FMCS Can Now Decline to Send an Arbitrator: What the New Screening Rule Means for Union Grievances

Bottom line

Until this month, the regulation said a request for an arbitration panel, “whether joint or unilateral, will be honored” ^[1]. Since August 4 it no longer says that. The Federal Mediation and Conciliation Service now lets its Office of Arbitration screen a request first, and then issue the panel, decline it or hold it in abeyance ^[1]. For unions at agencies excluded from collective bargaining in 2025, the arbitrator who used to arrive on request may not.

What happened: one sentence removed, a screening step added

FMCS published the change as an interim final rule, FR Doc. 2026-15798, amending 29 CFR part 1404 ^[1]. It took effect on publication. Comments are due September 3, after which FMCS may revise, withdraw or confirm it ^[1].

The old text. Section 1404.9(b) said that a panel request, joint or unilateral, “will be honored,” while adding that FMCS took no position on the contract or on arbitrability by issuing one ^[1]. Section 1404.10 said the Office of Arbitration would not decide that a dispute was not arbitrable ^[1]. Read literally, a union could ask for a panel of seven names on its own, and FMCS had to send one.

The new text keeps the seven-name panel and the ranked-selection process ^[1]. It adds a “limited threshold inquiry” ^[1]. Before issuing a panel, the Office of Arbitration may ask the parties for the contract, a statute, a regulation, a court order, written authorization “or other information” ^[1]. It then decides whether providing the service “would be inconsistent with applicable law, a court order, or FMCS’s statutory or regulatory authority” ^[1]. The same limit now attaches to additional panels and direct appointments, and to the rule that a non-responding party’s silence lets the other side’s ranked choice stand ^[1].

A unilateral request remains permissible unless the regulation, applicable law or the parties’ agreement requires joint authorization ^[1]. That clause is new, and it is where the screening will happen.

Why now. FMCS says it plainly. “Recent executive orders excluding certain agencies or subdivisions from Federal labor-management relations have increased the likelihood” of panel requests where one side says the arbitration is barred by law or a court order ^[1]. The rule names Executive Order 14251 ^[1]. That order, signed March 27, 2025, removed the Departments of State, Veterans Affairs and Justice, most of Defense and most of Treasury, among others, from chapter 71 coverage ^[2]. Section 6 of the order told each covered agency, once its contract ended, to “terminate agency participation in any pending grievance proceedings under section 7121” ^[2].

The legal theory is sovereign immunity. The rule says an agency cannot be brought into binding arbitration without statutory authorization, and that where none exists, FMCS cannot provide panels “for unlawful arbitration proceedings” ^[1]. It cites 5 U.S.C. 572 and 5 U.S.C. 7121 as statutes that do authorize arbitration in some settings ^[1].

What FMCS says it is not doing. A refusal or a hold “does not constitute a decision on the validity of any collective-bargaining agreement, the merits of any grievance, the arbitrability of any dispute” ^[1]. FMCS considered deciding arbitrability itself and rejected the idea ^[1]. It also says the rule does not undo panels already issued or appointments already made ^[1].

The good-cause finding. FMCS skipped advance notice and comment, saying a delay “would risk continued confusion” about its authority ^[1]. OIRA found the rule not significant under Executive Order 12866 ^[1].

What it means for you

Employees in units still covered by chapter 71. For most of you, little changes. Section 7121 still makes unresolved negotiated grievances subject to binding arbitration that either the union or the agency can invoke, and the rule describes that statute as an authorization ^[1]. FMCS expects to ask for documents only where a request draws a legal or authority-based objection ^[1].

Employees at excluded agencies whose contracts have ended. This is the group the rule was written around. If your agency has stopped recognizing the union under Executive Order 14251, a unilateral panel request from the union is the kind FMCS may now decline or shelve ^{[1, 2]}. Readers should note the word “abeyance.” A grievance held in abeyance is not lost, but it is not moving, and the rule sets no time limit on a hold ^[1].

Employees whose contracts are protected by a court order. The VA is the live example. On August 7, Judge Melissa DuBose of the U.S. District Court in Rhode Island granted AFGE’s motion to enforce her March 2026 preliminary injunction, after the VA told the union on July 24 that it would re-terminate the contract on August 8, according to Federal News Network ^[3]. She wrote that the VA’s position on the 30-day negotiation notice “is not well-taken” ^[3]. The contract with AFGE’s National VA Council covers about 320,000 employees ^[3]. The FMCS rule lists “a court order” as a reason to decline a panel ^[1]. It does not say whether an injunction keeping a contract alive counts as a reason to issue one. The preamble says only that FMCS “must administer its arbitration services consistent with applicable law and any court orders” ^[1].

Union officials filing grievances. Have the paperwork ready: the contract, any court order and the statutory basis. Those are what the Office of Arbitration may request ^[1]. If FMCS declines, the rule points to the Federal Labor Relations Authority and the courts ^[1]. Earlier coverage here on OPM’s bargaining guidance for the rating rule described how expiring contracts are already narrowing what can be grieved.

Contractors. The rule’s text is not limited to federal-sector requests ^[1]. FMCS’s analysis assumes small private entities may be affected only in the limited case of a legal objection, and that it does not change the fee schedule ^[1]. Nothing in the rule suggests ordinary private-sector arbitration clauses will draw screening, but FMCS has not said so outright.

Questions you’re probably asking

Can FMCS refuse to provide an arbitrator for a federal union grievance?

Yes, as of August 4. FMCS may decline a panel or appointment, or hold the request, when it decides that providing one would be inconsistent with law, a court order or its own authority ^[1].

Does an FMCS refusal mean my grievance is dismissed?

No. The rule states that a refusal or a hold does not decide the merits of a grievance, whether the dispute is arbitrable, or whether the contract is valid ^[1]. FMCS points parties to the FLRA, a court or another tribunal for any remedy ^[1].

What can a union do if FMCS won’t issue an arbitration panel?

FMCS says a claim that a party broke a contract’s arbitration clause can go to the Federal Labor Relations Authority as an unfair labor practice under 5 U.S.C. 7116 ^[1]. Courts remain an option where they have jurisdiction ^[1].

Does the FMCS rule cancel arbitrators already appointed?

No. FMCS says the rule does not retroactively invalidate any panel already issued, appointment already made or request already submitted ^[1].

When are comments due on the FMCS arbitration rule?

Comments must reach FMCS through regulations.gov by September 3, 2026 ^[1]. The rule is already in effect while comments are taken ^[1].

What I’m watching

• September 3, 2026: comment deadline on the interim final rule; FMCS may then revise, withdraw or confirm it ^[1].
• No date set: whether FMCS issues or holds panels for VA grievances while the Rhode Island injunction stands ^{[1, 3]}.
• No date set: the next step in AFGE’s lawsuit against the VA, which the First Circuit declined to pause in May ^[3].