[Senate Report 112-68]
[From the U.S. Government Publishing Office]
Calendar No. 148
112th Congress Report
SENATE
1st Session 112-68
======================================================================
A BILL TO AMEND TITLE 38, UNITED STATES CODE, TO REPEAL THE PROHIBITION
ON COLLECTIVE BARGAINING WITH RESPECT TO MATTERS AND QUESTIONS
REGARDING COMPENSATION OF EMPLOYEES OF THE DEPARTMENT OF VETERANS
AFFAIRS OTHER THAN RATES OF BASIC PAY, AND FOR OTHER PURPOSES
_______
September 6, 2011.--Ordered to be printed
_______
Mrs. Murray, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany S. 572]
The Committee on Veterans' Affairs (hereinafter, ``the
Committee''), to which was referred the bill (S. 572), to amend
title 38, United States Code (hereinafter, ``U.S.C.''), to
repeal the prohibition on collective bargaining with respect to
matters and questions regarding compensation of employees of
the Department of Veterans Affairs other than rates of basic
pay, and for other purposes, having considered the same,
reports favorably thereon, and recommends that the bill do
pass.
Introduction
On March 14, 2011, Senator Sherrod Brown of Ohio introduced
S. 572. Senators Begich, Franken, Merkley, Mikulski,
Rockefeller and Sanders were original cosponsors. S. 572, as
introduced, would amend title 38 to repeal the prohibition on
collective bargaining with respect to matters and questions
regarding compensation of employees of the Department of
Veterans Affairs (hereinafter, ``VA'' or ``the Department'')
other than rates of basic pay, and for other purposes. The bill
was referred to the Committee.
Committee Hearing
On June 8, 2011, the Committee held a hearing on pending
legislation, including S. 572. Testimony on S. 572 was offered
by: Robert L. Jesse, MD, PhD, Principal Deputy Under Secretary
for Health, Veterans Health Administration, Department of
Veterans Affairs; Joseph A. Violante, National Legislative
Director, Disabled American Veterans; and J. David Cox,
National Secretary-Treasurer, American Federation of Government
Employees (hereinafter, ``AFGE'').
Committee Meeting
After carefully reviewing the testimony from the foregoing
hearing, the Committee met in open session on June 29, 2011, to
consider, among other legislation, S. 572, as introduced by Mr.
Brown of Ohio. The Committee then agreed to the bill by a call
of the roll.
Summary of S. 572 as Reported
S. 572 as reported (hereinafter, ``the Committee bill'') is
summarized below:
Section 1 would repeal the prohibition on collective
bargaining for Department employees hired under the authority
of title 38, U.S.C., with respect to matters and questions
regarding compensation of such employees other than matters and
questions regarding rates of basic pay.
Background and Discussion
Sec. 1. Repeal of prohibition on collective bargaining with respect to
compensation of Department of Veterans Affairs employees other
than rates of basic pay.
Section 1 of the Committee bill would repeal the
prohibition on collective bargaining for Department employees
hired under the authority of title 38, U.S.C. (hereinafter,
``Title 38 Employees''), with respect to matters and questions
regarding compensation of such employees other than matters and
questions regarding rates of basic pay.
Background. Collective bargaining rights refer to the
rights of employees to grieve, arbitrate, and negotiate over
conditions of their employment. The Veterans Health
Administration (hereinafter, ``VHA'') employees are hired under
different statutory authority, depending upon their occupation,
and, as such, are subject to different personnel laws. Certain
personnel, such as physicians, dentists, registered nurses,
optometrists, physician assistants, and podiatrists, are hired
under the authority of title 38, U.S.C., and are subject to the
provisions of chapter 74 of title 38, U.S.C., for placement,
pay schedules, leave, hours of duty, discipline, adverse
actions and appeals, and performance management. Other
employees, such as practical nurses, occupational therapists,
pharmacists, physical therapists, and respiratory therapists
are covered by rules in title 38 for placement and pay
administration, but are covered by rules in title 5, U.S.C.,
for pay schedules, disciplinary and adverse action procedures,
and performance management and leave systems (hereinafter,
``Title 38 Hybrid Employees'').
