APWU Settles Lawsuit on Retirees’ Debts

The APWU and a retired union member have resolved a lawsuit against the Postal Service and an Accounting Services manager for violations of the Debt Collection Act, Industrial Relations Director Mike Morris has announced. The suit charged that the USPS and the manager routinely violated the rights of retired employees by instructing the Office of Personnel Management (OPM) to withhold a portion of the monthly annuities of retirees who had appealed Letters of Demand before they left the Postal Service.

Letters of Demand are issued when management alleges an employee is responsible for a financial loss to the Postal Service. The letters are subject to appeal through the grievance procedure and collection of alleged debts must be postponed until appeals have been exhausted.

“The lawsuit became necessary because the Postal Service was unwilling or unable to correct the misconduct of a rogue manager – even though postal officials said they agreed with the APWU that collections should have been postponed until the grievances were resolved. The manager simply refused to accept the directives of USPS Labor Relations officials to stop this practice,” Morris said.

“In the last round of contract negotiations, the APWU achieved a major goal by adding new language to Article 15 that permits retirees to file grievances challenging alleged debts. Even the new contract provisions did not stop him from taking money from retirees’ annuity checks,” Morris said. “Enough was enough! Our patience ran out waiting for the Postal Service to follow through on promises to correct the situation,” he added.

Morris directed APWU attorneys to file suit against the Postal Service on the union’s behalf and to file suit against the manager on behalf of Rosebud Grant, a retiree from Brooklyn, NY. The complaint, which was filed in federal court on April 2, alleged that the USPS and the manager violated Grant’s constitutional right to due process and the rights of other retirees.

Grant’s case was particularly egregious, Morris explained. She was a Self-Service Postal Clerk who was charged with a shortage of more than $75,000 when, after collecting stamps from self-service units and leaving the boxes securely in the station as directed by her supervisor, the postage disappeared.

The Postal Service never accused Grant of complicity in the loss of the stamps, but issued a Letter of Demand nonetheless. The Brooklyn Local APWU filed a grievance before she retired, and although the grievance was pending, the Accounting Services Manager in Eagan MN directed OPM to deduct half of each of her monthly annuity check to satisfy the alleged debt. In doing so, he falsely certified that all necessary procedures had been followed. The manager ignored requests from local postal officials to stop the collections, and in doing so, he utterly ruined Sister Grant’s long-awaited retirement plans.

The Postal Service finally got the message! Management has established a moratorium on all collections from retirees’ terminal checks and annuity payments. Under the settlement [PDF] with the APWU:

  • The Postal Service will draft new Debt Collection Act regulations which clearly mandate compliance with the Debt Collection Act. These will be submitted to the union.
  • The moratorium on collecting alleged debts from terminal checks and annuity payments will continue until the new regulations are finalized and published and the affected individuals are provided with due process. (The moratorium is a powerful incentive for the Postal Service to act expeditiously to finalize the proposed changes to the regulations.)
  • The national dispute on this issue is now moot and the grievances held pending resolution of that dispute will be released for settlement by agreement or an arbitration award. APWU advocates are free to argue that the violations of the Debt Collection Settlement entitle the retirees to interest on the money that was wrongfully withheld from them, win or lose.
  • Justice has been won for APWU Retiree Rosebud Grant! The Postal Service has cancelled the Letter of Demand and has refunded $31,672.38 that was wrongfully withheld from her retirement checks. At last, she will be able to enjoy her well-earned retirement.

As the union noted when the lawsuit was filed, the case was unusual because it named an individual manager (along with the Postal Service) as a defendant. This was permissible in this case, APWU attorneys explain, because Grant had no other forum to address her complaint. As a retiree, she didn’t have access to the grievance procedure to protest the violation of her legal rights.