A three-judge panel of the U.S. Court of Appeals here has ruled that the Department of Health and Human Services must bargain with unionized employees who want the department to relax its ban on smoking on its premises.

In deciding in favor of three locals of the National Treasury Employees Union, the appeals panel ruled that HHS did not demonstrate a compelling need for the ban -- the most stringent such regulation in the federal government.

The ruling, issued Friday, comes at a time when anti-smoking ordinances and regulations are being adopted throughout the country at a growing number of locations, including stores, businesses and government and private offices.

The department's secretary, Louis W. Sullivan, is one of the nation's most prominent and outspoken opponents of smoking. HHS general counsel Michael J. Astrue said in a statement that Sullivan "can and will pursue every legal avenue to ensure that HHS remains smoke-free."

The three-year-old case did not raise the question of whether the huge federal department must make arrangements to permit smoking for any of its 118,000 employees.

Instead, the matter, which initially was heard by the Federal Labor Relations Authority, focused only on whether HHS could legally refuse to bargain on such questions as whether smoking might be permitted within designated areas of its buildings.

However, David F. Klein, an assistant counsel for the NTEU, who helped argue the case, said it raised issues of due process and fairness that ranged beyond the narrow question of smoking.

"It was about the rights of workers," Klein said.

"What it is really about is whether government can shirk its duties to negotiate with a union and its employees simply by taking a particular interest and declaring it's compelling . . . ," he said.

The dispute involved employees at three HHS components: the department's headquarters, the Family Support Administration and the Kansas City regional office.

A government agency may refuse to negotiate on regulations concerning working conditions if the agency can demonstrate that the regulations answer a compelling need, according to an attorney for the FLRA.

The FLRA role in labor relations matters in the federal government is similar to that played by the National Labor Relations Board in adjudicating nongovernmental labor disputes.

In the smoking case, HHS argued that its mission of educating the public about the hazards of smoking created a compelling need for the employee smoking ban, the FLRA lawyer said.

In hearing the case originally, the lawyer said, the FLRA ruled that HHS failed to show that the ban was essential to that mission, and so could not refuse to negotiate with employees over the regulation.

The lawyer said the appeals court panel said that in such cases, an FLRA ruling deserved deference and that its ruling in the smoking case was reasonable. He said the judges, Karen L. Henderson, A. Raymond Randolph and Laurence H. Silberman, also noted the lack of a government-wide smoking ban.

Klein said that the union had proposed setting aside spaces for smoking while ensuring that nonsmokers were protected from the others' smoke.

He said the majority of the members represented were nonsmokers, but that the union "had a duty" to represent the interests of all members. In its statement, HHS said "we will continue to believe that the only way fully to protect nonsmoking workers and members of the public is to eliminate the carcinogens contained in tobacco smoke at their source."

Klein said, "There are better means for stamping out smoking . . . {than} telling several hundred employees they don't have a right to be heard. . . . "