Title 5, U.S.C., generally encompasses employment laws for
all Federal employees, except some VA personnel and national
security personnel, and provides more robust collective
bargaining rights for the employees hired under that authority.
In 1991, in recognition that both Title 38 Employees and Title
38 Hybrid Employees with different bargaining rights may work
alongside one another in VA facilities, Congress passed Public
Law 102-40, to provide collective bargaining rights to all
Department medical personnel hired under the authority of title
38, U.S.C. Under section 7422 of title 38, U.S.C., Title 38
Employees may negotiate, file grievances, and arbitrate
disputes over working conditions with three exceptions: matters
concerning professional conduct or competence, peer review, or
compensation.
The Committee received testimony from AFGE on June 8, 2011,
regarding S. 572. In a statement, AFGE National Secretary-
Treasurer J. David Cox asserted that ``VA's 7422 policy seems
especially arbitrary because it singles out one group of VHA
employees while affording full compensation bargaining rights
to others working in the same hospitals and clinics. For
example, a VA registered nurse cannot grieve over overtime pay
while a VA licensed practical nurse can. Similarly, a VA
psychiatrist cannot grieve over the loss of incentive pay while
a VA psychologist can. This disparate treatment also harms the
VA's ability to attract and retain medical professionals.'' Cox
further stated that S. 572 ``restores equal bargaining rights
over routine compensation matters,'' and ``provides a
commonsense solution for reducing costly, demoralizing disputes
between VHA managers and employees.'' It is also the position
of AFGE that S. 572 ``saves VA health care dollars that should
be spent on veterans, boosts workplace morale, and helps the VA
remain an employer of choice in the health care marketplace.''
Committee Bill. The Committee bill would amend subsections
(b) and (d) of section 7422 of title 38, United States Code, so
as to clarify the scope of the compensation exclusion to
bargaining, by substituting the phrase ``rates of basic pay''
for ``compensation.''
It is the Committee's intent that the term ``rates of basic
pay'' will clarify that the right to set pay scales is reserved
for Congress, and that Title 38 Employees may bargain over
other compensation issues, such as calculation of overtime pay,
access to wage survey data, and implementation of performance
pay measures.
Committee Bill Cost Estimate
In compliance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate, the Committee, based on
information supplied by the Congressional Budget Office
(hereinafter, ``CBO''), could increase personnel costs but
there is not enough information to estimate the likelihood or
potential magnitude of the potential increases. CBO further
estimates that enacting the bill would not increase direct
spending or affect revenues. Enactment of the Committee bill
would not affect receipts and would not affect the budget of
state, local or tribal governments.
The cost estimate provided by CBO, setting forth a detailed
breakdown of costs, follows:
Congressional Budget Office,
Washington, DC, July 6, 2011.
Hon. Patty Murray,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.
Dear Madam Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 572, a bill to amend
title 38, United States Code, to repeal the prohibition on
collective bargaining with respect to matters and questions
regarding compensation of employees of the Department of
Veterans Affairs other than rates of basic pay, and for other
purposes.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne M.
Wright.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure.
S. 572, A bill to amend title 38, United States Code, to repeal the
prohibition on collective bargaining with respect to matters
and questions regarding compensation of employees of the
Department of Veterans Affairs other than rates of basic pay,
and for other purposes
S. 572 would expand the collective bargaining authority of
certain employees of the Veterans Health Administration (VHA).
Under current law, the Secretary of Veterans Affairs has the
discretion to appoint certain personnel to VHA--such as
physicians, nurses, dentists, and physician assistants--and to
set their hours and conditions of employment. Such employees
are prohibited from collectively bargaining over matters
pertaining to professional conduct or competence, peer reviews,
or compensation. S. 572 would relax those restrictions by
allowing collective bargaining over compensation issues
excluding rates of basic pay.
