Public Sector Labor Law: Overview & Cases

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  • 0:00 What Is Public Sector…
  • 1:01 Postal Reorganization…
  • 3:14 National Partnership…
  • 4:44 Lesson Summary
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Lesson Transcript
Instructor: Beth Loy

Dr. Loy has a Ph.D. in Resource Economics; master's degrees in economics, human resources, and safety; and has taught masters and doctorate level courses in statistics, research methods, economics, and management.

This lesson looks at public sector labor law. The Postal Reorganization Act of 1970 brought collective bargaining to the federal government while the National Partnership Council continues to bring the best practices of labor-management relations.

What Is Public Sector Labor Law?

Sonya and Harold are federal employees. What rights do they have to unionize? Can they strike? Are they able to join in collective bargaining? Two events in our history shaped what we now know of today as public sector labor law. Public sector unions are different from private sector unions in that they involve state, local, and federal government entities. A private sector union exists when a private business becomes unionized.

Public sector labor law is much less developed than the private sector. Public sector unions are often more restricted in how they collectively bargain, whether or not they can strike, and how disagreements are resolved. Federal public sector unions are unions that involve federal government entities. This lesson focuses on the federal side of public sector labor law. Unionization and collective bargaining in the federal sector paved the way for other public sector entities to follow. Let's find out what two events were so impactful.

Postal Reorganization Act of 1970

In 1970, Sonya worked for the U.S. Postal Office Department. This was a year of change for the Department, as employees, including Sonya, went on strike. As a result, the Postal Reorganization Act of 1970 was passed, and the modern U.S. Postal Service (USPS) was born. The USPS was created as an independent entity under the executive branch of the federal government. Postal employees like Sonya were no longer in the private sector. She is now a federal employee.

Sonya and other postal workers went on strike because they were dissatisfied with their pay and benefits. A 5.4% retroactive pay raise was put into place, along with a reduction in reaching the top of a pay grade from 21 to 8 years. Postal workers like Sonya rejected this, saying it wasn't enough. When the strike began, President Nixon had to order the Army to deliver the mail. After Labor Secretary George Shultz got involved, employees received a raise of 6% plus an additional eight percent as long as the U.S. Postal Office Department could be reorganized. Reorganization was the next step.

Collective bargaining, negotiations to determine a contract between labor and management, was an important part of the USPS' reorganization. Both labor and management wanted a way to resolve disputes without work stoppages and courts. Sonya and her co-workers wanted to go back to work. Now, Sonya and other union members would have more say. Collective bargaining was required for disputes involving wages, working conditions, and benefits. The intent of the Act was clear. Any issue that the private sector could collectively bargain, the USPS would now need to bargain. However, strikes were now banned.

The Postal Reorganization Act of 1970 was landmark legislation for labor and management relations. We now had a federal agency that was compelled to collectively bargain without being able to strike. As a federal employee, Sonya looked forward to not having to strike in order to have her concerns heard by management.

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