In the first negotiability appeal,AFGE, Local 1547 (Local 1547),^[1] the Authority ordered the Agency to bargain over two Union proposals to give civilian employees represented by the Union              (unit employees) access to, respectively, the commissary and the exchange – including the exchange’s satellite stores, such as a “Shoppette” – on Luke Air Force Base (the base).^[2] When they were unable to reach agreement during subsequent bargaining, the Panel directed that the parties participate in mediation-arbitration, which resulted in a Panel Member (the arbitrator) directing the parties to include in their collective-bargaining agreement a provision that grants unit employees full access to the Shoppette. On agency-head review under § 7114(c) of the Federal Service Labor-Management Relations Statute (the Statute), the Agency head disapproved the provision. The Union then filed this (second) negotiability appeal under § 7105(a)(2)(E) of the Statute. The appeal presents us with two substantive questions.

                The second question is whether the Agency has shown that the provision is contrary to 10 U.S.C. §§ 101, 113, 2481(a)-(b), or 2484(c)(2). Because the Agency has not demonstrated that those sections either give the Secretary of Defense “sole and exclusive discretion” to determine who has access to the Shoppette,^[3] or prohibit the Agency from granting civilian employees such access, the answer is no.

The Shoppette, part of the base exchange, sells food, gas, and certain health and household items. Unit employees currently have access to the Shoppette only to purchase food that can be consumed on the premises. These unit employees work varying shifts during the week and on weekends, and many have limited break periods. And they often have to drive off of the base during breaks in their shifts to “satisfy their shopping needs,”^[4] which can contribute to traffic congestion on the base. 

 

The Union proposed to grant unit employees broad access to base commissary and exchange facilities, including the Shoppette. When the Agency declared the Union’s proposals outside the duty to bargain, the Union filed a petition for review with the Authority and, in Local 1547,^[5] the Authority found that the Agency was obligated to bargain over the following two proposals:

 

 

All . . . unit employees shall be granted access to and use of the . . . [e]xchange and all of its satellite stores (e.g., Shoppette, gas station, etc.), except for purchase of articles of uniform items.^[6] 

                The Authority concluded that the proposals concerned unit employees’ conditions of employment by applying the two-part test set forth nearly thirty years ago in Antilles Consolidated Education Ass’n.^[7] The Authority found that: (1) the proposals pertained to unit employees; and (2) the record established a direct connection between the proposals and unit employees’ work situation or employment relationship.^[8] Based on long-standing precedent, the Authority rejected the Agency’s arguments that the required connection was not established because: (1) access to the base facilities was only a matter of employee convenience;^[9] and (2) access to facilities could occur during nonduty hours.^[10] 

 

                The Authority concluded also that the statutory provisions on which the Agency relied – 10 U.S.C. §§ 2481 and 2482, 10 U.S.C. §§ 1061 to 1065 – neither expressly granted unit employees access to commissaries and exchanges nor prohibited granting such access.^[11] The Authority noted that “the Agency [did] not contend that the proposals [were] contrary to the provisions of Title 10; the Agency merely assert[ed] that nothing in Title 10 grants unit employees the privileges that the proposals request[ed].”^[12] Finding that the Agency had discretion to bargain over the proposals, the Authority found that the proposals were within the duty to bargain.^[13]

 

 

During arbitration, the Agencyconceded that “there is no statutory bar”^[14] to granting unit employees access to the Shoppette and acknowledged that, under Department of Defense Instruction 1330.21                   (the DOD Instruction), all civilian employees working on base have access to food and beverages sold at any exchange facility, if consumed on base. But the Agency argued that, with regard to the Shoppette, it had authority to extend access to unit employees “solely to the ‘heat and eat’ section.”^[15] The Agency’s proposal before the arbitrator was to permit “unit employees to purchase ‘at [the] . . . Shoppette . . . food and beverages of the heat and eat category.’”^[16]  

The arbitrator found that the DOD Instruction permits the Secretary of the Air Force to expand the list of authorized patrons of exchanges. The arbitrator acknowledged the Agency’s claim that access to commissaries and exchanges provides a benefit to military personnel that serves as a recruitment and retention tool. But she “fail[ed] to see how allowing civilian employees access to a gas station convenience store measurably weakens that benefit.”^[17] 

 