Based on information from VHA, CBO expects that under the
bill about 80,000 employees of the agency's roughly 250,000
employees would be able to collectively bargain over forms of
compensation such as special pays (which are based on
performance, cost of living, or market conditions), awards and
bonuses, and overtime or special scheduling arrangements.
Compensation for VHA employees is funded through annual
appropriations and will total almost $20 billion in 2011, CBO
estimates. Under the bill, VHA's personnel costs could increase
in several ways; for example, employees could negotiate bonuses
or performance awards, higher rates for overtime pay, and
higher special pay for employees in specialties that are in
high demand. However, CBO has no basis upon which to estimate
the likelihood or potential magnitude of those effects.
Enacting S. 572 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
S. 572 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Dwayne M.
Wright. The estimate was approved by Theresa Gullo, Deputy
Assistant Director for Budget Analysis.
Regulatory Impact Statement
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee on Veterans'
Affairs has made an evaluation of the regulatory impact that
would be incurred in carrying out the Committee bill. The
Committee finds that the Committee bill would not entail any
regulation of individuals or businesses or result in any impact
on the personal privacy of any individuals and that the
paperwork resulting from enactment would be minimal.
Tabulation of Votes Cast in Committee
In compliance with paragraph 7 of rule XXVI of the Standing
Rules of the Senate, the following is a tabulation of votes
cast in person or by proxy by members of the Committee on
Veterans' Affairs at its June 29, 2011, meeting. The following
senators were present: Mr. Akaka, Mr. Tester, Mr. Burr, Mr.
Isakson, Mr. Brown of Massachusetts, Mr. Moran, Mr. Boozman,
Madam Chairman.
The Committee then agreed to the measure and ordered
S. 572, to be reported favorably to the Senate by a call of the
roll.
----------------------------------------------------------------------------------------------------------------
Yeas Senator Nays
----------------------------------------------------------------------------------------------------------------
X (by proxy) Mr. Rockefeller
X Mr. Akaka
X (by proxy) Mr. Sanders
X (by proxy) Mr. Brown of Ohio
X (by proxy) Mr. Webb
X Mr. Tester
X (by proxy) Mr. Begich
Mr. Burr X
Mr. Isakson X
Mr. Wicker X (by proxy)
Mr. Johanns X (by proxy)
Mr. Brown of Massachusetts X
Mr. Moran X
Mr. Boozman X
X Madam Chairman
----------------------------------------------------------------------------------------------------------------
8 TALLY 7
----------------------------------------------------------------------------------------------------------------
Agency Report
On June 8, 2011, Robert L. Jesse, MD, PhD, Principal Deputy
Under Secretary for Health, Veterans Health Administration,
Department of Veterans Affairs, appeared before the Committee
on Veterans' Affairs and submitted testimony on, among other
things, S. 572. Excerpts from this statement are reprinted
below:
STATEMENT OF ROBERT L. JESSE, M.D., Ph.D., PRINCIPAL DEPUTY UNDER
SECRETARY FOR HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT
OF VETERANS AFFAIRS
* * * * * * *
S. 572 would amend 38 U.S.C. 7422 by replacing the word
``compensation'' in sections (b) and (d) with the words ``rates
of basic pay.'' While we appreciate the many contributions
collective bargaining and the labor-management partnership make
to VA's mission, we strongly oppose S. 572.
VA would like to stress to the Committee that we deeply
value the contributions of our employees, and work to enjoy a
collaborative, positive working relationship with unions across
the country. We hold retention of employees as a critically
important goal, and encourage the management teams of VA
facilities to offer professional development opportunities and
encourage personal growth.
This bill would repeal the prohibition on collective
bargaining with respect to compensation of title 38 employees.
