Guidelines, Section 5333(b), Federal Transit Law

SUMMARY: The Federal Transit law, Title 49 U.S.C., Chapter 53,

provides, in general, at Section 5333(b) (commonly referred to as

``Section 13(c)'', that, as a condition of certain Federal financial

assistance by the Department of Transportation's Federal Transit

Administration (FTA) in financing mass transportation systems, fair and

equitable arrangements must be made, as determined by the Department of

Labor (the Department), to protect the interests of employees affected

by such assistance. In conjunction with the Department's role in making

such determinations, the Department is providing information concerning

its procedures for processing applications for assistance under the

Federal Transit Law, and certification by the Department of acceptable

protective arrangements.

DATES: These Guidelines become effective January 8, 1996.

FOR FURTHER INFORMATION CONTACT: Kelley Andrews, Director, Statutory

Programs, U.S. Department of Labor, 200 Constitution Avenue, NW., Room

N-5411, Washington, DC 20210, (202) 219-4473.

SUPPLEMENTARY INFORMATION:

I. Background

Section 5333(b) of the Federal Transit law requires that

arrangements be made to protect certain rights of mass transit

employees affected by grants of Federal funds for the acquisition,

improvement, or operation of a transit system. These rights include the

preservation of rights, privileges, and benefits under existing

collective bargaining agreements, the continuation of collective

bargaining rights, the protection of individual employees against a

worsening of their positions related to employment, assurances of

employment to employees of acquired mass transportation systems,

priority of reemployment, and paid training or retraining. In

administering this program, the Department notifies relevant unions, if

any, in the area of the proposed project and provides the grant

applicant and the affected union(s) an opportunity to develop the terms

and conditions of the protections. The Department provides technical

and mediation assistance to the parties during the negotiations. These

new guidelines replace guidelines which have been in effect since May

1, 1978.

The Department's Office of Labor-Management Programs' Notice of

Proposed Rulemaking (NPRM), issued June 29, 1995 (FR Vol. 60, No. 125,

pg. 34072), proposed to change the procedures for certifying employee

protective arrangements which are required as a condition of assistance

under the Federal Transit law, in order to expedite the process and

make it more predictable to the parties.

Approximately 85% of the Department's certifications in the past

five years have been issued within 90 days of the date they were

received from FTA. The processing time for the remaining 15%, however,

has been less predictable. The Department's objective in revising its

procedures is to enhance the efficiency and predictability of the

certification process for all transit grant applications while assuring

that the required employee protections are in place. Where comments

were submitted which supported this objective, the guidelines have been

revised, as appropriate, to reflect the comments, and are discussed

under Section II, Summary and Discussion of Comments.

Numerous comments were submitted which relate in a general way to

the Department's administration of this employee protection program.

The guidelines were said to contain loopholes which would undermine the

effort to establish and meet deadlines for certification, create new

legal standards resulting in a more arbitrary and time-consuming

process, and establish protections and confer authority on the

Department which exceed the statute.

The Department has carefully reviewed the new guidelines with these

comments very much in mind to assure that its appropriate statutory

mandate will be fulfilled, without creating unnecessary ``loopholes''

or legal standards which would result in a more arbitrary or time

consuming process. Because the statute itself requires the Department

to exercise discretion and flexibility in determining what is fair and

equitable, the guidelines must also provide an appropriate level of

flexibility. Where appropriate, the guidelines have been changed to

reflect these concerns and in other instances, where no change was

deemed necessary, the specific points raised are also discussed in

Section II, Summary and Discussion of Comments.

The Department has also made a minor adjustment of a technical

nature to Sec. 215.2. This section, which addresses the required

documentation to be included in the grant application, has been

modified to reflect that the content of the grant application is as

determined by the FTA. The Department is not requesting any information

for processing of the grant that is not required by the FTA.

The new guidelines differ from the previous guidelines and the

Department's practice by establishing strict time frames for the

certification of protections in a more expeditious and predictable

manner. The procedures established by these guidelines will assure that

the required protections can be certified, within sixty days after the

initiation of processing by the Department, permitting the release of

the Federal transit grant funds.

The new guidelines continue to encourage local negotiations or

discussions for the development of employee protection terms. The

guidelines, in recognition of the fact that there are some states where

bargaining is prohibited for public employees, allow for ``discussion''

where necessary to satisfy the Federal Transit law in a manner that

does not violate state or local law.

The guidelines also eliminate referral of applications when the

grant is for routine replacement of equipment and/or facilities of like

kind and character. In cases where referral to the unions is

appropriate, the referral will include the intended terms of

certification. The parties will be given 15 days from the date of the

referral to submit objections, if any, to the referral terms. The

Department will Determine within 10 days thereafter whether objections

are sufficient. Should the Department find that the objections are not

sufficient, the Department will issue its certification on the terms

specified in the referral. When objections are found to be sufficient,

negotiations may proceed and the Department may provide technical and

mediatory assistance where appropriate. In the event the protections

cannot be agreed to within 60 days from the original referral date, the

Department will issue an interim certification, permitting the release

of Federal transit grant funds. In the event that the parties are still

not able to resolve their differences within 60 days after the

Department has issued the interim certification, the Department will

set forth the protective terms in a final certification.

