6690 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Proposed Rules

1The most recent views of the Department of

Justice are reflected in a September 7, 1995

memorandum from Walter Dellinger, Assistant

Attorney General, Office of Legal Counsel, to John

Schmidt, Associate Attorney General

(‘‘Constitutional Limitations on Federal

Government Participation in Binding Arbitration’’).

DEPARTMENT OF LABOR

Office of the Secretary

Wage and Hour Division

Occupational Safety and Health

Administration

Office of Federal Contract Compliance

Programs

29 CFR Parts 24, 825, and 1977

29 CFR Chapter V

41 CFR Chapter 60

Expanded Use of Alternative Dispute

Resolution in Programs Administered

by the Department of Labor

AGENCY: Office of the Secretary, Wage

and Hour Division, Occupational Safety

and Health Administration, Office of

Federal Contract Compliance Programs,

Labor.

ACTION: Notice; request for comments.

SUMMARY: This notice amends the

Department of Labor’s interim policy on

the use of alternative dispute resolution

(ADR), originally published on February

28, 1992 (57 FR 7292), and revised on

June 26, 1992 (57 FR 28701). The

Department of Labor (DOL) is interested

in expanding the voluntary use of ADR

in programs administered by the

Department. Accordingly, the

Department seeks public comment on a

proposed pilot test of voluntary

mediation and/or arbitration in six

categories of cases: Discrimination cases

arising under Section 11(c) of the

Occupational Safety and Health Act;

environmental ‘‘whistleblower’’ cases

arising under the employee-protection

provisions of the Clean Air Act, the

Comprehensive Environmental

Response, Compensation, and Liability

Act (CERCLA), the Energy

Reorganization Act, the Federal Water

Pollution Control Act, the Safe Drinking

Water Act, the Resource Conservation

and Recovery Act, and the Toxic

Substances Control Act; cases arising

under the Family and Medical Leave

Act; cases arising under the Fair Labor

Standards Act; compliance review cases

arising under Executive Order 11246;

and complaint investigation cases under

the Vietnam Era Veterans’ Readjustment

Assistance Act of 1974 (38 U.S.C. 4212).

DATES: Comments are due by April 14,

1997.

ADDRESSES: Submit written comments

to Roland G. Droitsch, Deputy Assistant

Secretary for Policy, U.S. Department of

Labor, Room S-2312, 200 Constitution

Avenue, N.W., Washington, DC 20210.

The Department is using this notice to

experiment with the electronic filing of

comments. Submit comments in

electronic format through the World

Wide Web of the Internet at the

following Website: http://www.dol.gov/

dol/public/regs/comments/main.htm.

Commenters who file electronically

do not need to confirm their comments

by submitting written confirmation

copies. Interested parties will also be

able to review comments filed (whether

submitted in written or electronic

format) at the same Website.

Questions about or problems with

filing electronically should be submitted

to: webmaster@dol.gov.

All of the comments received can be

viewed at the Office of the Assistant

Secretary for Policy, U.S. Department of

Labor, Room S-2312, 200 Constitution

Avenue, N.W., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Jim

Jones, Office of the Assistant Secretary

for Policy, U.S. Department of Labor,

Room S-2312, 200 Constitution Avenue,

N.W., Washington, DC 20210.

Telephone (202) 219–6026. (This is not

a toll-free number.)

SUPPLEMENTARY INFORMATION: After

discussing the legal authority for the

Department’s use of ADR, this Notice

describes: a prior pilot test of ADR (the

Philadelphia ADR Pilot), the use of ADR

by public agencies, the DOL programs

involved in the current pilot test, and

the details of the test. The Department

is interested in receiving comments on

ADR and the pilot test generally, as well

as on a number of specific issues

identified in the Notice. For example,

the Department invites comments on the

use of mediation and arbitration in the

pilot test, as well as on the relationship

between these two ADR techniques,

including the issue of whether

arbitration (in addition to mediation)

should be offered as an option in all

categories of cases included in the pilot

test.

Legal Authority

On February 28, 1992, under the

original Administrative Dispute

Resolution Act, Public Law 101–552,

which expired on September 30, 1995,

the Department published in the

Federal Register (57 FR 7292) an

interim policy on the use of ADR in the

programs administered by DOL.

On October 19, 1996, President

Clinton signed the Administrative

Dispute Resolution Act of 1996 (ADR

Act), Public Law 104–320, which

reauthorized alternative means of

dispute resolution in the Federal

administrative process.

