United States General Accounting Office

GAO Testimony

Before the Subcommittee on the Postal Service, House

Committee on Government Reform and Oversight

For Release on Delivery

Expected at

10:00 a.m., EST

Tuesday

November 4, 1997

U.S. POSTAL SERVICE

LITTLE PROGRESS MADE

IN ADDRESSING

PERSISTENT

LABOR-MANAGEMENT

PROBLEMS

Statement of Bernard L. Ungar

Director, Government Business

Operations Issues

GAO/T-GGD-98-7

Summary 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

GAO found that since its September 1994 report was issued, little progress

has been made in improving persistent labor-management relations

problems at the Postal Service. Although the Service, the four major

unions, and the three management associations generally agreed that

improvements were needed, they have been unable to agree on common

approaches to solving such problems. Moreover, these parties have not

been able to implement GAO’s recommendation to establish a framework

agreement that would outline common goals and strategies to set the stage

for improving the postal work environment.

In its recent report, GAO described some improvement initiatives that many

postal, union, and management association officials believed held promise

for making a positive difference in the labor-management relations

climate. Despite actions taken to implement such initiatives, little

information was available to measure results. Some initiatives had only

recently been piloted or implemented. Other initiatives were not fully

implemented or had been discontinued because postal, union, and

management association officials disagreed on the approaches used to

implement the initiatives or on the usefulness of the initiatives to help

make improvements.

Efforts to resolve persistent labor-management relations problems pose an

enormous challenge for the Service and its unions and management

associations. However, in today’s dynamic and competitive

communications environment, the Service can ill afford to be burdened

with these problems. Recently, with assistance from a third-party

facilitator, the Service and leaders from the four major unions and the

three management associations convened a summit, aimed at providing an

opportunity for all the parties to work toward reaching agreement on how

best to address persistent labor-management relations problems. Another

such opportunity involves the strategic plan required by the Government

Performance and Results Act, which can provide a foundation for all

major postal stakeholders to participate in defining common goals and

identifying strategies to be used to achieve these goals. In addition, a

proposal was included in the pending postal reform legislation to establish

a presidentially appointed Commission that could recommend

improvements.

GAO continues to believe that it is important for the eight organizations to

agree on appropriate strategies for addressing labor-management relations

problems. Various approaches exist that can be used to help the

organizations attain consensus. Without such consensus, the ability to

Page 1 GAO/T-GGD-98-7
Summary 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

sustain lasting improvements in the postal work environment may be

difficult to achieve.

Page 2 GAO/T-GGD-98-7
Statement 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to discuss our report1

 on the efforts of the

Postal Service, the four major labor unions, and the three management

associations to improve employee working conditions and overall

labor-management relations.2

 Our recently issued report provides updated

information related to our September 1994 report, which identified various

labor-management relations problems in the Postal Service and made

recommendations for addressing such problems.3

 In our most recent

report, we discussed the challenges that these eight organizations continue

to face in attempting to improve labor-management relations. Specifically,

this report provides information on three topics: (1) the extent to which

the Service, the four unions, and the three management associations have

progressed in addressing persistent labor-management relations problems

since our 1994 report was issued; (2) the implementation of various

improvement efforts, referred to in the report as initiatives, some of which

were intended to help these eight organizations deal with the problems

that we identified in our 1994 report; and (3) approaches that might help

the eight organizations improve labor-management relations.

To determine implementation progress on the initiatives, we identified 32

improvement initiatives that had been implemented and confirmed with

postal, union, and management association officials that these initiatives

generally included all known initiatives that had been implemented. Given

time and resource limitations, which made detailed follow-up on all 32

initiatives impractical, we focused on obtaining information on the status

and results of 10 of the 32 initiatives, which we believed had potential to

address some of the recommendations in our 1994 report. To identify

approaches that could help the eight organizations achieve consensus, we

generally reviewed proposed postal reform legislation and the sections of

the Government Performance and Results Act related to the Postal

Service. Also, we interviewed the Director of the Federal Mediation and

Conciliation Service (FMCS) to obtain information about the extent to

1

U.S. Postal Service: Little Progress Made in Addressing Persistent Labor-Management Problems

(GAO/GGD-98-1; Oct. 1, 1997).

2

The four major postal labor unions include the American Postal Workers Union (APWU), the National

Association of Letter Carriers (NALC), the National Postal Mail Handlers Union (Mail Handlers), and

the National Rural Letter Carriers’ Association (Rural Carriers). The three management associations

include the National Association of Postal Supervisors (NAPS), the National Association of

Postmasters of the United States (NAPUS), and the National League of Postmasters of the United

States (the League).