As to the latter point, the arbitrator noted that: (1) civilian employees have access to various eating establishments on base, including the “heat and eat” part of the Shoppette;^[18] (2) civilian employees who work in exchange facilities are authorized to shop in them, including the Shoppette; and (3) the prices at the Shoppette’s gas station are not cheaper than those outside the base. She found, as a result, that military personnel do not have exclusive access to the Shoppette and that access to the gas station provides them no “benefit other than convenience.”^[19] She noted that access to the Shoppette would “significantly benefit” unit employees, who “due to the closing of many gates after September 11, 2001, have been confronted with more traffic and, therefore, more travel time to leave the base,”^[20] and who are not able to buy on base such necessary items as “health items [and] feminine care products.”^[21] 

 

The arbitrator found it “illogical that it is acceptable to have civilians enter a store to buy hot dogs, but damaging to morale if they are allowed to purchase aspirin, batteries, or tissues.”^[22] Accordingly, the arbitrator concluded thatadopting the Union’s proposal for full access to the Shoppette was a reasonable compromise between the Union’s initial proposals    (found negotiable in Local 1547) and the Agency’s proposal for access only to food that is eaten on site.^[23] She directed the parties to adopt the provision at issue here. 

 

                The Agency head disapproved the provision, without elaboration, as contrary to “law, rule[,] or regulation.”^[24] The Union then filed with the Authority a petition for review (the Union’s petition) of the disapproval, resulting in the case now before us. The Agency filed a statement of position (the Agency’s statement), the Union filed a response (the Union’s response), and the Agency filed a reply (the Agency’s reply). 

 

 

 

                In Local 1547, the Authority concluded that the Union’s proposals – broader than the provision now before us – concerned conditions of employment. The Authority cited longstanding precedent that, in widely varying circumstances, providing unit employees access to food services at the workplace,^[30] as well as civilian employees access to military exchange and         exchange-related facilities,^[31] including access during    non-duty hours,^[32] concerns employees’ conditions of employment. The Authority cited judicial precedent to the same effect.^[33]

 

 

 

                The Agency argues that the provision is contrary to various sections of Title 10 of the U.S. Code because: (1) those sections give the Secretary of Defense “sole and exclusive discretion” to determine who has access to exchanges;^[34] and (2) the provision is inconsistent with the cited sections of Title 10.

 

                 And the Agency contends that its interpretations of Title 10 are “entitled to deference.”^[35] While the Agency does not specify what level of deference the Authority should give those interpretations, we find that deference is warranted to the extent that the interpretations have the “power to persuade.”^[36] In this regard, agency interpretations that are promulgated solely in the course of litigation receive the level of deference set forth in Skidmore v. Swift (Skidmore),^[37] under which the deference due an agency’s statutory interpretation “will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”^[38] 

 

                Here, the Agency provides no evidence that its interpretations of the cited sections of Title 10 were promulgated outside the course of litigation. And we note that the Agency head’s disapproval of the provision does not contain those interpretations, or even cite any sections of Title 10.^[39] As a result, the (higher) level of deference accorded under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. (Chevron),^[40] does not apply. We note that Chevron deference is due only if an agency reached its interpretations “in a     notice-and-comment rulemaking, a formal agency adjudication, or in some other procedure meeting the prerequisites for Chevron deference.”^[41] And Chevron deference is not warranted in cases involving “agency litigating positions that are wholly unsupported by regulations, rulings, or administrative practice”^[42] – in other words, “post hoc interpretations contained in agency briefs.”^[43] Thus, we accord Skidmore deference.^[44] To the extent that Authority decisions hold or imply to the contrary, we will no longer follow them.^[45] 

 

                In addition, we address only the Agency’s claims that cite specific sections of Title 10 and provide supporting arguments. In this regard, § 2424.24(c)(2) of the Authority’s Regulations requires an agency to include, in its statement of position, a “specific citation to any law” that the agency relies on.^[46] Thus, in its statement of position, “an agency has the burden of providing a record to support its assertion” that a provision is contrary to law.^[47] A “blanket assertion” that a provision conflicts with an entire statute “is insufficient to meet [an agency’s] regulatory burden to demonstrate how particular sections of the provision are contrary to specific terms of” the cited statute.^[48] 

 

