89–006

106TH CONGRESS REPT. 106–994 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1

MERIT SYSTEMS PROTECTION BOARD ADMINISTRATIVE

DISPUTE RESOLUTION ACT OF 2000

OCTOBER 23, 2000.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. GEKAS, from the Committee on the Judiciary,

submitted the following

REPORT

[To accompany H.R. 3312]

[Including cost estimate of the Congressional Budget Office]

The Committee on the Judiciary, to whom was referred the bill

(H.R. 3312) to clarify the Administrative Dispute Resolution Act of

1996 to authorize the Merit Systems Protection Board to establish

under such act a 3-year pilot program that will provide a voluntary

early intervention alternative dispute resolution process to assist

Federal agencies and employees in resolving certain personnel actions and disputes in administrative programs, having considered

the same, report favorably thereon with amendment and recommends that the bill as amended do pass.

CONTENTS

Page

The Amendment ...................................................................................................... 2

Purpose and Summary ............................................................................................ 4

Background and Need for the Legislation ............................................................. 4

Committee Consideration ........................................................................................ 7

Committee Oversight Findings ............................................................................... 7

Committee on Government Reform Findings ........................................................ 7

New Budget Authority and Tax Expenditures ...................................................... 7

Congressional Budget Office Cost Estimate .......................................................... 8

Constitutional Authority Statement ...................................................................... 9

Section-by-Section Analysis and Discussion .......................................................... 9

Agency Views ........................................................................................................... 11

Changes in Existing Law Made by the Bill, as Reported ..................................... 14

2

The amendments are as follows:

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Merit Systems Protection Board Administrative Dispute Resolution Act of 2000’’.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) Workplace disputes waste resources of the Federal Government, take up

too much time, and deflect managers and employees from their primary job

functions.

(2) The Merit Systems Protection Board (hereafter in this Act referred to as

the ‘‘Board’’) has already taken steps to encourage agency use of ADR before

appeals are filed with the Board, including extending the regulatory time limit

for filing appeals when the parties agree to try ADR, but high levels of litigation

continue.

(3) The Board’s administrative judges, who decide appeals from personnel actions by Federal agencies, find that by the time cases are formally filed with

the Board, the positions of the parties have hardened, communication between

the parties is difficult and often antagonistic, and the parties are not amenable

to open discussion of alternatives to litigation.

(4) Early intervention by an outside neutral, after the first notice of a proposed action by an agency but before an appeal is filed with the Board, will

allow the parties to explore settlement outside the adversarial context. However, without the encouragement of a neutral provided without cost, agencies

are reluctant to support an early intervention ADR program.

(5) A short-term pilot program allowing the Board, upon the joint request of

the parties, to intervene early in a personnel dispute is an effective means to

test whether ADR at that stage can resolve disputes, limit appeals to the Board,

and reduce time and money expended in such matters.

(6) The Board is well equipped to conduct a voluntary early intervention pilot

program testing the efficacy of ADR at the initial stages of a personnel dispute.

The Board can provide neutrals who are already well versed in both ADR techniques and personnel law. The Board handles a diverse workload including removals, suspensions for more than 14 days, and other adverse actions, the resolution of which entails complex legal and factual questions.

SEC. 3. MERIT SYSTEMS PROTECTION BOARD ALTERNATIVE DISPUTE RESOLUTION PILOT

PROGRAM.

(a) AMENDMENT TO CHAPTER 5 OF TITLE 5.—Chapter 5 of title 5, United States

Code, is amended by adding immediately after section 584 the following:

‘‘§ 585. Establishment of voluntary early intervention alternative dispute

resolution pilot program for Federal personnel disputes

‘‘(a) IN GENERAL.—

‘‘(1) The Board is authorized under section 572 to establish a 3-year pilot program to provide Federal employees and agencies with voluntary early intervention alternative dispute resolution (in this section referred to as ‘ADR’) processes to apply to certain personnel disputes. The Board shall provide ADR services, upon joint request of the parties, in matters involving removals, suspensions for more than 14 days, other adverse actions under section 7512, and removals and other actions based on unacceptable performance under section

4303.

‘‘(2) The Board shall test and evaluate a variety of ADR techniques, which

may include—

‘‘(A) mediation conducted by private neutrals, Board staff, or neutrals

from appropriate Federal agencies other than the Board;

‘‘(B) mediation through use of neutrals agreed upon by the parties and

credentialed under subsection (c)(5); and

‘‘(C) non-binding arbitration.

‘‘(b) EARLY INTERVENTION ADR.—

‘‘(1) AUTHORITY.—The Board is authorized to establish an early intervention

ADR process, which the agency involved and employee may jointly request,

after an agency has issued a notice letter of a proposed action to an employee

under section 4303 or 7513 but before an appeal is filed with the Board.

‘‘(2) NOTICE IN PERSONNEL DISPUTES.—During the term of the pilot program,

an agency shall, in the notice letter of a proposed personnel action under section

4303 or 7513—

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‘‘(A) advise the employee that early intervention ADR is available from

the neutral Board, subject to the standards developed pursuant to subsection (c)(1)(A), and that the agency and employee may jointly request it;

and

‘‘(B) provide a description of the program, including the standards developed pursuant to subsection (c)(1)(A).

