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Washington, D.C.—The National Treasury Employees Union (NTEU) has won an important arbitration victory in its continuing effort to secure higher pay for employees of the Securities and Exchange Commission (SEC). An arbitrator awarded more than $15 million in back pay and interest to be distributed to as many as 1,800 employees who were previously paid special rates salaries. The agency has 30 days to appeal with the Federal Labor Relations Authority.

The matter at issue in the arbitration dates back to 2002 when the SEC unilaterally adopted a new pay plan—under pressure from NTEU to raise the pay of its employees to that of other financial regulatory agencies. The SEC used a conversion formula that effectively reduced the base pay of certain special rate employees by an average of 3 percent less than that which they were entitled to receive. NTEU filed a national grievance, arguing that the action violated federal law.

The arbitrator ruled that the agency violated the plain language of applicable federal law and ordered adjustments in the pay of impacted employees, along with interest.

“This is an important victory,” said NTEU President Colleen M. Kelley, “and one more step in our efforts to secure fair pay for SEC employees that complies with the requirements established by Congress.”

Meanwhile, NTEU continues to work toward a compensation agreement for the more than 2,800 employees it represents at SEC—an action the union believes will lead to a fair and competitive pay system at the agency. To bring SEC employees level with workers in other federal financial regulatory agencies in comparable jobs, NTEU is proposing a pay adjustment for employees in Grades 1 through 12. The union proposal also continues a pay for performance system, but would improve this system by providing a direct link between pay increases and employee performance ratings.

The SEC was granted authority by Congress to adopt its own pay system, comparable to those provided by other federal financial regulatory agencies, but federal labor law requires it to bargain with the union over this system. However, the parties have been unable to reach a new agreement on compensation. NTEU has long conducted compensation bargaining at the Federal Deposit Insurance Corporation (FDIC), another federal agency with statutory authority to establish its own pay system.

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments.