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Washington, D.C.—In a precedent-setting decision, the National Treasury Employees Union (NTEU) has scaled back the ability of a federal agency to unilaterally reject potential contract language dealing with mid-term bargaining rights.

The decision by the Federal Labor Relations Authority (FLRA) says that an agency is required to bargain over a proposal that would define potential mid-term bargaining issues by limiting the availability of the ‘covered by’ defense.

“In deciding this case, the FLRA had made it clear that agencies must bargain in good faith when a union brings a proposal to the table that outlines mid-term bargaining rights and issues,” said NTEU President Colleen M. Kelley. “This is a positive step forward in helping both sides negotiate term agreements that are flexible and capable of dealing with changing circumstances during the life of the contract.”

The case emerged from contract negotiations between NTEU and the U.S. Customs Service—now part of U.S. Customs and Border Protection. NTEU proposed adding language to the contract which stated that a subject would be appropriate for mid-term bargaining unless it is clear that the matter was specifically addressed in the collective bargaining agreement. The agency refused to bargain over this proposal, claiming that it was not negotiable. NTEU challenged that determination, and after the FLRA initially sided with the agency, the union took the case to federal court.

In its decision, the court criticized the FLRA for failing to address relevant precedent and its own case law and sent the case back to the Authority. Last week’s decision by the FLRA overturns its earlier decision and likens NTEU’s proposal to reopener clauses in private sector contracts.

Throughout the legal proceedings, the agency claimed that NTEU’s initial proposal improperly sought to limit what is known as the ‘covered-by’ defense. Under that legal doctrine, a party is not required to bargain over a matter that is ‘expressly contained’ in an agreement or is plainly an aspect of a subject expressly covered by the agreement.

“In bringing its initial proposal, NTEU simply wanted to build language into the contract that defined mid-term bargaining rights and obligations,” President Kelley said. “This decision ensures that such proposals must be bargained in good faith. Agencies do not have to accept the proposal, but they can no longer dismiss it out of hand.”

Finding a duty to bargain, the FLRA decision says, “is likely to encourage parties to reach agreements that are more comprehensive, of greater duration, and clearer.” The FLRA added: “We find that the proposals at issue are similar to reopener proposals, which both the Authority and the National Labor Relations Board have found to be mandatory subjects of bargaining.”

Given the importance of the decision, President Kelley made clear the union’s determination to take whatever legal steps are necessary to defend it in the event of a further appeal.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.