[Federal Register Volume 60, Number 191 (Tuesday, October 3, 1995)]
[Proposed Rules]
[Pages 51762-51764]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24174]



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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 

[[Page 51763]]
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 

[[Page 51764]]
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]
BILLING CODE 6570-01-M