Compromise On Pentagon Pay System, Union Rights

By Stephen Barr
Monday, December 10, 2007; D01

It's a compromise aimed at ending four years of controversy.

House-Senate negotiators unveiled legislation Friday that would restore collective bargaining rights to unions at the Defense Department, permit the Pentagon to go forward with new pay rules and perhaps ease the angst of many Defense employees.

The legislation would modify significant parts of the National Security Personnel System, a Bush administration effort that sought to sharply curb union rights at Defense and to more rigorously link annual pay raises of civilian employees to job-performance ratings.

The measure would guarantee that NSPS employees receive 60 percent of the annual pay raise that most other government workers get. The remaining 40 percent would be used for performance-related salary increases, allocated according to an employee's job rating.

The proposal may disrupt the Pentagon's plans for NSPS raises in January.

Under current rules, the defense secretary has had the discretion to set raises, and the Pentagon has announced plans to phase out across-the-board increases to employees covered by the new system.

For 2008, NSPS employees were scheduled to receive 50 percent of the government-wide raise, with the rest of their salary increase linked to job ratings. In subsequent years, all raises would be determined by job performance.

That announcement had created some anxiety for Defense employees, who, like many other federal employees, see the annual raise provided by Congress as a cost-of-living adjustment and worried that their pay might not keep pace with workers elsewhere in the government.

According to the legislation, performance payments would be paid as raises, not bonuses. The distinction is important to some employees, because bonuses do not count toward pension credits. NSPS employees also would be eligible for locality pay.

The legislation is part of the fiscal 2008 defense bill that authorizes weapons programs for the military and would provide the armed forces with a 3.5 percent pay raise next year. The House and Senate will probably vote on the bill this week and send it on to the president.

Administration officials declined to comment on the proposed NSPS modifications, saying they were studying the measure. Congressional aides said the NSPS changes have bipartisan support and predicted acceptance by the White House.

The House and Senate Armed Services committees write the authorization bill and typically do not spend much time on civil service issues. But that was not the case this year.

At various times, several lawmakers and their aides have played key roles in shaping the compromise on the NSPS, union spokesmen said. They included Carl M. Levin (D-Mich.), chairman of the Senate Armed Services Committee; Ike Skelton (D-Mo.), chairman of the House Armed Services Committee; Sens. Daniel K. Akaka (D-Hawaii) and Susan Collins (R-Maine); and Reps. Solomon P. Ortiz (D-Tex.), Walter B. Jones (R-N.C.), Chris Van Hollen (D-Md.), Jay Inslee (D-Wash.), and Tom Allen (D-Maine).

As originally envisioned, the NSPS would have covered about 700,000 Defense employees and represented one of the biggest changes in federal pay and workplace rules since the 1978 Civil Service Reform Act.

But the Bush administration initiative quickly angered labor leaders, who formed a coalition of 36 Defense unions to stop the new system, especially rules that they said would gut union rights and undermine employee rights to challenge major disciplinary actions, such as suspensions and firings.

The unions filed a lawsuit challenging the new workplace rules for Defense and cranked up a lobbying campaign to bring their concerns before Congress. After Democrats took control of Congress, the unions stepped up efforts to win a legislative repeal of the NSPS.

The legislation would place labor relations and employee appeals back under regular civil service law. Unions would be able to negotiate binding contracts on the same scope of issues as elsewhere in government. It would permit Defense employees to appeal major disciplinary actions to the Merit Systems Protection Board, an independent agency that rules in disputes between employees and agencies.

The legislation would permit the unions and the Pentagon to agree to "national level bargaining," where department-wide policies could be settled in talks that might be attended by as many as 46 unions. It also permits unions to bargain over the implementation of new rules at the local level.

The House-Senate negotiators also reduced the number of employees eligible for the NSPS by excluding blue-collar workers and exempting employees at Defense laboratories through 2011. Both groups already work under special pay systems.

Labor leaders who have objected to the NSPS thanked lawmakers for restoring union rights.

John Gage, president of the American Federation of Government Employees, called the legislation "an acceptable compromise." Gregory J. Junemann, president of the International Federation of Professional and Technical Engineers, said "the workers at DoD can finally see the light at the end of the tunnel." Ron Ault, president of the Metal Trades Department of the AFL-CIO, said his lawyers were studying the compromise but that it appeared to be "an early Christmas present from this Congress."

The Pentagon, however, did not lose its key priority -- the creation of a performance-based pay system and the ability to continue phasing in the pay system.

The NSPS currently covers about 130,000 nonunion Defense employees, and another 55,000 are lined up to enter the system in the spring. If the department chooses, it remains able to start talks with labor leaders to bring unionized workers into the system.

The measure would not permit unions to bargain over pay. It would deny pay raises to Defense employees with a job rating of "unacceptable," one of the Pentagon's goals.

"We want them to do collective bargaining, but we want to give the department a fair chance to show that pay for performance can work," one congressional aide said. "The ball is in their court."

Stephen Barr's e-mail address isbarrs@washpost.com.