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                                                       Calendar No. 235
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-112
_______________________________________________________________________



 
                     POSTMASTER EQUITY ACT OF 2003

                               __________

                              R E P O R T

                                 of the

         COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE

                              to accompany

                                 S. 678

    TO AMEND CHAPTER 10 OF TITLE 39, UNITED STATES CODE, TO INCLUDE 
   POSTMASTERS AND POSTMASTERS' ORGANIZATIONS IN THE PROCESS FOR THE 
DEVELOPMENT AND PLANNING OF CERTAIN POLICIES, SCHEDULES, AND PROGRAMS, 
                         AND FOR OTHER PURPOSES




    July 25 (legislative day, July 21), 2003.--Ordered to be printed

                                 ______

                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003




                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas

           Michael D. Bopp, Staff Director and Chief Counsel
                  Ann C. Fisher, Deputy Staff Director
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
   Nanci E. Langley, Minority Deputy Staff Director, Subcommittee on
      Financial Management, the Budget, and International Security
                      Amy B. Newhouse, Chief Clerk




                                                       Calendar No. 235
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-112

======================================================================




                     POSTMASTER EQUITY ACT OF 2003

                                _______
                                

    July 25 (legislative day, July 21), 2003.--Ordered to be printed

                                _______
                                

Ms. Collins, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 678]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 678) to amend chapter 10 of title 39, 
United States Code, to include postmasters and postmasters 
organizations in the process for the development and planning 
of certain policies, schedules, and programs, and for other 
purposes, having considered the same reports favorably thereon 
with an amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background.......................................................2
III. Legislative History..............................................4
 IV. Regulatory Impact Statement......................................4
  V. Congressional Budget Office Cost Estimate........................4
 VI. Section-by-Section Analysis and Discussion.......................5
VII. Changes in Existing Law Made by the Bill, as Reported............6

                         I. Purpose and Summary

    The bill would amend chapter 10 of title 39, United States 
Code, to include postmasters and postmasters organizations in 
the process for the development and planning of certain 
policies, schedules, and programs. It would provide to the 
nation's postmasters the same rights as those afforded to 
postal supervisors.

