SEC Stonewalls on Payment of Back Pay in WIGI Case; Files Petition for Review with DC Circuit


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.

"The union strongly disagrees with the SEC's decision to file a Petition of Review of the FLRA's order," noted Chapter 293 President Greg Gilman. "This case has already dragged on for six years. For that entire period, hundreds of affected employees have been denied the back pay to which the FLRA has now ruled they are entitled. An ALJ has considered and rejected the SEC's arguments. The FLRA, which currently is not generally perceived as being overly friendly to federal employees, also has rejected the SEC's arguments in an extremely well-reasoned decision. The SEC's disappointing course of action will likely have an adverse effect upon the morale of the hundreds of employees who will now have to wait additional months for final resolution."

To review the FLRA's decision, click here: FLRA Decision.

NTEU originally commenced this case when it filed an Unfair Labor Practice (ULP) complaint against the SEC in 2002, asserting that the agency had violated federal labor law by unilaterally implementing its new Pay Parity system and terminating WIGIs without first completing bargaining with the union. The SEC ceased giving employees WIGIs as of May 19, 2002. This decision adversely affected many employees who were due to receive such salary raises. This state of affairs continued for approximately six months until November 8, 2002, when the Federal Service Impasses Panel finally issued a decision regarding the compensation negotiations impasse between NTEU and the SEC.

In response to NTEU's complaint, the SEC argued that compensation issues are “non-negotiable” and that “exigent circumstances” existed to justify implementation prior to the completion of bargaining with the union. However, in December 2005, ALJ Richard Pearson issued his decision ruling that the agency had indeed committed a ULP by unilaterally implementing the new Pay Parity system. As part of his decision, the ALJ ordered the SEC to provide back pay, with interest, to all employees who were scheduled to receive a WIGI during the period between May 19, 2002 and November 8, 2002.

In early 2006 the SEC appealed the ALJ's decision to the full FLRA, rather than simply paying the affected employees the compensation that they were owed as a result of the agency's violation of federal labor law as determined by the ALJ. As a consequence, the full FLRA panel was required to review the decision of the ALJ. In May, the FLRA finally issued its decision resolving the issue in NTEU's favor.