National Treasury Employees Union v. Federal Labor Relations Authority

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 15, 2021 Decided August 2, 2022
No. 20-1400
NATIONAL TREASURY E MPLOYEES UNION ,
P ETITIONER
v.
FEDERAL LABOR R ELATIONS AUTHORITY ,
R ESPONDENT
OFFICE OF P ERSONNEL M ANAGEMENT AND UNITED S TATES
DEPARTMENT OF A GRICULTURE,
INTERVENORS
Consolidated with 20-1402, 20-1403
On Petitions for Review of an Order
of the Federal Labor Relations Authority
Kathryn W. Bailey argued the cause for petitioners. With
her on the briefs were Gregory O’Duden, Julie M. Wilson,
Jessica Horne, David A. Borer, Andres M. Grajales, Mark L.
Vinson, Judith E. Rivlin, and Teague P. Paterson.
Rebecca J. Osborne, Deputy Solicitor, Federal Labor
Relations Authority, argued the cause for respondent. With her

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on the brief were Noah Peters, Solicitor, and Sarah C.
Blackadar and Joshua D. Brown, Attorneys.
Joseph F. Busa, Attorney, U.S. Department of Justice,
argued the cause for intervenors. With him on the brief were
Brian M. Boynton, Acting Assistant Attorney General, and
Melissa N. Patterson, Attorney.
Before: M ILLETT, KATSAS , and R AO , Circuit Judges.
Opinion for the Court filed by Circuit Judge KATSAS .
KATSAS , Circuit Judge: The Federal Service Labor-
Management Relations Statute grants the heads of federal
agencies the right to review collective bargaining agreements
before they go into effect. Once an agreement passes such
review, the Statute forbids enforcement of new regulations that
conflict with the agreement. The question presented is whether
the triggering of a continuance clause, which extends a contract
pending negotiations of a successor agreement, permits a
second round of agency-head review and enforcement of
conflicting regulations that became effective after the original
agreement. We hold that the operation of a continuance clause
does not have either consequence.
I
A
The Statute gives certain federal workers the right to
engage in collective bargaining with their employing agency.
5 U.S.C. § 7102(2). Negotiations result in a collective
bargaining agreement, which sets the terms and conditions of

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employment within the agency. Id. § 7114(a)(4). The Federal
Labor Relations Authority administers the Statute. Id. § 7105.
The Statute permits an agency head to review a collective
bargaining agreement before it takes effect. 5 U.S.C.
§ 7114(c)(1). The agency head must approve the agreement
unless it conflicts with applicable federal law. Id. § 7114(c)(2).
If the agency head fails to act within 30 days of the agreement’s
execution, the agreement takes effect and binds the parties for
its duration. Id. § 7114(c)(3).
The Statute generally prohibits agencies from enforcing
regulations that conflict with the terms of an existing collective
bargaining agreement and that became effective after the
agreement. 5 U.S.C. § 7116(a)(7). This prohibition runs for
the life of the agreement. But once a collective bargaining
agreement expires, all regulations issued since its effective date
become enforceable. Dep’t of Com. PTO & NTEU Chapter
245, 65 F.L.R.A. 817, 819 (2011).
B
Collective bargaining agreements often specify what
happens when the agreement nears its expiration and the parties
have not negotiated a successor contract. Relevant terms may
include continuance clauses and rollover clauses.
A continuance clause allows either party to extend the
duration of an expiring agreement until its successor is in place.
As the FLRA has explained, a continuance clause provides
that, “where renegotiations are requested, the existing
agreement continues in force until the parties reach a new one.”
Decision On Request For General Statement Of Policy Or
Guidance, 71 F.L.R.A. 986, 986 (2020) (Guidance). The
following language is illustrative:

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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.
Collective Bargaining Agreement between the National
Alliance of Postal and Federal Employees (NAPFE) and the
Centers for Disease Control and Prevention 42, Art. 40.
A rollover clause, by contrast, automatically renews a
collective bargaining agreement when neither party wishes to
renegotiate. Such a clause typically specifies a window for
either party to give notice of its desire to renegotiate. If neither
party does, the agreement “rolls over” for a new term. The
following language is illustrative:
This Agreement will remain in full force and
effect for 6 years from its effective date and
automatically renew itself from year to year
thereafter. However, either party may give
written or electronic notice of its intent to add,
amend, reopen, modify or terminate existing
Articles of the Agreement not more than 120 or
less than 90 calendar days prior to the expiration
date.
National Agreement between the American Federation of
Government Employees (AFGE) and the Social Security
Administration 33, Art. 7, § 2.
C
The Department of Agriculture asked the FLRA for
guidance on whether an agency head may review a collective

