01/10/2019 – In a decision issued on Friday, January 4, 2019, Arbitrator Stephen B. Goldberg ruled that the Postal Service did not violate the National Agreement in 2011 when it decided to subcontract roof maintenance and repair work.
The Union contended that the Employer had violated Article 32.1.A by failing to give due consideration to the five factors it must consider before subcontracting; violated Article 32.1.B by failing to give the Union advance notice, and by failing to comply with the other requirements of 32.1.B; violated the MOU on Contracting or Insourcing of Contracted Services; and violated ASM Section 535.112.
On the issue of due consideration of the five factors in Article 32.1.B, The Union provided evidence and argument showing that when the Postal Service was deciding whether or not to subcontract roof maintenance and repairs, the Postal Service analysis was “wrong about roof warranties, wrong about qualifications of employees, wrong about availability of equipment, and wrong about OSHA requirements.”
The Arbitrator’s decision examines each of these contentions in detail, including the evidence provided by a Union expert witness on commercial roofing, and concludes that, on each point, the Union’s evidence was insufficient to prove that the Postal Service’s purported consideration of the factors in 32.1.A was a sham or that the Postal Service had acted in bad faith, arbitrarily or capriciously. Thus, the Arbitrator concluded that the Union had failed to establish a violation of Article 32.1.A.
In rejecting the Union’s Article 32.1.B argument that the roof repair and maintenance subcontracting had a significant impact on bargaining unit work, the Arbitrator applied a standard by which significant impact did not depend on the number of employees affected; it “could…also result from a significant change in conditions of employment or a significant impairment of job tenure, employment security or reasonably anticipated work opportunities.” The Arbitrator concluded that the Union had not shown that this standard had been met.
The decision reaffirms the Arbitrator’s holding in the California Mode Conversion case (Case No. Q10V-4Q-C 12324573 (2013) that
…if factors other than cost do not rule out keeping the work in-house, and the cost of keeping the work in- house would be less than contracting out, both the text and the bargaining history of the Contracting MOU require that the work be kept in-house.
In rejecting the Union’s argument that contracting out is more costly in this case, the Arbitrator stated that he was not persuaded that the cost of performing the work in-house would be at a cost equal to or less than the cost of subcontracting the work.
In a decision at odds with a number of regional arbitration awards, the Arbitrator rejected the Union’s reliance on Section 535.112 of the ASM. The Union has relied on this ASM provision to establish that work covered by it may not be contracted out unless the Postal Service can show that it is less costly to contract out the work. The Arbitrator disagreed with the Union’s reading of the ASM provision. The Arbitrator found it “unlikely” that the Postal Service would have unilaterally set such a restriction on its discretion to contract out.