 United States Court of Appeals
          FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued December 8, 2011               Decided February 7, 2012

                          No. 11-1102

      UNITED STATES DEPARTMENT OF THE TREASURY,
      BUREAU OF THE PUBLIC DEBT WASHINGTON, D.C.,
                      PETITIONER

                                v.

          FEDERAL LABOR RELATIONS AUTHORITY,
                     RESPONDENT

          NATIONAL TREASURY EMPLOYEES UNION,
                      INTERVENOR


          On Petition for Review of a Final Decision
           of the Federal Labor Relations Authority


     Howard S. Scher, Attorney, United States Department of
Justice, argued the cause for the petitioner. Tony West, Assistant
Attorney General, and William Kanter and Thomas M. Bondy,
Attorneys, were on brief.
    Rosa M. Koppel, Solicitor, Federal Labor Relations
Authority, argued the cause for the respondent.
    Peyton H.N. Lawrimore argued the cause for intervenor
National Treasury Employees Union. Gregory O'Duden and
Larry J. Adkins were on brief.
    Before: HENDERSON, ROGERS and TATEL, Circuit Judges.
                               2

    Opinion for the Court filed by Circuit Judge HENDERSON.
     KAREN LECRAFT HENDERSON, Circuit Judge: The United
States Department of the Treasury (Department) petitions for
review of a decision of the Federal Labor Relations Authority
(FLRA, Authority) that adopted a new standard to determine
when a negotiated contract provision is an “appropriate
arrangement” under 5 U.S.C. § 7106(b)(3) and an agency head’s
disapproval thereof will therefore be set aside. Nat’l Treasury
Emps. Union, 65 F.L.R.A. 509 (2011). Because the Department
did not object to the new standard before the Authority—as
required under 5 U.S.C. § 7123(c)—we dismiss the
Department’s petition for lack of jurisdiction.
                               I.
    Negotiators for the Department’s Bureau of Public Debt
(BPD) and the National Treasury Employees Union (NTEU)
signed a new collective bargaining agreement on April 7, 2010.
The agreement was submitted to the agency head for review
pursuant to 5 U.S.C. § 7114(c), which provides in relevant part:
         (c)(1) An agreement between any agency and an
    exclusive representative shall be subject to approval by
    the head of the agency.
         (2) The head of the agency shall approve the
    agreement within 30 days from the date the agreement
    is executed if the agreement is in accordance with the
    provisions of this chapter and any other applicable law,
    rule, or regulation (unless the agency has granted an
    exception to the provision).
        (3) If the head of the agency does not approve or
    disapprove the agreement within the 30-day period, the
    agreement shall take effect and shall be binding on the
    agency and the exclusive representative subject to the
                                    3

    provisions of this chapter and any other applicable law,
    rule, or regulation.
The agency head disapproved the agreement on May 7, 2010,
finding that sixty-two of its provisions “d[id] not conform to
law, rule, or regulation.” Memorandum for Angela Jones,
Human Resource Officer, BPD, from Nicole A. Johnson,
Associate Chief Human Capital Officer for Human Capital
Strategic Management, U.S. Department of the Treasury (May
7, 2010) (JA 7). Before NTEU petitioned the FLRA for review
of the disapproval, the parties reduced the number of disputed
provisions to fifty-five, of which only three now remain.
    Each of the first two disputed provisions sets out a
performance-appraisal process for BPD employees who are
detailed or temporarily promoted for fewer than 120 days,
requiring, inter alia, that “performance expectations shall be
confirmed in writing by the temporary supervisor before the
employee can be held responsible for such performance
expectations.” NTEU, 65 F.L.R.A. at 509-10. The third
disputed provision requires that a BPD employee who abuses
emergency annual leave be “counseled concerning such abuse”
before he may be disciplined therefor. Id. at 515. The agency
head determined each of the provisions was nonnegotiable
because it interfered with a management right accorded a federal
agency under 5 U.S.C. § 7106(a)(2), namely the rights to direct
and to discipline employees.1 See Statement of Agency



