HOW TO MINIMIZE CONTRACTING OUT

While management has a right to contract out work, the union has a right to negotiate procedures making that decision a fair one and softening the impact on employees. Here is how.

NTEU, 65 FLRA 509 –  This decision made clear that unions can demand to negotiate into their master contracts provisions that mirror those found in A-76 so long as they do not substantively or excessively interfere with management’s right to contract out.  Once they are written into the contract, the union can enforce them as contract requirements.  This overcomes the long line of precedent holding that unions may not grieve to arbitration violations of A-76.  “However, neither the plain wording of A-76 nor the above-cited court and Authority decisions support a conclusion that parties are precluded from agreeing to, and enforcing in arbitration, contract provisions that independently impose on agencies obligations that are the same as, or similar to, the requirements set forth in A-76. In this connection, the Authority has stated that a proposal was not contrary to A-76 where it would merely limit grievances ‘to the right guaranteed by the contract — not the right guaranteed by … A-76.’AFGE, Local 1827, 58 FLRA at 350. As Article 38, Sections 2A and 2D do not subject enforcement of A-76 to the negotiated grievance procedure and the Agency does not argue that the provisions are otherwise contrary to law, we find that they are not contrary to law.”

IFPTE, 64 FLRA 508 – The Authority has upheld an arbitrator’s decision that management could not contract out work until it has jointly conducted a cost-benefit analysis with the union that was required by the contract and completed impact and implementation bargaining.  This enables unions to demand that there be a joint cost-benefit analysis before the decision is made to contract out work.  If you get that right, do not be shy about hiring a professional accountant to guide the union’s work.

AFGE, 64 FLRA 266 – Do not let management label your proposal non-negotiable merely because it would slow down management plans to contract out work. “Moreover, the Agency’s claim that the provision, as interpreted and applied by the Arbitrator, is not enforceable because it would prevent it from acting quickly is contrary to Authority precedent. In this regard, in Antilles, the Authority held that ‘proposals that simply defer the exercise of management rights pending the completion of the statutory bargaining process’ are negotiable procedures. “

NTEU, 48 FLRA 566 – Because agencies must serve advance notice on a union if they propose to contract out work in a way that would adversely impact unit employees, Union should negotiate over just when that notice must be provided.  For example, should it be before the agency even requests contractor bids, before it decides which bid to accept, before it completes negotiations with the outside contractor over the terms of the contract, etc.  If the employer fails to give the union advance notice, it can ask an arbitrator or FLRA ALJ to impose sanctions on management, “The court found that ‘[b]y providing for a CHOICE of forum, section 7116(d) assumes that a similar analytical approach would be followed–if not the same result reached–by both the arbitrator and the Authority with respect to matters over which there is concurrent jurisdiction.’ 963 F.2d at 438 (emphasis in original). The court further indicated that if the approaches were not required to be similar the promise of a choice of forums under section 7116(d) would be illusory. Id. Consequently, we conclude that an arbitrator is empowered to fashion the same remedies in the arbitration of a grievance alleging the commission of an unfair labor practice as those authorized under section 7118 of the Statute.”

LIUNA, 39 FLRA 999 – A contractor most often will be considered to be a representative of the agency when having discussions with unit employees and be required to follow the same contract and statutory rules as  any manager.  Parties would do well to negotiate over just how the contractor will interact with the union. “As to the fourth element, for the reasons stated by the Judge, we agree with the Judge’s finding that the contractor was functioning as the ‘representative of the agency,’ within the meaning of section 7114(a)(2)(A) of the Statute, when it conducted the orientation meetings with the Respondent’s employees. . . . We agree with the Judge, for the reasons stated in his decision, that the Respondent violated sections 7116(a)(1) and (8) of Statute by failing and refusing to afford the Union the opportunity to be represented at the orientation meetings conducted by the EAP contractor with the Respondent’s employees.”

AFGE, 25 FLRA 987 – This is an oldie, but goodie.  The union proposed, “DOL shall not contract out any current or future ETA functions, where positions in those functions are to be abolished or downgraded, for one year after the effective date of the RRD.”   The agency balked, but FLRA held it to be negotiable.  “This proposal does not impose any substantive criteria on management’s exercise of its rights to contract out, nor does it prevent the Agency from contracting out.  The Agency retains full discretion to take any actions it deems necessary in connection with a determination to contract out under section 7106(a)(2)(B), and to implement such a determination once the negotiated delay period has passed.  Consistent with established Authority precedent, such a proposal is negotiable under section 7106(b)(2) because it delays but does not prevent management from acting at all to exercise its rights. . . Consequently, we do not need to reach the question of whether this proposal constitutes an ‘appropriate arrangement’ within the meaning of section 7106(b)(3) of the Statute.”

