The FLRA Upholds an Arbitrator's Order to Restore HHS Telework Under the NTEU Contract

Bottom line

The January 2025 return-to-office memorandum told agencies to end remote work “as soon as practicable,” and also to carry it out “consistent with applicable law” ^[1]. On October 21, the Federal Labor Relations Authority let stand an arbitrator’s finding that, for HHS employees covered by the NTEU national contract, the second clause controlled ^[1]. The award orders telework and remote-work agreements restored ^[1]. Whether HHS complies now or seeks court review first is not yet known ^[3].

What happened

The contract and the directive. HHS and the National Treasury Employees Union signed their national agreement in July 2023 ^[1]. Article 26 covers telework and remote work. Section 8 of that article lets the department end an employee’s participation “for cause,” with a list of example criteria: losing eligibility, breaking the telework agreement, misreporting time, misconduct, and “organizational exigencies that impact on the mission” ^[1]. For remote workers, the department must document the reasons for a termination and be able to show them ^[1].

In January 2025 the President directed agencies to “take all necessary steps to terminate remote[-]work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis” ^[1]. On February 7, 2025, HHS issued a directive requiring all employees to work at an agency facility “unless otherwise excepted consistent with applicable law,” and said only situational and ad hoc telework agreements would be set up going forward ^[1]. Employees hired from remote-job announcements were among those told to report ^[1].

The award. NTEU grieved, and the case went to Arbitrator Michael J. Falvo ^[1]. He read Article 4 of the contract to bar enforcement of a rule issued after the agreement took effect if it conflicts with the agreement ^[1]. A separate clause lets HHS implement a government-wide rule immediately when the law requires it, but he found the memorandum imposed no such legal requirement ^[1]. He held that the memorandum is a “rule or regulation” under 5 U.S.C. 7116(a)(7), which makes it an unfair labor practice to enforce a rule that conflicts with a contract already in effect ^[1]. Because the terminations rested on the memorandum rather than the contract’s listed criteria, he found violations of Article 26 and of the statute, and concluded HHS should not have implemented the memorandum until the agreement expired ^[1].

He ordered HHS to rescind the directive, reinstate telework and remote-work agreements “terminated as a result of the [directive],” and post a notice stating that it violated the statute by repudiating the agreement ^[1]. He rejected NTEU’s separate claim under the Telework Enhancement Act because the grievance had not raised it ^[1].

The Authority’s decision. HHS filed exceptions on February 17, 2026 on nonfact, essence and exceeded-authority grounds ^[1]. Chairman Colleen Duffy Kiko and Member Anne Wagner denied all of them; Member Charles Arrington did not take part ^[1]. Three holdings matter most:

• HHS argued the arbitrator wrongly found that all telework had ended. The Authority said he made no such finding ^[1].
• HHS argued the memorandum itself was an “organizational exigency.” The Authority said nothing in the contract required the arbitrator to see it that way, and he had found the terminations were driven by the memorandum, not by the reasons HHS later offered ^[1].
• HHS argued arbitrators cannot limit presidential directives. The Authority answered that the arbitrator applied the memorandum’s own instruction to follow applicable law, and that HHS never argued his reading of the memorandum was contrary to law ^[1].

The Authority then turned to the brief. By its count, twenty-two of twenty-nine footnotes and thirty-five of forty-two legal or record citations were “fictitious, erroneous, or irrelevant” ^[1]. One cited case, it noted, “does not exist” ^[1]. It concluded that HHS “may have used a generative artificial-intelligence (AI) tool,” said nothing prohibits parties from using such tools, and told filers to verify AI-generated material ^[1].

The earlier case. The decision follows another from about five weeks earlier. On September 15, in a case involving Treasury’s Bureau of Engraving and Printing, it rejected an argument that the presidential memorandum and OPM guidance made a telework dispute moot ^[2]. The memorandum calls for implementation “consistent with applicable law,” the Authority wrote, and OPM’s guidance acknowledges “any collective[-]bargaining obligations” ^[2]. Member Arrington dissented in that case on how the contract’s telework language should be read ^[2]. The same two-member majority decided both cases. The Authority’s own rules on union representation were the subject of the October 22 memo.

