[00:00:00] Speaker 00: Case number 20-5280, National Association of Postal Supervisors, A Balance, versus United States Postal Service and United Postmasters and Managers of America. [00:00:12] Speaker 00: Ms. [00:00:12] Speaker 00: Graeber for the A Balance, Mr. Genda for the Epolies. [00:00:17] Speaker 01: Good morning. [00:00:18] Speaker 01: When you're ready, Ms. [00:00:19] Speaker 01: Graeber, you may proceed. [00:00:21] Speaker 02: Thank you, Your Honor, and may it please the court. [00:00:24] Speaker 02: The Postal Service now concedes on page 17 of its brief, quote, [00:00:29] Speaker 02: NAPs may seek non statutory review. [00:00:33] Speaker 02: That issue is no longer in dispute. [00:00:35] Speaker 02: The Postal Service then asserts that the statutory provisions at issue here are not limits on the Postal Service's authority. [00:00:44] Speaker 02: I'd like to spend my time today explaining why the statutory standards regarding supervisory differentials, compensation comparability with the private sector, [00:00:54] Speaker 02: and the rights of the postal supervisory and managerial personnel to be represented by NAPPS are clear and mandatory and how the Postal Service has violated those mandates. [00:01:06] Speaker 02: And our dispute with the Postal Service has two parts. [00:01:09] Speaker 02: The first concerns the 2016 to 2019 field pay package, which violates statutory mandates that the Postal Service pay a supervisory differential and that it establish [00:01:22] Speaker 02: compensation that is comparable with the private sector. [00:01:26] Speaker 02: Second, I will turn to why the statute permits NAPs to represent all supervisory and managerial employees, including postmasters, and why the Postal Reorganization Act does not distinguish between any category of supervisory and managerial personnel based on their reporting structure or any other category. [00:01:47] Speaker 02: Regarding the substance of the 2016 to 2019 pay plan, [00:01:52] Speaker 02: In the 1979 NAPPS decision, this court held that the very same provisions at issue here regarding the supervisory differential and pay comparability establish standards that are clear and mandatory and reviewable under non statutory review. [00:02:08] Speaker 02: This court held that the Postal Service was required to implement some supervisory differential and consider and fulfill in good faith pay comparability. [00:02:20] Speaker 02: The complaint here plausibly alleges that the Postal Service has failed to meet these requirements. [00:02:26] Speaker 02: As we point out on page 13 of our reply brief, this court already interpreted the Postal Reorganization Act to require that, quote, all, end quote, supervisory and other managerial personnel must receive some differential in compensation compared to the clerks and the carriers that they actually supervise. [00:02:46] Speaker 03: Isn't there a differential? [00:02:49] Speaker 03: The problem is just simply that the employees, the clerk or other employees who are the supervisees can earn overtime that the supervisors can't? [00:03:05] Speaker 02: No, Your Honor. [00:03:06] Speaker 02: As we explained at paragraphs 38 and 39 of our complaint, for thousands of supervisors, there is actually no differential at all, even before you take overtime into account. [00:03:17] Speaker 02: With regards to base pay, these supervisors earn less than the employees in the clerk or carrier grade that they supervise. [00:03:25] Speaker 02: And the reason is that the postal service has benchmarked a very low supervisory differential against a lower paid [00:03:33] Speaker 02: a grade in for the clerk employees and thousands of supervisors represent higher paid carriers. [00:03:41] Speaker 02: So for these employees, even before you get into overtime, there is simply no supervisory differential. [00:03:47] Speaker 02: And this court was clear in the 1979 opinion that all supervisors must earn some differential compared to the employees that they actually supervise. [00:03:58] Speaker 02: not again just compared to one of the lower paid clerks or carrier grades in the system. [00:04:04] Speaker 03: Did our opinion held that every single supervisor has to have a differential or else there's a violation of the statute? [00:04:16] Speaker 02: the import of the court's remand to the Postal Service when it determined that it could not know from the affidavit that the Postal Service had filed whether, quote, or quote, whether all supervisory and other managerial personnel actually received some kind of differential. [00:04:34] Speaker 02: It's also clear from the statute, which does not say some supervisory and managerial personnel must earn the differential. [00:04:41] Speaker 02: So yes, I do think that all supervisory and managerial personnel must earn some differential. [00:04:47] Speaker 01: But I guess the question is, is it when there's a comparison under the statute between supervisor and other managerial personnel and those they supervise, can that comparison be made in gross or does it have to be made for every single [00:05:04] Speaker 01: office or every single supervisor. [00:05:07] Speaker 01: And I take it that the Postal Service is saying, well, it can be made in gross. [00:05:14] Speaker 02: Again, I think turning to the court's 1979 opinion, what it said is that it couldn't tell and it had to remand to the Postal Service. [00:05:22] Speaker 02: It could not tell whether all supervisory and other managerial personnel actually received some kind of differential. [00:05:29] Speaker 02: And it made clear that that differential should be pegged [00:05:32] Speaker 02: to the employees and the clerk and the carrier grades that the supervisors actually supervised. [00:05:39] Speaker 02: So it seems clear from that opinion and from the language of the statute that that is, that yes, it does have to be all supervisory and managerial personnel, not just in gross. [00:05:52] Speaker 02: And I think it's an issue that can also be considered on the district court on remand as to which supervisory personnel, as to how the supervisory differential has actually played out. [00:06:03] Speaker 01: I had a question, Ms. [00:06:04] Speaker 01: Graber, about one of the other issues about whether the association was unlawfully denied participation in setting the pay for the postmasters. [00:06:16] Speaker 01: And I guess in part, this is a question that I think part of which also applies to the headquarters and area employees. [00:06:27] Speaker 01: If the postal service has not presented a pay plan that covers [00:06:33] Speaker 01: the Postmasters, does NAPCS have any dog in that fight? [00:06:41] Speaker 01: I mean, they just haven't presented a plan, have they? [00:06:46] Speaker 02: Your Honor, whether or not the Postal Service has presented a plan is not a fact flood in the complaint, but the consultation rights apply more broadly than just to individual pay plans. [00:06:57] Speaker 02: I can represent that the Postal Service did present a plan for the Postmasters. [00:07:02] Speaker 02: And we would be able to add that to our complaint if necessary on remand. [00:07:06] Speaker 02: But if you look at the statute, Section 1004C requires monthly consultations to implement the provisions of the statute. [00:07:14] Speaker 02: And furthermore, consultation is required to implement the, for the implementation of any given pay plan, not just for the negotiation of the play plan. [00:07:24] Speaker 01: So I had a question about this statutory provision, the Section 1004B, which the Postal Service argues, I gather, [00:07:36] Speaker 01: Mr. Janet can correct me if I'm wrong, but I gather that they're saying at least it's susceptible of being read to to set up three mutually exclusive categories. [00:07:48] Speaker 01: Your argument is no, I take it that you view them as the as nested categories. [00:07:54] Speaker 01: There's a supervisory organization that represents a majority of supervisors. [00:07:59] Speaker 01: or an organization other than an organization representing supervisors that represents at least 20% of postmasters, or a managerial organization other than a supervisor or postmaster organization representing a substantial percentage of managerial employees. [00:08:13] Speaker 01: When I read that, I actually don't see it as setting up three mutually exclusive categories. [00:08:19] Speaker 01: I see it as setting up nested categories, but my question is, [00:08:23] Speaker 01: why it's really hard to imagine what this is about in the real world and why it would be written this way, that I take it to be saying postmasters can be part of a supervisory organization, managerial employees can be part of a supervisory organization, [00:08:46] Speaker 01: If the if it's a standalone post masters organization, the representation only triggers, if it's at least 20% is it why would they have these different participation thresholds and why would they contemplate organizations that have. [00:09:04] Speaker 01: amalgams of different types of employees to some extent, but then not in other ways. [00:09:12] Speaker 01: Just having a hard time understanding it. [00:09:15] Speaker 02: I do want to answer a question. [00:09:16] Speaker 02: I'm also mindful of my time. [00:09:18] Speaker 