Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules 10787

Section 8 assistance. The Department’s

review of these cases did not disclose

any violation of program requirements.

In a number of the examples the total

rent received by an owner, from the

assisted tenant and the HUD subsidy,

was lower than rent the owner

previously charged for the unit. In

addition, a number of examples

involved seriously ill close family

members. Other examples, however, did

appear to involve owners who should

have had the financial ability to assist

a close family member, but were

nonetheless receiving Section 8

assistance payments.

Section 982.306 of title 24 CFR sets

out the restrictions on a housing agency

(HA) approving a unit based on facts

concerning the owner. The Department

proposes to amend § 982.306 so that an

HA may not approve a unit for lease if

the owner is the parent, child,

grandparent, grandchild, sister, or

brother of the certificate or voucher

holder that is seeking to rent the unit.

(Under § 982.306(e), ‘‘owner’’ includes a

principal or other interested party.) The

HA, however, could still approve the

unit for lease, if the HA determines that

approving the unit would provide

reasonable accommodation for a family

member who is a person with

disabilities. The Department specifically

invites comments on whether there

should be other exceptions to the

general policy.

When implemented, the policy would

apply to new admissions and to moves

with continued assistance. HUD would

add to HAP contract forms a simple

certification by the owner that the

owner is not a parent, child,

grandparent, grandchild, sister, or

brother of any member of the family.

HUD would also add a comparable

certification to the rental certificate and

rental voucher.

II. Findings and Certifications

Environmental Impact

A Finding of No Significant Impact

with respect to the environment has

been made in accordance with HUD

regulations at 24 CFR Part 50, which

implement section 102(2)(C) of the

National Environmental Policy Act of

1969 (42 U.S.C. 4332). The Finding of

No Significant Impact is available for

public inspection between 7:30 a.m. and

5:30 p.m. weekdays in the Office of the

Rules Docket Clerk at the above address.

Regulatory Planning and Review

This proposed rule has been reviewed

in accordance with Executive Order

12866, issued by the President on

September 30, 1993 (58 FR 51735,

October 4, 1993). Any changes to the

proposed rule resulting from this review

are available for public inspection

between 7:30 a.m. and 5:30 p.m.

weekdays in the Office of the Rules

Docket Clerk at the above address.

Regulatory Flexibility Act

The Secretary has reviewed this

proposed rule before publication and by

approving it certifies, in accordance

with 5 U.S.C. 605(b) (the Regulatory

Flexibility Act), that this proposed rule

does not have a significant economic

impact on a substantial number of small

entities because it simply restricts

leasing with assistance between certain

related individuals and does not

otherwise restrict or impose burdens on

the use or availability of Section 8 rental

certificate or rental voucher assistance.

Unfunded Mandates Reform Act

The Secretary has reviewed this

proposed rule before publication and by

approving it certifies, in accordance

with the Unfunded Mandates Reform

Act of 1995 (2 U.S.C. 1532), that this

proposed rule does not impose a Federal

mandate that will result in the

expenditure by State, local, and tribal

governments, in the aggregate, or by the

private sector, of $100 million or more

in any one year.

Federalism

The General Counsel, as the

Designated Official under section 6(a) of

Executive Order 12612, Federalism, has

determined that the policies contained

in this proposed rule will not have

substantial direct effects on States or

their political subdivisions, or the

relationship between the Federal

Government and the States, or on the

distribution of power and

responsibilities among the various

levels of government. The proposed rule

does not alter the relationship between

HUD and the HAs. Rather, it simply

amends one of the conditions for receipt

of Federal assistance.

Family Impact

The General Counsel, as the

Designated Official under Executive

Order 12606, The Family, has

determined that this proposed rule does

not have potential for significant impact

on family formation, maintenance, and

general well-being, and, thus, is not

subject to review under the Order. This

proposed rule furthers the purposes of

the Executive Order by revising program

requirements to recognize the primary

right and responsibility of families

themselves to assist needy family

members and by increasing the

likelihood that Federal assistance is

limited to those circumstances where it

is most needed.

Catalog

The Catalog of Federal Domestic

Assistance numbers are 14.855 and

14.857.

List of Subjects in 24 CFR Part 982

Grant programs—housing and

community development, Housing, Rent

subsidies, Reporting and recordkeeping

requirements.

Accordingly, 24 CFR part 982 is

proposed to be amended as follows:

PART 982—SECTION 8 TENANTBASED ASSISTANCE: UNIFIED RULE

FOR TENANT-BASED ASSISTANCE

UNDER THE SECTION 8 RENTAL

CERTIFICATE PROGRAM AND THE

SECTION 8 RENTAL VOUCHER

PROGRAM

1. The authority citation for part 982

continues to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f,

3535(d).

2. In § 982.306, paragraphs (d) and (e)

are redesignated as paragraphs (e) and

(f) and a new paragraph (d) is added to

read as follows:

§ 982.306 HA disapproval of owner.

* * * * *

(d) The HA must not approve a unit

if the owner is the parent, child,

grandparent, grandchild, sister, or

brother of any member of the family,

unless the HA determines that

approving the unit would provide

reasonable accommodation for a family

member who is a person with

disabilities.

* * * * *

Dated: December 24, 1996.

Kevin Emanuel Marchman,

Acting Assistant Secretary for Public and

Indian Housing.

