Court Blocks DOD's New Rules for Workers
Collective Bargaining Hurt, Judge Says

By Christopher Lee
Washington Post Staff Writer
Tuesday, February 28, 2006

A federal judge blocked the Defense Department from implementing much of its new personnel system yesterday, handing the Bush administration a major setback in its efforts to streamline work rules and install pay-for-performance systems in federal workplaces.

In a 77-page decision, U.S. District Judge Emmet G. Sullivan ruled that the Pentagon's National Security Personnel System (NSPS) fails to ensure collective bargaining rights, does not provide an independent third-party review of labor relations decisions and would leave employees without a fair process for appealing disciplinary actions.

"Taken as a whole, the design of these regulations appears to rest on the mistaken premise that Congress intended flexibility to trump collective bargaining rights," wrote Sullivan, who noted that the new regulations "entirely eviscerate collective bargaining."

The ruling marked the second time in six months that a federal judge has stiff-armed the Bush administration in its ambitious plans to rewrite federal personnel rules to curtail the power of labor unions, more strongly tie pay raises to job performance, and make it easier to hire, promote and discipline federal employees.

The two court decisions mean the new systems at Defense and the Department of Homeland Security -- each more than two years in the making, and affecting nearly 800,000 civilian employees -- appear destined either for lengthy court appeals or time-consuming revisions. Also in limbo are the administration's plans to overhaul federal pay at agencies government-wide.

The American Federation of Government Employees and 12 other unions representing more than 350,000 defense employees sued in November challenging the new system. The unions argued it would gut collective bargaining and that Pentagon officials did not meet their obligation, spelled out in the 2003 law that paved the way for the changes, to consult with employees' representatives in crafting a new labor management system.

"This is a big win," said AFGE President John Gage. "I think the judge very clearly showed in his decision that this was not collective bargaining by anybody's definition."

AFGE Assistant General Counsel Joseph Goldberg said the ruling "eviscerates the core of NSPS, leaving but a hollow shell of provisions that simply cannot stand on their own."

It was unclear yesterday whether the Pentagon would appeal, or how the decision would affect the department's long-term plans to change its pay system, which was not addressed in the lawsuit or the ruling.

"Our attorneys are reviewing Judge Sullivan's decision at this stage to determine what our next steps will be," said Joyce Frank, a Pentagon spokeswoman.

In August, U.S. District Judge Rosemary M. Collyer ruled against a similar system at the Homeland Security Department, faulting it for undermining employees' rights to collective bargaining. Collyer blocked implementation of new rules on labor relations and employee appeals, which led DHS officials to delay a new pay system as well. Sullivan cited Collyer's ruling throughout his decision. DHS has appealed.

Meanwhile, the administration has urged Congress to consider legislation to replace the 15-grade General Schedule pay system government-wide with one that sets broader pay ranges and relies on more stringent annual job evaluations in handing out raises. Bush officials say such changes are necessary to make agencies more effective, and that new personnel systems at Defense and Homeland Security are essential to making both more nimble in the struggle against terrorism. Unions have contended that the changes are about gutting the power of unions, not improving national security.

Congress, which has yet to embrace the administration's call for restructuring federal pay, appears even less likely to do so if the two departments at the vanguard of the effort go back to the drawing board or remain tied up in court.

Mary E. Lacey, program executive officer for the National Security Personnel System, said the ruling would not change the Pentagon's plans to move the first wave of 11,000 defense employees into the new pay and personnel systems at the end of April, because the rollout involves only non-union employees, who do not participate in collective bargaining. She conceded, however, that the legal setbacks at DHS and Defense will complicate efforts to win employee support for the new system.

"Would I prefer we didn't have this situation? Absolutely," Lacey said. "But I believe we're right, and we are going to proceed."

Sullivan's decision contained a few setbacks for the unions. He ruled that the Pentagon has much broader authority to depart from standard federal labor relations systems than the unions had contended. And he concluded that, despite union protestations of a "sham" process, defense officials had met their obligation to consult with unions in developing the new system. Both determinations could limit the unions' role in shaping any changes to the system if a new drafting process begins.

While "the defendants may not have met Congress' requirements with enthusiasm, the court finds no evidence that defendants acted in bad faith," Sullivan wrote.

Gage said AFGE is not fighting to maintain the status quo and some change appears inevitable.

"We're not against change, but these changes were very transparent [in] what they were about," he said. "It was really to strip away unions from DOD and to take away any semblance of due process for employees."

Staff writers Stephen Barr and Eric Yoder contributed to this report.

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