01: And I will give you more time as needed as long as the panel has questions. [00:09:22] Speaker 01: We'll give you additional time. [00:09:24] Speaker 02: OK, thank you, Your Honor. [00:09:25] Speaker 02: So some of the reason I think for the strangeness of the structure of the statute is you've identified [00:09:31] Speaker 02: is that the way the postmaster's organizations were sort of shoehorned into the statute in 2003 was somewhat peculiar. [00:09:40] Speaker 02: But we agree with Your Honor that the nested structure is the reading of the statute that conforms to the statutory text. [00:09:49] Speaker 02: And what it does is that it gives all supervisory and managerial employees the rights to join together [00:09:56] Speaker 02: in one umbrella organization if they choose, and if they don't, then they can form more group-specific organizations as you've identified. [00:10:07] Speaker 02: The fact of the matter is that there has never been a managerial organization. [00:10:12] Speaker 02: Employees have been satisfied with the representation that they've chosen through the National Association for Postal Supervisors and through the Postmasters organization, and that is permitted through the statutory structure that you've identified. [00:10:27] Speaker 02: What is very clear from that statutory structure is that there is no distinction made between employees who are headquarters and area employees and employees who operate in field positions. [00:10:40] Speaker 02: That's a distinction that the Postal Service has just read into the statute. [00:10:44] Speaker 02: And the Postal Service's position here is a fairly extreme one. [00:10:48] Speaker 02: What it's asking the court to do is give it the unreviewable total discretion [00:10:53] Speaker 02: to decide which employees can choose to be represented by NAPs and which cannot. [00:10:59] Speaker 02: And in doing so, it would give itself the power to not only deny NAPs arbitrarily, deny employees arbitrarily the right to be represented by the organization of their choice, but also really to destroy the supervisor's organization. [00:11:14] Speaker 02: And I want to emphasize that this is not a hypothetical. [00:11:17] Speaker 02: After briefing here was completed, [00:11:21] Speaker 02: The Postal Service announced a reorganization in which it realigned thousands of supervisory and managerial personnel who were in field positions into headquarters positions and then initially took the position that NAPCS could no longer represent those employees. [00:11:37] Speaker 02: What it is really saying here is that it has the power to totally destroy the supervisor's organization. [00:11:43] Speaker 02: And in doing so, it could totally eviscerate the entire statutory scheme. [00:11:48] Speaker 02: And that cannot be the law. [00:11:50] Speaker 03: I see that I have a series of questions, I guess, about related to this point. [00:11:59] Speaker 03: The statute doesn't define managerial employees, right? [00:12:04] Speaker 02: Correct, Your Honor. [00:12:05] Speaker 03: So how do we know what the difference is between a supervisor and a managerial employee? [00:12:13] Speaker 02: As Judge Pillard identified, for the purposes of the question before the court, it doesn't actually matter because NAPCS does have the power to represent all supervisory and managerial employees as the umbrella organization. [00:12:28] Speaker 02: So the distinction for our purposes today is one without a difference. [00:12:34] Speaker 03: Well, I guess what I'm trying to get at is [00:12:38] Speaker 03: The statute speaks in terms of in its definitions under 1004 I-2. [00:12:51] Speaker 03: It says members of the supervisor's organization means employees [00:13:04] Speaker 03: of the postal service who are recognized under an agreement between the postal service and the supervisor's organization as represented by such organization. [00:13:17] Speaker 03: I never saw in your complaint an allegation of who the postal service has agreed can be that your organization, your client can represent. [00:13:34] Speaker 03: I saw an allegation that the Postal Service said that they believed that you could not represent postmasters, but there's no allegation as to exactly who the Postal Service has agreed you could represent. [00:13:52] Speaker 03: Did I miss that? [00:13:54] Speaker 02: No, Your Honor. [00:13:55] Speaker 02: There has not been a present agreement between the Postal Service and NAFSA since 1981, when the previous agreement expired. [00:14:04] Speaker 02: But what is true is that under 39 USC 1205, the Postal Service has been deducting the dues of the supervisory and managerial personnel who have chosen to join NAPPS from their paychecks. [00:14:18] Speaker 02: But there is not a present agreement between NAPPS and the Postal Service. [00:14:22] Speaker 02: But if you allow the Postal Service to take the provision that you identified in 104 I2, [00:14:30] Speaker 02: to give it the power to agree to anybody or nobody to be represented by NAPCS. [00:14:36] Speaker 02: It's taking this narrow definitional provision and allowing it to totally override the entire statute. [00:14:43] Speaker 02: And that simply can't be right. [00:14:45] Speaker 02: This court has already found that whether or not the Postal Service has engaged in appropriate consultation is reviewable. [00:14:52] Speaker 02: And to allow the Postal Service a back door out of that consultation process and out of reviewability, [00:14:58] Speaker 02: for avoiding the consultation process is entirely inconsistent with the statutory scheme and with this court's precedent. [00:15:05] Speaker 06: What do you think the I'm sorry, go ahead. [00:15:08] Speaker 03: Go ahead. [00:15:10] Speaker 06: No, I just want to make sure I understand. [00:15:13] Speaker 06: What do you think the issue is? [00:15:14] Speaker 06: I'm trying to make sure I understand your position. [00:15:17] Speaker 06: You're lumping managers and supervisors in one category. [00:15:21] Speaker 06: And what are you saying about a postmaster? [00:15:24] Speaker 06: Are you saying they are managers and supervisors or [00:15:28] Speaker 02: Postmasters are a subset of supervisory and managerial personnel under the statute and therefore can be, can be, choose to be represented by the supervisory organization. [00:15:41] Speaker 01: Just to be nitpicky about that is I understand that they are a subset of managerial and that some of them are a subset of supervisory. [00:15:49] Speaker 01: If you're a postmaster that doesn't have employees that you supervise, I had the impression that that was the case in some places. [00:15:57] Speaker 01: That's correct, your honor. [00:15:59] Speaker 06: And then your claim is there is a separate issue with respect to the headquarters and area employees is a different issue. [00:16:06] Speaker 06: You're saying that the postal service is simply excluding persons who are working in those areas, right? [00:16:13] Speaker 02: Mostly. [00:16:14] Speaker 02: It doesn't take a fully consistent position. [00:16:17] Speaker 02: It actually does. [00:16:18] Speaker 06: So you're saying to the extent that they claim that those persons cannot be covered by the benefits of the statute, they're wrong, wherever it's happened. [00:16:26] Speaker 06: Yes, Your Honor. [00:16:27] Speaker 06: That's not the managerial supervisor postmaster issue. [00:16:32] Speaker 06: They're different issues. [00:16:33] Speaker 02: The issue of the postmasters versus the headquarters and managerial employees are distinct. [00:16:39] Speaker 02: I do want to clarify, I'm sorry, headquarters and area employees. [00:16:43] Speaker 02: I do want to clarify that headquarters and area employees are supervisors and managerial employees under the statute as our postmasters. [00:16:51] Speaker 01: Well, that the employees about which you're concerned are the supervisor or managerial employees at headquarters or in the areas, because there are employees at headquarters presumably who aren't managers or supervisors. [00:17:05] Speaker 02: Presumably there are employees at headquarters who are members of the senior executive service, correct? [00:17:10] Speaker 01: Or who are under collective bargaining agreements. [00:17:12] Speaker 02: Uh, that might be true, your honor. [00:17:14] Speaker 02: I I'm not 100% positive about that, but yes, we are concerned about that's a different issue is all I'm trying to make sure I understand. [00:17:21] Speaker 06: You're saying they are claiming they can exclude anyone who's in a place called headquarters or area because that's where they are. [00:17:30] Speaker 06: No matter what their job is. [00:17:32] Speaker 02: Right. [00:17:32] Speaker 02: Right. [00:17:35] Speaker 03: So just as far as trying to figure out how the statute works, um, [00:17:42] Speaker 03: 1004H talks specifically about postmasters and postmasters organizations. [00:17:52] Speaker 03: And then when I look at 1004B and setting up the kind of three different ways that an organization can be recognized, I see [00:18:10] Speaker 03: that Congress use when they talk about a managerial organization. [00:18:16] Speaker 03: They call it other than an organization representing supervisors or postmasters. [00:18:25] Speaker 