Why It Matters
The Federal Mediation and Conciliation Service (FMCS) can now decline or hold requests for arbitration panels from unions and employers when providing the requested service would be inconsistent with applicable law, a court order or the agency's authority. The agency must provide written notice of any refusal or delay.
The Office of Arbitration (OA) may conduct a "limited threshold inquiry" before issuing a panel, making a direct appointment or providing related services to determine whether doing so would be inconsistent with applicable law, a court order or FMCS's statutory or regulatory authority. FMCS says the former "will be honored" language "could be read to require OA to furnish panels and make appointments regardless of whether doing so was consistent with applicable law, a court order, or FMCS's authority."
FMCS says the rule implements Executive Order 14251, "Exclusions From Federal Labor-Management Relations Programs," and Executive Order 14343, "Further Exclusions From the Federal Labor-Management Relations Program," which excluded numerous agencies and subdivisions from Chapter 71 coverage and directed excluded agencies to terminate participation in pending grievance proceedings. FMCS says the "great majority of the panels OA issues each year involve private-sector parties or Federal-sector parties as to whom no question of FMCS's authority arises, and the rule does not change how those requests are processed."
The Big Picture
Under 29 C.F.R. § 1404.9(b)(3), the inquiry is "limited to whether FMCS may lawfully provide the requested service." A party's contention that a grievance lacks merit, is untimely or is not arbitrable "does not by itself establish that providing the requested service would be inconsistent with applicable law, a court order, or FMCS's statutory or regulatory authority."
New § 1404.9(b)(5) requires OA to notify parties in writing of any decision to decline or hold a request and state the basis for it. A held request retains its original date of receipt, OA must reconsider upon a party's submission of a court order or other relevant information, and a party that paid a fee may receive a refund or credit toward future FMCS arbitration services.
Technical corrections to 29 C.F.R. § 1404.7 replace references to a fee schedule "in the appendix to this part," removed in 2022, with references to the schedule of fees published by FMCS. No fee amounts change.
All five comments received opposed the rule; three groups asked FMCS to withdraw it entirely. FMCS responded that the inquiry concerns whether FMCS, as an executive branch agency, may lawfully take the administrative action requested, a question an arbitrator cannot answer with respect to FMCS because the agency is not a party to the proceeding.
- Three comments argued FMCS lacked good cause to bypass notice and comment. FMCS responded that the rule is independently exempt as a rule of "agency organization, procedure, or practice" and that the interim-final-rule-plus-comment process satisfied the Administrative Procedure Act's notice requirement.
- One comment, submitted by a coalition representing "more than 550,000 Federal and postal employees," argued the rule compromises FMCS's neutrality. FMCS responded that "neutrality . . . is impartiality between labor and management as to the merits of their disputes. It is not indifference to whether the law permits FMCS to act."
An April 22 guidance memorandum directing OA to confirm agency consent before issuing panels for executive-order-excluded agencies will be conformed to the final rule. Where any inconsistency exists, the regulation controls.
The Bottom Line
The final rule took effect Oct. 29. The amendments to 29 C.F.R. §§ 1404.9, 1404.10, 1404.11 and 1404.12 made by the interim final rule have been in effect since Aug. 4. FMCS says it expects the cost of implementing the new procedural protections "to be minimal and to be absorbed within existing OA resources."
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