‘‘(3) REQUEST.—Any agency and employee may seek early intervention ADR

from the Board by filing a joint request with the Board pursuant to the program

standards adopted under subsection (c)(1)(A). All personnel dispute matters appealable to the Board under section 4303 or 7513 shall be eligible for early

intervention ADR, upon joint request of the parties, unless the Board determines that the matter is not appropriate for the program subject to any applicable collective bargaining agreement established under chapter 71.

‘‘(4) CONFIDENTIALITY AND WITHDRAWAL.—The consent of an agency or an employee with respect to an early intervention ADR process is confidential and

shall not be disclosed in any subsequent proceeding. Either party may withdraw

from the ADR process at any time.

‘‘(5) ANCILLARY MATTER.—In any personnel dispute accepted by the Board for

the ADR pilot program authorized by this section, the Board may attempt to

resolve any ancillary matter which the Board would be authorized to decide if

the personnel action were effected under section 4303 or 7513, including—

‘‘(A) a claim of discrimination as described in section 7702(a)(1)(B);

‘‘(B) a prohibited personnel practice claim as described in section 2302(b);

or

‘‘(C) a claim that the agency’s action is or would be, if effected, not in accordance with law.

‘‘(c) IMPLEMENTATION.—

‘‘(1) PROGRAM DUTIES.—In carrying out the program under this section, the

Board shall—

‘‘(A) develop and prescribe standards for selecting and handling cases in

which ADR has been requested and is to be used;

‘‘(B) take such actions as may be necessary upon joint request of the parties, including waiver of all statutory, regulatory, or Board imposed adjudicatory time frames; and

‘‘(C) establish a time target within which it intends to complete the ADR

process.

‘‘(2) EXTENSION.—The Board, upon the joint request of the parties, may extend the time period as it finds appropriate.

‘‘(3) ADVOCACY AND OUTREACH.—The Board shall conduct briefings and other

outreach, on a non-reimbursable basis, aimed at increasing awareness and understanding of the ADR program on the part of the Federal workforce—including executives, managers, and other employees.

‘‘(4) RECRUITMENT.—The Chairman of the Board may contract on a reimbursable basis with officials from other Federal agencies and contract with other

contractors or temporary staff to carry out the provisions of this section.

‘‘(5) TRAINING AND CREDENTIALLING OF NEUTRALS.—The Board shall develop

a training and credentialing program to ensure that all individuals selected by

the Board to serve as program neutrals have a sufficient understanding of the

issues that arise before the Board and are sufficiently skilled in the practice of

meditation or any other relevant form of ADR.

‘‘(6) REGULATIONS.—The Board is authorized to prescribe such regulations as

may be necessary to implement the ADR program established by this section.

‘‘(d) EVALUATION.—

‘‘(1) CRITERIA.—The Board’s Office of Policy and Evaluation shall establish

criteria for evaluating the ADR pilot program and prepare a report containing

findings and recommendations as to whether voluntary early intervention ADR

is desirable, effective, and appropriate for cases subject to section 4303 or 7513.

‘‘(2) REPORT CONTENT.—The report, subject to subsection (b)(4) and section

574, shall include—

‘‘(A) the number of cases subject to the ADR program, the agencies involved, the results, and the resources expended;

‘‘(B) a comprehensive analysis of the effectiveness of the program, including associated resource and time savings (if any), and the effect on the

Board’s caseload and average case processing time;

‘‘(C) a survey of customer satisfaction; and

‘‘(D) a recommendation regarding the desirability of extending the ADR

program beyond the prescribed expiration date and any recommended

changes.

4

1 ADR refers to procedures for settling disputes by means other than litigation; e.g. by arbitration, mediation, mini-trials or a hybrid of each. Usually less costly and more expeditious, ADR

is increasingly used in commercial and labor disputes and in other disputes that would likely

otherwise involve court litigation. BLACK’S LAW DICTIONARY 78 (6th ed. 1990).

The recommendation under subparagraph (D) shall discuss the relationship between the Board’s pilot ADR program and those workplace ADR programs conducted by other Federal agencies.

‘‘(3) REPORT DATE.—The report shall be submitted to the President and the

Congress 180 days before the close of the ADR pilot program.’’.

(b) APPROPRIATIONS.—

(1) IN GENERAL.—For the purpose of carrying out the ADR pilot program established by this section, there are authorized to be appropriated such sums as

may be necessary for each of the 3 fiscal years beginning after the date of enactment of this Act.

(2) NO REDUCTIONS.—The authorization of appropriations by paragraph (1)

shall not have the effect of reducing any funds appropriated for the Board for

the purpose of carrying out its statutory mission under section 1204.

(c) EFFECTIVE DATE.—The amendment made by subsection (a) shall take effect no

later than the close of the 60th day after the enactment of appropriations authorized

by subsection (b)(1) and shall remain in effect for 3 years from the effective date.

(d) CONFORMING AMENDMENT.—The table of sections for subchapter IV of chapter

5 of title 5, United States Code, is amended by adding after the item relating to

section 584 the following new item:

‘‘585. Establishment of voluntary early intervention alternative dispute resolution pilot program for Federal personnel disputes.’’.

