Thursday, November 12, 2009

How Does Labor Law Matter for the USPS?

Currently the Postal Service operates under a unique labor law that is contained in the Postal Reorganization Act. This is in contrast to its competitors that operate under provisions of the Railway Labor Act (RLA) (e.g., Federal Express) and the National Labor Relations Act (NLRA) (e.g., UPS, printers, pre-sorters, etc.). There are numerous differences among the three laws that can be grouped into three major areas:
  • How the laws affect the ability of employees to organize and form unions;
  • The process of negotiating contracts including the ability of employees to strike, management to lock-out employees, and requirements for binding arbitration and other methods to prevent strikes and lock-outs; and
  • The process of handling employee grievances.
United Parcel Service is unique among the major competitors in the United States courier, express and postal market in that they have unionized employees that fall under both the RLA (its pilots and aircraft mechanics) and NLRA (its delivery drivers, over-the-road drivers, and distribution center employees.) and that it negotiates with a single union (the Teamsters) regarding employees covered under the different laws. Learning about the preferences of UPS and the Teamsters in negotiating contracts and handling grievances under the two private sector labor laws could provide some guidance about what the impact would be on management and labor if the Postal Service's labor law was changed. (The issue of organizing a union is not an issue as UPS operate a unionized airline.)

The one question that looking at UPS's experience with the RLA and NLRA would not answer would be what would happen if a new business model gave Postal Service unions the right to strike and binding arbitration was not required. The binding arbitration provision was included because mail was considered an essential service and Congress did not want to introduce the right-to-strike to any group of federal workers.

Public transit is an example of another service for which work stoppages could harm the economic well being of the communities affected. Public transit workers fall under variations of the RLA, NLRA and postal-like labor laws that affect contract negotiations and the ability of unions to call a work-stoppage or management to lock-out employees.

Recent negotiations in Philadelphia with SEPTA and Washington DC with METRO illustrate how the different processes affect the communities involved and type of contract employees receive from an employer with limited financial resources and the impact that settlements have on transit fares. In Philadelphia, a contract was signed after transit workers struck for 6 days. In Washington, a contract was imposed in a binding arbitration process that does not allow for a strike. While the strike was unpleasant, and forced thousands of people to find alternative ways to get to work, school and other destinations, there does not appear to any long-term affect of the strike in Philadelphia. In both cities, increases in compensation costs in the new contracts and lower levels of ridership due to the economy will likely result in higher transit fares.

The upcoming postal labor contact negotiations will be coming within a postal market environment that is more difficult than what transit agencies now face. In fact, the market environment is probably more similar to what transit agencies and their predecessor companies faced from the late 1950's though the 1960's as Americans moved to suburbs and switched from public to automobile transportation for most personal trips. In both instances, the change in the competitive environment forces labor and management into negotiations regarding changes in long standing contract provisions and expectations about pay increases and employee benefits. Determining whether the current method of negotiating contracts or alternatives used by UPS ground, UPS aircraft mechanics public transit workers in Philadelphia or public transit workers in Washington DC would ease the process of concluding negotiations successfully with the least harm to the mail market is now worth considering.

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