HOW FLRA BLEEDS AGENCY BUDGETS

Almost no one talks about it, but every day FLRA takes to resolve back pay cases costs federal agencies dearly. That is not opinion; it is cold, hard fact. Here is a great example.

In November 2005 management at the Customs and Border Protection agency proposed to change the process for granting performance awards from a negotiated, joint committee administered program to the traditional approach where management alone decides who gets awards. When the NTEU asked to negotiate, management just made the change unilaterally, and in early January 2005, the union filed a grievance alleging an illegal unilateral change.

The case moved quickly through the grievance process and the arbitrator issued a decision in January 2006 finding the agency violated the law. He ordered it to reconvene the 60 local joint labor-management committees that had existed around the country, let them review all of management’s unilateral decisions over the previous year, and then redo the process of identifying who should have received an award and for how much.  Anyone who should have received an award, or even a larger award, was to be given back pay with interest. No one who already received an award was to lose money. It was classic NTEU, known for its litigation smackdowns.

Up to that point, the agency alone was to blame for the cost of reconvening the committees, reviewing a year’s worth of decisions, making new decisions, calculating the back pay and adding interest. Management also takes the blame for filing exceptions with FLRA rather than accepting the decision or negotiating a resolution with the union.

However, once the agency filed exceptions and all the briefs had been submitted, which happened in March 2006, the onus was on FLRA to get the matter resolved pronto. Every day was another day of potential back pay.  Sadly, at that time the FLRA was chaired by an individual who either had no desire to issue quick decisions or had no idea of how to do so. The case lingered somewhere in FLRA storage space until that FLRA chair, Dale Cabaniss, suddenly resigned and was replaced.

When the FLRA decision did come out in June 2009, it upheld the arbitrator, ordering the agency to implement the remedy. Moreover, FLRA made clear that all the agency’s arguments failed based on precedent that was over a decade old, the agency’s admission that it did not present necessary evidence, and that it was objecting to the arbitrator addressing an issue that it asked the arbitrator to decide.  In other words, there was nothing ground-breaking or precedent setting about resolving this case. It was a no-brainer.

At that point, the union demanded its remedy, e.g., reconvene local joint committees, give them all the management paperwork spanning the five years that covered award decisions involving about 20,000 employees a year, and schedule local joint committee discussions to review and redo every decision. Rather than do that, management bought its way out of the mess and made a deal with NTEU that distributed retroactively an extra $10 million in performance awards. The formula provided about $475 dollars for each year each individual employee did not get an award, which worked out to be about $2 million per year since 2005.

There is no doubt that the agency’s extremely foolish labor relations decision-making started the problem. In fact, if there was such a thing as labor relations malpractice, the CBP managers who made that decision should be crowned “Mr. or Ms. LR Malpractice 2005-10.” But, if FLRA had resolved the problem even within one year of the exceptions, CBP could have saved about six million. In fact, if CBP only had to review two years of unilaterally issued awards, it might have gone through each decision and paid much less than even four million.

Now none of this blame falls on the three current FLRA members. They have all shown a deep commitment to clearing up the near-criminal backlog they inherited.

However, we have to ask why they have not taken steps to prevent this from happening again?  They have at least three options to avoid some future FLRA chair operating with the shameless ineffectiveness of Dale Cabaniss. First, they could move cases involving costly potential remedies to the head of the line ahead of all others. Second, they could establish a rule which dismisses any exceptions without the need for a written decision unless two of them have voted for a full review within 60 days of the record closing. (It could even be one vote if the case was appealable to the courts, e.g., ULPs.) That would clear out the cases filed just for political coverage by unions or management, and give FLRA more time (and staff) to deal with substantial claims. Third, they could help the parties assess on their own the chances of an exception succeeding.  For example, FLRA could develop an on-line form for exceptions making the process more mechanical to file and analyze. That could highlight missing links in the appealing party’s case and even provide some instant feedback.  If a party entered an exception and was asked by the software whether it had made the argument to the arbitrator, the on-line mechanism could inform the party that if it answered “No” it need not bother to file the exception.

Maybe the biggest dollar drain FLRA delay imposes on government is the cost of no management accountability.  By the time of the CBP FLRA decision was issued, three of the four LR managers responsible for it, and who showed neither willingness nor ability to settle it early, had retired.  In other cases, the offending LR manager has moved to another job, another agency or even been promoted based on a short view of his dominance over the union.