Amend the title so as to read:

A bill to clarify the Administrative Dispute Resolution Act of 1996 to authorize

the Merit Systems Protection Board to establish under such Act a 3-year pilot program that will provide a voluntary early intervention alternative dispute resolution

process to assist Federal agencies and employees in resolving certain personnel actions.

PURPOSE AND SUMMARY

H.R. 3312, the ‘‘Merit Systems Protection Board Alternative Dispute Resolution Act of 2000,’’ is designed to further encourage the

use of alternative dispute resolution within the Federal Government. H.R. 3312 clarifies the Administrative Dispute Resolution

Act of 1996 to authorize the Merit Systems Protection Board

(MSPB or the Board) to establish a 3-year pilot program to provide

Federal agencies and employees the opportunity to seek early

intervention alternative dispute resolution 1 (ADR) to resolve certain types of workplace disputes before they escalate into formal

litigation before the Board. The act also requires the MSPB to

evaluate different ADR techniques and to submit a report to Congress and the President detailing the effectiveness of the pilot program within 6 months of its expiration. Finally, H.R. 3312 authorizes the appropriation of sums necessary to implement the pilot

program during each year of the program’s 3-year duration.

BACKGROUND AND NEED FOR THE LEGISLATION

Alternative Dispute Resolution

Over the last few decades, as litigation costs have risen and court

dockets have become increasingly congested, parties have come to

rely on various forms of ADR to resolve their contractual disputes

in a timely and cost-effective manner. The use of ADR has been encouraged by Congress and the Federal courts, which have enunciated a strong national policy in favor of it.

5

2 United States Arbitration Act, ch. 213, 43 Stat. 883 (1925) (codified as amended at 9 U.S.C.

§§ 1–14 (2000)). 3See id. § 2. 4Moses Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). 5Southland Corp. v. Keating, 465 U.S. 1, 18 (1984). 6 Allied-Bruce Terminix v. Cos. v. Dobson, 513 U.S. 265 (1995). 7Pub. L. No. 101–552, 104 Stat. 2736 (codified as amended at 5 U.S.C. §§ 581–593 (2000)).

8 Exec. Order No. 12,778, 56 Fed. Reg. 55,195 (1991) (codified at 5 U.S.C. §§ 581–593 (2000)).

9 Administrative Dispute Resolution Act of 1996, Pub. L. No. 104–320, 110 Stat. 38709.

10See id. § 590. 11See id. § 584.

Congress’ first expression of Federal support for ADR came in

1925 with passage of the Federal Arbitration Act (FAA).2 The act

reversed judicial hostility toward arbitration, a common form of

ADR, by making agreements to arbitrate enforceable ‘‘save upon

such grounds as exist in law or in equity for the revocation of any

contract.’’ 3 At the same time, the Federal courts have advanced

ADR by liberally construing arbitration clauses in contracts and by

invalidating State efforts to limit the enforcement of these agreements. For example, the Supreme Court has held that ‘‘doubts concerning the scope of arbitrable issues should be resolved in favor

of arbitration.’’ 4 The Court has also held that congressional passage of the FAA ‘‘declared a national policy favoring arbitration

and withdrew the power of the States to require a judicial forum

for the resolution of claims which the contracting parties agreed to

resolve by arbitration.’’ 5 Finally, the Court has unequivocally rejected State efforts to limit the enforcement of arbitration agreements by ruling that the FAA preempts all State laws that subject

arbitration agreements to heightened levels of contractual scrutiny.6

Prevalence of ADR in the Federal Government

In response to spiraling litigation costs faced by the Federal Government, Congress has sought to extend the benefits of ADR to

Federal agencies. Finding that the ‘‘availability of a wide range of

dispute resolution procedures * * * will enhance the operation of

the Government and better serve the public,’’ Congress passed the

Administrative Dispute Resolution Act 7 (ADRA) in 1990. The

ADRA required Federal agencies to: adopt a policy favoring ADR;

designate a senior official as the agency responsible for ADR; provide training on ADR methods; and review agency contracts and

agreements for possible implementation of ADR techniques. A year

later, President Bush issued a corresponding executive order affirming the benefits of ADR and encouraging its continued implementation throughout the Federal Government.8

Encouraged by the success of ADR programs at Federal agencies,

Congress permanently reauthorized the ADRA, with amendments,

in 1996.9 The 1996 amendments extended the scope of the ADRA

by authorizing Federal agencies to establish ADR programs employing binding arbitration 10 and by prohibiting the disclosure of

confidential material obtained in the course of ADR settlement

under the Freedom of Information Act.11 These amendments have

served to further enhance the use of ADR at Federal agencies. Congress has also encouraged the judicial branch to implement ADR

programs. In 1990, Congress authorized Federal district courts to

implement pilot ADR programs to facilitate settlement outside of

6

12 Civil Justice Reform Act of 1990, Pub. L. No. 101–650, 104 Stat 5089 (codified at 28 U.S.C.

§§ 471–82 (2000)). 13 Alternative Dispute Resolution Act of 1998, Pub. L. No. 105–315, 112 Stat. 2993 (codified

at 28 U.S.C. §§ 651–658 2000)). 14Pub. L. No. 95–454, 91 Stat. 1111 (codified as amended in scattered sections of 5 U.S.C.). 15 5 U.S.C. §§ 7512 & 4303 (2000). 16See id. § 1204 (codified at 5 U.S.C. §§ 1201–22 (2000)). 17Pub. L. No. 101–12, 103 Stat. 16. 18Pub. L. No. 102–166, 105 Stat. 1071 (codified in scattered sections of 42 U.S.C.) 19Pub. L. No. 103–353, 108 Stat. 3149 (codified at 38 U.S.C. §§ 4301–4333 (2000)). 20Pub. L. No. 104–331, 110 Stat. 4054 (codified at 3 U.S.C. § 401 (2000)). 21Pub. L. No. 105–339, 112 Stat. 3182 (codified in scattered sections of 8 U.S.C.). 22 1999 MSPB. ANN. REP. 6. 23 Id. at 11.