As did its predecessor statute

(codified at 5 USC 575–580), the ADR

Act of 1996 authorizes and encourages

federal agencies to use arbitration,

mediation, negotiated rulemaking, and

other consensual methods of dispute

resolution. With respect to arbitration,

the ADR Act, in conjunction with the

Federal Arbitration Act (9 USC 1–16):

Provides for federal judicial

enforcement of arbitration agreements;

provides for judicial review and

enforcement of arbitration awards;

specifies the authority of the arbitrator;

and establishes rules for arbitration

proceedings, as well as rules governing

the effect of arbitration awards.

The pilot test includes, among other

methods of ADR, voluntary arbitration

to which the Department would be a

party. The Department believes that the

arbitration procedure described in this

Notice would be consistent with the

Constitution, as currently interpreted by

the Department of Justice.1 In

compliance with Section 8 of the ADR

Act of 1996, before participating in

binding arbitration, the Department will

consult with the Attorney General and

will issue guidance on the appropriate

use of arbitration and when Department

staff are authorized to use arbitration.

The Department also believes that the

pilot test would advance the goals of

Executive Order 12988 on Civil Justice

Reform, issued by the President on

February 5, 1996 (61 FR 4729). Section

1(c) of the Executive Order encourages

the use of ADR techniques and

processes by litigation counsel for

federal agencies, if the ‘‘use of a

particular technique is warranted in the

context of a particular claim or claims,

and * * * such use will materially

contribute to the prompt, fair, and

efficient resolution of the claims.’’

The Philadelphia ADR Pilot

The Department issued its 1992

interim ADR policy in conjunction with

the start of a pilot test in the

Philadelphia Region in which DOL

managers served as mediators for

enforcement cases that were awaiting

litigation. The results of the

Philadelphia ADR Pilot were

encouraging. Of the 27 cases mediated

in the pilot, 22 (81 per cent) were

settled, and most were resolved in a

single mediation session. The DOL

participants independently concluded

that the settlements were at least

comparable to the likely outcome of

litigation. Some of the cases were
Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Proposed Rules 6691

2The statutes are: the Clean Air Act, 42 U.S.C.

7622; the Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA), 42

U.S.C. 9610; the Energy Reorganization Act, 42

U.S.C. 5821; the Federal Water Pollution Control

Act, 33 U.S.C. 1367; the Safe Drinking Water Act,

42 U.S.C. 300j–9(I); the Resource Conservation and

Recovery Act, 42 USC 6971; and the Toxic

Substances Control Act, 15 U.S.C. 2622.

complex and would have cost the

Department and the outside parties

substantial time and resources to

litigate.

Public Agency Use of ADR

In 1993, a National Performance

Review report strongly endorsed ADR as

a means of reducing governments costs

and improving efficiency. Today, the

use of ADR by public agencies is

growing.

In the federal government, for

example, the Equal Employment

Opportunity Commission (with the

assistance of the Federal Mediation and

Conciliation Service) and the National

Labor Relations Board are exploring

various ADR techniques for

employment-related disputes brought

before those agencies. The Department

of Justice (DOJ), in turn, has begun a

program to facilitate mediation in civil

litigation handled by DOJ. A pilot test

of mediation to resolve complaints

under the Americans with Disabilities

Act is also underway at DOJ.

The States have begun to expand their

use of alternative dispute resolution as

well. On February 16, 1996, for

example, the Massachusetts

Commission against Discrimination

(MCAD) launched an ADR program that

will offer voluntary arbitration of

employment discrimination disputes.

The MCAD program will operate under

a new due-process protocol to assure

that the arbitration process is fair.

The December 1994 Report and

Recommendations of the Commission

on the Future of Worker-Management

Relations (the Dunlop Commission)

urged the Department to expand the

Philadelphia ADR Pilot to the remaining

DOL regions and to enlarge the mix of

cases submitted to mediation. The

Dunlop Commission also advised DOL

to ‘‘explore the use of different forms of

ADR, including mini trials, early neutral

evaluation, and arbitration to determine

which processes are most effective for

different kinds of cases.’’

Proposed Pilot Test

In light of the enactment of the ADR

Act of 1996, the recommendations of the

National Performance Review and the

Dunlop Commission, as well as the ADR

initiatives of federal and state agencies,

the Department is interested in building

on its past use of mediation and in

exploring the possible benefits of

arbitration, under appropriate

circumstances. After inviting and

considering public comments, the

Department therefore plans to proceed

with a pilot test to help determine

whether private, voluntary mediation

and/or arbitration can achieve the goals

of (1) resolving disputes faster and more

cheaply than conventional litigation; (2)

producing resolutions that satisfy the

parties and DOL; and (3) using the

enforcement and litigation resources of

DOL more effectively. (The Department

will continue to consider, on a case-bycase basis, other opportunities to

participate in ADR, either when DOL is

asked to do so by an outside party or by

a court or other adjudicative authority,

or when a DOL agency otherwise

believes that ADR would be effective in

resolving a particular dispute.)