[[Page 62965]]

Finally, it seems clear from the comments received that several

parties are concerned about and wish to discuss and resolve a number of

substantive issues relating to this program. While this is an important

matter, these are procedural guidelines and thus not the appropriate

forum for the resolution of such substantive rather than procedural

issues. The Department's policies on substantive issues are generally

addressed through certifications and are discussed in the Department's

determination letters.

II. Summary and Discussion of the Comments

Twenty comments were submitted and considered, including one from a

private individual.

Two comments were received from the following public transit

authorities and planning organizations:

--Northern Illinois Regional Transportation Authority

--Metropolitan Transit Commission, Oakland, CA

Twelve comments were received from the following public transit

providers:

--Central Arkansas Transit Authority

--New York City Department of Transportation

--Metropolitan Transit Authority, New York, NY

--Triangle Transit Authority, Research Triangle Park, NC

--Public Works Office/Transit, Johnson County KS

--StarTran, Lincoln, NE

--Washington Metropolitan Area Transit Authority

--Los Angeles County Metropolitan Transit Authority

--Regional Transportation Commission, Clark County, NV

--New Jersey Transit Corporation

--North County Transit District, Oceanside, CA

--Metropolitan Atlanta Rapid Transit Authority

One comment was received from a state department of transportation:

--State of Michigan, Department of Transportation

Three labor organizations provided comments:

--Amalgamated Transit Union

--Transportation Trades Department, AFL-CIO

--Transport Workers Union of America

Finally, one public transit association provided comments:

--American Public Transit Association

The Department has carefully reviewed and considered all of the

comments in developing these guidelines. The following provides a

summary of the comments and the Department's response.

A. Definition of ``Irreparable Harm''

One comment indicated that the safeguard against irreparable harm

to employees in Sec. 215.3(d)(8) pending completion of the special

dispute resolution process is an essential protection which should be

included in the guidelines. Others, however, suggested that the

language concerning irreparable harm would add a new substantive

protection under section 5333(b), which they view as providing a

``remedial scheme to provide compensation'' when employees are affected

by a project.

Section 5333(b), requires more than providing compensation for

impacts upon employees. It is also intended to minimize the impact of

Federal projects on employees. The restriction against causing

``irreparable harm'' in Sec. 215.3(d)(8), however, is limited solely to

any action which would ``result in irreparable harm to employees if

such action concerns matters subject to the steps set forth in

paragraph (e) of this section.'' (Emphasis added.) In specifying that

no action may be taken which would result in irreparable harm, the

Department intends for the recipient of funds to be able to take any

necessary action that will not irreparably harm employees while

allowing a project to move forward. The minimal restriction would

remain in effect only until final terms and conditions are determined

and certified.

B. Definition of ``Material Effect''

The Sec. 215.3(b)(1) provision with respect to ``material effect''

states that the procedural requirements of Sec. 215.3(b)(2) through

Sec. 215.3(h) will not apply ``absent a potentially material effect on

employees.'' One comment indicated that the phrase ``material effect on

employees'' should be limited in its scope to material adverse effects

on employees so that if a project for routine replacement of equipment

and/or facilities of like kind and character has a positive effect on

employees, no referral would be required. Impacts, however, may be

viewed by some individuals as positive while others view the same

effect as contrary to their interests. Therefore, no adjustment need be

made to accommodate this concern.

One comment noted that ``[i]t is not clear whether the substantive

determination of materiality (material effect on employees) is to be a

subjective judgment of the Department or a legal determination based on

specific standards or precedents.'' The Department, however, will

consult with FTA, where necessary, and will determine which projects

have a ``potentially material effect on employees'' based on available

applicable precedent and policy.

C. Definition of the Phrase ``Where Circumstances So Warrant''

Several comments were made indicating that the phrase ``where

circumstances so warrant'' in Sec. 215.3(h) enables the Department to

retain the right to withhold certification at its discretion. One saw

this as an expansion of the language of the law which would give the

Department ``veto authority over the release of grant funds.'' The

Department intends the phrase ``where circumstances so warrant'' to

mean that certification will not be issued where circumstances

inconsistent with the statute prevent the Department from certifying.

For instance, in a situation involving the Metropolitan Atlanta Rapid

Transit Authority (MARTA) in Georgia, the Department was unable to

certify grants for a short time because state law prohibited MARTA from

providing the requisite protections. Accordingly, given that at least

one comment indicated this is an expansion of the current law, the

Department will clarify the intent of this language by amending

Sec. 215.3(h) of the guidelines to read: ``Notwithstanding the

foregoing, the Department retains the right to withhold certification

where circumstances inconsistent with the statute so warrant until such

circumstances have been resolved.''

D. Definition of ``Sufficient'' as Applied to Objections to

Certification

In Sec. 215.3(d)(2)(i), the guidelines provide that the Department

will ``determine whether the objections raised are sufficient'' when

one party objects to terms and conditions proposed by the Department as

the basis for certification of a project. In Sec. 215.3(d)(3), the

guidelines set forth the criteria which the Department will consider in

determining whether an objection will be considered sufficient.

Comments indicated concern that the transit agencies would not be

given the same opportunity as would be provided to the employees to

object to the referred terms and conditions, citing as an example where

it believed that existing protections include provisions that are no

longer legally required or that are burdensome. Such objections, if

raised by the transit agencies, would require the Department to make a

determination as to whether they are sufficient. The definition does

not favor either party over the other.

