DEPARTMENT OF COMMERCE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION OFFICE OF OCEANIC AND ATMOSPHERIC RESEARCH ATLANTIC OCEANOGRAPHIC AND METEOROLOGICAL LABORATORY MIAMI, FLORIDA and NATIONAL WEATHER SERVICE EMPLOYEES ORGANIZATION, AFL-CIO
United States of America
BEFORE THE FEDERAL SERVICE IMPASSES PANEL
|In the Matter of
DEPARTMENT OF COMMERCE
OFFICE OF OCEANIC AND ATMOSPHERIC
ATLANTIC OCEANOGRAPHIC AND
NATIONAL WEATHER SERVICE EMPLOYEES
Case No. 02 FSIP 165
DECISION AND ORDER
The National Weather Service Employees Organization, AFL-CIO (Union) filed a request for assistance with the Federal Service Impasses Panel (Panel) to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (Statute), 5 U.S.C. § 7119, between it and the Department of Commerce (DOC), National Oceanic and Atmospheric Administration (NOAA), Office of Oceanic and Atmospheric Research, Atlantic Oceanographic and Meteorological Laboratory (AOML), Miami, Florida (Employer).
After investigating the request for assistance, which arose during negotiations over the parties’ initial collective-bargaining agreement (CBA), the Panel determined that the issue concerning the continued participation of bargaining-unit employees in an "Alternative Personnel Management System," also known as a personnel demonstration project, should be resolved through an informal conference between a Panel representative and the parties. If no settlement was reached, the representative would notify the Panel of the status of the dispute, including the parties’ final offers and her recommendations for resolving the matter. After considering this information, the Panel would take whatever action it deemed appropriate to resolve in impasse, including the issuance of a binding decision.
Accordingly, Panel Member Andrea Fischer Newman conducted an informal conference with the parties on October 29, 2002, at the Panel’s office in Washington, D.C. During that meeting, the parties’ chief negotiators agreed to resume their deliberations over a 6-week period at the local level in Miami, Florida, and exchange information, in an effort to achieve a voluntary agreement on the pending issues. Subsequently, the parties reported that while they had made some progress in terms of improving their relationship, the issues remained unresolved. On December 16, 2002, Member Fischer Newman convened a teleconference with the parties to further mediate the dispute; however, the parties failed to resolve the issues. The parties have submitted their final offers to the Panel along with summary statements of position. The Panel now has considered the entire record, including the parties’ arguments and supporting evidence.
The Employer’s mission is to conduct basic and applied research in oceanography, tropical meteorology, atmospheric and oceanic chemistry, and acoustics. The bargaining unit consists of approximately 70 professional and non-professional employees who hold positions such as meteorologist, physical scientist, and electronics technician. The Union was certified as the exclusive bargaining representative of the unit in July 2000.
On December 24, 1997, DOC received final approval from the Office of Personnel Management (OPM) to implement a personnel demonstration project for several of its organizations, including the Employer’s laboratory in Miami, Florida. The demonstration project was implemented in March 1998, for a 5-year duration; by letter dated February 14, 2003, from Kay Coles James, Director OPM, DOC was granted permission to extend the demonstration project for another 5 years; the letter stated, specifically, that the extension is authorized "to the extent necessary to validate the results of the project."
The demonstration project provides alternatives to the Federal Government’s customary procedures involving pay administration, position classification, staffing, reductions in force, performance evaluation and rewards. Instead of being paid under the General Schedule (GS) system of grades and steps, employees are assigned to one of four pay bands; management has been given the authority to align pay with performance, and exercise greater flexibility in hiring and retaining scientists and other personnel.
Essentially, the parties disagree over whether bargaining-unit employees should continue to participate in the personnel demonstration project.
