FDIC FLIPS, FLOPS, FLAPS, & FLAILS

The FDIC leadership is currently doing its best impression of a fish tightly caught on the end of an angler’s line. It’s struggling mightily in a desperate attempt to break free of the hook NTEU has set in it and the almost inevitable outcome.  But, given that our country entrusts these same FDIC executives with protecting the nation’s banking system, it is worrisome to see their chronically irrational decision-making playing out in NTEU and FDIC, 66 FLRA 696. This is not just some sporting spectacle.

During the Bush administration, agency leaders ignored NTEU’s bargaining table warnings and gave their managers too much discretion to decide who received performance bonuses and for what amount. Given the Impasses Panel’s contempt at that time for any union position, NTEU had little choice but to let management go through with its plan and then do precisely what it did to Securities and Exchange Commission.  After the management plan had been in operation for a while, the union statistically analyzed the FDIC data about who got what and how much. As predicted, NTEU found that management had violated various civil rights laws by discriminating against African-American employees and separately against those 40 and older. NTEU filed a nationwide grievance alleging civil rights violations.

When the arbitrator rejected NTEU’s discrimination claim, the union’s litigators appealed to FLRA. The Authority ordered the arbitrator to reconsider the case because he failed to properly apply the law the first time. When the neutral did, he confirmed that there was statistical proof of the civil rights violations NTEU had alleged and ordered the parties to reconvene to address the remedies.

That is when FDIC management began thrashing around wildly looking for any twisted position that would free it from the union’s deeply set hook. FDIC leaders filed a senseless appeal with FLRA. We call it senseless because there are dozens of FLRA decisions affirming that the arbitrator must complete the decision, including the remedy, before FLRA will review the case.

Some might say the appeal was filed merely as a delaying tactic while others might argue that FDIC LR and legal staffs do not have enough to do, and still others that FDIC LR lacks the skill to work out deals with NTEU that protect the Corporation’s legitimate interests. Personally, we think they are all right.  FDIC’s LR team is failing the corporation miserably.  For an agency whose success depends on the ability to manage risk, its LR shop is clearly oblivious to the concept.

But far more important than being senseless, the appeal was self-destructive, harming Corporation interests further. It likely will cost the agency money in several ways that could have been avoided had someone in management sat down with the union and worked out a quick settlement.  If the arbitrator awards back pay—as seems inevitable, NTEU can now potentially get—

· another year’s worth of interest on the back pay,

· more in attorney fees,

· an order that the agency pay any extra income taxes employees owes because they had to take the entire back pay amount in one tax year rather than spread over several years when his income was lower,

· an order allowing retroactive contributions to the TSP and negotiated 401 plan,

· an order compensating any employee claiming that had he been able to invest his retirement money earlier he would have earned more, and

· an order that management adjust the pensions of already-retired employees in the victimized classes as well as their lump-sum, end-of-career, annual leave checks.

At best, all this appeal did was give FDIC LR managers and labor lawyers an opportunity to act like they are doing something of value to the corporation.  None of their management colleagues will have any idea how senseless and costly this tactic was.  Wouldn’t it be so much better (and cheaper) if they focused on ending anything that even hints of a civil rights abuse of its own employees, remedying that harm, and working out a performance bonus program that the union will not attack–or at least cannot attack so easily.

About AdminUN

FEDSMILL staff has over 40 years of federal sector labor relations experience on the union as well as management side of the table and even some time as a neutral.
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