[[Page 62966]]

Another comment indicated that, in order to avoid challenges as to

whether legal or factual circumstances have changed, the Department

should modify Sec. 215.3(d)(3) so that it will consider an objection to

be sufficient when: (ii) the objection ``concerns legal or factual

issues relating to the terms proposed to be certified that may

materially affect the rights or interests of employees.'' The current

proposed language requires that the Department consider an objection to

be sufficient when: (ii) the objection concerns changes in legal or

factual circumstances that materially affect the rights or interests of

employees.

In response to this comment, the Department has determined that

there is a need to clarify Sec. 215.3(d)(3)(ii) and accordingly we have

added the word ``may'' before ``materially affect.''

E. Definition of the Term ``Appropriate'' in Sec. 215.3(b)(3)

One comment noted that this section sets forth procedures where

there is a new applicant or where the previous arrangements are ``not

appropriate to the current projects'' without providing guidance as to

what would be considered ``appropriate.'' This section further

specifies that the Department will refer such grants to the parties

based on terms and conditions similar to either the Model Agreement for

operating projects or the Special Warranty for capital projects.

There are several situations in which it would not be appropriate

to refer a project on the basis of previously certified arrangements.

It is not possible to anticipate all the factual circumstances where

the current terms would no longer be appropriate. However, referral on

the basis of existing arrangements is not appropriate in a situation

where the Department is aware that the terms and conditions of the

existing arrangements do not satisfy the conditions of the statute in

the circumstances presented, perhaps because of a change in the state

law or a change in the manner in which the transit system is operated

(e.g., the public body decides to operate services previously provided

through a management company drawing into question how specific

protections required by the statute will be provided). Another

situation might be one in which the parties have, for instance,

negotiated a capital agreement, but have not developed an agreement for

application to operating assistance projects.

F. Standards for Operating and Capital Grants Where Protections Do Not

Already Exist

One comment noted that the ``Model Agreement was developed to

provide a template for parties who wished to use it, but was never

intended to be a 'standard' or 'default' option.'' It was further

suggested that the details of the protective arrangements should be

largely left to the parties. Another comment noted that the proposed

Sec. 215.3(b)(3)(i) references ``terms and conditions similar to those

of the Model Agreement,'' and questioned which ``similar'' terms and

conditions would be specified by the Department. Other questions

included: Will the parties be given the opportunity to negotiate? Will

the Department abrogate a party's right to withdraw from the Model

Agreement?

Although the Model Agreement was not originally developed for

application to all operating assistance grants, the agreement has been

certified as meeting the requirements of the statute, and is applied

with the agreement of the parties in the majority of operating

assistance projects. The Department intends to expedite the

certification process by basing its initial referral of operating

assistance grants on terms and conditions similar to those of the Model

Agreement when no other existing arrangement is applicable. As with

referrals for applicants with previously certified arrangements, the

parties will have 15 days from the date of the referral and

notification letters to submit objections to the referred terms. The

parties will be afforded the opportunity to negotiate alternative terms

if the Department determines an objection to be sufficient in

accordance with Sec. 215.3(d)(3).

The Department will not ``abrogate'' the right of any party to

withdraw from the Model Agreement in a timely manner. However, if a

party withdraws from the Model Agreement, referral of the next

operating project involving that party, in accordance with

Sec. 215.3(b)(3)(i), will be based on terms and conditions ``similar''

to the Model Agreement because there will be no previously certified

arrangements ``appropriate to the current project.'' The parties will

then need to negotiate terms and conditions, under the procedures and

timeframes outlined in the guidelines, to substitute for those which

they object to from the Model Agreement.

Another comment suggested that, in order to make the standards for

protections required under capital grants and operating grants conform

with each other, Sec. 215.3(b)(3)(i) should be redrafted to require

that for operating grants, the terms and conditions will be based on

arrangements no less protective than those of the Model Agreement. The

Department has concluded that such consistency could more appropriately

be obtained by including language in Sec. 215.3(b)(3)(ii), which

indicates that ``for capital grants, the terms and conditions will be

based on arrangements similar to those of the Special Warranty applied

pursuant to section 5311.'' This language affords the Department

greater latitude in incorporating the language of prior Departmental

determinations into referrals.

One comment noted that ``one of the paragraphs ((b)(3)(ii)) cited

as being applicable to (b)(1) projects specifically states that it

applies to grants other than those referenced in (b)(1).'' We have

deleted the phrase ``other than those for replacement equipment or

facilities referenced in paragraph (b)(1) of this section,'' from

Sec. 215.3(b)(3)(ii) to clarify that the Special Warranty will be used

for new applicants which apply for routine replacement of equipment

and/or facilities of like kind and character.

Comments also questioned using the Special Warranty as the basis

for certification of capital grants. As with the Model Agreement, the

Special Warranty has been previously certified by the Department as

meeting the requirements of the statute and will serve as a starting

point for the parties to develop protections should sufficient

objections be submitted to the proposed terms. This will expedite the

processing of section 5333(b) certifications while continuing to ensure

the right of the parties to negotiate appropriate protective

arrangements.

G. Interim Certifications Under Sec. 215.3(d)(7)

Several comments noted that the court has held that the Department

does not have the statutory authority to issue conditional

certifications. These comments suggest that the proposed interim

certification would be a conditional certification. The conditional

certifications rejected by the courts in Amalgamated Transit Union v.