3

U.S. Postal Service: Labor-Management Problems Persist on the Workroom Floor

(GAO/GGD-94-201A/B; Sept. 29, 1994).

Page 3 GAO/T-GGD-98-7
Statement 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

which the Service was using a third party to serve as a facilitator in

labor-management discussions, which we recommended in our 1994

report.

Little Progress Has

Been Made in

Improving

Labor-Management

Relations Problems

Since our 1994 report was issued, the Postal Service has improved its

overall financial performance, as well as its delivery of First-Class Mail.

However, little progress has been made in improving persistent

labor-management relations problems. In many instances, such problems

were caused by autocratic management styles, the sometimes adversarial

relationships between postal management and union leadership at the

local and national levels, and an inappropriate and inadequate

performance management system. Labor-management problems make it

more difficult for these organizations to work together to improve the

Service’s performance so it can remain competitive in today’s dynamic and

competitive communications market.

In recent years, we have found that the sometimes adversarial

relationships between postal management and union leadership at

national and local levels have generally persisted, as characterized by

(1)a continued reliance on arbitration by three of the four major unions to

settle their contract negotiation impasses with the Service, also known as

interest arbitration;

(2)a significant rise not only in the number of grievances that have been

appealed to higher levels but also in the number of those awaiting

arbitration; and

(3)until recently, the inability of the Service and the other seven

organizations to convene a labor-management relations summit to discuss

problems and explore solutions.

According to various postal, union, and management association officials

whom we interviewed, the problems persist primarily because the parties

involved cannot agree on common approaches for addressing these

problems. This, in turn, has prevented the Service and the other seven

organizations from sustaining the intended benefits of specific

improvement efforts that could help improve the postal workroom

climate. I would now like to discuss these problems in more detail.

Page 4 GAO/T-GGD-98-7
Statement 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

Regarding the use of interest arbitration, as discussed in our 1994 report,

contract negotiations occur nationally between the Service and the four

labor unions every 3 or 4 years. Since as far back as 1978, interest

arbitration has sometimes been used to resolve bargaining deadlocks in

contract negotiations by APWU, NALC, and Mail Handlers. The most recent

negotiations occurred for contracts expiring in November 1994 for those

three unions.4

 The issues at stake were similar to those raised in previous

negotiations, which included the unions’ concerns about wage and benefit

increases and job security and postal management’s concerns about cost

cutting and flexibility in hiring practices. According to a postal official,

negotiations about old issues that keep resurfacing have at times been

bitter and damaging to the relationship between the Service and the

unions at the national level. Union officials also cited the Service’s

contracting out of various postal functions—also known as

outsourcing—as a topic that has caused them a great deal of concern.

Another problem concerns the number of unsettled grievances.5

 In our

1994 report, we highlighted issues associated with the

grievance/arbitration process, including the high number of grievances

that had been filed and the inability of postal and union officials to resolve

them at the lowest possible levels. The Service’s national grievance

arbitration database showed that in fiscal year 1994, a total of 65,062

grievances involved postal management and union officials at the area

office level. According to the Service, this number has increased to 89,931

in fiscal year 1996, an increase of approximately 38 percent. Also,

according to Service data, the number of grievances awaiting arbitration

by a third-party arbitrator—known as backlogged grievances—has

increased from 36,669 in fiscal year 1994 to 69,555 in fiscal year 1996, an

increase of approximately 90 percent.6

 Although the postal management

and union officials we interviewed for our 1994 review agreed that the

total volume of grievances was too high, they differed on the causes of this

4

For rural carriers, whose contract expired in November 1995, negotiations resulted in the

establishment of a new contract without the use of interest arbitration. The rural carriers have had a

more cooperative relationship with the Postal Service and generally have been able to negotiate

contracts without arbitration.

5

The grievance/arbitration process is the primary mechanism craft employees use to communicate

their work-related concerns; and a “grievance,” according to postal labor agreements, is “a dispute,

difference, disagreement, or complaint between the parties related to wages, hours, and conditions of

employment.”

6

Stated another way, in fiscal year 1996, the average rate of grievances to be decided at the area level

had risen to 13 for every 100 postal craft employees, compared to fiscal year 1994 when the average

rate was 10 such grievances per 100 craft employees. For backlogged grievances, in fiscal year 1996,

the average rate of such grievances had risen to 10 grievances per 100 craft employees, an increase

from the average rate of 6 such grievances per 100 craft employees in fiscal year 1994.

Page 5 GAO/T-GGD-98-7
Statement 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

high volume. These officials told us that their views had not changed

significantly since we issued our 1994 report. Generally, the officials

tended to blame each other for the high volume of grievances being filed

and the large number of backlogged grievances.

