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U.S. Customs Service: Varied Reaction to the Labor-Management Partnership Concept

Published by the Government Accountability Office on 1997-03-11.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                          United States General Accounting Office

GAO                       Testimony
                          Before the Subcommittee on Trade
                          Committee on Ways and Means
                          House of Representatives


For Release on Delivery
Expected at
10:00 a.m. EST
                          U.S. CUSTOMS SERVICE
Tuesday
March 11, 1997

                          Varied Reaction to the
                          Labor-Management
                          Partnership Concept
                          Statement of Norman J. Rabkin
                          Director, Administration of Justice Issues
                          General Government Division




GAO/T-GGD-97-54
Summary

U.S. Customs Service: Varied Reaction to the
Labor-Management Partnership Concept

               Executive Order 12871, October 1, 1993, required the head of each federal
               agency to create labor-management councils to help involve employees
               and their unions as full partners. These partnership councils are to identify
               problems and craft solutions to better serve the agency’s customers and
               accomplish its mission. In June 1994, the U.S. Customs Service and the
               National Treasury Employees Union (NTEU) entered into a partnership
               agreement that established 19 goals, set up a National Partnership Council,
               and stated that NTEU will participate in agency operational meetings and
               groups to ensure NTEU involvement in decisions that affect the workforce.
               In February 1997, Customs and NTEU implemented a new national contract.

               GAO’s limited work to date at Customs headquarters and selected field
               locations revealed a variety of opinions regarding Customs-NTEU relations
               since implementation of the executive order. Most of the Customs
               managers GAO interviewed characterized their relationship with NTEU
               chapters as better. Most of the NTEU chapter presidents GAO spoke with
               also said the relationship was better. The views of the Customs first-line
               supervisors GAO interviewed were more evenly distributed among the
               range of responses from “much better” to “much worse.” Customs
               managers and supervisors and NTEU representatives provided similar
               comments identifying advantages of the partnership concept, including
               (1) faster problem resolution, (2) improved communications, and
               (3) mutual involvement in decisions. Comments on disadvantages revealed
               no clearly shared views.

               To a limited extent, Customs has begun to evaluate the results of the new
               relationship. However, these efforts have not set the groundwork for the
               kind of comprehensive evaluation envisioned by the executive order and
               partnership agreement. Although the Commissioner expects it to take at
               least 5 years for the new relationship to become Customs’ normal
               operating environment, it is not too soon to develop a formal plan for an
               evaluation and to share this plan with the Subcommittee. This plan should
               address several critical questions, such as the performance measures to be
               used and how often an evaluation should be conducted.




               Page 1                                                       GAO/T-GGD-97-54
Statement

U.S. Customs Service: Varied Reaction to the
Labor-Management Partnership Concept

               Mr. Chairman and Members of the Subcommittee:

               I am pleased to be here today to discuss labor-management activities
               within the U.S. Customs Service. The Subcommittee asked us to review,
               among other topics, the history of union activity at Customs and the effect
               that the partnership agreement between Customs and the National
               Treasury Employees Union (NTEU)—the exclusive representative of
               Customs’ bargaining unit employees—had on Customs’ ability to establish
               and achieve its mission-related goals. To date, we have performed
               preliminary work at Customs headquarters, 5 Customs Management
               Centers (CMC), 11 ports of entry around the country, the NTEU national
               office, and 7 local NTEU chapters (see the appendix for a list of the CMCs,
               NTEU chapters, and ports we visited). My testimony will cover information
               we have obtained on the new relationship between Customs and NTEU;
               Customs’ management, supervisors, and NTEU views concerning the
               relationship; and our observations on evaluating this relationship.

               We judgmentally selected the ports for our review focusing on the
               southern border and those ports where Customs headquarters officials
               told us that labor-management relations were strong and effective and
               where there were less effective relationships. At these locations, we
               interviewed Customs managers and first-line supervisors as well as NTEU
               chapter presidents and representatives. We asked a series of questions
               designed to gauge the extent of respondents’ satisfaction with and identify
               their views on the advantages and disadvantages of the new relationship.
               The information provided represents the views and opinions of only the
               Customs officials and NTEU representatives we interviewed; it is not
               statistically projectable to the entire Customs Service.


