Judge Janice Rogers Brown of the U.S. Court of Appeals for the D.C. Circuit called a fight over whether pay raises for SEC employees were implemented too quickly an odd controversy.
In the opening of her opinion, published today, Brown wrote, “This is the sort of dispute that could only arise between public employees and a governmental agency.” The case amounts to a tiff among the Securities and Exchange Commission, the National Treasury Employees Union and the Federal Labor Relations Authority. Click here for a copy of the opinion.
As background, the SEC was having trouble keeping lawyers, accountants and examiners on staff, and so the agency asked Congress for the authority to adjust pay rates without being tethered to the General Schedule, the federal government’s pay scale.
In 2002, Congress passed the Investor and Capital Markets Fee Relief Act. The union and the SEC—both supported the legislation—began negotiations. But the talks reached an impasse. In May 2002, the SEC unilaterally imposed a new pay system.
Before the bargaining process ended, the SEC terminated so-called “WIGIs”—automatic annual within-grade increases. The union filed two unfair labor practice claims against the SEC, and an administrative law judge ordered retroactive pay raises for employees who were entitled to a WIGI—on top of the new raises the SEC obtained through congressional legislation.
Samuel Fornstein, assistant general counsel for the SEC, argued for the agency in the D.C. Circuit. The SEC was concerned about, among other things, the “undue windfall”—according to the D.C. Circuit—for the employees entitled to back pay in addition to the new raise. The agency also maintained it was necessary to the functioning of the agency to unilaterally implement the pay raises.
“As the SEC fails to appreciate, there is a difference between what an agency finds expedient and what is necessitated by an “overriding exigency,” Brown wrote in the opinion, which was joined by Judges Douglas Ginsburg and Brett Kavanaugh. The court sided against the SEC.
Kavanaugh wrote a separate opinion to slam home the point that the court has authority to hear a dispute between two independent agencies in the executive branch.
James Blanford argued for the Federal Labor Relations Authority, and Barbara Sheehy represented the National Treasury Employees Union as an intervenor.