Donovan, 767 F.2d 939 (D.C. Cir. 1985), however, were not statutorily

sufficient because they did not ensure that all requirements of the

statute were satisfied prior to certification. In those instances, the

Department had issued certifications which were lacking mandatory terms

and conditions. The interim certification provided for in these

guidelines will fully satisfy the requirements of the statute based

upon

[[Page 62967]]

the information available at the time of certification. Because the

terms of an interim certification will meet all the requirements of the

statute, the interim certification does not constitute a

``conditional'' certification.

Other comments suggested that the receipt of Federal funds may

affect a transit system's ability to later challenge different

certification arrangements if such are subsequently imposed on it by

the Department or that a system may prefer not to accept an interim

certification because different arrangements could later be imposed. In

the Department's view, the vast majority of applicants will benefit

from the expedited certification procedure. The interim certification

allows the transit authority to execute its grant contract with the

FTA, thus avoiding, in certain instances, a potential lapse of funds.

Moreover, the applicants will be aware of the disputed issues and thus

be able to judge any potential liability if a project is implemented

and the Department imposes language in the final certification that

differs from that in the interim certification. In any event, under the

guidelines, final certification will be issued within 60 days of the

interim certification, thus limiting any period of uncertainty for

transit systems.

H. Time Limits Under Sec. 215.3(d)(1) for the Parties To Submit

Objections

Several comments indicated support for the Department's ``progress

towards procedural reform'' and noted that strict time limits for

processing and issuance of certifications ``would truly expedite the

grant application and approval process for many grantees. Still others

commented that ``the proposed changes are consistent with the basic

purposes of 13(c).''

Comments also suggested that there should be consequences if the

Department or the parties fail to act within established timeframes.

The Department recognizes the need to ensure compliance with the

deadlines established in these guidelines. Funding cannot be released

in the absence of a certification that employee protections are in

place since the statute mandates the Department's certification as a

precondition to the release of Federal funds.

If objections by the parties are not timely, the Department will

proceed with certification on the basis proposed in the referral. To

accommodate objections from multiple parties, however, the Department

has made a technical correction to Sec. 215.3(d)(2) to indicate that a

determination regarding the sufficiency of objections will be made

within 10 days of the date for submitting objections.

I. Procedures Under Sec. 215.3(b)(1) for Routine Replacement of

Equipment and/or Facilities of Like Kind and Character Exempting These

From Referral

Section 215.3(b)(1) of the proposed guidelines specifies that

grants for routine replacement of equipment and/or facilities of like

kind and character will be certified without a referral to labor

organizations absent a potentially material effect on employees.

Several comments were made in support of this proposal. One comment

indicated that eliminating the referral of applications for grants for

routine replacement of equipment and/or facilities ``would benefit our

agency immediately if approved and implemented.''

One comment ``strongly object[ed] to exempting capital grants for

routine replacement of equipment of like kind and character and/or

facilities of like kind and character from the modified procedural

requirements.'' The comment requested that this exclusion be removed

from the final guidelines and that routine replacement grants be

processed under the modified grant procedures applicable to all other

projects.

Three comments indicated that the proposed guidelines failed to

establish a procedure for the parties to provide positions on the issue

of ``material effect on employees'' to the Department and, also, that

the proposed guidelines did not establish a time frame for the

Department's determination of whether a referral would be made.

It is not necessary for labor organizations to receive referrals of

grants for ``routine replacement'' projects. In instances where no

referral is made, the Department will apply existing protective

arrangements which have been deemed satisfactory for similar projects

in the past. For new applicants seeking ``routine replacement'' capital

items, the Department will apply protections based upon the Special

Warranty. The Department will only proceed with a certification in such

instances where all capital items are clearly ``routine replacement''

items of like kind and character. The Department will consult with the

FTA if necessary to determine whether a grant includes only routine

replacement items.

No opportunity has been provided in the guidelines for input from

the parties with regard to any ``potentially material effect'' on

employees. However, where there is routine replacement of capital

items, which will be used in the same locations and in the same manner

as the original capital items, it is unlikely that there will be an

impact upon employees which would not be covered by the existing

protective arrangements.

Routinely seeking input on this issue from the parties in advance

of the Department's determination would require nearly as much time as

a routine referral. Should the Department deem it necessary, however,

the Department could seek the input of the parties on the issue of

``potentially material effect.''

It is not necessary for the guidelines to include a time frame for

the Department's determination of whether a referral would be made. FTA

is responsible for identifying in its transmittal to the Department

that a grant application is for the purpose of purchasing routine

replacement equipment and/or facilities of like kind and character. If

the information in the grant application is sufficient for the

Department to concur in this designation, the Department will promptly

proceed with its certification, absent a finding of ``potentially

material effect'' pursuant to Sec. 215.3(b)(1). If the information in

the grant application does not support a conclusion that the project is

for routine replacement equipment and/or facilities of like kind and

character, the Department will refer the project to the appropriate

parties in accordance with the procedures in Sec. 215.3(b) within 5

days of receipt from the FTA.

For information purposes only, applications for ``routine

replacement'' items will continue to be transmitted to the labor

organizations representing employees in the service area of the

projects.

J. Procedures for Protective Arrangements as to States That Pass

Through Funds to Subrecipients

Two comments indicate that the Department has previously introduced

policies and procedures for processing of statewide grant applications

which are not reflected in its earlier guidelines. They further suggest

that procedures recently developed by the Department for processing of

grants to States which pass through funds to subrecipients,

particularly to small urban and rural recipients, be reflected in the

new guidelines in a separate section. In response to these comments,

the Department has determined that it would be appropriate to add a new

Sec. 215.3(a)(3) to clarify that protections generally will be provided

by the subrecipients which receive funds through a State administrative

agency.