the formal litigation process.12 In 1998, Congress greatly expanded

government support of ADR by passing legislation requiring every

Federal district court to provide litigants at least one ADR alternative during the Federal civil litigation process.13

Merit Systems Protection Board

The Merit Systems Protection Board (the Board) is an independent adjudicatory agency which was established by the Civil

Service Reform Act of 1978.14 The Board has appellate jurisdiction

over certain types of adverse personnel actions 15 taken against

Federal employees. Board decisions are appealable to the U.S.

Court of Appeals for the Federal Circuit, or if the appeal concerns

a discrimination claim, to the Equal Employment Opportunity

Commission.16 Since its creation, the Board has heard tens of thousands of cases while providing Federal employees with an institutionally independent and impartial forum for resolving their employment disputes with Federal agencies.

Over the last decade, Congress has steadily expanded the jurisdiction of the Board. Examples of this expansion include the Whistleblower Protection Act of 1989,17 the Civil Rights Act of 1991,18

the Uniformed Services Employment and Reemployment Rights

Act of 1994,19 the Presidential and Executive Office Accountability

Act of 1996,20 and the Veterans Employment Opportunities Act of

1998.21 The added scope and complexity of the Board’s jurisdiction

has not been matched by a commensurate increase in judicial resources. Since 1993, MSPB’s staff has fallen nearly 25 percent,

from 323 to 250 employees.22 In 1999, the Board and its regional

and field offices closed 9,806 cases.23 While the MSPB has lived up

to its promise of providing Federal employees with an independent

appellate forum to resolve employment disputes with the Federal

agencies for which they work, the volume of this caseload has necessitated further exploration of alternatives to formal litigation before the Board.

H.R. 3312, MSPB Alternative Dispute Resolution Act of 2000

H.R. 3312 would clarify the Administrative Dispute Resolution

Act of 1996 to authorize a 3-year, early intervention pilot ADR program at the Board to assist Federal agencies and employees in resolving personnel actions and disputes within the MSPB’s jurisdiction. The pilot program is designed to assist the Board’s judges in

managing an increasing caseload while reducing litigation expenses

faced by Federal agencies and employees who might have otherwise

sought formal litigation before the Board.

7

A key feature of the pilot program permits Federal agencies and

employees to seek early intervention ADR from a neutral after the

first notice of planned agency action but before an appeal is formally filed with the Board. This provision for early intervention

outside the adversarial context helps to maximize the chances of

settlement before the positions of the parties harden and become

so antagonistic that settlement is unlikely. Since a fully litigated

Board appeal can be as costly as private litigation, the administrative savings from effective early settlement can be substantial. The

program is also notable for its voluntariness, since either party

may withdraw from ADR at any stage of the process. Establishment of this program will in no way affect the collective bargaining

rights of covered personnel.

Another important provision of H.R. 3312 requires that the

Board evaluate the efficacy of a variety of ADR techniques. H.R.

3312 authorizes such sums as may be necessary to fund the pilot

program. The provision of funds will ensure that MSPB has the resources necessary to fully implement the pilot program while encouraging the participation of other agencies in the program. Finally, the bill requires the Board’s Office of Policy and Evaluation

to submit a comprehensive report detailing the effectiveness of the

pilot program within 6 months of the program’s termination. This

information, to be drawn from empirical evidence based upon actual settlements, will allow Congress to more fully ascertain the

fiscal prudence of extending the program beyond the 3-year period

of the pilot program.

COMMITTEE CONSIDERATION

On June 20, 2000, the Subcommittee on Commercial and Administrative Law met in open session and ordered favorably reported

the bill H.R. 3312, as amended, unanimously by voice vote, a

quorum being present. On September 19, 2000, the committee met

in open session and ordered favorably reported the bill H.R. 3312,

with a single amendment in the nature of a substitute unanimously by voice vote, a quorum being present.

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the

House of Representatives, the committee reports that the findings

and recommendations of the committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report.

COMMITTEE ON GOVERNMENT REFORM FINDINGS

No findings or recommendations of the Committee on Government Reform were received as referred to in clause 3(c)(4) of rule

XIII of the Rules of the House of Representatives.

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of House Rule XIII is applicable because this legislation provides new budgetary authority or increased tax expenditures.

8

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the

House of Representatives, the committee sets forth, with respect to

H.R.3312, the following estimate and comparison prepared by the

Director of the Congressional Budget Office under Section 402 of

the Congressional Budget Act of 1974:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, September 22, 2000.

