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USPS Grilled at DC Circuit Over Postal Supervisor Pay

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USPS Grilled at DC Circuit Over Postal Supervisor Pay
By Khorri Atkinson

Law360 (September 21, 2021, 8:58 PM EDT) -- Two D.C. Circuit judges took the U.S. Postal Service to task Tuesday, saying it had failed to fulfill statutory requirements to provide a differential in pay rates between thousands of supervisors and the employees they supervise and had not set compensation comparable to that provided in the private sector.

U.S. Circuit Judges Harry T. Edwards and Cornelia Pillard asserted this view while hearing oral arguments in the National Association of Postal Supervisors' appeal to revive its lawsuit accusing the agency of underpaying supervisors. A D.C. federal judge had dismissed the case in July 2020, finding that the Postal Reorganization Act, or PRA, which the worker group accused the Postal Service of violating, requires the agency to consult employee representatives about pay scales and other matters but does not allow them to seek judicial review.

U.S. Department of Justice attorney Sean Janda, who argued on behalf of the agency, told a three-judge panel Tuesday that U.S. District Judge Royce Lamberth correctly threw out the dispute because the law the group cited does not authorize complaints to force it into compliance. Moreover, Congress created the independent agency with the determination that the Postal Service must have the freedom to control costs and manage itself, Janda argued.

But Circuit Judge Harry T. Edwards was not convinced by Janda's notion that the statutory provisions at issue in the case are merely "policy goals" that don't limit the Postal Service's authority enforceable through non-statutory or ultra vires review.

The statute says the agency "shall" have a policy that provides adequate and reasonable differentials in rates of pay as well as compensation and benefits comparable to those paid by the private sector, the judge reasoned.

"It makes it clear: Shall," Judge Edwards emphasized, adding that "it's a mandatory language ... for what the Postal Service policy will be."

"It says 'shall,'" the senior judge continued.

Janda maintained that the statute only offers "broad" policy goals that may not be enforceable mandates.

But Judge Edwards said that had not been the D.C. Circuit's interpretation of the statute in other cases.

He further said the group's allegations were not "frivolous" because the agency made "no serious effort to look at the private sector and reach a comparability determination."

"If you've done it in good faith, you'd certainly have a whole lot of room to run," the judge added. "But you certainly [can't] ... do it willy-nilly" and sidestep what the statute mandates.

Judge Pillard, who presided over the case, expressed similar sentiments. The judge noted that the Postal Service does not offer annual raises, unlike the private sector, and she asked how the agency could judge whether its compensation and benefits were comparable to those in the private sector without proper analysis.

"How can it be comparable and be maintained as comparable if there are not even periodic increases that's standard in the private sector?" Judge Pillard asked.

The attorney replied that the statute does not require any specific parity and that the Postal Service issued a reasonable compensation to satisfy the comparability requirement.

But Judge Pillard interjected in part that the Federal Mediation and Conciliation Service, an independent agency that works to resolve federal labor disputes, had examined the matter before the group sued in federal court and found that the Postal Service fell short of its statutory obligation.

The district judge had granted the Postal Service's request to dismiss the complaint and a motion to dismiss filed by the United Postmasters and Managers of America, which intervened in the case and argued that the supervisors association did not speak for postmasters because they are a distinct group of postal workers. The judge said the statute does not contain express private causes of action but offers remedies other than judicial review that the group failed to exhaust.

Abigail A. Graber of Brown Goldstein & Levy LLP, representing the workers group, told the panel Tuesday that her client's claims are reviewable under the PRA and that the Postal Service failed to follow statutory requirements for its pay packages and did not weigh the factors that Congress required it to consider.

The National Association of Postal Supervisors is represented by Abigail A. Graber, Andrew D. Freeman and Jean M. Zachariasiewicz of Brown Goldstein & Levy LLP.

The U.S. Postal Service is represented in-house by Morgan E. Rehrig and Michelle A. Windmueller, and by Mark B. Stern and Sean Janda of the U.S. Department of Justice's Civil Division, Appellate Staff.

The case is National Association of Post v. USPS, case number 20-5280, in the U.S. Court of Appeals for the D.C. Circuit.

--Additional reporting by Jon Steingart. Editing by Peter Rozovsky.

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