[FR Doc. 97–5737 Filed 3–7–97; 8:45 am]

BILLING CODE 4210–33–P

EQUAL EMPLOYMENT OPPORTUNITY

COMMISSION

29 CFR Part 1625

Waiver of Rights and Claims Under the

Age Discrimination in Employment Act

(ADEA)

AGENCY: Equal Employment

Opportunity Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: EEOC is publishing its notice

of proposed rulemaking on agreements

waiving rights and claims under the Age
10788 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules

Discrimination in Employment Act, in

order to set forth procedures for

complying with the Older Workers

Benefit Protection Act of 1990.

DATES: To be assured of consideration

by EEOC, comments must be in writing

and must be received on or before May

9, 1997.

ADDRESS: Written comments should be

submitted to Frances M. Hart, Executive

Officer, Executive Secretariat, Equal

Employment Opportunity Commission,

1801 L Street, NW, Washington, DC

20507.

FOR FURTHER INFORMATION CONTACT:

Joseph N. Cleary, Assistant Legal

Counsel, or Paul E. Boymel, Senior

Attorney-Advisor, ADEA Division,

Office of Legal Counsel, 202–663–4692

(voice), 202–663–7026 (TDD).

SUPPLEMENTARY INFORMATION:

A. History

Congress amended the ADEA by

enacting the Older Workers Benefit

Protection Act of 1990 (OWBPA), Pub.

L. No. 101–433, 104 Stat. 983 (1990), to

clarify the prohibitions against

discrimination on the basis of age. In

Title II of OWBPA, Congress addressed

waivers of rights and claims under the

ADEA, amending section 7 of the ADEA

by adding a new subsection (f), 29

U.S.C. sec. 626(f).

Section 7(f)(1) provides that ‘‘an

individual may not waive any right or

claim under the [ADEA] unless the

waiver is knowing and voluntary.’’

Section 7(f) sets out the minimum

criteria for determining whether a

waiver is knowing and voluntary.

In light of the OWBPA amendments,

EEOC published an Advance Notice of

Proposed Rulemaking (ANPRM) in the

Federal Register, 57 FR 10626 (March

27, 1992), seeking information from the

public on various issues under both

titles of OWBPA. In response to the

ANPRM, EEOC received approximately

40 comments, many of which presented

detailed analyses of Title II issues,

requesting EEOC to provide formal

guidance on waivers of rights and

claims under the ADEA. Since the

publication of the ANPRM, EEOC also

has received numerous written and

telephone inquiries requesting

information on how to comply with

Title II.

On August 31, 1995, EEOC

announced in the Federal Register, 60

FR 45388 (August 31, 1995), its intent

to use negotiated rulemaking to develop

a proposed Title II rule.

B. Purpose of Negotiated Rulemaking

Negotiated rulemaking, under

procedures set out in the Negotiated

Rulemaking Act, 5 U.S.C. 561 et seq.,

Pub. L. 101–648, is a relatively new tool

used by agencies in connection with the

development of regulations. In using

negotiated rulemaking, EEOC has

reached out to employers, employees,

and their representatives to take into

account the concerns of all interested

communities in the development and

drafting of the proposed rule. This

procedure contrasts with the more

traditional ‘‘notice and comment’’

rulemaking where an agency receives

public input only after the proposed

rule is published for comment. The

advantages of negotiated rulemaking

include:

1. The negotiated rulemaking process

allows public input from the start,

permitting the stakeholders—

individuals, organizations, and

businesses actually affected by the

rule—to explain their concerns and help

shape the rule;

2. The agency gains the benefit of the

expertise of the stakeholders, enabling it

to draft a rule that reflects the realities

of the workplace, not just the agency’s

views;

3. The negotiated rulemaking process

requires consensus of the committee

members. By involving stakeholders

from all sides of the issues to be

addressed, the stakeholders will be

more willing to accept the regulation

without legal challenge. While no

stakeholder will be happy with every

provision of a rule, each will know that

the rule represents a reasonable solution

to shared problems.

C. Negotiated Rulemaking on Title II of

OWBPA

The August 31, 1995 Federal Register

notice set out nine issues that EEOC

suggested might be discussed during the

negotiated rulemaking process. EEOC

left open the possibility that the

Negotiated Rulemaking Committee

would add other issues to the proposed

rule and/or choose not to address one or

more of the enumerated issues.

The notice also invited members of

the public who were interested in

serving on the Committee to inform

EEOC of their interest and

qualifications. EEOC received over 70

requests to participate on the

Committee, representing a wide

diversity of interests and backgrounds.

EEOC chose 18 Committee participants

from members of the public

representing labor, management, and

employee interests, along with 2 EEOC

representatives to serve on the

Committee. The members of the

Committee were:

Elizabeth M. Barry, Esq., Harvard

University, Cambridge, MA

William H. Brown, Esq., Schnader,

Harrison, Segal & Lewis, Philadelphia,

PA

Joseph N. Cleary, Esq., Equal

Employment Opportunity

Commission, Washington, DC

John C. Dempsey, Esq., AFSCME, AFL–

CIO, Washington, DC

Raymond C. Fay, Esq., Bell Boyd &

Lloyd, Washington, DC

Burton D. Fretz, Esq., National Senior

Citizens Law Center, Washington, DC

Peter Kilgore, Esq., National Restaurant

Association, Washington, DC

Lloyd C. Loomis, Esq., Atlantic

Richfield Co., Los Angeles, CA

Benton J. Mathis, Esq., Drew, Eckl &

Farnham, Atlanta, GA

Thomas R. Meites, Esq., Meites,

Frackman, Mulder & Burger, Chicago,

IL

Niall A. Paul, Esq., Spilman, Thomas &

Battle, Charleston, WV

Markus L. Penzel, Esq., Garrison,

Phelan, Levin-Epstein & Penzel, and

National Employment Lawyers Assn.