Under the proposed pilot test, the

Department will continue to fully

investigate employees’ complaints of

violations of the laws covered by this

pilot test, as warranted. In selected

cases, as described below, employees

and employers will be offered the

option to mediate and/or arbitrate

disputes under the Department’s

auspices. In these cases, the Solicitor’s

Office may provide legal representation

to employees. In other types of cases, as

indicated, the Department would offer

an employer/contractor the option of

mediation or arbitration, and the

Department itself would be a party to

the proceeding. The pilot test will not

include disputes in which private

parties entered into an arbitration or

mediation agreement prior to the

dispute.

The Department recognizes that

Federal agencies acquired little if any

experience with arbitration during the

five-year life of the original ADR Act

(1990–1995) and thus intends to

proceed carefully in this area. For

example, the Department is committed

to following proper due process

safeguards in any use of ADR

techniques. In proposing the pilot test

described in this Notice, the Department

reviewed the ‘‘Due Process Protocol for

Mediation and Arbitration of Statutory

Disputes Arising out of the Employment

Relationship’’ issued by the Task Force

on Alternative Dispute Resolution in

Employment. (The Task Force, an

outgrowth of the Dunlop Commission,

included representatives of diverse

organizations involved in labor and

employment law.) In addition to

developing fair ADR procedures, the

Department would also make

arbitrators’ decisions available to the

public.

The Department’s proposed pilot test

will be limited to six types of cases,

described below. These programs were

selected because they seem to present

promising opportunities for effective

use of voluntary ADR. The results of the

proposed pilot test will guide DOL in

future ADR initiatives, including the

possible expansion of voluntary

mediation and/or arbitration to other

types of cases. The Department invites

comment on its selection of programs

for the proposed pilot test and on

possible alternatives or additions to the

programs selected.

The six types of cases that would be

included in the Department’s pilot test

are: (1) Discrimination cases under

Section 11(c) of the Occupational Safety

and Health Act (OSH Act), 29 U.S.C.

660(c); (2) environmental whistleblower

cases under the employee-protection

provisions of seven separate

environmental safety and health

statutes; 2 (3) cases under the Family

and Medical Leave Act of 1993 (FMLA),

29 U.S.C. 2601 et seq.; (4) cases under

the Fair Labor Standards Act of 1938

(FLSA), 29 U.S.C. 201 et seq.; (5)

compliance review cases under

Executive Order 11246; and (6)

complaint investigation cases under the

Vietnam Era Veterans’ Readjustment

Assistance Act, 38 U.S.C. 4212.

OSH Act Discrimination Cases:

Section 11(c) of the OSH Act prohibits

employers from discharging or

discriminating against employees for

engaging in protected, safety-related

activity under the Act. Discrimination

cases under Section 11(c) are initiated

by an employee filing a complaint with

the Occupational Safety and Health

Administration (OSHA). OSHA

investigates such complaints.

Meritorious complaints which OSHA

cannot settle administratively are

referred to the Solicitor’s Office for legal

action. The OSH Act authorizes the

Secretary of Labor to file suit in federal

district court to enforce Section 11(c).

The statute does not create a private

right of action for employees. (The

Department’s regulations interpreting

OSH Act Section 11(c) appear at 29 CFR

Part 1977.)

In recent years, OSHA has been

receiving approximately 3,200–3,300

complaints under Section 11(c)

annually. The great majority of these

complaints are either determined to be

meritless or are settled administratively.

On average, about 120 cases per year are

referred to the Solicitor’s Office, which

in turn files about 20 cases per year in

federal district court. Because of heavy

caseloads in the courts, these cases can

be subject to significant delays.
6692 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Proposed Rules

Environmental Whistleblower Cases:

The Secretary of Labor is responsible for

administering the employee-protection

provisions of several environmental

safety and health statutes (identified

above). (The Environmental Protection

Agency, the Nuclear Regulatory

Commission, or the Department of

Energy otherwise administer and

enforce these laws.) These laws protect

employees against discharge or

discrimination for certain conduct, such

as testifying in a statutory enforcement

proceeding.