03: Congress used an or, not an and. [00:18:29] Speaker 03: So I guess, unlike Judge Pillard, [00:18:33] Speaker 03: My inclination is to see these as three mutually distinct categories and not overlapping ones. [00:18:43] Speaker 03: Given that post-masters organizations seem to have kind of their own set of rules and just, I don't really understand how those clauses in the parentheticals are doing any work. [00:19:02] Speaker 03: unless you view these as three mutually exclusive groups. [00:19:09] Speaker 03: Tell me what's wrong with the way I'm seeing this. [00:19:13] Speaker 02: So under the nested interpretation that we think is the more persuasive or the really only textual interpretation of the statute, those parenthetical clauses are still doing work because they say that the postmaster's organization or the managerial organization [00:19:31] Speaker 02: can form groups that do exclude for the postmasters that exclude supervisors and for the managerial organization that exclude supervisors and postmasters. [00:19:42] Speaker 02: So then that does continue to give those clauses effect while still allowing employees to band together in the largest group available to them, the umbrella organization, which is the supervisory organization. [00:19:57] Speaker 03: Well, suppose, I believe that, well, maybe you do have an argument that that is a plausible reading of the statute, but I believe that the statute is ambiguous if the statutes ambiguous, then how do we. [00:20:13] Speaker 03: exercise non-statutory review when we only do so when the Postal Service is acting ultra-virus. [00:20:22] Speaker 03: And we said in the earlier 1979 case that where something was ambiguous, it falls outside of ultra-virus review. [00:20:36] Speaker 02: So this court in aid association for, so first of all, I have a [00:20:43] Speaker 02: A couple of points I want to make about that. [00:20:45] Speaker 02: First of all, this Court in Aid Association for Lutherans made clear that the scope of review contemplated by the 1979 decision is in all respects consistent with Chevron. [00:20:56] Speaker 02: So even if you did find ambiguity in the statute, the Postal Service's interpretation of the statute must still be within the reasonable range of interpretations that Chevron allows. [00:21:08] Speaker 02: And the Postal Service's decision particularly to exclude headquarters and area employees from being allowed to be represented by NAPs is not within the reasonable range of interpretations because it just it reads something into the statute that simply isn't there. [00:21:24] Speaker 02: Furthermore, if you were to find the statute ambiguous in this way and allow the Postal Service to create these three very distinct organizations, then [00:21:33] Speaker 02: the postal managers would have no representation because there is no managerial organization and there never has been one as far as I'm aware. [00:21:43] Speaker 03: That's not a problem with the statute. [00:21:45] Speaker 03: That's just a problem with those employees needing to form an organization and they can go out and do so. [00:21:53] Speaker 02: But I do think that it sort of [00:21:56] Speaker 02: cast some skepticism on the Postal Service's position that Congress would have wanted there to be three separate organizations because it perceived there to be some inherent conflict between these groups. [00:22:07] Speaker 02: That's not how the statute or the Postal Service has been put in operation for the last 50 years. [00:22:13] Speaker 01: Is there a conflict between the groups? [00:22:16] Speaker 01: I mean, what about the potential for conflict between managerial employees and their supervisors, for example? [00:22:25] Speaker 02: That's not an issue that has any factual support behind it that the Postal Service has been able to identify. [00:22:32] Speaker 02: It's something that perhaps could be explored on remand if necessary. [00:22:36] Speaker 02: But the Postal Service can't simply assert it and declare that it must be true, particularly when the managers have been a part of NAPPS for such a long time. [00:22:45] Speaker 01: All right. [00:22:46] Speaker 01: Do my colleagues have any further questions? [00:22:49] Speaker 03: I guess my final question is I'm trying to get an understanding [00:22:54] Speaker 03: Is there anything in your complaint or in the record that we can recognize that indicates that the Postal Service has acknowledged that NAPCS can represent managerial employees? [00:23:24] Speaker 02: concession by the Postal Service that NAPCS can represent some of the headquarters and area employees. [00:23:31] Speaker 02: Whether or not the Postal Service considers those employees to be managerial employees, I think the complaint is not clear. [00:23:39] Speaker 02: So I think that's the best answer I can give to your question given the posture of the case. [00:23:46] Speaker 01: All right. [00:23:46] Speaker 01: Thank you, Ms. [00:23:47] Speaker 01: Graber. [00:23:47] Speaker 01: We'll give you a limited time for rebuttal. [00:23:50] Speaker 01: And in the meantime, we'll hear from Mr. Janda for the Postal Service. [00:23:55] Speaker 07: Thank you, Your Honor, and may it please the Court. [00:23:57] Speaker 07: Good morning. [00:23:58] Speaker 07: Sean Janda for the United States Postal Service. [00:24:00] Speaker 07: I'd like to start, if I can, by just taking a step back for a moment. [00:24:04] Speaker 07: I think it's important to understand the context here, which is that when Congress created the Postal Service as an independent agency in 1970, it decided that the provisions of the APA generally should not apply to the Postal Service's decision-making. [00:24:18] Speaker 07: And that was a decision that is consistent with Congress's broader determinations that the Postal Service has to have the freedom to control its costs and to manage itself efficiently. [00:24:28] Speaker 07: And that the Postal Service and not the courts and certainly not the plaintiffs here are in the best position to weigh the many competing factors that are required for the Postal Service to try to achieve its many conflicting statutory goals of [00:24:44] Speaker 07: providing high quality and effective service, of controlling costs, of doing all of that while charging reasonable and just rates, and managing... Sorry, go ahead, Your Honor. [00:24:55] Speaker 01: I'm sorry, I didn't mean to interrupt you. [00:24:56] Speaker 01: Go ahead and finish your sentence. [00:24:58] Speaker 07: And just that that's sort of a multi-dimensional balancing act that the Postal Service, Congress has recognized, is in the best position to achieve. [00:25:07] Speaker 01: So we have recognized some nonsensical review of postal service under this provision. [00:25:14] Speaker 01: And the district court suggested that it wasn't available here because the association had an option to request a second non-binding fact-finding panel. [00:25:28] Speaker 01: But you're not pressing that point on appeal. [00:25:32] Speaker 07: We are not. [00:25:33] Speaker 07: So with respect to the pay package claims, which I think is what that mostly goes to our claim is twofold argument is twofold. [00:25:42] Speaker 07: One is that these provisions that naturalize on simply aren't limitations on the Postal Service's statutory authority. [00:25:50] Speaker 07: And so any claim under those provisions would not be cognizable in non-statutory review. [00:25:54] Speaker 07: And then second is that at the absolute most, and maybe this is what the 1979 NAPS decision recognizes, those provisions may require the Postal Service to consider those goals in good faith. [00:26:09] Speaker 07: And here the complaint makes clear that the Postal Service considered the goals in good faith. [00:26:13] Speaker 07: There's an explicit supervisory differential adjustment in the challenged pay package of 5%, [00:26:19] Speaker 07: And the comparability requirement, I think the complaint recognizes, you know, not only does the Postal Service evaluate that internally, but in this case, the Postal Service hired an outside expert to conduct a survey to look at the comparability provision. [00:26:35] Speaker 07: And that's sort of above and beyond, I think, what this court and the Supreme Court has said that agencies have to do even when faced with the prospect of APA review. [00:26:43] Speaker 07: And certainly suffices for the sort of low bar good faith consideration of the requirement that is all that NAPCS can get review of in this case. [00:26:56] Speaker 01: You are certain your brief that that the association didn't allege that the Postal Service failed to fulfill any of its obligations with respect to consultation and fact finding but as I read their complaint they are alleging that and that at a minimum there as you say there's this this sort of procedural requirement that the Postal Service at least. [00:27:16] Speaker 01: considering good faith, the views of NAPs, and they do allege, and as I see in paragraphs 53 and 54, page 17 of the appendix, that there was a failure in that regard. [00:27:29] Speaker 01: And what's your response to that? [00:27:32] Speaker 07: So although NAPCS does make those allegations in the complaint, there's not plausible facts in the complaint