[Federal Register Volume 62, Number 49 (Thursday, March 13, 1997)]
[Proposed Rules]
[Pages 11797-11805]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6305]


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FEDERAL MEDIATION AND CONCILIATION SERVICE

29 CFR Part 1404


Arbitration Policy; Roster of Arbitrators, and Procedures for 
Arbitration Services

AGENCY: Federal Mediation and Conciliation Service.

ACTION: Proposed rule.

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SUMMARY: The proposed revision to 29 CFR Part 1404 is being published 
in order to revise the policies and procedures used by Federal 
Mediation and Conciliation Service in administering its arbitration 
program.
    The goals of the proposed revision are to more accurately reflect 
current practice, clarify the role of the Arbitrator Review Board, 
revise the standards for arbitrator listing on the Roster, and announce 
certain changes. Among the changes made are:
    First, requests for special experience or qualifications, or other 
special requirements, must be either jointly submitted by the parties, 
or, if unilaterally submitted, must certify that the other party 
agrees, or there is no conflict with the applicable contract. This will 
allow a single party, for example, to request a panel with special 
expertise, so long as the required assurances are made. Similarly, FMCS 
will make a direct appointment of an arbitrator based on the assurances 
of one party.
    Second, the Federal Mediation and Conciliation Service, Office of 
Arbitration Services (OAS) will no longer receive or interpret contract 
language in regard to furnishing services.
    Third, as an alternative to the submission of a panel of 
arbitrators, FMCS, upon request, will furnish the names and 
biographical sketches of all listed arbitrators in specified 
geographical locations. In this case, the

[[Page 11798]]

parties may directly appoint and deal with the arbitrator without any 
further involvement of FMCS.
    Finally, the regulations call for an annual listing fee for all 
arbitrators as well as a fee for all arbitrator list and panel requests 
of FMCS.

DATES: Comments must be received on or before April 15, 1997.

ADDRESSES: Interested organizations and individuals are invited to 
submit written comments to these proposed regulatory changes. Comments 
should be submitted to Peter L. Regner, Director of Program Services, 
Federal Mediation and Conciliation Service, 2100 K Street, NW., 
Washington, DC 20427. All written comments will be available for 
inspection during work hours at the above address.

FOR FURTHER INFORMATION CONTACT: Mr. Peter L. Regner, Director, Program 
Services, Federal Mediation and Conciliation Service, 2100 K Street 
NW., Washington, DC 20427, (202) 606-8181.

SUPPLEMENTARY INFORMATION: An analysis of the changes in the proposed 
revisions follows.

Subpart A--Arbitration Policy; Administration of Roster, Sections 
1404.1-1404.3

Section 1404.3  Administrative Responsibilities

    (c) This section establishes the Arbitrator Review Board and 
outlines powers and duties. Paragraph (iv) is new. It provides that the 
Board may upon request of the Director, review FMCS Arbitration 
policies and procedures.

Subpart B--Roster of Arbitrators Admission and Retention, Sections 
1404.4-1404.7

Section 1404.4

    Paragraph (e). This part is unchanged except that the service of 
issuing lists or panels of arbitrator names will now be subject to a 
nominal fee. The collection of these fees is needed in order to assure 
a continuous non-appropriated source of funds to be solely used by FMCS 
for its internal education, training and professional development 
initiatives.
    Paragraph (f). A provision has been added to reinforce FMCS 
authority to remove or suspend from its Roster those arbitrators who 
habitually fail to adhere to the regulations.

Section 1404.5

    This section outlines the criteria the Arbitrator Review Board will 
use in recommending to the Director whether or not an individual will 
be listed on the Roster. This section provides that applicants for 
listing on the Roster must complete and submit an application. The 
Office of Arbitration Services will review the application, make the 
necessary inquiries, and forward the application to the Arbitrator 
Review Board. The Board will then review the application and make a 
recommendation to the Director about whether or not to list an 
applicant on the Roster based on the criteria established in paragraphs 
(a)(b)(c) of Sec. 1404.5. The Director of FMCS has the authority to 
make all final decisions about listing on the Roster. This section is 
substantially unchanged from current regulations.
    Paragraph (a) outlines the general criteria that the Arbitrator 
Review Board will use when considering an applicant. Individuals 
requesting listing on the Roster must be experienced, competent and 
acceptable in labor management decision-making roles. This paragraph is 
changed from the current regulations only to the extent that a 
statement in the current rules that the applicant have extensive 
experience in collective bargaining, and that he or she be capable of 
conducting an orderly hearing, analyze testimony and evidence and 
prepare a clear and concise award, is deleted. However, subsection (b) 
now contains similar requirements as outlined immediately below.
    Paragraph (b). Proof of Qualifications, is different from the 
current regulations in that the proposed rule provides that the 
standards of acceptability, experience and competence in subsection (a) 
above, are demonstrated by the submission of at least 5 actual 
arbitration awards, issued by the applicant while serving as an 
arbitrator of record chosen by the parties to a labor dispute. The 
Board is also authorized to consider an applicant's bargaining and 
labor negotiations experience, or experience as a judge or hearing 
examiner in labor relations issues as a substitute for the awards. This 
provision is similar to the current regulations Sec. 1404.5(a) (1) and 
(2). However, the specific requirement of 5 awards is new. It is 
designed to allow the Board to objectively apply a test of 
acceptability.
    Paragraph (c), Advocacy is substantially the same as the current 
Sec. 1404.5(c) (1) and (2). The paragraph prohibits advocates, except 
those who are ``grandfathered'' under the current rules, from being 
listed on the Roster. All persons who were listed on the Roster as 
advocates before the date of the ``grandfather'' clause, that is 
November 17, 1976, may remain listed on the Roster. However, no 
applicant for listing who is an advocate will be listed on the Roster. 
A person who was on the Roster before November 17, 1976, and did not 
divulge his or her advocacy status at the time his or her listing, 
(emphasis added) may not remain listed on the Roster. This policy is 
designed to insure that parties receive the names of arbitrators who 
are, and are seen as truly neutral, except in the case of those 
individuals listed on the Roster before the prohibition of advocacy as 
adopted.
    The definition of an advocate in (1) is the same as current FMCS 
policy. It is designed to be as broad as necessary to insure that 
parties will not have any reason to question the neutrality of a 
potential arbitrator. The provision prohibits listing on the Roster 
people who earn money, or any form of compensations, by representing 
either side in a labor relations matter.
    Paragraph (d) establishes the policies and procedures for listing 
retention and removal of and individual listed on the Roster. it is a 
clarification of the current policy in Sec. 1404.5(d). It provides that 
the Director of FMCS shall make all final decisions about an 
applicant's listing on the Roster. Removal is by the recommendation of 
the Arbitrator Review Board after notice for violations of the 
regulations and/or the Code of Professional Responsibility for 
Arbitrators of Labor Management Disputes as cited in Sec. 1404.4(b). 
Notice of cancellation will be given by the Board when a Roster member:
    (1) No longer meets the criteria for admission. This is the same 
policy as in the current regulations.
    (2) Has become an advocate as defined in 1404.5(c). This is a new 
provision and a clarification of current FMCS practice of removing from 
the Roster individuals who become advocates in order to protect the 
integrity and neutrality of the Roaster.
    (3) Has been repeatedly or flagrantly delinquent in submitting 
awards. This is also the current FMCS rule, and allows the Board to 
recommend removal of individuals who fail to meet the timely needs of 
the parties.
    (4) Has refused to make reasonable reports as required by FMCS in 
accordance with Subpart C infra. This is also current FMCS policy and 
regulation. It is designed to insure that the agency can obtain the 
necessary information to efficiently operate the program.
    (5) Has been the subject of complaints by the parties, and the 
Board, after inquiry, concludes that reasonable grounds for 
cancellation has been shown. This is also substantially the same as 
current FMCS policy and is designed to establish a method for