Environmental whistleblower cases

are handled in an administrative

process which results in a

determination by the Department’s

Administrative Review Board (ARB).

Employees who believe that they have

been discriminated against may file

complaints with the Occupational

Safety and Health Administration.

(Under Secretary’s Order 6–96, issued

on December 27, 1996, responsibility for

handling these cases was transferred to

OSHA, from the Wage and Hour

Division of the Employment Standards

Division.)

Under DOL regulations (29 CFR Part

24), within 30 days, the Department

must complete an investigation,

determine whether the alleged violation

occurred, and notify the parties. That

determination becomes final unless the

employee or the employer seeks a

hearing before the Department’s Office

of Administrative Law Judges. After the

hearing, the administrative law judge

(ALJ) will issue a recommended

decision, which is forwarded to the ARB

for a final order. Final orders may be

appealed to the federal courts of

appeals. The DOL Solicitor’s Office does

not represent employees in the

administrative hearing process, nor does

DOL typically participate in the

administrative adjudication. Employees

must secure their own legal

representation.

In recent years, the Department has

received about 90 environmental

whistleblower complaints every year.

The Department’s Office of

Administrative Law Judges (OALJ)

conducts about 80 hearings each year in

this type of case, resulting in 30 to 40

final decisions of the ARB. In the past,

there have been significant delays in the

administrative adjudication process.

Most recently, cases have been

adjudicated or resolved more promptly.

The OALJ has instituted a ‘‘settlement

judge’’ procedure, in which cases may

be temporarily transferred from the

presiding judge to another judge, whose

role is to explore the possibility of

settling the case.

Family and Medical Leave Act Cases:

Under the recently-enacted FMLA, the

Department’s Wage and Hour Division

is authorized to receive, investigate, and

attempt to resolve complaints of

statutory violations. The Wage and Hour

Division first seeks to resolve

complaints by conciliation. If that effort

is unsuccessful, the Division may

choose to conduct a complete

investigation. Meritorious complaints

that cannot be settled administratively

are referred to the Solicitor’s Office,

which may bring suit in federal district

court. The FMLA also creates a private

right of action for employees, who may

bring suit themselves in either state or

federal court.

Since the FMLA was enacted in 1993,

the Department has received more than

6,300 employee complaints, through

September 30, 1996. The great majority

of these complaints were resolved

through conciliation, many without the

need for a full investigation by the Wage

and Hour Division. The Solicitor’s

Office has filed fifteen lawsuits to

enforce the FMLA. Federal courts have

issued preliminary or final rulings in

more than twenty FMLA cases brought

directly by individual employees

against their employers.

Fair Labor Standards Act Cases:

Under the Fair Labor Standards Act,

which establishes minimum-wage and

overtime compensation standards (as

well as other employee protections), the

Wage and Hour Division is authorized

to receive, investigate, and attempt to

resolve complaints of statutory

violations. Meritorious complaints that

cannot be settled in conciliation are

referred to the Solicitor’s Office, which

may bring suit in federal court. The

FLSA also creates a private right of

action for employees, who may file suit

in either state or federal court. The vast

majority of cases under the FLSA are

brought by private employees directly

against their employers.

Compliance Review Cases under

Executive Order 11246 and Complaint

Investigation Cases under the Vietnam

Era Veterans’’ Readjustment Assistance

Act: The Department’s Office of Federal

Contract Compliance Programs (OFCCP)

administers three equal employment

opportunity programs applicable to

Federal contractors and subcontractors:

Executive Order 11246, Section 503 of

the Rehabilitation Act, and the

affirmative action provisions of the

Vietnam Era Veterans’’ Readjustment

Assistance Act (VEVRAA). Taken

together, these laws require covered

contractors and subcontractors to refrain

from discrimination and to take

affirmative action to ensure equal

employment opportunity without regard

to race, color, sex, national origin,

religion, or status as an individual with

disabilities, a Vietnam era veteran, or a

special disabled veteran.

OFCCP conducts compliance reviews

of covered contractors and

subcontractors, and investigates and

attempts to resolve complaints received

from employees and job applicants who

allege that there have been violations of

these laws. OFCCP first seeks to resolve

complaints and issues revealed during a

compliance review by conciliation. If

that effort is unsuccessful, OFCCP refers

the matter to the Solicitor’s Office,

which is authorized to institute

administrative enforcement

proceedings.

After a full evidentiary hearing, a

Department of Labor Administrative

Law Judge issues a recommended

decision. On the basis of the entire

record, the Department’s Administrative

Review Board issues a final

administrative order. Contractors may

appeal final adverse orders to the

Federal district courts. The laws

administered by OFCCP do not create a

private right of action for contractors’’

employees or job applicants. (OFCCP

regulations implementing contract

compliance laws are published at 41

CFR Chapter 60.)