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bargaining agreement when it is extended under a continuance
clause. The Authority concluded that agency heads may do so.
Guidance, 71 F.L.R.A. at 989. It further concluded that, when
an agreement is so extended, the employing agency may begin
to enforce regulations that conflict with the agreement and that
became effective after the agreement’s original effective date.
Id.
Member DuBester dissented. In his view, the Authority
should not have given general guidance divorced from the
precise language of specific continuance clauses. Id. at 990.
Further, he concluded that the guidance conflicts with the
Statute and with FLRA precedent. Id. at 990–91.
Three unions petitioned for review of the FLRA’s order.
The USDA, along with the Office of Personnel Management,
intervened to defend the guidance. We have jurisdiction under
5 U.S.C. § 7123(a). See AFGE v. FLRA, 750 F.2d 143, 144
(D.C. Cir. 1984).
II
We review FLRA orders under the standards set forth in
the Administrative Procedure Act. 5 U.S.C. § 7123(c). And
we review FLRA interpretations of the Statute under the
familiar Chevron framework. AFGE, AFL-CIO, Local 2031 v.
FLRA, 878 F.2d 460, 464 (D.C. Cir. 1989) (per curiam); see
Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). Thus, we
defer if the Authority has reasonably construed an ambiguous
provision, but we use all available tools of statutory
construction to decide whether the provision is ambiguous. See
id. at 842–43 & n.9.

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III
The guidance at issue interpreted two provisions. First, the
FLRA read section 7114(c) to permit agency-head review of a
collective bargaining agreement when a party has extended it
under a continuance clause. Second, the FLRA read section
7116(a)(7) not to bar the employing agency from enforcing
later-in-time regulations that conflict with the agreement. We
set aside both interpretations.
A
We start with agency-head review. Section 7114(c)
permits such review only “30 days from the date the agreement
is executed.” 5 U.S.C. § 7114(c)(2). So the question is
whether the extension of an agreement under a continuance
clause constitutes the execution of a new agreement. The
Statute does not define “executed,” so that term presumably
derives its meaning from background principles of contract
law. See FAA v. Cooper, 566 U.S. 284, 292 (2012). Under
those principles, a written agreement is executed when the
parties complete the formalities necessary to bring the
agreement into its final, legally enforceable form. See, e.g.,
Housing Auth. of City of Dallas v. Killingsworth, 331 S.W.3d
806, 811 (Tex. Ct. App. 2011); Nielsen Constr. Co. v. Int’l Iron
Prods., 22 Cal. Rptr. 2d 497, 500 (Cal. Ct. App. 1993);
Execute, Black’s Law Dictionary (11th ed. 2019).
The guidance posits the execution of a new agreement—
and thus a second round of agency-head review—whenever an
existing agreement is extended under a continuance clause. 71
F.L.R.A. at 988. But a continuance clause takes effect when
either party seeks unilaterally to renegotiate the terms of an
expiring agreement. It manifests the parties’ intent to be bound
by the terms of their original agreement pending further

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negotiations. And it remains in effect only while the parties
continue to disagree over the terms of any successor
agreement. Thus, a continuance clause “simply lengthens the
existing agreement for a new period of time.” Eastham v.
Chesapeake Appalachia, LLC, 754 F.3d 356, 362 (6th Cir.
2014) (applying Ohio law) (emphasis added); see also Nebo
Ventures, LLC v. NovaPro Risk Sols., LP, 752 S.E.2d 18, 27
(Ga. Ct. App. 2013) (“An extension … does not contemplate a
new agreement.” (cleaned up)); Extension, Black’s Law
Dictionary (11th ed. 2019) (providing for the “continuation of
the same contract for a specified period”); Renewal and
Extension of Contracts, Generally, 17B C.J.S. Contracts § 668
(2020) (similar). In other words, an agreement with a
continuance clause is simply a contract that expires on the later
of a date certain or the adoption of a successor agreement. For
these reasons, neither the invocation nor the operation of a
continuance clause executes a new agreement.
The guidance relied on administrative precedent
addressing the operation of rollover clauses. 71 F.L.R.A. at
988–89 & nn.29–30. It cited an order holding that an
“automatically renewed agreement is subject to agency-head
approval” upon each renewal. Kansas Army Nat’l Guard, 47
F.L.R.A. 937, 942 (1993). Whatever the merits of that ruling,
it has no applicability to continuance clauses. A rollover clause
takes effect when neither party expresses a desire to renegotiate
during a specified window, which may plausibly be described
as assenting to a new agreement through mutual inaction. See,
e.g., Eastham, 754 F.3d at 361–62 (rollover clause specifies
how “to execute a new contract” (cleaned up)); Distillery
Rectifying & Wine Workers Int’l Union of Am. v. Brown-
Forman Distillers Corp., 213 S.W.2d 610, 613 (Ky. 1948). In
contrast, we have found no support for treating the invocation
of a continuance clause as executing a new agreement.

