Indiana Law Journal

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94 Indiana Law Journal Supplement 64 (2019)


In his Fiscal Year 2019 Budget Submission, President Trump noted that about 60 percent of Federal employees belong to a union and lamented that dealing with Federal employee unions ostensibly “consume[s] considerable management time and taxpayer resources, and may negatively impact efficiency, effectiveness, cost of operations, and employee accountability and performance.” Although he acknowledged that Federal employee unions can negotiate over fewer matters than can unions in the private sector, he nonetheless claimed that collective bargaining contracts can negatively impact agency performance, workplace productivity, and employee satisfaction. The President told Congress that “[a]gency managers will be encouraged to restore management prerogatives that have been ceded to Federal labor unions,” and that “[t]he Administration sees an opportunity for progress on this front and intends to overhaul labor-management relations.”

The Administration took such an opportunity this past April when it submitted proposed legislation to the House and Senate Armed Services Committees that would revamp the statutes that authorize the Department of Defense (DOD) to operate schools on bases in the United States and overseas for military dependents. In 1990, the Supreme Court unanimously ruled in Fort Stewart Schools v. Federal Labor Relations Authority that teachers and other educational personnel in DOD’s domestic dependents schools could collectively bargain over wages because, unlike the majority of Federal employees, their salaries are not set by statute. DOD’s new legislative proposal contains a provision that would statutorily overturn the Fort Stewart Schools decision by granting the Secretary of Defense sole and exclusive discretion to set compensation rates in the DOD dependents schools.

Under the Federal Labor-Management Relations Statute, the 1.2 million Federal employees represented by labor unions have the right to “engage in collective bargaining with respect to conditions of employment.” “Conditions of employment” is defined as “personnel policies, practices, and matters, whether established by rule, regulation, or otherwise, affecting working conditions, except that such term does not include policies, practices, and matters . . . to the extent such matters are specifically provided for by Federal statute.” The essential holding of Fort Stewart Schools was that wages are a “condition of employment” for Federal employees and, as such, are negotiable unless they are set by statute. Most “white collar” Federal employees’ salaries are set by the Classification Act of 1949, and the salaries of employees in the skilled crafts and trades and unskilled labor positions are set by the Prevailing Rate Systems Act. But depending on the degree of disaggregation, there are over forty other separate pay systems that vary considerably in numbers of employees covered and method of determining pay. As of 2010, over 250,000 Federal employees were covered by pay plans unique to their agency. To the extent that Congress has left the head of an agency with discretion to set salaries that is not sole and exclusive, the employees in that agency may collectively bargain over wages as a result of Fort Stewart Schools.

This article argues that those bargaining rights are at risk if the Administration succeeds in eliminating the right of teachers in DOD schools to bargain over pay. It will first explain that the right of some Federal employees to bargain over wages predated the enactment of the Federal Service Labor-Management Relations Statute (FSLMR Statute). This article will then describe the debate over whether Congress intended for Federal employees to bargain over pay when it enacted the statute as part of the Civil Service Reform Act of 1978, and how that debate was resolved by the Supreme Court in the Fort Stewart Schools case. It will then explain how the legislation proposed by the DOD will eliminate the right of DOD teachers to bargain over pay and will identify other groups of Federal employees who may stand to lose their bargaining rights if the Administration succeeds in rolling back the Fort Stewart Schools decision.