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POST-HEARING
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I. INTRODUCTION There is one issue before the Panel in this compensation dispute between the National Association of Air Traffic Specialists ("NAATS" or "union") and the Federal Aviation Administration ("FAA" or "agency"): whether to recommend the pay raise proposed by the agency or the whopping 14.3% retroactive and cost prohibitive pay raise that the union contends is appropriate. The agency respectfully submits that the panel should recommend its proposal, which calls for a pay increase of 5.5 % above the government-wide pay increases over the next five years. The agency�s proposal is generous and fair, and reflects the concepts of internal pay equity and the treatment of flight service specialists in the worldwide marketplace. Contrary to the union�s contentions, there are very significant differences in the work performed by air traffic controllers (terminal and en route) and the flight service specialists. And the very statute enacted by Congress that gave the union the right -- unique in the federal sector -- to bargain over pay requires that these differences be taken into account in determining the pay raise of the specialists. The Personnel Reform Act1 instructs the FAA to develop and implement a personnel management system that addresses the "unique demands" on the agency�s workforce, including greater flexibility in the compensation of personnel. In response, the FAA adopted a personnel management system that required the agency to implement a pay system that values job complexity and compensates employees based on the level of work performed. In addition, the Personnel Reform Act requires the FAA and the unions representing agency employees to make every reasonable effort to find cost savings and to increase productivity. And, relying on this statute, OMB has instructed the agency that all pay increases must be fully offset by cost savings. Based on these considerations, the FAA respectfully submits that the Panel should recommend the FAA�s proposal of a 5.5% pay increase. II. BACKGROUND The FAA employs approximately 2,185 flight service specialists, represented by NAATS -- the National Association of Air Traffic Specialists -- an unaffiliated union. The approximately 15,000 air traffic controllers who work in terminals and centers are represented by the National Air Traffic Controllers Association, AFL-CIO ("NATCA"). The work performed by the controllers goes to the very core of the agency�s key mission -- ensuring the safe and efficient operation of the nation�s commercial air traffic system. Since 1998, and with the advent of the Personnel Reform Act, the FAA has provided different compensation for air traffic controllers on the one hand2 and flight service specialists on the other hand. In September 1998, the FAA and NATCA reached a collective bargaining agreement in which former GS-12 air traffic controllers were reclassified based on the complexity of their work. Those controllers were converted to the ATC pay plan, specifically to the ATC 6, 7, 8, or 9 level. See FAA Tab 3.3 The controllers received salary increases over a five-year term that varied by the complexity of their work. The FAA continued to compensate the flight service specialists under the General Schedule, in accordance with the 1993 collective bargaining agreement with NAATS. In keeping with that agreement, the specialists continued to receive government-wide increases, step increases, and locality pay. III. THE PARTIES� PROPOSALS A. NAATS In addition to all government-wide increases, NAATS proposes a 13.2% retroactive increase to be paid within 180 days from the date of execution of an agreement as follows:
Under the proposal, specialists would also receive any future wage increases that the FAA agrees to pay former GS-12 controllers represented by NATCA. See NAATS Tab 1. B. FAA In addition to all government-wide increases, FAA proposes a 5.5% additional base salary increase, subject to mutually agreed offsets:
See FAA Tab 28. IV. ARGUMENT A. The Duties of Specialists and Controllers Are Very Different. The FAA personnel management system requires the agency to implement a pay system that values job complexity and compensates employees according to the level of work performed. See FAA Tab 2. The duties, skills, and job requirements of the controllers and specialists widely differ in a number of important respects The FAA position classification standard provides that the critical tasks of controllers are the separation and control of aircraft. Controllers are required to have "extensive knowledge of the laws, rules, regulations and procedures governing the movement of air traffic, a knowledge of aircraft separation standards and control techniques." Moreover, controllers must have "the ability to apply them properly, often under conditions of great stress." See FAA Tab 4 at 1 (emphasis added). In sharp contrast, specialist jobs are defined as "related" positions that the standard specifically excludes from the definition of controllers:
