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[Senate Report 111-287]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 558
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-287

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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 2, 2010.--Ordered to be printed

  Filed, under authority of the order of the Senate of August 5, 2010

                                _______
                                

          Mr. Akaka, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                         [To accompany S. 3486]

    The Committee on Veterans' Affairs (hereinafter, ``the 
Committee''), to which was referred the bill (S. 3486), 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, having considered the same, reports 
favorably thereon, and recommends that the bill do pass.

                              Introduction

    On June 15, 2010, Senator Brown of Ohio introduced S. 3486. 
S. 3486 would repeal the prohibition on collective bargaining 
for matters and questions regarding compensation of employees 
of the Department of Veterans Affairs, other than rates of 
basic pay.
    In a Committee markup on August 5, 2010, Senator Brown of 
Ohio introduced an amendment, which contained the text of 
S. 3486, to the Committee Print of S. 3325.

                           Committee Meeting

    The Committee met in open session on August 5, 2010, to 
consider, among other legislation, an amendment to the 
Committee Print of S. 3325, introduced by Mr. Brown of Ohio. 
The Committee agreed by voice vote to separate this amendment 
and to report it individually if agreed to. The Committee then 
agreed to the amendment by a call of the roll.

                     Summary of S. 3486 as Reported

    S. 3486, as reported (hereinafter, ``the Committee bill''), 
would repeal the prohibition on collective bargaining with 
respect to matters and questions regarding compensation of 
employees of the Department of Veterans Affairs (hereinafter, 
``the Department'' or ``VA'') other than 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.

    The Committee bill would repeal the prohibition on 
collective bargaining for Department employees hired under the 
authority of title 38, United States Code (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, United States Code, and are 
subject to the provisions of chapter 74 of title 38, United 
States Code, 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, United States Code, for pay schedules, disciplinary 
and adverse action procedures, and performance management and 
leave systems (hereinafter, ``Title 38 Hybrid Employees'').
    Title 5, United States Code, 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, United States 
Code. Under section 7422 of title 38, United States Code, 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 the American 
Federation of Government Employees (hereinafter, ``AFGE'') on 
April 22, 2009, regarding S. 362, a related bill addressing 
collective bargaining rights, which was introduced by Senator 
Rockefeller on January 30, 2009. AFGE contended that the 
Department's interpretation of the exclusions to collective 
bargaining have been overly broad. Ammie Hilsabeck, a 
registered nurse at the Oscar G. Johnson VA Medical Center in 
Iron Mountain, Michigan, representing AFGE, stated that the 
Department applies the exception to bargaining over 
compensation, ``not just to negotiation over the setting of pay 
scales (which is clearly prohibited already by Title 5 for all 
federal employees), but also entitlements to `additional pay' 
such as overtime, weekend pay, and retention pay that Congress 
has specifically enacted to ensure a fair and desirable 
workplace.''
    Also, in testimony submitted at the same hearing, the 
Disabled American Veterans stated that it endorsed the intent 
of S. 362 and believed it to be an appropriate remedy that 
would give the Department and labor to a more balanced 
bargaining relationship on issues of importance to VA's 
professional workforce.
    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, August 30, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 3486, 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 Sunita 
D'Monte.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.

  Enclosure.

S. 3486--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. 3486 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. 3486 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 78,500 of the administration's roughly 260,000 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; such compensation is estimated to total almost 
$24 billion in 2010. Under the bill, collective bargaining 
could increase VHA's personnel costs in several ways; for 
example, employees could negotiate bonuses or performance 
awards, higher rates for overtime pay, and higher special pay 
for employees in highly demanded specialties. However, CBO has 
no basis upon which to estimate the likelihood or potential 
magnitude of those effects.
    Enacting S. 3486 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    S. 3486 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 Sunita D'Monte. 
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 August 5, 2010, meeting. On that date 
the Committee agreed by voice vote to report separately the 
amendment introduced by Mr. Brown of Ohio, if agreed to. The 
following senators were present: Mr. Rockefeller, Ms. Murray, 
Mr. Brown of Ohio, Mr. Webb, Mr. Tester, Mr. Begich, Mr. 
Burris, Mr. Burr, Mr. Isakson, Mr. Brown of Massachusetts, and 
Chairman Akaka.
    The Committee then agreed to the measure and ordered 
S. 3486, to be reported favorably to the Senate by a call of 
the roll.

