United States Department of Health and Human Services and National Treasury Employees Union
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United States Department of Health and Human Services and National Treasury Employees Union, 74 FLRA No. 87 (0-AR-6103), is a Federal Labor Relations Authority (FLRA) decision denying HHS’s exceptions to a telework arbitration award. In its October 21, 2026 decision, the Authority also identified widespread citation defects in HHS’s brief and cautioned parties to verify AI-generated material. It suspected possible generative-AI use, without finding that such use had occurred.[1]
Telework dispute and arbitration
HHS and the National Treasury Employees Union entered their collective-bargaining agreement in July 2023. The dispute arose from HHS’s February 7, 2025 directive implementing the President’s return-to-in-person-work memorandum. The Union alleged that implementation conflicted with the agreement’s telework and remote-work protections and federal labor law. The underlying dispute concerned those employment obligations; the citation issue arose later in the agency’s exceptions brief.[1]
As recounted by the Authority, arbitrator Michael J. Falvo found contractual violations and unfair labor practices. His award directed HHS to rescind its directive, reinstate telework and remote-work agreements terminated because of it, and post a notice concerning repudiation of the agreement. He rejected the Union’s Telework Enhancement Act claim because it had not been raised in the grievance. These were the arbitrator’s findings and remedies reviewed by the Authority.[1]
HHS filed exceptions on February 17, 2026, and the Union opposed them on March 19. An initial filing deficiency concerning the missing arbitration award was corrected on March 11, as described in note 31 of the decision.[1]
October 21, 2026 decision
The Authority denied the agency’s exceptions alleging material factual error, failure of the award to draw its essence from the agreement, and excess of arbitral authority. It distinguished factual challenges from disagreements over contractual interpretation or legal conclusions, rejected arguments that misunderstood the award, and found specified arguments unsupported. The agency did not establish that the award was irrational, implausible or inconsistent with the agreement under the applicable review standard.[1]
The decision treated the President’s memorandum’s requirement of consistency with applicable law as relevant to the contractual and statutory analysis. It rejected the agency’s assertion that the arbitrator exceeded his authority by resolving the submitted dispute over implementation. The disposition was a denial of the exceptions; it was not an adjudication that AI use itself violated the telework agreement.[1]
Citation defects and possible AI use
In section III.A, the Authority found that 22 of the agency brief’s 29 footnotes, encompassing 35 of 42 legal or record citations, were fictitious, erroneous or irrelevant. Notes 43–52 explain the defects, including nonexistent decisions, incorrectly identified authorities and citations that did not support their asserted propositions. This is not a finding that all 35 citations were fabricated.[1]
The Authority said the nature and extent of the errors suggested that HHS may have used a generative-AI drafting tool. It expressly stated that parties may use AI tools when preparing filings, while cautioning that they must verify generated material and comply with filing requirements. The decision relied on existing regulatory duties to explain and support exceptions, including 5 C.F.R. § 2425.6(b) and (e)(1). It imposed no AI-specific fine or general AI-drafting ban.[1]