Postal Service to create employee-owned firm to handle EEO complaints

The U.S. Postal Service plans to create a private, employee-owned company by June 2002 to investigate equal employment opportunity complaints, an agency official said Monday. Current EEO investigators at the agency will be considered first for jobs with the new company, said Laree Martin, manager of the Postal Service's national EEO compliance and appeals program. "We are trying to create an environment that takes care of as many people as possible," Martin said. The agency hopes that the maximum number of agency employees eligible will choose to work with the new firm, she said. The Postal Service currently has about 117 full-time employees nationwide working directly on EEO complaints filed against the agency. In fiscal 2000, Postal Service employees filed about 10,500 EEO complaints.

The Postal Service plans to convert its EEO compliance and appeals program into an employee stock ownership plan (ESOP), a type of tax-qualified employee benefit plan in which most or all of the assets are invested in the stock of the employer. In 1996, the Office of Personnel Management's investigations office, which conducts background checks of potential employees for federal agencies, was the first federal organization converted into an ESOP. OPM investigators left the government and became employees and owners of the private firm, U.S. Investigations Services Inc. Martin said the Postal Service is using U.S. Investigations Services as a model. After reviewing business plans and cost proposals, the agency will award a three-year sole-source contract with two one-year renewal options in February 2002, Martin said. The agency hopes to complete the transition to a new ESOP-based private company handling EEO complaints by June 2002. The Postal Service will select a trustee to represent the employees' interests and recruit a management team qualified to bid for the contract. The trustee will also help employees make the transition from the government to the private sector. Martin said the Postal Service will also seek authority to offer voluntary early retirement to ease the transition to the ESOP. According to Martin, opinions on the prospect of switching from government to industry vary among EEO investigators. "Those who are eligible for retirement and can cash in are generally excited and optimistic about the change," she said. "Other employees who have been working for five or 10 years and have kids in college are less optimistic; they feel that federal employment is more secure than a job in the private sector." Martin said the Postal Service is outsourcing its EEO caseload to streamline its operations and focus on its core missions. Concern over agency bias and neutrality in EEO investigations also led to the decision to give an independent, private firm authority over EEO complaints. "There is a broad perception throughout the Postal Service that an outside investigator will be more objective," she said. According to Martin, the Postal Service previously tried to outsource its EEO complaint workload in 1994. The agency had limited success, however, because the contractors hired to perform the work did not have the expertise or experience with the EEO complaint and investigation process that agency investigators possessed. The Postal Service eventually reverted to handling EEO complaints internally since the contractors were "calling us all the time anyway" for assistance, she said. The current effort, which would outsource the work, but would hire EEO complaint investigators from the agency, attempts to combine the best of both worlds. Martin said outsourcing EEO complaint investigations won't save the agency much money. She said other agencies that have handed over their EEO caseloads to private firms spend between $2,000 and $2,500 on each claim. The Postal Service currently spends roughly between $1,800 and $1,900 per claim, and that figure could increase with outsourcing, Martin said. The Postal Service is looking for the most cost-effective bid. Its large number of complaints could actually work in its favor when it comes to the contract's price tag, Martin said. "We have more investigations, and more volume could get us more cost-savings," she said. "We have to decide what it is worth to us to have more objectivity [in investigating complaints]."