that could support those allegations. [00:27:40] Speaker 07: And so with respect to the comparability requirement, the survey itself is more than enough to satisfy the requirement to consider comparability in good faith. [00:27:49] Speaker 07: And even beyond that, the Postal Service has an in-house compensation and benefits department that tracks and evaluates the comparability requirement in those trends [00:27:59] Speaker 07: And I don't think there's any sort of plausible facts to suggest that the Postal Service didn't consider that either when issuing the pay package or when going through the consultation and administrative mediation process. [00:28:11] Speaker 07: And to the extent that Knapp's argument is that a bare allegation of failure to consider is enough to survive a motion to dismiss in this context and to get into sort of evaluating the administrative record and doing whatever the next steps that they think would be appropriate in this litigation are, that just underscores how much Knapp's view of how this non-statutory review process ought to go would undermine Congress's determination that [00:28:39] Speaker 07: judicial review generally isn't appropriate. [00:28:42] Speaker 01: But let me just ask, I mean, I don't think this is a separate count, but the association alleges that the Postal Service has broadly failed to engage with NAPCS and failed to provide information required by the statute. [00:28:57] Speaker 01: They haven't furnished details of their decision to implement their pay programs. [00:29:03] Speaker 01: They haven't provided information on which they're based, but perhaps more [00:29:10] Speaker 01: sort of significantly from their perspective that when the Postal Service has rejected their recommendations, the Postal Service has an obligation to provide reasons to NAPs. [00:29:22] Speaker 01: And my understanding is that you don't dispute that that hasn't taken place to provide an explanation to the association if it rejects any recommendations. [00:29:34] Speaker 01: Am I wrong? [00:29:35] Speaker 01: Or do you think the recommendations are illegitimate because they purport to represent members they can't represent? [00:29:41] Speaker 01: Or what's your view of why those explanation obligations have been met? [00:29:51] Speaker 07: So I think initially that's not an issue presented in this appeal. [00:29:57] Speaker 07: NAPS hasn't briefed that issue, hasn't pressed any argument in this appeal on that issue. [00:30:03] Speaker 07: That being said, to the extent that the Postal Service is required to provide reasons, I can tell you it's not alleged in the complaint, but the Postal Service, when it issued the final pay package, provided, I think, an eight-page letter that goes through the fact-finding panel's recommendations, explains which ones is accepting, which ones is rejecting, [00:30:21] Speaker 07: and provides written reasons for each of those. [00:30:24] Speaker 07: And so, again, it's not alleged in the complaint, but the Postal Service did provide that written sort of decision explaining what it was and wasn't accepting from the fact-finding panel. [00:30:37] Speaker 07: And so, to the extent that is a statutory requirement, the Postal Service certainly fulfilled it in this case. [00:30:44] Speaker 03: Is that letter before us? [00:30:48] Speaker 03: Can we consider it as was it incorporated into the complaint? [00:30:52] Speaker 07: So your honor, our argument might well be that had NAPCS press that claim or press that argument that the letter is appropriately incorporated into the complaint and could be considered on a motion to dismiss. [00:31:06] Speaker 07: We haven't put it in the record. [00:31:08] Speaker 07: It wasn't in the record in the district court. [00:31:09] Speaker 07: It's not in the record before this court because NAPCS hasn't pressed that as an independent claim. [00:31:14] Speaker 03: I intended to ask the Palance Council that and I forgot, but I don't see a separate count in the complaint saying that the Postal Service violated the statute by giving an inadequate explanation. [00:31:31] Speaker 03: And I also didn't see any requested relief in the complaint of requesting a remand for [00:31:40] Speaker 03: or anything relating to requiring the postal service to provide more robust explanation or rejecting the recommendations. [00:31:53] Speaker 03: So that's why you're saying that the issue isn't before us. [00:31:57] Speaker 07: That's correct, Your Honor. [00:31:59] Speaker 07: I think neither in complaint nor certainly pressed in NAPCS brief in this appeal. [00:32:06] Speaker 07: And so even if there are portions of the complaint that gesture in that direction, it certainly hasn't coalesced into an argument for relief. [00:32:16] Speaker 06: My understanding is fairly straightforward that the obligation with respect to pay differential [00:32:21] Speaker 06: is as to supervisors and the employees they supervise. [00:32:25] Speaker 06: And you haven't satisfied that. [00:32:26] Speaker 06: You haven't shown that you satisfied that requirement. [00:32:29] Speaker 06: Maybe in some cases you have and other cases you clearly have not. [00:32:32] Speaker 06: And so there's certainly remand there. [00:32:34] Speaker 06: Am I wrong? [00:32:38] Speaker 06: If that is my interpretation of the statute, then it has to go back on that, right? [00:32:46] Speaker 07: So I cannot tell you that every supervisor earns more in base pay than every employee they supervise. [00:32:51] Speaker 07: And if that's your interpretation of the statute, then this ought to go back. [00:32:55] Speaker 06: But that's... It really is not as onerous as you're suggesting, unless the Postal Service is more screwy than I would have imagined, because most employers put supervisors in categories as to their employees. [00:33:07] Speaker 06: So you're not talking about Joe Blow and the two people he supervises. [00:33:11] Speaker 06: That's not what the inquiry would be. [00:33:14] Speaker 06: it would be whether certain groups of supervisors are making more than the groups of employees that they're supervising. [00:33:22] Speaker 06: It's not an onerous requirement. [00:33:25] Speaker 06: You either did it or you didn't. [00:33:26] Speaker 06: My understanding of the record, just so you can know what my concerns are, is that you certainly have not shown that. [00:33:35] Speaker 06: It may be the case in some instances, but you have not satisfied that requirement, if I am right, that that is the requirement. [00:33:41] Speaker 06: So that's one thing, right? [00:33:43] Speaker 07: So I think that depends on exactly how your under understands the requirement. [00:33:47] Speaker 07: So what the Post Service did in this case, and what it's done, my understanding is for a long time, is it chunked up supervisors into different groups. [00:33:55] Speaker 07: And for each group picked a benchmark supervisee employee, generally the most populous supervisee employee, and then added the supervisor differential to that employee's base salary to create the minimum salary for the supervisor. [00:34:10] Speaker 07: And there may be some supervisees in particular circumstances who earn more in base pay for whatever reason than their supervisor. [00:34:19] Speaker 07: But I think the NAPCS's argument is that that's not okay that every supervisee must make less than his supervisor. [00:34:28] Speaker 01: And that's- It does seem like if the statute says that employees [00:34:35] Speaker 01: there should be a differential between supervisory employees and the employees they supervise, that the methodology that you describe is fine up until the choice of some median or plurality of the supervisees. [00:34:52] Speaker 01: Why wouldn't the necessary benchmark be the highest paid of the supervisees? [00:34:56] Speaker 01: Since the point is there has to be a pay differential between the supervisory employees and the employees they supervise. [00:35:03] Speaker 07: So the, I think 1004A is the Robin Sashore provision, Your Honor. [00:35:08] Speaker 07: And all that says is that, I mean, number one, it's a policy goal, which is what you're trying to make clear. [00:35:14] Speaker 07: But beyond that, all it says is that it should be the policy of the Postal Service to provide adequate and reasonable differentials in rates of pay between employees in the clerk and carrier grades and supervisory and other managerial personnel. [00:35:26] Speaker 07: And so the statute speaks in gross terms between the two categories. [00:35:31] Speaker 07: The Postal Service, in this case, it broke it down even further by looking at, I think, four different groups. [00:35:38] Speaker 07: That's my understanding. [00:35:39] Speaker 07: I don't want to say that's definitely correct, but by a number of different groups of supervisors and sort of their supervisees. [00:35:47] Speaker 07: And that, I think, is more than enough to satisfy the statutory requirement. [00:35:52] Speaker 06: Well, that policy argument, you're not really pushing that, are you? [00:35:54] Speaker 06: There's another part of the statute that makes it clear. [00:35:56] Speaker 06: It says, shall. [00:35:58] Speaker 07: Actually, go ahead. [00:36:01] Speaker 07: I'm sorry. [00:36:01] Speaker 07: I don't