In Important Shift, SEC Senior Management Pursues Aggressive New Strategy in Contract Talks Seeking Reductions in Employee Benefits and Rights; Union Files Unfair Labor Practice Charge


6/22/11: In an unexpected shift, SEC management has opened the Collective Bargaining Agreement (CBA) negotiations pursuing an aggressive new strategy intended to achieve give-backs and reductions in many of the important work-life benefits and rights that are currently enjoyed by SEC employees. The SEC’s management negotiating team, under the direction of Chairman Schapiro’s new Chief Operating Officer, Jeffrey Heslop, is currently comprised of Rufus Beatty (OGC), Lacey Dingman (Enforcement), Merri Jo Gillette (CHRO), Amanda Ravitz (Corp Fin), John Walsh (OCIE) and Barry Walters (FOIA).

The CBA is your employment contract as an SEC employee. It was last agreed to in 2006 by the SEC under former SEC Chairman Christopher Cox. For several years, the work-life benefits and rights contained in the CBA have formed the basic foundation of the Agency’s successful human capital program for recruiting and retaining the highly skilled and motivated professionals necessary for the SEC to accomplish its mission. They include telework, alternative work schedules such as 5-4-9, the Student Loan Repayment Program and many others. A large majority of SEC employees have consistently highly rated these Union-negotiated work-life benefits and rights in OPM’s regular federal employee surveys. Indeed, SEC employees have identified them as the most important part of the agency’s compensation package and a key reason for continuing their employment at the SEC.

Despite the well-documented success of these important human capital policies, SEC senior management appears to be choosing a very different path for the agency going forward, by seeking to curtail and reduce those work-life benefits and rights. At a time of already plummeting SEC employee morale and difficult budget choices that are negatively affecting employee compensation, the Union seriously questions the wisdom of this new approach for shepherding the SEC’s most important resource, its own employees.

Current Status of Some Key Aspects of the CBA Negotiations

Following are updates on a few of the CBA issues currently under negotiation:

Cutting Back Telework

The SEC is proposing substantive changes to the existing Telework Program, the terms of which are set forth in Article 11 of the current CBA. For example, management proposes to redefine “telework” as a “management option to facilitate work.” This change would fundamentally transform the standard for telework from one that requires an employee to perform at the same level at home as he or she would at the office, to a standard that would require a management determination that the employee can perform better at home than in the office. This change could potentially end telework at the SEC, leaving it very much up to the discretion of managers. 

Telework is now regularly available in the private sector. It also constitutes a national program across the federal government that is intended to provide increased employee work-life flexibility, save on national fuel costs, reduce carbon emissions, reduce agency office expenses, and reduce traffic during commutes. It is supported by the President, the Director of OPM and the Congress – which recently enacted a statute providing further support for telework in the federal work place. Senior management’s continuing apparent hostility towards this work-life benefit is perplexing.

Moving Back to Pre-2000 Dress Code

The SEC is proposing to eliminate the existing attire standard in Article 26 of the CBA and return to a “professional business” standard. Management’s attire policy would only allow any deviation from “professional business” attire entirely at the discretion of local management in each office. This policy runs counter to the trends in the private sector from which we recruit most of our employees.

Abrogating All Existing Contracts with the Union

The SEC is also proposing to summarily terminate all existing contracts and agreements with the Union on all subjects. This would eliminate existing agreements to provide certain merit pay levels, to eliminate caps on grades, to provide domestic partner benefits, to provide Student Loan Repayment Program benefits to older employees, to maintain the SEC’s Diversity Council, and a host of others. It is an incredibly aggressive position that would eliminate SEC employee rights and benefits on many issues.

Reducing Voluntary Reassignments

The SEC is proposing to eliminate the voluntary reassignment policy and all of the existing processes and procedures for an employee in good standing to request a voluntary reassignment to a different office. Under the management team’s current proposal, all voluntary transfer requests would be granted solely at the discretion of management. This would further reduce fairness in internal SEC reassignments, in effect institutionalizing a lack of transparency in the process that would permit managers to refuse reassignments based on their personal prerogatives.

Eliminating the Upward Mobility Program

The SEC is also proposing to eliminate the agency’s successful Upward Mobility Program, which provides lower-graded SEC employees an opportunity to expand their career and promotion potential through a systematic, planned approach to training and career progression to a higher grade. It is difficult to understand why management would want to take away this opportunity from its employees.

Ensuring that it Is Difficult to Get Advanced Sick Leave when Needed

The SEC is also supporting the requirement that an employee who needs advanced sick leave must request and receive such leave in increments of no less than 40 hours at a time, effectively eliminating the possibility of using advanced sick leave in all but the most grievous cases. For example, if an employee was diagnosed with cancer, and then used up all of his sick leave and annual leave in a successful battle against the disease, he would then be required to take a full 40 hours of advanced sick leave just to attend a brief, routine doctor’s or dentist’s appointment. This is a particularly draconian position that would be extremely harmful in its application.

Reducing Employee Rights in Internal Investigations.

The SEC is also proposing CBA provisions that would reduce the rights of SEC employees in connection with internal investigations led by the SEC’s inspector general. The proposed changes would expand the inspector general’s jurisdiction to include “improper performance of your official duties,” which essentially invites the inspector general to second guess the work you perform which is already under the direction and supervision of SEC management. This change is particularly unsettling in an environment in which SEC senior management has recently sought to suspend, without pay, bargaining unit employees in connection with the Madoff investigation for their work which was at the direction of and with the approval of management.

