Labor relations ruling threatens Pentagon’s personnel reforms

Defense Department officials are moving ahead with a planned human resources overhaul by placing 11,000 nonbargaining-unit employees into a new pay structure in late April. But a legal snafu over the labor relations portion of reforms could complicate matters as the department tries to extend the human resources changes to employees represented by unions.

Shortly after a late February ruling by Judge Emmet Sullivan of the U.S. District Court for the District of Columbia that enjoined the Pentagon's new system of negotiating with labor unions, Defense officials reaffirmed their intention to move the first wave of employees into the National Security Personnel System, with a Web posting.

Sullivan ruled that NSPS failed to provide adequate collective bargaining rights for Defense employees, in part because officials retained the right to override negotiated agreements in the name of national security. He also said the Pentagon's plan to replace the governmentwide Federal Labor Relations Authority, which decides labor-management disputes, with an internal board whose members are appointed by the Defense secretary, did not meet a requirement for third-party review.

Sullivan's ruling did not touch the human resources side of the NSPS. But the scaled-down first phase, dubbed "Spiral 1.1" -- originally designed to include 65,000 employees -- now only includes a smaller group of nonunion workers. The reason is the department does not need to negotiate a new contract with such employees regarding the changed practices.

Without a new labor relations system, the Pentagon would have to separately negotiate the human resources changes with every local bargaining unit -- there are more than 1,000 nationwide -- and wait for contracts to expire, which could take years, said the former general counsel of the FLRA, Joseph Swerdzewski, who is helping the unions prepare for the possibility of such negotiations.

The new labor relations system the department is seeking would render all existing collective bargaining agreements unenforceable.

The revamp is thereby intimately linked to the rest of the planned changes including the crown jewel of the overhaul -- replacing the decades-old General Schedule pay system with one that measures employee performance and local markets to determine compensation.

"Potentially the issue is going to be whether or not they want to do piecemeal implementation or implement it all," Swerdzewski said. "You can only bargain…when the collective bargaining agreement's term has ended. For many of the activities, many of the DoD locations, I'm sure they still have existing contracts."

NSPS spokeswoman Joyce Frank said the Pentagon is "currently in the process of assessing options for implementation of NSPS beyond Spiral 1.1." The department also is deciding whether to appeal Sullivan's decision.

Congress also gave the department authority to conduct national-level bargaining in lieu of bargaining with so many local units of one union, but the Pentagon has not made plans to do so. The possibility of national-level bargaining further complicates the process of implementing NSPS without the proposed labor reforms, according to American Federation of Government Employees attorney Sarah Starrett.

National-level bargaining is not an easy fix to the problem, Starrett said, because some Defense Department work areas, for example, are represented by multiple unions that band together to negotiate one contract.

"It's going to be a transitional period," Starrett said. "Stay tuned because this is really going to be a work in progress. No one has ever done this before."

Deputy Defense Secretary Gordon England told federal employees at a conference in Baltimore that prospects for an appeal were high. Sullivan also gave the government an option to submit a reworked labor relations plan to him for consideration.