About 4,000 compliance reviews are

closed by OFCCP annually. About 3,000

reviews result in findings of violations.

About 200 complaints per year alleging

violations of the affirmative action

provisions of VEVRAA are filed with

OFCCP. On average, OFCCP refers 20

cases a year to the Solicitor’s Office,

which in turn files about 10

administrative complaints annually.

Lengthy delays may occur in cases

resolved through the complete formal

enforcement process.

Scope of Mediation or Arbitration

Under the Proposed Pilot

The Department invites comment on

the scope of mediation and arbitration

under the proposed pilot test. In DOL’s

experience, employment disputes that

involve laws enforced by the

Department often implicate other

statutory, common-law, or other legal

rights, outside of DOL’s jurisdiction. For

example, an employee with a colorable

claim under the Family and Medical

Leave Act or Section 503 of the

Rehabilitation Act may also have a

claim under the Americans with

Disabilities Act. An employee with a

colorable OSH Act discrimination claim

or environmental whistleblower claim

may also have claims under the

National Labor Relations Act, a private

collective bargaining agreement, or state

common law.
Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Proposed Rules 6693

An ADR proceeding that addresses

only claims under DOL-administered

laws may not resolve the entire dispute

between an employee and an employer.

Employers may be reluctant to

participate in a process that leaves some

employee claims outstanding. The

Department’s authority, however, is

limited to the laws it administers and

enforces. DOL invites comments on how

best to ensure that the pilot test

appropriately addresses the full range of

employees’ legal rights and remedies.

Case Selection Process

Cases for the proposed pilot test will

be selected from the six categories

described. After a complaint has been

investigated and found to have merit (or

violations have been identified during a

compliance review), and after efforts to

settle the case administratively have

failed, cases will be screened for ADR

suitability by the local office of the

program agency (e.g., OSHA), in

consultation with the regional office of

the Solicitor. (The criteria for case

selection are described below.)

Employers who agreed to mediate or

arbitrate a dispute would be expected to

waive any applicable statute of

limitations.

OSH Act Discrimination Cases: As

explained, Section 11(c) of the OSH Act

creates no private right of action for

employees. The Department thus

anticipates that in OSHA discrimination

cases, the Department would decide

whether to seek mediation or

arbitration.

This decision would be made after an

employee’s complaint was investigated,

but before suit was filed in federal

district court. In selecting cases for

mediation or arbitration, the Department

would be governed by the case selection

criteria set forth in this Notice. The

Department would consult the

complaining employee, as well as the

National Labor Relations Board (NLRB)

if the employee has filed a related

complaint with the NLRB. The

Department invites comment on

whether it should ever pursue

mediation or arbitration without the

agreement of the complaining employee.

DOL would be a party to the

subsequent mediation or arbitration

proceeding, and the Solicitor’s Office

would represent the public interest and

the interests of the employee. The

Department would be bound by the

results of the ADR proceedings, except

as otherwise provided by law. The

Department invites comment on

whether employees’ own attorneys or

other representatives should ordinarily

be permitted to participate in a

mediation or arbitration proceeding.

Alternatively, if the Department

determined that a case is suitable for

ADR under the criteria described below,

DOL could invite the employee and the

employer to participate in a mediation

or arbitration proceeding. DOL would

not be a party or a participant, nor

would it necessarily be bound by a

settlement or an arbitrator’s decision.

Rather, the Department would

determine whether to defer to the

parties’ resolution by foregoing its

exclusive right to bring suit under

Section 11(c) of the OSHA Act. (The

Department’s current policy on deferral

to the outcome of other proceedings

initiated by a complainant appears at 29

CFR 1977.18(c).) The Department

invites comment on this alternative

approach.

Only the OSH Act discrimination

complaint would be subject to

mediation or arbitration. Consistent

with longstanding OSHA practice, the

underlying allegation of a safety or

health standard violation would be

handled separately in administrative

proceedings prescribed by the OSH Act.

The Department would revise or

supplement its existing regulations for

OSHA discrimination cases (29 CFR

Part 1977), as necessary, to incorporate

the procedures described here.