think that's correct, Your Honor. [00:36:03] Speaker 07: So I'm not sure if you're looking at, I'm not sure which part of the statute you're looking at. [00:36:08] Speaker 07: 39 USC 1001C says the poster shall achieve and maintain compensation that's comparable to compensation. [00:36:19] Speaker 07: Again, it is a policy goal. [00:36:21] Speaker 05: It doesn't have a policy. [00:36:26] Speaker 07: So that mandatory language. [00:36:29] Speaker 07: So the title of section 101 is postal policy. [00:36:33] Speaker 07: And I think it's obvious from the context. [00:36:35] Speaker 06: And it says what postal policy will be the postal service shall achieve and maintain comparable compensation, etc. [00:36:44] Speaker 06: doesn't say the Postal Service will strive to reach a policy of, it says they shall. [00:36:51] Speaker 07: I think in the context of Section 101, if you look at it, it's, I believe, seven different sort of broad policy goals that the service should operate as a basic and fundamental service, that the Postal Service shall provide a maximum degree of effective and regular postal service to rural areas. [00:37:09] Speaker 07: And I think in that context, it is clear that these are broad goals that the Postal Service is required. [00:37:16] Speaker 06: Is that the way we initially construed the statute to say, you know, do your best? [00:37:20] Speaker 06: I didn't think that was our initial interpretation of the statute many years ago. [00:37:25] Speaker 07: So I think this court's interpretation of the statute is that the Postal Service has to give good faith consideration to these goals and has to arrive at a result that thinks in good faith appropriately balances the goals. [00:37:41] Speaker 07: And again, here, I don't think there's any question that the Postal Service did that. [00:37:44] Speaker 07: There's an explicit supervisory differential adjustment in the package. [00:37:48] Speaker 07: And on the comparability piece, the Postal Service went so far as to hire an outside expert to look at comparability of pay between the Postal Service and the private sector. [00:37:57] Speaker 06: But it could. [00:37:58] Speaker 06: I mean, I think their allegation on comparability is the and I thought our court had spoken to that as well. [00:38:05] Speaker 06: There is an obligation to attend to this. [00:38:08] Speaker 06: And I thought the their claim is, which is not frivolous, that it was bogus. [00:38:15] Speaker 06: There wasn't any serious effort. [00:38:18] Speaker 06: to look at the private sector and reach comparability determinations, we've certainly said there is such an obligation under the statute. [00:38:25] Speaker 06: You're right, where you end up if you've done it in good faith, you certainly have a whole lot of room to run, but you certainly don't have a whole lot of room to just do it willy-nilly and be subject to a claim that you didn't do this seriously. [00:38:40] Speaker 06: You haven't seriously looked at the private sector to make the determination the statute requires. [00:38:47] Speaker 07: So I have two responses to that, Your Honor. [00:38:49] Speaker 07: The first is that I think there's just no question in this case that the Postal Service looked at these obligations in good faith. [00:38:57] Speaker 07: I mean, they hired an outside expert on comparability to evaluate, to do an independent study to evaluate the comparability of the eight, my understanding is, most populous NAPCS-represented positions. [00:39:10] Speaker 07: And that goes well above and beyond what this court or the Supreme Court has held as required, even under APA review. [00:39:18] Speaker 07: And so that, I think, absolutely satisfies whatever good faith requirement there is. [00:39:23] Speaker 07: And to the extent that even in light of that study or in light of the explicit supervisory differential adjustment, NAPCS's conclusory allegations that the Postal Service didn't do it in good faith [00:39:34] Speaker 07: could be enough to get them over emotion to dismiss that just undermines Congress's judgment, which I think this court. [00:39:40] Speaker 07: articulated very, very clearly in the 1979 apps case that this isn't something that is generally subject to judicial review. [00:39:49] Speaker 01: So, yeah, I appreciate the, you know that there was some effort made and allegations before us are that the assessment was very very partial because they looked at eight of approximately 1000 positions. [00:40:03] Speaker 01: And I take it your pushback on that as well they were eight significant positions for purposes of naps. [00:40:08] Speaker 01: But the other thing they claim is that the Postal Service substantively just does not meet this requirement because they're not giving annual raises. [00:40:17] Speaker 01: So they're just in a really structural and persistent way tying into a approach to pay that just is not comparable. [00:40:30] Speaker 01: And that the statute requires that the Postal Service shall achieve and maintain [00:40:36] Speaker 01: compensation that's comparable to the rates and types of compensation paid in the private sector. [00:40:43] Speaker 01: So how is it comparable and how can it be maintained as comparable if there's not even, you know, increases, periodic increases that are standard in the private sector? [00:41:01] Speaker 07: I think, again, sort of quibbling around the edges of the specific portions of how pay is calculated and whether that's bonuses, whether it's annual raises, whether it's locality pay, none of that is in the statute. [00:41:16] Speaker 07: The statute doesn't require any specific parity between the postal service and the private sector. [00:41:21] Speaker 07: And it doesn't require any sort of particular features of the pay package to achieve that goal. [00:41:28] Speaker 07: And so to the extent of the postal service, [00:41:30] Speaker 07: sort of evaluate a comparability and made a good faith determination, which is clear from the record they did in this case, that the package that they were issuing was a good faith effort to satisfy the comparability requirement. [00:41:44] Speaker 01: When you refer to good faith, and I don't have any reason to question and, you know, as a subjective matter, any good faith on the part of the Postal Service, but they didn't need to say you need cost of living increases, you need, you know, [00:41:59] Speaker 01: regional adjustments for where it's really expensive to live or because they use a shorthand comparable to the private sector. [00:42:08] Speaker 01: So why doesn't, if there's no explanation of, oh, we do that in this different way in our pay structure, then how can the association employees, members be confident that it actually was even sought to be comparable? [00:42:30] Speaker 07: So I think there is, of course, an extensive consultation and administrative mediation process that the party is engaged in in this case. [00:42:41] Speaker 07: And that's the process where the Postal Service can provide reasons to NAPPS. [00:42:45] Speaker 07: It did provide reasons to NAPPS in this case. [00:42:48] Speaker 01: But even the fact finders there thought that the Postal Service had not fulfilled its obligations. [00:42:52] Speaker 01: I'm not sure that that supports you. [00:42:55] Speaker 07: So that was the finding of the mediation panel, but the Postal Service, even after that finding, provided a letter to NAPCS explaining how it had considered the requirement and why it believed it met the requirement. [00:43:06] Speaker 07: And I think, again, this all goes back to the fact that Congress has determined that the Postal Service is in the best position to weigh these competing factors. [00:43:14] Speaker 01: Right, if it's weighing them at all and giving an explanation. [00:43:18] Speaker 01: I know we've kept you up here a long time. [00:43:20] Speaker 01: I had really wanted to hear your view, though, [00:43:24] Speaker 01: The categories that the association claims were just completely categorically overlooked. [00:43:33] Speaker 01: What is the position of the Postal Service on the headquarters and area employees being excluded from the pay package? [00:43:41] Speaker 01: And what is the position on the statute that allows postmasters to be represented by a supervisor organization? [00:43:51] Speaker 07: Yes, Your Honor. [00:43:52] Speaker 07: So starting with the headquarters and area employees, the Postal Service's view is that most headquarters and area employees are not eligible for representation by NAPs as they're non-supervisors. [00:44:02] Speaker 07: That being said, even the complaint recognizes that the Postal Service has recognized that some area and headquarters employees are supervisors, are eligible for representation, and has excluded those employees from the 2016-19 area and headquarters pay package. [00:44:18] Speaker 07: And my understanding is included those employees in the recently issued pay package that was developed after consultation with naps and so that posters isn't drawing any absolute distinction between area and headquarters employees and field employees in terms of eligibility for representation. [00:44:35] Speaker 07: And again, I think it's under non-statutory review. [00:44:38] Speaker 07: It's NAPPS' burden to