Summer 2008: The SEC’s original budget proposal for FY 2009 included only a 1.5% increase for its merit pay budget. However, NTEU’s lobbying efforts this summer to increase that merit pay budget have been paying dividends.

8/1/08: This week, the SEC filed with the District of Columbia Circuit Court of Appeals a Petition for Review of NTEU's recent Federal Labor Relations Authority (FLRA) victory in the 2002 within grade increase (WIGI) case. As a result of the SEC's decision to proceed in this fashion, this summer hundreds of the agency's own employees will not receive the back pay to which they are entitled as a result of the SEC's violation of federal labor law as determined by the FLRA. Instead, those employees will now be required to wait additional months for a final decision by the DC Circuit.

The SEC will be limited on appeal to the issues that it raised below, which have already been rejected both by Administrative Law Judge Richard Pearson and by the FLRA. Furthermore, the DC Circuit will consider these issues largely under the highly deferential substantial evidence standard of review, which is generally limited to determining whether the FLRA's reasoning was supported by sufficient evidence from which it could have decided as it did. The DC Circuit typically will not second guess the FLRA's judgment under that standard.

7/10/08: The Senate Appropriations Committee today approved a fiscal 2009 funding bill that would provide federal civilian employees with a 3.9 percent pay raise — a full percentage point higher than that proposed by the White House, and an amount in step with a 2009 military pay raise moving through Congress. The committee also approved fiscal 2009 funding of $938 million for the Securities and Exchange Commission -- $25 million more than the White House proposal.

6/26/08: Yesterday afternoon, the House Appropriations Committee approved the FY 2009 Financial Services and General Government spending bill. In addition to several important NTEU-supported provisions on the GS pay raise and contracting out of federal jobs, the committee recommended an appropriation of $15 million over the President’s request for the Securities and Exchange Commission (SEC). The committee has also specifically instructed the SEC to allocate at least half of this $15 million increase to augment funds budgeted for merit pay under the agency’s negotiated performance-based pay system.

6/5/08: The Federal Labor Relations Authority (FLRA) ruled in favor of NTEU this week, affirming a decision of an Administrative Law Judge (ALJ) that the SEC is required to make back pay distributions to all SEC employees who should have received within grade increases (WIGIs) in 2002.

5/30/08: NTEU today called on the Equal Employment Opportunity Commission (EEOC) to establish regulations that guard against arbitrary management decisions leading to discrimination based on age under the Age Discrimination in Employment Act (ADEA), particularly in alternative pay systems.

May, 2008: In February, the SEC announced its intention to suspend its merit pay program for 2008 by temporarily separating it from the performance evaluation process, while it continues to work with NTEU to create a new, fairer process for evaluating employees. In April, NTEU and the SEC reached an agreement on implementation of this temporary separation of merit pay from the appraisal process.

4/30/08: The SEC sent out an announcement yesterday concerning a change to the agency’s pay schedules. Unfortunately, this announcement was unclear and consequently it has generated a great deal of unnecessary confusion among agency employees.

In short, the SEC is eliminating “steps” and is shifting to the use of “ranges” in its pay schedules. This change, which the SEC sought during compensation negotiations with NTEU in 2006, was ordered by the Federal Service Impasses Panel in October, 2006.

2/12/08: SEC Executive Director Diego Ruiz stated during testimony before a House subcommittee this afternoon that all employees receiving an "acceptable" performance rating will receive an "equivalent share" of the funds the SEC has available for merit pay increases, until the agency's new performance management system has been implemented.

1/24/08: NTEU has won a victory in its long-standing fight against pay-for-performance plans in the federal sector. Under an agreement reached by NTEU, the Federal Deposit Insurance Corporation (FDIC) has agreed to suspend its highly unpopular pay-for-performance system covering employees in the 2007 cycle. NTEU and FDIC are currently reviewing options for a more transparent, credible and fair pay system.

11/14/07: As you know, on September 4, Arbitrator James Harkless issued a decision on NTEU's national grievance with respect to the 2003 merit pay distributions, ruling that the SEC’s subjective pay for performance program violated Title VII of the Civil Rights Act, as well as the Age Discrimination in Employment Act (ADEA). NTEU and the SEC have now submitted briefs to the arbitrator regarding an appropriate remedy.

9/21/07: The SEC has yet to provide aggregate merit pay distribution information, broken down by office, division and type of employee. Nor has the SEC provided the preliminary recommendations on ratings that employees’ supervisors provided to the compensation committees (the so-called transmittal sheets), so that employees will be able to see management’s initial recommendations and the rationale for any changes made by the committees.

Washington, D.C.—In an important legal victory for the National Treasury Employees Union (NTEU), an arbitrator has ruled that a pay-for-performance system unilaterally designed and implemented by the Securities and Exchange Commission (SEC) is illegal because it has resulted in discrimination against large groups of agency employees.

9/6/07 (A message from NTEU National President Colleen Kelley): NTEU has won an important legal victory against the unfair and fundamentally-flawed pay-for-performance system at the SEC. An arbitrator ruled that the pay system unilaterally-designed and implemented by the agency is illegal because it has resulted in discrimination against large groups of agency employees.

August 2007: In late July, SEC management announced for the second consecutive year that its pay for performance budget would be substantially smaller than in the past, this time resulting in an average step increase of only approximately 1.3 steps per employee for the 2007 contribution year. In August, SEC managers informed disappointed employees of their actual merit pay step increases.

7/31/07: Various pay-for-performance systems often are touted as an effort to improve effectiveness and morale in the federal workplace, but there is no hard evidence these alternative systems accomplish those ends. In fact, there is evidence they have the opposite impact, NTEU President Colleen Kelley told a House subcommittee today.

7/25/07: Last Friday, SEC management announced that the Merit Pay budget for this year will be 2% of the agency’s current compensation level. This is the second consecutive year that the SEC has chosen not to fully fund the budget for the Merit Pay process at a level necessary to accomplish the program’s stated goals.

5/15/07: On Wednesday, May 16, the Financial Services and General Government Subcommittee of the Senate Appropriations Committee will begin work on fiscal 2008 funding for the Securities and Exchange Commission, which will have a significant impact upon your compensation. Chairman Christopher Cox is scheduled to testify. In March, he testified in support of the president's $905.3 million budget request for SEC before the House Subcommittee on Financial Services and General Government.

Full text of the October 2006 FSIP Decision on Compensation.

December 2006: In early October, the Federal Services Impasses Panel (FSIP) issued an important order that will affect compensation issues for all SEC employees.

For many months prior to this order, NTEU had been bargaining with SEC management for a new compensation agreement without reaching agreement. Due to SEC management proposals that NTEU believed were in violation of federal labor law, the parties failed to reach agreement on a new compensation package.

October 2006: As previously reported, NTEU continues to await decisions from both the Federal Labor Relations Authority (FLRA) and the Federal Service Impasses Panel (FSIP) related to its negotiations with the SEC over a new Compensation Agreement covering pay and benefits for agency employees.