Friday, August 12, 2011

Is the Postal Service's Proposal Constitutional?

A comment to the post on the Postal Service's white paper and the job cuts and contract changes that it wants raised an interesting question.  Are they constitutional?

Here is the comment:

The Contract Clause appears in the United States Constitution, Article I, section 10, clause 1. It states: The Contract Clause prohibits states from enacting any law that retroactively impairs contract rights. The Contract Clause applies to legislation, but not the Judicial Branch. Only an unconstitutional congress would void an employees contract.

The Constitutional Reference is here:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

The constitutional reference refers to state contracts and does not refer to contracts signed by the Federal Government.   There was some discussion about the obligations of the Federal government to honor contracts during the debt ceiling debate so it is possible that the Federal Government has a similar obligation. 

I would appreciate if lawyers who read this blog would post a comment so that I can provide a reference to the limits of Congress's power to require modification to labor contracts that would have to change if the law passes. 

If there are limits to Congress's power to mandate a change in contracts, the changes the Postal Service wants may still occcur but they would occur only after employees vote to approve new contracts that make the changes.  Congress has to the power to shut the Postal Service down by not providing the funding needed for it to make payroll beyond the middle of 2012. This power is the equivalent of creditors threatening liquidation which works as rather intense incentive for union employees to renegotiate contracts to keep their jobs. This is what happened with YRC Corporation and has happened at some unionized firms in the postal industry.    

If Congress chooses to use this power than postal unions may have no choice but to negotiate new contracts that include the changes that the Postal Service wants.  Otherwise they face the prospect that they will have no compensation for weeks or months.  This would be the equivalent of a lockout that would end only when employees agree to make changes in their contracts.  It is unclear what the Postal Service could  deliver with only the employees that are not working under labor agreements. 

What is clear is that this process will be quite heated until it is resolved and as long as Congress is both the owner and creditor, postal employees are likely to face the greatest losses as the Postal Service works to find a path to survival.


Mike K said...

OK so they lay people off and will spends tons and tons of money in severance packages for employees they don;t want anymore.

Why not use that money and give the civil service guys a payout and ask them to retire if they are 55? Say ok if you don;t you forfeit CSRS and you go to FERS because we are only running one retirement system anymore.

Maybe its because I have 15 years in and am in my mid thirties but I like delivering mail and talking to customers. I would rather see them pay people older to retire than fire younger workers who are carrying the nasty 600 stop walking routes

JoeTheMailman said...

I'm 31 with 8 years of Postal time. I finally made regular in March and now I'm looking at possibly being axed. I have been a shop steward for 3 years. I work my ass off everyday and so do the guys I work with. It's sickening to think that I could be out of work and thousands and thousands of COMPLETELY USELESS managers will continue to sit by a computer and look at bogus numbers. You need management, but you don't need the chain of command that we have to deal with. It's unreal that this could be a possibility.

Anonymous said...

Well...even if that were true it would be extremely easy to get around it. For example, Congress could pass a law seperating the USPS from the Federal government, essentially privatizing it. Once a private company, they could declare bankruptcy and use those laws to break the unions.

It is extremely plausible, one thing is for sure...big changes are ahead but with the USPS and Congress, stuff takes forever.

That said, any changes they have proposed will be hard sells, especially with a Democratic Senate and President. For any progress to be made, it would have to wait till 2013 and only if Republicans take control of Congress and the Presidency.

Anonymous said...

Joe, they made you regular in March? Our business agent told us stewards no PTF can be made regular under any circumstance right now?

Anonymous said...

You thought maybe USPS leadership could comprehend the meaning of a contract or Constitution?

Anonymous said...

Joe: stewards would be the last ones laid off. They have super seniority.

Anonymous said...

If carriers aren't contributing to COLCPE, this should be a wake up call!

Anonymous said...

Atty for 26 years. The Contract Clause only limits the ability of the state to impair contracts and does not limit the federal governemnt. Only legal limits on the federal government are the Fifth Amendment to the Constitution, requiring payment of just compensation for the taking of private property for public use, and the Tucker Act, which permits monetary compensation for breaches of express or implied contracts.

In short, the federal government can change its contracts and the only recourse available is a suit for monetary damages arising from the change.

JoeTheMailman said...

I fell into a sweet situation. I had been holding down a T6 swing for about 17 months and they promoted myself and a PTF ahead of me who was holding down the other T6 swing. We had 3 residual vacancies, so the Union got Labor to sign an agreement where 20 PTF's in our district will be made regulars within a year or so. We have so many residual vacancies that the PTF's aren't able to be abused the way the system is setup so I guess they figured just promote.