WASHINGTON – Governmental Affairs Committee Ranking Member Joe Lieberman, D-Conn., Wednesday objected to a proposed redesign of the Department of Homeland Security’s personnel management system, warning it would undermine a range of employee protections that prevent workplace abuses and improve employee performance.
In a letter to DHS Secretary Tom Ridge and Office of Personnel Management Director Kay Cole James, Lieberman addressed three areas in which he said protections would be restricted: the employee appeal process, collective bargaining, and the procedure for establishing pay and performance provisions.
Lieberman said the proposed changes to the appeal process would interfere with employees’ rights to due process; limits on collective bargaining would go beyond what is necessary to maintain the critical mission of the department; and the pay provisions and employee performance evaluations give the department too much control, leaving employee representatives, Congress, and the public out of the process.
“I fear the actual effect of these sweeping changes would … undermine the employee safeguards that prevent arbitrary and abusive workplace practices and that sustain the employee morale and performance on which the Department’s mission depends,” Lieberman said. “I urge you to reconsider and redesign this proposal to avoid provisions that could disrupt and degrade the employee protections such that the ability of the Department to secure our homeland may suffer.”
During Congressional consideration of the Homeland Security Act in 2002, Lieberman strongly protested Republican efforts to erode civil service safeguards against political and managerial abuse. In the final bill, Congress did allow the department to make certain changes to civil service law. However, Lieberman said, the new changes the department proposes could leave employees open to such abusive practices and impede the department’s mission.
Following is Lieberman’s letter:
May 19, 2004
The Honorable Tom Ridge
Department of Homeland Security
3801 Nebraska Avenue, N.W.
Washington, D.C. 20528
The Honorable Kay Coles James
Office of Personnel Management
1900 E Street, N.W.
Washington, D.C. 20415
Dear Secretary Ridge and Director James:
I am writing to express my serious concerns about the proposed regulations published by the Department of Homeland Security (DHS) and the Office of Personnel Management (OPM) to establish a new human resources management system for DHS. In the Homeland Security Act of 2002 (HSA), Congress allowed DHS to make certain changes in applicable civil service and collective bargaining provisions to enable it to fulfill its unique and critical mission. In the published preamble to the proposal, DHS and OPM assert that the purpose of the regulations is to enable the Department to carry out its mission, but I fear the actual effect of these sweeping changes would be the opposite: to undermine the employee safeguards that prevent arbitrary and abusive workplace practices and that sustain the employee morale and performance on which the Department’s mission depends. I urge you to reconsider and redesign this proposal to avoid provisions that could disrupt and degrade the employee protections such that the ability of the Department to secure our homeland may suffer. My specific objections to the proposal are set forth below.
Federal employees who are threatened with dismissal, suspension, or demotion generally have the right to appeal to the independent Merit Systems Protection Board (MSPB). These due process rights not only provide fairness to employees, but also further agencies’ missions by helping safeguard the workplace against what MSPB calls “partisan political and other prohibited personnel practices” and “abuses by agency management.” The proposed DHS rules would severely limit DHS employees’ appeal rights, by throwing up roadblocks in the way of employees seeking due process. The proposal asserts that these changes would “better support the mission of the Department,” but I believe that a failure to provide meaningful due process would have the opposite effect, because unremedied partisan favoritism and management abuse can corrode the ability to achieve results at DHS no less than at agencies with less critical security missions. I urge you to rethink and revise this proposal so as to afford an adequate appeal process to DHS employees. I believe the following four areas require revision.
Lowering the Department’s standard of proof.
The proposed regulation would lower the burden of proof that the Department must meet in cases of alleged employee misconduct from the “preponderance of the evidence” standard to the “substantial evidence” standard. This proposal would unfairly stack the deck against employees, so that MSPB could be required to uphold a firing, demotion, or suspension even if the evidence shows the employee probably did not commit the alleged offense.
Under current law, when an agency seeks to fire, demote or suspend an employee and the employee appeals, the MSPB is generally required to sustain the decision if it is supported by a “preponderance of the evidence” – meaning, evidence that shows “a contested fact is more likely to be true than untrue.” However, current law makes an exception to this general rule, if the agency seeks to demote or remove an employee under the specialized statutory procedures for unacceptable performance. On appeal of such actions, the MSPB must uphold the decision if it is supported by the more deferential standard of “substantial evidence” – meaning, evidence that a reasonable person “might accept as adequate to support a conclusion, even though other reasonable persons might disagree.”