Hon. HENRY J. HYDE, Chairman,

Committee on the Judiciary,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3312, a bill to clarify the

Administrative Dispute Resolution Act of 1996 to authorize the

Merit Systems Protection Board to establish under such act a 3-

year pilot program that will provide a voluntary early intervention

alternative dispute resolution process to assist federal agencies and

employees in resolving certain personnel actions.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is John R. Righter.

Sincerely,

DAN L. CRIPPEN, Director.

Enclosure.

H.R. 3312—A bill to clarify the Administrative Dispute Resolution

Act of 1996 to authorize the Merit Systems Protection Board to

establish under such act a 3-year pilot program that will provide a voluntary early intervention alternative dispute resolution process to assist federal agencies and employees in resolving certain personnel actions

H.R. 3312 would authorize the Merit Systems Protection Board

(MSPB) to establish a three-year pilot program to encourage agencies and employees to use alternative dispute resolution (ADR) procedures to settle disputes before they escalate into formal actions

before the MSPB. The bill would require that the MSPB evaluate

and report on the pilot program within six months of its expiration.

H.R. 3312 would authorize the appropriation of such sums as are

necessary each year to implement the program.

Based on information from the MSPB, CBO estimates that implementing H.R. 3312 would cost around $2 million in each of fiscal

years 2001 through 2003. (The MSPB received an appropriation of

$27.6 million for fiscal year 2000.) That estimate would allow the

MSPB to develop and advertise the program to federal agencies, to

both hire new employees and contract with nonfederal professionals, to train and certify individuals in the practice of ADR techniques, and to report on the program’s effectiveness. Because the

bill would not affect direct spending or receipts, pay-as-you-go procedures would not apply. H.R. 3312 contains no intergovernmental

or private-sector mandates as defined in the Unfunded Mandates

Reform Act and would not affect the budgets of state, local, or tribal governments.

9

The CBO staff contact for this estimate is John R. Righter, who

can be reached at 226–2860. This estimate was approved by Robert

A. Sunshine, Assistant Director for Budget Analysis.

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House

of Representatives, the committee finds the authority for this legislation in article I, section 8 of the Constitution.

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

Section 1. Short title

This section entitles the bill the ‘‘Merit Systems Protection Board

Administrative Dispute Resolution Act of 2000.’’

Section 2. Findings

Section 2 consists of a congressional statement of findings. The

findings reflect Congress’ recognition of the cost, time and expense

of Federal workplace disputes and the persistence of high levels of

litigation at the MSPB. The statement stresses the importance of

early intervention ADR to help resolve disputes while parties are

more amenable to formal litigation, and notes that Federal agencies are more inclined to support alternatives to formal litigation

if neutrals are provided to them without expense. The findings

state that a pilot program that permits Federal agencies and employees to request early intervention ADR at the Board would effectively test the efficacy of ADR in this context. Finally, the statement stresses that the Board is well-equipped to implement the

pilot program since Board judges are well-versed in both ADR techniques and in the substance of employment law.

Section 3. Merit Systems Protection Board Alternative Dispute Resolution Pilot Program

Section 3(a) amends chapter 5 of title 5 of the United States

Code by adding section 585, which authorizes the establishment of

a voluntary early intervention ADR pilot program at the Board.

Subsection (a) specifies the types of personnel and administrative

disputes that may be resolved by the program and requires the

Board to evaluate a variety of ADR techniques, including mediation

conducted by Board staff, private neutrals, or neutrals from appropriate Federal agencies other than the Board.

Subsection (b) stresses that Federal agencies and employees may

jointly request to participate in the program at any time if the dispute is one under a Board administrative program. In the case of

personnel disputes, parties may jointly request ADR under the program after an agency has issued a notice letter of proposed action

under section 4303 or 7513 of title 5. This subsection requires that

the notice letter of proposed agency action under sections 4303 and

7513 describe the Board’s early intervention ADR program and inform employees of their option to participate in the program. Section 585(b) further provides that agencies and employees may seek

early intervention ADR under the program by filing a joint request

with the Board and states that all personnel disputes under sections 4303 and 7513 are eligible for early intervention ADR unless

the Board determines that the matter is not appropriate for the

10

program. Finally, section (b) provides that an agency or employee

decision to participate in the Board’s early intervention ADR program shall not be disclosed in any subsequent proceeding and

states that either party may withdraw from the ADR program

throughout the process.

Section 585(c) specifies how the Board should implement the

ADR program. It requires the Board to develop and prescribe

standards for selecting and handling cases in which ADR has been

requested and enables the Board to take actions that might be necessary, including waiver or extension of all statutory, regulatory or

Board-imposed time frames, to facilitate the success of the program. This subsection also requires the Board or other contractors

hired by the Board Chairman to conduct advocacy and outreach to

increase awareness of the program within the Federal workforce.

Section 585(c) further requires the Board to develop a training and

credentialing program to ensure that all individuals selected by the

Board to serve as program neutrals possess sufficient understanding of ADR process and of the issues that arise before the

Board. Finally, section 585(c) authorizes the Board to prescribe

such regulations as may be necessary to implement the ADR program.