show that the Postal Service has plainly violated the statute. [00:44:43] Speaker 07: And there's just nothing in the complaint that explains which employees NAPPS thinks have been improperly excluded from representation. [00:44:52] Speaker 01: I thought it was pretty clear. [00:44:54] Speaker 01: I thought it was pretty clear. [00:44:55] Speaker 01: Supervisory Postmaster Managerial Employees. [00:44:59] Speaker 01: And as you just said, the Postal Service excluded them from the past pay package to the extent that they were area or headquarters employees, even if they were or maybe because they were represented by NAPs. [00:45:19] Speaker 01: So there's like a carve out there saying we are generally looking at [00:45:24] Speaker 01: area and headquarters employees, but if you happen to be NAPS represented, we're not going to include you. [00:45:31] Speaker 01: Is that right? [00:45:32] Speaker 01: And I'm trying to make sense of that. [00:45:35] Speaker 07: So my understanding, Your Honor, is that there are two separate pay packages. [00:45:38] Speaker 07: So one is for area and headquarters employees that carves out those employees who are represented by NAPs. [00:45:44] Speaker 07: And the other is for field employees and those area and headquarters employees who the Postal Service recognizes as represented by NAPs. [00:45:50] Speaker 07: So those are the two pay packages. [00:45:52] Speaker 07: And NAPs is consulted on the pay package for field employees and for area and headquarters employees who are represented by NAPs. [00:45:58] Speaker 07: And so the distinction that the Post Service is drawing is between NAPs represented employees and non-NAPs represented employees or employees that the Post Service doesn't think are validly represented by NAPs. [00:46:10] Speaker 07: And I think you can look through the complaint. [00:46:12] Speaker 07: There's just nothing in the complaint that says here are the... So run that by me. [00:46:15] Speaker 01: I'm sorry. [00:46:16] Speaker 01: Run that by me again. [00:46:17] Speaker 01: So there are two pay packages. [00:46:19] Speaker 01: One is area and headquarters employees and the other is field employees. [00:46:24] Speaker 01: And those pay packages generally include supervisory and non-supervisory employees, generally, but they exclude supervisory managerial employees represented by NAPs? [00:46:36] Speaker 07: No, you're all right. [00:46:37] Speaker 07: I'm sorry. [00:46:37] Speaker 07: That is what I said. [00:46:39] Speaker 07: So my understanding is there are two pay packages. [00:46:41] Speaker 07: One is area and headquarters, executive and administrative service employees, but not those that the postal service recognizes as represented by NAPs, just the other ones. [00:46:52] Speaker 01: And when you say EAS, that means typically supervisor managerial. [00:46:58] Speaker 07: I think not necessarily, Your Honor. [00:47:00] Speaker 07: There are. [00:47:01] Speaker 01: But a bunch of them are. [00:47:03] Speaker 07: Some of them are, yes. [00:47:04] Speaker 01: OK. [00:47:06] Speaker 07: My understanding is many fewer in headquarters. [00:47:09] Speaker 07: There are many more, whether it's sort of SES or whether it's professional or administrative employees rather than supervisors and managers. [00:47:17] Speaker 07: And then the other pay package, and this is the one that was issued, sorry, the challenged one, and then also the one that was recently issued that we filed a letter about, that pay package covers all field EAS employees and the headquarters and area EAS employees who the Postal Service believes are validly represented by NAPCS. [00:47:37] Speaker 07: And NAPCS has been consulted on that package. [00:47:40] Speaker 07: I don't think there's any question about that. [00:47:41] Speaker 01: And so the second package, just so I have it right, is the field employees and the area and headquarters employees that NAPCS represents? [00:47:51] Speaker 07: That is correct. [00:47:52] Speaker 07: That is my understanding. [00:47:54] Speaker 07: And I think at the end of the day, the fundamental point is that just looking at the face of the complaint, NAPCS concedes that the Postal Service has excluded from the unconsulted package those employees who the Postal Service believes are represented by NAPCS. [00:48:11] Speaker 07: And there's just no factual allegations in the complaint that could support the notion [00:48:17] Speaker 07: that the Postal Service has plainly violated the statute in drawing the distinction they drew. [00:48:23] Speaker 01: So it bunches all the NAPS employees, whether they're area and headquarters or field, all the NAPS represented employees into the field package, just as a way of saying everyone we're dealing with with the NAPS is going to be in the field package, even if they're not field employees. [00:48:39] Speaker 07: That is my understanding. [00:48:42] Speaker 06: All right. [00:48:42] Speaker 06: And the problem is we don't know who you're [00:48:45] Speaker 06: I'm listening to you carefully. [00:48:47] Speaker 06: We don't know. [00:48:48] Speaker 06: You say who the postal service determines the union represents. [00:48:55] Speaker 06: But in that answer, I think what you're saying is you're making some determinations with regard to certain supervisors and managerial employees that you will not recognize or you say the union cannot represent. [00:49:10] Speaker 06: It's totally unclear. [00:49:12] Speaker 06: Are you conceding now? [00:49:14] Speaker 06: Let me see if I can clear it up this way. [00:49:15] Speaker 06: Are you conceding that the union can represent [00:49:19] Speaker 06: supervisory and managerial employees in these offices in headquarters and area offices. [00:49:25] Speaker 06: There's no doubt in your mind they can. [00:49:27] Speaker 06: They represent them. [00:49:28] Speaker 06: You have to consult with them. [00:49:29] Speaker 06: You agree? [00:49:31] Speaker 07: Uh, so you're the my understanding is take my question. [00:49:35] Speaker 06: I want you to answer my question. [00:49:36] Speaker 06: Are you conceding to the court that yes, the union can represent managerial and supervisory employees in any area and headquarter [00:49:48] Speaker 06: situation. [00:49:51] Speaker 06: We are not objecting to that and we have an obligation to consult with them if they do represent those employees. [00:49:57] Speaker 06: We cannot exclude from representation employees who are supervisors or managers merely because they are in area and headquarter positions, right? [00:50:08] Speaker 06: Yes or no? [00:50:09] Speaker 06: Are you conceding that or not? [00:50:12] Speaker 07: So I think there were two different questions there. [00:50:14] Speaker 06: No, no, there's not. [00:50:15] Speaker 06: There really is not. [00:50:17] Speaker 06: I'm going to try and make it one question because I really am curious what your answer is. [00:50:22] Speaker 06: Are you conceding that the union may represent supervisors and managers in area and headquarters positions and that the postal service has an obligation to consult with the union with respect to those employees? [00:50:40] Speaker 07: Our understanding of the statute is that employees may not be excluded from valid representation merely because they are headquarters or area employees. [00:50:49] Speaker 06: Do you concede that area that supervisors and managers in headquarters and areas of positions can be represented by the union and you have an obligation to consult with the union with respect to those employees? [00:51:07] Speaker 06: Do you concede that or not? [00:51:09] Speaker 07: I don't think I can broadly concede that, Your Honor. [00:51:12] Speaker 07: I can see that because I think supervisory and managerial employees is a very broad category. [00:51:20] Speaker 07: I think it's not necessarily clear from the statute that NAPCS is even entitled to represent managerial employees as distinct from supervisory employees. [00:51:28] Speaker 07: And my understanding is that the Postal Service has recognized a list of positions of headquarters and area employees who NAPCS validly represents. [00:51:38] Speaker 07: has excluded those. [00:51:39] Speaker 06: I mean, that's self-serving with validly represents. [00:51:42] Speaker 06: That's the whole point. [00:51:45] Speaker 06: Everywhere else, if they're supervisors and managers, they're not in headquarters, they're not in area, you're conceding, you're not doubting that the union may represent those employees and that you must consult with respect to them, right? [00:51:59] Speaker 06: Everywhere else, if you're a supervisor or a manager, the union can represent those employees and you must consult, right? [00:52:06] Speaker 07: I do not know that that is correct, Your Honor. [00:52:08] Speaker 01: But my understanding- So just to focus it, I think, on your resisting managerial, and I think that gets back to the three different categories and whether they're mutually exclusive or not. [00:52:16] Speaker 01: So let's just keep it simple and say, supervisory employees that are headquarters and area employees. [00:52:27] Speaker 01: Those are people that NAPCS is entitled to represent. [00:52:33] Speaker 01: and with respect to which the Postal Service