Unions blast Defense personnel overhaul, back Homeland effort

House-approved legislation to overhaul the civil service system at the Defense Department is drawing fire from federal employee representatives, even as they praise the process of implementing similar legislation at the Homeland Security Department.

The bills authorizing new personnel systems for the Defense and Homeland Security departments are similar, with at least two important differences in the Defense bill that appear to favor federal labor unions:

• Defense employees can appeal disciplinary decisions to the Merit Systems Protection Board after an initial appeal at a yet-to-be created internal Defense appeals board.
• An independent third party-although not necessarily the Federal Labor Relations Authority-must review labor disputes.

American Federation of Government Employees President John Gage blasted the bill, saying it would "only serve to pave the way for a patronage system where hard work and merit are not rewarded but political loyalty is paramount."

That angry rhetoric contrasts with the optimism union officials have expressed about the planning process that has gone into creating a new personnel system at Homeland Security this year. Union leaders were included in the Homeland Security design team and senior review committee, which since April has narrowed personnel options for DHS, presenting them last month to Homeland Security Secretary Tom Ridge and Office of Personnel Management Director Kay Coles James.

"They appeared to be listening and to appreciate our interest in solving problems while protecting employee rights," said National Treasury Employees Union President Colleen Kelley at the conclusion of three days of meetings on the new DHS system last month.

The difference, union officials say, is attitude. They argue that the Defense Department has remained tight-lipped about its intentions and arrogant in its requests for new authorities. One top AFGE official said the unions arranged a meeting last month with Defense officials hoping to hash out an agreement. "We thought that if we just sat down and talked to people, it could be more reasonable, but we were pretty much shut down," the union representative said.

Many observers don't expect Defense to take as long as Homeland Security has-seven months-to prepare its new system. Defense officials have been mulling proposals to overhaul the civilian personnel system for years, and Defense Secretary Donald Rumsfeld won a key victory in the legislative tug-of-war when House and Senate negotiators removed a provision that would have required him to phase in a new system. The compromise bill allows Rumsfeld to move forward immediately with a new system for 300,000 workers, and to extend it to all employees when he certifies that a new performance appraisal system is in place.

Under the new system, employee performance, rather than seniority, will determine annual salary increases. The General Accounting Office has criticized Defense's performance appraisal system in the past. That worries many agency managers.

"The changes are going to be swift and we're going to go into this thing blind," said Daryl Perkinson, a Defense Department supervisor and board member of the Federal Managers Association. "The worst thing we can do to the employees of the DoD...is to come in and demoralize them by putting in new pay systems that can't be financed or executed."

"If Defense officials had been more open about their intentions for a new system, I don't think we would have all the nervousness going on in the background," Perkinson said.

Rumsfeld's aggressive approach on the Hill may be the reason he didn't get all the authorities granted to Ridge.

"I think the harder Rumsfeld pushed, the more the Senate thought about some checks and balances," said Paul Light, a professor of public service at New York University.

The MSPB appeal language in the bill originated in the Senate. The MSPB, an independent agency, currently arbitrates most disputes about disciplinary decisions between federal employees and agency managers. Rumsfeld initially proposed that Defense set up an internal disciplinary appeals system with no outside review of decisions by the MSPB.

Rumsfeld also wanted to waive rules governing labor-management bargaining that would have freed Defense management from the outside review of the FLRA, another independent agency that arbitrates disputes between labor unions and agency management. But Senate Governmental Affairs Committee Chairwoman Susan Collins, R-Maine, insisted on third-party review of labor disputes.

All the positive union reaction to the Homeland Security planning process and negative responses to the Defense bill may shift quickly when the details finally emerge about what either department actually will do with its new authorities. Whatever they do, though, it will mark "a very significant change for federal employment," Light said.

"Labor is saying, 'Show us a system that will be fair and provide benefits based on solid measurement and real performance, rather than preferences and brown-nosing and favoritism.' " Whether either department can implement such a system, Light said, depends on the training of agency managers.

"Do managers know how to use these new authorities?" Light asked. "Organized labor is saying rightly, 'We are nervous about it.' "