Wal-Mart and FSIP's Gift-Giving
By Frank Ferris
Monday, November 19, 2007
On the surface, the Federal Service Impasses Panel appears to be the "gift that keeps on giving" for managers in a collective bargaining relationship. My own unofficial count shows that since October 1, 2006 it has ruled for management in nearly 80% of the issues to come before it. Its chair is a Vice President of the Heritage Foundation, whose web page proclaims its strong disdain for unions. The only two lawyers on the Panel throughout this period represent management. And not one member has any credentials as a labor-management neutral. Nonetheless, it would probably surprise many, even the Panel itself, to learn how much harm it has caused management.
Composed of seven White House appointees who do not have to be confirmed by the Senate or anyone else, the Panel resolves bargaining disputes by imposing binding contract terms on the parties. Members do not need any measureable knowledge of labor-management relations or any other professional credentials. It is the perfect place for the patronage appointments that Teddy Roosevelt worked so hard to bar from government. However, before the current Panel members were appointed, it was regularly staffed with nationally respected labor-management neutrals on the theory that their professional pride would prevent them from becoming political operatives for a patron's election strategy or coffers.
This body can unilaterally decide whether to let disputing parties come before it or leave them in a perpetual state of dispute for years. When the Panel does decide an issue, it need not explain why it reached the conclusion it did, base its decision on evidence, gather factual evidence at all, treat both parties equally, or use consistent standards from case to case. In short, it is free to do what it wants. Its decision cannot be appealed to the courts or anyone else even if they are arbitrary, capricious1, biased2, totally unreasonable3 or based on a conflict of interest4. The Panel even considers itself free to deny a party and the FLRA General Counsel the right to a decision on a pending unfair labor practice charge by simply resolving the contract language dispute as if the allegations of "bad faith" never existed5. That effectively moots the unfair labor practice case. The Panel needs only to avoid breaking the law to maintain this immunity from review. TV's O'Reilly may have his "No Spin Zone," but FSIP operates in the "No Checks and Balances Zone," making it a rarity, if not unique, among federal agencies.
Armed with nearly unstoppable power, the Panel can force management to operate more fairly, effectively, and objectively than it might wish and/or it can take anything from employees that is not tied down by law. For example, it can take away their traditional work schedules, terminate their flexi-place arrangement, remove many protections they have against unfair appraisals, deny them performance awards, reduce their wages, strip them of their office furniture or walls, and even force them to work without dignity. (That last comment may be an overreaction on my part to a recent Panel decision adopting management's proposal that gave it need only provide its employee firefighters job-site drinking and bathing water that even management admitted smelled and tasted foul6. Feel free to draw your own conclusion about how dignified you would feel in that situationâ€"while bathing in or drinking a glass of smelly, foul-tasting water.)
So, with all this power and freedom behind its pro-management, anti-union, "put employees in their place" predisposition, it may be hard to see how this Panel could possibly hurt management--unless you have internalized one of the earliest lessons in any high school physics class, i.e., for every action, there is an equal and opposite reaction.
Change is driven in a workplace, as in every other environment, by a near endless spectrum of forces ranging between slow moving evolutionary pressures and sudden violent upheaval. The only constant about change is that anyone impacted by it wishes they had some control over its speed and direction.
In the workplace, "collective bargaining" is among the slower, more conservative forces for change because it requires two parties to extensively discuss an issue, produce facts about that issue, agree to something and put it in writing. It generally produces incremental and pre-scheduled changes; it rarely requires retroactive compensation for past harms; and it never ends in someone being punished for the past managerial or leadership errors. Finally, so long as the Impasses Panel is perceived as fair, both parties work harder to design the change themselves rather than submit to the uncertainty of an unbiased, outside professional's judgment.
Of course, if the Panel is perceived as biased in one party's favor, bargaining becomes far less attractive to both parties. The favored party sees bargaining as a waste of time when a virtually certain, highly favorable Panel decision awaits. After all, why work for anything (or even bother with the legal niceties of bargaining) when the Panel is acting as your not-so-secret Santa? The non-favored party complicates bargaining hoping to avoid the Panel's inevitable blow and give good-fortune an opportunity to intervene.
However, if one assumes that employee efforts to achieve change will stop just because one of the more conservative ways to achieve change is as corrupted as a mishandled computer disk, that person is, in my humble opinion, dangerously naïve. Wal-mart has fought collective bargaining endlessly and in the process left its employees no choice but to sue as individuals, sue as class members, disparage their employer publicly, invite legislators into company decision-making, and otherwise make Wal-mart not just the world's greatest discounter, but also the world's greatest litigation and media target. Not long ago, Forbes Magazine reported that Wal-mart had 5,000 lawsuits pending against it with 17 new employee suits filed each day on average.7
So, when the Panel proclaims as a matter of policy that, despite management's statutory obligation to negotiate over mandatory performance award systems, it will treat awards only as a permissive subject of bargaining8, it is actually encouraging federal employees to take up more adversarial, radical and disruptive means of changing their award systems. (It is also demonstrating an almost breath-taking unfamiliarity with everything scientific research says about motivating employees with awards.9) I am not talking about a strike, walkout or anything like that. Lawsuits, adverse publicity, legislative intervention, and binding arbitration will more than do the job in the modern world.
