[Federal Register Volume 67, Number 113 (Wednesday, June 12, 2002)]
[Notices]
[Pages 40367-40371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14692]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

[Docket No. OST-2000-7800]
RIN 2105-AC94


Statement of Policy on Alternative Dispute Resolution

AGENCY: Office of the Secretary, DOT.

ACTION: Statement of policy.

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SUMMARY: The Department of Transportation publishes this Statement of 
Policy to further its commitment to using alternative dispute 
resolution (ADR) to advance national transportation goals by 
preventing, minimizing, and resolving disputes among our employees and 
with external parties, in a mutually acceptable and cost-effective 
manner. This policy statement announces the Department's continuing 
interest in collaborative problem-solving.

DATES: This notice is effective June 12, 2002.

FOR FURTHER INFORMATION CONTACT: Judith S. Kaleta, Senior Counsel for 
Dispute Resolution and Dispute Resolution Specialist, Room 10428, 400 
Seventh Street, SW., Washington, DC 20590. 202-493-0992. 
[email protected]

SUPPLEMENTARY INFORMATION:

Statement of Policy on Alternative Dispute Resolution (ADR)

    ADR is a collaborative, consensual dispute resolution approach. It 
describes a variety of problem-solving processes that are used in lieu 
of litigation or other adversarial proceedings to resolve 
disagreements. ADR encompasses mediation, facilitation, conciliation, 
factfinding, mini-trials, negotiation, negotiated rulemaking, neutral 
evaluation, policy dialogues, use of ombuds, arbitration, and other 
processes that usually involve a neutral third party who assists the 
parties in preventing, minimizing the escalation of, and resolving 
disputes. The efficient and effective use of ADR will help us resolve 
disputes at an early stage, in an expeditious, cost-effective, and 
mutually acceptable manner.
    The Department of Transportation is committed to advancing our 
national transportation goals though alternative dispute resolution. We 
will consider using ADR in all areas including workplace issues, formal 
and informal adjudication, issuance of regulations, enforcement and 
compliance, issuing and revoking licenses and permits, contract and 
grant award and administration, litigation brought by or against the 
Department, and other interactions with the public and the regulated 
community.
    We will ensure that neutrals disclose any actual or potential 
conflicts of interest.
    We will provide learning and development opportunities for our 
employees so that they will be able to use conflict resolution skills, 
understand the theory and practice of ADR, and apply ADR appropriately.
    We will use a variety of evaluation and assessment strategies to 
measure and improve our processes and our use of ADR.
    We will allocate resources to support the use of ADR.
    We will provide confidentiality consistent with the provisions of 
the Administrative Dispute Resolution Act and other applicable Federal 
laws.
    The Department will attempt to incorporate ADR in its dispute 
resolution, or as appropriate, rulemaking processes. In addition, 
either on our own initiative or in response to a request, the 
Department will examine the appropriateness of using ADR on a case-by-
case basis. ADR is voluntary and the Department will

[[Page 40368]]

not impose its use on parties. The decision-making on when to use ADR 
should reflect sound judgment that ADR offers the best opportunity to 
resolve the dispute. In appropriate disputes, the Department will use 
ADR in a good-faith effort to achieve consensual resolution. However, 
if necessary, we will litigate or participate in some other process to 
resolve a dispute.
    We will work together, internally and with external stakeholders 
and experts, to further ADR use across the Department. However, 
decision-making on incorporating ADR into dispute resolution processes, 
using ADR to resolve a particular dispute, and allocating resources 
rests with the Department's operating administrations, secretarial 
offices, or Office of the Inspector General.
    We are committed to eliminating all barriers to equal opportunity 
for all employees and persons who participate in our programs. A 
disability on the part of one or more parties otherwise willing to use 
ADR will not act as a bar to its use.
    All employees and persons who interact with the Department are 
encouraged to identify opportunities for collaborative, consensual 
approaches to dispute resolution or rulemaking.