                Consistent with this regulation, we do not address the Agency’s citations to “Chapter 147” of Title 10^[49] and “10 U.S.C. § 2481 et seq.” because they lack the required specificity under the regulations.^[50] But we address the Agency’s arguments that, under specific sections of Title 10: (1) it has sole and exclusive discretion to determine access to exchanges;^[51] and (2) the provision conflicts with those specific sections.^[52] In this regard, the Agency cites 10 U.S.C. §§ 101, 113, 2481, and 2482(c)(2).^[53] In citing § 2482(c)(2) – which deals with decisions to close commissaries^[54] – the Agency actually quotes from § 2484(c)(2).^[55] As it is clear that the Agency intended to cite § 2484(c)(2), we include it among the provisions that we address. And as § 2484(c)(2) references, and is understood only in the context of, § 2484(c)(1), we also address § 2484(c)(1).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                The Agency contends that the Secretary of Defense has “sole and exclusive discretion” to determine who has access to the exchanges, and that, as a result, the Secretary’s authority is not subject to collective bargaining.^[60] 

 

                Where law or applicable regulation gives an agency “sole and exclusive discretion” over a matter, the Authority has found that it would be contrary to law to require that discretion to be exercised through collective bargaining.^[61] In resolving an agency’s claim of sole and exclusive discretion, the Authority examines the plain wording and legislative history of the statute or regulation at issue.^[62] The Authority has found that laws that give agency officials the authority to make certain determinations “without regard to the provisions of other laws” and “notwithstanding any other provision of law” demonstrate sole and exclusive discretion.^[63] 

                The Agency did not claim in Local 1547 that the Secretary of Defense has sole and exclusive discretion to determine access to commissaries and exchanges. And before the arbitrator, the Agency expressly made a contrary claim: that the Secretary of the Air Force had power to grant access to the Shoppette.^[64] Although the Agency’s latter claim is not before us, the former has scant, if any, support. In this regard, § 113(b) gives the Secretary of Defense “authority, direction, and control over the Department of Defense,”^[65] and § 101(a)(6) defines “department” as various entities “under the control or supervision” of the Secretary of Defense.^[66] Section 2481(a) provides that the Secretary of Defense “shall operate, in the manner provided by” Title 10, Chapter 147 and other provisions of law, a system of exchanges,^[67] and § 2481(b) discusses the purpose of the exchange system.^[68] 

 

                The Agency neither cites any judicial or Authority precedent regarding sole and exclusive discretion, nor explains how the cited sections of Title 10 are similar to statutes that have been found to provide such discretion. And there is nothing in the plain wording of these sections comparable to the wording, noted above, found to provide sole and exclusive discretion. Instead, these sections, individually and as a whole, provide the Secretary with power to operate an exchange system, in concert with laudable statutory goals. Further, the only legislative history the Agency cites is a House of Representatives subcommittee report (the subcommittee report) that, according to the Agency, provides that the exchange system was intended to “improve [military-service members’] purchasing power”^[69] and to be “maintained for the morale and vital benefit” of those members.^[70] We have no doubt that the exchange system is intended for these purposes and agree that they are important. But nothing in this report addresses whether such benefits may be extended to others. And it certainly does not address the situation here, involving only an incremental extension (from a part of the Shoppette to the whole).   

 

                As for the Agency’s reliance on § 2484(c)(2), that section states, as relevant here, that: (1) the Secretary of Defense may authorize the sale of certain merchandise in commissaries;^[71] and (2) “the Department of Defense military resale system shall continue to maintain the exclusive right to operate convenience stores, shopettes, and troop stores, including such stores established to support contingency operations.”^[72] But the commissary system addressed by § 2484 is “separate” from the exchange system at issue here.^[73] Thus, it is unclear how § 2484(c)(2) is relevant. Further, the plain wording of § 2484(c)(2) does not suggest that it is intended to provide sole and exclusive discretion. To the contrary, this section is about the sale of specific merchandise, not access to facilities selling it. And the Agency has cited no legislative history supporting its claim.

                As noted above, the deference we provide the Agency’s interpretations of these statutory sections under Skidmore “depend[s] upon the thoroughness evident in its consideration, the validity of its reasoning, [and] its consistency with earlier and later pronouncements.”^[74] The foregoing demonstrates that the Agency’s interpretations do not satisfy these requirements. As such, we do not defer to the Agency’s interpretations and conclude that the Secretary does not have sole and exclusive discretion to determine access to the Shoppette under 10 U.S.C. §§ 101, 113, 2481(a)-(b), or 2484(c)(2). 

