LABOR-MANAGEMENT PARTNERSHIP A REPORT TO THE PRESIDENT

United States Office of Personnel Management

LABOR-MANAGEMENT PARTNERSHIP
A REPORT TO THE PRESIDENT
December 2000

Background
Executive Order 12871
Reaffirmation of Executive Order 12871
Information Sources and Methods
Section I - Requirements of Executive Order 12871

1. Creation of Partnership Councils

2. Pre-decisional Union Involvement

3. Training in ADR and Interest-Based Bargaining Techniques

4. Negotiation of Permissive Subjects

5. Evaluation

Section II - Labor-Management Strategic Planning
Section III - Results and Accomplishments

1. Customer Service

2. Quality

3. Productivity and Efficiency

4. Cost Savings and Cost Avoidance

5. Quality of Worklife

6. Labor-Management Relations

Section IV - Keys to Success

1. Partnership Principles Incorporated into the Day-to-Day Operations of the Agency

2. Widespread Commitment to Partnership

3. Willingness to Tackle the Tough Issues

4. Training in the Techniques and Tools of Partnership

Section V - Barriers and Struggles

1. No Common Understanding of What Partnership Means

2. Lack of Trust and Mutual Respect

3. Turnover and Changes in Leadership

4. Inconsistent Commitment to Partnership

Section VI - Conclusions and Recommendations

1. Stronger Commitment to Training and Education

2. Maintain Continuity in the Face of Change

3. Greater Focus on Strategic Planning

4. Stronger and More Visible Leadership

5. Expand Membership on the National Partnership Council

6. Fortify Links Between Labor Relations Directors and National Unions

Background

Over the past four decades, the Federal labor-management relations program has evolved from a 1962 Executive Order granting limited unionization rights to a formal collective bargaining program established by law. Title VII of the Civil Service Reform Act of 1978, also known as the Federal Service Labor-Management Relations Statute, protects the rights of Federal employees to organize, bargain collectively, and participate through labor organizations of their own choosing in decisions that affect their working lives. The latest available data from the Office of Personnel Management shows, as of January 1999, there are 1,050,423 Federal employees represented by 90 unions in 2,218 bargaining units. Unionized employees make up 60% of the total non-postal Federal workforce.

Almost from its inception, the labor relations statute has been a source of considerable labor-management conflict. In a 1991 report entitled Federal Labor Relations: A Program in Need of Reform, the General Accounting Office (GAO) concluded that the Federal labor-management relations program was overly legalistic, too adversarial, and bogged down by litigation over procedural issues and minutiae. GAO stressed the need for a new labor relations framework that

motivates labor and management to form productive relationships to improve public service; makes collective bargaining meaningful; improves the dispute resolution processes; and is compatible with innovative human resource management practices that emphasize employee involvement, team building, and labor-management cooperation. The Clinton-Gore Administration has been committed to moving the Federal Government away from labor-management conflict and toward collaboration and partnership. Early on, the Administration examined successful private sector corporations and saw company after company point to meaningful union involvement as essential to their transformation. Companies like Xerox, Saturn, and Corning Glass learned that business as usual between labor and management was not good enough in a highly competitive business environment. Increasingly, companies were finding that genuine partnerships between labor and management could contribute to increased productivity, better customer service, and higher employee job satisfaction.

Executive Order 12871

In its September 1993 report, From Red Tape to Results: Creating a Government That Works Better and Costs Less, the National Performance Review (NPR) acknowledged the lessons learned from private industry and concluded that

traditional union-employer relations are not well-suited to handle a culture change that asks workers and managers to think first about the customer and to work hand-in-hand to improve quality.We can only transform government if we transform the adversarial relationship that dominates federal union-management interaction into a partnership for reinvention and change. Based on these findings, the NPR recommended that President Clinton establish labor-management partnership as a top priority for the Administration. In response, the President issued Executive Order 12871 (Labor-Management Partnerships) on October 1, 1993. In the preamble to the Order, the President made this powerful statement about the importance of partnership:

The involvement of Federal Government Employees is essential to achieving the National Performance Reviews Government reform objectives. Only by changing the nature of Federal labor-management relations so that managers, employees, and employees elected union representatives serve as partners will it be possible to design and implement comprehensive changes necessary to reform Government. Labor-management partnerships will champion change in Federal Government agencies to transform them into organizations capable of delivering the highest quality service to the American people. The Order established the National Partnership Council (NPC), an advisory body comprised of labor, management, and neutrals, to promote the creation of labor-management partnerships throughout the Executive branch and to report on the activity and performance of partnerships. The Order also directed agency heads to:

