oversight

U.S. Postal Service: Little Progress Made in Addressing Persistent Labor-Management Problems

Published by the Government Accountability Office on 1997-11-04.

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

                          United States General Accounting Office

GAO                       Testimony
                          Before the Subcommittee on the Postal Service, House
                          Committee on Government Reform and Oversight




For Release on Delivery
Expected at
10:00 a.m., EST
                          U.S. POSTAL SERVICE
Tuesday
November 4, 1997

                          LITTLE PROGRESS MADE
                          IN ADDRESSING
                          PERSISTENT
                          LABOR-MANAGEMENT
                          PROBLEMS
                          Statement of Bernard L. Ungar
                          Director, Government Business
                          Operations Issues




GAO/T-GGD-98-7
Summary

U.S. Postal Service: Little Progress Made in
Addressing Persistent Labor-Management
Problems
                GAO  found that since its September 1994 report was issued, little progress
                has been made in improving persistent labor-management relations
                problems at the Postal Service. Although the Service, the four major
                unions, and the three management associations generally agreed that
                improvements were needed, they have been unable to agree on common
                approaches to solving such problems. Moreover, these parties have not
                been able to implement GAO’s recommendation to establish a framework
                agreement that would outline common goals and strategies to set the stage
                for improving the postal work environment.

                In its recent report, GAO described some improvement initiatives that many
                postal, union, and management association officials believed held promise
                for making a positive difference in the labor-management relations
                climate. Despite actions taken to implement such initiatives, little
                information was available to measure results. Some initiatives had only
                recently been piloted or implemented. Other initiatives were not fully
                implemented or had been discontinued because postal, union, and
                management association officials disagreed on the approaches used to
                implement the initiatives or on the usefulness of the initiatives to help
                make improvements.

                Efforts to resolve persistent labor-management relations problems pose an
                enormous challenge for the Service and its unions and management
                associations. However, in today’s dynamic and competitive
                communications environment, the Service can ill afford to be burdened
                with these problems. Recently, with assistance from a third-party
                facilitator, the Service and leaders from the four major unions and the
                three management associations convened a summit, aimed at providing an
                opportunity for all the parties to work toward reaching agreement on how
                best to address persistent labor-management relations problems. Another
                such opportunity involves the strategic plan required by the Government
                Performance and Results Act, which can provide a foundation for all
                major postal stakeholders to participate in defining common goals and
                identifying strategies to be used to achieve these goals. In addition, a
                proposal was included in the pending postal reform legislation to establish
                a presidentially appointed Commission that could recommend
                improvements.

                GAO continues to believe that it is important for the eight organizations to
                agree on appropriate strategies for addressing labor-management relations
                problems. Various approaches exist that can be used to help the
                organizations attain consensus. Without such consensus, the ability to



                Page 1                                                        GAO/T-GGD-98-7
Summary
U.S. Postal Service: Little Progress Made in
Addressing Persistent Labor-Management
Problems




sustain lasting improvements in the postal work environment may be
difficult to achieve.




Page 2                                                    GAO/T-GGD-98-7
Statement

U.S. Postal Service: Little Progress Made in
Addressing Persistent Labor-Management
Problems
                Mr. Chairman and Members of the Subcommittee:

                We are pleased to be here today to discuss our report1 on the efforts of the
                Postal Service, the four major labor unions, and the three management
                associations to improve employee working conditions and overall
                labor-management relations.2 Our recently issued report provides updated
                information related to our September 1994 report, which identified various
                labor-management relations problems in the Postal Service and made
                recommendations for addressing such problems.3 In our most recent
                report, we discussed the challenges that these eight organizations continue
                to face in attempting to improve labor-management relations. Specifically,
                this report provides information on three topics: (1) the extent to which
                the Service, the four unions, and the three management associations have
                progressed in addressing persistent labor-management relations problems
                since our 1994 report was issued; (2) the implementation of various
                improvement efforts, referred to in the report as initiatives, some of which
                were intended to help these eight organizations deal with the problems
                that we identified in our 1994 report; and (3) approaches that might help
                the eight organizations improve labor-management relations.