POSITIONS OF THE PARTIES
1. The Union’s Position
The Union proposes alternative solutions to resolve the dispute. Its preferred outcome is that employees cease participation in the demonstration project at the end of the initial 5-year term (i.e., March 28, 2003); however, if the Panel determines that employees should remain under the demonstration project, the Union proposes that the Employer "maintain compensation during the project at the level it would have under the General Schedule pay system. Consequently, there shall be no reduction in the amount of the pay pool during the term of this agreement."
Preliminarily, the Union argues that the Panel has no choice but to end bargaining-unit employee participation in the demonstration project, if the Union so requests. This position is based on informal advice received from OPM that, in the absence of a voluntary resolution between the parties, employees should be released from the demonstration project.(1) Furthermore, the Panel should reach the same outcome as it did in a previous case where it ordered the adoption of a union proposal to immediately terminate bargaining-unit participation in a demonstration project.(2) In reaching its conclusion in Fort Detrick, the Panel relied on a survey taken 1 year after the project was implemented which revealed general employee dissatisfaction. Similarly, a survey of AOML bargaining-unit employees taken 18 months after implementation of the demonstration project shows that 56 percent were dissatisfied with it; another 62 percent expressed a desire to revert to the GS pay system.
Although OPM has agreed to allow DOC to extend the demonstration project for another 5 years, the Union alleges that the Employer may have failed to provide OPM with evidence that an extension of the demonstration project was necessary "to validate the results of the project," as required by 5 U.S.C. § 4703(d)(1)(B). Furthermore, the Union contends that a contractor’s report, commissioned by the Employer, based on data gathered during the 3rd year of the project, shows only a minimal relationship between performance and pay raises in the demonstration project. The report concludes that measuring the linkage between the two is "limited by attributes inherent in the pay for performance system," which demonstrates that the project is structurally flawed, making it impossible to reward superior performance with higher pay over the long term; this paradoxical outcome could undermine the motivation of superior employees to continue to perform outstanding work. The Employer has failed to include career-ladder promotions in its assumptions about what employees’ salaries would have been had they remained under the GS system, which undercuts the Employer’s claim that average salaries have increased more under the demonstration project than they otherwise would have. Moreover, salary increases under the demonstration project have been unjustifiedly discriminatory, e.g., employees within the Office of the Director have received substantially higher percentages of salary and total dollar amount payout than those who work in the Employer’s scientific divisions, fueling employee resentment. The pay system under the demonstration project forces employees to compete against one another for an annual pay raise, thereby undermining the collaborative scientific work which employees perform at the Employer’s laboratory facility. Employee surveys indicate that teamwork among employees has declined since the inception of the demonstration project.
In the alternative, if the Panel determines to require employees to continue their participation in the demonstration project, it should mandate that the Employer not diminish the size of the pay pool. This would ensure the availability of funds to reward employee performance. Otherwise, employees could find themselves in the situation of a sister laboratory in Boulder, Colorado, which also participates in the demonstration project where, in the face of a budget shortfall, employees had to sacrifice their pay increases.
2. The Employer’s Position
The Employer proposes that bargaining-unit employees remain under the demonstration project "permanently for such time as NOAA and DOC have authority to participate in the Project." To address concerns raised by the Union during negotiations and improve labor-management relations, it also proposes that: (1) a facilitated retreat be held during which the Union and management would work in teams to better understand different performance scores and requirements for promotions; (2) "teamwork" wording be built into employee performance plans, as appropriate, with Union input to be solicited in its development; (3) a Union representative be invited to participate in annual meetings held for rating officials to ensure a more common understanding of the rating guidelines and their meaning; (4) after employee annual performance scores are determined, the Employer continue to hold meetings for all employees and present statistics describing the distribution of scores and pay increases; (5) a Union representative be invited to attend local budget development meetings, on a case-by-case basis; (6) the 4-person ZT Pay Pool remain within AOML, and no longer "float up" to a higher level within the organization;(3) and (7) the parties continue to work together on morale issues.