Environmental Whistleblower Cases:

Environmental whistleblower cases are

handled through an administrative

process (described above) in which

employees are responsible for securing

their own representation or proceeding

pro se. Under the proposed pilot test,

after an employee’s complaint had been

investigated by the Department, DOL

would determine whether the case was

suitable for ADR under the criteria

described in this Notice. If ADR was

appropriate, the Department would offer

the employer and the employee the

option of mediation and/or arbitration,

conducted either by a Settlement Judge

in DOL’s Office of Administrative Law

Judges or by a private mediator or

arbitrator. The Department would not be

a party to, or participant in, this

mediation or arbitration. The

Department invites comment on how

best to coordinate the pilot test with

OALJ’s existing settlement judge

process.

The Administrative Review Board

would not be bound by any resolution

reached by the parties, but instead

would review the results of mediation

or arbitration. If appropriate (using the

same standard now applied in ARB

review of certain environmentalwhistleblower settlements between

employees and employers), the parties’

mediated settlement or the arbitrator’s

decision would be embodied in a final

order of the Administrative Review

Board. The Department would revise or

supplement its existing regulations for

environmental whistleblower cases (29

CFR Part 24), as necessary, to

incorporate these procedures.

Family and Medical Leave Act Cases:

Under the pilot test, after an employee’s

FMLA complaint was investigated and

found to be meritorious, and after

administrative efforts to settle the case

had failed, the Department would

determine whether the case was suitable

for ADR under the criteria described in

this Notice. (The Department would

consult the complaining employee in

making this determination.) If ADR was

appropriate, the Department would offer

the employer and the employee the

option of mediation.

If requested by the employee, the DOL

Solicitor’s Office would represent the

employee in mediation. The employee

would be free to choose other

representation (including representation

by non-lawyers) at the employee’s

expense, or to proceed individually.

Whether or not an employee was

represented by the Solicitor’s Office in

mediation, the employee would be free

to resolve the dispute on terms

acceptable to the employee. If a

mediated settlement were reached, the

Department ordinarily would close its

file on the matter.

Because only a few judicial decisions

have been issued under the FMLA, the

need to develop authoritative precedent

on many issues remains. This

consideration will guide the

Department’s use of ADR. Moreover,

about ninety per cent of the FMLA

complaints that the Department finds to

be meritorious are resolved in

conciliation. Therefore, the pool of cases

that are appropriate for ADR may be

quite small. The Department invites

comment on the types of FMLA cases

that are most likely to be appropriate for

mediation.

Fair Labor Standards Act Cases:

Under the pilot test, after an employee’s

FLSA complaint was investigated and

found to be meritorious, and after

administrative efforts to settle the case

had failed, the Department would

determine whether the case was suitable

for ADR under the criteria described in

this Notice. (The Department would

consult the complaining employees in

making this determination.) If ADR was

appropriate, the Department would offer

the employer and the employee the

option of mediation.

If requested by the employee, the DOL

Solicitor’s Office would represent the

employee in mediation. The employee

would be free to choose other

representation (including representation
6694 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Proposed Rules

by non-lawyers) at the employee’s

expense, or to proceed individually.

Whether or not an employee was

represented by the Solicitor’s Office in

mediation, the employee would be free

to resolve the dispute on terms

acceptable to the employee. If a

mediated settlement were reached, the

Department ordinarily would close its

file on the matter.

Executive Order 11246 Compliance

Review Cases and Complaint

Investigation Cases under the Vietnam

Era Veterans’ Readjustment Assistance

Act (38 U.S.C. 4212): As explained,

there is no private right of action under

the laws administered by OFCCP. Under

the pilot test, after an Executive Order

11246 compliance review or a Vietnam

Era Veterans’ Readjustment Assistance

Act discrimination complaint

investigation are completed, violations

have been identified, and administrative

efforts to resolve the case have failed,

the Department would determine

whether the case was suitable for ADR

under the criteria described in this

Notice. If ADR was appropriate, the

Department would offer the contractor

the option of mediation. If the

contractor agreed to mediation, the

Department’s OFCCP staff would

represent the interests of the

Department in the mediation process.

The Department would revise or

supplement its existing regulations (41

C.F.R. Chapter 60), as necessary, to

incorporate these procedures.

Case Selection Criteria

Whether or not DOL is a party to an

arbitration or mediation proceeding, the

Department will use, encourage, or defer

to ADR only when it is consistent with

existing law. The Department will not

use, encourage, or defer to ADR when it

believes (1) That the need for injunctive

relief makes ADR inappropriate; or (2)

based on consultation with the

Department of Justice or other

concerned government agencies, that

the dispute involves a criminal

violation; or (3) that the dispute

implicates the authority of the DOL

Inspector General. Nor will the

Department recognize any prior

agreement that makes the use of

mediation or arbitration a condition of

employment or otherwise prospectively

requires the use of ADR in an

employment dispute.