[[Page 11799]]

parties to state their concerns and complaints. Removal under such 
grounds, however, must be conducted according to the procedures 
established in this paragraph.
    (6) This provides that the Director may remove an individual who is 
not being selected by the parties in at least 2 percent of the cases 
per year in which his/her name is submitted to parties for selection. 
This is to insure that the Roster is composed of individuals who are 
aceeptable to the parties.
    The procedures for removal is left up to the Arbitrator Review 
Board, so long as the individual proposed to be removed is given 60 
days prior notice of the proposed removal and an opportunity to 
respond. The Board will consider the reasons for the removal and all 
responses before making a recommendation to the Director. All decisions 
to remove must be made by the Director. This is designed to insure that 
individuals will be given an opportunity to present evidence and 
argument on their behalf before a decision is made to remove.
    There is also a new provision which states that the Director of the 
Office of Arbitration Services (OAS) may suspend--that is not send out 
an individual's name on any panel or appoint an individual to serve as 
arbitrator for up to 180 days--if the Director of OAS has determined 
that someone has violated the aforementioned criteria.
    This was established to insure prompt action on the part of FMCS to 
deal with violations of the regulations and to protect the arbitration 
process, the Roster and the parties. A suspension is not a 
determination on the merits of any dispute or controversy, and the 
suspension may not exceed 180 days. Arbitrators will be notified 
promptly of a suspension and will be afforded an opportunity to appeal, 
if they wish to do so, to the Arbitrator Review Board. The Board will 
make a recommendation to the Director of FMCS, whose decision shall 
constitute final agency action.

Section 1404.6

    This is also a new section which provides that an individual listed 
on the Roster may request that he or she may be put on an inactive 
status. This means that while they are on such status, their name will 
not be sent to the parties. This enables a Roster member to request 
that his or her name not be sent to parties while, for example, they 
are on an extended vacation. It is designed for the convenience of the 
person listed on the Roster and the parties.

Section 1404.7

    This is a new section announcing that FMCS will be charging all 
arbitrators wishing to be listed on its Roster an annual listing fee. 
As with the charging for the provision of lists and panels to the 
parties, the fees collected will assure FMCS of a continuous non-
appropriated source of funds for its internal education, training and 
professional development initiatives.

Subpart C--Procedures for Arbitration Services, Sections 1404.8-
1404.16

Section 1404.8

    This new provision applies only to Subpart C. The new text 
incorporates the provision which currently appears at Sec. 1404.6, but 
points out that while the parties are free to choose arbitration 
procedures that are acceptable to them, such procedures are subordinate 
to the provisions of Subpart C. Thus, if either
    (a) The parties designate in their agreement that FMCS furnish 
arbitration services, or
    (b) One or more parties request FMCS arbitration services, then all 
parties are subject to the rules contained in Subpart C. This new 
language has been added to insure that FMCS has the authority to remedy 
any abuse of Subpart C rules and enforce compliance with them.

