaker 06:
But again, I'm sorry, Your Honor.

[01:07:34] Speaker 02:
Thanks, Judge, for asking questions.

[01:07:36] Speaker 03:
So, Mr. Beasley, if you could just maybe state a little more clearly, going back to Judge Katz's question earlier in this argument.

[01:07:43] Speaker 03:
So, if we were to disagree with your view that this position

[01:07:51] Speaker 03:
What is the best argument that the government should prevail here?

[01:07:55] Speaker 03:
I mean, if we think that this reading is not consistent with sort of Contracts 101 principles.

[01:08:01] Speaker 05:
The statute here is using the word agreement in a way that's different from Contract 101 principles.

[01:08:07] Speaker 05:
So I take it actually as being undisputed among the parties that the FLRA would have the power to interpret the word agreement here to disallow a forever agreement, an indefinite agreement with no known end date.

[01:08:20] Speaker 05:
Right.

[01:08:20] Speaker 05:
But of course, I think under Contract 101 principles, parties would be free to agree to such an agreement.

[01:08:25] Speaker 05:
So I think what we know that we're dealing with something here that is not just subject to the whim of the parties in which the FLRA has no view as to, you know, what the boundaries of agreements are.

[01:08:37] Speaker 05:
The Supreme Court in 1999 made clear that the statute's definition of agreement is ambiguous and circular, and that the FLRA

[01:08:45] Speaker 05:
is therefore been given power by Congress to fill in the gaps to best effectuate the policies of the statute.

[01:08:52] Speaker 05:
That's what the FLRA did here.

[01:08:54] Speaker 05:
It balanced the important interests in labor stability during the first express term of an agreement.

[01:09:00] Speaker 05:
against the government's also very important interests in having federal employees conduct controlled by democratically accountable officials, and it reached a common sense resolution that is consistent with its rollover cases that have been around for at least 30 years and that no party challenges here.

[01:09:19] Speaker 05:
And it's consistent with the text and the structure of the statute.

[01:09:22] Speaker 05:
The statute, again, contemplates that agreements are coterminous with terms, which I think is actually a little bit different than perhaps what the common law might allow for.

[01:09:29] Speaker 05:
The common law doesn't require the chopping up an agreement into terms.

[01:09:34] Speaker 05:
It may or may not.

[01:09:35] Speaker 05:
But here, a term is an agreement.

[01:09:38] Speaker 05:
And the FLRA was well within its authority to say, if the parties go about specifying a specific end date in order to gain the benefits of, for example, displacing

[01:09:48] Speaker 05:
certification challenges for a period of time, then the party should be bound by the idea that that really is meaningful.

[01:09:55] Speaker 05:
for the parties outside of that context.

[01:09:57] Speaker 05:
It's the end of that term, regardless of whatever specific wordsmithing the parties might want to come up with in order to forestall implementation of government-wide rules for an additional time period.

[01:10:09] Speaker 05:
There was an expiration date.

[01:10:10] Speaker 05:
That date was reached.

[01:10:11] Speaker 05:
That's the entire reason why the continuance clause is triggered.

[01:10:15] Speaker 05:
I think the FLRA was within its authority to recognize that something new really has happened when that first date is reached.

[01:10:23] Speaker 05:
because it's only by reaching that first date that the continuance clause was triggered in the first place.

[01:10:28] Speaker 05:
It's not as if nothing happened here.

[01:10:30] Speaker 05:
And I'm sorry, Your Honor.

[01:10:33] Speaker 02:
Do my colleagues have any more questions?

[01:10:39] Speaker 02:
Okay, thank you.

[01:10:39] Speaker 02:
Thank you very much.

[01:10:40] Speaker 02:
Thank you, Your Honor.

[01:10:41] Speaker 02:
Ms.

[01:10:41] Speaker 02:
Bailey, I think you have two minutes of rebuttal, correct?

[01:10:44] Speaker 01:
Yes, thank you, Your Honor.

[01:10:47] Speaker 01:
I'd really like to make one simple point, which is if the parties want their contracts to end on the calendar date listed in the contract, they don't need to include a continuance provision.

[01:11:00] Speaker 01:
If they don't include a continuance provision, that calendar date will be the expiration of the agreement.

[01:11:07] Speaker 01:
I'd be glad to answer any other questions from the court.

[01:11:11] Speaker 01:
Otherwise, we'll rest on our briefs.

[01:11:15] Speaker 02:
Questions?

[01:11:17] Speaker 02:
Thanks to everybody.

[01:11:18] Speaker 02:
Now the case is submitted.