New Haven, CT

L. Steven Platt, Esq., Arnold and

Kadjan, and National Employment

Lawyers Assn., Chicago, IL

Pamela S. Poff, Esq., Paine Webber Inc.,

Weehawken, NJ

Michele C. Pollak, Esq., American

Association of Retired Persons,

Washington, DC

Jaime Ramon, Esq., Jackson Walker,

Dallas, TX

Patrick W. Shea, Esq., Paul Hastings,

Janofsky & Walker, Society for Human

Resource Management, Stamford, CT

Paul H. Tobias, Esq., Tobias Kraus &

Torchia, Cincinnati, OH

Ellen J. Vargyas, Esq., Equal

Employment Opportunity

Commission, Washington, DC

Robert Williams, Esq., McGuiness &

Williams, Equal Employment

Advisory Council, Washington, DC

The Negotiated Rulemaking

Committee began work on December 6,

1995. Committee meetings were held on

December 6–7, 1995, January 23–24,

1996, March 6–7, 1996, April 16–17,

1996, June 18–19, 1996, and July 23–24,

1996. The Committee discussed in

detail the issues set out in the August

31, 1995, Federal Register notice, as

well as other issues that the Committee

considered needed to be resolved. The

Committee functioned by consensus

which it defined as the absence of

objection by any Committee member.

The Committee unanimously

forwarded a recommended proposed

rule to EEOC for its consideration. As a

result of the recommendations received

from the Committee, and its

deliberations regarding such
Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules 10789

recommendations, EEOC is publishing

for public comment the Committee’s

negotiated rule in this Notice of

Proposed Rulemaking.

Because the recommendation was

based on a consensus of the Committee

members, it did not include issues on

which the Committee could not reach a

consensus. EEOC recognizes that this

Notice of Proposed Rulemaking does not

address certain issues that arise under

Title II of OWBPA. EEOC emphasizes

that no inference should be drawn on

any issue by reason of the proposed

regulation’s silence with respect to that

issue.

Following the end of the 60 day

comment period, members of the

Negotiated Rulemaking Committee will

be given a period of 30 days to provide

EEOC with their written views relating

to the proposed rule and the comments

received. At the expiration of that 30

day period, EEOC will review all

comments and determine the content of

the final regulation.

As a convenience to commentors, the

Executive Secretariat will accept public

comments transmitted by facsimile

(‘‘FAX’’) machine. The telephone

number of the FAX receiver is 202–663–

4114. (Telephone numbers published in

this Notice are not toll-free). Only

public comments of six or fewer pages

will be accepted via FAX transmittal.

This limitation is necessary in order to

assure access to the equipment. Receipt

of FAX transmittals will not be

acknowledged, except that the sender

may request confirmation of receipt by

calling the Executive Secretariat staff on

202–663–4078.

Comments received will be available

for public inspection in the EEOC

Library, Room 6502, 1801 L Street, NW,

Washington, DC 20507, by appointment

only, from 9:00 a.m. to 5:00 p.m.,

Monday through Friday, except legal

holidays. Persons who need assistance

to review the comments will be

provided with appropriate aids such as

readers or print magnifiers. Copies of

this notice of proposed rulemaking are

available in the following alternative

formats: Large print, braille, electronic

file on computer disk, and audio-tape.

To schedule an appointment or receive

a copy of the notice in an alternative

format, call 202 663–4630 (voice), 202–

663–4399 (TDD).

Executive Order 12866, Regulatory

Planning and Review

Under section 3(f)(4) of Executive

Order 12866, EEOC has determined that

this regulation would be a ‘‘significant

regulatory action;’’ therefore, EEOC has

coordinated this NPRM with the Office

of Management and Budget. However,

under section 3(f)(1) of Executive Order

12866, EEOC has determined that the

regulation will not have an annual effect

on the economy of $100 million or more

or adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State or local or tribal governments or

communities. The rule will not create a

serious inconsistency or otherwise

interfere with an action taken or

planned by another agency. Therefore,

EEOC has not needed to prepare a

detailed cost-benefit assessment of the

regulation.

Paperwork Reduction Act

The rule as proposed does not require

the collection of information by EEOC

or by any other agency of the United

States Government. However, the

provisions of Title II of OWBPA do

require employers to provide certain

information to employees (but not to

EEOC) in writing.

Accordingly, EEOC, as part of its

continuing effort to reduce paperwork

and respondent burden, is, as required

by the Paperwork Reduction Act for all

collections of information, soliciting

comments concerning the proposed rule

with regard to the paperwork

requirements contained in Title II of

OWBPA. The provisions of the

proposed rule dealing with

informational requirements have been

submitted to the Office of Management

and Budget for review under section

3507 of the Paperwork Reduction Act.

The public reporting and

recordkeeping burden for this collection

of information is estimated to be 41,139

hours in order for employers to collect

the information and to determine: (1)

what information must be given to

employees; (2) which employees must

be given the information; (3) how the

information should be organized.