See FAA Tab 4 at 1. Air traffic controllers and flight service specialists, at best, are distant cousins. As explained during the hearing, the duties contained in the position descriptions are significantly different. Flight service employees generally provide recommendations to private pilots if those pilots elect to contact the flight service station or file a flight plan. During the hearing before the panel, the union itself described specialists as "the FAA�s meteorologists" and made numerous references to the relaying of weather information to pilots. Although controllers are also responsible for providing weather and field briefings, see FAA Tab 7, their most significant tasks involve giving instructions to commercial pilots relating to the separation and control of aircraft, which are often large jets with hundreds of passengers on board. A mistake could have fatal consequences for hundreds of people, as recently and all too graphically illustrated by the collision of two aircraft in Europe due to a miscommunication with controllers. FAA Tab 23 provides a more detailed contrast of the different duties.4 The separation and control of aircraft, performed exclusively by controllers, demands a far different skill set than the duties performed by specialists. Controllers must perform their duties under conditions of great stress and often for sustained periods. See FAA Tab 4. The OPM standard states that terminal controllers must have the "[a]bility to act decisively under stressful situations and to maintain alertness over sustained periods of pressure." See FAA Tab 8 (emphasis added). The union argued that specialists also are under stress, on the occasions when they assist disoriented pilots. To be sure, the position description on which the union relies states that emergencies and pilot assists place specialists under stress. See NAATS Tab 15 at 12. But the position description also recognizes that such situations occur "on an irregular and unpredictable basis." See NAATS Tab 15 at 12 (emphasis added). By contrast, controllers must separate and control multiple large commercial aircraft operating at high speed that regularly and predictably land and depart in short periods of time from one another. Specialists, moreover, generally are able to focus on one aircraft at a time. Thus, the union�s argument that specialists are responsible for multiple airports, while terminal controllers are responsible for only one, falls flat; specialists typically deal with one pilot of a small private aircraft at a time. As the union was forced to concede during the hearing, the controller�s position is "three dimensional" -- controllers, by definition, deal with many pilots flying numerous commercial aircraft at high rates of speed and in relatively close proximity to each other. See NAATS Tab 14 at 2. Not surprisingly, the training requirements for controllers are far more extensive both in the number of courses and in their technical nature. See FAA Tab 9 (and appendices). The more difficult and rigorous training received by controllers explains why those who fail controller training often turn to the specialists� option. Similarly, the medical requirements for air traffic controllers are more stringent than for flight specialists positions. See FAA Tab 10. B. The FAA�s Proposal is Quite Generous and Fair
The FAA�s proposal should be considered in light of other increases that flight service specialists will receive, or will be eligible to receive. First, the 5.5% increase will be computed after adjustments to base bay for conversion to "core compensation." See FAA Tab 18. Second, the 5.5% increase is in addition to government-wide general increases that specialists will receive. Third, the 5.5% increase is in addition to locality pay increases. See FAA Tab 18 at 5. Fourth, specialists will be eligible for an additional 1% Organization Success Increase (OSI). See FAA Tab 18 at 5. Fifth, specialists will be eligible for an additional .6% Superior Contribution Increase (SCI). Sixth, the new agreement provides for new premium pay increments, including a 10% premium for On-the-Job Training ("OJT") instruction, see FAA Tab 16, and a 10% premium for Controller-in-Charge ("CIC") duties, see FAA Tab 17. In total, the FAA�s proposal represents an actual increase of up to 41.3% over five years. 6 The pay increase provided in the agency�s offer is approximately 24% higher than the projected rise in the Consumer Price Index ("CPI"), even excluding locality pay increases. See FAA Power Point Presentation at 17. This calculation assumes an average CPI increase of 4.1% per year, which was determined based on historical Labor Department statistics. See FAA Tab 25.
The way in which NAV Canada pays its specialists relative to controllers provides particularly compelling evidence in support of the agency�s proposal. Flight service specialists in the U.S. perform virtually identical duties as flight service specialists who work for Nav Canada.7 See FAA Tabs 11; 13. The position descriptions are virtually the same. Compare FAA Tabs 7 and 23 (FAA) with Tab 11 (Nav Canada). In addition, Nav Canada, like the FAA, draws a distinction between controllers and specialists: "It should be noted that Flight Service Specialists are not Air Traffic Controllers." See FAA Tab 13 (emphasis added). FAA specialists are better paid than their Canadian counterparts. The median salary of FAA specialists ($57,451) is more than 50% greater than the median salary of Nav Canada flight service specialists (USD $28,001). Moreover, the difference in pay between FAA specialists and controllers is less than the difference between Canadian controllers and specialists. The difference in median base pay between Nav Canada Flight Service Specialists (USD $28,001) and Air Traffic Controllers (USD $47,435) is 41%. The difference in median base pay between FAA specialists ($57,451) and controllers ($83,507) is only 31%. See FAA Tabs 11-12; 14-15.
