Coverage of Apprenticeship Programs Under the Age Discrimination in Employment Act (ADEA)

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

29 CFR Part 1625

Coverage of Apprenticeship Programs Under the Age Discrimination

in Employment Act (ADEA)

AGENCY: Equal Employment Opportunity Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Due to changing circumstances in the workforce and structural

changes in the workplace, the Commission has decided to review its

interpretation excluding apprenticeship programs from coverage under

the ADEA to determine whether it is required by the language of the Act

and to assess the policy considerations involved, i.e., does the

interpretation implement sound policy under present day conditions. In

order to conduct that review and in accordance with Executive Order

12866 the Commission proposes to seek public comment on rescinding the

existing interpretation and issuing a legislative rule covering

apprenticeship programs under the ADEA. The Commission hopes to

determine from the comments whether a proposed rule covering

apprenticeship programs would better advance the ADEA's objectives of

promoting the employment of older persons based on their ability rather

than age, and prohibiting arbitrary age discrimination in employment or

whether there are sound policy reasons for retaining the current

interpretation.

DATES: To be assured of consideration by the Commission, comments must

be in writing and must be received on or before December 4, 1995.

ADDRESSES: Written comments should be submitted to Frances M. Hart,

Executive Officer, Executive Secretariat, Equal Employment Opportunity

Commission, 1801 ``L'' Street, NW., Washington, DC 20507.

As a convenience to commenters, the Executive Secretariat will

accept public comments transmitted by facsimile (``FAX'') machine. The

telephone number of the FAX receiver is (202) 663-4114. (Telephone

numbers published in this Notice are not toll-free). Only public

comments of six or fewer pages will be accepted via FAX transmittal.

This limitation is necessary in order to assure access to the

equipment. Receipt of FAX transmittals will not be acknowledged, except

that the sender may request confirmation of receipt by calling the

Executive Secretariat Staff at (202) 663-4078.

Comments received will be available for public inspection in the

EEOC Library, room 6502, by appointment only, from 9 a.m. to 5 p.m.,

Monday through Friday except legal holidays, from December 4, 1995

until the Commission publishes the rule in final form. Persons who need

assistance to review the comments will be provided with appropriate

aids such as readers or print magnifiers. To schedule an appointment

call (202) 663-4630 (voice), (202) 663-4630 (TDD).

Copies of this notice of proposed rulemaking are available in the

following alternate formats: large print, braille, electronic file on

computer disk, and audio tape. Copies may be obtained from the Office

of Equal Employment Opportunity by calling (202) 663-4395 (voice) or

(202) 663-4399 (TDD).

FOR FURTHER INFORMATION CONTACT: Joseph N. Cleary, Assistant Legal

Counsel or James E. Cooks, Senior Attorney Advisor, (202) 663-4690

(voice), (202) 663-7026 (TDD).

SUPPLEMENTARY INFORMATION:

Historical Background

The Department of Labor (DOL) was initially given jurisdiction over

the enforcement of the ADEA. In 1969, DOL published an interpretation

that excluded apprenticeship programs from the ADEA. See 34 FR 323

(January 9, 1969). The rationale given by DOL for the ``no-coverage''

position was that apprenticeship programs had been traditionally

limited to youths under a specified age in recognition of

apprenticeship as an extension of the educational process.

The Commission assumed responsibility for enforcing the ADEA

pursuant to Reorganization Plan No. 1 of 1978. See 45 FR 19807 (May 9,

1978). In June of 1979, the Commission published a notice in the

Federal Register advising the public that all DOL interpretive

guidelines on the ADEA would remain in effect until such time as the

Commission could issue its own guidelines. See 44 FR 37974 (June 29,

1979). In November of 1979, the Commission published its own proposed

ADEA Guidelines, but did not include a proposal on the apprenticeship

issue. See 44 FR 68858 (Nov. 30, 1979).

On September 23, 1980, the Commission preliminarily approved a

proposed recision of the DOL position on apprenticeship and voted to

replace it with a legislative rule providing for coverage of

apprenticeship programs. The Commission then published for comment a

proposed legislative rule stating that age limitations in

apprenticeship programs would be unlawful under the ADEA unless

justified as a BFOQ or specifically exempted by the Commission under

section 9 of the Act. See 45 FR 64212 (Sept. 29, 1980).

After considering the public comments submitted in response to this

proposal, the Commission declined to adopt it by a vote of 2-2. It then

republished the DOL interpretive rule as part of its final ADEA

interpretations. See 46 FR 47726 (Sept. 29, 1981).

In August of 1983, a United States District Court in New York

reviewed the Commission's position on the applicability of the ADEA to

apprenticeship programs in Quinn v. New York State Electric and Gas

Corp., 569 F. Supp. 655 (1983). The Quinn court, inter alia, found the

interpretation invalid because it was not supported by ``the language,

purpose, and legislative history of the ADEA.'' Quinn, 569 F. Supp. at

664. The Commission, however, was not a party in this case, and the

court's decision did not require that the Agency take any action

regarding its apprenticeship interpretation.

