Union Submits Proposals on Diversity to SEC Management


The union today submitted to SEC management proposals regarding diversity at the agency. The union has vetted and discussed these proposals with dozens of Chapter 293 union leaders across the SEC. We believe that the proposals are reasonable steps that the agency could, and should, immediately take. In fact, the union previously submitted many of these same proposals to SEC management last summer, in response to their multiple “town hall meetings” discussing diversity as part of the national dialogue related to these issues. At that time, management refused to bargain over the union’s proposals. It is our hope that, given President Biden’s issuance on January 20 of his Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, management will finally give our proposals more thoughtful consideration.

Union leadership is mindful, however, that the SEC has a long and unfortunate history of refusing to address diversity concerns raised by the union. In fact, you may be surprised to learn that many of the proposals the union submitted to management today were agreed upon between the parties over a decade ago—only to be ignored or outright blocked over the years. Please take a moment to consider some of this history.

In 2003, the union filed a national grievance over the SEC's so-called Merit Pay system. In late 2007, an independent federal arbitrator ruled in the union’s favor that the Merit Pay system violated Title VII of the Civil Rights Act, as well as the Age Discrimination in Employment Act because the subjective standards and procedures used to make Merit Pay decisions had an impermissible adverse impact upon large groups of SEC employees. The arbitrator ruled that, because the SEC’s highly subjective and discretionary system for awarding pay increases was not valid or even reasonable, African-American professionals, as well as employees aged 40 and over, received significantly fewer merit increases than would be expected given their representation in the pool of eligible employees.

A year later, in late 2008, the union and the SEC signed a Merit Pay settlement agreement requiring the SEC to provide raises and pay a total of $2.7 million to African-American employees and employees aged 40 and older who had suffered disparate impact discrimination under the agency’s illegal Merit Pay program. As part of that deal, the SEC also signed a Diversity Initiatives Contract with the union. The Diversity Initiatives Contract required the agency to take some very basic steps to encourage diversity at the SEC, including working with the union to: implement an independent "barrier analysis" at the SEC by an outside contractor to identify potential barriers to promotion at the agency based on race, gender, sexual orientation, age and ethnicity; create diverse hiring committees for each SEC Office and Division and post information about those committees on the Insider (now the ”Exchange”); and implement a 360-degree review process at the agency which would have allowed frontline staff to provide feedback on their managers. The contract also included a number of procedural provisions intended to create more transparency at the agency around diversity issues.

Union officials tried for years to work together cooperatively with senior SEC management to get the Diversity Initiatives Contract on track to help address lingering concerns that many employees continued to express about the agency in this area. Unfortunately, the SEC never took its responsibilities under the contract seriously. Instead, SEC management, including senior officers and also officials from the Office of Human Resources and the Office of Minority and Women Inclusion, consistently acted to stonewall and prevent implementation of the provisions.

The same problems that existed in 2007 at the SEC have persisted over the years. This has been evident over and over again when the union analyzed data from the SEC's “pilot runs” of its various attempts to create performance management systems. For example, pilot data consistently showed that white employees were much more likely than African American employees to receive the highest ratings. Similarly, African American employees were much more likely than white employees to receive the lowest ratings. Statistically significant differences also appeared in the top level data based upon age, with many more employees who were forty and over receiving lower ratings than those under forty. Other biases also appeared in the data. 

At one point, the union even had to call the SEC out for its decision to use an obviously racially insensitive image in the agency’s training materials regarding performance management, which is described here. We also saw evidence of bias in discipline and performance-based cases against SEC employees. For example, several years ago, when we were dealing with discipline matters resulting from “turnstile” cases at HQ, the overwhelming majority of employees who received discipline were minorities.

"Unfortunately, we continue to believe that the SEC is on the wrong track and that it is failing to take steps to address fundamental issues that were revealed by the arbitrator's order in the Merit Pay case back in 2007," Chapter 293 President Greg Gilman said today. “My initial sincere optimism about helping to bring about constructive change to our culture when we entered into the original Diversity Initiatives Contract over a decade ago has shifted to a growing sense of cynicism about SEC management decisions on this front. Managers appear to be more than willing to hold town hall meetings and ask us to look into our hearts—they are far less willing to bring a real sense of transparency and fairness to SEC processes and decisions.”

"I was disappointed that we were unable to even get SEC management to the table regarding diversity last summer," said Chapter 293 Officer Emeritus Pat Copeland, who is a co-Chair of Chapter 293’s Diversity Committee. Pat went on to say that "the SEC talks about diversity, but it doesn't back it up with action. When the agency breaks its promises and refuses to address issues like this, it has a very negative effect on the entire SEC community. I’m afraid that history may repeat itself over and over again until SEC management learns from past mistakes. The time has come for real change."

The union will keep you posted regarding our efforts and management’s responses to our proposals.