Finally, at the time our 1997 report was issued, the Postal Service and the

other seven organizations had been unable to convene a

labor-management relations summit. The Postmaster General (PMG)

proposed the summit over 2 years ago to, among other things, address our

recommendation to establish a framework agreement of common goals

and approaches that could help postal, union, and management

association officials improve labor-management relations and employee

working conditions. Initially, the responses from the other seven

organizations to the PMG’s invitation were mixed. For instance, around

January 1995, the leaders of the three management associations and the

Rural Carriers union accepted the invitation to participate in the summit.

However, at that time, the contracts for three unions—APWU, NALC, and

Mail Handlers—had expired and negotiations had begun. The union

leaders said they were waiting until contract negotiations were completed

before making a decision on the summit. In April 1996, when negotiations

had been completed, the three unions agreed to participate.

Because of these initial difficulties in convening the summit, in

February 1996, the Service asked the Director of FMCS to provide mediation

services to help convene the summit. Also, in March 1996, Mr. Chairman,

you encouraged the FMCS Director to assist the Service by providing such

services. As discussed in our 1997 report, although various preliminary

meetings had taken place to determine an agenda, the efforts to convene a

summit were not successful. Recently, according to an FMCS official, a

summit occurred on October 29, 1997, that was attended by various

officials from the eight organizations, including the Postal Service, the four

major unions, and the three management associations. We are encouraged

by the fact that this meeting occurred. Such meetings can provide the

participants a means of working toward reaching agreement on common

approaches for addressing labor-management relations problems. We

believe that such agreement is a key factor in helping these organizations

sustain improvements in their relations and in the postal work

environment.

Page 6 GAO/T-GGD-98-7
Statement 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

Actions to Implement

Initiatives Have Been

Taken, but Little

Information Was

Available on Results

Since our 1994 report was issued, the Postal Service and the other seven

organizations have continued their efforts to address labor-management

problems by implementing, or attempting to implement, specific

improvement initiatives. During our discussions with these officials, they

said that they generally agreed with the overall goals of some of the 10

improvement initiatives that we focused on. They also believed that some

of these initiatives held promise for making a positive difference in the

labor-management relations climate. However, although various actions

had been taken to implement the 10 initiatives that we reviewed, we found

it difficult to determine what results, if any, were achieved, mainly because

(1) some initiatives had only recently been piloted or implemented,

(2) some were only partially implemented because of disagreements on

how to implement them, and (3) some were discontinued because the

Service and the other involved participants disagreed on how best to use

the initiatives to help improve the postal work environment. For each of

these categories, I would like to discuss an initiative that shows why we

found it difficult to determine results.

• The Associate Supervisor Program (ASP) is an example of a recently

implemented initiative that many officials believe may have the potential

to improve the postal work environment. ASP is a 16-week training program

for new postal supervisors that was first established in 1994. As of

March 1997, the Service was still completing the last ASP pilot. Various

postal, union, and management association officials we interviewed at

some ASP pilot locations told us that although they believed it was too soon

to evaluate the results of the program, they believed it had the potential for

providing the Service with more qualified and better trained supervisors.

Also, local union officials told us they liked the additional training that is

to be provided to current postal supervisors under ASP.

7

• Delivery Redesign is an example of an initiative that has been only

partially implemented because of disagreements among the parties on how

to implement it. Delivery Redesign is a program begun in 1995 that was to

make appropriate changes to the system by which city letter carriers,

represented by NALC, sort and deliver mail. According to postal officials, in

1997, after numerous discussions with NALC that resulted in no agreement

on an approach, the Service decided to test some revised processes for

mail delivery by city letter carriers. These processes are collectively

known as Delivery Redesign. Postal officials also told us that NALC

officials, although briefed several times (May, July, and

7

According to a postal official responsible for managing ASP, the Service plans to make specific parts

of ASP training available to current postal supervisors, such as conflict resolution and methods for

dealing with problem employees. The purpose of this effort is to provide current postal supervisors

with training that is similar to the training that ASP candidates receive.

Page 7 GAO/T-GGD-98-7
Statement 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

September 1996) on Delivery Redesign, have not endorsed the testing of

the revised processes. At the national level, NALC officials told us that they

believed that revisions to the processes by which city carriers sort and

deliver mail should be established through the collective bargaining

process.

