RE: National Arbitration Decision: PostalEase Fraud (pdf)
We are writing to inform you of a recent national arbitration decision issued by Arbitrator Dennis Nolan in a grievance brought by the National Association of Letter Carriers, which concerned the Postal employees who did not receive their paychecks as a result of the breach of the Postal Service’s PostalEase system. The NPMHU also filed a grievance on this issue, and the NPMHU (along with the APWU) intervened in the NALC grievance.
By way of background, on December 20, 2022, the Union received notification from the Postal Service that some Postal Service employees had unknowingly provided their usernames and passwords to criminal websites while attempting to access PostalEase. We were told that employees had been using Google to access PostalEase and that Google in turn was redirecting them to third party criminally run websites that mirrored the look and access of PostalEase. When employees entered in their login credentials on to those websites, it allowed the criminals to steal that information and therefore compromise the employees’ accounts. The criminals were then able to go to the official PostalEase site, use the employees’ login credentials and add allotments that were then deducted from the employees’ checks. These added allotments were sent to various bank accounts which were set up by the criminals allowing them to withdraw all the funds.
The primary argument advanced by all three Unions was that, when the Postal Service erroneously transferred moneys meant to be paid to employees as wages to unknown third parties, the Postal Service failed in its obligations under the National Agreement to pay employees for the work they performed. The NPMHU’s brief also focused on the real steps the Postal Service could have – but failed to – take that could have reduced the possibility that this criminal activity would have affected so many Postal employees, including implementing standard security measures and not waiting months after learning of this criminal attack to notify Unions and Postal employees that it was occurring.
Arbitrator Nolan rejected these arguments, dismissing the steps that the Postal Service could have taken as a series of “should-haves” or an application of 20-20 “hindsight.” With respect to the question of whether the National Agreement requires the Postal Service to “make sure the employees actually receive the direct deposit money,” or is it enough for the Postal Service to “make a direct deposit in the bank account on record,” Arbitrator Nolan stated it “could fairly be applied either way.” Because the Unions had the burden of proof, Arbitrator Nolan denied the grievance.
We are disappointed in Arbitrator Nolan’s ruling, and we will continue to raise with the Postal Service its obligations to ensure that Postal employees can have confidence in the security of the online systems the Postal Service requires them to use. Please do not hesitate to contact us should you have any questions.