[[Page 62968]]

Accordingly, the following section has been added:

215.3(a)(3) If an application involves a grant to a state

administrative agency which will pass through assistance to

subrecipients, the Department of Labor will refer and process each

subrecipient's respective portion of the project in accordance with

this section. If a state administrative agency has previously

provided employee protections on behalf of subrecipients, the

referral will be based on those terms and conditions. These

procedures are not applicable to grants under section 5311.

It was also suggested that the Department should automatically

certify section 5309 (formerly section 3) projects for rural providers

on the basis of the Special Warranty. Under the guidelines, referrals

for rural providers receiving funds under section 5309 will be based

upon terms and conditions similar to those of the Special Warranty,

unless there are previously certified arrangements which have been

applied to the section 5309 projects. However, although the guidelines

at Sec. 215.3(b)(3)(iii) indicated that referrals for projects under

section 5311 (formerly section 18) will be made on the basis of the

Special Warranty, the Department will amend the proposed guidelines to

continue to provide for automatic certification of applications

pursuant to section 5311 for rural providers.

K. Procedure for Dispute Resolution to Determine Terms and Conditions

of Final Certifications, Sec. 215.3(e)(4)

One comment stated that ``[t]he regulations explicitly decline to

establish the manner of dispute resolution by the Department of

Labor.'' Another indicated that Sec. 215.3(e)(4) appears to give the

Department the authority to utilize alternative methods of dispute

resolution, noting that the statute does not allow the Department to

delegate this authority to a third party. Section 215.3(e)(4)

specifically reserves to the Department the sole authority to render

the final determination. The statute does not mandate that the

Department use a specific dispute resolution procedure.

L. Protections for Employees Not Represented by a Labor Organization

One comment indicated that Sec. 215.4 improperly expands the

protections afforded to employees not represented by a labor

organization by affording such employees ``the same protections'' as

those afforded to employees represented by a labor organization rather

than ``substantially the same protections.''

The concerns raised by this comment that rights have been expanded

have been clarified by amending the language in Sec. 215.4(b) to

eliminate any reference to the terms and conditions authorized in

Sec. 215.3(b). Instead, Sec. 215.4(b) will provide, as in the prior

guidelines, that the protective terms and conditions in the letter of

certification will be set forth by the Department. There is no

expansion of rights provided in these guidelines.

M. Procedures for Processing Amendatory Grant Applications

One comment suggested that ``[t]he special processing exemption for

'amendatory applications' in Sec. 215.3(c) as amplified in Sec. 215.5

should be eliminated in its entirety.'' It argued that, since all

grants are subject to only a 15 day review period for the purpose of

filing any objections, and any grant amendment which revises a project

in only ``immaterial respects'' would not give rise to an objection

considered sufficient under the new procedures, turnaround is expedited

and employee representatives should have the opportunity ``to provide

their views within the narrow time frame specified to ensure that the

agency is fully informed regarding the potential effects of each

project.''

The automatic certification of amendatory grants is limited to

those where changes are immaterial. If there is a change in the scope

of a project, amendatory grants should not and will not be processed

under this expedited procedure. The revised procedures for processing

other grants should not give rise to new procedures for processing of

amendatory grants containing immaterial changes which would have the

potential for delaying their approval. Thus, the suggested changes to

the proposed guidelines are not necessary.

N. Other Comments

1. One comment suggested that the proposed guidelines be withdrawn

because they appear to draw substantial content from union proposed

reforms. Another comment indicated that the ``proposed rule has been

undertaken without the input of the transit industry'' and that State

and local public body transit systems were not involved in the

development of the NPRM. Several comments suggested that the

regulations be withdrawn and that the rulemaking process be undertaken

with greater consideration for the procedures set forth in Executive

Order 12866 which ``provides that interested parties should be involved

prior to issuance of a proposed rule.'' The Department's decision to

provide 30 days rather than 60 days for a comment period was also

raised.

The Department developed language based on concepts favored by both

unions and transit management. As demonstrated by the numerous comments

received from interested parties from across the country, the

rulemaking process in this instance has afforded all the interested

parties with ample opportunity to provide comments and input on the

procedural issues which are the subject of these guidelines.

2. One comment noted that the Department may view these procedures

as ``guidelines'' rather than ``rules.'' The comment further notes that

``rules are binding on parties, including Federal agencies, and subject

to specific rulemaking procedures; in contrast, ``guidelines'' are

generally considered informal in nature and presumably are not binding

on parties.'' There is no statutory authority to issue regulations

under section 5333(b). The guidelines, however, are intended to be

binding in administering this employee protection program.

3. Numerous comments addressed administrative processes followed by

the Department and raised matters concerning the Administrative

Procedures Act. It was suggested that procedural safeguards against

what the parties characterize as ``ex parte contacts'' with labor

representatives in pending matters should be addressed in the

guidelines. Similarly, comments proposed that the guidelines address

how final decisions on disputed issues would be made available under

Sec. 215.3(e)(5) and address the matter of the procedural ability to

have access to and to rely on matters previously ruled upon by the

Department. Finally, comments indicated that the proposed guidelines

did not require the Department to ``articulate the underlying legal

rationale for its decisions'' nor did they provide for meaningful

judicial review for parties who receive an adverse ruling from the

Department.