               The Customs Service is responsible for ensuring that all goods and
Background     persons entering and exiting the United States do so in accordance with all
               U.S. laws and regulations. As of January 1997, Customs’ workforce
               included about 19,500 personnel, approximately 11,200 of whom were
               eligible to join NTEU. Approximately 7,200 (65 percent) of those eligible to
               join NTEU had done so.

               In September 1994, Customs’ report, People, Processes and Partnerships,
               provided a blueprint of its plans to transform itself into an agency
               prepared to meet the demands of the 21st Century. The report proposed in
               general terms the agency’s vision and a three-part process to achieve this




               Page 2                                                       GAO/T-GGD-97-54
                      Statement
                      U.S. Customs Service: Varied Reaction to
                      the Labor-Management Partnership Concept




                      vision: (1) organizational change, (2) reengineered business processes, and
                      (3) cultural conversion.

                      Customs has made progress in implementing its reorganization plan. Two
                      years ago we reported1 that Customs had started to downsize its
                      headquarters and was planning to close its 7 regional offices and 42
                      district offices, replacing them with 20 CMCs. Many functions formerly
                      performed by the regions and districts, such as hiring and assessing fines
                      and penalties on companies violating trade laws, were to be transferred to
                      the ports. CMC and port directors we spoke with told us that the transition
                      of responsibility to the ports was proceeding as planned. Customs was
                      also proceeding with the redesign and development of performance
                      standards for its core business processes.

                      One element of Customs’ process to achieve its vision is its plan to change
                      its culture, including its relationship with NTEU. According to its
                      September 1994 report, Customs has historically been characterized by
                      divisive internal competition, highly visible turf battles with other
                      agencies, a controlling management style, and an adversarial relationship
                      with its employee union. To help change this relationship, Customs and
                      NTEU created a labor-management partnership.



                      On October 1, 1993, the President issued Executive Order 12871, which
The New               called for creating cooperative labor-management relations throughout the
Labor-Management      federal government and setting up a national council to promote
Partnership: How It   partnership. The Order required the head of each agency to create
                      labor-management councils at appropriate levels to help involve
Came About and What   employees and their union representatives as full partners with
It Is                 management representatives to identify problems and craft solutions to
                      better serve the agency’s customers and accomplish its mission. The Order
                      further required agencies to bargain with unions on issues formerly
                      bargained on only at the agency’s discretion. These issues include
                      “numbers, types and grades of employees or positions assigned to any
                      organizational subdivision, work project, or tour of duty, or on the
                      technology, methods, and means of performing work.” It also called for
                      agencies to evaluate the progress and improvements in organizational
                      performance resulting from the labor-management partnerships.




                      1
                       Customs Management: Status of Reorganization and Modernization Efforts (GAO/T-GGD/AIMD-95-70
                      Jan. 30, 1995).



                      Page 3                                                                     GAO/T-GGD-97-54
                        Statement
                        U.S. Customs Service: Varied Reaction to
                        the Labor-Management Partnership Concept




                        In June 1994, Customs and NTEU entered into a partnership agreement that
                        established 19 specific goals. These include involving employees (through
                        NTEU) before final decisions are made and managing conflict to settle or
                        resolve disputes faster. The agreement established a National Partnership
                        Council at Customs Headquarters as well as local partnership councils at
                        CMCs and ports. The partnership agreement states that NTEU will participate
                        in agency operational meetings and groups to ensure NTEU involvement in
                        decisions that affect the workforce. NTEU may also appoint representatives
                        to all task forces and groups formed by Customs for the purpose of
                        improving or changing work processes and procedures.

                        In February 1997, Customs and NTEU implemented a new National
                        Agreement.2 Key provisions in the new agreement include (1) alternative
                        dispute resolution procedures that attempt to resolve conflicts informally
                        at the lowest level possible to replace the old grievance procedures;
                        (2) involvement of NTEU as an observer in the promotion process; and
                        (3) nine new issues to be negotiated locally, such as uniforms and a pilot
                        alternative work schedule program.