In selecting cases for possible

voluntary mediation or arbitration, the

Department will follow the ADR Act,

which provides that:

An agency shall consider not using a

dispute resolution proceeding if—

(1) a definitive or authoritative resolution

of the matter is required for precedential

value, and such a proceeding is not likely to

be accepted generally as an authoritative

precedent;

(2) the matter involves or may bear upon

significant questions of Government policy

that require additional procedures before a

final resolution may be made, and such a

proceeding would not likely serve to develop

a recommended policy for the agency;

(3) maintaining established policies is of

special importance, so that variations among

individual decisions are not increased and

such a proceeding would not likely reach

consistent results among individual

decisions;

(4) the matter significantly affects persons

or organizations who are not parties to the

proceeding;

(5) a full public record of the proceeding

is important, and a dispute resolution

proceeding cannot provide such a record;

and

(6) the agency must maintain continuing

jurisdiction over the matter with authority to

alter the disposition of the matter in light of

changed circumstances, and a dispute

resolution proceeding would interfere with

the agency’s fulfilling that requirement.

5 U.S.C. 572.

The Department invites comment on

appropriate case-selection criteria. In

particular, the Department invites

comment on the suitability of ADR

proceedings, especially arbitration, in

cases in which an employeecomplainant lacks legal or other

representation. The Department is

advised that some court-sponsored ADR

programs exclude unrepresented

persons.

Selection of Mediators and Arbitrators

Mediators and arbitrators under the

proposed pilot test will be selected

consistent with all applicable legal

requirements.

The Department intends for mediation

and arbitration to be conducted only by

impartial, experienced, and qualified

persons. Mediators and arbitrators who

participate in the pilot test would be

required to disclose to the parties and to

the Department any relationship that

might reasonably constitute or be

perceived as a conflict of interest. The

Department invites comment on

appropriate conflict-of-interest

standards.

The Department also invites comment

on the best means of selecting suitable

mediators and arbitrators. DOL

anticipates that it will maintain a roster

of qualified persons. Parties to a

mediation or arbitration proceeding

would be provided with a panel of

mediators and arbitrators from which

they could make a selection.

The Department is considering

entering into an agreement with a

qualified nation-wide contractor who

would serve as a sponsor of mediators

and arbitrators and who would handle

the administration of the roster. The

Department would reserve the right to

set standards for inclusion on the roster

and to oversee its final composition.

DOL invites comment on this approach.

The Department also invites comment

on the specific qualifications that

should be required for mediators and

arbitrators. DOL believes that only

mediators and arbitrators who are able

to provide evidence of an established

part-time or full-time practice in

mediation or arbitration, and to

complete a DOL classroom training

course in the relevant statutes and ADR

procedures, should be eligible for the

pilot-test roster. In addition, DOL

believes that the following factors,

among others, should be considered: (1)

Professional standing and good

character; (2) experience as an

arbitrator, mediator, adjudicator, or

litigator of employment-related

disputes, particularly in the areas

covered by the pilot test; and (3) other

experience in the fields of labor and

employment law, industrial relations, or

dispute resolution.

Compensation of Mediators and

Arbitrators

Mediators and arbitrators who

participate in the proposed pilot test

would be compensated by the parties to

the proceeding (including the

Department), according to their

agreement. The parties themselves

would determine how to fairly allocate

the fees and expenses of a mediator or

arbitrator.

The Department believes that

requiring the parties to share the fees

and expenses of the mediator or

arbitrator helps ensure impartiality. In

cases in which the Department is a party

or a participant, DOL generally expects

that it would pay one-half of the

mediator or arbitrator’s fees and

expenses. The Department invites

comment on whether permitting the

negotiation of a different arrangement is

advisable. To reduce the possibility of

bias based on disparate contributions,

payment would be forwarded to the

mediator or arbitrator by the sponsor of

the roster (or by the Department, when

it is not a party or participant), without

disclosing the parties’ respective shares.

One of the potential benefits of using

ADR is lower litigation costs to the

parties and, in the case of government

agencies, the ability to resolve more

cases with the same resources. Based on

its experience with the Philadelphia

ADR pilot test, the Department believes

that ADR can reduce enforcement and

litigation costs per case. In this pilot

test, the threshold questions of who
Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Proposed Rules 6695

pays the private mediator or arbitrator

(the neutral) and how much the neutral

is paid are central to the evaluation of

the program’s costs and benefits.

