Pay Freeze Misses Federal Employees Whose Unions Will Bargain Pay

The Author discusses the Federal pay freeze statute, the Obama Executive Order and implementing memo as well as OPM’s guidance. He asks whether the apparent exclusion from a pay freeze for those who are going to bargain pay is intentional or otherwise. Nowhere in the law is there a limit or in any of the paper, instructions to Agency management to hold the pay line with the unions. Read it for yourself and decide whether the President’s union friends got a pass.

unionized Federal employees appear to be getting a payback from the
Administration for supporting democrats in 2008. Employees of the Federal Aviation
Administration, Federal Deposit Insurance Corporation, Securities and Exchange
Commission, National Credit Union Administration and a fair number of obscure
or small Agencies bargain pay for their organized employees. 

These, by the way and no surprise, are some
of the highest paid Federal employees and, if the truth be known,
classification system busters and leg up recruiters as a result.

So when the
President froze Federal pay, did these folks slip through the cracks?  

Here’s how it works. Under Federal labor law, a presidential
Executive Order or a government-wide regulation in conflict with an existing
collective bargaining agreement must wait implementation until the agreement
expires. So if Agencies that do pay
bargaining have an existing agreement for 2011 and 2012 covering pay, it will
continue its increase provisions since there was no mention of such
arrangements in the pay freeze statute.

The Tricky Part

No sweat,
right? A deal, after all, is a deal. But
the tricky part comes with those unions who aren’t covered by current agreement
on pay (i.e., an expired one).   So one
would think that these Federal employees would become subject to the freeze as
their contracts expire, right? It
doesn’t appear so. Let’s take a look.

The Statute 

This is the
applicable provision of PL 111-322 addressing the freeze (Bold for emphasis).


1 ‘‘(b)(1) Notwithstanding any other
provision of law, except as provided in subsection (e), no statutory pay
adjustment which (but for this subsection) would otherwise take effect during
the period beginning on January 1, 2011, and ending on December 31, 2012, shall
be made.

For purposes of this subsection, the term ‘statutory pay adjustment’ means—

an adjustment required under section 5303, 5304, 5304a, 5318, or 5343(a) of
title 5, United States Code; and ‘‘(B) any similar adjustment, required by
statute, with respect to employees in an Executive agency.

Notwithstanding any other provision of law, except as provided in subsection
(e), during the period beginning on January 1, 2011, and ending on December 31,
2012, no senior executive

senior-level employee may receive an increase in his or her rate of basic pay
absent a change of position that results in a substantial increase in
responsibility, or a promotion.

The President may issue guidance that Executive agencies shall apply in the implementation of this

The Non-Foreign Area Retirement Equity Assurance Act of 2009 (5 U.S.C. 5304 note) shall be applied
using the appropriate locality-based comparability payments established by the
President as the applicable comparability payments in section 1914(2) and (3) of such Act.

As you can
see, there is no mention of employees whose pay is set by agreement.

The Executive Order and White House

Executive order makes no mention of pay set by agreement nor does the implementing memorandum
The pertinent part of the memo says:

Despite the sacrifices that I knew a pay freeze would entail for
our dedicated civil servants, I concluded that a two-year freeze in the upward statutory adjustment of pay
schedules is a necessary first step in our effort to address the challenge of
our fiscal reality. The Congress responded to my proposal by including such a
freeze in the Continuing Appropriations and Surface Transportation Extensions
Act, 2011 (H.R. 3082), which I signed into law today (the “Act”). The
Act freezes statutory pay adjustments for all executive branch pay schedules
for a two-year period. It also generally prohibits executive departments and
agencies from providing any base salary increases at all to senior executives
or senior level employees, including performance-based increases.

(My emphasis)

Again, no
mention of bargained increases.

OPM’s Guidance

OPM issued
 basically repeats the White House memo with more words (no surprise
there). However, in an attachment to the
guidance (attachment #2), OPM says the following:

While this legislation will prevent
adjustments in executive branch pay schedules that are made by statute, some
laws allow such adjustments to be made by agency heads as an exercise of
administrative discretion. In order to ensure consistent treatment of executive
branch employees and to promote the fiscal purposes of my original proposal,
agency heads who have such discretion should not provide any upward adjustments
in Federal employees’ pay schedules or rates during the two-year period covered
by the statutory pay freeze.

you should suspend any increases to any pay systems or pay schedules covering
executive branch employees that could otherwise take effect as a result of an
exercise of administrative discretion during the period beginning on January 1,
2011, and ending on December 31, 2012. You also should forgo any general
increases (including general increases for a geographic area, such as locality
pay) in covered employees’ rates of pay that could otherwise take effect as a
result of the exercise of administrative discretion during the same period. To
the extent that an agency pay system provides performance-based increases in
lieu of general increases, funds allocated for those performance-based
increases should be correspondingly reduced to reflect the freezing of the
employees’ base pay schedule.”

Game over,
right? If an Agency has discretion, it
can choose not to bargain on pay, right? Think again, the Federal Labor Relations Authority (which defers to no
one) has the following policy:

“…the Authority
has consistently held that matters concerning conditions of employment over
which an agency has discretion are negotiable if the agency’s discretion is not
exclusive and the matters to be negotiated are not otherwise inconsistent with
law or applicable rule or regulation.
 “ 44 FLRA No. 16

So the union shows up and says
we want to bargain pay as usual. The law
doesn’t stop it; the Order doesn’t stop it; and, OPM’s guidance (even if it
were regulation) doesn’t stop it. So if
you’re in one of the covered Agencies and you want a raise, it appears you can
bargain one as nothing prevents it.

Accident or Intent

The big question is whether
the drafters of all the paper discussed above missed this issue or intended all
the paper to read that way. Let’s test
the logic trail: unions support current President in election, President issues
unpopular pay freeze covering everybody but some unionized employees, if they’re
left out, who will notice, ergo let’s do the unions a favor. You decide but sounds like a syllogism to me
(remember, I went to a Jesuit college).

As always,
if you discern an opinion in any of the above, its 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.