NTEU PROVES FDIC PAY RAISES VIOLATE CIVIL RIGHTS ACT

NTEU charged the Federal Deposit Insurance Corporation with discriminating against its African-American employees and those 40 and over when it distributed performance awards. Last week an arbitrator agreed ruling that FDIC violated civil rights laws.

During the George W. Bush years and its anti-union FSIP, NTEU had little choice but to accept the management-designed Corporate Success Awards program.  It repeatedly told management throughout negotiations that the program was  grossly unfair, and NTEU promised to challenge it through grievance-arbitration litigation if the program turned out to be as bad as NTEU projected.

After giving management some time to implement its program and examining the impact on all groups protected by the civil rights acts, the union filed a grievance charging illegal discrimination. NTEU brought in an expert witness statistician who presented a report showing that employees in the two classes were getting far fewer awards than would be expected based on the numbers. Management countered with its own statistician who argued that the union expert had incorrectly analyzed the numbers.

Initially, the arbitrator rejected the grievance, but NTEU filed exceptions with FLRA and the Authority ordered the arbitrator to reconsider the facts in light of the legal standards used in discrimination cases, rather than the words in the contract. (65 FLRA 302)  Upon reexamination, the arbitrator agreed with NTEU that FDIC had illegally discriminated in how it distributed awards.

Management first alleged that NTEU had failed to identify a specific “employment practice” in its awards process that led to the discrimination. The arbitrator rejected that very common management defense. He found that the selection process was so subjective that the entire process constituted an employment practice, “The selection process seems to be a seamless series of subjective evaluations, with no guidelines for supervisors and managers to follow when evaluating employees. . . .Testimony disclosed an inability of supervisor and managers to explain the criteria. . . in anything but the most general terms.”

Management then charged that NTEU was wrong to statistically analyze all FDIC employees in one pool; the agency insisted that the law requires that each individual office be analyzed separately. That also is a common management defense technique because smaller pools make it harder to develop statistical conclusions. The arbitrator saw through that gimmick and cited numerous cases to reject management’s defense. He specifically noted that the FLRA has ruled, “We note that a statistical report that incorporates data from similarly situated employees at different worksites should normally be considered probative of class-wide impact if the employer uses substantially similar standards or practices at those sites, even when different individuals work at each site.”

He then noted that the law only requires that the union show that the two classes of employees were treated differently at a level of at least 1.96 standard deviations and certified that NTEU showed proof far in excess of that benchmark. The union demonstrated the standard deviation difference for FDIC African-Americans employees was 3.6 in comparison to Caucasian employees and for those 40 and older it was a 6.2 S.D difference in comparison to everyone under 40. The arbitrator concluded that statistically there was a very low probability that the treatment of employees in these two classes was due to chance. That permitted him, as the courts have certified, to attribute the difference to illegal discrimination.

Management’s third defense was that it had a “business necessity” for running the program as it designed it, but the arbitrator said it failed to show evidence of that. It also alleged without any evidence that the differences were due to such things as how salaries were distributed, employees’ individual assignments, and whether they worked on teams.

The neutral concluded by stating that the union had proven that there were civil rights violations in the distribution of awards.

The case now moves to a determination of the appropriate remedy. NTEU will likely ask for retroactive back pay for the employees in the two targeted classes who were illegally denied a fair share of the awards for each year since 2004, interest on that money, attorney fees, expert witness fees, a cease and desist order barring any further use of the defective award program, and other remedies. It could even help employees make individual claims for compensatory damages up to a maximum of $300,000 per employee.

Given that violations of civil rights laws are per se prohibited personnel practices, it will be interesting to see if the union asks the arbitrator or the Special Counsel to take disciplinary action against the managers responsible for the violations.

Finally, will anyone in the FDIC leadership apologizes for the mistreated of hundreds of employees in these two classes based on widespread racial bias and age animus? An apology would be the classy thing to do.

NTEU seems to have developed a special expertise in processing disparate impact claims on behalf of large classes. It has hired several statistical experts to help its legal staff assemble statistical evidence to prove discrimination on a class-wide basis. It won millions in back pay for SEC employees and currently has similar cases pending at NRC and other agencies.

While the anti-union FSIP may have stopped this union temporarily, in the long run the Bush appointees have cost the government far more than if a fair system had been instituted in 2004.