The 1984 Postal Arbitration: Issues Surrounding the Award

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The 1984 postal arbitration: issues surrounding the award

The 1984 interest arbitration was the first time that the United States Postal Service (USPS) and its two largest unions, the American Postal Workers Union and the National Association of Letter Carriers, implemented the legislated impasse procedure of the Postal Reorganization Act of 1970 to resolve all economic issues raised in bargaining. As such, it represented a significant development in postal labor relations and resulted in an award for more than 500,000 employees, the largest number of workers involved in a single arbitration in the United States. It also raised questions about standards to be employed in wage-setting and in interest arbitration.

The 1984 negotiations

The 1984 postal negotiations were the first postal labor talks since the air traffic controllers' strike of 1981. The tone for the negotiations was set by a policy statement issued by the Board of Governors of USPS 2 weeks before the initial bargaining meeting which found that postal workers' compensation exceeded that of comparable private-sector employees and which therefore directed USPS management "to seek correction of this situation.'1 The mandate of the Board was reflected in management's economic proposals which included a two-tier wage structure, with the scale for new hires 33 percent below the current base.

The unions' Joint Bargaining Committee (JBC) believed that the USPS proposal was regressive and unwarranted by the economic success of USPS. Postal volume had continued to climb in spite of rate hikes and of doomsayers who had predicted a decline in hard mail copy. Annual productivity had also increased beyond that in the private sector in 7 of the last 10 years. USPS had accumulated more than $1.5 billion in surplus in 3 successive years, even though congressional subsidies had ended. Moreover, the unions claimed that employees had received an overly modest economic settlement in the 1981 agreement. JBC wanted significant improvements in wages and benefits.

Negotiations were unsuccessful. Impasse procedures were initiated. Another attempt at negotiations proved no more successful than the earlier one, leading the parties to mandated binding arbitration.

Interest arbitration

The statutory arbitration format is a three-member panel, with each party choosing one member and those two selecting a third; if the two are unable to agree, the director of the Federal Mediation and Conciliation Service designates the impartial neutral. The tripartite panel has 45 days in which to issue its award. In 1984, the statutory scheme was complicated by the presence of a joint bargaining team of two unions and by a time frame much shorter than the statute envisioned. The parties eventually agreed on a five-member panel: each union would nominate a member to the panel; USPS would nominate two members to balance the union representation; and one impartial chairman would be selected. Each representative arbitrator would cast a half vote; the chairman would be entitled to a full vote. The impartial chairman was Clark Kerr, an arbitrator and former chancellor of the University of California at Berkeley. The deadline for the arbitration award according to the statutory timetable was December 25. The hearings began December 11 and concluded on December 19.

The central question addressed by the parties during the arbitration hearings was the interpretation of Section 1003 of the Postal Reorganization Act of 1970:

It shall be the policy of the Postal Service to maintain compensation and benefits for all officers and employees on a standard of comparability to the compensation and benefits paid for comparable levels of work in the private sector of the economy.

To demonstrate that postal employees were paid a premium over comparable private-sector employees, USPS presented expert witnesses to testify on econometric studies, job evaluation studies, occupational wage surveys, and package industry wage surveys. …