"Special Edition"
December 2003


The DOD Bill: H.R. 1588, Title XI

Signed by the President, November 24, 2003.

Title XI of this law adds a new Chapter 99 to title 5 of the U.S. Code. It authorizes the Secretary of Defense to create, in consultation with the Director of OPM and with the affected unions, a new personnel system called "The National Security Personnel System."

The new system must not waive, modify or otherwise affect:

The public employment principles of merit and fitness set forth in 5 USC 2301, including the principles of hiring based on merit, fair treatment without regard to political affiliation or other non-merit considerations, equal pay for equal work and protection of employees against reprisal for whisleblowing.

Any provision of 5 USC 2302 (prohibited personnel practices)

Any provision of 5 USC 2302(b)(1) (all EEO laws)

The new system shall ensure that employees may organize and bargain collectively.

The new system shall include a performance management system that includes a process for ensuring feedback and dialogue between supervisors, managers and employees throughout the appraisal period, and setting timetables for review. This shall also include a "pay for performance" system.

To the maximum extent possible, the pay or civilians and of uniformed service members shall be adjusted at the same rate.

The Secretary may establish an appeals process that provides DOD employees with fair treatment in any appeals that they bring in decisions relating to their employment. This system shall ensure that employees are afforded the protections of due process.

Legal standards and precedents established by the MSPB and

the courts shall apply to DOD employees.

An employee who is subjected to an action normally appealable

to MSPB (suspension for more than 14 days, demotion or removal) shall have the right to appeal the final decision of the DOD personnel appeals system to the Headquarters office of


Provisions for Unions:

National level bargaining: The Secretary may decide to negotiate only with a national union in developing the new National Security Personnel System. Any such bargaining shall be binding on all subordinate levels of the labor organization.

The law declares the following chapters of title 5 to be non-waivable: 41, 45, 47, 55, 57, 59, 71, 72, 73 and 79. Chapter 71 is the chapter that contains all the laws on labor-management relations. Despite this, near the end of the bill, Congress says that the Secretary and the Director of OPM may establish a new labor relations system. How much of Chapter 71 DOD would choose to retain is unknown. The bill does say that "the labor relations system shall provide for independent third party review of decisions." This part of the bill (authorizing a new labor relations system) expires in 6 years, after which the provisions of 5 USC Chapter 71 shall be effective again.


    1. Congress has required DOD to engage in quite a bit of consultations (though no bargaining) with federal employee unions before the new personnel system is put into effect. Also, Congress has instructed DOD not to apply the new system to more than 300,000 employees at a time. This is reason to hope that the new system will not be in effect for a year or so. If we are very lucky, there will be a change in administrations during this time, and the new (Democratic) Secretary of Defense, can choose not to implement the new system at all. If we have to live with the law, we have to live with it, but it represents the biggest attack ever on unions in the federal sector and on civil service principles.
    2. What does "third party review" in the new labor relations system mean? Does it include arbitration for resolving grievances? FLRA enforcement of ULPs? The Federal Service Impasses Panel for resolving bargaining impasses? Third-party review must be something outside DOD and not subject to the control of DOD. Where can DOD go for third party review except to the entities that have traditionally performed this function?
    3. Nothing in this law prohibits unions or makes them obsolete. Even though the law encourages national bargaining and national labor contracts, there are bound to be issues of purely local application that the national parties delegate to the local parties to resolve, like overtime distribution, parking, cafeterias and other facilities for employees, and official time for local representatives.
    4. Are unions unaffiliated with the national union with whom DOD is bargaining bound by these negotiations? There is a good argument that the answer is "no" since the law says the new national contract is binding on all subordinate bargaining units "of the labor organization."
    5. What about the "appeal process" for DOD employees? We'll have to wait to see how this system is set up and how it functions. If it turns out to be a joke, we should still retain the option to take adverse action appeals to arbitration.
    6. Our prediction is that the following union rights will not be affected much by this legislation: the right to dues withholding; the right to official time; the right to process grievances on behalf of employees; and the right to obtain data necessary to represent employees. The biggest changes this legislation will cause is the lack of bargaining on labor contracts around the country and the lack of access to MSPB. DOD seems determined to have one single labor contract that applies to all DOD bargaining units; DOD has also severely restricted the MSPB's ability to review its personnel actions.
    7. If you don't work in a Defense agency and think you are safe from all this, think again! This administration wants to dismantle the entire civil service. Your agency could be next! Get out there and work for the election of the Democratic nominee for president. Its never been more important than it is now!