Background

    As the Department of Transportation strives to meet national 
transportation goals, we recognize the need to collaborate, to work 
together in the spirit of cooperation, and to form partnerships, 
internally and externally. Experience at the Department, in other 
Federal agencies, and in the private sector shows that alternative 
means of dispute resolution can achieve mutually acceptable solutions 
more effectively than traditional, non-collaborative processes. 
Mediation, facilitation, conciliation, factfinding, mini-trials, 
negotiation, negotiated rulemaking, early neutral evaluation, policy 
dialogues, use of ombuds, arbitration, and other processes that usually 
involve a neutral third party who assists the parties in preventing and 
resolving disputes, when used effectively, will help us resolve 
potential conflicts and disputes at an early stage and in an 
expeditious, cost-effective manner. These approaches to problem-solving 
are not just ``alternatives,'' but an integral part of the way we do 
business at the Department. We are issuing this statement of policy on 
the use of alternative dispute resolution to further our commitment to 
its use.
    For purposes of this initiative, ``the Department'' or ``we'' 
refers to the Office of the Secretary, the operating administrations 
(the United States Coast Guard, the Federal Aviation Administration, 
the Federal Highway Administration, the Federal Motor Carrier Safety 
Administration, the Federal Railroad Administration, the National 
Highway Traffic Safety Administration, the Federal Transit 
Administration, the Maritime Administration, the Saint Lawrence Seaway 
Development Corporation, the Research and Special Programs 
Administration, the Transportation Security Administration, the Bureau 
of Transportation Statistics, and the Transportation Administrative 
Services Center), and the Office of Inspector General.
    On November 15, 2000, the Department published an interim policy 
statement on the use of alternative dispute resolution (65 FR 69121). 
The Department requested comment on the statement, on how to 
incorporate ADR into our processes, and how to encourage its use in 
appropriate circumstances. The Department also requested input on areas 
of agency activity that would benefit from a dispute resolution process 
that incorporates ADR techniques. The Department noted the following 
areas for consideration: workplace issues, formal and informal 
adjudication, issuance of regulations, enforcement and compliance, 
issuing and revoking licenses and permits, contract and grant award and 
administration, litigation brought by or against the Department, and 
other interactions with the public and the regulated community.

Response to Request for Comments

    In response to the request, the Department received seven comments. 
Commenters included private neutrals; an attorney representing clients 
in various motor carrier related activities; a State department of 
transportation; and the American Bar Association, Commission on Mental 
and Physical Disability Law, Subcommittee on Disability Dispute 
Resolution and Mediation.
    None of the commenters objected to the initiative and some were 
very supportive of the Department's efforts. For example, one commenter 
noted that ``once tried, ADR proves to be a valuable method to resolve 
difficult issues, disputes, discrepancies and squabbles.'' Another 
stated that ADR ``can often conserve all the participants'' time, 
energy, and resources (and costs associated with them), speed the time 
for resolution of matters, and smooth over some of the rougher edges 
created by the adversarial nature of many of the matters in which DOT 
is involved.''
    Some commenters offered suggestions and recommendations for 
clarifying and strengthening the policy. Their comments and the 
Department's response follow.

ADR Is Voluntary

    One commenter suggested that the Department add to the section on 
``No Creation of Rights'' that the Department ``would not require or 
impose the use of ADR on an unwilling private sector entity or 
employee.''
    The Department agrees that ADR is voluntary and there must be 
mutual agreement to use it. ADR cannot work unless the users of it want 
it to work and want to use it. Therefore, the Department has included a 
statement on the voluntary nature of ADR in its policy statement and in 
the section on ``No Creation of Rights.''

Litigation

    One commenter noted that the Interim Statement of Policy said that 
the Department will use ADR to resolve litigation. The commenter 
suggested that we clarify whether the Department has the ability or the 
authority to use ADR to resolve a matter in litigation or whether the 
Department of Justice makes that decision.
    The Department of Transportation works closely with the Department 
of Justice to ensure that the interests of the United States are fully 
and properly represented. Together, we determine whether litigation 
should be initiated and whether adverse decisions should be appealed. 
Likewise, we determine whether ADR would be appropriate in particular 
cases. Furthermore, with the passage of the Alternative Dispute 
Resolution Act of 1998, in which Congress directed all Federal courts 
to establish ADR programs, continued growth in ADR usage by the Federal 
government in litigation matters is highly likely. The Department of 
Justice estimates that its use of ADR has quadrupled from 5 years ago 
to more than 2000 cases in FY 2000.