• The Employee Opinion Survey (EOS) is an example of an initiative that

was discontinued. The nationwide annual EOS, begun in 1992 and

continued through 1995, was a voluntary survey designed to gather the

opinions of all postal employees about the Service’s strengths and

shortcomings as an employer. Postal officials told us that such opinions

have been useful in helping the Service determine the extent of

labor-management problems throughout the organization and make efforts

to address those problems. Efforts to continue implementing this initiative

were hampered primarily by disagreements among the Service and the

other involved participants over how best to use the initiative to help

improve the postal work environment. Also, according to postal officials, a

lack of union participation in this initiative generally caused the Service to

discontinue its use. According to some postal and union officials, the 1995

EOS was boycotted primarily because some unions believed that the

Service inappropriately used the results of past surveys during the 1994

contract negotiations.

Continued Need to

Improve

Labor-Management

Relations

As discussed in our report, we continue to believe that to sustain and

achieve maximum benefits from any improvement efforts, it is important

for the Service, the four major unions, and the three management

associations to agree on common approaches for addressing

labor-management relations problems. Our work has shown that there are

no clear or easy solutions to these problems. But continued adversarial

relations could lead to escalating workplace difficulties and hamper

efforts to achieve desired improvements.

In our report, we identified some approaches that might help the Service,

the unions, and the management associations reach consensus on

strategies for dealing with persistent labor-management relations

problems. Such approaches included

• the use of a third-party facilitator,

• the requirements of the Government Performance and Results Act, and

• the proposed Postal Employee-Management Commission.

Page 8 GAO/T-GGD-98-7
Statement 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

As I mentioned previously, with the assistance of FMCS, the Postal Service,

the four major unions, and the three management associations recently

convened a postal summit meeting. As discussed in our 1994 report, we

believe that the use of FMCS as a third-party facilitator indicated that

outside advice and assistance can be useful in helping the eight

organizations move forward in their attempts to reach agreement on

common approaches for addressing labor-management relations

problems.

In addition, the Government Performance and Results Act provides an

opportunity for joint discussions. Under the Results Act, Congress, the

Postal Service, its unions, and its management associations as well as

other stakeholders with an interest in postal activities can discuss not only

the mission and proposed goals for the Postal Service but also the

strategies to be used to achieve desired results. These discussions can

provide Congress and the other stakeholders a chance to better

understand the Service’s mission and goals. Such discussions can also

provide opportunities for the parties to work together to reach consensus

on strategies for attaining such goals, especially those that relate to the

long-standing labor-management relations problems that continue to

challenge the Service.

Another approach aimed at improving labor-management relations is the

proposed establishment of an employee-management commission that

was included in the postal reform legislation you introduced in June 1996

and reintroduced in January 1997. Under this proposed legislation, a

temporary, presidentially appointed seven-member Postal

Employee-Management Commission would be established. This

Commission would be responsible for evaluating and recommending

solutions to the workplace difficulties confronting the Service. The

proposed Commission would prepare its first set of reports within 18

months and terminate after preparing its second and third sets of reports.8

8

Under this proposed legislation, the Commission would submit its recommendations in the form of a

written report to the President and Congress to the extent that such recommendations involved any

legislation and to the Postal Service to the extent that the recommendations did not involve legislation.

Page 9 GAO/T-GGD-98-7
Statement 

U.S. Postal Service: Little Progress Made in

Addressing Persistent Labor-Management

Problems

Comments From the

Postal Service, Labor

Unions, Management

Associations, and

FMCS

We received comments on a draft of our report from nine

organizations—the Service, the four major unions, the three management

associations, and FMCS. The nine organizations generally agreed with the

report’s basic message that little progress had been made in improving

persistent labor-management relations problems, although they expressed

different opinions as to why. Also, the nine organizations often had

different views on such matters as the implementation of and results

associated with the 10 initiatives; the likelihood of the organizations to

reach consensus on the resolution of persistent labor-management

relations problems; the desirability of having external parties, such as

Congress, become involved in addressing such problems; and the

comprehensiveness of our methodology, which we believed was

reasonable and appropriate given the time and resources available. We

believe that the diversity of opinions on these matters reinforces the

overall message of our most recent report and provides additional insight

on the challenges that lie ahead with efforts to try to improve

labor-management relations problems in the Postal Service.

In summary, the continued inability to reach agreement has prevented the

Service, the four major unions, and the three management associations

from implementing our recommendation to develop a framework

agreement. We continue to believe that such an agreement is needed to

help the Service, the unions, and the management associations reach

consensus on the appropriate goals and approaches for dealing with

persistent labor-management relations problems and improving the postal

work environment. Although we recognize that achieving consensus may

not be easy, we believe that without it, workplace difficulties could

escalate and hamper efforts to bring about desired improvements.

Mr. Chairman, this concludes my prepared statement. My colleague and I

would be pleased to respond to any questions you may have.

(240271) Page 10 GAO/T-GGD-98-7
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