                             II. Background

    The Postal Reorganization Act of 1970 (PRA),\1\ which 
established the U.S. Postal Service (USPS) as an independent 
establishment of the executive branch, created a framework for 
collective bargaining by labor organizations over pay, 
benefits, and working conditions. In particular, the Act 
established a process for binding arbitration when the USPS and 
one or more of its unions could not agree on what constituted 
``comparability to the compensation and benefits paid for 
comparable levels of work in the private sector of the 
economy.'' \2\
---------------------------------------------------------------------------
    \1\ Postal Reorganization Act of 1970, Pub. L. No. 91-375.
    \2\ 39 U.S.C. 1003.
---------------------------------------------------------------------------
    The PRA also provided that USPS would have ``a program for 
consultation with recognized organizations of supervisory and 
other managerial personnel who are not subject to the 
collective-bargaining agreements . . . (and that) such 
organization or organizations shall be entitled to participate 
directly in the planning and development of pay policies and 
schedules, fringe benefit programs, and other programs related 
to supervisory and other managerial employees.'' \3\ The Senate 
committee report did ``not recommend collective bargaining for 
supervisory personnel, postmasters, or administrative employees 
in the headquarters or regional offices of the Postal 
Service,'' but did ``define `participation' as meaning 
precisely that--to have share in planning and developing the 
programs.'' \4\
---------------------------------------------------------------------------
    \3\ 39 U.S.C. 1004(b).
    \4\ Senate Report 91-912, pp. 6-7, as quoted in Legislative 
History, U.S. Congress, House Committee on Post Office and Civil 
Service, ``Postal Supervisors' Arbitration,'' H. Rept. 96-234, 96th 
Cong., 1st sess., pp. 3-4.
---------------------------------------------------------------------------
    Postmasters are the managers-in-charge of the nation's 
individual post offices. There are approximately 27,000 
postmasters who are accountable for postal operations and 
services, including retail postal operations and community 
relations. Some postmasters manage mail-processing facilities 
and letter carrier annexes within a particular post office's 
jurisdiction. All are responsible for the management and 
supervision of personnel and postal operations under the 
authority of a particular post office. Generally, postal 
supervisors are individuals who supervise employees who process 
mail and who deliver mail. They may work in plants, post 
offices, or stations. They may also be mid-level and senior 
managers in functional areas of the Postal Service, including 
marketing, finance, human resources and maintenance. The key 
distinction between a postmaster and a supervisor is that 
front-line supervisors tend to be supervised by a postmaster at 
a post office and that the postmaster is the ``manager-in-
charge'' of the post office. These two groups of managers are 
under the same pay and compensation system, but they discuss 
these issues separately with the Postal Service.
    During the 1970s, while the wages of craft employees were 
rising under the binding arbitration provisions, the National 
Association of Postal Supervisors (NAPS) believed their 
salaries were not keeping pace and that the differential 
between supervisors and employees was being eroded. NAPS 
brought three lawsuits against the Postal Service, contending 
that USPS did not seriously engage with the association on 
wages and benefits, but simply framed a proposal and 
implemented it after a pro forma consultation.\5\ The United 
States Court of Appeals for the D.C. Circuit eventually decided 
in favor of USPS, holding that USPS had broad discretion in 
setting compensation levels for supervisory and other 
managerial employees. In addition, the court held that the 
Postal Service meets its obligation under section 1004(b) of 
title 39 if it gives NAPS an opportunity to analyze and 
criticize proposed compensation decisions, and then supplies 
NAPS with the reasons for rejecting any criticisms.\6\
---------------------------------------------------------------------------
    \5\ National Association of Postal Supervisors v. United States 
Postal Service, doc. no. 77-1684 (D.C.C.A.), June 14, 1979.
    \6\ 602 F.2d 420 (D.C. Cir. 1979).
---------------------------------------------------------------------------
    To address this situation, Congress passed H.R. 827, which 
became Public Law 96-326 on August 8, 1980. The Act established 
a fact-finding process for resolving disputes that now 
constitutes 39 U.S.C. 1004(c). It requires the convening of a 
fact-finding panel to consider disputes over pay and benefits 
and to make recommendations to the Postal Service. It does not 
provide for arbitration of such disputes, nor are the 
recommendations binding on the Postmaster General. It also 
limited fact-finding to pay and benefit programs. In the Senate 
report accompanying H.R. 827, the Committee on Governmental 
Affairs said that it recognized that many of the supervisors' 
concerns had merit--particularly with respect to pay increases 
that lagged behind those achieved by rank and file employees 
through interest arbitration.'' \7\ Since passage of H.R. 827, 
negotiations between NAPS and USPS have been reasonably 
constructive, and a fact-finding panel has never been convened.
---------------------------------------------------------------------------
    \7\ U.S. Congress, Senate Committee on Governmental Affairs, report 
to accompany H.R. 827, S. Rept. 96-856, 96th Cong., 2nd sess., p. 4.
---------------------------------------------------------------------------
    Before enactment of Pub. L. 96-326, postmasters and their 
management organizations were subject to the same consultation 
and participation provisions as were postal supervisors. 
However, with the enactment of this statute, the changes were 
limited to supervisors. This left postmasters with no avenue to 
resolve disagreements with Postal Headquarters. The postmasters 
organizations have found that the inability to seek third-party 
review of disagreements has limited their ability to have 
meaningful discussions with Postal Headquarters on issues 
relating to pay and benefits. In fact, like postal supervisors 
before them, the lack of fact-finding has precluded a fair pay 
differential between postmasters and craft employees, as 
required by law.\8\
---------------------------------------------------------------------------
    \8\ 39 U.S.C. Sec. 1004(a).
---------------------------------------------------------------------------
    There is no reason for postmasters and supervisors to be 
treated differently with regards to the pay and benefits 
discussions with the USPS. Both postmasters and supervisors are 
front line managers who supervise postal employees, and are 
currently paid under the same compensation schedule. The 
Committee hopes that enactment of this legislation will 
encourage postmasters and the USPS to have good faith 
discussions over pay and benefits, and enhanceefforts to 
recruit and retain postmasters. This is important as there are areas of 
the country where USPS has had difficulty recruiting qualified 
individuals to assume the position of postmaster. The lack of qualified 
postmasters affects the Postal Service's ability to perform its primary 
mission of delivering the mail to all addresses throughout the United 
States.
    Without the option of fact-finding, postmasters have only 
their consultative rights that provide for discussion on 
compensation and working conditions. As a result, Postal 
Headquarters can make unilateral decisions on these issues, 
with or without agreement by the nation's postmasters. S. 678 
would extend to the nation's postmasters the rights and options 
currently enjoyed by postal supervisors in negotiating with 
Headquarters. Fact-finding, as noted, is a process that allows 
for an unbiased review of the issues in dispute and the 
issuance of non-binding recommendations. Without this right, 
postmasters lack any form of recourse when consultation fails. 
The bill would also define the term ``postmaster'' for the 
first time by noting that a postmaster is an individual who is 
the manager-in-charge of the operations of a post office, with 
or without the assistance of subordinate managers or 
supervisors.

