DOD to proceed with new pay rules

A judge’s decision that parts of the Defense Department’s new personnel system are illegal throws a wrench into DOD’s plans to expand managers’ rights in dealing with employees, but DOD officials said they will proceed with performance pay and new pay band classifications. “Would I prefer that we didn’t have this situation? Absolutely,” said Mary Lacey, program executive officer for the National Security Personnel System, DOD’s new job classification and performance-based pay system for 700,000 civilian employees. Judge Emmet Sullivan of the U.S. District Court for the District of Columbia ruled Feb. 27 against DOD on all but one complaint in a lawsuit that a coalition of DOD unions filed in federal district court last year. Sullivan rejected the unions’ allegation that DOD failed to confer with the unions in developing the new personnel system. But in a 77-page opinion, Sullivan said NSPS contains illegal labor relations provisions and fails to preserve collective bargaining and independent third-party review of labor relations decisions. Sullivan also ruled that its provisions for employees to appeal adverse actions, such as job demotions or pay cuts, are unfair. Union officials greeted the judge’s decision as decisive. "Judge Sullivan's ruling eviscerates the core of NSPS, leaving but a hollow shell of provisions that simply cannot stand on their own," said Joe Goldberg, assistant general counsel for the American Federation of Government Employees, one of the unions involved in the court case to block NSPS. DOD officials said they are reviewing the decision and have not decided whether to appeal Sullivan’s ruling. The legal setback, however, will not add further delays to DOD’s plans to switch 11,000 nonunion, white-collar employees to the new pay bands and performance pay at the end of April, Lacey said. “In January 2007, we’ll have those 11,000 folks seeing a difference in the way they are compensated.” About 1,300 DOD managers have received NSPS training and will be ready to use the new system to evaluate and rate the performance of those 11,000 employees, Lacey said. Anticipating a possible court injunction and knowing that it couldn’t rush manager training, DOD scaled back its initial deployment numbers, she said. DOD made good on its promise to simplify the performance pay component of NSPS after receiving complaints from program managers who will be the ones to use the system, Lacey said. “We took the last six weeks to do that,” she said. DOD has been informed that the Government Accountability Office will study the costs of deploying NSPS, Lacey said. But she did not know when GAO would begin that study or how broad it would be.