[Federal Register Volume 60, Number 235 (Thursday, December 7, 1995)]
[Rules and Regulations]
[Pages 62964-62971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29752]




[[Page 62963]]

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Part III





Department of Labor





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Office of Labor-Management Programs



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29 CFR Part 215



Guidelines, Section 5333(b), Federal Transit Law; Final Rule

  Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / 
Rules and Regulations   

[[Page 62964]]


DEPARTMENT OF LABOR

Office of Labor-Management Programs

29 CFR Part 215

RIN 1294-AA14


Guidelines, Section 5333(b), Federal Transit Law

AGENCY: Office of Labor-Management Programs, Office of the American 
Workplace, Labor.

ACTION: Final guidelines.

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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