Two recent agreements that the FAA concluded with other non-controller bargaining units lend further support to the fact that the FAA proposal is reasonable and fair. The July 2000 agreement between the FAA and the Professional Airways Systems Specialists, covering technicians who repair and maintain the air traffic control system, provided for a 5.5% pay increase over a five-year period. See FAA Tab 26. The February 2001 agreement between the FAA and NATCA Engineers and Architects also provided for a 5.5% pay increase over a five-year period. See FAA Tab 27. Neither agreement provided for retroactive pay, as NAATS has sought. In addition, both bargaining units also converted to core compensation. 8
Congress requires the parties to use every reasonable effort to find cost savings and to increase productivity. See FAA Tab 20 (49 U.S.C. � 40122). According to the Office of Management and Budget ("OMB") and Department of Transportation Inspector General, this statute requires cost savings. Because of OMB�s directive to the agency, the FAA�s last and best offer thus requires offsets for the 5.5% pay increase. This OMB requirement is not new. In July 1999, for example, the FAA informed NAATS, "Any cost savings or efficiencies that result in costs savings agreed to between the FAA and NAATS, and that relate to the Flight Service Option, will be used to provide the NAATS bargaining unit with a correlative pay adjustment." See NAATS Tab 3 � 1. A total of $58.4 million in offsets would be required to pay for the FAA�s proposed 5.5% increase. See FAA Tab 29. Although the FAA has suggested several cost savings measures, the union has refused to negotiate meaningfully. The only NAATS proposal (in September 1999) was to allow bargaining unit members compensatory time in lieu of (a) overtime, (b) holiday pay, or (c) a day in lieu of holiday. See FAA Tab 22. Such a proposal would result in, at most, insignificant cost savings and there would be no guarantee of any savings. But it was this union proposal that was the genesis of the agency�s proposal regarding holiday pay. The FAA�s proposal would allow specialists 10 additional days off in lieu of holiday pay. And the resulting savings in premium pay would fund the pay increase. The agency also offered a part-time option in which calls would be re-routed to other flight service stations during off-peak hours.9 Thus, the agency has identified possible cost-savings measures. The union, on the other hand, has offered a single proposal that would result in no more than insignificant cost savings and made a proposal at the hearing that cannot even be considered an offset. The "offset" that NAATS offered at the hearing would be accomplished by employee attrition. See NAATS Tab 4. The union argued that since the bargaining unit has decreased 25% through attrition in the past, the remaining members have "already paid for the entire proposal through attrition." Further, the union later stated that the FAA has already received a "$15 million windfall" due to attrition. This argument is without merit. Past attrition obviously is not a negotiated offset at all -- but ironically reflects the declining importance of the flight service option to private aviation as private sector weather briefing alternatives have become available. Finally, NAATS� last and best offer promises only that "the parties will meet at least annually and make every reasonable effort to find ways of improving productivity and curtailing costs." See NAATS Tab 1. This empty promise is not sufficient. As stated above, the OMB and Department of Transportation Inspector General interpret the statute as requiring cost savings. Further, once NAATS receives a pay raise, there is simply no incentive for the union to make any effort to identify cost savings
Contrary to NAATS� suggestion that its proposal is only $14 million more than the agency�s proposal, the NAATS� proposal is in fact approximately $164.6 million more than the agency�s proposal.
The union also contends that the Panel must recommend its proposal because the agency already agreed to a retroactive pay increase. The union is wrong. The union relies on a letter dated July 8, 1999, by the agency�s counsel that makes clear that retroactivity is hinged on an agreement on pay:
See NAATS Tab 3 � 3 (emphasis added). Since the parties have never reached agreement on pay adjustments, the union�s argument for retroactivity has no basis whatsoever.
Even if the FAA agreed to retroactivity, which it did not in the absence of an agreement, the NAATS proposal is unsupportable for several reasons. A retroactive pay increase would ratchet up the actual cost of the union�s proposal by well over 13.2%. The FAA calculates that retroactivity would result in a total liability of $50 million in back pay. A retroactive increase would undoubtedly affect the calculation of retirement pay for recent retirees. The increased amount of retirement pay would also need to be offset. The union identified no offsets for 1999, 2000, and 2001. The FAA�s current budget does not allow for any retroactive pay increases. Finally, a retroactive pay increase would essentially turn the union�s proposal from a five-year agreement to an eight-year deal. The union�s proposal also includes a five-year "me too" clause. See NAATS Tab 1. While negotiations with NATCA have not commenced, any pay raise awarded to NATCA represented employees would, of course, increase NAATS� proposal above 13.2%.
In June 2002, the agency notified NAATS that the agency would begin an A-76 competitive sourcing feasibility study of the functions of the flight service positions. See FAA Tab 33. The union�s proposal would make its members less competitive under this study.
Despite NAATS' refusal to acknowledge reality, there can be no doubt as to the difficult financial strain confronting the agency. The FAA faces a severe budget shortfall within the Air Traffic Services organization for the current fiscal year (FY-2002). Specifically, there is a shortfall of about $100 million, in large part because of the unanticipated security expenditures following September 11. See FAA Tab 30. The agency has already identified offsets (not related to NAATS) of about $90 million, including a total freeze on hiring and reductions to the budgets for travel, training, supplies, and contracts. See FAA Tab 30. The agency still faces insufficient resources to cover payroll costs for all of FY-2002. See FAA Tab 30. Nor is there any indication that the agency�s financial picture will improve in the foreseeable future. The union�s proposal is simply not realistic. See FAA Tabs 31; 32. V. CONCLUSION For all of the reasons discussed above, the FAA respectfully requests that the Panel adopt its proposal and reject the NAATS� proposal.
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