----------------------------------------------------------------------------------------------------------------
                Yeas                                 Senator                                 Nays
----------------------------------------------------------------------------------------------------------------
                                 X   Mr. Rockefeller
                                 X   Mrs. Murray
                      X (by proxy)   Mr. Sanders
                                 X   Mr. Brown of Ohio
                      X (by proxy)   Mr. Webb
                                 X   Mr. Tester
                                 X   Mr. Begich
                                 X   Mr. Burris
                      X (by proxy)   Mr. Specter
                                     Mr. Burr                                                                 X
                                     Mr. Isakson                                                              X
                                     Mr. Wicker                                                    X (by proxy)
                                     Mr. Johanns                                                   X (by proxy)
                                     Mr. Brown of Massachusetts                                               X
                                     Mr. Graham                                                    X (by proxy)
                                 X   Mr. Chairman
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                                10   TALLY                                                                    6
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                             Agency Report

    On July 30, 2010, the Committee received a letter from 
Secretary Shinseki which was supplemental to the Department's 
views on pending legislation provided at the Committee hearing 
on May 19, 2010, at which Thomas J. Pamperin, Associate Deputy 
Under Secretary for Policy and Program Management, Veterans 
Benefits Administration, and Robert Jesse, MD, Acting Principal 
Deputy Under Secretary for Health, Veterans Health 
Administration, appeared before the Committee and submitted 
written testimony on pending legislation. Excerpts of the 
additional views are reprinted below:

                         The Secretary of Veterans Affairs,
                                     Washington, DC, July 30, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: I am pleased to provide the Committee 
with the views of the Department of Veterans Affairs (VA) on 
twelve of the thirteen bills listed in your May 21, 2010, 
letter. In addition, we are providing cost estimates for three 
bills about which we testified at the Committee's May 19, 2010, 
hearing but for which we were unable to develop cost estimates 
in time for that hearing. We will provide views and costs on 
S. 3486 to the Committee in a separate letter.

           *       *       *       *       *       *       *

                                S. 3486

    S. 3486 would repeal the prohibition on collective 
bargaining with respect to compensation of VA employees other 
than rates of basic pay. We will provide the Committee with 
formal written comments on this bill in a separate letter.
    The Office of Management and Budget has advised that there 
is no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely,
Eric K. Shinseki.

           *       *       *       *       *       *       *

                  MINORITY VIEWS OF HON. RICHARD BURR,
                             RANKING MEMBER

    I am concerned that my colleagues in the majority have 
approved this legislation to expand collective bargaining 
rights without a full understanding of its potential impact on 
VA's health care system. The Committee did not have the views 
of the administration or other interested groups, did not have 
the ability to question witnesses about the legislation's 
effect and, at the August 5 markup, was not presented with any 
compelling evidence as to why the Committee's consideration of 
the bill needed to be rushed.
    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.
    Here are my concerns:

    The Committee received testimony in each of the last two 
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 Bush 
and Obama administrations testified strongly against the 
legislation. For example, here is an excerpt from VA testimony 
at the April 22, 2009, Committee hearing to review legislation 
to modify the collective bargaining law:

        ``While we appreciate the many positive contributions 
        collective bargaining and labor-management partnership 
        make to VA's mission, VA strongly opposes S. 362, 
        which, if enacted, would imperil VA's ability to 
        furnish timely and quality care for veterans.''

    Although what we considered at the August 5, 2010, mark up 
was narrower in scope than the legislation referred to in the 
above testimony, as a Congress, we have an obligation to 
understand the consequences, both intended and unintended, of 
what we considered. Certainly any matter affecting union rights 
to bargain which may ``imperil VA's ability to furnish timely 
and quality care for veterans'' should give us all pause.
    I was able to get a brief list of the items that, under the 
legislation adopted by the majority, would be open to 
collective bargaining. It includes 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. Are we prepared to say that we 
understand how extending the ability to bargain over these 
matters will 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?
    Again, without answers to all of these questions--each 
raised in the last few years by both the Bush and Obama 
administrations--we are simply flying blind. I believe that it 
is important to see the views of the Administration and others 
before this bill is considered by the full Senate. I would have 
hoped for a more deliberative Committee process and not one 
that, in my opinion, threw caution to the wind.

                        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.
    (e) * * *

           *       *       *       *       *       *       *

                                  
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