                        III. Legislative History

    S. 678 was introduced by Senator Daniel Akaka and Senator 
Susan Collins on March 20, 2003, and was referred to the 
Committee on Governmental Affairs. No hearings were held on S. 
678. On June 17, 2003, the Committee met in open session. 
Senator Akaka offered a substitute amendment to conform the 
bill to H.R. 2249, the House version of the bill, introduced by 
Representative John McHugh. The amendment was accepted and the 
Committee ordered favorably reported the bill S. 678, as 
amended, by voice vote, a quorum being present. Senators 
present were Collins, Lieberman, Voinovich, Coleman, 
Fitzgerald, Sununu, Akaka, Durbin, Carper, Lautenberg, Levin, 
and Pryor.

                    IV. Regulatory Impact Statement

    Paragraph 11(b)(1) of rule XXVI of the Standing Rules of 
the Senate requires that each report accompanying a bill 
evaluate the ``regulatory impact which would be incurred in 
carrying out this bill.'' The Committee has determined that the 
enactment of this legislation will not have significant 
regulatory impact.

              V. Congressional Budget Office Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and with section 403 of the 
Congressional Budget Act of 1974, 2 U.S.C. Sec. 653, the 
Committee sets forth the following cost estimate with respect 
to S. 678 submitted to the Committee by the Congressional 
Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 24, 2003.
Hon. Susan M. Collins,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 678, the Postmasters 
Equity Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

S. 678--Postmasters Equity Act of 2003

    S. 678 would afford postmasters of the U.S. Postal Service 
the same rights as postal supervisors regarding the negotiation 
of pay, benefits, and other personnel issues. Based on 
information from the Postal Service about its current treatment 
of postmasters, CBO estimates that implementing the bill's 
provisions would lead to an insignificant change in the 
agency's net cost. (Cash flows of the Postal Service are 
classified as off-budget.) The legislation would not affect 
revenues.
    S. 678 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets on state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Mark Grabowicz. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

             VI. Section-by-Section Analysis and Discussion


Section 1. Short title

    This Act will be known as the ``Postmasters Equity Act of 
2003.''