For example, if employees and their unions negotiate a performance award system with the employer, they are quite likely to defend it from attackers and work to make it operate effectively. After all, the union could hardly file suit against a system it negotiated without some potential political or even financial liability for the damage it caused. But, when the union and employees are told that the award system is strictly management's work, over which they have no say, then the system begs for attack.
Precisely this happened to one federal employer when it won total freedom from FSIP to pass out performance raises without any negotiated limitations10. The union turned around a year later, demanded to see how management distributed the raises by race, national origin, age, and other protected classes, and convinced a grievance arbitrator that management had violated various civil rights laws in using the unfettered discretion FSIP awarded it. Consequently, aside from the humiliation of being found guilty of discriminating based on race and age, the employer is liable for back pay and interest to hundreds of employees and attorney fees. It remains to be seen whether there will be a finding that one or more individual managers committed a prohibited personnel practice that warrants discipline, e.g., a fine, suspension, or termination. Nor is it clear whether any individual employees also request compensatory damages.
In another case, the employer sought to change how it reimbursed employee student loan debts. Knowing with "metaphysical certainty" how the Panel would rule, the union bargained cautiously in search of a voluntary solution without Panel intervention. When the new budget year arrived without an agreement, management implemented the change unilaterally to save money. The union responded with a grievance charging it with making the change in violation of not only labor law, but also in such a way that it amounted to age discrimination. An arbitrator agreed with both allegations with the result that hundreds of thousands in back pay and interest were paid to the employees11.
In a third case, when the Panel brushed aside the union's allegation that the management proposal was illegal, the union simply refused to accept the Panel's binding legal order12. Because Panel decisions cannot be appealed directly, the union had to file an unfair labor practice charge against the employer hoping to undo implementation of the FSIP order. As a result, that management group has to not only absorb the costs of a ULP dispute, but also move forward not knowing whether the Panel order is enforceable or, worse, a source of a major financial liability. It is often said that what management dreads most is uncertainty, yet that is exactly what the Panel has produced for federal agency managers. Employees and their unions lose nothing by resisting Panel decisions any way that they can when treated so dismissively.
In still another case, when the union refused to sign the term contract FSIP had imposed on it, management did not file a charge against the union nor even unilaterally implement the Panel's order. One can only guess whether management found this order so loaded with liabilities if it tried to enforce it that it chose to continue under the prior term agreement that it had just petitioned the Panel to replace.13
These union actions are exceptions to the rule today, but Panel actions are quickly pushing these exceptions closer to being the rule, just as Wal-mart's actions have shown millions of employees and plaintiff lawyers how to achieve change. There are over a dozen employment laws and hundreds of pages of federal personnel regulations that can be used to push for change and fairness if the Panel is going to cut off the more conservative change process of collective bargaining. Just examining the distribution of performance awards, quality step increases, student loan repayments, AWOL charges, and performance appraisals for disparate illegal impact or treatment can potentially produce enormous beneficial changes for employees through other change channels.
Of course, those changes come through the more adversarial, but far more impartial, binding grievance arbitration process that potentially creates retroactive costs for the employer that bargaining never can. In addition, using these alternative change processes brings outsiders into discussions that collective bargaining limits to just managers and employees. Presumably, this is why the collective bargaining statute begins with the proclamation that actual "experience" has proven that collective bargaining "contributes to the effective conduct of public business," "encourages amicable settlements," and is "in the public interest." While the Heritage Foundation and others may not accept that, that is the law of our nation. Moreover, having taken an oath to enforce the nation's laws rather than some political or campaign agenda, one would think the Panel should focus more on its obligation to make sure collective bargaining remains a viable mechanism that maximizes "amicable settlements."
Because grievances and unfair labor practice charges utilizing these laws and regulations are more complicated than the average case, the shop stewards and elected union official, who commonly arbitrate these claims today, will have to be supported by or replaced with attorneys and similar professionals to maximize the chances of winning. Some unions are better prepared today to do that than others, but all seem to understand that is how to react to what most would describe as the current "hijacking of the collective bargaining process." Only time will show how much good the Panel has done management reaction by forcing it to deal more frequently with attorneys than employee stewards to solve job-site problems.
