Muscling In

By October, President Clinton had issued an executive order directing agencies to form labor-management partnership councils to jointly identify problems, craft solutions and head off potential conflicts. At agencies where partnerships have flourished, union-management relations are definitely better, observers agree. But the broader picture is less encouraging. Resistance at many local offices from both union leaders and managers has kept the cooperation concept from penetrating deep into government ranks. And many mid-level managers, because they've been excluded from partnership councils, feel disenfranchised by the entire effort.

Now the unions want to push the concept of partnership a step further. They have urged the administration to enforce a provision of the order most agencies chose to ignore. In addition to forming partnership councils, agencies were directed to negotiate with unions over the so-called "permissive" subjects listed in 5 U.S.C. 7106 (b)(1). Often referred to as (b)(1) issues, they include: "the numbers, types, and grades of employees or positions assigned to any organizational subdivision, work project, or tour of duty, or . . . the technology, methods, and means of performing work." Since federal unions have no statutory right to negotiate these matters, this provision promised them a significantly greater voice in major management decisions, most notably those related to pay.

Most agencies chose not to follow that part of the order, relying on language in the statute which says that (b)(1) issues shall be put on the table only "at the election [or discretion] of the agency." White House officials were miffed when agencies didn't comply, but didn't do anything about it until earlier this year, when Vice President Al Gore's office circulated a draft memo that would require agency heads to sign a statement pledging to negotiate over (b)(1) subjects. The memo, many observers say, was clearly timed to help Gore woo union support as he gears up for his 2000 presidential bid.

A number of agencies-Justice, Treasury and Defense among them-have expressed serious concern about the memo. The Senior Executives Association and the Federal Managers Association have declared their flat-out opposition, insisting agencies should be free to individually decide whether negotiating over (b)(1) matters is appropriate for their circumstances. In a Feb. 24 letter to members of Congress, FMA President Michael Styles urged lawmakers to block the plan. "If it is allowed to proceed, it will have a devastating long-term impact on the federal government's ability to carry out its congressionally mandated missions in a timely and cost-effective manner," he wrote.

Meanwhile, some union leaders say they may abandon partnership unless (b)(1) bargaining becomes part of the package. They also dragged their feet earlier this year on helping the Office of Personnel Management draft a consensus civil service reform proposal because Gore had not officially issued the memo, according to a management source working with OPM on the proposal.

In the unions' view, a deal's a deal. "Partnership has a partner itself and that's (b)(1) bargaining," says Bobby Harnage, president of the American Federation of Government Employees, the largest federal union. "The (b)(1) issue is going to determine the future of partnership."

Adversarial Relations

Before the idea of partnership took hold, adversarial collective bargaining, grievances and litigation were the mainstays of federal labor-management relations. As one AFGE local president told Government Executive several years ago, "We bargain virtually every time they turn the lights out."

Relations started to shift in the late 1980s and early 1990s, but at only a few agencies. Clinton administration officials who developed the National Performance Review reforms "looked at the federal labor-management relations climate and said, 'Hey wait a minute, we can't make [these changes] happen,' " recalls Robert Tobias, president of the National Treasury Employees Union. NTEU represents 150,000 federal workers in 18 agencies, about two-thirds of whom work at the Internal Revenue Service.

Tobias and the late John Sturdivant, who was then president of AFGE, convinced the Clinton-Gore team that if unions were treated as partners in the reinvention effort, relations could turn around. Their efforts led to Clinton's October 1993 order on partnerships. "Only by changing the nature of federal labor-management relations so that managers, employees, and employees' elected union representatives serve as partners will it be possible to design and implement comprehensive changes necessary to reform government," the order said. A 10-member National Partnership Council, now headed by Office of Personnel Management Director Janice Lachance and including administration and union officials, was set up to guide and support efforts across government.

The partnership model, championed by companies such as Saturn and Harley-Davidson, promised drastic change. The goal was to get away from top-down dictates and tap into front-line workers' experience to find innovative ways to improve agencies' operations. "This probably is the largest change effort in labor-management relations in the history of the federal government," notes an OPM official.

To some involved, the idea of partnership was too broad a concept to be realistic. "I was a little bit skeptical about whether this would work in the federal sector, because the adversarial roles were so entrenched on both sides," Harnage recalls. But in some places it has worked, he says, and, among people who've experienced success, "there's a higher level of respect on both sides."

Changing Ways

To anyone who's been a party to the traditional, us-vs.-them collective bargaining process, the benefits of partnership are easy to see. In the traditional system, parties come to their respective sides of the table with exaggerated wish lists and then trade back and forth, trying to win as much as they can while conceding as little as possible, says Larry Goodwin, a personnel expert at the National Academy of Public Administration and former human resources director at the Labor Department. The process, which can take years, often ends up in a stalemate that goes to arbitration, where a third party makes a binding final decision that satisfies neither side. Recalling one set of traditional collective bargaining negotiations he worked on that lasted more than two years, Goodwin says, "It was the worst experience of my life."