Administrative Enforcement Proceedings

    An attorney representing clients in various motor carrier related 
activities recommended that the Department consider using ADR in motor 
carrier enforcement proceedings. He provided three reasons in support 
of this position. First, he noted that ADR results in cost savings. 
Second, he stated that ``to the extent the resolution of enforcement 
matters may be speeded up by ADR, this has the benefit of a quick 
response to a perceived safety problem.'' Third, he said that ``ADR can 
frequently take the

[[Page 40369]]

rough edges off of adversarial proceedings * * * When one is engaged in 
a bitter dispute, one may lose sight of the greater purpose.'' 
Referring to the FMCSA enforcement decisions as reported on the 
Department's Docket Management System, he noted that ``the tenor of the 
pleadings on both sides often appears to be bitter, going well beyond 
the mere assertion of different, conflicting arguments about what the 
law requires and what penalty, if any, should be imposed.''
    While the commenter referred to the FMCSA enforcement program, the 
Department considered the appropriateness of ADR for all its 
administrative enforcement proceedings. The Department is committed to 
concluding its administrative enforcement proceedings as fairly, 
effectively, efficiently, and expeditiously as possible. The Department 
will use ADR as an opportunity to further develop and refine its 
processes to achieve less costly, less contentious, and more timely 
decisions when appropriate. Parties to any enforcement proceeding, both 
Departmental personnel and regulated entities, are encouraged to 
identify cases that are appropriate for a variety of ADR techniques, 
including mediation, early neutral evaluation, and arbitration. The 
interim statement of policy included a list of ADR considerations. For 
the ease of those wishing to determine whether ADR may be appropriate, 
these considerations are included in the Appendix. As noted below, a 
party may want to explore the possibility of using ADR without talking 
with their immediate adversary. Therefore a list of ADR contacts is 
available on the Department's ADR web site: www.dot.gov/adr. However, 
ADR is voluntary and there must be mutual agreement to use it.

Evaluation

    One commenter suggested that the evaluation of ADR should include a 
comparison of the traditional processes. The commenter noted that ``if 
ADR were evaluated alone, it might look pretty terrible since no one in 
particular likes conflict and ADR is both that and requires the 
expenditure of resources that people would just as soon not spend; but, 
as compared to litigation and traditional rulemaking, it is highly 
likely that it will be viewed quite positively.''
    Evaluation is an important component of an ADR program. The 
Department will use a variety of evaluation and assessment strategies 
to provide valid and reliable information for measuring and improving 
performance. Depending on the ADR program, we may look at the number of 
attempts to use ADR, the number of resolutions, customer satisfaction 
with the process, the neutral, and /or the resolutions, estimated cost-
and/or time-savings, or whether the program is meeting its stated 
goals. The Department agrees that evaluating ADR without evaluating 
traditional processes may lead to a distorted and inaccurate picture. 
In FY 2001, the Department's Dispute Resolution Council conducted a 
program evaluation of the Department's use of mediation to resolve 
complaints of discrimination. As a result of this effort, the 
evaluation found that the costs associated with traditional processes 
are not usually readily available. We will attempt to estimate those 
costs when evaluating ADR use, even if based on anecdotal information 
and non-quantifiable data.