What it means for you

HHS employees in the NTEU unit. The award’s remedy covers telework and remote-work agreements terminated because of the February 2025 directive ^[1]. Readers should note what the remedy does not say. It restores agreements; it does not create telework for positions that never had it, and the contract still allows terminations for cause under Article 26’s criteria ^[1]. Employees who believe they fall within the remedy should keep the paperwork for their prior agreement and their 2025 termination notice. That is a practical point, not a legal one: the remedy turns on which agreements were ended “as a result of” the directive ^[1].

Remote workers hired as remote. The contract’s remote-work section carves employees “hired as a remote worker” out of its for-cause termination clause ^[1]. The directive nonetheless sent such employees to agency facilities ^[1]. The award’s reinstatement language reaches them on its face, though the Authority did not discuss them separately ^[1].

Timing. Here the record pulls in two directions. NTEU’s statement says HHS employees “are, unfortunately, unlikely to see immediate changes” because HHS has until December 21 to appeal ^[3]. The statute is narrower on both points. Section 7123 bars court review of Authority orders on arbitration awards “unless the order involves an unfair labor practice under section 7118” ^[5]. The arbitrator found unfair labor practices, but through the grievance process, and the decision does not say whether that opens the door to review ^[1]. The statute also says a petition for review “shall not operate as a stay” of the Authority’s order unless the court orders one ^[5]. In other words, filing does not by itself pause the obligation to comply. How HHS treats the period before any filing is the practical question, and HHS has not addressed it in the statements cited here ^{[3, 4]}.

Employees at other agencies. The decision enforces one contract ^[1]. Its reasoning is portable, though: where a contract signed before January 2025 limits telework terminations to listed causes, two Authority decisions now say the memorandum did not override it ^{[1, 2]}. Labor attorney Suzanne Summerlin told Federal News Network that Authority rulings can take three to four years ^[4]. A grievance filed today would not resolve quickly.

Contractors. The decision concerns federal employees under a collective bargaining agreement and does not address contractor work sites or telework terms ^[1].

• Whether HHS will petition a court of appeals, and whether a court would accept review of this kind of order ^{[1, 3, 5]}.
• When HHS will rescind the directive and post the notice the award requires ^{[1, 3]}.
• How many employees the reinstatement order covers ^[1].

Questions you’re probably asking

Did the FLRA order HHS to restore telework?

The Authority denied HHS’s exceptions, which leaves the arbitrator’s award in place ^[1]. That award directs HHS to rescind its February 7, 2025 directive and reinstate telework and remote-work agreements terminated as a result of it ^[1].

When will HHS employees get their telework back?

No date has been set. NTEU says employees are unlikely to see immediate changes because HHS has until December 21 to appeal to a federal appeals court ^[3]. The statute says a petition for review does not by itself stay an Authority order unless the court orders a stay ^[5].

Does the HHS telework ruling apply to other agencies?

Directly, no. It enforces one contract between HHS and NTEU ^[1]. The Authority used the same reasoning in September for Treasury’s Bureau of Engraving and Printing, holding that the presidential memo and OPM guidance did not excuse compliance with a telework contract ^[2].

Can an agency end telework under a union contract because of the return-to-office memo?

Under this contract, not on that basis alone. The arbitrator found the agreement allowed terminations only for cause under listed criteria, which did not include the memorandum, and the Authority found that reading plausible ^[1].

Did HHS use AI to write its brief to the FLRA?

The Authority did not find that it did. It said the errors suggest HHS ‘may have used’ a generative AI tool, after finding 35 of 42 legal or record citations fictitious, erroneous or irrelevant ^[1].

What I’m watching

• December 21, 2026: NTEU’s stated deadline for HHS to seek review in a federal appeals court ^[3].
• No date set: HHS’s compliance with the award, including rescission of the February 7, 2025 directive and the posted notice ^[1].