Section 585(d) sets standards for evaluating the Board’s ADR

pilot program. It requires the Board to establish criteria for evaluating the program and to prepare a report detailing finding and

recommendations as to whether voluntary early intervention ADR

is a desirable, effective, and appropriate means of resolving disputes before the Board. Section 585(d) requires the report to identify the number of cases subject to the ADR program, the agencies

involved, the results of the program, and the resources expended.

The report must include a detailed analysis of the effectiveness of

the program, including any resource and time savings, and the program’s impact on the Board’s caseload and case processing time.

The report must also include a customer service survey, a recommendation as to whether to extend the program beyond its expiration date, any suggested improvements to the program, and a

discussion of the relationship between the Board’s pilot ADR program and workplace ADR programs conducted by other Federal

agencies. Section 585(d) requires that the report be submitted to

the President and Congress 180 days before the close of the ADR

pilot program.

Section 3(b) authorizes the appropriation of sums necessary to

implement the pilot ADR program for each of the 3 years following

the enactment of the act. This subsection also requires that the authorization of funds shall not reduce the funds appropriated to the

Board to carry out its statutory mission under section 1204.

Section 3(c) states that the program shall take effect no later

than 60 days after the enactment of appropriations authorized

under subsection (b)(1) and remain in effect for 3 years from the

effective date.

Section 3(d) amends subchapter IV of chapter 5 of title 5 of the

United States Code by adding section 584, ‘‘Establishment of voluntary early intervention ADR pilot program for Federal personnel

disputes.’’

11

AGENCY VIEWS

FEDERAL MEDIATION AND

CONCILIATION SERVICE,

Washington, DC, May 15, 2000.

Hon. GEORGE W. GEKAS,

Chairman, Subcommittee on Commercial & Administrative Law,

Committee on the Judiciary, House of Representatives, Washington, DC.

DEAR CONGRESSMAN GEKAS: Please consider this letter to be the

official submission of commentary by the Federal Mediation & Conciliation Service (FMCS) on HR 3312, which seeks to clarify the Administrative Dispute Resolution Act of 1996 to authorize the Merit

Systems Protection Board (‘‘MSPB’’ or ‘‘the Board’’) to establish a

3-year pilot program to provide a voluntary early intervention Alternative Dispute Resolution (ADR) process. The purpose of this

commentary is to explain to the Subcommittee why FMCS believes

HR 3312, modified as recommended by the Department of Justice,

to be a worthy and important bill that it should recommend for

passage to the Judiciary Committee.

I. ABOUT FMCS

Employing over 200 full time mediators, the largest cadre of full

time mediators in the world, FMCS is a unique federal agency with

over fifty years of experience in the resolution of labor-management

disputes. FMCS is only one of two agencies in the federal government that has conflict resolution as its primary mission. (The other

is the National Mediation Board, which resolves disputes in the air

and railway transportation industries.) In recent decades, FMCS’

mandate has expanded significantly in response to the changing

needs of the U.S. economy and the growing awareness that FMCS’

dispute resolution techniques can be successfully applied to many

situations beyond the labor-management context. In particular,

through congressional legislation, federal agency regulations, executive orders, and agreements with other federal agencies, FMCS

has for many years provided expert services as outside third party

neutrals, ADR systems designers, and ADR trainers throughout

the federal government.

II. WHY THIS SUBCOMMITTEE SHOULD RECOMMEND HR 3312 FOR

PASSAGE TO THE JUDICIARY COMMITTEE

It is FMCS’ position that HR 3312, modified as recommended by

the Department of Justice, is a good bill which, if enacted, would

save a significant amount of time and money in the form of reduced

litigation costs and increased productivity for employees, agencies

and taxpayers alike. Resolving disputes at the lowest possible level

and in the most expeditious manner avoids significant resource expenditures to resolve them more formally later on. Early resolution

of disputes often better preserves workplace relationships because

the parties tend to become less entrenched in their respective positions. Relationships can also improve from the joint exercise of

working cooperatively toward a resolution in an ADR setting. In

addition, early and lasting resolution of workplace disputes enhances productivity because it keeps employees away from their

12

jobs for shorter periods of time and reduces the amount of time

they are mentally distracted by workplace conflict. In the long run,

ADR can also contribute to the development of a culture of conflict

resolution that keeps disputes from escalating in the first place.

HR 3312 provides an important mandate as well a legal and economic framework in which the above positive outcomes can occur.

It provides built-in flexibility for the MSPB to experiment with different systems and approaches for resolving disputes in the most

expeditious manner and at the lowest possible level. It wisely provides for the continuous learning that is necessary when an organization adopts any significant change in its operating procedures.

These are significant strengths that reflect a most enlightened approach to legislation. For these reasons this Subcommittee should

strongly recommend passage of HR 3312.

1. HR 3312 is also laudable for its emphasis on a systems approach

to ADR

It is FMCS’ view that passage of HR 3312 would be extremely

beneficial not only because of its economic and social impact, but

also because of its value as Congress’ continuing recognition of the

importance of ADR and the elements that comprise a coherent and

successful ADR system. As ADR professionals, we at FMCS always

advise our clients to think in terms of a systems approach. This advice recognizes that an ADR system is, in reality, the interdependence of several indispensable elements.