 

                If an agency has discretion to take an action, and that discretion is not sole and exclusive, then the Statute requires the agency to bargain over that action, unless bargaining is otherwise unlawful.^[75] The Agency disagrees, relying on Department of the Navy, Military Sealift Command v. FLRA (Military Sealift Command).^[76] There, the court held that “Congress did not intend to subjectthe Navy’s pay practices” to collective bargaining but found it unnecessary to decide whether the test urged by the Authority – that matters subject to an agency’s discretion are within the duty to bargain subject to such exceptions as sole and exclusive discretion – could have “utility in defining the scope of bargaining over agency discretion outside the area of pay and pay practices.”^[77] Thus, Military Sealift Command does not undermine our reliance on “discretion” precedent, both judicial and Authority.^[78] 

 

                In addition, subsequent to Military Sealift Command, the Supreme Court held in Fort Stewart Schools v. FLRA (Fort Stewart)^[79] that pay matters can constitute conditions of employment; the Authority has held that the decision in Military Sealift Command is no longer viable in light of the Supreme Court’s decision in Fort Stewart.^[80] As for the dissent’s reliance on            U.S. Dep’t of the Navy, Naval Undersea Warfare Center Division, Newport, Rhode Island v. FLRA,^[81]the court there disagreed with the Authority’s interpretation of a statute. But that disagreement proves nothing here, which involves interpretation of a different statute in a different context using different legal principles.

 

 

                The Agency argues that the provision is contrary to 10 U.S.C. §§ 101, 113, 2481(a)-(b), and 2484(c)(2).^[82] According to the Agency, those statutory sections set forth categories of individuals who are authorized to use exchanges, and “[t]o impose [a] requirement to extend [e]xchange privileges to” individuals who are not listed would be contrary to law.^[83] Citing the subcommittee report, the Agency claims that the exchange system is maintained “for the morale and vital benefit of the military service personnel”^[84] and that “[a]ny expansion of patron privileges without the express authority granted by the Secretary [of Defense] is contrary to law.”^[85] 

 

                The wording of the cited provisions is set forth above. They define various terms, including “department” ^[86] as used with respect to the Department of Defense, and provide that the Secretary has authority to operate commissary and exchange systems. They also provide that the systems “are intended to enhance the quality of life of members of the uniformed services, retired members, and dependents of such members, and to support military readiness, recruitment, and retention.”^[87] As for 10 U.S.C. § 2484(c)(2) (and as discussed previously), that provision addresses the commissary system, not the separate exchange system, and is of questionable, if any, relevance. 

 

                None of these provisions addresses civilian access to exchanges. And the Agency does not provide any reasoning, or cite any precedent, to support its contrary interpretations. We have no doubt either that exchanges are intended to benefit the military community or that those benefits support readiness, recruitment, and retention. But this does not resolve the issue of whether extending those benefits to unit employees is contrary to law. And nothing in the wording of the provisions suggests that the incremental extension of benefits encompassed by the provision (as stated by the arbitrator, from “hot dogs” to “aspirin, batteries, [and] tissues”^[88]) is unlawful. 

 

                We note that, under the DOD Instruction, the Agency has already extended some benefits to civilians, including unit employees.^[89] In fact, the DOD Instruction permits numerous non-military persons access to exchange facilities. As noted by the arbitrator, civilian employees of the exchanges themselves have unlimited access to the exchanges (with the exception of uniform items and tobacco).^[90] So do civilian employees working for the Red Cross.^[91] And “contract surgeons” have “unlimited exchange privileges” during the periods of their contracts.^[92]

                In addition, the Agency’s position on this matter has been far from consistent. The Agency did not claim in Local 1547 that the proposals were “contrary to the provisions of Title 10; the Agency merely assert[ed] that nothing in Title 10 grants unit employees the privileges that the proposal[] request[ed].”^[93] The Agency also did not make such a claim before the arbitrator; in fact, as set forth above, it argued that the Secretary of the Air Force had discretion to grant such access.^[94] And the Authority previously has rejected similar arguments.^[95] 

 

                For these reasons, the Agency has not demonstrated that its interpretations have the “power to persuade” within the meaning of Skidmore. Accordingly, we conclude that the Agency has not demonstrated that the provision is inconsistent with 10 U.S.C. §§ 101, 113, 2481(a)-(b), or 2484(c)(2). And as the Agency has not demonstrated that the provision is contrary to law on any other basis, we order the Agency to rescind its disapproval of the provision. We note that, in reaching this conclusion, we have not relied on the Agency’s reply, which was untimely filed. In this regard, the Agency requested that the time limit for filing the reply be waived because (according to the Agency) its designee never received the Union’s response. But the Union’s supplemental submission, for which the Union requested and was granted permission to file, establishes that the designee did receive the Union’s response on May 14, 2012. Therefore, the Agency’s request for waiver is denied. As the Agency was required to file its reply by May 29,^[96] but did not file it until June 13, we do not consider the reply. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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