Partnerships, on the other hand, encourage interest-based bargaining, which focuses on mutual interests, such as the development of a new performance-appraisal system or family-friendly work policies. Parties sit interspersed at the table, rather than on opposite sides, and once a mutual interest is identified, the group collectively brainstorms options for addressing the matter. Sometimes a facilitator helps guide participants. Final decisions are reached only by consensus.

The process often takes longer than the traditional method, but because up-front employee buy-in leads to fewer grievances, it takes less time to actually implement changes, advocates say. After 25 years of government labor-relations experience, Goodwin believes "the interest-based approach and the partnership approach are much more challenging, but they lead to better solutions."

Agency executives and union officials are quick to point out that partnership is not co-management. "At the end of the day, if we don't reach consensus and I'm the manager, I can make the decision," Tobias notes. "But what it does do is pledge that as I'm making this decision, I'm going to include you and your interest, and I'm going to try to resolve this with you before a decision gets made."

Anyone who's experienced a working partnership will be sold on the concept, Tobias insists. "When you assign people an important substantive task, you provide them with facilitated assistance, you teach them how to do interest-based problem solving, they will come out of that experience and say 'I'm a believer,' " he says. "Where that experience has occurred, people treat each other differently."

It can't work unless everyone at the table is committed to the process, Goodwin says. In the early days of NTEU's agreement with the Customs Service, Tobias remembers hearing grumbling from senior managers after they'd been informed of the new partnership arrangement. According to Tobias, at one of the initial meetings then-Commissioner George Weiss told his staff that he would be evaluating people who reported to him on how well they implemented not only the language but the spirit of the agreement, and that he expected they would evaluate the managers they supervised in the same way. "That's a very powerful message," says Tobias. "It made a significant difference in how fast we were able to start doing business."

Even with that commitment, the process is far from easy. "Partnerships are a lot like marriages," Harnage notes. "You're going to have your disagreements, but you have to work at it." And for some issues, partnership simply can't work. "Even in a partnership, you have instances where you go to traditional bargaining because the parties don't have mutual interests over a particular subject," Goodwin notes. When budget constraints force agencies to implement reductions in force, for example, the parties likely will resort to traditional bargaining because the union clearly would not have an interest in seeing members lose their jobs.

Success Stories

Where partnership has taken root, agencies have seen impressive results. At the Social Security Administration, a partnership with AFGE led to a labor-management joint benchmarking study seeking improvements for the agency's 800 number telephone service. After identifying best practices in the private sector and government, the group recommended changes that transformed SSA's 800 number from one of the country's worst to one of the most efficient. Now, 95 percent of callers get through within five minutes, says Paul Barnes, SSA deputy commissioner for human resources.

SSA also used partnership to help solve the problem of an excess of data-entry staff, Barnes says. By the early 1990s, improved automation had made two of the agency's three data-entry service centers unnecessary. Rather than close the centers, eliminate 1,000 jobs and face the costly and unpleasant grievances that would likely follow, SSA worked with AFGE to redesign the two centers from data-entry facilities to telephone-service operations.

Employees were happy, because they got training for new jobs that carried higher grades and higher salaries, Barnes says. SSA officials were happy because they expanded their much-needed telephone services. And since the two centers were located in Salinas, Calif., and Albuquerque, N.M., and employed many Spanish speakers, the agency satisfied its need for more Spanish-speaking telephone workers, he says.

An internal agency evaluation of SSA partnership activities found that the 42 partnership councils formed at various levels of the organization had affected 1,500 projects or outcomes. In addition, while staffing numbers have stayed relatively constant, the number of grievances filed against the agency dropped from 382 in 1993 to 131 in 1998, leading to significant litigation cost savings, Barnes says.

The Customs Service, which signed its first partnership agreement with NTEU in June 1994, also has seen benefits. According to a report by consulting firm Booz-Allen Hamilton, since 1994, every dollar spent on partnership has yielded at least $1.20 in benefits in the form of litigation costs avoided, time saved and increased revenue from fines. Jointly designed and implemented drug interdiction strategies have led to significantly higher seizure rates. "Partnership increased Customs' efficiency and effectiveness in meeting its mission," the report concluded.

Mature Relations

IRS officials and NTEU have one of the maturest partnerships in government. What started in 1987 as a way to get the agency back on track after a disastrous tax filing season has become an integral part of managing the IRS' recent restructuring effort. Since Congress passed legislation last year to reform the agency, "We have been included and involved every step of the way in every decision that has been made so far," Tobias says. "I believe that as a result of our participation, the decisions will be better, the implementation will occur faster, and we will have more chance at achieving [employee] acceptance than if we were operating in an environment where the IRS made the decisions and then announced them to the employees."

Contentious (b)(1) bargaining matters are very much on the table at IRS. Tobias has convinced agency officials to negotiate how jobs are classified-and therefore how much they pay-under the new organizational structure. Traditionally, unions have not had any say in job classifications, although they could challenge agency decisions to downgrade positions. Tobias also convinced IRS officials not to outsource any jobs as part of a recently signed contract to replace the agency's aging technology infrastructure. Now, Tobias sits on a steering committee that will oversee implementation of the 15-year multibillion-dollar contract.

