Daniel Minahan

Minahan and Shapiro, PC

Attorneys at Law

165 S. Union Blvd., Suite 366

Lakewood, CO 80228

(303) 986-0054

The authority to create NSPS is contained in Title XI of the FY 2004 Defense Appropriations Bill, Public Law 108-136. Along with an earlier statute providing for a new personnel system for the Department of Homeland Security, this statute was Congress' response to the Administration’s insistence that the executive branch must have more "flexibility" in managing civilian personnel to protect the nation from global terrorism.

In reality, the principal purposes of these laws are to weaken unions and to limit or abolish third-party review of management decisions affecting unions and employees.

Fortunately, these laws allow but do not require the establishment of new personnel systems, so a new administration can change or eliminate what a previous administration has established.

The NSPS statute adds a new chapter 99 to title 5 of the U.S. Code.

The authority for the new personnel system is in one (long!) section: 5 USC 9902.

NSPS allows DOD to waive most chapters of title 5 of the U.S. Code, as well as the OPM regulations in title 5 of the Code of Federal Regulations corresponding to those chapters.

Examples:

Ch. 43, Performance and performance-based actions, performance standards, PIP’s.

Ch.53, Basic pay (GS and WG)

Ch. 55 (waiver extends only to premium pay, night, Sunday, EDP, etc)

Ch. 61, Hours of work and tours of duty, alternative work schedules

Ch.63, Leave (includes sick leave, annual leave, FMLA, military leave)

Ch.71, Labor relations (bargaining, grievance/arbitration, official time, ULP’s)

Ch.75, Discipline and adverse actions

5 CFR Part 335, temporary promotions, permanent promotions

5 CFR Part 351, reductions in force

5 CFR Part 531, probationary employees

What about 5 USC Ch. 81 (workers compensation) ?

5 USC Chs. 83, 84 (retirement) ?

(Nothing in the NSPS law says these chapters of title 5 cannot be waived!)

NSPS does not affect 5 USC 2301 (merit system principles) or 5 USC 2302 (prohibited personnel practices). This includes the protection against whistleblower reprisal and the right to file an "individual right of action" appeal with MSPB alleging such reprisal.

NSPS does not affect EEO cases, which will be processed in the same manner as before, with the right to a hearing before an administrative judge of the EEOC, and the right to file an EEO case in federal district court.

NSPS does not affect any laws outside title 5 of the U.S. Code.

Examples:

10 USC (armed forces) depot maintenance

29 USC (labor) FLSA, OSHA, Equal Pay Act, Age Discrimination in Employment Act.

31 USC (financial management) personal property claims, waiver of overpayments

38 USC (veterans) USERRA

42 USC (civil rights) EEO, race, sex, national origin, religion, disability

NSPS does not affect any provisions of the U.S. Constitution.

Examples:

First Amendment: freedom of speech, religion, association

Fourth Amendment: search and seizure

Fifth Amendment: due process (liberty, property rights); self-incrimination, equal protection

Sixth Amendment: right to counsel if in "custody"

NSPS shall be "flexible and contemporary."

NSPS shall ensure that employees may organize, bargain collectively and participate through labor organizations of their own choosing in decisions which affect them "subject to the provisions of this chapter."

NSPS shall ensure that any appeal process for employees "provides fair treatment in any appeals that they bring in decisions relating to their employment and ensures they are afforded the protections of due process."

NSPS labor relations system "shall provide for independent third party review of decisions, including defining what decisions are reviewable by the third party, what third party would conduct the review and the standard or standards for that review."

"Pay for performance" Congress said almost nothing about this program and set forth no definitions or requirements. The NSPS law says only that a pay for performance system shall "better link individual pay to performance and provide an equitable method for appraising and compensating employees."

Pay Banding Congress said nothing about this, leaving it to DOD to design and implement. The NSPS law does say that the overall amount allocated for compensation of civilian employees shall not be les than the amount that would have been allocated to them if they were not in NSPS.

NSPS requires a performance management system that:

• adheres to merit principles
• "is fair, credible and transparent"
• links the performance system to the "agency’s strategic plan"
• ensures employee involvement in the design and implementation of the system
• provides training and retraining on the system for supervisors and employees
• assures ongoing feedback and dialogue between supervisors, managers and employees throughout the appraisal period
• includes safeguards to ensure that management of the system is fair and equitable based on employee performance
• includes a pay for performance evaluation system

• NSPS allows DOD to establish a permanent program for separation incentives
• The maximum payment is $25,000
• Allows employees eligible for a discontinued service retirement to receive both a separation payment and their annuity

• The NSPS statute says almost nothing about what can be included or excluded from the new employee relations system, with the exception of the few "non-waivable" laws identified above.
• Before the new system can be put into effect, DOD and OPM are required to "collaborate" with unions:

• Unions must be given 30 days notice of the new system so they can review it and make recommendations
• DOD and OPM must give the union recommendations "full and fair consideration."
• DOD and OPM shall accept such recommendations as they find advisable
• For recommendations not accepted, DOD and OPM must notify Congress and must meet and confer with the unions in an attempt to reach agreement
• If requested by a majority of the union representatives, the parties shall meet with FMCS representatives
• Once 30 days from Congressional notification have elapsed, DOD and OPM may decide to implement those portions of the NSPS to which the unions do not agree, but only with 30 days additional notification to Congress

• Level of union participation: DOD may choose which unions get to participate in the "collaboration" process and may decide to collaborate only with unions above the level of exclusive representation

• Bargaining after the implementation of NSPS: the statute allows DOD to bargain with a union above the level of exclusive recognition on anything, from a single issue change in compressed work schedules, for example, to a complete master labor agreement. This bargaining shall be binding on all subordinate bargaining units, shall supercede all other collective bargaining agreements, and shall not be subject to further negotiations with other labor organizations for any purpose, except as DOD allows.

