IRS finds 1,400 employees unfairly passed over for promotions

Nearly 1,400 employees at the Internal Revenue Service will receive notice in the coming days that they were unfairly denied the opportunity for promotions. This move was prompted by a ruling last fall from the Federal Labor Relations Authority.

The National Treasury Employees Union brought the issue to the FLRA -- which presides over federal labor-management disputes -- claiming that the IRS used a criterion measuring employees' potential to perform in a new job to unfairly eliminate high-quality candidates for promotions.

IRS employees go through a series of examinations before receiving merit-based promotions. First, they must meet minimum qualifications. From that list of candidates, the agency narrows the pool using ratings on performance appraisals, and by rating employees on their "good potential" to perform the new job. From there, the four best-qualified candidates are submitted to the hiring official to fill the slot.

NTEU claimed the middle step of ranking "good potential" unfairly eliminated employees who, without that criterion, would have ranked among the top four best qualified candidates.

Employees who were eliminated because of a lower score on potential will have priority consideration for future promotions, meaning that they will have to be considered before a hiring manager looks at other applicants. A spokeswoman for the IRS said qualifying employees, identified by the agency, will soon receive a letter providing information on the positions for which they now have priority consideration.

NTEU President Colleen Kelley called the development a "major victory for every IRS employee" and said the union will "closely monitor the implementation to ensure that promotions are properly awarded."

FLRA arbitrator Roger Abrams first ruled against the IRS in December 2004. The agency appealed the decision, and the FLRA rejected the appeal in September 2005. After reviewing thousands of employee-applicants, the agency now is preparing to send out notices of priority consideration for future promotions.

Abrams' ruling centered on the IRS' introduction of the middle step without formal acceptance by NTEU. The agency agreed to eliminate a previous middle step, which narrowed the list of applicants by one rating, based on prior performance, potential and performance awards. In negotiating its new contract, NTEU sought to eliminate this middle ranking and the agency agreed. The IRS later inserted the "good potential" criterion without NTEU's official consent.

Abrams also agreed with the union on the substance of its complaint, because the middle step eliminated any employee who received less than a three on a scale of one to five in good potential.

"The good potential policy could work to undermine the essential characteristic of the merit system," Abrams said. "The good potential policy might result in an arbitrary action."

The IRS argued it has the right to promote employees based on potential, in keeping with Office of Personnel Management guidance.