The SEC is also seeking to eliminate a provision of the current CBA which requires that the agency provide a written copy of the standard rights and warnings to investigated employees when they are questioned. This change is perplexing, in that the SEC appears to be seeking to afford its own employees less process than the fraudsters that we investigate, who routinely receive a copy of standard rights and warnings in writing when they are questioned by the SEC.

Eliminating Cooperation on Equal Employment Opportunity

The SEC is also proposing to eliminate the Equal Employment Opportunity Committee, a joint labor-management committee that meets to discuss and resolve EEO issues at the agency. Such committees are commonplace across the federal government. It is difficult to understand why the agency would want to reduce cooperation on EEO issues in the workplace.  

Opposing Correction of the Rule for When a Management Directive Would Violate an Employee’s Local Ethics Obligations

The SEC is also opposing a proposal to eliminate the current“Nuremberg rule” at the agency by permitting an employee to refuse a directive when it is deemed to be a violation of the attorney’s ethical rules by the body responsible for enforcement of those rules in his or her state. Under current SEC rules, if an agency attorney believes that a particular directive or assignment would violate his or her Code of Professional Responsibility, he or she may challenge it – but then must obey the order if directed to do so by management even if doing so would violate the attorney’s own ethical rules as promulgated by his or her state bar. It cannot be gainsaid that SEC management should be seeking to foster strict adherence with ethical rules, rather than pushing to allow for management directives in violation of such ethical standards.

Opposing Procedures for Contracting Out

The SEC is also opposing a proposal to establish procedures to ensure a fair and transparent process in connection with “contracting out” SEC positions to private sector contractors. The reason identified for opposition by the SEC was to ensure that it could contract out SEC positions as quickly as possible if it decides to do so.

Opposing Procedures for Handling Potential Furloughs Due to a Lapse in Appropriations

The SEC is also opposing a proposal to establish procedures to follow when a furlough might occur due to a lapse in appropriations. The Union made this proposal to ensure that there is a transparent process in such circumstances that involves employee representatives to protect employee rights. In light of recent events in the federal government, as well as looming issues with the debt limit, it is difficult to understand why the SEC would be unwilling to provide some sense of certainty to its workforce.

Aggressive New Negotiating Tactics and the Union’s Unfair Labor Practice Charge against the SEC

In addition to seeking to curtail important work-life benefits and rights, the SEC’s management CBA team, at the direction of Chairman Schapiro’s new Chief Operating Officer, appears to have made a decision to depart from the positive, collaborative, negotiating approach employed by the labor-management specialists in the Office of Human Resources (OHR) in past discussions.

Indeed, in a sudden and unexpected move last month, the Chief Operating Officer removed several members from the management CBA negotiating team, including the Director of OHR, who had been the SEC’s Chief Negotiator, as well as two experienced OHR labor management specialists. These individuals are labor-management experts who have day-to-day interactions with Union representatives at the SEC, who know the history of our various agreements and interactions, and who know federal labor law. Experienced labor specialists will no longer be handling the contract negotiations with the Union.

It should also be noted that the Director of OHR, who was removed from his role as the Chief Negotiator for the management CBA team, is the co-chair of the SEC’s Labor Management Forum. That Forum was established last year pursuant to President Obama’s Executive Order establishing such forums, to improve labor-management relations at the SEC and increase an interest-based, collaborative relationship between the Union and management. Thus, removing the OHR Director from his lead role on the CBA negotiations, after the parties had already committed to taking an interest-based approach to those negotiations, signals a clear shift on the part of senior management at the SEC away from the President’s mandated collaborative approach and towards a more combative and negative style. In fact, the SEC's new Chief Negotiator has stated several times to the Union that the agency is not at all interested in engaging in interest-based discussions.

After making these changes to the management negotiating team, the management negotiating team shortly thereafter unilaterally cancelled three full days of contractually scheduled CBA bargaining sessions. Under the contract, such a cancellation required the consent of both parties. Under federal labor law, refusing to negotiate in this fashion constitutes bad faith.

In response to this and other violations, last month NTEU filed an Unfair Labor Practice charge against the SEC with the Federal Labor Relations Authority, asserting that the SEC has violated federal labor statutes by engaging in bad faith bargaining by refusing to negotiate with NTEU during contractually scheduled bargaining sessions, and by repeatedly violating the parties’ ground rules agreement. The Union expects the FLRA to act on this charge soon.

Poor Judgment in the Timing of SEC Management’s New Employee Relations Strategy

The SEC’s recent, sudden shift away from the collaborative, positive approach that has been the standard in discussions with SEC management in recent years and towards a more negative and hostile approach that seeks reductions in employee rights and benefits is troublesome for many reasons, not the least of which is the extent to which it reflects a new SEC direction on human capital policies. 

Indeed, the SEC has faced a steady decline in employee morale over the past few years, including during the current administration. In that context, this year SEC employees have faced further challenges to their government service, including a government-wide, two-year federal employee pay freeze, plans to reduce federal employee pensions and increase employee pension contributions, threatened salary reductions in the form of government shutdowns and unpaid furloughs, and direct frontal attacks upon the important work that they do for our nation. In such a negative climate, the Union is at a loss to understand why senior management at the SEC believes that it will enhance the agency's ability to achieve its mission to actively work towards reducing work-life benefits and employee rights at the agency.

The SEC has never faced greater challenges. The agency has never experienced a greater need to attract and retain the best and the brightest employees possible to meet our ever expanding mission. Reducing the work-life benefits and other rights that serve to attract and retain top talent to the SEC will only serve to impede the SEC’s ability to meet its mandate. Simply put, management hostility towards its own workforce is not the philosophy of a winning organization that seeks to attract the best people.

The Union will continue to keep you updated on important developments regarding the CBA negotiations with the SEC.