62964 Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Rules and Regulations

DEPARTMENT OF LABOR

Office of Labor-Management Programs

29 CFR Part 215

RIN 1294–AA14

Guidelines, Section 5333(b), Federal

Transit Law

AGENCY: Office of Labor-Management

Programs, Office of the American

Workplace, Labor.

ACTION: Final guidelines.

SUMMARY: The Federal Transit law, Title

49 U.S.C., Chapter 53, provides, in

general, at Section 5333(b) (commonly

referred to as ‘‘Section 13(c)’’, that, as a

condition of certain Federal financial

assistance by the Department of

Transportation’s Federal Transit

Administration (FTA) in financing mass

transportation systems, fair and

equitable arrangements must be made,

as determined by the Department of

Labor (the Department), to protect the

interests of employees affected by such

assistance. In conjunction with the

Department’s role in making such

determinations, the Department is

providing information concerning its

procedures for processing applications

for assistance under the Federal Transit

Law, and certification by the

Department of acceptable protective

arrangements.

DATES: These Guidelines become

effective January 8, 1996.

FOR FURTHER INFORMATION CONTACT:

Kelley Andrews, Director, Statutory

Programs, U.S. Department of Labor,

200 Constitution Avenue, NW., Room

N–5411, Washington, DC 20210, (202)

219–4473.

SUPPLEMENTARY INFORMATION:

I. Background

Section 5333(b) of the Federal Transit

law requires that arrangements be made

to protect certain rights of mass transit

employees affected by grants of Federal

funds for the acquisition, improvement,

or operation of a transit system. These

rights include the preservation of rights,

privileges, and benefits under existing

collective bargaining agreements, the

continuation of collective bargaining

rights, the protection of individual

employees against a worsening of their

positions related to employment,

assurances of employment to employees

of acquired mass transportation systems,

priority of reemployment, and paid

training or retraining. In administering

this program, the Department notifies

relevant unions, if any, in the area of the

proposed project and provides the grant

applicant and the affected union(s) an

opportunity to develop the terms and

conditions of the protections. The

Department provides technical and

mediation assistance to the parties

during the negotiations. These new

guidelines replace guidelines which

have been in effect since May 1, 1978.

The Department’s Office of LaborManagement Programs’ Notice of

Proposed Rulemaking (NPRM), issued

June 29, 1995 (FR Vol. 60, No. 125, pg.

34072), proposed to change the

procedures for certifying employee

protective arrangements which are

required as a condition of assistance

under the Federal Transit law, in order

to expedite the process and make it

more predictable to the parties.

Approximately 85% of the

Department’s certifications in the past

five years have been issued within 90

days of the date they were received from

FTA. The processing time for the

remaining 15%, however, has been less

predictable. The Department’s objective

in revising its procedures is to enhance

the efficiency and predictability of the

certification process for all transit grant

applications while assuring that the

required employee protections are in

place. Where comments were submitted

which supported this objective, the

guidelines have been revised, as

appropriate, to reflect the comments,

and are discussed under Section II,

Summary and Discussion of Comments.

Numerous comments were submitted

which relate in a general way to the

Department’s administration of this

employee protection program. The

guidelines were said to contain

loopholes which would undermine the

effort to establish and meet deadlines

for certification, create new legal

standards resulting in a more arbitrary

and time-consuming process, and

establish protections and confer

authority on the Department which

exceed the statute.

The Department has carefully

reviewed the new guidelines with these

comments very much in mind to assure

that its appropriate statutory mandate

will be fulfilled, without creating

unnecessary ‘‘loopholes’’ or legal

standards which would result in a more

arbitrary or time consuming process.

Because the statute itself requires the

Department to exercise discretion and

flexibility in determining what is fair

and equitable, the guidelines must also

provide an appropriate level of

flexibility. Where appropriate, the

guidelines have been changed to reflect

these concerns and in other instances,

where no change was deemed

necessary, the specific points raised are

also discussed in Section II, Summary

and Discussion of Comments.

The Department has also made a

minor adjustment of a technical nature

to § 215.2. This section, which

addresses the required documentation

to be included in the grant application,

has been modified to reflect that the

content of the grant application is as

determined by the FTA. The

Department is not requesting any

information for processing of the grant

that is not required by the FTA.

The new guidelines differ from the

previous guidelines and the

Department’s practice by establishing

strict time frames for the certification of

protections in a more expeditious and

predictable manner. The procedures

established by these guidelines will

assure that the required protections can

be certified, within sixty days after the

initiation of processing by the

Department, permitting the release of

the Federal transit grant funds.

