MCC Remedy Decision
On December 3, 2015, Arbitrator Harry MacLean ruled that the Postal Service violated Article 32 when it failed to provide notice to the APWU and give due consideration to the five factors listed in Article 32.1.A prior to subcontracting work with New Breed to operate the Mail Consolidation Center (MCC).
On March 27, 2013, management entered into a new contract with New Breed for the services at the MCC. The Union filed a grievance over this contact on January 26, 2014.
The National Postal Mail Handlers Union intervened in the arbitration hearing arguing that some of the work is mail handler work and the jurisdiction of such work must be determined through the RI-399 Dispute Resolution Procedures.
Arbitrator MacLean sustained the APWU on the grounds that management failed to give due consideration to the five factors and failed to provide notice as required by Article 32 of the National Agreement.
The arbitrator referred the matter of work assignment jurisdiction to the Dispute Resolution Committee and retains jurisdiction of the case solely to determine the appropriate remedy if and when the Dispute Resolution Committee assigns the work to one of the unions.
Arbitrator MacLean ruled that the initial decision canceled the contract with New Breed and that the remaining issue is how the work at the MCC should be assigned between the two Unions.
The Arbitrator was clear that management was obligated to return the work to the bargaining unit based on his initial decision.
The remedy was limited based on the Arbitrator’s perspective that employees did not lose any work. Arbitrator MacLean opined that since the work had been contracted out since 1997, the loss is based on who would have performed the work had management not improperly contracted out the work in 2013.
The Arbitrator states ‘there are no employees to be made whole.’ As such, he ruled that though it does not preclude a monetary remedy, it takes the case ‘outside the normal formulations.’
The Arbitrator cites National arbitration decisions in reasoning that ‘even though there are no identifiable employees who suffered harm as a result of the contracting out of work’ that a monetary remedy is appropriate ‘to protect the union against injury to its reputation and standing among employees.’
Arbitrator MacLean ruled that the Postal Service liability accrued during two limited periods.
1. From the date of the initial violation (April 1, 2013) through the date of the Arbitrator’s initial decision (December 3, 2015)
On December 3, 2015, the Arbitrator referred the question of remedy to the RI-399 process to make a determination of how the work would be allocated between the two unions.
The Arbitrator ‘stops the clock’ on the remedy, reasoning that until a decision was made, the Service would not have been able to take over the operations.
The second of period of liability began when Arbitrator Lundberg issued his RI-399 decision on January 29, 2018. The Arbitrator reasoned that it would take management six additional months to take over the mail processing functions at the MCC.
2. The second period of liability begins July 29, 2018 until management returns the work to the bargaining unit.
In addressing the rate of pay for the hours at issue, the Arbitrator noted that:
1. the Union suggested that the appropriate rate would be the bid rates used by the contractor for it’s employees multiplied by the number of years elapsed by the contract
2. management argued that appropriate rate of pay is the PSE rate as of April 1, 2013 – a rate of $14.40 per hour
Arbitrator MacLean made the following ruling on the rate of pay:
Of the two suggested wage rates, the Arbitrator finds the PSE rate to be the most reasonable. The rates paid by the contractor to its employees bears no necessary relationship to the wage rates paid by the Service.
Again, we are not trying to compensate the Union based on the ‘value of the job’ that was lost, as described by Arbitrator Goldberg.
We are instead trying to come up with a reasonable method to calculate the damages to the Union for the initial and ongoing violation of Article 32 by the Service.
The Arbitrator assessed the liability to be based on 1640 hours per week at $14.40 per hour, for a total of $23,616 per week of violation.
The first period of liability is 113 weeks, which equals $2,668, 608.
The second period of liability is from July 29, 2018 until whatever date the facility begins operations.
The Arbitrator notes that these figures are based on ALL of the hours worked by contract employees during the two remedy periods.
The Arbitrator is allowing the National Postal Mail Handlers Union 30 days to exercise the option of providing a statement as to its position on the issue of remedy.
As such, the actual amount of remedy is not clear at this point.
The current total liability is approximately $2.9 million.
As the final remedy is based on the return of work and any other remedy considerations, it appears that it will be several months until there is a final answer.
Updates will be provided upon availability.