The reasons for applying the more deferential standard for actions based on unacceptable performance are set out in the legislative history accompanying the Civil Service Reform Act of 1978. The Senate Governmental Affairs Committee stated that, in taking unacceptable-performance actions, agencies must follow special procedures tailored to assessing whether the employee’s performance meets expected standards, and then a higher-level official must concur in the agency’s final decision as “a safeguard against taking unwarranted or ill-considered action.” With these special procedures in place, the Committee then concluded that the more deferential “substantial evidence” standard is –
“ . . . mandated by the special nature of actions taken for unacceptable performance. An agency’s assessment of an employee’s overall performance in light of its needs and standards may be the most important part of the case. Yet it may be less susceptible to proof through traditional trial-type procedure than when the agency takes an adverse action on the basis of employee misconduct which is linked to specific provable offenses.”
Accordingly, the Committee concluded that, where an agency uses the special procedures to take an action based on unacceptable performance, the “substantial evidence” standard is appropriate to enable the MSPB to “give deference to the judgment by each agency of the employee’s performance in light of the agency’s assessment of its own personnel needs and standards.”
But there is no reason why the current law should be changed to give this deference to the Department where the matter is not the agency’s judgment about performance, exercised using procedures specially tailored to avoid “unwarranted or ill-considered action.” Rather, cases of misconduct involve facts that the Department should be able to demonstrate under the preponderance of evidence test – i.e., “more likely to be true than untrue.”
The proposal asserts that the lower standard of proof “grants appropriate deference to DHS officials in recognition of the critical nature of the agency mission,” but the proposal does not demonstrate why it would serve the agency’s mission for the MSPB to defer when agency managers allege specific provable offenses, especially in the case of routine employee appeals having little or no security implications. For example, it would not further DHS’s homeland security mission to require deference to a manager’s decision to fire a maintenance worker for pilfering cleaning supplies even when evidence shows it was probably someone else who did it.
Review of penalties.
The proposal seeks to place the sole and unreviewable discretion to select a penalty in the hands of the Department. The proposal forbids the MSPB or an adjudicating official to reduce or otherwise modify the penalty selected by the Department, and, if some but not all charges are overturned, the proposal would authorize the Department to make a penalty decision that is final and exempt from review by the MSPB or any other entity.
This proposal would strip employees of the right to obtain review of whether the penalty selected by the Department is excessive. Moreover, if some but not all charges are overturned, even a retaliatory or otherwise unlawful penalty decision by the Department would be exempt from review. The proposed regulation exempts penalties from mitigation regardless of whether the particular employee’s position or infraction affects security. I do not believe that depriving DHS employees of the due process right to seek review of excessive or even unlawful penalties is necessary or appropriate to further the Department’s mission.
“Mandatory removal offenses.”
Under the proposed rules, the Secretary would be granted unreviewable discretion to identify “mandatory removal offenses,” which will be offenses “that have a direct and substantial impact on the ability of the Department to protect homeland security”; and an employee who commits such an offence must be removed from federal service, subject only to the Secretary’s discretionary authority to mitigate the penalty. The proposal explained that examples of such offences would be to take or solicit a bribe that would compromise border security, or to willfully disclose classified information. These offenses would be identified well in advance and made known to all employees, and would be incorporated into the Department’s implementing regulations.
I agree that certain offenses that substantially compromise the Department’s ability to protect security must be swiftly punished. However, any specific offenses must be very carefully drafted to avoid unintended consequences. As Comptroller General Walker stated in testimony commenting on these proposed rules, we might learn from the experience of the Internal Revenue Service (IRS) in implementing its mandatory removal offenses, which IRS officials believed “had a negative impact on employee morale and effectiveness and had a ‘chilling’ effect on IRS frontline enforcement employees who are afraid to take certain appropriate enforcement actions.”
