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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 5, 2009 Decided June 12, 2009 No. 08-1256 S

ECURITIESAND

XCHANGE

OMMISSION

ETITIONER

v.F

EDERAL

ABOR

ELATIONS

UTHORITY

, R

ESPONDENT

ATIONAL

REASURY

MPLOYEES

NION

, I

NTERVENOR

Consolidated with 08-1294

On Petition for Review and Cross-Application for Enforcement of aDecision and Order of the Federal Labor Relations Authority

Samuel M. Forstein

, Assistant General Counsel, Securities &Exchange Commission, argued the cause for petitioner. With him on the briefs were

Andrew N. Vollmer

, Acting General Counsel, and

Rufus Beatty

, Senior Special Counsel.

Richard M. Humes

, Associate GeneralCounsel, entered an appearance.

James F. Blandford

, Attorney, Federal Labor Relations Authority,argued the cause for respondent. With him on the brief were

Rosa M. Koppel

, Solicitor, and

William R. Tobey

, Deputy Solicitor.

Barbara A. Sheehy

argued the cause for intervenor. With her on the brief were

Gregory O'Duden

and

Elaine Kaplan

Barbara A. Atkin

entered an appearance.Before: G

INSBURG

, B

ROWN

and K

AVANAUGH

Circuit Judges

.Opinion for the Court filed by

Circuit Judge

ROWN

.Concurring opinion filed by

Circuit Judge

AVANAUGH

ROWN

Circuit Judge

: This is the sort of dispute that could onlyarise between public employees and a governmental agency. TheSecurities and Exchange Commission (SEC or Agency) was eager to payits employees more money. The National Treasury Employees Union(NTEU or Union) complains the SEC implemented the raises too quickly.The Federal Labor Relations Authority (FLRA or Authority) agrees withthe Union and has ordered the SEC to provide back pay to atone for theaffront. Counterintuitive though it may be, we agree the FLRA has properly resolved this odd controversy so we deny the petition for reviewand grant the Authority’s cross-application for enforcement.I.This is what happened. After years of struggling with high attritionfrom the ranks of its professional employees (attorneys, accountants, andexaminers), the SEC began focusing on pay disparities between itself andother financial regulatory agencies, such as the Federal Deposit InsuranceCorporation, the Office of the Comptroller of the Currency, and theOffice of Thrift Supervision. Since 1989, these other agencies had beenauthorized to determine their own compensation and benefit levelswithout regard to the General Schedule, which continued to define paygrades for SEC employees. Although the SEC took advantage of asmany compensation and benefit flexibilities as existing law allowed,including special pay rates for its most sought-after employees, by 2001 —with its workload increasing dramatically and staffing shortagesreaching crisis levels—the Agency sought legislative relief. Congress