Section 1404.9

    Paragraph (a) is essentially a repeat of the provision now found at 
Sec. 1404.10.
    Paragraph (b) is essentially a repeat of the provision found at 
Sec. 1404.10(a). In stating that the issuance of a panel--or a direct 
appointment--is nothing more than a response to a request, the text 
adds new language setting that such actions also do not signify the 
adoption of any position in regard to arbitrability. This additional 
language aligns the text with the wording that appears at the bottom of 
FMCS Form R-43, Request for Arbitration Services.
    Paragraph (c). This is a new service which will allow parties to 
receive the names and biographical sketches of arbitrators and deal 
directly with the arbitrator. This is a cost-savings measure for those 
parties with frequent need for arbitrators and whose relationship is 
such that they can select and deal with the arbitrators without FMCS 
appointment and tracking services.
    Paragraph (d). This new provision allows FMCS to refuse to supply 
arbitration services if the request crates difficult operational 
problems. For example, if FMCS received a request for 100 panels, it 
might be refused because of the workload imposed. In such case the OAS 
might contact the requestor to see if some less burdensome arrangements 
could be made or if FMCS could design an alternative solution. It also 
allows FMCS to deny services to parties who abuse the process by 
habitually failing to pay arbitrator fees or other such actions.
    Paragraph (e). This provision changes the text found in 
Sec. 1404.10 (b) and (d) and replaces those two subsections. While the 
current language urges parties to use FMCS Form R-43 to make requests 
for arbitration services, it also allows the use of letters as a 
substitute. The revised text mandates that only Form R-43 be used and 
states that a failure to do so may result in the request being returned 
to the sender. This change to mandatory use of Form R-43 is required 
because OAS has converted its operations from a manual system to 
computer system, and the receipt of typed requests on Form R-43 is 
necessary in order to obtain prompt entry and storage of data. Although 
approximately 80% of all requests are now received on Form R-43, FMCS 
will (1) allow for a phase-in period for this new requirement, (2) 
conduct a campaign of notification and education to make requesters 
aware of the requirement, and (3) make Form R-43 available in quantity 
to all labor organizations and employers dealing with FMCS. This change 
is a product of a lengthy reinvention effort by the staff of OAS. It is 
their collective opinion that even if this presents a small burden to 
some of our customers, it will provide a greater benefit to all 
concerned by streamlining our processing of requests.
    Paragraph (f). This is a new provision. It is based on the 
experience of the OAS, that a significant increase has taken place in 
incidents involving procedural quarrels between the parties. These 
clashes concern such matters as (1) whether or not one party or the 
other has refused to cooperate in striking names from a panel of 
arbitrators, (2) whether or not the grievance issues have been 
determined in a previous arbitration award, (3) whether arbitrators on 
a panel should or should not have special expertise, (4) whether 
arbritators should or should not come from a particular geographic 
area, and (5) whether a local contract or a national contract governs 
the parties.
    The OAS has found itself increasingly entangled in such procedural 
disputes and therefore has decided on the following changes:
    (1) The OAS will no longer receive or review the terms contained in 
the parties collective bargaining agreements, and will make 
determinations as to the meaning or effect of such agreements. 
Accordingly, the second sentence of the text now appearing at 
Sec. 1404.10(c)--

[[Page 11800]]

 calling for submissions of contract language--has been deleted. Also, 
since there is no longer a requirement that a brief statement 
describing each issue in dispute accompany the request, the first 
sentence of the current Sec. 1404.10(c) has similarly been deleted, 
thus negating the entire text of this section.
    (2) For unilateral requests--except those asking for a list or 
standard panel of seven names--the requestor will certify that one of 
the following conditions applies:
    (a) The other party has agreed to the request, or
    (b) There is no conflict with the parties collective bargaining 
agreement.
    FMCS Form R-43, Request for Arbitration Services, has been modified 
to allow requestors to so certify in a simple and convenient way. The 
OAS will consider all statements as made in good faith and will honor 
all requests as submitted. A failure to supply the information required 
in (a) or (b) above disqualifies the request.
    While the OAS realizes that a unilateral request, under the 
conditions set out above, may be subject to abuse by one party or the 
other, the following policy considerations have let to the adoption of 
the proposed new language.
    As to the issuance of panels.
    If the OAS were to require that all requests--except for a standard 
7 person panel--be submitted on the basis of mutual consent, the 
arbitration process would be frustrated by the quarrels of the parties. 
That is, there would be no agreement, no submission of a request, and 
recourse would have to be sought through the relatively lengthy 
procedures of the National Labor Relations Board, the Federal Labor 
Relations Authority or the courts.
    By placing a burden of good faith on the party submitting the 
unilateral request, and by acting promptly to honor it, the OAS acts to 
further the arbitration process. Moreover, receiving the OAS panel 
establishes no obligation on any party to use it, or to arbitrate any 
issue. The panel simply permits the option of moving further on the 
path of arbitration.
    As to direct direct appointments.
    In the case of a unilateral request for appointment of an 
arbitrator, the result may cause a burden to be placed on a party. That 
is, a party may be either obliged to appear before an appointed 
arbitrator to argue that arbitration is not warranted, or risk the 
result of an ex parte award. While OAS is mindful of this possible 
result, it has proposed the new procedure for the following reasons.
    (i) Reliance by the OAS on contract interpretation, as the basis 
for a direct appointment, means becoming entangled in the parties' 
quarrels. One side or the other may dispute the reading of the contract 
made by the OAS, and thus make OAS interpretation one more obstacle to 
arbitration.
    (ii) Reliance by the OAS, on mutual assent by the parties, as the 
basis for a direct appointment, again means frustrating the arbitration 
process. Thus, the quarreling parties will refuse to agree, and a 
solution will have to be sought through the relatively time consuming 
procedures of the National Labor Relations Board, the Federal Labor 
Relations Authority, or the courts.
    (iii) By instead placing a burden of good faith on the party making 
the unilateral request, and simply honoring it, the OAS will promptly 
place the matter of proper jurisdiction before a neutral decision 
maker--the arbitrator. If the arbitrator finds that one party or the 
other has acted improperly in pursuing arbitration, the arbitrator may 
provide redress in the terms of the remedy awarded, or the arbitrator's 
finding may be used as the basis for redress before another tribunal.

Section 1404.10

    This provision follows the language which currently appears a 
Sec. 1404.11. No significant change has been made.