Currently, 38 U.S.C. 7422(b) and (d) exempt ``any matter or
question concerning or arising out of * * * the establishment,
determination, and adjustment of [title 38] employee
compensation'' from collective bargaining. This bill would
replace the word ``compensation'' with the phrase ``rates of
basic pay.'' This change would apparently make subject to
collective bargaining all matters relating to the compensation
of title 38 employees (physicians, dentists, nurses, et al.)
over which the Secretary has been granted any discretion.
In order to provide the flexibility necessary to administer
the title 38 system, Congress granted the Secretary significant
discretion in determining the compensation of VA's health care
professionals. When Congress first authorized title 38
employees to engage in collective bargaining with respect to
conditions of employment, it expressly exempted bargaining over
``compensation'' in recognition of the U.S. Supreme Court's
ruling in Ft. Stewart Schools v. FLRA, 495 U.S. 641 (1990). In
that case the Court held that the term ``conditions of
employment,'' as used in the Federal Service Labor-Management
Relations Statute (5 U.S.C. 7101), included salary, to the
extent that the agency has discretion in establishing,
implementing, or adjusting employee compensation. Id. at 646-
47. Thus, Congress sought to make clear in 38 U.S.C. 7422(b)
that title 38 employees' right to bargain with respect to
``conditions of employment'' did not include the right to
bargain over compensation. Over the years, Congress has
authorized VA to exercise considerable discretion and
flexibility with respect to title 38 compensation to enable VA
to recruit and retain the highest quality health care
providers.
The term ``rates of basic pay'' is not defined in title 38.
However, the Department has defined ``basic pay'' as the ``rate
of pay fixed by law or administrative action for the position
held by an employee before any deductions and exclusive of
additional pay of any kind.'' VA Handbook 5007, Part IX, par.
5. Such additional pay includes market pay, performance pay,
and any other recruitment or retention incentives. Id.
Accordingly, S. 572 would subject many discretionary aspects of
title 38 compensation to collective bargaining. For example,
there are two discretionary components of compensation for VA
physicians and dentists under the title 38 pay system--market
pay and performance pay. Market pay, when combined with basic
pay, is meant to reflect the recruitment and retention needs
for the specialty or assignment of the particular physician or
dentist in a VA facility. Basic pay for physicians and dentists
is set by law and would remain non-negotiable under this bill,
but the Secretary has discretion to set market pay on a case-
by-case basis. Market pay is determined through a peer-review
process based on factors such as experience, qualifications,
complexity of the position, and difficulty recruiting for the
position. In many cases, market pay exceeds basic pay. In those
situations, this bill would render a large portion or even the
majority of most physicians' pay subject to collective
bargaining. The Secretary also has discretion over the amount
of performance pay, which is a statutorily authorized element
of annual pay paid to physicians and dentists for meeting goals
and performance objectives. Under this bill, performance pay
would also be negotiable. Likewise, pay for nurses entails
discretion because it is set by locality-pay surveys. Further,
Congress has granted VA other pay flexibilities involving
discretion, including premium pay, on-call pay, alternate work
schedules, Baylor Plan, special salary rates, and recruitment
and retention bonuses. The ability to exercise these pay
flexibilities is a vital recruitment and retention tool. It is
necessary to allow VA to efficiently compete on a cost-
effective basis with the private sector and to attract and
retain clinical staff who deliver health care to Veterans. As
described below, this flexibility would be greatly hindered by
the collective bargaining ramifications of S. 572.
This bill would obligate VA to negotiate with unions over
all discretionary matters relating to compensation, and to
permit employees to file grievances and receive relief from
arbitrators when they are unsatisfied with VA decisions about
discretionary pay. If VA were obligated to negotiate over such
matters, it could be barred from implementing decisions about
discretionary pay until it either reaches agreements with its
unions or until it receives a binding decision from the Federal
Service Impasses Panel. Stated differently, VA could be
prevented from hiring clinical staff and have decisions
regarding appropriate clinical staff subject to third party
delay and retroactive change. This could significantly hinder
our ability and flexibility to hire clinical staff as needed to
timely meet patient-care needs.