The estimated burden of collecting

and distributing the information was

calculated as follows:

Collection Title: Informational

requirements under Title II of the Older

Workers Benefit Protection Act of 1990

(OWBPA), 29 CFR Part 1625.

Form Number: None.

Frequency of Report: None required.

Type of Respondent: Business, state or

local governments, not for profit

institutions.

Description of the Affected Public:

Any employer with 20 or more

employees that seeks waiver agreements

in connection with exit incentive or

other employment termination programs

(hereinafter, ‘‘Programs’’).

Responses: 13,713.

Reporting Hours: 41,139.

Number of Forms: None.

Abstract: This requirement does not

involve record keeping. It consists of

providing adequate information in

waiver agreements offered to a group or

class of persons in connection with a

Program, to satisfy the requirements of

the OWBPA.

Burden Statement: There is no

reporting requirement nor additional

record keeping associated with this rule.

The only paperwork burden involved is

the inclusion of the relevant data in

waiver agreements. The rule applies

only to those employers who have 20 or

more employees and who offer waivers

to a group or class of employees in

connection with a Program.

There are 542,000 employers who

have at least 20 employees. Programs

come into play when, as a result of

business activity, employers are forced

to cut their work force. Based on

statistics from EEOC’s private employer

survey, it is estimated that in any one

year 4.6% of employers are involved in

activities, such as mergers or

downsizing, which occasion the use of

Programs. It is further estimated, based

on figures from a General Accounting

Office study, and the Bureau of Labor

Statistics, that at most 55% of those who

use Programs require waivers and thus

are affected by this rule.

Applying the above factors to the total

number of employers:

[(542,000×.046×.55)=13,713] yields

13,713 employers that are affected by

this requirement. The larger employers

are assumed to have computerized

record keeping, and thus can produce

the requisite notification with a

minimum of effort, while smaller

employers have far less information to

process.

Therefore, it is estimated that, on the

average, a notification can be produced

in approximately 3 hours. This would

then produce a maximum of

(13,713×3)=41,139 hours annually.

Organizations and individuals

desiring to submit comments on the

information collection requirements

should submit written comments on or

before April 9, 1997. This deadline does

not affect the deadline for the public to

comment to EEOC on the proposed

regulation itself. Address comments to:

Office of Information and Regulatory

Affairs, Office of Management and

Budget, Room 10235, New Executive

Office Building, Washington, D.C.

20503, Attention: Desk Officer for the

United States Equal Employment

Opportunity Commission. Comments

also should be sent to EEOC at the

address listed at the beginning of this

Notice.
10790 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules

EEOC will consider comments by the

public on this proposed regulation to:

• Evaluate whether the proposed

collection of information is necessary

for the proper performance of the

functions of EEOC, including whether

the information shall have practical

utility;

• Evaluate the accuracy of EEOC’s

estimate of the burden of the proposed

collection of information;

• Enhance the quality, utility, and

clarity of the information to be

collected; and

• Minimize the burden of collection

of information on those who are to

respond, including through the use of

automated collection techniques or

other forms of information technology.

EEOC certifies under 5 U.S.C. 605(b),

enacted by the Regulatory Flexibility

Act (Pub. L. 96–354), that this regulation

will not result in a significant economic

impact on a substantial number of small

entities. For this reason, a regulatory

flexibility analysis is not required. A

copy of this proposed rule was

furnished to the Small Business

Administration.

In addition, in accordance with

Executive Order 12067, EEOC has

solicited the views of affected Federal

agencies.

List of Subjects in 29 CFR Part 1625

Advertising, Age, Employee benefit

plans, Equal employment opportunity,

Retirement.

Signed at Washington, DC this 4th day of

March, 1997.

Gilbert F. Casellas,

Chairman.

It is proposed to amend chapter XIV

of title 29 of the Code of Federal

Regulations as follows:

PART 1625—AGE DISCRIMINATION IN

EMPLOYMENT ACT

1. The authority citation for part 1625

continues to read as follows:

Authority: 81 Stat. 602; 29 U.S.C. 621, 5

U.S.C. 301, Secretary’s Order No. 10–68;

Secretary’s Order No. 11–68; sec. 12, 29

U.S.C. 631, Pub. L. 99–592, 100 Stat. 3342;

sec. 2, Reorg. Plan No. 1 of 1978, 43 FR

19807.

2. In part 1625, § 1625.22 would be

added to Subpart B—Substantive

Regulations to read as follows:

§ 1625.22 Waivers of rights and claims

under the ADEA.

(a) Introduction. (1) Congress

amended the ADEA in 1990 to clarify

the prohibitions against discrimination

on the basis of age. In Title II of

OWBPA, Congress addressed waivers of

rights and claims under the ADEA,

amending section 7 of the ADEA by

adding a new subsection (f).

(2) Section 7(f)(1) of the ADEA

expressly provides that waivers may be

valid and enforceable under the ADEA

only if the waiver is ‘‘knowing and

voluntary’’. Sections 7(f) (1) and 7(f) (2)

of the ADEA set out the minimum

requirements for determining whether a

waiver is knowing and voluntary.

(3) Other facts and circumstances may

bear on the question of whether the

waiver is knowing and voluntary, as, for

example, if there is a material mistake,

omission, or misstatement in the

information furnished by the employer

to an employee in connection with the

waiver.

