The exemption of the Departments of Homeland Security and Defense from key provisions of Title 5 of the United States Code in 2002–2003 was among the most radical changes to the civil service system in decades.1 The civil service has long been characterized by a relatively consistent set of employment rules across agencies.

The exemption of the Departments of Homeland Security and Defense from key provisions of Title 5 of the United States Code in 2002–2003 was among the most radical changes to the civil service system in decades.1 The civil service has long been characterized by a relatively consistent set of employment rules across agencies.

2 The intent was to create a sense of cohesion within the workforce and to counteract centrifugal tendencies. Although there had been occasional, small-scale exemptions to this policy over the decades, the creation of the MaxHR system at the Department of Homeland Security (DHS) in 2002 and the National Security Personnel System at the Department of Defense (DoD) in 2003 represented exemptions of such magnitude as to represent a change in the system itself.

DHS and DoD include a combined 46% of all civilian federal employees (Congressional Research Service 2011). Thus, when these agencies were exempted from portions of the Title 5 rules relating to compensation, performance management, and labor-management relations, it appeared to signal the demise of the traditional civil service model and the triumph of a “strategic” approach to HRM in which each agency would be allowed to customize HRM policies to the agency’s specific mission and strategy (Thompson 2006). However, such predictions proved to be premature. A coalition of federal employee unions successfully challenged both programs in court, and Congress subsequently withdrew authorization, leaving the pre-2002 status quo substantially in place.

Union opposition to the National Security Personnel System (NSPS) and MaxHR was provoked primarily by the proposed labor-management relations provisions, which would have narrowed the scope of issues subject to collective bargaining and provided for agency-specific and management-controlled labor-relations boards to resolve collective bargaining disputes (Thompson 2007a). A coalition of federal employee unions sued to stop implementation of MaxHR on the grounds that those rules would deny employees their statutory right to bargain over working conditions. The courts sided with the unions and forced DHS back to the drawing board. By the time the court case was resolved in 2006, the political landscape had shifted. Members of both parties in Congress called upon the department to consult with the unions on the terms of a new system. The department instead decided to put the entire initiative on hold while retaining the traditional Title 5 personnel rules. The few HRM changes that have been made at DHS since have been incremental rather than radical in nature.

Early developments at the Department of Defense paralleled those at DHS: Rules with provisions similar to those proposed by DHS were challenged by the unions in court on the grounds that they violated the right of employees to bargain collectively. Although a District Court decision favored the unions, a panel of judges of the U.S. Court of Appeals for the District of Columbia ruled in 2007 that the proposed rules were in compliance with the law and allowed NSPS implementation to go forward. After Congress intervened to suspend authority for the proposed labor-management relations provisions, the department determined that only nonbargaining unit personnel would be included in NSPS. By late 2008, over 200,000 such employees had been transitioned to NSPS. However, after President Obama took office in 2009, the federal employee unions prevailed upon their congressional allies to repeal NSPS entirely. In October 2009, President Obama signed the 2010 National Defense Authorization Act repealing NSPS and directing that all DoD employees who had transitioned to NSPS be converted back to the traditional Title 5 rules.

Compensation and Classification

Although the demise of both NSPS and MaxHR represent a setback for those who regard the provisions of Title 5 as out of date, pressures for reform of the civil service system have persisted. The General Schedule system of compensation and classification has been subject to particular criticism. The General Schedule (GS) is widely regarded as outdated, overly rigid, not compatible with the needs of an increasingly professional workforce, and insufficiently sensitive to performance in matters of pay setting (Office of Personnel Management 2002).

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