FUBAR: FSIP’S UNICORN
The Federal Service Impasses Panel (FSIP) has a unicorn that it treasures. While the members prefer to call it their “demonstrated need criterion,” that label is merely to obscure outsiders from seeing clearly that there is nothing of earthly substance to the Panel’s valued possession. By trotting this unicorn out repeatedly and treating it as if it alone can transport parties with grace and purity to future labor agreements, the Panel has impasse resolution Fouled Up Beyond All Reason. It is time the Panel confronted the reality of bargaining table dynamics that practicing negotiators face every day and gave up its fantasy.
The Panel has said repeatedly that “. . . a party proposing to change the status quo bears the initial burden of demonstrating why the change is necessary.” AFGE, 12 FSIP 66 (7/10/12) and NFFE, 13 FSIP 13 (4/6/13). While that might sound judicially noble, it damages the federal sector collective bargaining process in at least nine ways.
First, nothing in the law or regulations requires that the “demonstrated need” criterion be used. As a result, there are times that Panel members use other standards, creating disparities in how cases are evaluated. Here are some excerpts from recent decisions that turned on the “reasonableness” criterion.
“Having carefully considered the parties’ positions on this issue, which was not addressed in the Factfinder’s Report and Recommendations, we conclude that the Union’s proposal provides the more reasonable basis for resolving the dispute.” NTEU, 10 FSIP 119 (11/30/11)
“After full and careful review of the parties’ arguments and evidence on the issues dividing them in this article, in our view, the Employer’s final offer provides the more reasonable basis for resolving their impasse.” AFGE, 02 FSIP 167 (5/10/04)
“Having considered the evidence and arguments, we conclude that the Employer’s position provides a reasonable basis for settlement.” AFGE, 90 FSIP 145 (02/08/91)
In another case the decision flatly rejected the idea that one party has the burden at the Panel in favor of noting that both parties have a burden to convince the arbitrator of the worthiness of their proposals.
“At the outset, I believe it is important to underscore that this dispute is being resolved under the Statute where the parties have a shared burden of convincing the Arbitrator of the merits of their respective positions.” AFGE, 12 FSIP 84 (10/09/12)
And in other cases the Panel realized what practitioners did years ago, namely, that when neither party can show a demonstrated need, reasonableness and equities should be the basis for any imposed compromise or alternative.
“Having fully considered the evidence and arguments presented by the parties, we conclude that a modified version of the Union’s final offer provides the more reasonable basis for settling their dispute.” NTEU, 13 FSIP 20 (6/12/13)
“Accordingly, we shall order the adoption of compromise wording consistent with the discussion above which, in our view, balances the equities involved.” AFGE 11 FSIP 138 (2/8/12)
“After thoroughly reviewing the parties’ final offers on the Hours of Work article, we find that neither side has fully demonstrated the need for the numerous changes to the status quo being proposed. For this reason, the Panel shall impose compromise wording.” AFGE 02 FSIP 60 (12/12/02)
Second, what does the Panel’s criterion quoted in the second paragraph of this posting even mean? It is so packed with ambiguity that, like the unicorn, it can only exist in the eye of the beholder. Unlike the standard of “just cause for discipline” which over time has taken on specific criteria or MSPB’s “Douglas Factors,” the Panel has done virtually nothing to further refine the DN concept. Consequently, it is inevitable that biases—good and bad, large and small, intentional and subconscious–of the individual Panel member(s) deciding the case are the only things that matter.
Third, Panel members have even flip-flopped on what the “status quo” means. For example, in a 2012 case the Panel member faced a management demand that bargaining unit employees have their cubicle size reduced from 96 sq. ft., which had been the standard for everyone, to only 80 sq. feet. Rather than treat the 96 sq. ft. as the status quo and place the burden on the Employer, the Panel member said that the status quo was really that the unit employees had had the same size cubicles as others. Consequently, now that the agency was reducing everyone to 80 sq. ft., that was the new status quo. See AFGE, 12 FSIP 79 (6/6/12)
Fourth, Panel decisions built atop a demand for DN often mention that the party with the burden did not provide “evidence” of a need for a change. But again, the Panel has done nothing to define what evidence is. For example, when will a proposal supported only by logic/reason be considered mere speculation rather than evidence? How many grievances are enough to show that there has been a problem, if not abuse? What is minimally required of statistical evidence to be treated as significant?
Fifth, by demanding that the parties provide evidence showing that there is a problem with the status quo, the Panel, ironically, is encouraging the party that wants the change to stir up some problems. For example, if a union wants a more objective contract provision on when sick leave restriction letters are appropriate, the DN criterion forces it to file grievances every time management imposes one alleging any and every plausible violation. They should allege that the decision was discriminatory, retaliatory, violated past practice, and misapplied the contract language. Unions should ask for as many records as possible and generally make a mess over the issue. Based on Panel decisions to date, it does not seem to matter whether the union wins or loses. The Panel just wants to see fighting, no matter how much official time that wastes.