It is also essential that the process by which any particular offenses are identified and defined should be open and collaborative to both gain the benefit of the experience of affected employees and to help win their acceptance and commitment. In this regard, I again suggest you consider the comments of Comptroller General Walker’s testimony:
“I believe that the process for determining and communicating which types of offenses require mandatory removal should be explicit and transparent and involve a member of key players. Such a process should include an employee notice and comment period before implementation, collaboration with relevant Congressional stakeholders, and collaboration with employee representatives.”
Internal appeals process for “Mandatory Removal Offenses.”
The proposal would also establish an internal appeals process for mandatory removal offenses. A new appeals Panel would be established, comprised of three members, who would be appointed by the Secretary for three-year terms, and one of whom would be designated by the Secretary as Chairman. The members would also be removable by the Secretary for any of several specific reasons, including the subjective reason of “inefficiency.” An employee would be able to appeal a removal action based on a mandatory removal offense to an adjudicating official designated by the Panel, and the decision of that official could then be appealed to the Panel for a final decision. The proposal states that such an internal appeals process is needed for mandatory removal offenses because “it is critical that the adjudicator of the appeal be intimately familiar with the mission of DHS in order to understand the particular impact of these offenses on the Department’s ability to carry out its mission.”
The proposal refers to the Panel as “independent,” but I am deeply concerned that the authority of the Secretary to appoint and remove the members and chairman of the panel will inevitably compromise the real or perceived independence of the Panel’s decisions. I urge you to carefully consider ways to further ensure the independence of the review process, or, if adequate independence cannot be achieved, to consider retaining the authority of the MSPB for these offenses.
The proposed regulations would cut back on DHS employees’ collective bargaining rights in several substantial respects, including granting management broad power to determine what subject matter will be bargained about, weakening management’s obligation to share information that unions need, limiting individual employees’ right to be represented by the union, and replacing the neutral administrator of the labor relations system with an internal DHS panel beholden to management. The proposal states generally that the purpose of the changes is to “be more responsive to the unique and critical mission of DHS.” However, the proposed collective bargaining rules would broadly expand the discretion of management and cut back on employees’ collective bargaining rights far beyond anything needed to enable prompt and effective Departmental action to protect our security. Indeed, the proposal seems to lose sight of the fact that strong collective-bargaining programs help agencies achieve their mission by facilitating prompt and congenial resolution of workplace disagreements, by assuring that front-line employees’ ideas for the safe and effective accomplishment of their work are taken into account by management, and by helping protect employees against managerial abuse that can corrode performance. The severe limitations on collective bargaining proposed in these rules could seriously disrupt employee relations and morale, to the significant detriment of the Department’s security mission. My concerns fall within three general categories, as discussed below.
(1) Curtailment of collective bargaining.
The proposed rules contain a series of related provisions to give DHS management broad power to cut back on collective bargaining, even where no mission-critical subject is involved, and even with respect to bargaining after the change has been completely implemented. Existing law establishes core areas of managerial discretion within which management can act unilaterally, without bargaining with employee representatives, including setting the agency’s organization and staffing levels, hiring and firing employees and assigning work, and other key managerial and operational matters. The proposed regulations would effect a sweeping expansion of management’s power to act without bargaining, far broader than necessary to assure security. The proposal would block bargaining even as to actions that are not essential to carry out the Department’s mission, and even after actions are implemented, when any need for urgent action is past.
Policies incorporated into Departmental rules. Under the proposal, DHS management would be able to incorporate controversial policies into rules at the Departmental level and thereby block all collective bargaining on those subjects, even overriding contract provisions already agreed to. Under existing law, policies incorporated in agency rules and regulations are exempt from bargaining if a “compelling need” exists for the rule or regulation. The proposed regulations would simply omit the “compelling need” limitation. The proposal claims this change is needed “[i]n order to ensure a consistent approach to managing the Department,” but I do not see why it is necessary to allow the Department to deprive employees of a voice in policy decisions that affect them, in situations where there is no compelling need for uniformity to accomplish the Department’s security mission.
Impact and implementation bargaining. The proposal would also specifically curtail bargaining over ways to mitigate harm to employees. Under existing law, even when management has complete discretion to take actions, management must still bargain over implementation procedures and appropriate methods to mitigate the impact on employees. However, for structural and operational decisions having profound impact on employees, including agency reorganization, personnel reassignment, or the application of new technology or work methods, the proposed regulations would eliminate all such impact and implementation bargaining, not only in advance of implementation, but even after managers have implemented the change.