                To determine implementation progress on the initiatives, we identified 32
                improvement initiatives that had been implemented and confirmed with
                postal, union, and management association officials that these initiatives
                generally included all known initiatives that had been implemented. Given
                time and resource limitations, which made detailed follow-up on all 32
                initiatives impractical, we focused on obtaining information on the status
                and results of 10 of the 32 initiatives, which we believed had potential to
                address some of the recommendations in our 1994 report. To identify
                approaches that could help the eight organizations achieve consensus, we
                generally reviewed proposed postal reform legislation and the sections of
                the Government Performance and Results Act related to the Postal
                Service. Also, we interviewed the Director of the Federal Mediation and
                Conciliation Service (FMCS) to obtain information about the extent to


                1
                 U.S. Postal Service: Little Progress Made in Addressing Persistent Labor-Management Problems
                (GAO/GGD-98-1; Oct. 1, 1997).
                2
                 The four major postal labor unions include the American Postal Workers Union (APWU), the National
                Association of Letter Carriers (NALC), the National Postal Mail Handlers Union (Mail Handlers), and
                the National Rural Letter Carriers’ Association (Rural Carriers). The three management associations
                include the National Association of Postal Supervisors (NAPS), the National Association of
                Postmasters of the United States (NAPUS), and the National League of Postmasters of the United
                States (the League).
                3
                 U.S. Postal Service: Labor-Management Problems Persist on the Workroom Floor
                (GAO/GGD-94-201A/B; Sept. 29, 1994).



                Page 3                                                                           GAO/T-GGD-98-7
                      Statement
                      U.S. Postal Service: Little Progress Made in
                      Addressing Persistent Labor-Management
                      Problems




                      which the Service was using a third party to serve as a facilitator in
                      labor-management discussions, which we recommended in our 1994
                      report.


                      Since our 1994 report was issued, the Postal Service has improved its
Little Progress Has   overall financial performance, as well as its delivery of First-Class Mail.
Been Made in          However, little progress has been made in improving persistent
Improving             labor-management relations problems. In many instances, such problems
                      were caused by autocratic management styles, the sometimes adversarial
Labor-Management      relationships between postal management and union leadership at the
Relations Problems    local and national levels, and an inappropriate and inadequate
                      performance management system. Labor-management problems make it
                      more difficult for these organizations to work together to improve the
                      Service’s performance so it can remain competitive in today’s dynamic and
                      competitive communications market.

                      In recent years, we have found that the sometimes adversarial
                      relationships between postal management and union leadership at
                      national and local levels have generally persisted, as characterized by

                      (1)a continued reliance on arbitration by three of the four major unions to
                      settle their contract negotiation impasses with the Service, also known as
                      interest arbitration;

                      (2)a significant rise not only in the number of grievances that have been
                      appealed to higher levels but also in the number of those awaiting
                      arbitration; and

                      (3)until recently, the inability of the Service and the other seven
                      organizations to convene a labor-management relations summit to discuss
                      problems and explore solutions.

                      According to various postal, union, and management association officials
                      whom we interviewed, the problems persist primarily because the parties
                      involved cannot agree on common approaches for addressing these
                      problems. This, in turn, has prevented the Service and the other seven
                      organizations from sustaining the intended benefits of specific
                      improvement efforts that could help improve the postal workroom
                      climate. I would now like to discuss these problems in more detail.




                      Page 4                                                        GAO/T-GGD-98-7
Statement
U.S. Postal Service: Little Progress Made in
Addressing Persistent Labor-Management
Problems




Regarding the use of interest arbitration, as discussed in our 1994 report,
contract negotiations occur nationally between the Service and the four
labor unions every 3 or 4 years. Since as far back as 1978, interest
arbitration has sometimes been used to resolve bargaining deadlocks in
contract negotiations by APWU, NALC, and Mail Handlers. The most recent
negotiations occurred for contracts expiring in November 1994 for those
three unions.4 The issues at stake were similar to those raised in previous
negotiations, which included the unions’ concerns about wage and benefit
increases and job security and postal management’s concerns about cost
cutting and flexibility in hiring practices. According to a postal official,
negotiations about old issues that keep resurfacing have at times been
bitter and damaging to the relationship between the Service and the
unions at the national level. Union officials also cited the Service’s
contracting out of various postal functions—also known as
outsourcing—as a topic that has caused them a great deal of concern.

