1/17/12:  This week, the Union filed a national grievance against the SEC for its breach of a Diversity Initiatives Contract that the agency signed with NTEU. The Diversity Initiatives Contract was originally part of a settlement deal to resolve litigation over discrimination in the SEC's compensation practices, and it requires the SEC to implement several basic diversity initiatives at the agency. The SEC's current senior management team, however, has refused to implement the initiatives. 

The Diversity Initiatives Contract requires the agency to take some very basic steps to encourage diversity at the SEC, including working with the Union to: implement a "barrier analysis" at the SEC by an independent outside contractor, to identify potential barriers to promotion at the agency based on race, gender, sexual orientation, age and ethnicity;  create diverse hiring committees for each SEC Office and Division and post information about those committees on the Insider; and implement a 360-degree review process at the agency which will allow frontline staff to provide reviews of managers. The contract also includes a number of procedural provisions, all of which have now been ignored by the SEC.

The Diversity Iniatives Contract originally emerged from the Union's national grievance over the SEC's so-called "Merit Pay" pay for performance system. In late 2007, an independent federal arbitrator ruled that the Merit Pay system violated Title VII of the Civil Rights Act, as well as the Age Discrimination in Employment Act, because the subjective standards and procedures used to make merit pay decisions had an impermissible adverse impact upon large groups of SEC employees. The arbitrator ruled that, because the SEC’s highly subjective system for awarding pay increases was not valid or even reasonable, African-American professionals, as well as older employees, received significantly fewer merit increases than would be expected given their representation in the pool of eligible employees.

A year later, in late 2008, the SEC and the Union signed a Merit Pay settlement agreement requiring the SEC to pay a total of $2.7 million to African-American employees and employees aged 40 and older who had suffered discrimination under the agency’s illegal Merit Pay program. As part of the deal, the SEC also signed the Diversity Initiatives Contract with the Union, which required the agency to implement the diversity initiatives described above, which were recommended by the Union.

Union officials have tried for three years now to work together cooperatively with senior SEC management to get this Diversity Initiatives Contract on track, to help address lingering concerns that many employees continue to express about the agency. The SEC is not, however, in compliance with any of the above requirements. Indeed, last fall senior SEC management unilaterally disbanded the agency's Diversity Council, dismissing its NTEU representatives. With the deadline for filing a national grievance looming, and with SEC senior management now refusing to engage with Union representatives on these issues, NTEU was compelled to litigate this matter.

The same problems that existed in 2007 continue to persist at the SEC.     This was exemplified by the agency's use of an inappropriate image in the agency’s training materials regarding the new performance management system, which is described here. It was also plainly evident from the SEC's pilot run of its new, so-called "evidence based" performance management system in Enforcement and OCIE for FY 2010. The pilot data showed that white employees were approximately two and one half times more likely to receive the highest rating, a “5,” than African American employees. Similarly, African American employees were approximately twice as likely to receive a “3” as white employees. Statistically significant differences also appeared in the top level data based upon age, with many more employees who were over forty receiving a “3” than those under forty. Other biases also appeared in the data. 

The Union has not yet received the data for FY 2011.

 "I""Unfortunately, we believe that the SEC is on the wrong track and that it is failing to take steps to address fundamental issues that were revealed by the arbitrator's order in the Merit Pay case," Chapter 293 President Greg Gilman noted today. "Even as we try to resolve this disagreement over the Diversity Initiatives Contract, the SEC is once again attempting to unilaterally implement another fundamentally flawed and highly subjective pay for performance system, without working with the employees' representatives in the Union. I fear that history may repeat itself because SEC senior management simply refuses to learn from the agency's past mistakes."

"I am really disappointed that we had to file a national grievance to try to get the SEC to do what it promised to do three years ago," said Chapter 293 Vice President Pat Copeland, who was a member of the Diversity Council until it was disbanded by SEC management last fall. "The SEC gives lip service to diversity, but it doesn't back it up with its actions. When the agency breaks its promises and refuses to address issues like this, it has a very negative affect on SEC employees. I have been at this agency for many years, and I have never seen SEC employee morale as low as it is right now."