Moreover, any time an employee was unsatisfied with VA's
determination of his or her discretionary pay, the union could
grieve and ultimately take the matter to binding arbitration.
This would allow an arbitrator to substitute his or her
judgment for that of VA and, with regard to physician market
pay, to override peer review recommendations. This bill would
allow independent third-party arbitrators and other non-VA,
non-clinical labor third parties who lack clinical training and
expertise to make compensation determinations. VA would have
limited, if any, recourse to appeal such decisions.
Importantly, S. 572 would result in unprecedented changes
in how the Federal Government operates. It would permit unions
to bargain over, grieve, and arbitrate a subject--employee
compensation--that is generally exempted from collective
bargaining even under title 5. Although Congress has built much
more Agency discretion into the title 38 compensation system
both to achieve the desired flexibility and because the system
is unique to VA, permitting title 38 employees to negotiate the
discretionary aspects of their compensation would be at odds
with how other Federal employees are generally treated.
Further, collective bargaining over discretionary aspects of
pay is unnecessary. VA's retention rates for physicians and
dentists are comparable to private sector retention rates,
while retention rates for VA registered nurses significantly
exceed those of the private sector, strongly suggesting that
the lack of bargaining ability over discretionary aspects of
pay has not negatively affected VA's ability to retain title 38
employees.
To address some of the concerns expressed by the unions,
the Secretary convened a group of union and management
officials to formulate recommendations to jointly explore and
clarify the implementation of the title 38 exclusions under
section 7422.
This workgroup was a significant cooperative effort,
spanning multiple meetings, in person and via conference calls,
from July 2009 through May 2010. The 7422 workgroup membership
included field clinicians, the Office of General Counsel, the
Office of Labor Management Relations, and the five national
unions (American Federation of Government Employees (AFGE);
National Association of Government Employees (NAGE); Service
Employees International Union (SEIU); United American Nurses
(UAN) (now National Nurses United (NNU)); and, National
Federation of Federal Employees (NFFE). Assistant Secretary for
HR&A, John Sepulveda, participated in all face to face meetings
of the workgroup.
The final result of the workgroup was sixteen individual
recommendations, as well as concise position papers of the
parties and joint supporting documents. Included in the
recommendations approved by the Secretary in December 2010 was
language to address union concerns with the way section 7422,
including the compensation exclusion is implemented. Also in
December 2010, Memorandum of Understanding (MOU) with the
approved recommendations was signed by the Deputy Secretary, W.
Scott Gould; the Under Secretary for Health, Robert A. Petzel,
MD; the Assistant Secretary for HR&A, John U. Sepulveda; and
the leaders of four of the five national unions. The Secretary
has charged an implementation team to work on further
development of an action plan to implement the 7422 working
group's approved recommendations. A meeting is scheduled for
July 6-7, 2011, in Washington, DC. Additional meetings will be
scheduled to complete the implementation process. The MOU as
well as our actions to implement it show our commitment to
collaborate with the unions and make the passage of S. 572
unnecessary.
We are not able to estimate the cost of S. 572 for two
reasons. First, if VA is required to negotiate over
compensation matters, and if the Agency is unable to reach
agreements with the unions, the final decisions on pay will
ultimately rest with the Federal Service Impasses Panel. The
Panel has discretion to order VA to comply with the unions'
proposals. Second, if pay issues become grievable and
arbitrable, the final decisions on pay will rest in the hands
of arbitrators.
On the whole, our efforts to recruit and retain health care
professionals have been widely successful, and have not in any
way been impaired by the exclusion of matters concerning or
arising out of compensation from collective bargaining. We
would be glad to share applicable data with the Committee and
brief the members on our continuing efforts in this area.
* * * * * * *
MINORITY VIEWS OF HON. RICHARD BURR,
RANKING MEMBER
I write separately because any matter affecting union
rights to bargain, which may negatively affect the health care
benefits our nation's veterans receive, should give us all
pause.
