Unions have had a hard time even slowing agencies down in their pursuit of outside contractors.  OMB removed a lot of the issues from negotiations by issuing a detailed government-wide regulation. The Supreme Court tried its damnedest to minimize union rights to bargain over contracting out.  And arbitrators have moved timidly even when they have found the agencies contracting out in violation of law or regulation.  For example, in IFPTE, 64 FLRA 508 (2010) the arbitrator found the agency had failed to bargain with the union before contracting out work, but merely ordered the agency to comply with the law going forward.  Arbitrator Ira Jaffe did the same in AFGE, 64 FLRA 266 (2009).  Neither ordered a return to the status quo ante nor back pay for the earning opportunities lost by unit employees when their work was moved out the door.  But, speaking of doors, NTEU just kicked its way through the most fortified one protecting agencies.  It convinced an arbitrator to order the agency to take the work back from the contractor until it properly negotiated over moving it to an outside vendor and to pay the employees for the work they lost because it was sent outside the unit.

IRS notified NTEU a few years ago that it was going to reorganize an Information Technology unit that had been doing two kinds of work by having everyone do just one of those two things.  The agency said it would no longer need the other work done, and it assured the union it would not contract it out.  Shortly after agreement was reached, the agency contracted out the work previously done by unit employees. Failing to see anything amusing or beneficial in that decision, NTEU filed a grievance alleging that the agency adversely impacted unit employees by taking this work away from them without notice and bargaining, a classic unfair labor practice violation.

The agency either did not understand the union’s theory or it was banking on getting the same petty slap on the hand penalty that previous arbitrators had imposed. Probably the latter.  But NTEU’s attorney showed the arbitrator how much work the outside vendor did, how it reduced the amount of overtime available to employees in the IT unit, and how it probably hurt promotion opportunities.  In the face of the evidence, the arbitrator not only found a violation of the law and contract, but also ordered the very significant remedies listed above.  The arbitrator, Susan MacKenzie, also ordered the agency to give NTEU documents it had been withholding so that the union can get a better picture of just how much damage employees suffered.

The IRS has filed exceptions with FLRA asking the Authority to help it out of this mess.  IRS could have avoided all this if it had negotiated when the union first complained, but chose not to.  If NTEU prevails, employees will get millions in back pay and perhaps vendors will start asking agencies to guarantee them that all necessary collective bargaining has been completed before they sign on the dotted line.

This decision goes a long way toward rebalancing the scale.  Agencies still have much more power in the contracting out arena than unions, but at least now agencies have a good reason to take the union’s role seriously.

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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