The Department does not believe that it is appropriate to restrict

contacts with individual parties in the processing of certifications of

employee protections. In processing FTA grant applications, the

Department's role includes providing technical and mediatory assistance

to the parties. As contemplated by the legislative history, the efforts

of the Department are directed toward facilitating an agreement between

the transit authority and the union in order to ensure that the

requirements of the statute are satisfied. During mediation the

Department's

[[Page 62969]]

representative may discuss issues separately with each party, suggest

bases for settlement in an effort to resolve the dispute, and respond

to requests for technical assistance. If the parties do not reach an

agreement and the Department must make a determination of the terms and

conditions upon which a certification will be based, the standard for

communications with the parties shifts to a more formal process, where

outstanding issues are specified and schedules for briefs and

counterbriefs are committed to written instructions. No exploration of

options or issues occurs at this time absent the initiation or consent

of the other party.

Under the guidelines, the Department will take steps pursuant to

Sec. 215.3(e)(5) to assure the parties' access to the final decisions

it renders on disputed issues. The Department will continue to send

copies of its final decisions to the FTA and the affected applicant and

labor organizations. Similarly, the guidelines address the matter of

access to Departmental decisions by making available the Department's

final determinations on disputed issues. In fact, during efforts to

facilitate agreement, these decisions are regularly provided to parties

involved in negotiations when their negotiations have addressed related

subjects.

The parties will continue to be able to rely on previously issued

determinations to the extent that circumstances are similar to those in

the prior determinations. Certifications will continue to be developed

on a case by case basis to ensure that protections are statutorily

sufficient in the circumstances presented by the specific project and

under any applicable state law.

In establishing ``fair and equitable'' protections under the

statute in those circumstances where the parties are unable to reach

agreement, the Department provides the underlying rationale for the

terms and conditions upon which certification is based. The Department

will continue to provide the rationale in these cases to explain the

basis of its decisions to the parties and to facilitate other parties'

efforts to reach agreement in cases where the circumstances are

comparable. In addition, judicial review of the Department's

certification is available to the parties. See, e.g., Amalgamated

Transit Union v. Donovan, 767 F.2d 939 (D.C. Cir. 1985).

4. One comment indicated that the guidelines do not define whether

the ``days'' referred to in the various deadlines means calendar or

business days. The Department intends for the term ``days'' to refer to

calendar days. When a deadline expires on a date that is not a business

day, the deadline will then be considered to be the next business day.

5. One comment suggests that, to minimize legal expenses, the

briefing schedule, if one is adopted, should be shortened and a one-

step process instituted rather than requiring reply briefs. The

guidelines at Sec. 215.3(e)(3) provide for some flexibility in

determining the briefing schedule. In the past, the Department has

typically provided up to 30 days for briefs and for reply briefs, which

were routinely required, up to 10 days. The proposed guidelines specify

``no more than twenty (20) days for opening briefs and no more than ten

(10) days for reply briefs, when the Department deems reply briefs to

be beneficial.'' (Emphasis added.) The guidelines, therefore, already

provide for an expedited process which the Department can accelerate

when appropriate. The guidelines balance the need for an expedited

process with the need for a full disclosure of pertinent information to

facilitate the determination process.

6. One comment requested that the Department address the procedures

for processing claims determinations under the statute. This is not an

appropriate issue to be addressed under these guidelines. These are

procedural guidelines and thus not the appropriate forum for resolution

of such issues.

III. Administrative Notices

A. Executive Order 12866

These guidelines have been reviewed by the Office of Management and

Budget in accordance with Executive Order 12866.

B. Regulatory Flexibility Act

The Agency Head has certified that these guidelines are not

expected to have a significant impact on a substantial number of small

entities as defined in the Regulatory Flexibility Act.

C. Paperwork Reduction Act

These guidelines contain no information collection requirements for

purposes of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et

seq.).

List of Subjects in 29 CFR Part 215

Grant administration; Grants--transportation; Labor-management

relations; Labor unions; Mass transportation.

Signed at Washington, DC this ------ day of --------------,

1995.

Charles L. Smith,

Deputy Assistant Secretary.

Accordingly, 29 CFR Chapter II is amended by revising Part 215 to

read as follows:

PART 215--GUIDELINES, SECTION 5333(b), FEDERAL TRANSIT LAW

Sec.

215.1 Purpose.

215.2 General.

215.3 Employees represented by a labor organization.

215.4 Employees not represented by a labor organization.

215.5 Processing of amendatory applications.

215.6 The Model Agreement.

215.7 The Speciality Warranty.

215.8 Department of Labor contact.

Authority: Secretary's Order No. 2-93, 58 FR 42578, August 10,

1993.

Sec. 215.1 Purpose.

(a) The purpose of these guidelines is to provide information

concerning the Department of Labor's administrative procedures in

processing applications for assistance under the Federal Transit law,

as codified at 49 U.S.C. chapter 53.

(b) Section 5333(b) of title 49 of the United States Code reads as

follows:

Employee protective arrangements.--(1) As a condition of

financial assistance under sections 5307-5312, 5318(d), 5323 (a)(1),

(b), (d), and (e), 5328, 5337, and 5338(j)(5) of this title, the

interests of employees affected by the assistance shall be protected

under arrangements the Secretary of Labor concludes are fair and

equitable. The agreement granting the assistance under sections

5307-5312, 5318(d), 5323 (a)(1), (b), (d), and (e), 5328, 5337, and

5338(j)(5) shall specify the arrangements.