                        Our limited work at Customs and NTEU headquarters, 5 CMCs, 7 NTEU
Management and          chapters, and 11 ports of entry revealed a variety of opinions regarding
NTEU Views              Customs-NTEU relations since the partnership concept had begun. When
Regarding Partnership   asked to compare NTEU-management relations at the time of our visits with
                        the relationships before the partnership agreement, CMC directors we
Relations               interviewed characterized the relationship with the seven NTEU chapters as
                        better than before partnership with five, about the same with one, and
                        worse with one.3 Six of the seven NTEU chapter presidents also said that
                        the relationship was better than before partnership; one chapter president
                        said that the relationship was worse. In addition, 7 of the 11 port directors
                        characterized the relationship with NTEU chapters as better than before, 2
                        said it was about the same, and 2 said it was much worse.

                        In addition to interviewing Customs management officials and NTEU
                        representatives, we asked 55 first-line Customs supervisors at the 11 ports
                        we visited how they would characterize the relationships at the time of our
                        visits between management and NTEU at their ports compared to the


                        2
                         This agreement, also known as the “contract”, replaced the prior labor-management agreement dated
                        May 19, 1991. As distinguished from the partnership agreement and the 19 goals, the contract sets out
                        44 articles governing items such as travel, attire and appearance, adverse actions, and arbitration.
                        3
                         Three CMC directors work with one NTEU chapter each, and two CMCs work with two NTEU
                        chapters each.



                        Page 4                                                                            GAO/T-GGD-97-54
    Statement
    U.S. Customs Service: Varied Reaction to
    the Labor-Management Partnership Concept




    relationships before the partnership agreement. Their views were more
    evenly distributed among the range of responses from much better to
    much worse than were those of the Customs managers and NTEU chapter
    presidents.4 One supervisor told us that labor-management relations were
    100-percent better now and that problems were handled informally at the
    supervisor-subordinate level with less confrontation. Another supervisor
    stated that in his 22 years with the Customs Service, he had never seen
    better management-labor relations. On the other hand, several supervisors
    described the management-NTEU relationship under the partnership
    concept as “us against them.” One supervisor told us that implementation
    is one-sided. Another supervisor stated that NTEU does not compromise
    unless it is to its advantage.

    Our limited work also identified a variety of views from managers,
    supervisors, and NTEU representatives regarding the advantages and
    disadvantages of the partnership concept. While our results cannot be
    generalized to all of Customs, they can be summarized and characterized
    in terms of the managers, supervisors, and NTEU representatives we
    interviewed at the locations we visited.

    A few clearly shared views emerged. Managers, supervisors, and NTEU
    representatives provided similar comments identifying advantages of the
    partnership concept. They generally stated that the concept has resulted in

•   faster resolution of problems;
•   a reduction in the number of grievances filed;
•   improved communications between management and the union; and
•   mutual involvement in decisions.

    NTEU representatives we interviewed believed that these factors had
    contributed to improved operational efficiency at the Customs Service.

    Our analysis of the comments about the disadvantages of the partnership
    concept and how it was being implemented at the ports we visited did not
    show any clearly shared views. While individual managers, supervisors,
    and NTEU representatives told us that some managers did not understand
    the concept of partnership, the underlying reasons differed significantly.
    Managers and supervisors generally stated that



    4
     Fifteen percent said it was much better, 29 percent said it was better, 33 percent said it was about the
    same, 11 percent said it was worse, 9 percent said it was much worse, and 4 percent had no basis to
    judge.



    Page 5                                                                               GAO/T-GGD-97-54
                            Statement
                            U.S. Customs Service: Varied Reaction to
                            the Labor-Management Partnership Concept




                        •   all issues must be bargained with the union before any action can be taken
                            by management;5
                        •   the partnership concept requires too many meetings and too much of
                            management’s time;
                        •   while managers remain accountable for actions and results at their ports,
                            there is no union accountability; and
                        •   the union will only bargain on issues that address union interests and not
                            on those that address the needs of the Customs Service.

                            NTEU   officials generally raised the following concerns:

                        •   the partnership concept is not clearly understood by management;
                            managers want to choose when they include NTEU in making decisions and
                            when they do not;
                        •   managers are not fully trained in the partnership concept; and
                        •   managers do not want to involve union representatives in the
                            decisionmaking process; they continue to want to make unilateral
                            decisions.


                            In our January 1995 testimony on Customs’ reorganization, we concluded
GAO Observations on         that Customs’ efforts to date had the potential to position Customs to meet
Evaluating Customs’         its future challenges. We encouraged Customs to continue discussing both
and NTEU’s                  its progress and results with this Subcommittee. Among the issues we
                            encouraged Customs to explore was identifying what indicators or
Implementation of the       measurements it should use to determine the success or effectiveness of
Partnership Concept         the new relationship.