    1
        Section 7106(a) provides in relevant part:
        (a) Subject to subsection (b) of this section, nothing in
    this chapter shall affect the authority of any management
    official of any agency—
            ...
            (2) in accordance with applicable laws—
                                  4

Position, Legal Analysis, NTEU, Case No. 0-NG-3076, at 3, 5
(FLRA July 6, 2010) (JA 125, 127) (performance-appraisal
provisions “not negotiable” because each “imposes a burden on
management’s right to direct employees under
§ 7106(a)(2)(A)”); id. at 7 (JA 129) (leave abuse provision “not
negotiable because it excessively interferes with management’s
right to discipline under § 7106(a)(2)(A)”).
     The Federal Service Labor-Management Relations Act
(Act), 5 U.S.C. §§ 7101 et seq., generally requires a federal
agency to bargain in good faith with a public employee union
over conditions of employment. See Ass’n of Civilian Techs. v.
FLRA, 534 F.3d 772, 776 (D.C. Cir. 2008); NTEU v. FLRA, 550
F.3d 1148, 1150 (D.C. Cir. 2008). Section 7106(a), however,
exempts certain “management rights”—such as the duties to
direct and discipline employees—from the agency’s duty to
bargain, making them ordinarily nonnegotiable. NTEU v. FLRA,
550 F.3d at 1150. Section 7106(b) nonetheless requires an
agency to bargain over a proposal that affects a management
right if the proposal constitutes an “ ‘appropriate arrangement[]
for employees adversely affected’ by the exercise of
management rights.” Nat’l Ass’n of Gov’t Emps., Inc. v. FLRA.,
179 F.3d 946, 948 (D.C. Cir. 1999) (quoting 5 U.S.C.
§ 7106(b)(3)).
    The FLRA uses a two-part test to determine whether a
negotiated provision is an “appropriate arrangement” subject to
bargaining notwithstanding it affects a protected management


              (A) to hire, assign, direct, layoff, and retain
         employees in the agency, or to suspend, remove,
         reduce in grade or pay, or take other disciplinary
         action against such employees;
              ....
5 U.S.C. § 7106(a)(2)(A).
                                   5

right. First, the Authority considers whether the provision is
“intended to be an ‘arrangement’ for employees adversely
affected by the exercise of a management right” guaranteed
under section 7106(a)(2); if so, it next evaluates whether the
arrangement is appropriate within the meaning of section
7106(b)(3)2 and therefore subject to bargaining. See NTEU v.
FLRA, 437 F.3d 1248, 1253 (D.C. Cir. 2006). Until now, the
Authority has made the second determination using an
“excessive interference” standard, i.e., finding a negotiated
provision to be inappropriate if it “ ‘excessively interferes’ with
management’s rights” as enumerated in section 7106(a). NTEU,
65 F.L.R.A. at 511 (quoting Am Fed’n of Gov’t Emps., Local
1770, 64 F.L.R.A. 953, 959 (2010)).3 In this case, however,

     2
         Section 7106(b)(3) provides:
        (b) Nothing in this section shall preclude any agency and
     any labor organization from negotiating—
             ...
            (3) appropriate arrangements for employees
           adversely affected by the exercise of any authority
           under this section by such management officials.
5 U.S.C. § 7106(b)(3) .
     3
     The Authority adopted the “excessive interference” in 1983 in
response to our decision in American Federation of Government
Employees, Local 2782 v. FLRA, 702 F.2d 1183 (D.C. Cir. 1983).
There, we rejected the Authority’s use of a “direct interference” test
(making inappropriate any arrangement that directly interferes with
a management right, regardless of the degree of interference) but we
observed: “To say that the word ‘appropriate’ (in the phrase
“appropriate arrangements” of paragraph (b)(3)) cannot bear this much
weight is not to say that it can bear no weight at all. Undoubtedly,
some arrangements may be inappropriate because they impinge upon
management prerogatives to an excessive degree.” 702 F.2d at 1188
(emphasis in original).
                                  6