Confidentiality

    One commenter complimented the Department on the way 
confidentiality was addressed.
    The Department recognizes the importance of confidentiality. In 
some instances, many of the benefits of ADR can be realized only 
through confidential proceedings. Confidentiality ensures that the 
parties may speak freely with a neutral who will not disclose their 
confidences to other parties or to the outside world. Without that 
assurance, the parties may be unwilling to freely discuss their 
interests and possible settlements with the neutral. Confidentiality 
also allows the parties to raise sensitive issues and discuss creative 
ideas and solutions that they would be unwilling to discuss publicly.
    Although negotiated rulemaking is a process conducted under the 
Federal Advisory Committee Act at public meetings that have been 
announced in the Federal Register, confidentiality may also be a 
consideration for the participants. For example, a convenor who 
impartially assists an agency in determining whether establishment of a 
negotiated rulemaking committee is feasible and appropriate may agree 
not to disclose the identity of a party who raises a particular concern 
about an agency. Information shared in caucuses may also be 
confidential.
    The Administrative Dispute Resolution Act generally provides that 
communications (including a neutral's notes and documents prepared for 
the proceedings) between a neutral and the parties must be kept 
confidential by the neutral and the parties, unless certain specific 
exceptions exist. A court may require disclosure of such information if 
it is necessary to prevent a manifest injustice, help establish a 
violation of law, or prevent harm to the public health or safety. The 
injustice, violation, or harm must be of a sufficient magnitude in the 
particular case to outweigh the integrity of the dispute resolution 
proceedings. In addition, other Federal laws may impact the 
confidentiality of information in specific cases.

Working Together

    One commenter questioned the meaning of the statement in the 
Interim Statement of Policy on ADR: ``We will work together to further 
ADR.'' The commenter requested that the Department clarify whether the 
statement was intended to apply to the Department and its employees or 
whether it referred to the Department working with affected interests 
on the outside. The commenter suggested that an inclusion of outside 
interests, both stakeholders and experts, be made explicit.
    The Department has adopted this suggestion and the statement of 
policy reads accordingly.

Persons With Disabilities

    The American Bar Association, Commission on Mental and Physical 
Disability Law, Subcommittee on Disability Dispute Resolution and 
Mediation, suggested that the Department incorporate the provisions of 
the ADA Mediation Guidelines (http://www.cardozo.yu.edu/cojcr/guidelines) or adopt some modifications of the Guidelines to meet the 
Department's needs. Under the Guidelines, ``ADA mediation'' means 
programs mediating claims arising under the Americans with Disabilities 
Act and other disability civil rights statutes. The Guidelines address 
issues in the areas of program and case administration, process, 
training, and ethics.
    The Department is committed to eliminating all barriers to equal 
opportunity for all employees of the Department, for all applicants for 
jobs in the Department, and for the persons who participate in the 
Department's programs, services, and activities. The Department will 
comply with Section 504 of the Rehabilitation Act of 1973, which 
prohibits discrimination on the basis of disability and requires our 
programs, activities, and facilities to be accessible, subject to the 
limitations contained within the statute and our regulations. A 
disability on the part of one or more parties otherwise willing to use 
ADR will not act as a bar to its use. The Department will bear the cost 
of these accommodations. As particular

[[Page 40370]]

ADR programs are established, we will consider whether to fully 
incorporate the ADA Mediation Guidelines.

Requesting the Department To Consider ADR

    One commenter suggested that we provide persons who are potentially 
interested in using ADR with a way of exploring the possibility of its 
use. The commenter noted that parties should be able to explore the 
potential for using ADR without talking with their immediate adversary.
    The Department agrees. We have updated the Department's ADR web 
site (www.dot.gov/adr) to include information about the Department's 
Dispute Resolution Council and contact information for the Department's 
Dispute Resolution Specialist and the Deputy Dispute Resolution 
Specialists in each of the operating administrations and the Office of 
Inspector General.