DOL tentatively estimates that the

typical neutral’s fees in cases under the

proposed pilot test will be in the range

of $1,000 to $1,500 per case. (The

Department invites comment on this

estimate.) If the Department pays these

fees, the opportunity to reduce agency

costs per case (and to increase DOL’s

ability to process more cases with the

same resources) will be greatly

diminished. At the same time, the

Department recognizes both that

employer payment of the arbitrator or

mediator raises conflict-of-interest

concerns, and that in many cases

employees will be unable or unwilling

to pay half of the neutral’s fee.

Accordingly, the Department invites

comment on the best mechanism for

compensating mediators and arbitrators,

as well as on the following specific

issues: (1) Whether the Department

should consider making a contribution

toward the fees of a mediator or

arbitrator in cases involving a lowincome complainant; and (2) whether to

authorize arbitrators to tax attorney’s

fees and costs to the losing party (if

lawful) and/or to apportion the

arbitrator’s fees and costs equitably.

Authority of the Mediator or Arbitrator;

Arbitration Proceedings

The authority of mediators and

arbitrators under the proposed pilot test,

as well as the rules for arbitration

proceedings, would be determined

largely by the ADR Act.

The Department anticipates that

consistent with the ADR Act, DOL

would draft standard mediation and/or

arbitration agreements recognizing the

authority of mediators and arbitrators

under the pilot test. Parties who agreed

to mediation or arbitration would be

expected to sign such a standard

agreement.

Under Section 8 of the ADR Act of

1996, arbitration agreements ‘‘shall

specify a maximum award that may be

issued by the arbitrator and may specify

other conditions limiting the range of

possible outcomes.’’ DOL anticipates

that arbitrators would be authorized to

make awards imposing the full range of

remedies provided by the statutes

involved in the pilot test.

Consistent with the ADR Act,

arbitrators would have the authority to

regulate the course of and conduct

hearings, to administer oaths and

affirmations, and to compel the

attendance of witnesses and the

production of evidence to the extent

permitted by law. The Department also

expects to authorize pre-hearing

discovery by the parties, such as the

production of documents.

With the consent of the parties,

arbitrators would be responsible for

ensuring that a record (stenographic or

tape recording) of the proceeding was

made. Arbitrators would also be

required to issue a written opinion and

award within 30 days of the close of the

proceeding. Copies of the opinion and

award would be provided to the parties

and to the Department and would be

made available to the public.

The Department invites comment on

the relationship between mediation and

arbitration proceedings. In some

instances, the parties may wish to

attempt mediation and proceed to

arbitration only if mediation fails. In

those cases, it may be inappropriate for

the mediator to serve as an arbitrator of

the dispute.

Effect of an Arbitrator’s Award

If a case were mediated to a successful

conclusion or arbitrated under the

proposed pilot test, the Department

would ordinarily close its file on the

matter at the conclusion of the

proceeding. In environmental

whistleblower cases (as described

above), an arbitrator’s award would, if

appropriate, be incorporated in a final

order of the Administrative Review

Board.

The binding effect of an arbitrator’s

award under the pilot test will be

determined by the ADR Act, which

provides that an award becomes final 30

days after service on all parties, that a

final award is binding on the parties,

and that a final award may be enforced

pursuant to the provisions of the

Federal Arbitration Act (9 USC 9–13).

The Federal Arbitration Act (9 USC

10) specifies the circumstances under

which a federal court may vacate an

arbitration award. They include cases:

where there has been dishonesty by a

party or an arbitrator, where there has

been prejudicial misconduct by the

arbitrator, or where the arbitrator has

exceeded his authority or failed to make

a definite award. Only in such cases

would the Department choose not to

recognize an arbitration award issued

under the pilot test.

The Department invites comment on

its appropriate role in reviewing the

results of ADR proceedings to ensure

fairness to the parties and conformity

with the law.

Evaluation

The Department has not yet

established a time-table for the proposed

pilot and invites comment on this issue.

DOL does intend to carefully evaluate

the results of the pilot test described in

this Notice. This evaluation would be

conducted by a working group drawn

from participating DOL agencies and

from the Solicitor’s Office, comprised of

both field and national office staff

members. The Department also

contemplates a review of the pilot test

by representatives of employees,

employers, and the public. Comments

and suggestions on the implementation

of the Department’s ADR policy are

welcome.

Signed at Washington, DC this 6th day of

February, 1997.

Cynthia A. Metzler,

Acting Secretary of Labor.

[FR Doc. 97–3475 Filed 2–11–97; 8:45 am]

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