In 1984 the Commission revisited the issue, expressing serious

concern about the interpretation. Prompted by this concern, the

Commission voted 4-0 to send a proposal to the Office of Management and

Budget (OMB) that would rescind the apprenticeship interpretation and

replace it with a legislative rule covering apprenticeship programs

under the Act. However, the proposal was never published in the Federal

Register for public comment. On July 30, 1987, the Commission voted 3-1

to terminate the proposed regulatory action and affirmatively approved

the interpretation excluding apprenticeship programs. See 52 FR 33809

(Sept. 8, 1987).

In 1995, a lawsuit was filed challenging the interpretation as an

arbitrary and capricious agency action within the meaning of the

Administrative Procedure Act. 5 U.S.C. sec. 551 et seq. The Commission

is of the view that its prior actions with respect to the difficult

issue of the

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proper relationship between the ADEA and apprenticeship programs have

been reasonable, deliberate, and taken in good faith. The Commission

rejects any claim that it has acted in a manner that is arbitrary and

capricious or otherwise inconsistent with law.

The Commission is also of the view, however, that neither the ADEA

nor its legislative history requires the existing position or prohibits

the proposed change--both are silent on the issue. Therefore, because

of changing circumstances in the workforce and structural changes in

the workplace, we have decided to reassess our position in order to

insure the most appropriate policy under present circumstances. In

connection with this reassessment, the Commission has decided to seek

public comment on a proposal rescinding the current interpretation and

replacing it with a substantive regulation which would provide that

apprenticeship programs are subject to the ADEA\1\

\1\An ``(a)dministrative agency concerned with furtherance of

the public interest is not bound to rigid adherence to its prior

rulings.'' Columbia Broadcasting System V. Federal Communications

Commission, 454 F.2d 1018, 1026 (D.C. Cir. 1971).

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Reasons for Issuing the Notice of Proposed Rulemaking

Congress has directed the Commission to help employers and workers

find ways of meeting problems arising from the impact of age on

employment. 29 U.S.C. sec. 621 (b). The Commission can fulfill this

obligation in part by reviewing periodically its interpretive

regulations in light of applicable law and policy. Public comment is

vital to the Commission's effort in this regard.

One problem facing many within the ADEA'S protected age group is

that changing technology and dynamic market conditions have left a

substantial number of older persons not only without jobs but often

without the prospect of future jobs. Additionally, many older women

encounter serious barriers when they seek to enter or reenter the

workplace. Congress itself has observed that older workers frequently

find themselves disadvantaged in their effort to retain employment, and

especially to regain employment when displaced from jobs. 29 U.S.C.

sec. 621(a)(1). The Commission is examining the factors which

contribute to many of the problems facing older workers and is now

seeking public comment to determine if this situation can be improved

by the elimination of the provision exempting apprenticeship programs

from ADEA coverage.

To begin with, the Commission notes that demographically the

workforce is changing more rapidly then ever before. The older worker

population has doubled over the past 30 years and is expected to

continue to increase. In the not too distant future, older people are

expected to outnumber children and youth. As a consequence, older

workers are considered an important resource in today's market place.

The Commission seeks to determine whether a change in the

interpretation would benefit employers and/or workers or whether

employers and/or workers would be better served by retaining the

current interpretation.

A second critical issue is the impact of the current interpretation

on groups that have been disadvantaged by historical employment

discrimination. The latest census figures demonstrate that minorities

and women are poorly represented in the crafts and that minorities have

unemployment levels almost triple that of the majority. With respect to

participation in skilled labor positions, census data from 1980 show

that women occupied 7.8% of the available positions, African Americans

6.8%, Hispanics 6.1% American Indians 0.6%, Asians, 1.0%, and minority

women 1.8%. The 1990 census data show that participation by women

decreased overall to 7.5% and demonstrate no gain at all for minority

women. The same data shows extremely modest gains in overall

representation of minorities with African Americans constituting 7.2%,

Hispanics 8.8%, American Indians 0.8%, and Asians 1.6% of all skilled

laborers. The Commission is interested in gathering information which

will help determine whether, and if so how, removing the interpretation

would affect minorities and women.

Third, the Commission would like to reexamine: (i) Whether removing

age barriers from apprenticeship programs would diminish training

opportunities for youth; and (ii) whether removing age barriers from

apprenticeship programs would increase costs because older trainees,

unlike younger ones, would leave the workforce before the employer is

able to recoup a fair return on its training investment. Input,

particularly from employers, labor organizations and other interested

individuals or groups, would greatly assist the Commission in its

efforts to determine whether recision of the interpretation would

reduce the number of employer/labor organization sponsored

apprenticeship programs.