(b) Wording of waiver agreements. (1)

Section 7(f)(1)(A) of the ADEA provides,

as part of the minimum requirements for

a knowing and voluntary waiver, that:

The waiver is part of an agreement between

the individual and the employer that is

written in a manner calculated to be

understood by such individual, or by the

average individual eligible to participate.

(2) The entire waiver agreement must

be in writing.

(3) Waiver agreements must be drafted

in plain language geared to the level of

understanding of the individual party to

the agreement or individuals eligible to

participate. Employers should take into

account such factors as the level of

comprehension and education of typical

participants. Consideration of these

factors usually will require the

limitation or elimination of technical

jargon and of long, complex sentences.

(4) The waiver agreement must not

have the effect of misleading,

misinforming, or failing to inform

participants and affected individuals.

Any advantages or disadvantages

described shall be presented without

either exaggerating the benefits or

minimizing the limitations.

(5) Section 7(f)(1)(H) of the ADEA,

relating to exit incentive or other

employment termination programs

offered to a group or class of employees,

also contains a requirement that

information be conveyed ‘‘in writing in

a manner calculated to be understood by

the average plan participant.’’ The same

standards applicable to the similar

language in section 7(f)(1)(A) of the

ADEA apply here as well.

(6) Section 7(f)(1)(B) of the ADEA

provides, as part of the minimum

requirements for a knowing and

voluntary waiver, that ‘‘the waiver

specifically refers to rights or claims

under this Act.’’ Pursuant to this

subsection, the waiver agreement must

refer to the Age Discrimination in

Employment Act (ADEA) by name in

connection with the waiver.

(7) Section 7(f)(1)(E) of the ADEA

requires that an individual must be

‘‘advised in writing to consult with an

attorney prior to executing the

agreement.’’

(c) Waiver of future rights. (1) Section

7(f)(1)(C) of the ADEA provides that:

A waiver may not be considered knowing

and voluntary unless at a minimum * * *

the individual does not waive rights or

claims that may arise after the date the

waiver is executed.

(2) The waiver of rights or claims that

arise following the execution of a waiver

is prohibited. However, section

7(f)(1)(C) of the ADEA does not bar, in

a waiver that otherwise is consistent

with statutory requirements, the

enforcement of agreements to perform

future employment-related actions such

as the employee’s agreement to retire or

otherwise terminate employment at a

future date.

(d) Consideration. (1) Section

7(f)(1)(D) of the ADEA states that:

A waiver may not be considered knowing

and voluntary unless at a minimum * * *

the individual waives rights or claims only

in exchange for consideration in addition to

anything of value to which the individual

already is entitled.

(2) ‘‘Consideration in addition’’ means

anything of value in addition to that to

which the individual is already entitled

in the absence of a waiver.

(3) If a benefit or other thing of value

was eliminated in contravention of law

or contract, express or implied, the

subsequent offer of such benefit or thing

of value in connection with a waiver

will not constitute ‘‘consideration’’ for

purposes of section 7(f)(1) of the ADEA.

Whether such elimination as to one

employee or group of employees is in

contravention of law or contract as to

other employees, or to that individual

employee at some later time, may vary

depending on the facts and

circumstances of each case.

(4) An employer is not required to

give a person age 40 or older a greater

amount of consideration than is given to

a person under the age of 40, solely

because of that person’s membership in

the protected class under the ADEA.

(e) Time periods. (1) Section 7(f)(1)(F)

of the ADEA states that:

A waiver may not be considered knowing

and voluntary unless at a minimum * * *

(i) The individual is given a period of at

least 21 days within which to consider the

agreement; or

(ii) If a waiver is requested in connection

with an exit incentive or other employment

termination program offered to a group or

class of employees, the individual is given a

period of at least 45 days within which to

consider the agreement.
Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules 10791

(2) Section 7(f)(1)(G) of the ADEA

states:

A waiver may not be considered knowing

and voluntary unless at a minimum * * *

the agreement provides that for a period of

at least 7 days following the execution of

such agreement, the individual may revoke

the agreement, and the agreement shall not

become effective or enforceable until the

revocation period has expired.

(3) The term ‘‘exit incentive or other

employment termination program’’

includes both voluntary and involuntary

programs.

(4) The 21 or 45 day period runs from

the date of the employer’s final offer.

Material changes to the final offer restart

the running of the 21 or 45 day period;

changes made to the final offer that are

not material do not restart the running

of the 21 or 45 day period. The parties

may agree that changes, whether

material or immaterial, do not restart the

running of the 21 or 45 day period.

(5) The 7 day revocation period

cannot be shortened by the parties, by

agreement or otherwise.

(6) An employee may sign a release

prior to the end of the 21 or 45 day time

period, thereby commencing the

mandatory 7 day revocation period.

This is permissible as long as the

employee’s decision to accept such

shortening of time is knowing and

voluntary and is not induced by the

employer through fraud,

misrepresentation, a threat to withdraw

or alter the offer prior to the expiration

of the 21 or 45 day time period, or by

providing different terms to employees

who sign the release prior to the

expiration of such time period.

However, if an employee signs a release

before the expiration of the 21 or 45 day

time period, the employer may expedite

the processing of the consideration

provided in exchange for the waiver.

(f) Informational requirements.