The proposal states that such curtailment of bargaining rights is needed to enable the Department to respond promptly to security threats. I agree there are situations, such as when the Department must redeploy personnel to respond to an imminent security threat, when managers may need to act promptly, without prior negotiation with employee representatives. Moreover, some kinds of implementation procedures, such as requiring managers to canvass for volunteers or to consider seniority before redeployment, may be unduly time-consuming for supervisors to meet certain security exigencies. I believe existing law allows agencies to take immediate action in such situations, but I see no harm in making such authority explicit in regulations. However, the fact that pre-implementation bargaining or time-consuming negotiated procedures may be inappropriate under certain circumstances is no reason to block impact and implementation bargaining altogether. I do not see why requiring post-implementation bargaining would impair the Department’s mission, provided the Department is not required to enter into imprudent negotiated agreements, and I do not see why even pre-implementation bargaining should be curtailed when immediate implementation is not necessary for the Department’s mission.
Power unilaterally to make mid-term changes to conditions of employment. Under current law, if management wishes to change the conditions of employment during the term of a collective bargaining agreement, it must bargain with the union, and, if no agreement can be reached, the impasse is resolved through binding arbitration by the Federal Services Impasses Panel. The proposed rules would dispense with binding arbitration, and, if agreement is not be reached within 30 days, management could implement the change unilaterally. To allow one side to a negotiated agreement to change the terms unilaterally vitiates the purpose of collective bargaining, which is joint decisionmaking. Provided that the Department retains authority to make pre-bargaining mid-term changes when exigent security circumstances so require, I do not see how this proposed rule is needed to further the Department’s security mission.
(2) Coverage of Transportation Security Administration (TSA).
On January 9, 2002, then-Under Secretary of Transportation for Security, Admiral James Loy, issued an order precluding collective bargaining by TSA screeners. Asserting authority under the Aviation and Transportation Security Act, Adm. Loy stated his reason that “mandatory collective bargaining is not compatible with the flexibility required to wage the war against terrorism.” However, by requiring mandatory collective bargaining at DHS, Congress in the HSA established the national policy that such bargaining is not incompatible with the war against terrorism. The proposal by DHS and OPM, insofar as it retained the obligation to bargain collectively, was likewise based on the premise that collective bargaining may be appropriate within agencies responsible for the war on terrorism. TSA screeners, while certainly on the front line in fighting terrorism, are no more so than other workforces at DHS, including employees from the Customs Service, Border Patrol, Immigration and Naturalization Service, and Animal and Plant Health Inspection Service, who have a long tradition of collective bargaining. I strongly urge that TSA screeners be covered under the rules governing collective bargaining at DHS.
(3) Internal board for reviewing collective bargaining appeals.
Finally, the proposal would eliminate the impartial administration of collective bargaining at DHS by the independent Federal Labor Relations Authority (FLRA) and turn it over to a board beholden to the DHS Secretary. Under the proposal, the DHS Secretary would select all three members of a new in-house Homeland Security Labor Relations Board, would designate one member to be chairman, and would have the authority to remove members for specified reasons, including “inefficiency.” Although the FLRA would retain its authority over elections and individual employee rights at DHS, the new internal Board would be given responsibility for collective bargaining at the Department.
As I stated earlier with respect to the Panel to hear employee appeals for “mandatory removal offenses,” I am deeply concerned that the authority of the Secretary to appoint and remove the members and the chairman of the Board would compromise its real or perceived independence, thereby undermining employees’ trust in the fairness of collective bargaining at the Department. I believe that if the Board’s independence cannot be better insured, the independent FLRA should retain its existing responsibilities.
Management of employee pay and performance.
The proposal would entirely displace the civil service systems governing employee pay and performance evaluation. In its place, the proposal sketches out the broad outlines of a system. Jobs would be classified into broad occupational “clusters” and, within each cluster, into progressive pay levels (or “bands”). Each pay band would be associated with an initial range of pay rates, with annual pay adjustments. Annual pay adjustments might include an individual performance-based adjustment, depending on the individual employee’s performance evaluation. A performance management system would be developed under which each employee’s performance expectations would be set and communicated, and under which performance would be judged.
