Is Pay Bargaining Around the Corner in DHS and DOD?

In the twists and turns of implementing new human resources systems in DoD and DHS, unexpected events may lead to unanticipated results. Could unions end up bargaining on pay at DHS and DoD? Here is how such a scenario could play out in these agencies.

A recent court ruling on labor relations in the Department of Homeland Security (DHS) raises some interesting questions about the future of labor relations in two of the government’s biggest agencies. Some federal labor relations experts have ideas on how the labor relations programs in these agencies could eventually unfold.

While the DHS will certainly confer with OPM and the Justice Department to consider its options, there is little doubt that some of the agency’s employees will be going back to the drawing board to take another look at the future labor relations plan.

And the Department of Defense, with human resource reforms that track the DHS effort closely, may be in the same boat as DHS.

There may be an irony in all of this that has thus far escaped notice among those in OPM and Congress.

Generally, the new labor relations systems that were drafted for DHS and for DOD were a throwback to the old executive order programs (See Labor Relations in Government: Back to the Future). Bargaining would be limited, the right of unions to stand in the way of new programs would be seriously diminished, and the ability to appeal change would be much more restricted than under the current labor relations statute.

Despite the current protests from a variety of sources, it is certainly arguable that the programs drafted by DHS, DOD and OPM are what Congress could have anticipated when giving these agencies the ability to set up new personnel systems, including their labor relations programs. Part of the problem with the existing labor relations system is that negotiating changes can (and often does) take days, months or years. If we are fighting a war, more speed and flexibility is certainly desirable. Under the proposed new systems, the requirement for speed and flexibility would take precedence over negotiating procedures such as how many days advance notice will be given before moving employees into position to help thwart a threat to American lives.

But, with recent legal setbacks, is it possible that the proposed changes may ultimately result in the system going in a direction much different from the original intent?

From the viewpoint of federal employees, taxpayers and especially labor relations officials, here is an interesting question: Will the current situation lead these agencies into implementing pay for performance systems (as the Director of OPM has already indicated will happen in DHS) and will that trigger the duty to negotiate on pay issues under the requirements of the current labor relations program?

The Secretaries of Homeland Security and Defense have extensive powers to establish new human resource systems. Both of the proposed new systems envision extensive pay for performance programs based on employee and manager accomplishments. These objectives-based or results-based systems involve chucking out, for the most part, the annual and step increases.

The money from these sources goes into a pool. The money is then distributed according to the determination of a pay pool manager and/or committee on how well the person did on accomplishing their preset goals and objectives.

So what has all this got to do with labor relations?

It starts with the banking agencies.

When Congress cleaned up the savings and loan debacle of the late 80s, it gave the heads of most of the banking agencies authority to set employee compensation, ostensibly to be able to recruit the best and brightest. Some of the legislation gave these executives “Sole” authority, other laws did not do so.

Where the agencies did not have this authority, the courts found that they had to bargain on compensation issues with unions representing at least some of their agency employees.

The biggest of these players is the Federal Deposit Insurance Corporation. FDIC’s union, the National Treasury Employees Union, is fairly quiet about this arrangement. And, with the possible exception of air traffic controllers who also have the authority to bargain on pay, FDIC employees have one of the highest average compensation systems in government.

NTEU is uncharacteristically quiet about this unique arrangement in FDIC and probably should be as it might lead to new legislation and political pressure to change the system if some on Capitol Hill and others became more knowledgeable of the relatively generous compensation programs at the agency.

By the way, the same thing happened at the Securities and Exchange Commission–another agency with employees represented by NTEU.

So how does this affect DHS and DOD?

If the Secretary has authority to establish pay pools and to put congressional and step increases in the pot to be distributed to employees, what might the unions representing those employees be able to negotiate? It is rumored that under the pay for performance system, mission money may be able to be used, if available, to sweeten the pay pool pot.

No doubt, any union at DoD or DHS would want to negotiate how much goes in the pot and how it comes out. In essesnce, that is bargaining over pay for federal employees.

This article began with the idea that times to come might be interesting. OPM is pushing agencies to do pay for performance throughout the government. Absent some contrary legislation, negotiations may become as lively and perhaps as public as the recent negotiations between the air traffic controllers and the Federal Aviation Administration.

About the Author

Bob Gilson is a consultant with a specialty in working with and training Federal agencies to resolve employee problems at all levels. A retired agency labor and employee relations director, Bob has authored or co-authored a number of books dealing with Federal issues and also conducts training seminars.