(1) Introduction. (i) Section 7(f)(1)(H)

of the ADEA provides that:

A waiver may not be considered knowing

and voluntary unless at a minimum * * * if

a waiver is requested in connection with an

exit incentive or other employment

termination program offered to a group or

class of employees, the employer (at the

commencement of the period specified in

subparagraph (F)) [which provides time

periods for employees to consider the waiver]

informs the individual in writing in a manner

calculated to be understood by the average

individual eligible to participate, as to—

(i) Any class, unit, or group of individuals

covered by such program, any eligibility

factors for such program, and any time limits

applicable to such program; and

(ii) The job titles and ages of all individuals

eligible or selected for the program, and the

ages of all individuals in the same job

classification or organizational unit who are

not eligible or selected for the program.

(ii) Section 7(f)(1)(H) of the ADEA

addresses two principal issues: to whom

must information be provided, and what

information must be disclosed to such

individuals.

(iii)(A) Section 7(f)(1)(H) of the ADEA

references two types of ‘‘programs’’

under which employers seeking waivers

must make written disclosures: ‘‘exit

incentive programs’’ and ‘‘other

employment termination programs.’’

Usually an ‘‘exit incentive program’’ is

a voluntary program offered to a group

or class of employees where such

employees are offered consideration in

addition to anything of value to which

the individuals are already entitled

(hereinafter in this section, ‘‘additional

consideration’’) in exchange for their

decision to resign voluntarily and sign

a waiver. Usually ‘‘other employment

termination program’’ refers to a group

or class of employees who were

involuntarily terminated and who are

offered additional consideration in

return for their decision to sign a

waiver.

(B) The question of the existence of a

‘‘program’’ will be decided based upon

the facts and circumstances of each

case. A ‘‘program’’ exists when an

employer offers additional

consideration for the signing of a waiver

pursuant to an exit incentive or other

employment termination (e.g., a

reduction in force) to two or more

employees. Typically, an involuntary

termination program is a standardized

formula or package of benefits that is

available to two or more employees,

while an exit incentive program

typically is a standardized formula or

package of benefits designed to induce

employees to sever their employment

voluntarily. In both cases, the terms of

the programs generally are not subject to

negotiation between the parties.

(C) Regardless of the type of program,

the scope of the terms ‘‘class,’’ ‘‘unit,’’

‘‘group,’’ ‘‘job classification,’’ and

‘‘organizational unit’’ is determined by

examining the ‘‘decisional unit’’ at

issue. (See paragraph (f)(3) of this

section, ‘‘The Decisional Unit,’’ below).

(D) A ‘‘program’’ for purposes of the

ADEA need not constitute an ‘‘employee

benefit plan’’ for purposes of the

Employee Retirement Income Security

Act of 1974 (ERISA). An employer may

or may not have an ERISA severance

plan in connection with its OWBPA

program.

(iv) The purpose of the informational

requirements is to provide an employee

with enough information regarding the

program to allow the employee to make

an informed choice whether or not to

sign a waiver agreement.

(2) To whom must the information be

given. The required information must be

given to each person in the decisional

unit who is asked to sign a waiver

agreement.

(3) The decisional unit. (i)(A) The

terms ‘‘class,’’ ‘‘unit,’’ or ‘‘group’’ in

section 7(f)(1)(H)(i) of the ADEA and

‘‘job classification or organizational

unit’’ in section 7(f)(1)(H)(ii) of the

ADEA refer to examples of categories or

groupings of employees affected by a

program within an employer’s particular

organizational structure. The terms are

not meant to be an exclusive list of

characterizations of an employer’s

organization.

(B) When identifying the scope of the

‘‘class, unit, or group,’’ and ‘‘job

classification or organizational unit,’’ an

employer should consider its

organizational structure and decisionmaking process. A ‘‘decisional unit’’ is

that portion of the employer’s

organizational structure from which the

employer chose the persons who would

be offered consideration for the signing

of a waiver and those who would not be

offered consideration for the signing of

a waiver. The term ‘‘decisional unit’’

has been developed to reflect the

process by which an employer chose

certain employees for a program and

ruled out others from that program.

(ii)(A) The variety of terms used in

section 7(f)(1)(H) of the ADEA

demonstrates that employers often use

differing terminology to describe their

organizational structures. When

identifying the population of the

decisional unit, the employer acts on a

case-by-case basis, and thus the

determination of the appropriate class,

unit, or group, and job classification or

organizational unit for purposes of

section 7(f)(1)(H) of the ADEA also must

be made on a case-by-case basis.

(B) The examples in paragraph

(f)(3)(iii) of this section demonstrate that

in appropriate cases some subgroup of

a facility’s work force may be the

decisional unit. In other situations, it

may be appropriate for the decisional

unit to comprise several facilities.

However, as the decisional unit is

typically no broader than the facility, in

general the disclosure need be no

broader than the facility. ‘‘Facility’’ as it

is used throughout this section generally

refers to place or location. However, in

some circumstances terms such as

‘‘school,’’ ‘‘plant,’’ or ‘‘complex’’ may be

more appropriate.

(C) Often, when utilizing a program

an employer is attempting to reduce its

workforce at a particular facility in an

effort to eliminate what it deems to be

excessive overhead, expenses, or costs

from its organization at that facility. If
10792 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules

the employer’s goal is the reduction of

its workforce at a particular facility and

that employer undertakes a decisionmaking process by which certain

employees of the facility are selected for

a program, and others are not selected

for a program, then that facility

generally will be the decisional unit for

purposes of section 7(f)(1)(H) of the

ADEA.