                            Customs’ partnership agreement with NTEU and Executive Order 12871 call
                            for evaluating the progress of and improvements in the agency’s
                            performance resulting from the partnership concept. To a limited extent,
                            Customs has begun that effort.

                            A working group met in October 1995 to review and analyze data on
                            partnership activities. The group questioned the accuracy of the
                            information it had gathered and recommended that on-site surveys be
                            conducted. In a memorandum to the Commissioner shortly after the
                            working group report, the Assistant Commissioner for Human Resources
                            Management concluded that Customs needed an effective way to monitor
                            partnership performance.

                            5
                             While this was a perception of some managers and supervisors, 5 U.S.C. 7101-35 contains specific
                            provisions related to which issues are and are not bargainable.



                            Page 6                                                                           GAO/T-GGD-97-54
    Statement
    U.S. Customs Service: Varied Reaction to
    the Labor-Management Partnership Concept




    In April 1996, the Commissioner and the President of NTEU jointly sent all
    Customs employees an “organizational climate survey” that included
    questions about the partnership concept. Customs has compiled and
    analyzed the results of that survey, and intends to use the data as a
    baseline against which to measure the results of future surveys.

    However, neither of these efforts has set the groundwork for the kind of
    comprehensive evaluation envisioned by the Executive Order and
    partnership agreement. In our work thus far at Customs’ headquarters and
    several field locations, we have not seen any plans for an evaluation of the
    impact of the partnership approach on Customs’ mission.

    Cultural changes such as those promised by the partnership concept do
    not occur quickly. The Commissioner told us that he expects it to take at
    least 5 years for partnership to become part of the normal operating
    environment throughout Customs. Nevertheless, given that Customs and
    NTEU have been in this new relationship for almost 3 years, it is not too
    soon to develop a formal plan for the evaluation of progress and
    improvements in organizational performance resulting from this
    labor-management partnership. Some of the critical questions to be
    answered include:

•   What performance measures should be used?
•   What factors in addition to the partnership concept may be affecting
    organizational performance?
•   How often should an evaluation be conducted?
•   Should the focus of an evaluation be at the national or the port level or
    both?

    Developing a plan that addresses these questions will be difficult and will
    present Customs with significant challenges. It is reasonable for Customs
    and NTEU not to have completed any comprehensive evaluation at this
    point. However, it is also reasonable to expect that they would have begun
    developing and sharing with this Subcommittee their plan for carrying out
    that evaluation.


    Mr. Chairman, this completes my statement. I would be pleased to answer
    any questions.




    Page 7                                                        GAO/T-GGD-97-54
Appendix

Field Locations Visited



               Customs Management
               Centers                           NTEU chaptersa                  Ports of entryb
               South Pacific                     Chapter 111                     Los Angeles International
               (Long Beach, California)          (Los Angeles International      Airport
                                                 Airport, California)

                                                 Chapter 103                     Los Angeles Harbor
                                                 (Los Angeles Harbor,
                                                 California)
               Southern California               Chapter 105                     San Ysidro
               (San Diego, California)           (San Diego, California)
                                                                                 Otay Mesa
                                                 Chapter 123
                                                 (Calexico, California)          Calexico

               West Texas/New Mexico             Chapter 143                     El Paso
               (El Paso, Texas)                  (El Paso, Texas)
                                                                                 Presidio
               Arizona                           Chapter 116                     Nogales
               (Tucson, Arizona)                 (Nogales, Arizona)

               South Florida                     Chapter 137                     Miami International Airport
               (Miami, Florida)                  (Miami, Florida)
                                                                                 Miami Seaport

                                                                                 Port Everglades
               a
                NTEU chapters that we visited represent bargaining unit employees at more ports than those we
               visited.
               b
                The Port of Los Angeles includes the Los Angeles International Airport and the Los
               Angeles/Long Beach Harbor (Terminal Island). They are represented by two separate local NTEU
               Chapters—#111 and #103, respectively. We, therefore, treated them as two separate ports for
               this review.




(264435)       Page 8                                                                        GAO/T-GGD-97-54
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