DOD may establish a new appeals process "that provides fair treatment in any appeals employees bring in decisions relating to their employment."

• The process must "ensure that employees are afforded the protections of due process."
• DOD is required to consult with MSPB before issuing regulations on its new appeals process.
• The appeals process is also subject to the same notice and collaboration requirements as the rest of NSPS, described above.
• The standards for the NSPS appeals process must be consistent with the merit principles in 5 USC 2301.
• Legal standards developed by the MSPB and the courts under 5 USC Chapters 43, 75 and 77 shall apply to NSPS employees "unless such standards and precedents are inconsistent with legal standards established under this subsection."
• For adverse actions (suspension of more than 14 days, demotion or removal) employees may appeal NSPS decisions to the full MSPB, but only on the written record to see if the NSPS decision is arbitrary or unsupported by substantial evidence. The MSPB’s decision can be appealed by the affected employee OR DOD to the Federal Circuit.
• The right to appeal a final DOD decision to MSPB is provisional for 7 years and will become permanent unless Congress changes the law before then.

NSPS allows DOD and OPM to establish a new labor relations system for DOD employees.

DOD and OPM must give unions at least 30 days notice to allow the unions to review the new system and make recommendations.

DOD and OPM must give union recommendations "full and fair consideration."

For any union recommendations not accepted, DOD and OPM must meet and confer with the unions for at least 30 days. If requested by a majority of the unions, FMCS will participate in these meetings.

DOD may implement any or all of the new system, even if the unions disagree, after it has given 30 additional days notification to Congress.

National level application:

• DOD may engage in all pre-implementation collaboration on NSPS at a level above the level of exclusive recognition.
• The labor relations system under NSPS may incorporate the authority to bargain at a level above the level of exclusive recognition. The labor relations system shall be binding on all bargaining units in DOD "and shall supersede all other collective bargaining agreements in DOD, except as otherwise determined by DOD."

• "The labor relations system shall provide for independent third party review of decisions, including defining what decisions are reviewable by the third party, what third party would conduct the review, and the standard or standards for that review."

NSPS will expire in 6 years (2009), after which 5 USC Chapter 71 would apply again.

In a letter to all affected employees on December 14, 2004, Mary E. Lacey, NSPS Program Executive Officer, announced that NSPS will be implemented in 3 "spirals" (stages) for various groups of DOD employees. A list showing the number of employees affected at each installation is on the NSPS website. Spiral 1 is expected to begin July 1, 2005. Spiral 1 will be phased-in over about a year, with Spiral 1a on July 1, 2005, Spiral 1b about six months after that, and Spiral 1c about six months after that. DOD expects Spiral 2 and Spiral 3 to be finished in the next 2-3 years. The number of employees at each installation shown on the NSPS list suggests that DOD does not intend to apply NSPS to all employees at each installation, at least not in Spiral 1.

Ms. Lacey announced that the NSPS labor relations system should be implemented DOD-wide around July 1, 2005. The systems that will be implemented in "spirals" are the new employee relations system and the new appeals system. Why does DOD want the labor relations system in place first for the whole agency? Why are the most active and effective union locals included in "Spiral 1"? The answers to these questions speak volumes about the central goal of NSPS, which is to destroy the unions. Once this becomes obvious, even to Congress, perhaps the unions can succeed in getting the law repealed or modified.

Will DOD establish a legitimate appeals process for disciplinary cases, with proposal letters and access to evidence relied on to support the proposal and a fair hearing after the decision is made, including pre-hearing discovery and a hearing before a competent, unbiased and independent hearing officer, followed by a decision which identifies and correctly decides all issues raised in the case? The chances of a fair appeals process are virtually nil if it is entrusted to an internal, DOD-controlled Board.

Will DOD impose one worldwide labor contract for all installations or will it ensure that local parties can still bargain local issues?

Congress guaranteed the right to collective bargaining. What does DOD think this phrase means? It is not "collaboration." It is not "meet and confer." Collective bargaining means two parties negotiating as equals. Collective bargaining means that whichever party is negotiating for a change in personnel policy or working conditions must respect and preserve the status quo until a new agreement is reached. Collective bargaining means each party has access to an independent, third party decisionmaker in the event of an impasse who will make a final decision binding on both parties.

What about labor arbitration? This has been a feature of federal sector labor contracts for decades, and has been a feature of federal sector personnel law since the 1970’s. Arbitrators have been empowered to issue decisions on any topics covered by a labor contract, from overtime to promotions to discipline and adverse actions. No collective bargaining agreement that does not include arbitration is a collective bargaining agreement.

What about the FLRA? Will it still have a role to play in preventing and correcting unfair labor practices? Will the FSIP still resolve bargaining impasses? All indications are that DOD plans to assign these functions to an internal, DOD-controlled Board.