(D) However, if an employer seeks to

terminate employees by exclusively

considering a particular portion or

subgroup of its operations at a specific

facility, then that subgroup or portion of

the workforce at that facility will be

considered the decisional unit.

(E) Likewise, if the employer analyzes

its operations at several facilities,

specifically considers and compares

ages, seniority rosters, or similar factors

at differing facilities, and determines to

focus its workforce reduction at a

particular facility, then by the nature of

that employer’s decision-making

process the decisional unit would

include all considered facilities and not

just the facility selected for the

reductions.

(iii) The following examples are not

all-inclusive and are meant only to

assist employers and employees in

determining the appropriate decisional

unit. Involuntary reductions in force

typically are structured along one or

more of the following lines:

(A) Facility-wide: Ten percent of the

employees in the Springfield facility

will be terminated within the next ten

days;

(B) Division-wide: Fifteen of the

employees in the Computer Division

will be terminated in December;

(C) Department-wide: One-half of the

workers in the Keyboard Department of

the Computer Division will be

terminated in December;

(D) Reporting: Ten percent of the

employees who report to the Vice

President for Sales, wherever the

employees are located, will be

terminated immediately;

(E) Job Category: Ten percent of all

accountants, wherever the employees

are located, will be terminated next

week.

(iv) In the examples in paragraph

(f)(3)(iii) of this section, the decisional

units are, respectively: (A) the

Springfield facility; (B) the Computer

Division; (C) the Keyboard Department;

(D) all employees reporting to the Vice

President for Sales; and (E) all

accountants.

(v) While the particular circumstances

of each termination program will

determine the decisional unit, the

following examples also may assist in

determining when the decisional unit is

other than the entire facility:

(A) A number of small facilities with

interrelated functions and employees in

a specific geographic area may comprise

a single decisional unit;

(B) If a company utilizes personnel for

a common function at more than one

facility, the decisional unit for that

function (i.e., accounting) may be

broader than the one facility;

(C) A large facility with several

distinct functions may comprise a

number of decisional units; for example,

if a single facility has distinct internal

functions with no employee overlap

(i.e., manufacturing, accounting, human

resources), and the program is confined

to a distinct function, a smaller

decisional unit may be appropriate.

(vi)(A) For purposes of this section,

higher level review of termination

decisions generally will not change the

size of the decisional unit unless the

reviewing process alters its scope. For

example, review by the Human

Resources Department to monitor

compliance with discrimination laws

does not affect the decisional unit.

Similarly, when a regional manager in

charge of more than one facility reviews

the termination decisions regarding one

of those facilities, the review does not

alter the decisional unit, which remains

the one facility under consideration.

(B) However, if the regional manager

in the course of review determines that

persons in other facilities should also be

considered for termination, the

decisional unit becomes the population

of all facilities considered. Further, if,

for example, the regional manager and

his three immediate subordinates jointly

review the termination decisions, taking

into account more than one facility, the

decisional unit becomes the populations

of all facilities considered.

(vii) This regulatory section is limited

to the requirements of section 7(f)(1)(H)

and is not intended to affect the scope

of discovery or of substantive

proceedings in the processing of charges

of violation of the ADEA or in litigation

involving such charges.

(4) Presentation of information. (i)

The information provided must be in

writing and must be written in a manner

calculated to be understood by the

average individual eligible to

participate.

(ii) Information regarding ages should

be broken down according to the age of

each person eligible or selected for the

program and each person not eligible or

selected for the program. The use of age

bands broader than one year (such as

‘‘age 20–30’’) does not satisfy this

requirement.

(iii) In a termination of persons in

several established grade levels and/or

other established subcategories within a

job category or job title, the information

shall be broken down by grade level or

other subcategory.

(iv) If an employer in its disclosure

combines information concerning both

voluntary and involuntary terminations,

the employer shall present the

information in a manner that

distinguishes between voluntary and

involuntary terminations.

(v) If the terminees are selected from

a subset of a decisional unit, the

employer must still disclose information

for the entire population of the

decisional unit. For example, if the

employer decides that a 10% RIF in the

Accounting Department will come from

the accountants whose performance is

in the bottom one-third of the Division,

the employer still must disclose

information for all employees in the

Accounting Department, even those

who are the highest rated.

(vi) An involuntary termination

program in a decisional unit may take

place in successive increments over a

period of time. Special rules apply to

this situation. Specifically, information

supplied with regard to the involuntary

termination program should be

cumulative, so that later terminees are

provided ages and job titles or job

categories, as appropriate, for all

persons in the decisional unit at the

beginning of the program and all

persons terminated to date. There is no

duty to supplement the information

given to earlier terminees so long as the

disclosure, at the time it is given,

conforms to the requirements of this

section.

(vii) The following example

demonstrates one way in which the

required information could be presented

to the employees. (This example is not

presented as a prototype notification

agreement that automatically will

comply with the ADEA. Each

information disclosure must be

structured based upon the individual

case, taking into account the corporate

structure, the population of the

decisional unit, and the requirements of

section 7(f)(1)(H)) of the ADEA:

Example: Y Corporation lost a major

construction contract and determined

that it must terminate 10% of the

employees in the Construction Division.