therefore has an obligation to inform, discuss, consult. [00:52:43] Speaker 07: Sir, we have not made any argument that supervisory employees at area and headquarters are not validly represented by NAPCS. [00:52:52] Speaker 06: No, could you just... No, no, it would be easier for... Wait, Judge Pillott, answer Bill's question. [00:52:58] Speaker 06: Do you agree with what she just said? [00:53:00] Speaker 06: Yes or no? [00:53:01] Speaker 06: Because then that takes the big issue off the table for me. [00:53:04] Speaker 06: Because if Weber is writing this, that's pretty easy. [00:53:08] Speaker 06: That ends the big question. [00:53:10] Speaker 06: Do we agree or not? [00:53:13] Speaker 07: I don't know that I can broadly agree to that statement. [00:53:16] Speaker 07: What I can say is that there is not a single thing in the complaint that makes out an allegation that there is some group of supervisory employees that are at area or headquarters that are not being consulted or who are not being covered by the consultant pay package. [00:53:30] Speaker 01: I think there is an allegation to that regard. [00:53:33] Speaker 01: They say that the pay package, the 2016-2019 pay package concerned only association members designated as field employees, excluding 7,500 of its members that the postal service treats [00:53:54] Speaker 01: as headquarters or area employees. [00:53:57] Speaker 01: And so they're saying we have a big chunk of membership that, you know, I recognize there's a separate legal position that the Postal Service is taking with respect to managers, but that includes managers and supervisors that we represent that are headquarters and area employees and everything else the Postal Service says. [00:54:18] Speaker 01: And you're not including them. [00:54:20] Speaker 01: and you're not recognizing us. [00:54:23] Speaker 06: I thought the fight was over. [00:54:24] Speaker 06: I thought your position somewhere along the line was that you were trying to distinguish between supervisors and managers on the one hand and professional and technical on the other. [00:54:33] Speaker 06: I thought that was the fight, but maybe I've just completely missed this case. [00:54:39] Speaker 06: That's why I'm trying to get you to either concede or not that the fact that you're a supervisor and manager and you're in an area or headquarters position [00:54:50] Speaker 06: you still can be represented by the union and the Postal Service must consult. [00:54:57] Speaker 07: So I don't think I have the ability to broadly concede that. [00:55:02] Speaker 06: Broadly? [00:55:03] Speaker 06: I don't want you to do it broadly or narrowly. [00:55:05] Speaker 06: I just want you to concede that sentence. [00:55:07] Speaker 06: That's all. [00:55:07] Speaker 07: I do not believe I can concede that. [00:55:09] Speaker 06: And why is that wrong? [00:55:11] Speaker 07: So I think there's two things. [00:55:14] Speaker 07: One is that this court doesn't need to get into that. [00:55:17] Speaker 06: No, no. [00:55:18] Speaker 06: Counsel, please, you know, indulge me. [00:55:20] Speaker 06: Okay? [00:55:21] Speaker 06: Indulge me. [00:55:22] Speaker 06: Forget whether I have the authority to decide something. [00:55:24] Speaker 06: I'm trying to understand the case. [00:55:26] Speaker 06: So I don't want you to tell me what I can and cannot decide. [00:55:29] Speaker 06: Just tell me whether you agree that the union can represent area supervisory and managerial employees and the Postal Service is obliged to consult with respect to those employees if the union does represent them. [00:55:46] Speaker 07: So I agree that the mere fact of being an area or headquarters employee does not exclude someone from valid representation. [00:55:55] Speaker 07: I think the fight in this case is over the exact scope of that valid representation with respect to area and headquarters employees. [00:56:02] Speaker 07: My understanding is that the Postal Service has recognized a set of area and headquarters supervisors as validly represented by NAPCS and has consulted with NAPCS with respect to those employees. [00:56:12] Speaker 01: And there's no- In what context, with respect to what pay package? [00:56:15] Speaker 01: With respect to the field pay package? [00:56:17] Speaker 07: So my understanding, Your Honor, is that those employees were carved out of the 2016-19 Area Headquarters package and were included in the recently issued 2021, sort of, I don't know that it's called the field pay package, but it's the pay package that includes all employees that the Post Service recognizes as represented by NAPCS. [00:56:39] Speaker 01: Okay. [00:56:40] Speaker 01: But before your 28J letter, we had nothing showing that they were included in anything. [00:56:46] Speaker 01: Correct your honor, but but I think the complaint admits they were excluded from right and so your view is is they were excluded and there's no, we'll just, we'll just put these people by the side of the road and then we won't violate our consultation packet consultation obligations because we're just not giving them a package. [00:57:04] Speaker 07: So I don't think that's what NAPCS' claim is getting at. [00:57:08] Speaker 07: I think NAPCS' claim is focused on the issuance of the 2016-19 area and headquarters pay package. [00:57:14] Speaker 07: And my understanding, I mean, if I could just back up for a second. [00:57:16] Speaker 01: And your view is, so your threshold view is they don't have a dog in that fight because that doesn't even cover any of their people. [00:57:22] Speaker 01: It doesn't actually affect the terms and conditions of their employment because even though they may work in headquarters or work in what for other administrative purposes, [00:57:32] Speaker 01: USPS denominates area, they actually are treated for purposes of a pay package as not there. [00:57:40] Speaker 01: And therefore, they don't even have standing to kind of address the headquarters and area package. [00:57:48] Speaker 01: Is that right? [00:57:50] Speaker 07: So I don't think it's an issue of standing, Your Honor. [00:57:53] Speaker 01: I mean, I mean that loosely. [00:57:54] Speaker 01: I mean that they don't have, they're not included. [00:57:57] Speaker 01: And so they're not harmed in your view. [00:58:01] Speaker 07: Yes, sort of. [00:58:02] Speaker 07: So if I could just back up for a second. [00:58:04] Speaker 07: This is my understanding of NAPPS' claim. [00:58:06] Speaker 07: NAPPS says you issued this 2016-19 area and headquarters pay package for area and headquarters employees. [00:58:14] Speaker 07: You excluded from that pay package certain employees that you recognize are validly represented by NAPPS. [00:58:20] Speaker 07: And that is true. [00:58:22] Speaker 07: But I think what NAPCS' claim is, is that they believe they represent additional area and headquarters employees who were not excluded from the pay package and that they ought to have been consulted with respect to those employees. [00:58:35] Speaker 07: And that is how I understand NAPCS' claim. [00:58:37] Speaker 01: And when you say that the additional employees, you're talking about managerial employees and this is because of the tripartite reading under 1004 I2 or something? [00:58:49] Speaker 07: So I don't have the information on sort of the exact employees who were excluded and who were included and who NAPCS believes they represent. [00:58:57] Speaker 07: And I think fundamentally that is a problem with the complaint. [00:59:00] Speaker 07: The complaint doesn't include, it could include a paragraph that says, here are the five job titles of employees at area and headquarters that we think we represent. [00:59:10] Speaker 07: Here are their job duties. [00:59:12] Speaker 07: Here's why we validly represent them. [00:59:14] Speaker 07: And we should have been consulted with respect to them. [00:59:15] Speaker 07: The complaint doesn't do any of that. [00:59:18] Speaker 07: All it says is that we disagree with who you excluded, but that's not enough to plausibly allege a plain violation of the statute because there's just no supporting facts. [00:59:29] Speaker 01: All right, I really also want to hear your view on the provision that requires a postal service to recognize associations of its employees. [00:59:45] Speaker 01: Because as I mentioned, this is 1004B. [00:59:51] Speaker 01: Upon presentation of evidence, the supervisory organization represents a majority of supervisors, [00:59:59] Speaker 01: that an organization represents at least 20% of post-masters or that a managerial organization represents a substantial percentage of managerial employees, such organization shall be entitled to participate directly. [01:00:11] Speaker 01: And then there are these parentheticals that I left out on that reading. [01:00:14] Speaker 01: Supervisory organization represents a majority of supervisors, that an organization other than an organization representing supervisors represents at least 20% of post-masters. [01:00:23] Speaker 01: Implication to me, clear, unmistakable implication of the parenthetical is that [01:00:30] Speaker 01: An organization that represents supervisors could include postmasters because they're basically saying if you're postmasters and you want legitimate