Issue Briefs

Following are excerpts from a recent Congressional Research Service report describing the allowed scope of union bargaining in the U.S. Postal Service, which is broader than what applies in federal agencies generally.

Scope of Collective Bargaining

Article I, Section 8, clause 7 of the Constitution grants Congress power to establish post offices and post roads. Pursuant to this authority, Congress enacted the Postal Reorganization Act of 1970, which created the United States Postal Service as an independent establishment in the executive branch of the U.S. government. It enacted this statute to permit the Postal Service to operate more like a business than a government entity. Before the 1970 act became law, the Cabinet-level Department of the Post Office operated postal services.

While Congress applied to the Postal Service some statutes, including those relating to veterans’ preference and retirement, that apply to federal entities and prohibited postal employees, like other federal employees, from striking, it provided in 39 U.S.C. Section 1209(a) that, “Employee management relations shall, to the extent not inconsistent with the provisions of this title, be subject to the provisions of subchapter II of chapter 7 of title 29” (i.e., the National Labor Relations Act [NLRA], which governs private sector employee-management relations). Most federal departments and agencies are regulated by chapter 71 of Title 5 of the U.S. Code, known as the Federal Labor-Management Relations Statute.

In the 1970 act, codified at Title 39 of the U.S. Code, Congress also granted the U.S. Postal Service broader employee-management authority than it gave most other federal departments and agencies. A provision of the act, 39 U.S.C. Section 1005(f), identifies subjects of Postal Service collective bargaining: compensation, benefits, and other terms and conditions of employment. This scope differs from the one that applies to most federal agencies, which is limited to conditions of employment. For those agencies, the phrase “conditions of employment” is defined in 5 U.S.C. Section 7103 expressly to exclude policies, practices, and matters relating to political activities prohibited under subchapter III of chapter 73 of Title 5 (i.e., the Hatch Act); classification of any position; and, significantly, conditions of employment that are specifically provided for in federal statute. This final exclusion precludes collective bargaining over conditions of employment such as Federal Employees Group Life Insurance (FEGLI) and the Federal Employees Health Benefits Program (FEHBP) because they are specifically provided for in 5 U.S.C. chapters 87 and 89, respectively.

Addressing the transition from the Postal Office Department to the businesslike U.S. Postal Service, Congress in 39 U.S.C. Section 1005(f) indicated that compensation, fringe benefits, and other terms and conditions of employment that were in effect immediately prior to the effective date of the section (it was enacted on August 12, 1970) would continue to apply to officers and employees of the Postal Service in accordance with chapters 10 and 12 of Title 39, which relate to employment and employee-management relations, respectively. The final sentence of Section 1005(f) states the following: No variation, addition, or substitution with respect to fringe benefits shall result in a program of fringe benefits which on the whole is less favorable to the officers and employees in effect on the effective date of this section, and as to officers and employees for whom there is a collective-bargaining representative, no such variation, addition, or substitution shall be made except by agreement between the collective bargaining representative and the Postal Service. (Emphasis supplied.) Congress provided procedures for terminating collective bargaining agreements in Section 1207 of Title 39. This section states that a party wishing to terminate or modify an agreement while it is in effect must serve timely written notice on the other party. If parties cannot agree on a resolution or adopt a procedure for a binding resolution of a dispute, the Director of the Federal Mediation and Conciliation Service must appoint a mediator. This section also grants authority to establish an arbitration board under certain circumstances and provides that a board decision is conclusive and binding on the parties.

Congress’s Authority to Modify Scope of Bargaining or Terms of Collective Bargaining Agreements

Collective bargaining agreements are contracts between the Postal Service and union that prescribe employee-management relations for subjects that Congress has permitted to be collectively bargained. Can Congress through legislation modify the scope of bargaining or terms of collective bargaining agreements? Congress has authority prospectively to modify the scope of bargaining or terms of collective bargaining agreements after they expire. In the 1970 act, Congress granted the Postal Service and collective-bargaining representatives authority to bargain collectively over compensation, fringe benefits such as health insurance and life insurance, and other conditions of employment, but it could amend that statute to limit the scope of bargaining subjects in the future. For example, Congress could mandate that premiums for health or life insurance no longer will be subjects of collective bargaining.

Enacting a statute to modify the scope of bargaining or terms of agreements before they expire, however, may present legal questions to be resolved by a court. For example, a court may have to determine whether such a statute may cause the Postal Service to breach a contract or exceed constitutional limits under the Takings and/or Due Process Clauses of the Fifth Amendment.