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The FLRA contends that the word “executed” is at least
ambiguous enough for its interpretation to warrant Chevron
deference. Two of the cases it cites merely confirm the
uncontroversial principle that the parties themselves may
determine what steps should be required to execute—i.e.,
finalize—their agreement. See Ass’n of Civilian Technicians
Kentucky, 70 F.L.R.A. 968, 969 (2018); Ft. Bragg Ass’n of
Teachers, 44 F.L.R.A. 852, 857–58 (1992). Its third case held
that the agreement subject to agency-head review includes
terms imposed by the Federal Service Impasses Panel in
binding arbitration. AFGE v. FLRA, 778 F.2d 850, 857 (D.C.
Cir. 1985). That holding rests on the statutory definition of the
phrase “collective bargaining agreement,” which includes
terms imposed by the Impasses Panel. 5 U.S.C. § 7103(a)(8);
see AFGE v. FLRA, 712 F.2d 640, 646 n.24 (D.C. Cir. 1983).
Our reasoning on this point does nothing to undercut the default
rule that, absent a statutory directive to the contrary, a
contractual agreement requires the parties’ mutual assent. See,
e.g., Northland Capital Corp. v. Silver, 735 F.2d 1421, 1427
(D.C. Cir. 1984). Nor do the AFGE cases say anything about
when an agreement is “executed”—a question we did not
address. See 778 F.2d at 857 (“a Panel-imposed settlement,
once adopted by the parties, should be regarded as part of a
collective bargaining agreement” (emphasis added) (quoting
712 F.2d 640, 646 n.24)). None of these cases bears on the
question presented here.
Because invoking a continuance clause does not execute a
new agreement, there is no statutory basis for a second round
of agency-head review.

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B
Section 7116(a)(7) forbids employing agencies from
enforcing most regulations that conflict with a collective
bargaining “agreement” that was “in effect” before the
regulation issued. 5 U.S.C. § 7116(a)(7). The FLRA
concluded that, once an agreement has been extended through
a continuance clause, the agency may enforce all conflicting
regulations that became effective before the extension.
For many of the reasons already discussed, section
7116(a)(7) cannot bear that interpretation. As shown above,
contract extensions preserve an existing agreement rather than
supplant it with a new one. Thus, an extended contract is the
same “agreement” that was “in effect” before the extension.
And so long as it remains in effect, the employing agency may
not enforce new regulations that conflict with it.
The FLRA’s own description of continuance clauses
reinforces our conclusion. According to the Authority, a
continuance clause provides for an existing agreement to
remain “in force” during renegotiations. Guidance, 71
F.L.R.A. at 986. Yet section 7116(a)(7) bars enforcement of
conflicting regulations while an agreement remains “in effect.”
And there is no difference between the terms “in force” and “in
effect,” which are used interchangeably. See, e.g., Bhd. of R.R.
Trainmen v. Akron & Barberton Belt R.R. Co., 385 F.2d 581,
611 (D.C. Cir. 1967) (labor agreements “in force continued in
effect”); Liddell by Liddell v. Bd. of Educ. of St. Louis, 105 F.3d
1208, 1211 (8th Cir. 1997) (similar).
Seeking deference, the FLRA contends that the phrase “in
effect” is ambiguous because the terms of expired collective
bargaining agreements sometimes continue to have legal force.
For support, the Authority cites U.S. Border Patrol Livermore

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Sector, 58 F.L.R.A. 231 (2002), which states “the general
principle that parties to an expired agreement continue to be
bound by the provisions of that agreement until otherwise
agreed or the provisions are modified in a manner consistent
with the Statute.” Id. at 233. But this case does not involve
expired agreements. And the fact that even expired agreements
may in some sense remain “in effect” hardly supports the
FLRA’s position that agreements extended under a
continuance clause do not remain “in effect.”
Because the invocation of a continuance clause extends a
collective bargaining agreement pending negotiations over its
successor, the existing agreement remains “in effect” until a
new agreement is in place. Thus, the employing agency may
not enforce regulations that conflict with the agreement and
that became effective after it did.
IV
The FLRA’s guidance conflicts with the Statute, so we
grant the petitions for review and set aside the guidance.1
So ordered.
1 Given our disposition, we need not address the unions’
alternative argument that the FLRA insufficiently justified its
decision to issue general guidance divorced from the terms of an
actual agreement.

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