To preserve bargaining's conservative, incremental change role in the workplace, any Panel must be perceived as fair, professionally skilled, and quick-acting. A mere Presidential appointment cannot convey either fairness or professional skills; they only come from an honorable work effort and product.
As to the issue of acting quickly, a recent response to an FOIA request shows that this Panel has substantially increased the amount of time it takes to resolve a case. It indicates that the Panel resolved cases in 59 days in 2000 on average, but took to 94 days in 2007. That likely is due to cutting the Panel's professional staff by two-thirds so that the funds could be devoted to reestablishing FLRA authority over the FSIP.14 Another cause of delay is the Panel's unwillingness to urge parties to jointly select outside professional neutrals to obtain far faster decisions. For example, despite the White House's insistence that the Dept. of Homeland Security needed special attention from the labor-management community to resolve disputes quickly, the Panel has taken ten weeks to schedule its first meeting with the parties over a DHS ground rules dispute.15 If the parties had been encouraged to use a private neutral, they could have had a final decision already and be well into bargaining the contract that is sorely needed to unify the working conditions of four prior bargaining units and three contracts into one newly formed unit and one contract.
Not long ago, Panel member Mark Carter gave employers the following advice, "When employees have that open door and they know that ideas are not only allowed but encouraged, it builds trust." 16 Perhaps he should give that speech to his Panel colleagues, and urge them to not only open the door to employee ideas, but encourage them, and then act on them in a way that builds trust--because trust is probably the single most important gift any workplace can be given.
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Footnotes:
1. For example, the current Panel refuses to recognize that a union can raise a "covered-by" defense (See Dept of the Army, NJ and Local 476, NFFE, 06 FSIP 127 (2007) even though the FLRA and courts have repeatedly said they can, as shown by the following references to it being a right of either party: "It is well settled that neither party is required to bargain concerning modifications to conditions of employment embodied in an agreement for a fixed period. See Department of Navy, Marine Corps Logistics Base, Albany, Georgia v. FLRA, 962 F.2d 48, 53 (D.C. Cir. 1992) See also"[W]here a matter that would otherwise be a mandatory subject of bargaining is 'covered by' or 'contained in' a collective bargaining agreement, the parties are absolved of any further duty to bargain about that matter during the term of the agreement. See also U.S. Department of the Treasury, Internal Revenue Service, Washington, D.C. and Internal Revenue Service, Cincinnati, Ohio District Office, 37 FLRA 1423, 1431 (1990) (once agreement is reached on mandatory subjects of bargaining, the agreement is binding on the parties for the term of their contract)."
2. In Dept. of Treasury, IRS and NTEU, 06 FSIP 66 (2007) the Panel adopted management's request that it be allowed to keep certain letters of reprimands given employees for more than twice the government-wide practice of two years because the IRS management was not able to discipline employees as quickly as all other agencies. Some might call that a reward for ineffective management.
3. For example, the Panel ruled in one case that a federal employee was barred from signing a federal form required by the employee's federal employer if that employee was on federal propertyâ€"merely because signing that form would result in employee dues being sent to a union. Fortunately, a private arbitrator refused to enforce such an obviously absurd holding when management tried to enforce it. See Centers for Medicare and Medicaid Services and AFGE, Local 1923, (Fed. Arb. 06/26/07).
4. For example, the two attorneys on the Panel actively represent employers which would seem to make it against their self-interest to order adoption of a benefit which their own employer or clients have or might hire them to oppose.
5. See SEC and NTEU, 06 FSIP 54 (2006).
6. See Dept. of the Air Force, Air Force Materiel Command, Wright-Patterson AFB, Ohio and Local F-88, International Association of Firefighters, AFL-CIO , 07 FSIP 36 (2007)
7. "Wal-mart Stands Up to Waive of Lawsuits," Tom Van Riper, Forbes Magazine.
8. Dept. of the Army, CO. and Local 1345, AFGE, 06 FSIP 68 (2006)
9. See almost anything written about "expectancy theory" which suggests that a reward loses its motivational lure if it is not a certainty that it will be paid if the employee performs. This is called "instrumentality." Click here for an example.
10. Security and Exchange Commission and NTEU, 02 FSIP 122 (2002)
11. See http://www.secunion.org/PLUSloandecision
12. Dept. of Treasury, IRS and NTEU, 06 FSIP 66 (2007)
13. Security and Exchange Commission and NTEU, 06 FSIP 54 (2006)
14. Documents released Nov. 13, 2007 to NTEU via an FOIA request.
15. Dept. of Homeland Security, Customs and Border Protection and NTEU, 07 FSIP 108.
16. "Reducing Labor Litigation Exposure," By Brendan Coffey for Martindale-Hubbell (January 2006).
© 2008 Frank Ferris. All rights reserved. This article may not be reproduced without express written consent from Frank Ferris.
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