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Postal Unions Uneasy as USPS Chief Prepares to Step Down

Oct. 21, 2019, 1:34 PM

The prospect of Postmaster General Megan Brennan’s retirement early next year is alarming some postal union leaders, who are concerned that talk of privatizing the service comes at a time when only one of the four major postal unions has a labor contract in place.

“It kind of caught us by surprise,” said Paul Hogrogian of the announcement that Brennan will step down Jan. 31. Hogrogian is president of the National Postal Mail Handlers Union, which represents about 50,000 mail handlers.

“While I didn’t always agree with the postmaster general, I appreciated the fact that her door was always open. She was able to work with the unions, postal management, the board, and the major mailers” in a productive way, Hogrogian said.

The five current members of the U.S. Postal Service Board of Governors, which will select the next postmaster general, all were picked by President Donald Trump and confirmed by the Republican-controlled Senate.

“The best-case scenario is they pick someone similar to Megan who wants to keep the USPS as a public service,” including the continuation of six-day mail delivery to all U.S. addresses, Hogrogian said. The worst-case scenario would be a postmaster general who wants to privatize the Postal Service, which shouldn’t “be treated like a Fortune 500 company” because its purpose is to serve the U.S. public and not to generate profits, Hogrogian said.

With about 634,000 mostly union-represented workers, the Postal Service is the hub of the U.S. mailing industry, which according to the service generates $1.4 trillion in annual sales revenues and supports 7.5 million jobs. The service has been losing money for years, in large part because of a requirement in a 2006 law that it prefund its projected future retirement liabilities. The Trump administration last year said the service should be restructured, asserting among other things that the agency isn’t charging Amazon.com enough for package delivery.

“In the months to come, the Governors will conduct a nationwide search for the 75th Postmaster General of the United States, while continuing to work with Postmaster General Brennan through a successful holiday season and a seamless transition in leadership,” Robert Duncan, chairman of the USPS Board of Governors, said in a statement on Brennan’s retirement. The service declined to comment further on the process and timing for choosing a new postmaster general.

Status of Labor Talks

The Mail Handlers union is negotiating with the Postal Service over a new labor contract after its existing agreement expired Sept. 20, Hogrogian said. “We agreed that we were close enough to extend the bargaining process,” he said, adding that the terms of the expired agreement will remain in place while negotiations continue.

The American Postal Workers Union, which represents about 200,000 employees, is awaiting an arbitration decision to decide a new labor contract after the Postal Service and the union couldn’t reach a collective bargaining agreement through negotiations, said Mark Dimondstein, president of the union.

“We expect them to be finished by mid-November,” he said of the arbitration board that will decide the new contract. Arbitrator Stephen Goldberg is the chair of the three-member board, which also consists of an arbitrator appointed by the Postal Service and another appointed by the APWU.

Labor negotiations between the APWU and the Postal Service began in June 2018. The talks broke down late last year, leading to the appointment of the arbitration panel. The union’s membership includes maintenance workers, truck drivers and people who repair vehicles, and workers at the Postal Service’s retail centers.

The National Association of Letter Carriers, which represents about 200,000 letter carriers, also is continuing to bargain with the Postal Service after their existing contract expired Sept. 20. NALC President Fredric Rolando wasn’t immediately available to comment.

Only one of the four major postal unions—the National Rural Letter Carriers, which represents about 131,000 rural letter carriers—is now covered by a labor contract. The Rural Letter Carriers’ three-year contract with the Postal Service expires May 20, 2021.

Public or Private?

Not everyone believes privatization would be a bad thing.

The Postal Service should be privatized and postal markets opened to competition, said Chris Edwards, an economist at the libertarian Cato Institute. These reforms would give the USPS flexibility to cut costs, diversify, and innovate, while creating a more equal playing field between it and private-sector delivery companies, he said.

Dimondstein said he welcomes innovation, just not privatization. The Postal Service should consider providing loans and other financial services to rural and low-income areas that are underserved by banks, he said. There’s also no reason why the Postal Service, with its nationwide network of post offices, can’t handle licensing duties for other federal agencies and spearhead a new vote-by-mail program that would raise revenue for the service while encouraging more U.S. citizens to vote, he said.

“There’s so much more the USPS should be doing,” Dimondstein said.

To contact the reporter on this story: Louis C. LaBrecque in Washington at llabrecque@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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