das award - searchable

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Here's the latest interest arbitration award for city letter carriers, better known as the Das Award. I've made it searchable.

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  • 1. BEFORE THE BOARD OF INTEREST ARBITRATIONIn the Matter of:)UNITED STATES POSTAL SERVICE and NATIONAL ASSOCIATION OF LETTER CARRIERS,AFL-CIO) ) ) ) 2011 National Agreement ) ) )-----------------------------) AWARD BOARD OF ARBITRATION SHYAM DAS, Impartial Chair ROBERT DUFEK, USPS Member BRUCE SIMON, NALC Member AWARD DATE: JANUARY 10,2013APPEARANCES FOR THE PARTIES NALC Keith E. Secular, Esq., Cohen, Weiss and Simon, LLP, New York, N.Y. Babette Ceccotti, Esq., Cohen, Weiss and Simon, LLP, New York, N.Y. Thomas N. Ciantra, Esq., Cohen, Weiss and Simon, LLP, New York, N.Y. Peter D. DeChiara, Esq., Cohen, Weiss and Simon, LLP, New York, N.Y. USpS Thomas E. Reinert, Jr., Esq., Morgan Lewis & Bockius, LLP, Washington, D.C. Stephan J. Boardman, Esq., Chief Counsel, Appellate and Commercial Litigation, Washington, D.C. Teresa A. Gonsalves, Esq., Chief Counsel, Labor Relations, Washington, D.C. Sonya J. Penn, Labor Relations Specialist, Washington, D.C. Katherine P. Sullivan, Labor Relations Specialist, Washington, D.C.