Another problem concerns the number of unsettled grievances.5 In our
1994 report, we highlighted issues associated with the
grievance/arbitration process, including the high number of grievances
that had been filed and the inability of postal and union officials to resolve
them at the lowest possible levels. The Service’s national grievance
arbitration database showed that in fiscal year 1994, a total of 65,062
grievances involved postal management and union officials at the area
office level. According to the Service, this number has increased to 89,931
in fiscal year 1996, an increase of approximately 38 percent. Also,
according to Service data, the number of grievances awaiting arbitration
by a third-party arbitrator—known as backlogged grievances—has
increased from 36,669 in fiscal year 1994 to 69,555 in fiscal year 1996, an
increase of approximately 90 percent.6 Although the postal management
and union officials we interviewed for our 1994 review agreed that the
total volume of grievances was too high, they differed on the causes of this

4
 For rural carriers, whose contract expired in November 1995, negotiations resulted in the
establishment of a new contract without the use of interest arbitration. The rural carriers have had a
more cooperative relationship with the Postal Service and generally have been able to negotiate
contracts without arbitration.
5
 The grievance/arbitration process is the primary mechanism craft employees use to communicate
their work-related concerns; and a “grievance,” according to postal labor agreements, is “a dispute,
difference, disagreement, or complaint between the parties related to wages, hours, and conditions of
employment.”
6
 Stated another way, in fiscal year 1996, the average rate of grievances to be decided at the area level
had risen to 13 for every 100 postal craft employees, compared to fiscal year 1994 when the average
rate was 10 such grievances per 100 craft employees. For backlogged grievances, in fiscal year 1996,
the average rate of such grievances had risen to 10 grievances per 100 craft employees, an increase
from the average rate of 6 such grievances per 100 craft employees in fiscal year 1994.



Page 5                                                                                GAO/T-GGD-98-7
Statement
U.S. Postal Service: Little Progress Made in
Addressing Persistent Labor-Management
Problems




high volume. These officials told us that their views had not changed
significantly since we issued our 1994 report. Generally, the officials
tended to blame each other for the high volume of grievances being filed
and the large number of backlogged grievances.

Finally, at the time our 1997 report was issued, the Postal Service and the
other seven organizations had been unable to convene a
labor-management relations summit. The Postmaster General (PMG)
proposed the summit over 2 years ago to, among other things, address our
recommendation to establish a framework agreement of common goals
and approaches that could help postal, union, and management
association officials improve labor-management relations and employee
working conditions. Initially, the responses from the other seven
organizations to the PMG’s invitation were mixed. For instance, around
January 1995, the leaders of the three management associations and the
Rural Carriers union accepted the invitation to participate in the summit.
However, at that time, the contracts for three unions—APWU, NALC, and
Mail Handlers—had expired and negotiations had begun. The union
leaders said they were waiting until contract negotiations were completed
before making a decision on the summit. In April 1996, when negotiations
had been completed, the three unions agreed to participate.

Because of these initial difficulties in convening the summit, in
February 1996, the Service asked the Director of FMCS to provide mediation
services to help convene the summit. Also, in March 1996, Mr. Chairman,
you encouraged the FMCS Director to assist the Service by providing such
services. As discussed in our 1997 report, although various preliminary
meetings had taken place to determine an agenda, the efforts to convene a
summit were not successful. Recently, according to an FMCS official, a
summit occurred on October 29, 1997, that was attended by various
officials from the eight organizations, including the Postal Service, the four
major unions, and the three management associations. We are encouraged
by the fact that this meeting occurred. Such meetings can provide the
participants a means of working toward reaching agreement on common
approaches for addressing labor-management relations problems. We
believe that such agreement is a key factor in helping these organizations
sustain improvements in their relations and in the postal work
environment.