Section 2. Postmasters and postmasters' organizations

    Amends Section 1004 of Title 39, United States Code, to 
ensure that postmasters' organizations can engage in fact-
finding similar to other supervisory organizations as it 
relates to the planning and development of pay policies and 
schedules, fringe benefit programs and other programs. The bill 
provides that if an agreement cannot be reached on such 
programs, the postmasters' organization may request the Federal 
Mediation and Conciliation Service (FMCS) to convene a fact-
finding panel. If two postmasters' organizations exist, the two 
shall be treated as one entity for the purposes of convening 
the fact-finding panel and shall be jointly and severally 
liable for the cost of such panel, apart from the portion to be 
borne by the Postal Service. The FMCS will provide a list of 
seven individuals recognized as experts in supervisory and 
managerial pay policies to serve on the fact-finding panel. One 
member shall be selected by the Postal Service, one by the 
postmasters' organizations, and the third (the chair of the 
panel) by the two individuals previously selected. The panel 
would make recommendations on pay and benefit policies. The 
Postal Service would then issue its decision on the matter 
giving full and fair consideration to the panel's 
recommendations.
    The bill defines the term postmaster and postmasters' 
organization. The postmaster is defined as the manager-in-
charge of the operations of the post office while a 
postmasters' organization is an organization consisting of no 
less than 20 percent of all individuals employed as 
postmasters.
    The bill also provides that this section will have no 
effect on the role both postmasters' organizations play on the 
Thrift Advisory Council as detailed in 5 U.S.C. 
Sec. 8473(b)(4).

Section 3. Effective date

    The Act would take effect 60 days after the date of 
enactment.

                      VII. Changes in Existing Law

    In compliance with clause 12 of rule XXVI of the Rules of 
the United States Senate, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                        TITLE 39. POSTAL SERVICE

                           PART II. PERSONNEL

            CHAPTER 10. EMPLOYMENT WITHIN THE POSTAL SERVICE


Sec. 1004. Supervisory and other managerial organizations

    (a) * * *
    (b) The Postal Service shall provide a program for 
consultation with recognized organizations of supervisory and 
other managerial personnel who are not subject to collective-
bargaining agreements under chapter 12 of this title. Upon 
presentation of evidence satisfactory to the Postal Service 
that a supervisory organization represents a majority of 
supervisors, that an organization (other than an organization 
representing supervisors) represents at least 20 percent of 
postmasters, after majority of supervisors, or that a 
managerial organization (other than an organization 
representing [supervisors)] supervisors or postmasters) 
represents a substantial percentage of managerial employees, 
such organization or organizations shall be entitled to 
participate directly in the planning and development of pay 
policies and schedules, fringe benefit programs, and other 
programs relating to supervisory and other managerial 
employees.
    (c) * * *

           *       *       *       *       *       *       *

    (h)(1) In order to ensure that postmasters and postmasters' 
organizations are afforded the same rights under this section 
as are afforded to supervisors and the supervisors' 
organization, subsections (c) through (g) shall be applied with 
respect to postmasters and postmasters' organizations--
          (A) by substituting ``postmasters' organization'' for 
        ``supervisors' organization'' each place it appears; 
        and
          (B) if 2 or more postmasters' organizations exist, by 
        treating such organizations as if they constituted a 
        single organization, in accordance with such 
        arrangements as such organizations shall mutually agree 
        to.
    (2) If 2 or more postmasters' organizations exist, such 
organizations shall, in the case of any factfinding panel 
convened at the request of such organizations (in accordance 
with paragraph (1)(B)), be jointly and severally liable for the 
cost of such panel, apart from the portion to be borne by the 
Postal Service (as determined under subsection (f)(4)).
    [(h)] (i) For purposes of this section--
          (1) ``supervisors' organization'' means the 
        organization recognized by the Postal Service under 
        subsection (b) of this section as representing a 
        majority of supervisors; [and]
          (2) ``members of the supervisors' organization'' 
        means employees of the Postal Service who are 
        recognized under an agreement between the Postal 
        Service and the supervisors' organization as 
        represented by such organization[.];
          (3) ``postmaster'' means an individual who is the 
        manager in charge of the operations of a post office, 
        with or without the assistance of subordinate managers 
        or supervisors;
          (4) ``postmasters' organization'' means an 
        organization recognized by the Postal Service under 
        subsection (b) as representing at least 20 percent of 
        postmasters; and
          (5) ``members of the postmasters' organization'' 
        shall be considered to mean employees of the Postal 
        Service who are recognized under an agreement--
                  (A) between the Postal Service and the 
                postmasters' organization as represented by the 
                organization; or
                  (B) in the circumstance described in 
                subsection (h)(1)(B), between the Postal 
                Service and the postmasters' organizations 
                (acting in concert) as represented by either or 
                any of the postmasters' organizations involved.