Internal vs. External Neutrals

    One commenter recommended that the Department rely on outside 
contractors to serve as neutrals in ADR proceedings. The commenter 
stated that in-house staff may ``have an opinion about the general 
nature of the problem and therefore may not be neutral.'' In addition 
the commenter noted that there may be a perception of bias by the 
parties. Another commenter noted that the United States Postal Service 
has successfully used private mediators to resolve employment disputes 
and that feedback from employees and management has been extremely 
positive.
    In using a variety of ADR techniques, the Department has relied 
upon both internal and external neutrals. For example, the Department 
established a mediation program to resolve EEO complaints, in which 
employees serve as mediators as a collateral duty to their assigned 
positions. In addition, depending upon the availability of Departmental 
employees or to avoid conflicts of interest, private mediators have 
been used. In litigation, the Department has used private mediators. 
The Department of Justice has noted that private mediators are the best 
source of mediators for government cases. In the area of environmental 
ADR, the Department is considering external neutrals. The U.S. 
Institute for Environmental Conflict Resolution is assembling a roster 
of qualified dispute resolution and consensus building professionals 
with particular experience in transportation cases. The Institute will 
draw from its roster of qualified neutrals with substantial experience 
in environmental conflict resolution. This Transportation Roster is 
part of an ADR system designed through an interagency agreement with 
the Federal Highway Administration. For most negotiated rulemakings, 
the Department has generally relied upon outside neutrals. However, 
internal neutrals have been used to convene and facilitate negotiated 
rulemaking when parties were interested in the process, but there was a 
lack of funding to pay for an outside neutral.
    The Department will continue to make a determination of whether to 
use an internal or external neutral on a case-by-case basis, 
considering a variety of factors, including costs. As a practical 
matter, in some instances, the Department may be choosing between in-
house neutrals or no ADR process. In response to the comment, we have 
added a provision to the policy statement that neutrals will disclose 
actual and potential conflicts of interest. This is consistent with the 
Model Standards of Conduct for Mediators that have been approved by the 
American Arbitration Association, the Litigation Section and the 
Dispute Resolution Section of the American Bar Association, and the 
Society of Professionals in Dispute Resolution.

Environment

    Appendix II to the Interim Statement of Policy (65 FR 69125) 
provided examples of a variety of the Department's ADR initiatives. The 
environmental example noted that, with the assistance of the U.S. 
Institute for Environmental Conflict Resolution, a Federal agency 
created to assist parties in resolving environmental conflicts around 
the country that involve Federal agencies or interests, the Federal 
Highway Administration (FHWA) is working on developing an ADR system 
that would be applied during the National Environmental Policy Act 
(NEPA) process. One State department of transportation (the State) 
commented on the example. The State welcomed the use of ADR as long as 
it has the discretion to participate in ADR, without the risk of losing 
Federal funds. The State is concerned that the Department may create a 
policy implementing ADR that would mandate or compel the use of ADR to 
resolve disputes.
    A copy of the State's comments was provided to FHWA for its 
consideration and, as this effort continues, FHWA will continue to 
consider input. Draft documents relating to FHWA's initiative will be 
posted for review and comment on its environmental streamlining website 
http://www.fhwa.dot.gov/environment/strmlng.htm. For additional 
information, you may call Lucy Gariliauskas at 202-366-2068 or Fred 
Skaer at 202-366-2058. You may write to them at FHWA, Office of 
National Environmental Policy Act Facilitation, 400 Seventh Street, SW, 
Washington, DC 20590.

List of ADR Considerations

    The interim statement of policy included a list of ADR 
considerations. The Department did not receive any comments on that 
list. For the ease of those wishing to determine whether ADR may be 
appropriate, these considerations are included in the Appendix.

Legal Authority

    This policy statement is issued pursuant to the Administrative 
Dispute Resolution Act of 1996, 5 U.S.C. 571-583, which authorizes and 
encourages Federal agencies to use consensual means of dispute 
resolution as alternatives to traditional dispute resolution processes. 
The Act defines alternative means of dispute resolution as ``any 
procedure that is used to resolve issues in controversy * * *'' It 
defines ``issue in controversy'' as ``an issue which is material to a 
decision concerning an administrative program of an agency, and with 
which there is disagreement * * *'' The Act requires that each Federal 
agency adopt a policy that addresses the use of ADR and appoint a 
Dispute Resolution Specialist. Congress enacted the Administrative 
Dispute Resolution Act to reduce the time, cost, inefficiencies, and 
contentiousness that too often are associated with litigation and other 
adversarial dispute resolution mechanisms.
    This policy is also consistent with several other Federal statutes 
and regulations.
    The Negotiated Rulemaking Act of 1996, 5 U.S.C. 561-570, 
establishes a framework for use of negotiated rulemaking. Congress 
enacted the Negotiated Rulemaking Act to increase the acceptability and 
improve the substance of rules, making it less likely that the affected 
parties will challenge the rules or resist enforcement.
    The Alternative Dispute Resolution Act of 1998, 28 U.S.C. 651-658, 
directs all Federal courts to establish ADR programs.
    The Contracts Disputes Act, 41 U.S.C. 605(d) and (e), permits the 
use of ADR for resolving claims.
    The FAA's Procedures for Protests and Contracts Disputes, 14 CFR 
Part 17, encourages the use of ADR as the primary means of resolving 
procurement related disputes.