In contrast, if the Panel valued logic and reasonableness above all else, the union could wait for contract negotiations to fix the problem—prospectively as well as retroactively. If impasse assistance was needed, it could feel confident that solid reasoning could prevail.
Sixth, the DN criterion puts more emphasis on looking at the past rather than the future despite the fact that the contract will apply only to the future. For example, few federal employees have had to deal with furloughs recently, but that is likely to change soon. Consequently, if a union goes to impasse seeking a detailed furlough article, the probable Panel response will be to reject any substantial change because there is no demonstrated need in the past.
Seventh, by demanding that the party seeking a change carry the burden of proof to demonstrate a need for change, the Panel has positioned itself as anti-change. Although it is not radically anti-change nor perhaps even knowingly against it, that is the effect. The DN criterion presumes something in place today to be better than something that is proposed. Yet, defending the status quo rather than championing reasonable change is a death sentence for any modern organization. If you doubt that, what comes to mind when we say the Vatican, Kodak, and the pre-bailout GM. FEDSMILL is not saying that the Panel should be pro change, but rather that it should be neutral on the issue.
Eighth, use of the DN criterion ignores the concept of risk. Modern management has created a cottage industry focusing on risk management, primarily the risk of litigation. Yet, the Panel seems oblivious to the idea when it Panel imposes a discretionary clause over a mandatory one, creating the perfect environment for disparate treatment claims. Imagine a clause such as this is imposed, “Advanced annual leave may be granted by a supervisor when reasonable.” While the union’s first reaction may be dismay at the loss, the Panel just handed it the perfect environment in which to lay back, search for the best applications of the clause and then whipsaw other managers or declare those preferred applications to be the past practice from which no one may deviate without negotiations. It also can charge management with disparate treatment the first time two similarly situated employees from different protected civil rights groups are treated differently. A finding of civil rights discrimination can be extremely costly for management, and the Panel should care about that.
Here is an actual example. In NTEU and Securities and Exchange Commission, 02 FSIP 122 (11/8/02) the Panel ordered the parties to adopt the following clause despite union objections to it as a standardless system ripe for errors and abuse, “The Employer may provide an employee with an annual merit increase of up to three steps within the employee’s level based on his/her performance. All merit increases are subject to budgetary considerations.” It only took NTEU a few years to prove that when implemented the system resulted in illegal systemic discrimination against African-American and older employees. The arbitrator ordered millions in back pay, which the Panel could have avoided had it considered how high the risk of imposing standardless clauses. The Panel should consider itself obligated to impose contract language that minimizes the government’s risk, whether that be risk of violating the law or the risk that flows from imposing a poorly-worded, ambiguous, grievance-breeding contract provision.
The NTEU-SEC case also demonstrated that the Panel needs to show more of an understanding of the dozens of employment laws outside of the CSRA that create litigation liabilities. There is more to the law than ULPs and negotiability protests.
Ninth, and probably most important of all these, is that the Panel’s DN criterion triggers a terrible dynamic at the bargaining table. It rewards a party not only for defending the status quo, but also for refusing to deviate even a little from the current practice. Any attempt at compromise weakens its ability to profit from the DN burden-shifting mindset.
On the assumption that we have at least shaken the Panel’s confidence in its use of the DN criterion, we close with a suggestion of criteria it should use in lieu of DN. We recommend that it use the “reasonable basis” standard, as the opening case excerpts in this article show it has from time to time. It should also adopt the principle that the parties have a shared burden to convince the neutral of the worthiness of their proposals. Finally, just as the MSPB spelled out the elements of the Douglas Factors, the Panel should offer more substantive guidance as to the elements of reasonableness in a bargaining impasse. That could look something like this:
Litigation Risk– proposals which create financial liabilities under employment laws because of their ambiguity and unbridled discretion are not as reasonable as those that narrow the exposure.
Administrative Burden and Cost– proposals which impose an inordinate burden on the other party are not as reasonable as those that minimize it.
Viability– proposals that are more likely to reach a legitimate goal are more reasonable than those lacking feasibility.
Comparables– the more similarly situated the employees of the other contracts the more reasonable the comparison.
Potential Value – proposals that offer potential value to both parties are more reasonable than those that meet the interests of only one.
Evidence v. Argument– while what happened in the past is relevant if there is documentary evidence analyzing the impact, reasoning and a focus on what needs to happen in the future are just as important.
Rate of Change– proposals calling for a moderate rate of change are generally more reasonable than those that oppose any change or that change things in bursts.
Loss– proposals that impose tangible losses on a party are not as reasonable as those that avoid or minimize them.
Relationship– proposals that encourage the parties to work together are more reasonable than those that set them at odds with one another.
These are the criteria the parties should be looking at themselves prior to impasse; they are inherent in the purpose of the statute spelled out in 5 USC 7101. Panel recognition and approval of them will only boost the effectiveness of the bargaining process.
Demonstrated need is a relic from private industry collective bargaining where employers came to the bargaining table as owners of the business. It also has its roots in rights arbitration, where again the concept of property is involved. However, in public sector interest arbitration, the public owns the operation and the neutral is there to do what is most reasonable—not just mindlessly endorse what the last guy did.