Page 6                                                         GAO/T-GGD-98-7
                            Statement
                            U.S. Postal Service: Little Progress Made in
                            Addressing Persistent Labor-Management
                            Problems




                            Since our 1994 report was issued, the Postal Service and the other seven
Actions to Implement        organizations have continued their efforts to address labor-management
Initiatives Have Been       problems by implementing, or attempting to implement, specific
Taken, but Little           improvement initiatives. During our discussions with these officials, they
                            said that they generally agreed with the overall goals of some of the 10
Information Was             improvement initiatives that we focused on. They also believed that some
Available on Results        of these initiatives held promise for making a positive difference in the
                            labor-management relations climate. However, although various actions
                            had been taken to implement the 10 initiatives that we reviewed, we found
                            it difficult to determine what results, if any, were achieved, mainly because
                            (1) some initiatives had only recently been piloted or implemented,
                            (2) some were only partially implemented because of disagreements on
                            how to implement them, and (3) some were discontinued because the
                            Service and the other involved participants disagreed on how best to use
                            the initiatives to help improve the postal work environment. For each of
                            these categories, I would like to discuss an initiative that shows why we
                            found it difficult to determine results.

                        •   The Associate Supervisor Program (ASP) is an example of a recently
                            implemented initiative that many officials believe may have the potential
                            to improve the postal work environment. ASP is a 16-week training program
                            for new postal supervisors that was first established in 1994. As of
                            March 1997, the Service was still completing the last ASP pilot. Various
                            postal, union, and management association officials we interviewed at
                            some ASP pilot locations told us that although they believed it was too soon
                            to evaluate the results of the program, they believed it had the potential for
                            providing the Service with more qualified and better trained supervisors.
                            Also, local union officials told us they liked the additional training that is
                            to be provided to current postal supervisors under ASP.7
                        •   Delivery Redesign is an example of an initiative that has been only
                            partially implemented because of disagreements among the parties on how
                            to implement it. Delivery Redesign is a program begun in 1995 that was to
                            make appropriate changes to the system by which city letter carriers,
                            represented by NALC, sort and deliver mail. According to postal officials, in
                            1997, after numerous discussions with NALC that resulted in no agreement
                            on an approach, the Service decided to test some revised processes for
                            mail delivery by city letter carriers. These processes are collectively
                            known as Delivery Redesign. Postal officials also told us that NALC
                            officials, although briefed several times (May, July, and

                            7
                             According to a postal official responsible for managing ASP, the Service plans to make specific parts
                            of ASP training available to current postal supervisors, such as conflict resolution and methods for
                            dealing with problem employees. The purpose of this effort is to provide current postal supervisors
                            with training that is similar to the training that ASP candidates receive.



                            Page 7                                                                              GAO/T-GGD-98-7
                        Statement
                        U.S. Postal Service: Little Progress Made in
                        Addressing Persistent Labor-Management
                        Problems




                        September 1996) on Delivery Redesign, have not endorsed the testing of
                        the revised processes. At the national level, NALC officials told us that they
                        believed that revisions to the processes by which city carriers sort and
                        deliver mail should be established through the collective bargaining
                        process.
                    •   The Employee Opinion Survey (EOS) is an example of an initiative that
                        was discontinued. The nationwide annual EOS, begun in 1992 and
                        continued through 1995, was a voluntary survey designed to gather the
                        opinions of all postal employees about the Service’s strengths and
                        shortcomings as an employer. Postal officials told us that such opinions
                        have been useful in helping the Service determine the extent of
                        labor-management problems throughout the organization and make efforts
                        to address those problems. Efforts to continue implementing this initiative
                        were hampered primarily by disagreements among the Service and the
                        other involved participants over how best to use the initiative to help
                        improve the postal work environment. Also, according to postal officials, a
                        lack of union participation in this initiative generally caused the Service to
                        discontinue its use. According to some postal and union officials, the 1995
                        EOS was boycotted primarily because some unions believed that the
                        Service inappropriately used the results of past surveys during the 1994
                        contract negotiations.


                        As discussed in our report, we continue to believe that to sustain and
Continued Need to       achieve maximum benefits from any improvement efforts, it is important
Improve                 for the Service, the four major unions, and the three management
Labor-Management        associations to agree on common approaches for addressing
                        labor-management relations problems. Our work has shown that there are
Relations               no clear or easy solutions to these problems. But continued adversarial
                        relations could lead to escalating workplace difficulties and hamper
                        efforts to achieve desired improvements.