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    The Federal Sector Equal Employment Opportunity Regulations, 29 CFR 
Part 1614 requires agencies to establish or make available an ADR 
program. The ADR program must be available during both the pre-
complaint process and the formal complaint process.

Relationship to Other Dispute Resolution Procedures

    This policy statement replaces the Interim Statement of Policy on 
Alternative Dispute Resolution published in the Federal Register on 
November 15, 2000. It does not supersede collective bargaining 
agreements or other statutory, regulatory, or contractual dispute 
resolution procedures, or military disciplinary processes. ADR is 
intended to supplement, not replace, existing procedures.

No Creation of Rights

    ADR is voluntary. The choice of when and how to use ADR is within 
the discretion of the Department's Operating Administrations and 
Secretarial offices, and all parties must agree. This statement of 
policy does not create any right to judicial review involving the 
compliance or noncompliance with the statement. In addition, the 
statement does not obligate the Department to offer funds to settle any 
case, to accept a particular settlement or resolution of a dispute, or 
to alter any existing delegation of settlement or litigation authority.

    Issued in Washington, DC on June 3, 2002.
Norman Y. Mineta,
Secretary of Transportation.

Appendix--ADR Considerations

    A decision to use ADR may be made before or after a dispute 
arises. Several factors should be considered in making that 
decision. Some factors may favor the use of ADR while others may 
weigh against it. Although not intended as an exhaustive list of 
factors, the Department has determined that ADR may be helpful in 
resolving a particular dispute where one or more of the following 
factors are present:
    1. Identifiable Parties. There is an identifiable group of 
constituents with interests (the parties) so that all reasonably 
foreseeable interests can be represented.
    2. Good Faith. The parties are willing to participate in good 
faith.
    3. Communication. The parties are interested in seeking 
agreement, but poor communication or personality conflicts between 
the parties adversely affect negotiations.
    4. Continuing Relationship. A continuing relationship between 
the parties is important and desirable.
    5. Issues. There are issues that are agreed to be ripe for a 
negotiated solution.
    6. Unrealistic View of the Issues. The parties' demands or views 
of the issues are unrealistic. A discussion of the situation with a 
neutral may increase the parties' understanding and result in more 
realistic alternatives and options.
    7. Sufficient Areas of Compromise. There are sufficient areas of 
compromise to make ADR worthwhile.
    8. Expectation of Agreement. The parties expect to agree 
eventually, most likely before reaching the courtroom or engaging in 
other adversarial processes.
    9. Timing. There is sufficient time to negotiate and ADR will 
not unreasonably delay the outcome of the matter in dispute. There 
is a likelihood that the parties will be able to reach agreement 
within a fixed time. There are no statutory or judicial deadlines 
that are adversely affected by the process. ADR may result in an 
earlier resolution of the dispute.
    10. Resources. The parties have adequate resources (budget and 
people) and are willing to commit them to the process.
    While many of these factors may apply to agency rulemaking, 
there may be some variation in the consideration. For example, with 
regard to ``Expectation of Agreement,'' the consideration may be 
that all affected interests recognize that there is a problem that 
must be solved and that Federal regulation is the appropriate 
response. Furthermore, under the Negotiated Rulemaking Act, the head 
of the agency would determine whether negotiated rulemaking is in 
the public interest and would consider several factors concerning 
the parties, the timing, the costs, and the issues. See 5 U.S.C. 
561.
    There are also factors that suggest that ADR should not be used. 
The Administrative Dispute Resolution Act of 1996 provides factors 
that suggest that ADR is inappropriate or may not be productive in a 
particular dispute resolution proceeding. See 5 U.S.C. 572.
[FR Doc. 02-14692 Filed 6-11-02; 8:45 am]
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