Technically, classification and technology are (b)(1) issues, but Tobias prefers to see them in a different light. "When partnership is working, issues are not designated as (b)(1) or not (b)(1)," he says. "They are issues to be resolved. They are resolved in the context of a consensus decision-making model." David Mader, the IRS' chief of management and finance, agrees. It makes sense to get the union's views as the work moves forward, because technology and structural changes affect how employees do their jobs, he says. The IRS modernization can't succeed without employee buy-in, Mader adds. "Right now, partnership is more critical than ever."

Despite all these positive words, IRS and NTEU have had some tense moments on the (b)(1) issue. The agency's Memphis Service Center, for example, couldn't agree with the union on a plan for shift change procedures, so they took their conflict to arbitration. In its defense, IRS cited the statutory management right not to bargain over any (b)(1) subjects. But the arbitrator ruled in favor of the union. Because IRS signed a partnership agreement that said it would bargain over (b)(1) matters, the agency had to do so, the arbitrator ruled. In late April, IRS appealed the arbitrator's decision to the Federal Labor Relations Authority, an independent agency that adjudicates federal labor-management disputes.

Even with some relative successes, Mader, SSA's Barnes and their union colleagues are the first to admit that partnership has yet to take root throughout their agencies. It's a slow, sometimes painful growing process that requires training, changes in attitudes and commitment from all involved, they say. But the fact that not all organizational levels have made partnership work yet doesn't spell failure, insists an OPM official. It's "extraordinarily difficult" to fundamentally change the model of labor-management relations, he says. "I think we have seen tremendous progress."

Permissive Pitfalls

Despite these partnership successes, the recent uproar about Gore's draft memo shows that the (b)(1) issue still threatens to divide labor and management. Both sides have been litigating the matter for years. Last summer, agencies finally won a victory when the Federal Labor Relations Authority ruled that the executive order permits, but does not require, individual agencies to bargain over these subjects. Unions were furious. "There's been a lot of litigation and heartache around the (b)(1) issue," an OPM official says.

Gore's one-page memorandum, the future of which was still uncertain in late April, would have agency heads sign a notice stating that "I am hereby making the election to bargain over the matters set forth in 5 U.S.C. 7106(b)(1)." Agencies would have the right to revoke their election if, when the parties reached an impasse, unions filed suit in the courts. However, in the event of an impasse, unions could request that an administrative law court review the agency's decision, a right not included in the executive order.

The administration had intended the original order to direct all agencies to agree to bargain over (b)(1) issues, notes the OPM official. This provision was a critical part of the order, because "the (b)(1) issues really go to the heart of what a reinvented government is all about," he says. But most agencies took-and continue to take-the view that regardless of the order, the law allows them to make the final decision. Even OPM, which publicly endorses (b)(1) negotiating, has yet to bring those issues to its own bargaining table. Relations with the AFGE local at OPM have been tense ever since the agency underwent significant downsizing a few years ago.

Many managers, especially those at agencies that don't have solid labor-management partnerships in place, insist that forcing the (b)(1) issue will only make relations more tense. "I think it's going to make the situation much worse, because then people are going to be much more reluctant to share information than before," says one career manager. Managers may not say it publicly, but many also fear situations like the one Federal Aviation Administration supervisors faced last August. The National Air Traffic Controllers Association struck an agreement with FAA that will boost controllers' salaries by as much as $10,000 a year, while reducing supervisory positions.

G. Jerry Shaw, general counsel to the Senior Executives Association, has other concerns. In addition to the proposed Gore order, he notes, the Supreme Court recently decided that agencies must engage in so-called "mid-term bargaining," in which unions can initiate discussions during the life of labor contracts over issues not included in the original contracts.

"We are in for a tremendous amount of litigation," Shaw says. Unions now "literally can lock up an agency and throw away the key."

Arguments such as these are "specious," says Tobias, who says he has been working "for some time" to get the administration to reiterate its commitment to (b)(1) bargaining. "Managers have been able to avoid confronting the reality of having to bargain over this," he says. "I see [Gore's memo] as a real shot in the arm for pushing managers and union leaders off the diving board and into the water." To Tobias, if these issues don't come to the table, partnership won't necessary fail, but neither will the effort achieve its potential.

It's still not clear whether the concept of partnership will have staying power. Tim Chamberlin, president of the NTEU Montana local at the IRS, says that early partnership efforts within his district were "enormously successful" in dealing with substantive matters-even subjects traditionally handled only by management, such as budget and security. But a five-state partnership formed in 1997 to reflect the IRS' consolidation of district offices has been much less productive, he says.

Nevertheless, Chamberlin says he would never abandon the concept of cooperative relations. "If you look at the big picture of employee-management relations, partnership represents a turning point in the history of how we view labor's role," he says. "We would be crazy as labor leaders not to recognize that."