2. BACKGROUND Pursuant to Section 1207(c) of Title 39 of the U.S. Code, the Postal Reorganization Act, P.L. 91-373, 39 U.S.C. Section 101m~.("Acf' or "PRA"),the Federal Mediation and Conciliation Service ("FMCS") has designated the undersigned as an Arbitration Board for the purpose of resolving the present dlspute between the United States Postal Service ("USPS" or "Postal Service"), and the National Association of letter Carriers, AFl-CIO (flNAlC"). The Act provides that following collective bargaining all unresolved disputes between the parties are to be resolved through mediation and arbitration unless other procedures are adopted by the parties," The U~PS is an independent establishment of the Executive Branch of the Government of the United States, authorized to provide mail services to the American public. 39 U.S.C. Section~ 101 and 201. The Postal Service was created by the PRA, as subsequently amended by the Postal Enhancement and Accountability Act (PAEA) in 2006. It is the successor to the former Post Office Department. The NAlC is a national labor organization representing over 175,000 employees of the USPS in the City letter Carrier Craft. This proceeding is to establish a successor to the 2006 National Agreement between the parties, which expired on November 20, 2011. During the 90-day period prior to the expiration of the 2006 Agreement, the parties' representatives engaged in collective bargaining with respect to proposals for a 1 By memorandum dated August 3, 2012, the parties agreed to ground rules for conducting these interest arbitration proceedings. USPS Exhibit 1 As discussed further herein, the parties, in . association with the Board, adopted revisions to these procedures.1 3. new agreement. The first formal negotiating session took place on August 18, 2011. During this period, the parties engaged in good faith negotiations over a host of economic and work rule issues. The parties met frequently in main table discussions and subcommittee meetings. Nevertheless, when the contract expired at midnight, November 20, 2011, no tentative agr~ement had been reached. Negotiations were extended by the parties, initially until December 7, 2011, then again until December 16, 2011, and ultimately until January 20,2012.At that point, no agreement having beenreached, impasse was declared. The Federal Mediation and Conciliation Service appointed Joshua M. Javits, Esq. to mediate the dispute between the parties. Mediation lasted from February 16, 2012 to March 30, 2012. These efforts were unsuccessful. PROCEDURAL HISTORY Interest arbitration by its nature is litigation-oriented and adversarial. Thus, it is not surprising that interest arbitration in the Postal Service has been a time consuming and protracted affair, and has resulted in the creation of many extremely large records. For example, in the latest interest arbitration between the USPS and the National Rural Letter Carriers' Association (NRLCA), resulting in an Award issued on July 3,2012, the proceedings included some 26 hearing days, 60 witness presentations, and over 4,600 pages of transcript. The last interest arbitration between the USPS and NALC in 1999 was nearly as lengthy. Prior to the beginning of evidentiary hearings in the present proceeding, the parties determined that it was not in their interests to engage in a protracted2 4. proceeding over many months, and they explored ways to accelerate the process. Ultimately, the parties, with the Board's concurrence, agreed that direct case presentations could bemace through written submissions.2 This process is akin to procedures before the Postal Regulatory Commission. The parties deferred the issue of live cross-examination for determination after written submissions and further discussions among the parties and the Board.3 While this manner of proceeding strained the resources of the parties to prepare and submit the lengthy and comprehensive written submissions necessary for a full record in this case, it provided for efficient use of available hearing time and undoubtedly enabled the issuance of an award much more quickly than otherwise, would have been possible. The Board appreciates the efforts of both parties in making this process as complete as possible. The parties submitted Pre-Hearing Briefs to the Board on August 30, 2012, and the Board heard the parties' respective opening statements on September 6, 2012. The parties then submitted written direct testimony and evidentiary exhibits to the Board in November and December 2012. The issues addressed and the evidence submitted in this case were extensive.4 Without attempting to be full and complete, we will summarize some of the parties' major arguments below. The Postal Service argued the following points:See Procedural Order, dated November 16, 2012. Board ultimately Indicated to the parties that live cross-examination was unnecessary given the substantial detail of both parties' written submissions, and the parties concurred. 4 Specifically, the record exceeds one thousand pages and indudes 421 pages of testimonyfrom 21 witnesses as well as 153 separate exhibits.23 The3 5. The Postal Service has experienced an unprecedented and permanent decline in Flrst-Olass mail revenue due largely to electronic diversion. This fact, combined with certain regulatory burdens imposed by Congress, has led to a dangerous and untenable financial situation for the Postal Service-onethatcannot be solved by Congressional action alone. As the delivery network continues to grow while the value of the product delivered declines, the Postal Service must bring its delivery cost structure in line with its declining revenues. As the Postal Service seeks to generate new revenue In response to the dramatic, permanent loss of Flrst-Olass mail volume, it will ;move increasingly into the packages and parcels market, which is intensely competitive. The growth of e-cornmerce has led to a large increase in demand for low-cost same-day or next-day delivery in the business-to-consumer market. To effectively compete for this business, the Postal Service needs a less expensive delivery workforce with increased flexibility to deliver outside the typical 9to-5 delivery window. City delivery is significantly more costly than both rural delivery and contract delivery service; indeed, it is the most expensive cost center within the Postal Service. The Postal Service needs a less expensive delivery workforce to (1) ensure the gap between cost and revenue per delivery does not continue to grow, and (2)4 6. position the Postal Service to be competitive as it moves further into the same-day and next-day package delivery markets. City letter carriers enjoy a very rich and very costly wage and benefit package that exceeds comparable wages and benefits paid for similar levels of work in the private sector. The appropriate comparison for purposes of private sector comparability is the entire private sector, not only large, unionized employers. Past interest arbitrators have recognized the postal wage premium.Collective bargaining does not exist in a vacuum, and must take into account financial realities and changes In product markets. Provisions such as COLA clauses, no-layoff protections, and restrictions on contracting are nearly non-existent in private sector labor contracts today. Accordingly, they should be excised from the parties' agreement.The NALC argued the following points: The Postal Service faces significant financial and strategic challenges-challengesthat are driven by two root causes: (1) theunprecedented financial burdens and operational limitations imposed on the USPS by the Postal Accountability and Enhancement Act of 2006; and (2) the secular decline of letter mail volumes as Americans increasingly shift their communications to digital and electronic media.5 7. The decline of mail volume is generally understood. The PAEA's impact is less so, and it is considerably more significant. First, contrary to universally accepted practice in the private and public sectors, the PAEA requires the USPS to pre-fund its obligation to provide health care to future postal retirees. The Postal Service has contributed in excess of $20 billion into a retiree health care trust over the past five years. Second, the PAEA prohibits the Postal Service from raising prices on market dominant products by more than the Consumer Price Index for all Urban Consumers (CPI-U). This is the wrong cap on pricing and its significance cannot be overstated.If Congress tied First-Class mail postage to an inflation measure more representative of the actual costs for mailing services (CPI-U Delivery Services), the USPS could have generated over $20 billion of additional profit and cash flow between 2006 and 2012. In short, although much public attention has focused on the secular decline of mail, it is important to understand that the Postal Servi