Postal Service Pay and the Postal Act
In a case before the US Court of Appeals for the District of Columbia Circuit, the National Association of Postal Supervisors (Association) went to court contending the Postal Service pay package for its “Field” Executive and Administrative Schedule (“EAS”) personnel (“Field Pay Package”) violates the Postal Act. The Association contends the violation is due to the Postal Service failing to provide a pay differential between clerks and carriers and the supervisors that manage them and also failing to fully consider private-sector compensation and benefits. (National Association of Postal Supervisors v. Postal Service and United Postmasters and Managers Of America, No. 1:19-cv-02236, February 22, 2022).
The Postal Act requires that the Postal Service “provide adequate and reasonable differentials in rates of pay between employees in the clerk and carrier grades in the line workforce and supervisory and other managerial personnel.”
As an initial issue, the Postal Service (USPS) argued that the matters in dispute on the Field Pay Package are not subject to judicial review. The Appeals Court disagreed. It concluded the statutory provisions at issue, in this case, are mandatory directives and enforceable through judicial review.
Postal Service Pay Differential for Supervisors
The Postal Act requires that the Postal Service “provide adequate and reasonable differentials in rates of pay between employees in the clerk and carrier grades in the line workforce and supervisory and other managerial personnel.” The Postal Service contends it has satisfied the pay differential requirement through its Supervisory Differential Adjustment. This adjustment sets a five percent differential between supervisors’ pay and the pay of clerks and carriers.
However, the National Association of Postal Supervisors believes the method used to implement the pay differential is flawed and, as a result, “thousands of EAS employees earn less than the craft workers they supervise.”
The Court noted that the Postal Act requires a pay differential and the Postal Service has broad discretion to decide the size of the differential and how it is computed. This means “a court can compel the Postal Service to consider and fulfill the differential requirement, but it cannot substitute its own judgment of what is adequate and reasonable for that of the Postal Service.”
Postal Service Pay and Private-Sector Pay and Benefits
The Association argued the Postal Service did not study private-sector compensation or benefits before issuing its Field Pay Package. And, it believes, the result is a Postal Service Pay compensation package the Association alleges is not “comparable” to the private sector.
The Court held that to meet its statutory obligation, the Postal Service must:
- Consider private-sector compensation and benefit rates in setting compensation for “all” employees and
- Show a good faith determination that compensation and benefits are comparable.
Postal Service Did Not Meet Requirement to Consider Private Sector Compensation
In this case, the Court held the Postal Service did not adequately demonstrate it considered private sector compensation and benefits and did not explain how it has achieved comparability in its rates.
In other words, the Postal Service did not satisfy the Court that the USPS provided a justification for its conclusion that comparability was achieved, and did not explain its resolution of factors built into the comparability requirement like locality pay and market rate increases in pay.
The Court also stated the Postal Act does require some differential in the pay rates between employees in the clerk and carrier grades in the line workforce and supervisory and other managerial personnel. The statute also requires that the differential be “adequate and reasonable.”
The Association made a claim the Postal Service exceeded its statutory authority. It is the responsibility of the Postal Service and it is the responsibility of the USPS to demonstrate that it has provided some differential within the meaning of the Postal Act. The Court concluded the USPS failed to demonstrate it met this standard.
Decision of the Court of Appeals
The DC Court of Appeals held that the Association plausibly alleged the Postal Service exceeded the scope of its delegated authority on multiple counts.
The Appeals Court reversed the decision of the District Court and remanded the case for further review consistent with this opinion. Potentially, this decision could impact the pay levels for “thousands” of Postal supervisors under the USPS Field Pay Package.