Trading an “Agency Shop” for Civil Service Reform

The price paid for the Civil Service Reform Act of 1978’s merit pay, senior executive service and performance based removals was Federal employee labor relations being controlled by a law instead of an executive order. It was a lousy trade in the view of some. So as we approach the next great civil service reform, what’s on the table?

Last week, after peering into my crystal ball, I offered some predictions for the 2010 course of labor and employee relations.

One prediction I didn’t make was on the price Federal unions would demand from the administration to accept or support the kind of reforms OPM’s John Berry has been suggesting.

As a true Federal labor relations fossil, I recall in lucid moments what happened when the last round of civil service reformers tried fixing human resources then called personnel. The price paid for the Civil Service Reform Act of 1978’s merit pay, senior executive service and performance based removals was Federal employee labor relations under law. It was a lousy trade in the view of some. So as we approach the next great civil service reform, what’s on the table?

What Does the Administration Want?

Mr. Berry has been complaining about the drift away from Title 5. Banking legislation from the early 90s put Agencies such as FDIC, SEC, Office of Thrift Supervision, Office of the Comptroller of the Currency, and the National Credit Union Administration out of compliance with OPM’s policies in a number of ways (it’s complicated).

Some of these Agencies bargain pay as a result of sloppy statutory language (Not Congressional intent!). The Federal Aviation Administration is a case in point of how badly Congress can micromanage. Authorized in the mid-90s to create a new personnel system, it bungled that effort, rolling over to Air Traffic Controller pressure.

The FLRA further muddled affairs by getting involved in the late 90s and allowing bargaining units in the FAA based on whether someone could file a petition. The result was that the intent to assuage the controllers’ union resulted in pay bargaining for all the Agency’s components.

In a 1980s move, the FLRA really started the ball rolling by deciding it was in the Defense Department’s best interest to bargain pay with teachers and non-appropriated fund employee representatives.

The reality is that Berry’s worries result from a monumentally weak central personnel agency; an upstart Federal Labor Relations Authority that arrogates to itself the perfection of legislation; and a Merit Systems Protection Board that has seen itself as a court of appeals rather than a merit systems advocate.

In other words, while Congress diddled piecemeal with finger in the dike fixes, those responsible for the Federal workplace decided it wasn’t in their P.D. (position description) to get involved. I would like to get a count of how many times OPM has involved itself in critical cases before the FLRA, MSPB, EEOC or courts but I have trouble getting them to tell me how many Feds are in bargaining units so asking about legal activity would really bring out the turtle in them.

Berry says he wants to move everybody back under title 5; make hiring more expeditious and “modernize” merit (are you awake MSPB?); fix the performance appraisal system; and unify classification. Without going into a description of all of the rice bowls that might be jarred, dumped or cracked by Mr. Berry’s ambitions, let’s leave it at there would be many.

Union Issues

Federal unions have a lot at stake in all of this.

Mouthing merit, the unions propose language in contracts that seeks to limit access to all but entry-level jobs to union represented employees. Touting Merit, unions seek to require Agencies to do everything affecting employees on a “seniority” basis. Claiming merit, the unions have repeatedly battled anything that looked remotely like “pay for performance” as subjective toady rewarding by Agency supervision. In other words, Mr. Berry may wish he had stayed at his often and self proclaimed “dream job” at the National Zoo. Before his reform ambitions come to a Hill vote (if that even happens), he may come to believe that the Zoo was a tamer environment than federal Labor relations.

What Might Get the Unions On Board?

Getting the Transportation Security Administration into Title 5 may be involved although the President already promised it in the campaign so his administration would be hard pressed to try and trade for it at this late date.

Pay bargaining for everybody? I don’t think so.The Congress is so into running Agencies now and using the power of the purse to do it that giving the bureaucracy control of the single highest Agency cost, labor dollars, is about as likely as a having a humble FLRA member.  So, what’s to give?

Other than pay or fringe benefit bargaining, the one thing left to give is a revision of the Federal labor law’s mandate of an open shop. For those of you unfamiliar with the terms, a closed shop is one in which you must be a union member to get a job (illegal in the U.S. since 1947); a union shop is one in which you don’t have to be a member to be employed but must join to keep the job; and an open shop is one in which an employee may not be compelled or coerced to join the union.

There is one other type of union security arrangement. Called an Agency shop, employees cannot be compelled to join but must pay a fee to cover the costs of collective bargaining. The Supreme Court has ruled this arrangement appropriate and since 1977, has ruled five times on various issues surrounding it.

Currently, the Federal statute provides the union bargainable access to facilities and services, official time and other economic benefits. The unions argue that this is only fair since they must represent all employees in a bargaining unit, not just members.

Of course, in a number of federal units the unions get two, five, ten or more times the value in benefits that they get in union dues. Also, any dues received need only be spent on union activity and not on administrative expenses. The windfall of official time and provided facilities and services is conservatively estimated at in excess of a billion dollars a year.

Trading Agency Shop for Civil Service Reform

Actually an argument can be made that the agency shop is a huge government benefit.

Since OPM can’t figure out how many employees are in bargaining units, it’s hard to figure exact costs but let’s look at what would happen to the American Federation of Government Employees if it lucked upon the agency shop.

AFGE claims 650,000 represented employees and according to Labor Department figures about 250,000 of those are members. AFGE National charges $17.50 monthly tax to the locals for each member and lets the Locals charge what they want for the rest. Let’s say on the average, a member pays $15.00 per pay period (AFGE figure). That amounts to $390.00 per year per member. For 650,000 represented employees, an agency shop would bring AFGE $253,500,000.00 in income per year. For that kind of number, AFGE could buy its own office space, furniture, computers, paper and union representatives.

Now there is one fly in the ointment. Would federal employees in bargaining units currently having less than 10% members stand for a $390.00 assessment against earnings or throw the union out? On the positive side, some believe local union leadership would drastically improve if the average employee had to pay dues since current elected officials in such units often comprise the self-serving. You figure it out.

An Agency shop would cost the government nothing and potentially save it a billion or more in reduced subsidy to the unions if Congress had the guts to hold the line and require unions to pay their way. Canadian Federal employees work under an agency shop arrangement as do many in northern U.S. states.

Buying Civil Service Reform

So based on the above, charging federal employees for union representation is a pretty big carrot for a lot of Federal unions. Some already have a lot of members and might not be as willing to take the freebee cut in services if it goes that way. The government has an impressive card to play. Will it be wise in playing it or play it at all? Somebody ask Mr. Berry his opinion and let me know.

As always, any opinion stated above is mine and mine alone.

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.