Section 1404.11

    This section--made up of four subsections--replaces the current 
Sec. 1404.12.
    Paragraph (a) describes the content of lists and standard panels. 
It deletes the reference to the parties' contract, as contracts will no 
longer be reviewed, (ii) deletes the reference to requests by parties 
for a number of arbitrators different than 7, as joint requests for 
services other than a standard panel are described in the last sentence 
of the new text, and (iii) adds the statement that requests for 
standard panels--made jointly or unilaterally--will be honored without 
the need for compliance with Sec. 1404.9(f), and (iv) paragraph (a) 
adds language explaining the new ``list of arbitrators'' service 
offered by OAS.
    Paragraph (b) describes non-standard panels, and states, in 
conformance with the new policy of FMCS, that unilateral requests for a 
non-standard panel must comply with the requirement of Sec. 1404.9(f). 
This subsection serves as a replacement for the language now appearing 
at Sec. 1404.12(c)(4).
    Paragraph (c) This provision describes the assignment OAS case 
numbers and is essentially the same as that now found at 
Sec. 1404.12(b).
    Paragraph (d) describes the factors involved in selecting names for 
panels now found at Sec. 1404.12(c). The current statement--that the 
agreed upon wishes of the parties are paramount--is deleted, as this 
concept is expressed in subsections (d)(2) and (d)(3) which follow 
immediately below.
    Paragraph (d)(1) is a new provision which explain that unless the 
parties jointly request otherwise, the site of the dispute serves as 
the geographical basis for the selection of the arbitrators.
    Paragraph (d)(2) is a repeat of the text of Sec. 1404.12(c)(1), 
with one change. The phrase for valid reasons is omitted because the 
OAS will not pass judgment on the validity of the reasons given--if 
any--that persons be included or omitted from panels of arbitrators. 
This position corresponds to the FMCS policy that its arbitration 
services constitute a response to a request and nothing more.
    Paragraph (d)(3). This language replaces the current text at 
Sec. 1404.12(c)(3). While the current language prohibits a single party 
from including or omitting names from a panel, the revised text permits 
one party to do so, if the conditions as to numbers, and compliance 
with Sec. 1404.9(f), are met.
    Section (e) replaces the language now found at Sec. 1404.12(c)(5). 
The new text eliminates reference to the terms of agreement in the 
parties' contract--as the OAS will no longer receive or review such 
terms--and places a fixed ceiling--of three--on the number of panels 
which will be successively issued. Under the current language no fixed 
ceiling is established, and instead the matter is left open ended with 
consideration to be made on a case by case basis. After the issuance of 
three panels, FMCS will make a direct appointment.

Section 1404.12

    This section, consisting of three paragraphs, replaces the current 
Sec. 1404.13.
    Paragraph (a). The current language--in Sec. 1404.13(a)--says that 
parties should not notify the OAS of their selection of an arbitrator. 
The new text makes this requirements mandatory and states that the 
parties must do so. The new text also adds a requirement--not present 
in the current Sec. 1404.13(c)--that parties must notify the arbitrator 
as well as OAS if they decide not to proceed to arbitration. As to both 
of these mandatory provisions there is also new penalty language 
stating that a consistent failure to comply may led to denial of OAS 
services. These changes will assist FMCS in implementing these 
regulation.

[[Page 11801]]

    The portion of the revised text directing the arbitrator to notify 
the OAS of his or her selection remains the same, except for (i) the 
added word stating that the arbitrator must do so promptly, and (ii) 
the added statement that the arbitrator is expected to communicate with 
the parties within 14 days of notification of appointment by OAS. This 
added statement replaces the current Sec. 1404.13(d) which requires the 
arbitrator to communicate immediately.
    This notification to OAS by the arbitrator is only necessary 
following the selection of a panel by FMCS. It is not necessary or 
wanted if the parties have elected to work off a list of all 
aribitrators in their area as described in section 1404.11(a).
    Paragraph (c). The current text--found at Sec. 1404.13(b)--is 
mostly unchanged.
    Paragraph (d) describes direct appointments. The revised text 
removes the phrase referring to the applicable collective bargaining 
agreement, as such agreements will no longer be considered by the OAS. 
Once more, if a unilateral request for a direct appointment is made, 
the unilateral request must comply with Sec. 1404.9(f). In other 
respects, the revised text is basically the same as the current 
provisions in Sec. 1404.13(c).

Section 1404.13

    The revised text is similar to that now found at Sec. 1404.14, 
except as follows:
    (i) The current text says that an arbitrator is expected to conduct 
all proceedings in conformity with Sec. 1404.4(b). The revised text 
states that the arbitrator shall do so.
    (ii) The current text says that the arbitrator's decision is to be 
based upon the evidence and testimony presented. The revised text 
states that the decision shall be so based.

Section 1404.14

    The revised text is similar to that now found at 1404.15, except as 
follows:
    Paragraph (a),
    (i) The current text of Sec. 1404.15(a) says that arbitrators are 
encouraged to render awards not later than 60 days from the date of the 
closing of the record. The revised text at Sec. 1404.14(a), states that 
arbitrators shall make awards no later than 60 days from the same date.
    (ii) In the current text, at Sec. 1404.15(a), the date of the 
closing of the record is described as determined by the arbitrator, 
unless otherwise agreed upon by the parties or specified by law. The 
revised text, at Sec. 1404(a), adds to this description by inserting 
the phrase--or specified by the corrective bargaining agreement.
    (iii) The current text as Sec. 1404.15(a) says that the issuance of 
untimely awards by an arbitrator may lead to his removal from the FMCS 
roster. The revised text, at Sec. 1404.14(a), removes the word his, 
thus deleting any reference to whether the arbitrator is male or 
female.
    Paragraph (b). The current text states that an arbitrator should 
inform the OAS concerning a delay in issuing an award, and in 
describing the circumstances when the arbitrator should do so, say that 
this should happen when the aribtrator cannot schedule, hear and 
determine issues promptly. The revised text changes the phrase 
``determine issues'' to ``render decisions,'' as the new phrase is more 
complete and encompasses within it the inability to determine issues.

Section 1404.15

    The revised text is similar to that now found at Sec. 1404.1b, 
except as follows:
    Paragraph (a),
    (i) The current text requires that fees charges by arbitrators be 
certified in advance to the Service. The revised text requires only 
that they be provided in advance.
    (ii) The revised text adds two requirements, not contained in the 
current provisions at Sec. 1404.16(a), as follows:
    (A) Arbitrators with dual business addresses shall bill the parties 
for expenses from the nearest business address to the hearing site. 
This provision has been added in order to prevent excessive billing 
charges.
    (B) Arbitrators shall submit their schedule of fees to both parties 
when accepting arbitration appointments. This provision has been added 
because biographical sketches state only the per diem fee charged by 
the arbitrator. Other fees involved in the arbitrator's service must 
therefore be made known to the parties when accepting an appointment.
    (C) A reference is once again made to charging arbitrators an 
annual listing fee.
    Paragaph (d). While the current text, at Sec. 1404.16(d), states 
that the Service will not attempt to resolve any fee dispute, the 
revised text states that the Service does not resolve such disputes. 
The language also notifies the public that FMCS will file complaints 
about excessive charges and that repeated complaints will be forwarded 
to the Arbitrator Review Board.