Although this case was never overturned, watch out for the warning FLRA issued in NAGE, 55 FLRA 1081.  There the union argued that a very similar proposal was negotiable only to have those three FLRA members rule it was non-negotiable, but then criticized the union for not making more complete arguments. “

“Consistent with the foregoing Authority precedent, because Proposal 4 determines when management may exercise its right to contract out, we find that it affects that management right. The Union does not claim that Proposal 4 is a procedure under section 7106(b)(2) or an appropriate arrangement under section 7106(b)(3) and thus, we do not address those issues. Accordingly, we find that Proposal 4 is outside the duty to bargain because it affects management’s right to contract out under section 7106(a)(2)(B) of the Statute.”

Rebecca A. Carranza, v. John M. McHugh, Secretary, Department of the Army,  EEOC Appeal No. 0120092727 (2010) – At FEDSMILL.com we believe deeply in using our rights outside traditional labor law to protect and benefit members.  Aside from expanding the service the union can provide members, it often totally surprises our LR management counterparts.   Generally, they know only labor law because MSPB, EEOC, OPM and other precedents are administered by other units outside LR. 

This case is a great one to work with at the bargaining table where contracting is an issue.  Here an employee of an outside contractor filed an EEO charge as if he was a federal employee.  To make a long story short, EEOC ruled that contract employees can at times qualify as federal employees, and that means that the union can legitimately demand that the employer address and spell out how each contract employee measures up against all of the factors noted below.  It may also mean that we can petition to have contract employees treated as bargaining unit employees, but FLRA has not stepped up to that yet. Here is the EEOC’s reasoning.

“The Commission’s federal sector case precedent has long defined an ‘aggrieved employee’ as one who suffers a present harm or loss with respect to a term, condition, or privilege of employment for which there is a remedy. The Commission has applied the common law of agency test to determine whether complainants are agency employees under Title VII. . . .Specifically, the Commission will look to the following non-exhaustive list of factors: (1) the extent of the employer’s right to control the means and manner of the worker’s performance; (2) the kind of occupation, with reference to whether the work is usually done under the direction of a supervisor or is done by a specialist without supervision; (3) the skill required in the particular occupation; (4) whether the “employer or the individual furnishes the equipment used and the place of work; (5) the length of time the individual has worked; (6) the method of payment, whether by time or by the job; (7) the manner in which the work relationship is terminated, i.e. by one or both parties, with or without notice and explanation; (8) whether annual leave is afforded; (9) whether the work is an integral part of the business of the ‘employer;’ (10) whether the worker accumulates retirement benefits; (11) whether the ‘employer’ pays social security taxes; and (12) the intention of the parties.

“Furthermore, in Baker, we noted that the Commission has recognized that a ‘joint employment’ relationship may exist where both the agency and the ‘staffing firm’ may be deemed employers. . . . A joint employment determination requires an assessment of the comparative amount and type of control the ‘staffing firm’ and the agency each maintain over complainant’s work. Id. Thus, a federal agency will qualify as a joint employer of an individual if it has the requisite means and manner of control over the individual’s work under the Ma criteria, whether or not the individual is on the federal payroll. Id.

“Upon review, we find the agency exercised sufficient control over the complainant’s position for a joint employment situation to exist, allowing complainant to file an EEO complaint against the agency within the 29 C.F.R. Part 1614 process. It is undisputed that Honeywell acted as a staffing firm in this case, placing complainant into the Executive Assistant position at issue. However, the record indicates that the agency, through LTC, controlled the means and manner of complainant’s work as she served under his general supervision as his Executive Assistant. The record further reflects that the agency provided complainant with her worksite, materials, equipment and supplies. Most significantly, complainant has asserted that LTC, an agency manager, was the party directly responsible for her removal from her Executive Assistant position. Complainant alleges that LTC provided Honeywell with critiques of her work performance and specifically requested that she be removed from her position with him. In its brief submitted on appeal the agency does not dispute LTC’s role in complainant’s removal, although arguing that Honeywell ultimately retained the relevant personnel authority over her. We find this argument unpersuasive, however, because all the incidents complainant alleges were discriminatory were the result of the actions of LTC, an agency manager, rather than managers at Honeywell.”

 

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