The draft text of HR 3312 submitted by the Justice Department

(‘‘Draft Text’’) recognizes the importance of these elements in several ways. First, it explicitly provides for the training and

credentialing of the program’s neutrals. This is a very attractive

feature of the legislation: without a system in place to train the

program’s neutrals to ensure that they are sufficiently skilled in

the practice of mediation and also understand the arcane and complex issues that the Board confronts, there would be a great risk

that quality would suffer. In such a case, parties could lose faith

in the system and stop using it, thereby continuing to increase the

Board’s caseload with even more deeply entrenched positions. For

these reasons, it is wise to include a provision for the training and

credentialing of the program’s neutrals in HR 3312.

FMCS agrees with our colleagues at the Justice Department that

the MSPB should not require parties to use mediators who are

MSPB Administrative Judges (AJs) in order to participate in the

program. Such an arrangement risks creating a perception that the

MSPB AJ mediating the case might share information with the

MSPB AJ(s) hearing the case. Irrespective of whether such a communication would actually take place, there might very well be the

perception that it could. That perception is potentially very damaging to the mediation process, as candor and openness are essential elements of any successful mediation. Parties may not make

the statement that can ‘‘seal the deal’’ if they suspect it could prejudice them before the AJ if the mediation ultimately does not resolve the issue. For these reasons as well as the reasons identified

by the Justice Department, FMCS endorses subsection 585(a)(2)(A)

of the HR 3312 Draft Text, requiring the Board to test and evaluate a variety of ADR techniques, including ‘‘mediation conducted by

private neutrals, Board staff, or neutrals from appropriate federal

13

agencies other than the Board.’’ If MSPB AJs do end up serving as

mediators in this program, there should be procedures in place to

assure the parties that he or she will not reveal statements made

in mediation with the Judge(s) that will hear the case.

Another attractive feature of the HR 3312 Draft Text is its mandate for the Board to conduct appropriate advocacy and outreach

aimed at increasing awareness and understanding of the ADR program on the part of the federal workforce. Such advocacy and outreach is critical to ensuring that the program’s potential users are

aware that it is available and, of fundamental importance, that

they are informed as to how to recognize when ADR is appropriate

and how to go about availing themselves of the program. Appropriate advocacy and outreach can also ensure that potential parties

feel comfortable using the program—that they understand that it

is voluntary, does not require that they forfeit any of their rights,

is neutral and confidential, and that there are great potential benefits from participating in the process. For these reasons, the Draft

Text’s provision for outreach to federal managers, supervisors and

staff is an example of very smart legislation, legislation that takes

into account how it will actually be put into practice.

Finally, the bill wisely provides for an independent evaluation

and feedback mechanism to track not only whether the program is

meeting its objectives but also whether it is meeting the needs of

its customers. As guardians of the public’s trust and the public’s

money, it is important for implementing agencies to not only publicly account for a program’s results, but also to have a feedback

mechanism by which they can continuously improve the quality of

their service delivery. FMCS has much confidence in the expertise

of the MSPB and its capacity to deliver a quality program to the

public, and trusts that as the Board designs its program it will provide for an evaluation loop to feed back into service delivery at several points, well before the final independent report is due at the

end of three years. As the most experienced designers of ADR systems in the federal government, FMCS stands prepared to advise

the Board, at its request, in how to provide for a continuously improving ADR program that most wisely spends the taxpayers’

money.

III. CONCLUSION

As I have discussed above, this Subcommittee should recommend

HR 3312, modified as recommended by the Department of Justice,

for passage because it encourages early settlement of disputes, with

all of the attendant benefits, and does so by taking a systems approach. While the provisions that I have discussed—training and

credentialing, education and outreach, and independent evaluation

and feedback—are important components of a coherent ADR system, the design of a truly effective system is a complex task requiring great expertise and experience. With FMCS’ considerable expertise in the areas of ADR training and certification, education

and outreach, program evaluation, maintenance of a panel of outside neutrals (FMCS has over 1400 of them), and the development

and maintenance of standards of professional responsibility, we

would be happy to contract with the MSPB to coordinate with and

advise them as they implement this pilot program.

14

In conclusion, FMCS strongly encourages the Subcommittee to

support this commendable legislation and the good work of the

Merit Systems Protection Board by recommending it for passage to

the Judiciary Committee. I would be happy to appear before the

Subcommittee to provide further comment on how the proposed legislation could be implemented successfully, and the role that FMCS

could play in making that happen.

Sincerely,

RICHARD BARNES, Director.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows (new matter is printed in italic

and existing law in which no change is proposed is shown in

roman):

TITLE 5, UNITED STATES CODE

* * * * * * *

PART I—THE AGENCIES GENERALLY

* * * * * * *

CHAPTER 5—ADMINISTRATIVE PROCEDURE

* * * * * * *

SUBCHAPTER I—GENERAL PROVISIONS

Sec.

500. Administrative practice; general provisions.

* * * * * * *

SUBCHAPTER IV—ALTERNATIVE MEANS OF DISPUTE RESOLUTION IN THE

ADMINISTRATIVE PROCESS

* * * * * * *

585. Establishment of voluntary early intervention alternative dispute resolution

pilot program for Federal personnel disputes.