(2) Arrangements under this subsection shall include provisions

that may be necessary for--

(A) the preservation of rights, privileges, and benefits

(including continuation of pension rights and benefits) under

existing collective bargaining agreements or otherwise;

(B) the continuation of collective bargaining rights;

(C) the protection of individual employees against a worsening

of their positions related to employment;

(D) assurances of employment to employees of acquired mass

transportation systems;

(E) assurances of priority of reemployment of employees whose

employment is ended or who are laid off; and

(F) paid training or retraining programs.

(3) Arrangements under this subsection shall provide benefits at

least equal to benefits established under section 11347 of this

title.

[[Page 62970]]

Sec. 215.2 General.

Upon receipt of copies of applications for Federal assistance

subject to 49 U.S.C. 5333(b), together with a request for the

certification of employee protective arrangements from the Department

of Transportation, the Department of Labor will process those

applications, which may be in either preliminary or final form. The

Federal Transit Administration will provide the Department with the

information necessary to enable the Department to certify the project.

Sec. 215.3 Employees represented by a labor organization.

(a)(1) If affected employees are represented by a labor

organization, it is expected that where appropriate, protective

arrangements shall be the product of negotiation/discussion, pursuant

to these guidelines.

(2) In instances where states or political subdivisions are subject

to legal restrictions on bargaining with employee organizations, the

Department of Labor will utilize special procedures to satisfy the

Federal statute in a manner which does not contravene state or local

law. For example, employee protective terms and conditions, acceptable

to both employee and applicant representatives, may be incorporated

into a resolution adopted by the involved local government.

(3) If an application involves a grant to a state administrative

agency which will pass assistance through to subrecipients, the

Department of Labor will refer and process each subrecipient's

respective portion of the project in accordance with this section. If a

state administrative agency has previously provided employee

protections on behalf of subrecipients, the referral will be based on

those terms and conditions. These procedures are not applicable to

grants under section 5311.

(b) Upon receipt of an application involving affected employees

represented by a labor organization, the Department of Labor will refer

a copy of the application to that organization and notify the applicant

of referral.

(1) If an application involves only a capital grant for routine

replacement of equipment of like kind and character and/or facilities

of like kind and character, the procedural requirements set forth in

Secs. 215.3(b)(2) through 215.3(h) of these guidelines will not apply

absent a potentially material effect on employees. Where no such effect

is found, the Department of Labor will certify the application based on

the terms and conditions as referenced in Secs. 215.3(b)(2) or

215.3(b)(3)(ii).

(2) For applicants with previously certified arrangements, the

referral will be based on those terms and conditions.

(3) For new applicants and applicants for which previously

certified arrangements are not appropriate to the current project, the

referral will be based on appropriate terms and conditions specified by

the Department of Labor, as follows:

(i) for operating grants, the terms and conditions will be based on

arrangements similar to those of the Model Agreement (referred to also

as the National Agreement);

(ii) for capital grants, the terms and conditions will be based on

arrangements similar to those of the Special Warranty applied pursuant

to section 5311.

(c) Following referral and notification under paragraph (b) of this

section, and subject to the exceptions defined in Sec. 215.5, parties

will be expected to engage in good faith efforts to reach mutually

acceptable protective arrangements through negotiation/discussion

within the timeframes designated under paragraphs (d) and (e) of this

section.

(d) As part of the Department of Labor's review of an application,

a time schedule for case processing will be established by the

Department of Labor and specified in its referral and notification

letters under paragraph 215.3(b) or subsequent written communications

to the parties.

(1) Parties will be given fifteen (15) days from the date of the

referral and notification letters to submit objections, if any, to the

referred terms. The parties are encouraged to engage in negotiations/

discussions during this period with the aim of arriving at a mutually

agreeable solution to objections any party has to the terms and

conditions of the referral.

(2) Within ten (10) days of the date for submitting objections, the

Department of Labor will:

(i) Determine whether the objections raised are sufficient; and

(ii) Take one of the two steps described in paragraphs (d)(5) and

(6) of this section, as appropriate.

(3) The Department of Labor will consider an objection to be

sufficient when:

(i) The objection raises material issues that may require

alternative employee protections under 49 U.S.C. 5333(b); or

(ii) The objection concerns changes in legal or factual

circumstances that may materially affect the rights or interests of

employees.

(4) The Department of Labor will consult with the Federal Transit

Administration for technical advice as to the validity of objections.

(5) If the Department of Labor determines that there are no

sufficient objections, the Department will issue its certification to

the Federal Transit Administration.

(6) If the Department of Labor determines that an objection is

sufficient, the Department, as appropriate, will direct the parties to

commence or continue negotiations/discussions, limited to issues that

the Department deems appropriate and limited to a period not to exceed

thirty (30) days. The parties will be expected to negotiate/discuss

expeditiously and in good faith. The Department of Labor may provide

mediation assistance during this period where appropriate. The parties

may agree to waive any negotiations/discussions if the Department,

after reviewing the objections, develops new terms and conditions

acceptable to the parties. At the end of the designated negotiation/

discussion period, if all issues have not been resolved, each party

must submit to the Department its final proposal and a statement

describing the issues still in dispute.