representation, if you're on your own, you have to have 20% of postmasters. [01:00:48] Speaker 01: If you're folded in with an organization representing supervisors, that limitation, that threshold does not apply. [01:00:56] Speaker 01: you can just be part of a supervisor organization representing a majority of supervisors and whatever portion of postmasters or managers want to be part of it. [01:01:08] Speaker 01: And so too, on the third clause, a managerial organization, other than an organization representing supervisors or postmasters, which have their own membership thresholds that we've just told you about, [01:01:20] Speaker 01: Managers can be part of an organization and the Postal Service will have to consult with an organization that represents a substantial percentage of managerial employees. [01:01:30] Speaker 01: Why is that not the clear and in fact only way to read the statute? [01:01:33] Speaker 01: Because if what they wanted to say was these three groups can have mutually exclusive organizations and they have to be specific to these job categories and we'll talk to them. [01:01:44] Speaker 01: That would be like way easier to say in a different way. [01:01:47] Speaker 01: The only reason it would be done in this way is if they're nested in the way I mentioned. [01:01:52] Speaker 07: So the statute is certainly not a model of clarity, Your Honor, and we recognize that. [01:01:57] Speaker 07: That being said, we think a couple features of the statute point in the opposite direction, and it's certainly not the case that the only reasonable reading of the statute is that it's nested. [01:02:06] Speaker 07: So there's a couple things. [01:02:07] Speaker 07: So one, as Judge Wilkins sort of pointed [01:02:11] Speaker 07: to earlier is that I think that second parenthetical that says other than an organization representing supervisors or postmasters, which seems to suggest a distinction between an organization representing supervisors and organization representing postmasters. [01:02:24] Speaker 07: And then second and more broadly is that this provision, I think the only reason to enact it the way that Congress enacted it, [01:02:33] Speaker 07: is as recognizing that there are sort of supervisory postmasters and managerial organizations and that the interest of those employees may conflict and the purposes of effective consultation may not be served by allowing the same organization to represent both. [01:02:47] Speaker 01: So it's your position also that the intervener who intervened in your favor, which purports to represent managers is illegitimate as a representative of those managers as well. [01:02:59] Speaker 07: So Your Honor, the statute [01:03:02] Speaker 07: sort of carves out manager organizations as a separate organization. [01:03:04] Speaker 01: My understanding is- Under your reading, under your reading. [01:03:08] Speaker 07: Right, correct. [01:03:09] Speaker 07: My understanding is that, as Ms. [01:03:11] Speaker 07: Graber said, there has not ever been a managerial organization. [01:03:15] Speaker 07: There is not a managerial organization. [01:03:16] Speaker 07: And in recognition of that reality, my understanding is that the Postal Service has been willing to consult with sort of non-managerial organizations with respect to their managerial members. [01:03:27] Speaker 01: Well, there's also never been a separate postmaster's organization. [01:03:30] Speaker 01: There's a postmasters and managers organization, right? [01:03:36] Speaker 01: It's a postmasters and managers organization. [01:03:38] Speaker 01: And there's the National Association of Postal Supervisors, which purports to represent all three tiers to the extent they want to be represented by it. [01:03:46] Speaker 01: So your view is that the postmasters and managers that the postal service actually cannot negotiate with them about the managers because of the way you read 1004B. [01:04:02] Speaker 07: So there's a difference in our view between [01:04:06] Speaker 07: who the Postal Service may consult with an organization about and who an organization is entitled to be consulted about. [01:04:14] Speaker 07: And I think as a practical accommodation, the Postal Service has traditionally been willing to consult with NAPCS or with [01:04:24] Speaker 07: UPMA to the extent that those organizations represent managers or claim managers as members. [01:04:29] Speaker 01: So there it really doesn't matter that there's a conflict of interest between the postmasters and the managerial employees under their purview who help them run the post offices, whereas there is a conflict that would prevent reading of the statute as establishing these organizations as nested. [01:04:49] Speaker 07: I don't think that's necessarily the case, Your Honor. [01:04:52] Speaker 07: I think the Postal Service's view is that, and I don't know what would happen or what the Postal Service's view would be if there were a managerial organization, but rather than cutting off their managerial employees from any consultation whatsoever, the Postal Service has been willing to make an accommodation, even if that accommodation is not one to which NAPS or PMA are entitled by the statute. [01:05:10] Speaker 01: We've really, we've really, I'm sure, [01:05:14] Speaker 01: kept you longer than you anticipated. [01:05:16] Speaker 01: I want to make sure that my... I'd like to ask one question. [01:05:22] Speaker 03: How does the Postal Service say that a managerial employee is defined and can be distinguished between a supervisor? [01:05:36] Speaker 07: So the statute, my understanding is, does not define managerial assisting from supervisors. [01:05:42] Speaker 07: And I think because there is no sort of separate managerial organization, I don't know if the Postal Service has ever had to articulate a clean dividing line beyond sort of the plain text difference between supervisor and manager. [01:05:57] Speaker 07: And so that's just not an issue that I know if the Post Service has a sort of articulated understanding or what that understanding is. [01:06:07] Speaker 03: All right, thank you. [01:06:09] Speaker 01: Thank you, Your Honor. [01:06:10] Speaker 01: Thank you, Ms. [01:06:10] Speaker 01: Kraber. [01:06:12] Speaker 01: I don't believe you have any rebuttal time because we kept you up for more than your allotted time, but we'll give you two minutes for rebuttal. [01:06:20] Speaker 02: Thank you, Your Honor. [01:06:21] Speaker 02: And I'll do my very best to stay within those two minutes. [01:06:23] Speaker 02: There are three main points I want to make sure I hit. [01:06:27] Speaker 02: The first is that the 1979 NAP decision was very clear that it is not just the Postal Service must consider the statutory factors, but that it must fulfill them. [01:06:38] Speaker 02: So it is not enough for the Postal Service to allege, by the way, drawing inferences in its favor from the complaint that it has given good faith consideration. [01:06:47] Speaker 02: The second point I want to hit is regarding pay comparability. [01:06:52] Speaker 02: What NAPCS has alleged is that the Postal Service engaged in a post hoc survey after it had already implemented the 2016 to 2019 or established the 2016 to 2019 pay package. [01:07:04] Speaker 02: It did a post hoc survey of only eight of 1,000 positions. [01:07:08] Speaker 02: And even for those eight positions, that survey could not allow it to fulfill the statutory mandate because 101C and 1003A refer to rates and types of compensation [01:07:21] Speaker 02: and compensation and benefits, telling the Postal Service to look at total compensation. [01:07:27] Speaker 02: And the Postal Service never studied total compensation for any position. [01:07:32] Speaker 02: And the court cannot simply allow the Postal Service to draw inferences in its favor that it must have because it has unplugged internal expertise. [01:07:41] Speaker 02: Third, regarding this issue of the headquarters and area employees, [01:07:46] Speaker 02: We do not share the Postal Service's understanding that any 2016 to 2019 pay package covered the headquarters and area employees represented by NAFTS. [01:07:56] Speaker 02: And under 1004E, the Postal Service was required to issue a pay package and consult with NAFTS during a certain period of time after it issued the pay package for the collective bargaining groups. [01:08:09] Speaker 02: I do want to make sure I point the court to paragraph 57 of our complaint. [01:08:13] Speaker 02: where we allege that the employees represented by NAPCS, that the postal service has refused to recognize, include employees to perform both supervisory and managerial responsibilities. [01:08:25] Speaker 02: Just to wrap up here, the Postal Reorganization Act anticipates and desires all supervisory and managerial employees to have representation, and thousands of postmasters and headquarters and area and other supervisory and managerial employees have chosen NAPCS as their representative [01:08:42] Speaker 02: and we ask this court to allow them to do so. [01:08:45] Speaker 02: Thank you. [01:08:47] Speaker 01: Thank you. [01:08:48] Speaker 01: We'll take the case under advisement. [01:08:49] Speaker 01: Thank you both for your energetic responsiveness to our questions.