Y decided to offer all terminees $20,000

in severance pay in exchange for a

waiver of all rights. The waiver provides

the section 7(f)(1)(H) of the ADEA

information as follows:

(A) The decisional unit is the

Construction Division.
Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules 10793

(B) All persons in the Construction

Division are eligible for the program. All

persons who are being terminated in our

November RIF are selected for the

program.

(C) All persons who are being offered

consideration under a waiver agreement

must sign the agreement and return it to

the Personnel Office within 45 days

after receiving the waiver. Once the

signed waiver is returned to the

Personnel Office, the employee has 7

days to revoke the waiver agreement.

(D) The following is a listing of the

ages and job titles of persons in the

Construction Division who were and

were not selected for termination and

the offer of consideration for signing a

waiver:

Job title Age Number

selected

Number not

selected

(1) Mechanical Engineers, I ...................................................................................................................... 25 21 48

26 11 73

* * * * * * *

63 4 18

64 3 11

(2) Mechanical Engineers, II ..................................................................................................................... 28 3 10

29 11 17

(1)

(3) Structural Engineers, I ........................................................................................................................ 21 5 8

(1)

(4) Structural Engineers, II ....................................................................................................................... 23 2 4

(1)

(5) Purchasing Agents .............................................................................................................................. 26 10 11

(1)

1 etc., for all ages.

(g) Waivers settling charges and

lawsuits. (1) Section 7(f)(2) of the ADEA

provides that:

A waiver in settlement of a charge filed

with the Equal Employment Opportunity

Commission, or an action filed in court by

the individual or the individual’s

representative, alleging age discrimination of

a kind prohibited under section 4 or 15 may

not be considered knowing and voluntary

unless at a minimum—

(A) Subparagraphs (A) through (E) of

paragraph (1) have been met; and

(B) The individual is given a reasonable

period of time within which to consider the

settlement agreement.

(2) The language in section 7(f)(2) of the

ADEA, ‘‘discrimination of a kind prohibited

under section 4 or 15’’ refers to allegations

of age discrimination of the type prohibited

by the ADEA.

(3) The standards set out in section (f) of

these regulations for complying with the

provisions of section 7(f)(1)(A)-(E) of the

ADEA also will apply for purposes of

complying with the provisions of section

7(f)(2)(A) of the ADEA.

(4) The term ‘‘reasonable time within

which to consider the settlement agreement’’

means reasonable under all the

circumstances, including whether the

individual is represented by counsel or has

the assistance of counsel.

(5) However, while the time periods under

section 7(f)(1) of the ADEA do not apply to

subsection 7(f)(2) of the ADEA, a waiver

agreement under this subsection that

provides an employee the time periods

specified in section 7(f)(1) of the ADEA will

be considered ‘‘reasonable’’ for purposes of

section 7(f)(2)(B) of the ADEA.

(6) A waiver agreement in compliance with

this section that is in settlement of an EEOC

charge does not require the participation or

supervision of EEOC.

(h) Burden of proof. In any dispute

that may arise over whether any of the

requirements, conditions, and

circumstances set forth in section 7(f) of

the ADEA, subparagraph (A), (B), (C),

(D), (E), (F), (G), or (H) of paragraph (1),

or subparagraph (A) or (B) of paragraph

(2), have been met, the party asserting

the validity of a waiver shall have the

burden of proving in a court of

competent jurisdiction that a waiver

was knowing and voluntary pursuant to

paragraph (1) or (2) of section 7(f) of the

ADEA.

(i) EEOC’s enforcement powers. (1)

Section 7(f)(4) of the ADEA states:

No waiver agreement may affect the

Commission’s rights and responsibilities to

enforce [the ADEA]. No waiver may be used

to justify interfering with the protected right

of an employee to file a charge or participate

in an investigation or proceeding conducted

by the Commission.

(2) No waiver agreement may include

any provision prohibiting any

individual from:

(i) Filing a charge or complaint,

including a challenge to the validity of

the waiver agreement, with EEOC, or

(ii) Participating in any investigation

or proceeding conducted by EEOC.

(3) No waiver agreement may include

any provision imposing any condition

precedent, any penalty, or any other

limitation adversely affecting any

individual’s right to:

(i) File a charge or complaint,

including a challenge to the validity of

the waiver agreement, with EEOC, or

(ii) Participate in any investigation or

proceeding conducted by EEOC.

(j) Effective date of this section. (1)

This section is effective [30 days after

publication of the final rule in the

Federal Register.]

(2) This section applies to waivers

offered by employers on or after the

effective date specified in paragraph

(j)(1) of this section.

(3) No inference is to be drawn from

this section regarding the validity of

waivers offered prior to the effective

date.

(k) Statutory authority. The

regulations in this section are legislative

regulations issued pursuant to section 9

of the ADEA and Title II of OWBPA.

[FR Doc. 97–5745 Filed 3–7–97; 8:45 am]

BILLING CODE 6570–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 1

[MD Docket No. 96–186; FCC 97–49]

Assessment and Collection of

Regulatory Fees For Fiscal Year 1997

AGENCY: Federal Communications

Commission.

ACTION: Notice of Proposed Rulemaking.

SUMMARY: The Commission is proposing

to revise its Schedule of Regulatory Fees

in order to recover the amount of

regulatory fees that Congress has

required it to collect for fiscal year 1997.

Section 9 of the Communications Act of

1934, as amended, provides for the

annual assessment and collection of