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Fraternal Order of Police v. Board of Governors of the Federal Reserve System

July 27, 2005

FRATERNAL ORDER OF POLICE, ET AL., PLAINTIFFS,
v.
THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, ET AL., DEFENDANTS.



The opinion of the court was delivered by: William B. Bryant Senior United States District Judge

MEMORANDUM

This matter is before the Court on the parties' cross-motions for summary judgment. Upon consideration of the parties' submissions and the entire record herein, and for the reasons stated below, Defendants' Motion for Summary Judgment is granted.

I. Background

Plaintiffs, the Fraternal Order of Police, Lodge 45/119, Federal Reserve Protective Officers' Association ("FOP")*fn1 and Derrick H. Piercy,*fn2 filed this suit under the Administrative Procedure Act ("APA"), 5 U.S.C. § 551 et. seq., against the Board of Governors of the Federal Reserve System (the "Board"), Alan Greenspan, the Special Labor Relations Panel of the Federal Reserve System and Laurence H. Meyer,*fn3 seeking a declaration that the Board acted ultra vires by enacting the "Policy on Labor Relations for the Federal Reserve Banks,"*fn4 12 C.F.R. Part 269 (the "Labor Relations Policy" or "Policy"), which governs the recognition of labor organizations and related labor relations matters at the Federal Reserve Banks. In addition, Plaintiffs seek a declaration that the Board exceeded its authority and acted arbitrarily and capriciously by mandating the use of a commercial arbitration service and the payment of associated fees in order to exercise the procedures set forth in the Labor Relations Policy. Finally, Plaintiffs challenge the Policy's cost-sharing provisions and the make-up of the decisionmaking panels on due process grounds. Plaintiffs seek declaratory relief and reimbursement of the arbitration fees paid pursuant to the Policy.

Previously, this Court denied Defendants' Motion to Dismiss, largely because Defendants' arguments were more appropriate for the summary judgment stage. The matter is now before the Court on the parties' cross-motions for summary judgment. The Court adopts the facts set forth in its Memorandum of August 2, 2002 which fully describe the circumstances leading to Plaintiffs' Complaint. Currently at issue is whether the Board exceeded its statutory mandate by promulgating regulations governing labor relations, whether the cost-sharing provisions of the Labor Relations Policy are lawful, and whether the Plaintiffs were deprived of any due process rights.

II. The Policy

The Labor Relations Policy at issue succeeded and revised the "Policy on Unionization and Collective Bargaining for the Federal Reserve Banks" ("1969 Policy"), which the Board adopted in 1969. See Board of Directors of the Federal Reserve System, Policy on Unionization and Collective Bargaining for the Federal Reserve Banks, May 9, 1969. The Board adopted the 1969 Policy in recognition of a gap in statutory coverage regarding unionization for Federal Reserve employees. See id. The Board issued the current Policy in its final form on July 11, 1983, after notice and comment, "[p]ursuant to its statutory authority [under the Federal Reserve Act, 12 U.S.C. §§ 221-522 (2001)] to exercise general supervision over the twelve regional Federal Reserve Banks that are part of the Federal Reserve System." Final Policy Statements, Policy on Labor Relations for the Federal Reserve Banks; and Policy on Labor Relations for the Board of Governors of the Federal Reserve System, 48 Fed. Reg. 32,330, 32,330-32,331 (July 15, 1983).

The Labor Relations Policy creates an infrastructure and delineates certain procedures for employee organizing, collective bargaining and the resolution of labor disputes. For example, the Policy (1) creates a Special Tribunal to oversee the representation election process and to resolve any issues that arise, (2) defines the procedures by which employees or a labor organization can request a representation election, (3) describes the representation election process, (4) outlines measures for resolving post-election objections, and (5) creates a Federal Reserve System Labor Relations Panel to receive claims of unfair labor practices. See 12 C.F.R. pt. 269.

The Policy provides that once a labor organization presents a request for a representation election by at least thirty (30) percent of the employees in a proposed bargaining unit, the labor organization and the Reserve Bank shall impanel a Special Tribunal. 12 C.F.R. § 269.4(a), (b). The Special Tribunal is comprised of a representative from the labor organization, a representative from the Reserve Bank, and a neutral arbitrator chosen by the labor organization and the Reserve Bank from a list of professional arbitrators provided by the American Arbitration Association ("AAA"),*fn5 12 C.F.R. § 269.4(a). The professional arbitrator serves as the chairperson of the Special Tribunal. Id.

If a Reserve Bank and labor organization are unable to agree on the appropriate bargaining unit, the Special Tribunal is authorized to investigate facts, conduct hearings and rule on the propriety of the proposed bargaining unit. 12 C.F.R. § 269.4(b). The expenses for this process, including the fees of the AAA and the Special Tribunal's arbitrator-chairperson are borne equally by the Reserve Bank and the labor organization. Id.

Once an appropriate bargaining unit has been determined, the Special Tribunal must order a representation election. 12 C.F.R. § 269.5(a). The election is held under the auspices of the AAA, subject to the AAA's election rules and regulations. 12 C.F.R. § 269.5(b). The fees charged by the AAA for its election services are borne equally by the Reserve Bank and the labor organization. Id.

The Special Tribunal also hears and decides any post-election objections. 12 C.F.R. § 269.5(f). The Policy provides that a party may appeal the Special Tribunal's ruling on objections to the Federal Reserve System Labor Relations Panel (the "Panel"), id., which is comprised of three members: one member of the Board, who serves as chairperson, and two public members selected by the Board of Governors. 12 C.F.R. § 269.11. The Policy does not indicate how costs of post-election objections and appeals are to be paid.

Aside from post-election appeals, the Panel is entrusted with resolving unfair labor practice charges. 12 C.F.R. § 269.6; 12 C.F.R pt. 269b. The Panel may refer an unfair labor practice charge to the AAA for investigation and determination of whether the charging party has established a prima facie case. 12 C.F.R. § 269b.210. The Panel normally bears the costs associated with investigating and determining an unfair labor practice charge; however, costs may be assessed to a party in instances where a "clearly spurious charge has been filed or where the filing of a charge was necessary to redress the respondent's flagrant misconduct." 12 C.F.R. § 269b.230.

Finally, the Policy prescribes procedures for dealing with employee grievances, 12 C.F.R. ยง 269.8, and provides for the assistance of an independent mediator upon request in the event of an impasse in negotiations for ...


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