However, other than sketching a skeletal outline and articulating wishes in hortatory terms (e.g., that the performance management system “must . . . be fair, credible, and transparent”), the main function of the proposal is for DHS and OPM to delegate the authority to actually design the system to themselves. In enacting the HSA, Congress clearly provided that personnel flexibilities could only be exercised through an open process that includes collaboration and negotiation with employee representatives, advance notice to Congress, and notice and comment from the public. The actual design of the pay and performance systems should not be determined by a closed, unilateral, Departmental decisionmaking process.
A brief review of the proposal illustrates the extent to which the pay and performance system still remains to be developed, and the extent to which DHS and OPM, by publishing this proposal, seek to delegate extremely broad discretion to themselves:
∙ As to the classification of jobs, the proposal states that DHS “may establish” occupational clusters, in coordination with OPM, and “may establish” one or more bands, in coordination with OPM. The proposal suggests, but does not require, what factors DHS will consider, but calls on the Department to develop: a “methodology” for describing job requirements, “procedures” for evaluating jobs, and “a plan” to review the accuracy of job evaluation decisions.
∙ As to establishing a pay system, DHS is required to “establish a pay system.” In doing so, the Department must include, among other things, “[p]olicies regarding” the setting and adjusting of pay ranges, “[p]olicies regarding” the setting and adjusting of supplements to basic pay, and “[p]olicies regarding” the eligibility of individual employees to pay increases. DHS is then granted “sole discretion” to set and adjust pay ranges considering various market factors, internal governmental factors, “and any other relevant factor.”
∙ As to performance management, the proposal states that “DHS may issue internal implementing regulations that establish one or more performance management systems.” The proposed regulations establish a number of general criteria and objectives that the performance management system must meet (e.g., “In design and application, be fair, credible, and transparent”), but there is no statement of the polices and procedures that will be used to try to meet those criteria and objectives – that is left to the future discretion of DHS.
The proposal states that the provisions on employee pay and performance are intended to create a “performance-focused” system that “best meets the critical operations and mission-focused needs of DHS.” However, without knowing the policies and procedures that will be applied, it is impossible to judge whether the system will further the Department’s mission or will actually impede it. For example, if the system for establishing pay levels is not seen as competitive, predictable, and non-discriminatory, recruitment and retention may suffer. If the process for evaluating performance is not sufficiently transparent and accountable, it can foster the perception, if not the reality, of management favoritism and abuse. Unfortunately, the current proposal is so sketchy and incomplete that it is impossible to judge the extent to which these threats to DHS’s ability to fulfill its mission will be avoided.
The proposal acknowledges that the design of the “detailed features of the new system” remains to be done and states that DHS “is committed to a high degree of employee involvement” in developing these details, but the proposed regulations completely fail to codify that “commitment.” To the contrary, the proposal forthrightly asserts that the development of the detailed features will be “by DHS at its sole and exclusive discretion and/or in coordination with OPM.” In enacting the HSA, Congress authorized DHS and OPM to “establish, and from time to time adjust, a human resources management system.” The procedures required under the Act include notice and comment for public participation, advance notice to Congress, and a collaboration and negotiation process “that ensures the participation of employee representatives in the planning, development, and implementation of any human resources management system or adjustments to such system . . . .” However, the proposal on employee pay and performance is far too incomplete for employee representatives, Congress, or members of the public to be able to negotiate about or even comment on. DHS and OPM should recast and recharacterize these provisions as what they really are – not components of the human resources management system, but rather a plan to develop such components of the system. When these agencies’ ideas are sufficiently well developed, they should be resubmitted for consideration by employee representatives and others.
* * * * *
I know you share my goal of avoiding the potential disruption and deterioration of workplace morale that can erode the ability of the Department to protect our security. Therefore, I urge you to modify the proposed rules to better assure protections against arbitrary workplace practices that can lead to favoritism and management abuse and potentially affect the ability of the Department to perform its mission.
Thank you for your consideration.
Joseph I. Lieberman