(7) The Department will issue a certification to the Federal

Transit Administration within five (5) days after the end of the

negotiation/discussion period designated under paragraph (d)(6) of this

section. The certification will be based on terms and conditions agreed

to by the parties that the Department concludes meet the requirements

of 49 U.S.C. 5333(b). To the extent that no agreement has been reached,

the certification will be based on terms and conditions determined by

the Department which are no less protective than the terms and

conditions included in the referral pursuant to Secs. 215.3(b)(2) and

215.3(b)(3).

(8) Notwithstanding that a certification has been issued to the

Federal Transit Administration pursuant to paragraph (d)(7) of this

section, no action may be taken which would result in irreparable harm

to employees if such action concerns matters subject to the steps set

forth in paragraph (e) of this section.

(e) If the certification referred to in paragraph (d)(7) of this

section is not based on full mutual agreement of the parties, the

Department of Labor will take the following steps to resolve

outstanding differences:

(1) The Department will set a schedule that provides for final

resolution of the disputed issue(s) within sixty (60) days of the

certification referred to in paragraph (d)(7) of this section.

[[Page 62971]]

(2) Within ten (10) days of the issuance of the certification

referred to in paragraph (d)(7) of this section, and after reviewing

the parties' descriptions of the disputed issues, the Department will

define the issues still in dispute and set a schedule for final

resolution of all such issues.

(3) The Department may establish a briefing schedule, usually

allowing no more than twenty (20) days for opening briefs and no more

than ten (10) days for reply briefs, when the Department deems reply

briefs to be beneficial. In either event, the Department will issue a

final certification to the Federal Transit Administration no later than

thirty (30) days after the last briefs are due.

(4) The Department of Labor will decide the manner in which the

dispute will be resolved. In making this decision, the Department may

consider the form(s) of dispute resolution employed by the parties in

their previous dealings as well as various forms of third party dispute

resolution that may be appropriate. Any dispute resolution proceedings

will normally be expected to commence within thirty (30) days of the

certification referred to in paragraph (d)(7) of this section, and the

Department will render a final determination, including the bases

therefor, within thirty (30) days of the commencement of the

proceedings.

(5) The Department will make available final decisions it renders

on disputed issues.

(f) Nothing in these guidelines restricts the parties from

continuing to negotiate/discuss over final terms and conditions and

seeking a final certification of an agreement that meets the

requirements of the Act prior to the issuance of a final determination

by the Department.

(g) If, subsequent to the issuance of the certification referred to

in paragraph (d)(7) of this section, the parties reach an agreement on

one or more disputed issues that meets the requirements of the Act,

and/or the Department of Labor issues a final decision containing

revised terms and conditions, the Department will take appropriate

steps to substitute the new terms and conditions for those previously

certified to the Federal Transit Administration.

(h) Notwithstanding the foregoing, the Department retains the right

to withhold certification where circumstances inconsistent with the

statute so warrant until such circumstances have been resolved.

Sec. 215.4 Employees not represented by a labor organization.

(a) The certification made by the Department of Labor will afford

the same level of protection to those employees who are not represented

by labor organizations.

(b) If there is no labor organization representing employees, the

Department of Labor will set forth the protective terms and conditions

in the letter of certification.

Sec. 215.5 Processing of amendatory applications.

When an application is supplemental to or revises or amends in

immaterial respects an application for which the Department of Labor

has already certified that fair and equitable arrangements have been

made to protect the interests of mass transit employees affected by the

subject project the Department of Labor will on its own initiative

apply to the supplemental or other amendatory application the same

terms and conditions as were certified for the subject project as

originally constituted. The Department of Labor's processing of these

applications will be expedited.

Sec. 215.6 The Model Agreement.

The Model (or National) Agreement mentioned in paragraph (b)(3)(i)

of Sec. 215.3 refers to the agreement executed on July 23, 1975 by

representatives of the American Public Transit Association and the

Amalgamated Transit Union and Transport Workers Union of America and on

July 31, 1975 by representatives of the Railway Labor Executives'

Association, Brotherhood of Locomotive Engineers, Brotherhood of

Railway and Airline Clerks and International Association of Machinists

and Aerospace Workers. The agreement is intended to serve as a ready-

made employee protective arrangement for adoption by local parties in

specific operating assistance project situations. The Department has

determined that this agreement provides fair and equitable arrangements

to protect the interests of employees in general purpose operating

assistance project situations and meets the requirements of 49 U.S.C.

5333(b).

Sec. 215.7 The Special Warranty.

The Special Warranty mentioned in paragraph (b)(3)(ii) of

Sec. 215.3 refers to the protective arrangements developed for

application to the small urban and rural program under section 5311 of

the Federal Transit statute. The warranty arrangement represents the

understandings of the Department of Labor and the Department of

Transportation, reached in May 1979, with respect to the protections to

be applied for such grants. The Special Warranty provides fair and

equitable arrangements to protect the interests of employees and meets

the requirements of 49 U.S.C. 5333(b).

Sec. 215.8 Department of Labor contact.

Questions concerning the subject matter covered by this part should

be addressed to Statutory Programs, U.S. Department of Labor, Suite

N5411, 200 Constitution Avenue, NW., Washington, DC 20210; phone number

202-219-4473. (Secretary's Order 2-93, 58 FR 42578, August 10, 1993.)

[FR Doc. 95-29752 Filed 12-6-95; 8:45 am]

BILLING CODE 4510-86-P