Section 1404.16

    There are no major changes in this section.

Executive Order 12291

    This proposed rule is not a ``major rule'' under Executive Order 
12291 because it is not likely to result in (1) an annual effect on the 
economy of $100 million or more (2) a major increase in costs or prices 
for consumers, individual industries, Federal, State, or local 
government agencies, or geographic regions; or (3) a significant 
decline in productivity, innovation, or on the ability of the United 
States-based enterprises to compete with foreign-based enterprises in 
domestic or export markets. Accordingly, no regulatory impact analysis 
is required.

Regulatory Flexibility Act Certification

    The FMCS finds that this proposed rule will have no significant 
economic impact upon a substantial number of small entities within the 
meaning of section 3(a) of the Regulatory Flexibility Act, Pub. L. 96-
354, 94 Stat. 164 (5 U.S.C. 605(g)), and will so certify to the Chief 
Counsel for Advocacy of the Small Business Administration. This 
conclusion has been reached because the proposed rule does not, in 
itself, impose any additional economic requirements upon small 
entities. Accordingly, no regulatory flexibility analysis is required.

List of Subjects in 29 CFR Part 1404

    Administrative practice and procedure, Labor management relations.

    For the reasons stated in the preamble, the Federal Mediation and 
Conciliation Service proposes to revise 29 CFR Part 1404 to read as 
follows:

PART 1404--ARBITRATION SERVICES

Subpart A--Arbitration Policy; Administration of Roster

Sec.
1404.1  Scope and authority.
1404.2  Policy.
1404.3  Administrative responsibilities.

Subpart B--Roster of Arbitrators; Admission and Retention

1404.4  Roster and status of members.
1404.5  Listing on the roster, criteria for listing and retention.
1401.6  Inactive status.
1401.7  Listing fee.

Subpart C--Procedures for Arbitration Services

1404.8  Freedom of choice.
1404.9  Procedures for requesting arbitration panels.
1404.10  Arbitrability.
1404.11  Nominations of arbitrators; Standard and non-standard 
panels.
1404.12  Selection by parties and appointment of arbitrators.
1404.13  Conducts of hearings.
1404.14  Decision and awards.

[[Page 11802]]

1404.15  Fees and charges of arbitrators.
1404.16  Reports and biographical sketches.

    Authority: 29 U.S.C. 172 and 29 U.S.C. 173 et seq.

Subpart A--Arbitration Policy; Administration of Roster


Sec. 1404.1  Scope and authority.

    This chapter is issued by the Federal Mediation and Conciliation 
Service (FMCS) under Title II of the Labor Management Relations Act of 
1947 (Public Law 80-101) as amended. It applies to all arbitrators 
listed on the FMCS Roster of Arbitrators, to all applicants for listing 
on the Roster, and to all persons or parties seeking to obtain from 
FMCS either names or panels of names of arbitrators listed on the 
Roster in connection with disputes which are to be submitted to 
arbitration or factfinding.


Sec. 1404.2  Policy.

    The labor policy of the United States promotes and encourages the 
use of voluntary arbitration to resolve disputes over the 
interpretation or application of collective bargaining agreements. 
Voluntary arbitration and factfinding are important features of 
constructive employment relations as alternatives to economic strife.


Sec. 1401.3  Administrative responsibilities.

    (a) Director. The Director of FMCS has responsibility for all 
aspects of FMCS arbitration activities and is the final agency 
authority on all questions concerning the Roster and FMCS arbitration 
procedures.
    (b) Office of Arbitration Services. The Office of Arbitration 
Services (OAS) maintains a Roster of Arbitrators (the Roster); 
administers Subpart C of this part (Procedures for Arbitration 
Services); assists, promotes, and cooperates in the establishment of 
programs for training and developing new arbitrators; and provides 
names or panels of names of listed arbitrators to parties requesting 
them.
    (c) Arbitrator Review Board. The Arbitrator Review Board shall 
consist of a chairman and members appointed by the Director who shall 
serve at the Director's pleasure. The Board shall be composed entirely 
of full-time officers or employees of the Federal Government and shall 
establish procedures for carrying out its duties.
    (1) Duties of the Board. The Board shall:
    (i) Review the qualifications of all applicants for listing on the 
Roster, interpreting and applying the criteria set forth in 
Sec. 1401.5;
    (ii) Review the status of all persons whose continued eligibility 
for listing on the Roster has been questioned under Sec. 1404.5;
    (iii) Recommend to the Director the acceptance or rejection of 
applicants for listing on the Roster, or the withdrawal of listing on 
the Roster for any of the reasons set forth in this part;
    (iv) At the request of the Director of FMCS, review arbitration 
policies and procedures, including all regulations and written guidance 
regarding the use of the FMCS arbitrators, and make recommendations 
regarding such policies and procedures to the Director.
    (2) [Reserved]

Subpart B--Roster of Arbitrators; Admission and Retention


Sec. 1404.4  Roster and status of members.