relying on its recent decision in U.S. Environmental Protection
Agency, 65 F.L.R.A. 113 (2010), in which it replaced the
excessive interference standard with an “abrogation” standard
when reviewing arbitral awards,4 the Authority similarly
substituted the abrogation standard for review of an agency
head’s disapproval of a negotiated agreement. Under the
abrogation standard, the Authority “will find that a contractual
arrangement is an ‘appropriate’ arrangement within the meaning
of § 7106(b)(3) . . . —and that an agency head may not
disapprove such an arrangement on § 7106 grounds—unless the
arrangement abrogates, or waives, a management right,” that is,
unless it “ ‘precludes [the] agency from exercising’ the affected
management right.” 65 F.L.R.A. at 515 (quoting U.S. Dep’t of
Transp., Fed. Aviation Admin., 65 F.L.R.A. 171, 174 (2010)).
Finding that the three contested provisions “limit”
management’s ability to exercise its rights but “do not preclude”
their exercise altogether, two of the Authority’s members
concluded the provisions “are appropriate arrangements within
the meaning of § 7106(b)(3)” and are therefore “not contrary to
§ 7106(a)(2)(A) and (B)” nor subject to agency head
disapproval. Id. at 515. Accordingly, the Authority majority
ordered the Department to “rescind its disapproval of the
provisions.” Id. at 519. The third member dissented from the
majority’s adoption of the abrogation standard and would have
applied the excessive interference standard to invalidate the
provisions as inappropriate arrangements.5


     4
     Over twenty years ago, the Authority adopted the abrogation
standard in reviewing arbitral awards, see Dep’t of the Treasury, U.S.
Customs Serv., 37 F.L.R.A. 309, 313-14 (1990), but returned to the
excessive interference standard in 2002. See U.S. Dep’t of Justice,
Fed. Bureau of Prisons, 58 F.L.R.A. 109, 115 (2002).
     5
     The Authority majority premised its adoption of the abrogation
standard on the “plain wording” of the Act, contrasting the language
                                   7

     The Department filed a timely petition for review.
                                  II.
     Before reaching the merits of the Department’s arguments,
we must satisfy ourselves that we have subject-matter
jurisdiction. Chamber of Commerce v. EPA, 642 F.3d 192, 199
(D.C. Cir. 2011) (citing Steel Co. v. Citizens for a Better Env’t.,
523 U.S. 83 (1998)). Intervenor NTEU contests the court’s
jurisdiction on the ground the Department did not challenge the
Authority’s use of the abrogation standard before the Authority


of section 7114(c)(2)—which requires that an agency head approve a
negotiated agreement “if the agreement is in accordance with the
provisions of this chapter and any other applicable law, rule, or
regulation”—with that of 5 U.S.C. § 7117(c)—which authorizes a
union to appeal to the Authority an agency’s claim that “the duty to
bargain in good faith does not extend to any matter.” 65 F.L.R.A. at
512. It determined that the difference between the two italicized
phrases meant they were intended to bear different meanings so that
a proposal’s subject matter may be outside the duty to bargain (and
therefore subject to negotiability challenge under section 7117(c)) and
yet still be “in accordance with the provisions of this chapter and any
other applicable law, rule, or regulation” and therefore not subject to
disapproval by the agency head. Relying on its decision in U.S. EPA,
it then concluded a contract provision is not contrary to section
7106—and therefore may not be disapproved by the agency head on
that basis—unless it abrogates a management right accorded
thereunder. The dissenting member responded that a proposal that is
prohibited by section 7106(a) because it “impermissibly interferes
with a management right” may “properly be characterized as being
both outside the duty to bargain and not ‘in accordance with the
provisions of [the Act]’ ” so as to be “subject to agency head rejection
under § 7114(c)(2).” 65 F.L.R.A. at 521 (Member Beck dissenting)
(emphasis in original) (alteration added). The dissent also questioned
the logic of “applying a different test for negotiability at the stage of
agency head review than is applied at bargaining table.” Id. We
express no opinion on the merits of the abrogation standard.
                                8