Create labor-management partnerships by forming labor-management committees or councils at appropriate levels to help reform Government;
Involve employees and their union representatives as full partners to identify problems and craft solutions to better serve the agencys customers and mission;
Provide training for line managers, first line supervisors, union representatives who are Federal employees, and other appropriate employees in consensual methods of dispute resolution, such as alternative dispute resolution and interest-based bargaining approaches;
Negotiate over the subjects in 5 U.S.C. Section 7106(b)(1), and instruct subordinate officials to do the same; and
Evaluate progress and improvements in organizational performance resulting from labor-management partnership.

With Executive Order 12871, the President began to change the operating assumptions of labor and management in the Federal Government. Agencies and unions were challenged to move beyond the hostility and conflicts that defined labor-management relations all too often in the past. The President directed labor and management to forge genuine partnerships aimed at improving the performance of Government.

Reaffirmation of Executive Order 12871

As this report will discuss, much has been achieved since the President signed Executive Order 12871 in 1993. In 1998, the National Partnership Council found that 67% of unionized Federal employees were represented by partnership councils. Partnerships between labor and management have helped cut costs, enhance productivity, and improve customer service at agencies across Government. But the President believed more could be done to achieve the objectives established in Executive Order 12871. He recognized that partnerships did not yet exist in every agency and, in some places, partnerships had stagnated or dissolved over the years.

On October 28, 1999, the President issued a memorandum in which he reaffirmed his strong commitment to partnership and called on Federal agencies to redouble their efforts to create partnerships with their unions. He instructed agencies and unions to develop joint labor-management strategic plans designed to help the Government and its employees deliver the highest quality service to the American people. The President also directed agencies to report annually on their progress toward achieving the goals of both his Executive Order and the reaffirmation memorandum.

The first of these progress reports was due to the Office of Management and Budget (OMB) on April 14, 2000. The President directed the Office of Personnel Management (OPM) to analyze the reports and, in coordination with OMB, to prepare a summary report on the status of labor-management partnerships in the Federal Government.

Information Sources and Methods

In this report, OPM examines how labor-management partnerships are working in the Federal Government; identifies the factors that contribute to successful labor-management cooperation and those that hinder such cooperative efforts; and offers

recommendations for steps that could help labor and management work together more effectively and efficiently in the future.

The information for this report comes primarily from the agency and union reports submitted in response to the Presidents reaffirmation memorandum. In guidance OPM published soon after the Presidents memorandum was issued, we instructed agencies to provide an assessment of the progress being made toward achieving the goals of EO 12871 and the Presidents memorandum. Specifically, we asked agencies to:

describe any strategic goals or objectives they had developed together;
identify the specific steps they had taken towards achieving the objectives established by Executive Order 12871 and the Presidential memorandum reaffirming partnership;
describe the results that have been achieved through partnership, with a special emphasis on changes in customer service, quality, productivity and efficiency, cost savings and cost avoidance, quality of worklife, and labor-management relations; and
provide copies of their labor-management strategic plans or, if no plans had yet been developed, provide a timetable for preparing such plans in the future.

OPM reviewed 38 agency reports, 16 of which were prepared jointly by labor and management. We also received 29 separate union statements or reports, mostly from the local union level. In addition to these reports, we reviewed information gathered by the National Partnership Council over the last several years, including the Councils annual reports to the President and its periodic surveys of union representatives and managers. We also reviewed labor relations data gathered by the Federal Labor Relations Authority. Finally, we considered comments from national union representatives and agency labor relations directors who have reviewed drafts of this report. Taken together, these varied sources offered a broad view of the state of labor-management partnership in the Federal Government.

OPM developed a uniform set of measures to track broad trends in partnership and to gauge, as best we could, the progress that agencies and unions are making to achieve the goals established by the President. In Section I of this report, we use the following measures to describe the extent to which Federal agencies met the directives of Executive Order 12871:

Substantial -- When the directive has been met in most parts of the agency.
Moderate -- When the directive has been met in some parts of the agency.
Minimal -- When the directive has been met in few parts of the agency.

In Section II, we use the following measures to describe the results that have been achieved through labor-management partnership:

Substantial -- When partnership has contributed directly and significantly to results achieved in most parts of the agency.
Moderate -- When partnership has contributed directly and significantly to results achieved in some parts of the agency.
Minimal -- When little has been achieved as a result of partnership.

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