* * * * * * *

SUBCHAPTER IV—ALTERNATIVE MEANS OF DISPUTE RESOLUTION IN THE

ADMINISTRATIVE PROCESS

* * * * * * *

§ 585. Establishment of voluntary early intervention alternative dispute resolution pilot program for Federal

personnel disputes

(a) IN GENERAL.—

(1) The Board is authorized under section 572 to establish a

3-year pilot program to provide Federal employees and agencies

with voluntary early intervention alternative dispute resolution

(in this section referred to as ‘‘ADR’’) processes to apply to certain personnel disputes. The Board shall provide ADR services,

upon joint request of the parties, in matters involving removals,

suspensions for more than 14 days, other adverse actions under

15

section 7512, and removals and other actions based on unacceptable performance under section 4303.

(2) The Board shall test and evaluate a variety of ADR techniques, which may include—

(A) mediation conducted by private neutrals, Board staff,

or neutrals from appropriate Federal agencies other than

the Board;

(B) mediation through use of neutrals agreed upon by the

parties and credentialed under subsection (c)(5); and

(C) non-binding arbitration.

(b) EARLY INTERVENTION ADR.—

(1) AUTHORITY.—The Board is authorized to establish an

early intervention ADR process, which the agency involved and

employee may jointly request, after an agency has issued a notice letter of a proposed action to an employee under section

4303 or 7513 but before an appeal is filed with the Board.

(2) NOTICE IN PERSONNEL DISPUTES.—During the term of the

pilot program, an agency shall, in the notice letter of a proposed

personnel action under section 4303 or 7513—

(A) advise the employee that early intervention ADR is

available from the neutral Board, subject to the standards

developed pursuant to subsection (c)(1)(A), and that the

agency and employee may jointly request it; and

(B) provide a description of the program, including the

standards developed pursuant to subsection (c)(1)(A).

(3) REQUEST.—Any agency and employee may seek early

intervention ADR from the Board by filing a joint request with

the Board pursuant to the program standards adopted under

subsection (c)(1)(A). All personnel dispute matters appealable to

the Board under section 4303 or 7513 shall be eligible for early

intervention ADR, upon joint request of the parties, unless the

Board determines that the matter is not appropriate for the program subject to any applicable collective bargaining agreement

established under chapter 71.

(4) CONFIDENTIALITY AND WITHDRAWAL.—The consent of an

agency or an employee with respect to an early intervention

ADR process is confidential and shall not be disclosed in any

subsequent proceeding. Either party may withdraw from the

ADR process at any time.

(5) ANCILLARY MATTER.—In any personnel dispute accepted

by the Board for the ADR pilot program authorized by this section, the Board may attempt to resolve any ancillary matter

which the Board would be authorized to decide if the personnel

action were effected under section 4303 or 7513, including—

(A) a claim of discrimination as described in section

7702(a)(1)(B);

(B) a prohibited personnel practice claim as described in

section 2302(b); or

(C) a claim that the agency’s action is or would be, if effected, not in accordance with law.

(c) IMPLEMENTATION.—

(1) PROGRAM DUTIES.—In carrying out the program under

this section, the Board shall—

16

(A) develop and prescribe standards for selecting and

handling cases in which ADR has been requested and is to

be used; (B) take such actions as may be necessary upon joint request of the parties, including waiver of all statutory, regulatory, or Board imposed adjudicatory time frames; and (C) establish a time target within which it intends to

complete the ADR process. (2) EXTENSION.—The Board, upon the joint request of the

parties, may extend the time period as it finds appropriate. (3) ADVOCACY AND OUTREACH.—The Board shall conduct

briefings and other outreach, on a non-reimbursable basis,

aimed at increasing awareness and understanding of the ADR

program on the part of the Federal workforce—including executives, managers, and other employees. (4) RECRUITMENT.—The Chairman of the Board may contract

on a reimbursable basis with officials from other Federal agencies and contract with other contractors or temporary staff to

carry out the provisions of this section. (5) TRAINING AND CREDENTIALLING OF NEUTRALS.—The

Board shall develop a training and credentialing program to

ensure that all individuals selected by the Board to serve as

program neutrals have a sufficient understanding of the issues

that arise before the Board and are sufficiently skilled in the

practice of meditation or any other relevant form of ADR. (6) REGULATIONS.—The Board is authorized to prescribe such

regulations as may be necessary to implement the ADR program

established by this section. (d) EVALUATION.— (1) CRITERIA.—The Board’s Office of Policy and Evaluation

shall establish criteria for evaluating the ADR pilot program

and prepare a report containing findings and recommendations

as to whether voluntary early intervention ADR is desirable, effective, and appropriate for cases subject to section 4303 or

7513.

(2) REPORT CONTENT.—The report, subject to subsection (b)(4)

and section 574, shall include— (A) the number of cases subject to the ADR program, the

agencies involved, the results, and the resources expended; (B) a comprehensive analysis of the effectiveness of the

program, including associated resource and time savings (if

any), and the effect on the Board’s caseload and average

case processing time; (C) a survey of customer satisfaction; and

(D) a recommendation regarding the desirability of extending the ADR program beyond the prescribed expiration

date and any recommended changes. The recommendation under subparagraph (D) shall discuss the

relationship between the Board’s pilot ADR program and those

workplace ADR programs conducted by other Federal agencies. (3) REPORT DATE.—The report shall be submitted to the President and the Congress 180 days before the close of the ADR

pilot program.

* * * * * * *

Æ