itself as required by 5 U.S.C. § 7123(c). We agree with NTEU
that we lack subject matter jurisdiction under section 7123(c).
     Section 7123(c) provides: “No objection that has not been
urged before the Authority, or its designee, shall be considered
by the court, unless the failure or neglect to urge the objection
is excused because of extraordinary circumstances.” Where, as
here, the Authority raises an issue sua sponte in its decision,
section 7123(c) “precludes us from considering a pertinent
objection if the petitioner has not raised the objection before the
Authority in a request for reconsideration.” Nat’l Ass’n of Gov’t
Emps., Local R5-136 v. FLRA, 363 F.3d 468, 479 (D.C. Cir.
2004) (citing U.S. Dep’t of Commerce v. FLRA, 7 F.3d 243,
245-46 (D.C. Cir. 1993)); see 5 C.F.R. § 2429.17 (authorizing
motion for reconsideration). The Department acknowledges it
failed to move for reconsideration of the new abrogation
standard but argues the omission should be excused for three
reasons.
     First, the Department invokes the “futility” exception to
section 7123(c) which applies “when a request for
reconsideration would be ‘patently futile’ in light of recent
Authority decisions squarely addressing the issue in question.”
Local R5-136, 363 F.3d at 479. In particular, the Department
relies on the Authority’s decision in U.S. EPA in which “the
Authority decided to return to the ‘abrogation’ standard, which
had been used from 1990 to 2002, to decide cases involving the
review of arbitration decisions under Section 7122(a).” Reply
Br. at 19; see supra note 3. According to the Department, “in
EPA the Authority had already made up its mind that it would
apply ‘abrogation’ in the agency head review context, and no
motion for reconsideration would have budged the Authority
from that position.” Reply Br. 19; see also Pet’r’s Opening Br.
26 n.11. The Department overstates the Authority’s decision in
U.S. EPA. There, the Authority simply “note[d] that [its]
analysis call[ed] into question whether abrogation also should be
                               9

the standard applied in negotiability cases involving contract
provisions (where agreement has been reached and subsequently
disapproved).” U.S. EPA, 65 F.L.R.A. at 118 n.11 (citing U.S.
Dep’t of Justice, Bureau of Prisons, 57 F.L.R.A. 158, 162
(2001)). Because U.S. EPA involved review of an arbitration
and not of an agency head disapproval, the Authority expressly
“le[ft] [the question] for another day.” Id. Thus, U.S. EPA did
not, as the Department claims, “squarely address[]” what
standard applies to review of an agency head disapproval or
indicate it had “already made up its mind” on the issue. Pet’r’s
Opening Br. 26 n.11; Reply Br. 19. Given the different contexts
and the Authority’s tentative tone in U.S. EPA, we cannot
conclude it would have been patently futile for the Department
to file the required reconsideration motion here. Cf. W & M
Props. of Conn., Inc. v. NLRB, 514 F.3d 1341, 1346 (D.C. Cir.
2008) (to establish patent futility as “extraordinary
circumstance[]” excusing failure to move for reconsideration
under analogous provision of National Labor Relations Act,
petitioner must “show that a motion for reconsideration was
‘clearly doomed’ by the agency’s rejection of identical
arguments” (emphasis added)); NLRB v. FLRA, 2 F.3d 1190,
1196 (D.C. Cir. 1993) (reconsideration motion challenging
Authority’s determination that proposal was arrangement would
have been futile where it “seem[ed] clear that the FLRA would
have rejected” it given Authority had “repeatedly held
negotiable” similar proposals, “including two proposals that
[court] view[ed] as indistinguishable” from proposal at issue
(emphasis added)); U.S. Dep’t of the Interior Minerals Mgmt.
Serv. v. FLRA, 969 F.2d 1158, 1161 (D.C. Cir. 1992)
(reconsideration motion disputing proposal was arrangement
“would have been futile given that the Authority had just found
an identical proposal negotiable under § 7106(b)(3)” (emphasis
added)).
   The Department also argues that moving for reconsideration
would have been futile in light of the “vigorous” dissent, which
                               10