In this regard, preliminary information suggests that (i) Many of

the states currently prohibit age discrimination in apprenticeship

programs--there also may be county and municipal laws with similar

prohibitions; (ii) many, if not most, craft/skilled trade

apprenticeship programs now operate without age limitations; and (iii)

job mobility today is more the rule than the exception for workers of

all ages. The Commission is specifically interested in whether there is

evidence which demonstrates that fewer apprenticeship programs operate

in jurisdictions that prohibit age discrimination. If so, is increased

cost the reason for fewer programs or are there other explanations? Is

there evidence demonstrating that youth are deprived of training

opportunities when programs abandon age limitations or are prohibited

from using them? Is there evidence showing that younger trainees remain

with an employer longer than trainees age 40 and older? If such

evidence exists, is the difference in average length of service great

enough to increase the cost of operating an apprenticeship program

without an age limitation? The Commission will carefully assess all

comments bearing on these matters before developing its final position.

Finally, the Commission is interested in examining any information

which provides insight into the question of whether apprenticeship

programs are an extension of the educational process rather than

employment. This includes any data demonstrating that apprenticeship

should be considered employment because apprentices perform work that

an employer would have to hire others to perform in the absence of the

apprentices, or which demonstrates apprenticeship should be considered

an extension of education because its main purpose is to teach

vocational skills.

The Commission also notes that under sec. 9 of the ADEA it has the

authority to permit covered entities to establish age limitations in

bona fide apprenticeship programs when such limitations are necessary

and proper in the public interest. In addition, programs that seek to

provide training opportunities specifically for persons with special

employment problems, for example, disadvantaged youth or minority

youth, may be able to do so under an existing Commission exemption. See

29 CFR sec. 1627.16. Commentors are encouraged to address whether any

of these specific provisions are adequate to meet the legitimate needs

of apprenticeship programs.

For all the above reasons, as well as any others that commenters

may want to bring to its attention, the Commission seeks public comment

on a proposal to rescind the interpretation and, using its

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substantive rulemaking authority under sec. 9 of the ADEA, to

promulgate a rule providing that apprenticeship programs are subject to

the Act.

Executive Order 12866, Regulatory Planning and Review

The Equal Employment Opportunity Commission has determined that

this is not a significant rule as defined by Executive Order 12866 and

will not have an annual effect on the economy of $100 million or more

or adversely affect in a material way the effect on the economy of $100

million or more or adversely affect in a material way the economy, a

sector of the economy, productivity, competition, jobs, the

environment, public health or safety, or State, or local or tribal

governments or communities. The rule will not create a serious

inconsistency or otherwise interfere with an action taken or planned by

another agency.

The rule as proposed does not contain any information collection or

record keeping requirements as defined in the Paperwork Reduction Act

of 1980 (Pub. L. 96-511). Similarly, the Commission certifies under 5

U.S.C. 605(b), enacted by the Regulatory Flexibility Act (Pub. L. 96-

354), that this rule will not result in a significant economic impact

on a substantial number of small entities. For this reason, a

regulatory flexibility analysis is not required.

The Commission is desirous of receiving comments concerning this

proposed rule from interested members of the public. Accordingly, the

Commission will receive comments for a period of 60 days after

publication. The Commission will consider such comments before taking

final action.

In addition, in accordance with Executive Order 12067, the

Commission has solicited the views of affected Federal agencies.

The proposed rule appears below.

List of Subjects in 29 CFR Part 1625

Advertising, Aged, Employee benefit plans, Equal employment

opportunity, Retirement.

Signed at Washington, D.C. this 22 day of September, 1995.

Gilbert F. Casellas,

Chairman.

It is proposed to amend chapter XIV of title 29 of the Code of

Federal Regulations as follows:

PART 1625--AGE DISCRIMINATION IN EMPLOYMENT ACT

1. The authority citation for part 1625 continues to read as

follows:

Authority: 81 Stat. 602; 29 U.S.C. 621, 5 U.S.C. 301,

Secretary's Order No. 10-68; Secretary's Order No. 11-68; sec. 12,

29 U.S.C. 631, Pub. L. 99-592, 100 Stat. 3342; sec. 2, Reorg. Plan

No. 1 of 1978, 43 FR 19807.

Sec. 1625.13 [Removed]

2. In Part 1625, Sec. 1625.13 would be removed.

Subpart B--Substantive Regulations

3. In Part 1625, Sec. 1625.21 would be added to Subpart B--

Substantive Regulations to read as follows:

Sec. 1625.21 Apprenticeship programs.

All apprenticeship programs, including those apprenticeship

programs created or maintained by joint labor--management

organizations, are subject to the proscriptions of sections 4(a) and

4(c) of the Act, 29 U.S.C. 623(a) and (c). Age limitations in those

programs are valid only if excepted under section 4(f)(1) or

specifically exempt under section 9 of the Act in accordance with the

rule set forth in 29 CFR 1627.15.

[FR Doc. 95-24174 Filed 10-2-95; 8:45 am]

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