                        In our report, we identified some approaches that might help the Service,
                        the unions, and the management associations reach consensus on
                        strategies for dealing with persistent labor-management relations
                        problems. Such approaches included

                    •   the use of a third-party facilitator,
                    •   the requirements of the Government Performance and Results Act, and
                    •   the proposed Postal Employee-Management Commission.




                        Page 8                                                         GAO/T-GGD-98-7
Statement
U.S. Postal Service: Little Progress Made in
Addressing Persistent Labor-Management
Problems




As I mentioned previously, with the assistance of FMCS, the Postal Service,
the four major unions, and the three management associations recently
convened a postal summit meeting. As discussed in our 1994 report, we
believe that the use of FMCS as a third-party facilitator indicated that
outside advice and assistance can be useful in helping the eight
organizations move forward in their attempts to reach agreement on
common approaches for addressing labor-management relations
problems.

In addition, the Government Performance and Results Act provides an
opportunity for joint discussions. Under the Results Act, Congress, the
Postal Service, its unions, and its management associations as well as
other stakeholders with an interest in postal activities can discuss not only
the mission and proposed goals for the Postal Service but also the
strategies to be used to achieve desired results. These discussions can
provide Congress and the other stakeholders a chance to better
understand the Service’s mission and goals. Such discussions can also
provide opportunities for the parties to work together to reach consensus
on strategies for attaining such goals, especially those that relate to the
long-standing labor-management relations problems that continue to
challenge the Service.

Another approach aimed at improving labor-management relations is the
proposed establishment of an employee-management commission that
was included in the postal reform legislation you introduced in June 1996
and reintroduced in January 1997. Under this proposed legislation, a
temporary, presidentially appointed seven-member Postal
Employee-Management Commission would be established. This
Commission would be responsible for evaluating and recommending
solutions to the workplace difficulties confronting the Service. The
proposed Commission would prepare its first set of reports within 18
months and terminate after preparing its second and third sets of reports.8




8
 Under this proposed legislation, the Commission would submit its recommendations in the form of a
written report to the President and Congress to the extent that such recommendations involved any
legislation and to the Postal Service to the extent that the recommendations did not involve legislation.



Page 9                                                                               GAO/T-GGD-98-7
                        Statement
                        U.S. Postal Service: Little Progress Made in
                        Addressing Persistent Labor-Management
                        Problems




                        We received comments on a draft of our report from nine
Comments From the       organizations—the Service, the four major unions, the three management
Postal Service, Labor   associations, and FMCS. The nine organizations generally agreed with the
Unions, Management      report’s basic message that little progress had been made in improving
                        persistent labor-management relations problems, although they expressed
Associations, and       different opinions as to why. Also, the nine organizations often had
FMCS                    different views on such matters as the implementation of and results
                        associated with the 10 initiatives; the likelihood of the organizations to
                        reach consensus on the resolution of persistent labor-management
                        relations problems; the desirability of having external parties, such as
                        Congress, become involved in addressing such problems; and the
                        comprehensiveness of our methodology, which we believed was
                        reasonable and appropriate given the time and resources available. We
                        believe that the diversity of opinions on these matters reinforces the
                        overall message of our most recent report and provides additional insight
                        on the challenges that lie ahead with efforts to try to improve
                        labor-management relations problems in the Postal Service.


                        In summary, the continued inability to reach agreement has prevented the
                        Service, the four major unions, and the three management associations
                        from implementing our recommendation to develop a framework
                        agreement. We continue to believe that such an agreement is needed to
                        help the Service, the unions, and the management associations reach
                        consensus on the appropriate goals and approaches for dealing with
                        persistent labor-management relations problems and improving the postal
                        work environment. Although we recognize that achieving consensus may
                        not be easy, we believe that without it, workplace difficulties could
                        escalate and hamper efforts to bring about desired improvements.

                        Mr. Chairman, this concludes my prepared statement. My colleague and I
                        would be pleased to respond to any questions you may have.




(240271)                Page 10                                                      GAO/T-GGD-98-7
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