Employees governed under the title 38, United States Code,
personnel system can collectively bargain over all matters
except professional conduct or competence; matters affecting
peer review; or the establishment, determination, or adjustment
of employee compensation. The legislation approved by the
majority would make all compensation matters (except basic
rates of pay) open to collective bargaining. Specifically, this
change would allow collective bargaining with respect to items
that are now at the Secretary's discretion, including market
pay; performance pay; premium pay; on-call pay; pay connected
with the Baylor Plan schedule; special salary rates;
recruitment and retention bonuses; and nurse locality pay.
Here are my concerns:
The Committee received testimony in each of the last three
Congresses regarding legislation to amend the law governing VA
employees' collective bargaining rights, a law that has not
been amended since its inception 20 years ago. Both the Obama
and Bush administrations testified strongly against the
legislation. For example, here is an excerpt from VA's
testimony at the June 8, 2011, Committee hearing to review
legislation to modify the collective bargaining law:
While we appreciate the many contributions collective
bargaining and the labor-management partnership make to
VA's mission, we strongly oppose S. 572.
* * * * * * *
* * * The ability to exercise * * * pay flexibilities
is a vital recruitment and retention tool. It is
necessary to allow VA to efficiently compete on a cost-
effective basis with the private sector and to attract
and retain clinical staff who deliver health care to
Veterans * * *. [T]his flexibility would be greatly
hindered by the collective bargaining ramifications of
S. 572.
* * * VA could be prevented from hiring clinical staff
and have decisions regarding appropriate clinical staff
subject to third party delay and retroactive change.
This could significantly hinder our ability and
flexibility to hire clinical staff as needed to timely
meet patient-care needs.
In the face of this testimony, are we prepared to say that
extending the ability to bargain over these matters will not
negatively affect operation of VA's health care system? What
would be the effect of protracted negotiations on these matters
if VA and the unions could not reach agreements? What would be
the effect of a third party arbitrator deciding matters
impacting operations of a health care system? What would the
impact be on hospital budgets and management flexibility to use
resources on critical items?
Furthermore, it's hard to imagine how this legislation
could be considered necessary. To address union concerns that
apparently led to this legislation, the Secretary convened a
workgroup of management officials and national unions to
clarify and explore the exclusions in section 7422 of title 38.
This workgroup held meetings spanning close to a year which
resulted in numerous recommendations approved by the Secretary
in December 2010, prescribing the manner in which exclusions
under section 7422 are implemented. In other words, VA is
already addressing the unions' concerns.
While I support the men and women who tirelessly work to
serve our nation's veterans, I must recommend caution in moving
forward with any legislation that may adversely affect the
health care our nation's veterans receive.
* * * * * * *
Changes in Existing Law
In compliance with paragraph 12 of Rule XXVI of the
Standing Rules of the 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 38. VETERANS' BENEFITS
* * * * * * *
PART V. BOARDS, ADMINISTRATIONS, AND SERVICES
* * * * * * *
CHAPTER 74. VETERANS HEALTH ADMINISTRATION--PERSONNEL
* * * * * * *
Subchapter II. Collective Bargaining and Personnel Administration
* * * * * * *
SEC. 7422. COLLECTIVE BARGAINING
(a) * * *
(b) Such collective bargaining (and any grievance
procedures provided under a collective bargaining agreement) in
the case of employees described in section 7421(b) of this
title may not cover, or have any applicability to, any matter
or question concerning or arising out of (1) professional
conduct or competence, (2) peer review, or (3) the
establishment, determination, or adjustment of employee
[compensation] rates of basic pay under this title.
(c) * * *
(d) An issue of whether a matter or question concerns or
arises out of (1) professional conduct or competence, (2) peer
review, or (3) the establishment, determination, or adjustment
of employee [compensation] rates of basic pay under this title
shall be decided by the Secretary and is not itself subject to
collective bargaining and may not be reviewed by any other
agency.
* * * * * * *