Bush signs bill that sends unions back to bargaining table at Defense

President Bush on Monday signed into law defense authorization legislation that will fundamentally alter a new personnel system at the Defense Department.

The fiscal 2008 Defense Authorization Act includes language that would restore collective bargaining and appeal rights under the National Security Personnel System. It also would exempt all wage-grade employees from NSPS.

"There haven't been many wins in our history bigger than this one," said John Gage, president of the American Federation of Government Employees. "On all fronts -- our rights, collective bargaining, contracting out -- this is a huge win."

Federal labor unions have been pressuring Congress to restore collective bargaining rights, especially after a three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled in May that the department has the authority to limit labor negotiations through November 2009. On Jan. 7, 2008, AFGE filed an appeal with the Supreme Court.

But AFGE General Counsel Mark Roth said Tuesday that the union already has notified the Supreme Court solicitor general that it will be withdrawing the case. "Everything we were suing for we achieved in the bill," Roth said.

The law will allow labor unions and the Pentagon to bargain over certain policies at the national level, and both parties say they are optimistic. If an agreement cannot be reached at the national level, the parties can mutually agree on an independent third party to resolve the dispute or take their case to the Federal Labor Relations Authority, Gage said.

"We believe these NSPS reforms greatly improve DoD's personnel system," said Rick Brown, president of the National Federation of Federal Employees. "With these changes, NSPS has a much better chance of being a success."

Gage questioned, however, whether the new law will actually curb the Pentagon's plans to impose NSPS on bargaining unit employees. "I think there's a good chance that they won't be in the NSPS," he said. "I'm just guessing, but I think DoD might want to try this out on the managers and nonrepresented people [first]."

While the legislation bars unions from negotiating over pay, Gage said employee groups would work to bargain over certain elements of the system that help determine pay. For example, AFGE will try to block forced distributions -- the setting of quotas on the numbers of employees who can receive a particular rating -- and ensure performance standards are clear and applied fairly, he said.

Meanwhile, the law also requires the Pentagon to modify its pay plan, which previously involved distributing the entire governmentwide pay increase based on performance. But the law requires that employees with acceptable ratings receive 60 percent of the annual increase, with the remaining 40 percent allocated to pay pools and distributed based on performance.

Still, union officials said they continue to have some major concerns with pay-for-performance implementation at the department, despite reports that the average NSPS employee received a significantly higher pay increase and bonus this year compared with workers on the General Schedule.

Gage indicated that if pay for performance were implemented across government and if 70 percent to 80 percent of employees actually made more than was possible under the General Schedule, there would not be enough appropriated salary money to fund the raises. "This is really about how you fund this thing in a nonprofit environment," he said. "With the forced distribution and money crunch, in the long run, federal employees will receive less in salary."

The 2004 authorizing legislation that created NSPS required that the Pentagon spend no less than it would have otherwise spent on annual pay increases if it had not implemented NSPS. That means pay increases at the department are funded at the same level as those on the General Schedule.

The department has not released plans on when it intends to bring bargaining unit employees into NSPS. Currently, 110,000 nonbargaining unit employees are operating under the system, with an additional 57,000 scheduled for conversion in the spring. Mary Lacey, program executive officer for NSPS, said last week that the Pentagon is already in talks with unions on how to proceed with the national-level bargaining strategy.

"A couple of unions actually approached us and mentioned a couple of issues they want to bargain on, and we're game to start down that path," Lacey said.