    (a) The Roster. FMCS shall maintain a Roster of labor arbitrators 
consisting of persons who meet the criteria for listing contained in 
Sec. 1404.5 and who remain in good standing.
    (b) Adherence of standards and requirements. Persons listed on the 
Roster shall comply with FMCS rules and regulations pertaining to 
arbitration and with such guidelines and procedures as may be issued by 
the OAS pursuant to subpart C of this part. Arbitrators shall conform 
to the ethical standards and procedures set forth in the Code of 
Professional Responsibility for Arbitrators of Labor Management 
Disputes, as approved by the National Academy of Arbitrators, Federal 
Mediation and Conciliation Service, and the American Arbitration 
Association.
    (c) Status of arbitrators. Persons who are listed on the Roster and 
are selected or appointed to hear arbitration matters or to serve as 
factfinders do not become employees of the Federal Government by virtue 
of their selection or appointment. Following selection or appointment, 
the arbitrator's relationship is solely with the parties to the 
dispute, except that arbitrators are subject to certain reporting 
requirements and to standards of conduct as set forth in this part.
    (d) Role of FMCS. FMCS has no power to:
    (1) Compel parties to appear before an arbitrator;]
    (2) Enforce an agreement to arbitrate;
    (3) Compel parties to arbitrate any issue;
    (4) Influence, alter, or set aside decisions of arbitrators on the 
Roster;
    (5) Compel, deny, or modify payment of compensation to an 
arbitrator.
    (e) Nominations and panels. On request of the parties to an 
agreement to arbitrate or engage in factfinding, or where arbitration 
or factfinding may be provided for by statue, OAS, will provide names 
or panels of names for a nominal fee. Procedures for obtaining these 
services are outlined in subpart C of this part. Neither the submission 
of a nomination or panel nor the appointment of an arbitrator 
constitutes a determination by FMCS that an agreement to arbitrate or 
enter factfinding proceedings exists; nor does such action constitute a 
ruling that the matter in controversy is arbitrable under any 
agreement.
    (f) Rights of persons listed on the Roaster. No person shall have 
any right to be listed or to remain listed on the Roster. FMCS retains 
its authority and responsibility to assure that the needs of the 
parties using its services are served. To accomplish this purpose, FMCS 
may establish procedures for the preparation of panels or the 
appointment of arbitrators or factfinders which include consideration 
of such factors as background and experience, availability, 
acceptability, geographical location, and the expressed preferences of 
the parties. FMCS may also establish procedures for the suspension and 
removal from the Roster of those arbitrators who fail to adhere to 
provisions contained in this part.


Sec. 1404.5  Listing on the Roster; criteria for listing and retention.

    Persons seeking to be listed on the Roster must complete and submit 
an application form which may be obtained from OAS. Upon receipt of an 
executed application, OAS will review the application, assure that it 
is complete, make such inquiries as are necessary, and submit the 
application to the Board. The Board will review the completed 
application under the criteria in paragraphs (a), (b), and (c) of this 
section, and will forward to the FMCS Director its recommendation 
whether or not the applicant meets the criteria for listing on the 
Roster. The Director shall make all final decisions as to whether an 
applicant may be listed on the Roster. Each applicant shall be notified 
in writing of the Director's decision and the reasons therefor.
    (a) General criteria. Applicants for the Roster will be listed on 
the Roster upon a determination that they are experienced, competent, 
and acceptable in decision-making roles in the resolution of labor 
relations disputes.
    (b) Proof of qualification. The qualifications for recommending 
listing on the Roster shall be demonstrated by submission of a least 
five (5) actual arbitration awards prepared by the applicant while 
serving as an impartial arbitrator of record chosen by the parties to 
disputes arising under collective bargaining agreements. The Board may

[[Page 11803]]

consider experience in relevant positions in collective bargaining or 
as a judge or hearing examiner in labor relations controversies as a 
substitute for such awards.
    (c) Advocacy. No person who at the time of application is an 
advocate as defined in paragraph (c)(1) of this section, may be 
recommended for listing on the Roster by the Board. Except in the case 
of persons listed on the Roster as advocates before November 17, 1976, 
any person who did not divulge his or her advocacy at the time of 
listing, or who has become an advocate while listed on the Roster, 
shall be recommended for removal by the Board after the fact of 
advocacy is revealed.
    (1) Definition of advocacy. An advocate is a person who represents 
employers, labor organizations, or individuals as an employee, 
attorney, or consultant, in matters of labor relations, including but 
not limited to the subjects of union representation and recognition 
matters, collective bargaining, arbitration, unfair labor practices, 
equal employment opportunity, and other areas generally recognized as 
constituting labor relations. The definition includes representatives 
of employers or employees in individual cases or controversies 
involving workmen's compensation, occupational health or safety, 
minimum wage, or other labor standards matters. This definition of 
advocate also includes a person who is directly associated with an 
advocate in a business or professional relationship as, for example, 
partners or employees of a law firm.
    (2) [Reserved]
    (d) Duration of listing, retention. Listing on the Roster shall be 
by decision of the Director of FMCS based upon the recommendations of 
the Arbitrator Review Board. The Board may recommend, and the Director 
may remove, any person listed on the Roster, for violation of this part 
and/or the Code of Professional Responsibility. Notice of cancellation 
or suspension shall be given to a person listed on the Roster whenever 
a Roster member:
    (1) No longer meets the criteria for admission;
    (2) Has become an advocate as defined in paragraph (c) of this 
section;
    (3) Has been repeatedly or flagrantly delinquent in submitting 
awards;
    (4) Has refused to make reasonable and periodic reports in a timely 
manner to FMCS, as required in subpart C of this part, concerning 
activities pertaining to arbitration;
    (5) Has been the subject of complaints by parties who use FMCS 
services, and the Board after appropriate inquiry, concludes that 
reasonable cause for cancellation has been shown.
    (6) Is determined by the Director to be unacceptable to the parties 
who use FMCS arbitration services; the Director may base a 
determination of unacceptability on FMCS records which show the number 
of times the arbitrator's name has been proposed to the parties and the 
number of times it has been selected.
    (e) The Board may, at its discretion, direct an inquiry into the 
facts of any proposed removal from the Roster. An arbitrator listed on 
the Roster may only be removed after 60-day notice and an opportunity 
to submit a response or information showing why the listing should not 
be canceled. The Board shall recommend to the Director whether to 
remove an arbitrator from the Roster. All determinations to remove an 
arbitrator from the Roster shall be made by the Director.
    (f) The director of OAS may suspend for a period not to exceed 180 
days any person listed on the Roster who has violated any of the 
criteria in paragraph (d) of this section. Arbitrators shall be 
promptly notified of a suspension. They may appeal a suspension to the 
Arbitrator Review Board, which shall make a recommendation to the 
Director of FMCS. The decision of the Director of FMCS shall constitute 
the final action of the agency.


Sec. 1404.6  Inactive status.

    A member of the Roster who continues to meet the criteria for 
listing on the Roster may request that he or she be put in an inactive 
status on a temporary basis because of ill health, vacation, schedule, 
etc.


Sec. 1404.7  Listing fee.

    All arbitrators will be required to pay an annual fee for listing 
on the Roster. The schedule of fees will be published separately.

