GovernmentExecutive.com

A judge ruled Monday that the Defense Department's new personnel system unlawfully diminishes collective bargaining, blocking the labor relations portion of the system from moving forward.

Judge Emmet Sullivan of the U.S. District Court for the District of Columbia wrote in his decision that the department's regulations went beyond congressional intent.

"The design of these regulations appears to rest on the mistaken premise that Congress intended flexibility to trump collective bargaining rights," Sullivan said.

In the 2004 Defense authorization bill, Congress granted the department authority to create a new human resources system, based on the notion that the current system was too rigid and outdated to respond with agility to modern threats of terrorism.

The Pentagon issued regulations for its National Security Personnel System in November 2005, and a coalition of unions quickly filed a lawsuit over the labor relations portion of the plan.

Much of Sullivan's decision echoed, and even quoted from, an August 2005 decision issued by fellow District Judge Rosemary Collyer on the Homeland Security Department's similarly revamped labor relations system.

Collyer ruled that the DHS system was illegal because the department had the ability to override collective bargaining agreements by releasing so-called implementing issuances or documents from high-level officials amending the rules. Sullivan found that the Pentagon's system was similar enough to DHS' that much of Collyer's ruling applied.

"As was the case in [the DHS decision], this court concludes that . . . the new rule fails to ensure even minimal collective bargaining rights," Sullivan said. "As in [the DHS case], the regulations concerning management rights fail in this case because 'any collective bargaining negotiations pursuant to its terms are illusory: the secretary retains numerous avenues by which s/he can unilaterally declare contract terms null and void.' "

Sullivan went beyond Collyer's ruling in one area: He knocked down a new internal labor relations board, which would investigate and decide upon labor-management disputes in place of the governmentwide Federal Labor Relations Authority.

Collyer let DHS keep its board, but Sullivan ruled that the National Security Labor Relations Board, whose members would be appointed by the Defense secretary, "does not satisfy Congress' requirement for an 'independent third party' to review labor-management disputes."

Sullivan also ruled against the NSPS process for appealing personnel actions such as demotions, calling it "the antithesis of fairness." The judge cited the department's ability to reverse an appeal if it is found to affect the national security mission.

After Collyer issued her ruling, the Pentagon changed the standards by which the Merit Systems Protection Board could mitigate the penalty for employee misconduct. Originally the Pentagon followed DHS' lead and said the MSPB could not modify the department's penalties unless the action was found to be "wholly without justification." After the DHS ruling, the department changed its standard to "totally unwarranted in light of all pertinent circumstances."

But the change did not convince Sullivan: "The 'totally unwarranted' standard merely provides further evidence that this process fails to provide employees with fair treatment," he said.

Sullivan did rule in favor of the Pentagon in two areas. The unions argued that the department failed to meet its obligation to collaborate with them in creating the system. Sullivan said the department followed the law, however.

"While defendants may not have met Congress' requirements with enthusiasm, the court finds no evidence that defendants acted in bad faith," Sullivan said, citing numerous meet-and-confer sessions and the public comment period.

Also, the unions tried to argue that the department never had authority to broadly revamp the labor relations system beyond a couple of specific changes expressly stated by Congress. Sullivan found, though, that the "language of the statute" shows that "Congress clearly authorized defendants to establish a labor relations system that modifies" the current one.

Sullivan blocked implementation of the adverse action and appeals section of NSPS permanently, but he invited the government to submit a new labor-management relations proposal that complies with his ruling.

Both sides also have the right to appeal the parts of the decision that went against them, and both sides said their lawyers are reviewing the ruling to determine next steps.

In the DHS case, both sides chose to appeal unfavorable aspects of Collyer's decision. Lawyers had until Monday to file briefs in the appellate court, which will hear oral arguments April 6.