Employees should continue to participate in the demonstration project because both the Employer and employees benefit from the pay-for-performance system. The demonstration project has enabled the Employer to link pay with performance and improve the strategic management of its financial resources and human capital. Moreover, it provides greater flexibility to manage the budget, and hire and promote, with pay increases commensurate with an employee’s experience and accomplishments. Annual evaluation reports verify that allowing managers increased personnel management flexibility benefits employees, as evidenced by higher average pay increases and bonuses than those employees would have received under the GS system. Furthermore, the demonstration project is designed to facilitate the Employer’s mission by providing management with tools to improve recruitment, recognition and retention of high performers. In this regard, there has been an increase in productivity as well as greater communication between rating officials and their employees under the demonstration project.
As to the Union’s claim that OPM supports releasing bargaining-unit employees from demonstration projects if their exclusive representatives object to further participation, this matter subsequently was clarified by OPM.(4) Continued employee participation in the demonstration project is needed to further assess whether alternative personnel practices are more effective than traditional practices. OPM recently authorized DOC to extend the demonstration project for a second 5-year term, which shows that OPM believes that its continuation would be worthwhile. Moreover, there is no evidence to suggest that the Employer has ever treated employees disparately or exercised favoritism in utilizing its authority under the demonstration project to reward achievement. No agency grievances have been filed by employees since the inception of the project in 1998 alleging management bias in rewarding employee performance. The other proposals put forth by the Employer are intended to improve labor relations between the parties and help employees gain a better understanding of personnel practices under the demonstration project. In this regard, a retreat which brings together management, employees and Union representatives might help to dispel misconceptions regarding the demonstration project and foster an environment where the parties have an open dialogue to address concerns. Including a Union representative at the annual meeting of rating officials would give the parties the opportunity to develop a common understanding of rating guidelines.
Having carefully considered the parties’ proposals and positions on the issues, we conclude that the impasse should be resolved on the basis of a modified version of the Employer’s final offer. We are persuaded that the personnel demonstration project has, at least initially, achieved certain objectives "to link pay and performance, to retain high performers, and to expedite and delegate human resources processes."(5) In our view, employees should continue under the demonstration project so management can better determine the effectiveness of a more flexible personnel management system. Continued employee participation also is consistent with OPM’s decision to extend the demonstration project for another 5 years to "validate the results of the project." As to the Union’s position, there is little evidence in the record to suggest that the Employer has been unfair when distributing funds rewarding performance.(6) Moreover, requiring the Employer to guarantee a pay pool equivalent to compensation levels that otherwise would have been in effect under the GS pay system would undermine the flexibility the Employer seeks in determining how performance should be compensated, and could impede its ongoing effort to validate the results of the project. We also find the decision of a previous Panel in Fort Detrick to be inapposite. The primary basis for the Panel’s decision to release employees from the demonstration project was a requirement in the Federal Register notice specific to that project stating that bargaining units that did not want to participate should be excluded; there is no similar provision in the Federal Register notice for the Employer’s demonstration project. In addition, the employer’s proposal in Fort Detrick was to permit unit employees to vote on whether they wanted to continue to participate in the demonstration project, which is not the case here.
The Employer’s proposals for, among other things, a facilitated retreat for managers, employees and Union representatives, should lead to a mutual understanding of pay practices under the demonstration project, and help alleviate skepticism about how performance is rewarded. We find it necessary, however, to eliminate the portion of the Employer’s proposal requiring bargaining-unit employees to remain under the demonstration project "permanently for such time as NOAA and DOC have authority to participate in the Project." Under 5 U.S.C. § 7119(c)(5)(C), final actions of the Panel "shall be binding on  parties during the term of the agreement, unless the parties agree otherwise," so imposition of the Employer’s wording would be inconsistent with the authority vested in the Panel by the Statute. Thus, our modification of the Employer’s final offer ensures that the Union may revisit the issue of the continued participation of bargaining-unit employees in the demonstration project when the parties’ CBA expires.
Pursuant to the authority vested in it by the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7119, and because of the failure of the parties to resolve their dispute during the course of the proceedings instituted under the Panel&rsquo