Subpart C--Procedures for Arbitration Services


Sec. 1404.8  Freedom of choice.

    Nothing contained in this part should be construed to limit the 
rights of parties who use FMCS arbitration services to jointly select 
any arbitrator or arbitration procedure acceptable to them. Once a 
request is made to OAS, all parties are subject to the procedures 
contained in this part.


Sec. 1404.9   Procedures for requesting arbitration panels.

    (a) The Office of Arbitration Service (OAS) has been delegated the 
responsibility for administering all requests for arbitration services. 
Requests should be addressed to the Federal Mediation and Conciliation 
Service, Office of Arbitration Services, Washington, DC 20427.
    (b) The OAS will refer a panel of arbitrators to the parties upon 
request. The parties are encouraged to make joint requests. In the 
event, however, that the request is made by only one party, the OAS 
will submit a panel of arbitrators. However, the issuance of a panel--
pursuant to either a joint or unilateral request--is nothing more than 
a response to a request. It does not signify the adoption of any 
position by FMCS regarding the arbitrability of any dispute or the 
terms of the parties' contract.
    (c) As an alternative to a request for a panel of names, OAS will, 
upon request, submit a list of all arbitrators and their biographical 
sketches from a specific geographical area. The parties may then select 
and deal directly with an arbitrator of their choice, with no further 
involvement by FMCS with the parties or the arbitrator.
    (d) The OAS reserves the right to decline to submit a panel or make 
appointments of arbitrators if the request submitted is overly 
burdensome or otherwise impracticable. The OAS, in such circumstances, 
may refer the parties to an FMCS mediator to help in the design of an 
alternative solution. The OAS may also decline to service any requests 
from parties with a history of non-payment of arbitrator fees or other 
behavior which constrains the spirit or operation of the arbitration 
process.
    (e) The parties are required to use the Request for Arbitration 
Panel Form (R-43), which has been prepared by the OAS and is available 
in quantity upon request to the Federal Mediation and Conciliation 
Service, Office of Arbitration Services, Washington, DC 20427, or by 
calling (202) 606-5111. Requests that do not contain all required 
information requested on the R-43 in typewritten form may be rejected.
    (f)(1) When a request is made by only one party for a service other 
than the furnishing of a standard list or panel of seven (7) 
arbitrators, the requestor must certify that one of the following 
conditions applies:
    (i) Both parties agree to the request, or
    (ii) There is no conflict with the parties' collective bargaining 
agreement.
    (2) The party making such a request must copy the certification to 
the other party. The OAS will consider all statements as having been 
made in good faith and will honor requests as submitted. Absent 
statements conforming to the requirements of this paragraph, the 
unilateral request will not be honored.

[[Page 11804]]

    (g) The OAS will charge a nominal fee for all requests for lists, 
panels, and other major services. Payments for these services must be 
received before the service is delivered. A schedule of fees will be 
published separately.


Sec. 1404.10   Arbitrability.

    The OAS will not decide the merits of such a claim by either party 
that a dispute is not subject to arbitration.


Sec. 1404.11   Nominations of arbitrators: Standard and non-standard 
panels.

    (a) The parties may request a list and biographic sketches of some 
or all arbitrators in one or more specific geographical areas. If the 
parties can agree on the selection of an arbitrator, they may appoint 
their own arbitrator directly without any further case tracking by 
FMCS. The parties may also request a randomly selected panel containing 
the names of seven (7) arbitrators accompanied by a biographical sketch 
for each member of the panel. This sketch states the background, 
qualification, experience, and per diem fee, as furnished to the OAS by 
the arbitrator. It also states that other fees may exist, such as 
cancellation, postponement, rescheduling, or administrative fees, as 
furnished by the arbitrator, but does not state the amounts of such 
other fees. Requests for a panel of seven (7) arbitrators, whether 
joint or unilateral, will be honored without the need for compliance 
with Sec. 1404.9(f). Joint requests for a panel of other than seven (7) 
names, a direct appointment of an arbitrator, or other service will 
also be honored without compliance with Sec. 1404.9(f) so long as the 
request does not otherwise conflict with the regulations in subpart C 
of this part.
    (b) Unilateral requests for a panel of arbitrators with special 
qualifications or other than a list of seven (7) arbitrators, must 
conform to the requirements of Sec. 1404.9(f).
    (c) All panels submitted to the parties by the OAS, and all letters 
issued by the OAS making a direct appointment, will have an assigned 
FMCS case number. All future communications between the parties and the 
OAS must refer to this case number.
    (d) The OAS will provide a randomly selected panel of arbitrators 
located in state(s) in proximity to the hearing site. The parties may 
request arbitrators with specific qualifications or experienced in 
certain issues or industries. The OAS has no obligation to put an 
individual on any given panel, or on a minimum number of panels in any 
fixed period. In general:
    (1) The geographical location of arbitrators placed on panels is 
governed by the site of the dispute as stated on the request received 
by the OAS.
    (2) If at any time both parties request that a name or names be 
included or omitted from a panel, such name or names will be included 
or omitted, unless the number of names is excessive.
    (3) If a unilateral request is made to omit or include names on a 
panel, the request shall be honored if it is in compliance with 
Sec. 1404.9(f), unless the number of names is excessive.
    (e) If the parties do not agree on an arbitrator from the first 
panel, the OAS will furnish a second and third panel to the parties 
upon joint request. If a second or third panel is requested by only one 
party, the request will be honored if it conforms with the procedures 
stated in Sec. 1404.9(f). Requests for a second or third panel should 
be accompanied by a brief explanation as to why the previous panel(s) 
was inadequate. If parties are unable to agree on a selection after 
having received three panels, the OAS will make a direct appointment 
upon request.


Sec. 1404.12  Selection by Parties and appointment of arbitrators.