argued the Department’s case for it—albeit to no avail. Reply
Br. 20. The Department acknowledges that we considered and
rejected the same argument in Local R5-136, 363 F.3d at 479-
80; it attempts to distinguish this case, however, based on its
“facts,” asserting that “[f]utility is a case-by-case matter.”
Reply Br. 20 n.11, 21. According to the Department, Local R5-
136 “made the point that a dissenting opinion does not
automatically satisfy Section 7123(c)’s requirements because a
party must make clear to the Authority what its own arguments
are” but, the Department argues, such “guidance” is inapplicable
here because “the dissent raised all of the issues that the agency
could have raised.” Reply Br. 20 n.11 (emphasis in original).
In Local R5-136, however, we rejected the petitioners’ futility
claim not only because it “presuppose[d] that a party’s position
is always coterminous with a dissenting opinion” but also
because it “appear[ed] to assume that the persuasive power of a
party’s argument can never exceed the quality of a dissenting
opinion,” Local R5-136, 363 F.3d at 479 (emphases added)—a
consideration that applies whether or not the substance of the
party’s arguments would have mirrored the dissent’s. Because
the Department made no objection to the new standard before
the Authority, we cannot know how persuasive its hypothetical
arguments might have been. Moreover, in Local R5-136, based
on both the need to hear from the parties themselves and our
precedent interpreting “virtually identical” language in the
National Labor Relations Act, we did more than simply offer
“guidance”—we established a jurisdictional prerequisite, stating:
“Section 7123(c) requires a party to present its own views to the
Authority in order to preserve a claim for judicial review.” Id.
(citing Contractors’ Labor Pool, Inc. v. NLRB, 323 F.3d 1051,
1061 (D.C. Cir. 2003) (interpreting 29 U.S.C. § 160(e))
(emphasis added). Because the Department ignored this
jurisdictional requirement, the Authority was left to make its
decision and articulate its rationale without the views of either
the Department or NTEU. For these reasons, here, as in Local
                                  11

R5-136, “the dissent below did not excuse the [agency’s] failure
to raise its objections in a request for reconsideration.” Id. at
480.6
     Finally, we reject the Department’s claim of “extraordinary
circumstance” based on its assertions that (1) the abrogation
standard will inevitably come up for review in “the very next
agency head review case” and (2) “delay in resolving the issue
will only cause confusion and uncertainty.” Reply Br. 22. As
an initial matter, the cited circumstances seem anything but
“extraordinary”—they are, we think, a commonplace of
litigation. Moreover, that the issue will arise again soon—and
likely be resolved when it does—argues against the need for an
irregular, accelerated resolution in this proceeding. Any
“confusion and uncertainty” resulting from our adherence to
section 7123(c)’s jurisdictional requirement will be speedily
dispelled should the issue again arise in “the very next agency
head review case.”
     Because the Department failed to move for reconsideration
objecting to the Authority’s use of the abrogation standard to
review the agency head’s disapproval of the negotiated
agreement, we dismiss the Department’s petition for lack of
subject matter jurisdiction pursuant to 5 U.S.C. § 7123(c).
                                                         So ordered.




     6
       The Department asserts that the FLRA’s “failure to challenge the
Court’s jurisdiction here reflects the Authority’s apparent agreement
with the agency that a motion for reconsideration would have been
futile.” Reply Br. 21. We decline to draw so speculative an inference
from the Authority’s silence; in fact, at oral argument counsel for the
FLRA assured the court its silence manifested no such agreement. In
any event, the Authority can no more divine how it might have reacted
to arguments not made than can the party that did not make them.