    (a) After receiving a panel of names, the parties must notify the 
OAS of their selection of an arbitrator or of the decision not to 
proceed with arbitration. Upon notification of the selection of an 
arbitrator, the OAS will make a formal appointment of the arbitrator. 
The arbitrator, upon notification of appointment, is expected to 
communicate with the parties within 14 days to arrange for preliminary 
matters, such as the date and place of hearing. Should an arbitrator be 
notified directly by the parties that he or she has been selected, the 
Arbitrator must promptly notify the OAS of the selection and his or her 
willingness to serve. If the parties settle a case prior to the 
hearing, parties must inform the arbitrator as well as the OAS. 
Consistent failure to follow these procedures may lead to a denial of 
future OAS services.
    (b) If the parties request a list of names and biographical 
sketches rather than a panel, they may choose to appoint and contact an 
arbitrator directly. In this situation, neither the parties nor the 
arbitrator is required to furnish any additional information to FMCS.
    (c) Where the parties' collective bargaining agreement is silent on 
the manner of selecting arbitrators, the parties may wish to consider 
any jointly determined method or one of the following methods for 
selection of an arbitrator from a panel:
    (1) Each party alternately strikes a name from the submitted panel 
until one remains, or
    (2) Each party advises the OAS of its order of preference by 
numbering each name on the panel and submitting the numbered list in 
writing to the OAS. The name that has the lowest combined number will 
be appointed.
    (d) The OAS will make a direct appointment of an arbitrator either 
on joint or unilateral request. If the request is unilateral,it must be 
accompanied by a statement as provided for in 1404.9(f), certifying 
that either:
    (1) The request is agreed to by both parties, or
    (2) The request does not conflict with the applicable contract.
    (e) The issuance of a panel of names or a direct appointment in no 
way signifies a determination on arbitrability or an interpretation of 
the terms and conditions of the collective bargaining agreement. The 
resolution of such disputes rests solely with the parties.


Sec. 1404.13  Conduct of hearings.

    All proceedings conducted by the arbitrators shall be in conformity 
with the contractual obligations of the parties. The arbitrator shall 
comply with Sec. 1404.4(b). The conduct of the arbitration proceeding 
is under the arbitrator's jurisdiction and control, and the 
arbitrator's decision shall be based upon the evidence and testimony 
presented at the hearing or otherwise incorporated in the record of the 
proceeding. The arbitrator may, unless prohibited by law, proceed in 
the absence of any party who, after notice, fails to be present or to 
obtain a postponement. An award rendered in an ex parte proceeding of 
this nature must be based upon evidence presented to the arbitrator.


Sec. 1404.14  Decision and awards.

    (a) Arbitrators shall make awards no later than 60 days from the 
date of the closing of the record as determined by the arbitrator, 
unless otherwise agreed upon by the parties or specified by the 
collective bargaining agreement or law. A failure to render timely 
awards reflects upon the performance of an arbitrator and may lead to 
removal from the FMCS Roster.
    (b) The parties should inform the OAS whenever a decision is unduly 
delayed. The arbitrator shall notify the OAS if and when the 
arbitrator:
    (1) Cannot schedule, hear, and render decisions promptly, or
    (2) Learns a dispute has been settled by the parties prior to the 
decision.

[[Page 11805]]

    (c) Within 15 days after an award has been submitted to the 
parties, the arbitrator shall submit an Arbitrator's Report and Fee 
Statement (Form R-19) to OAS showing a breakdown of the fee and expense 
charges so that the OAS may review conformance with stated charges 
under Sec. 1404.12(a). The Form R-19 is not to be used to invoice the 
parties.
    (d) While the FMCS encourages the publication of arbitration 
awards, arbitrators should not publicize awards if objected to by one 
of the parties.


Sec. 1404.15   Fees and charges of arbitrators.

    (a) FMCS will charge all arbitrators a fee to be listed on the 
Roster. All arbitrators listed on the Roster may charge a per diem fee 
and other predetermined fees for services, if the amount of such fees 
have been provided in advance to the FMCS. Each arbitrator's maximum 
per diem fee and the existence of other predetermined fees, if any, are 
set forth on a biographical sketch which is sent to the parties when 
panels are submitted. The arbitrator shall not change any fee or add 
charges without giving at least 30 days' advance written notice to the 
FMCS. Arbitrators with dual business addresses must bill the parties 
for expenses from the nearest business address to the hearing site.
    (b) In cases involving unusual amounts of time and expenses 
relative to pre-hearing and post-hearing administration of a particular 
case, an administrative charge may be made by the arbitrator.
    (c) Arbitrators shall submit their schedule of fees to both parties 
when accepting arbitration appointments. All charges other than those 
specified in paragraph (a) of this section shall be divulged to and 
agreement obtained by the arbitrator with the parties immediately after 
appointment.
    (d) The OAS requests that it be notified of any arbitrator's 
deviation from the policies expressed in this part. While FMCS will not 
resolve fee disputes, repeated complaints concerning the fees charged 
by an arbitrator will be brought to the attention of the Arbitration 
Review Board for further consideration.


Sec. 1404.16   Reports and biographical sketches.

    (a) arbitrators listed on the Roster shall executive and return all 
documents, forms and reports required by FMCS. They shall also keep the 
OAS informed of changes of address, telephone number, availability, and 
of any business or other connection or relationship which involves 
labor-management relations or which creates or gives the appearance of 
advocacy as defined in Sec. 1404.5(c)(1).
    (b) The OAS will provide biographical sketches on each person 
admitted to the Roster from information supplied by applicants. 
Arbitrators may request revision of biographical information at later 
dates to reflect changes in fees, the existence of additional charges, 
or other relevant data. The OAS reserves the right to decide and 
approve the format and content of biographical sketches.

Appendix to 29 CFR Part 1404--Arbitration Policy; Schedule of Fees

Annual listing fee for all arbitrators.................  $100 for the first address; $50 for second address.    
Request for panel of arbitrators.......................  $30 for each panel request (includes subsequent        
                                                          appointment).                                         
Diect appointment of an arbitrator when a panel is not   $20 per appointment.                                   
 used.                                                                                                          
List and biographic sketches of arbitrators in a         $10 per request plus $10 per page.                     
 specific area.                                                                                                 
                                                                                                                

John Calhoun Wells,
Director.
[FR Doc. 97-6305 Filed 3-12-97; 8:45 am]
BILLING CODE 6732-01-M