The new guidelines continue to

encourage local negotiations or

discussions for the development of

employee protection terms. The

guidelines, in recognition of the fact that

there are some states where bargaining

is prohibited for public employees,

allow for ‘‘discussion’’ where necessary

to satisfy the Federal Transit law in a

manner that does not violate state or

local law.

The guidelines also eliminate referral

of applications when the grant is for

routine replacement of equipment and/

or facilities of like kind and character.

In cases where referral to the unions is

appropriate, the referral will include the

intended terms of certification. The

parties will be given 15 days from the

date of the referral to submit objections,

if any, to the referral terms. The

Department will Determine within 10

days thereafter whether objections are

sufficient. Should the Department find

that the objections are not sufficient, the

Department will issue its certification

on the terms specified in the referral.

When objections are found to be

sufficient, negotiations may proceed and

the Department may provide technical

and mediatory assistance where

appropriate. In the event the protections

cannot be agreed to within 60 days from

the original referral date, the

Department will issue an interim

certification, permitting the release of

Federal transit grant funds. In the event

that the parties are still not able to

resolve their differences within 60 days

after the Department has issued the

interim certification, the Department

will set forth the protective terms in a

final certification.
Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Rules and Regulations 62965

Finally, it seems clear from the

comments received that several parties

are concerned about and wish to discuss

and resolve a number of substantive

issues relating to this program. While

this is an important matter, these are

procedural guidelines and thus not the

appropriate forum for the resolution of

such substantive rather than procedural

issues. The Department’s policies on

substantive issues are generally

addressed through certifications and are

discussed in the Department’s

determination letters.

II. Summary and Discussion of the

Comments

Twenty comments were submitted

and considered, including one from a

private individual.

Two comments were received from

the following public transit authorities

and planning organizations:

—Northern Illinois Regional

Transportation Authority

—Metropolitan Transit Commission,

Oakland, CA

Twelve comments were received from

the following public transit providers:

—Central Arkansas Transit Authority

—New York City Department of

Transportation

—Metropolitan Transit Authority, New

York, NY

—Triangle Transit Authority, Research

Triangle Park, NC

—Public Works Office/Transit, Johnson

County KS

—StarTran, Lincoln, NE

—Washington Metropolitan Area

Transit Authority

—Los Angeles County Metropolitan

Transit Authority

—Regional Transportation Commission,

Clark County, NV

—New Jersey Transit Corporation

—North County Transit District,

Oceanside, CA

—Metropolitan Atlanta Rapid Transit

Authority

One comment was received from a

state department of transportation:

—State of Michigan, Department of

Transportation

Three labor organizations provided

comments:

—Amalgamated Transit Union

—Transportation Trades Department,

AFL-CIO

—Transport Workers Union of America

Finally, one public transit association

provided comments:

—American Public Transit Association

The Department has carefully

reviewed and considered all of the

comments in developing these

guidelines. The following provides a

summary of the comments and the

Department’s response.

A. Definition of ‘‘Irreparable Harm’’

One comment indicated that the

safeguard against irreparable harm to

employees in § 215.3(d)(8) pending

completion of the special dispute

resolution process is an essential

protection which should be included in

the guidelines. Others, however,

suggested that the language concerning

irreparable harm would add a new

substantive protection under section

5333(b), which they view as providing

a ‘‘remedial scheme to provide

compensation’’ when employees are

affected by a project.

Section 5333(b), requires more than

providing compensation for impacts

upon employees. It is also intended to

minimize the impact of Federal projects

on employees. The restriction against

causing ‘‘irreparable harm’’ in

§ 215.3(d)(8), however, is limited solely

to any action which would ‘‘result in

irreparable harm to employees if such

action concerns matters subject to the

steps set forth in paragraph (e) of this

section.’’ (Emphasis added.) In

specifying that no action may be taken

which would result in irreparable harm,

the Department intends for the recipient

of funds to be able to take any necessary

action that will not irreparably harm

employees while allowing a project to

move forward. The minimal restriction

would remain in effect only until final

terms and conditions are determined

and certified.

B. Definition of ‘‘Material Effect’’

The § 215.3(b)(1) provision with

respect to ‘‘material effect’’ states that

the procedural requirements of

§ 215.3(b)(2) through § 215.3(h) will not

apply ‘‘absent a potentially material

effect on employees.’’ One comment

indicated that the phrase ‘‘material

effect on employees’’ should be limited

in its scope to material adverse effects

on employees so that if a project for

routine replacement of equipment and/

or facilities of like kind and character

has a positive effect on employees, no

referral would be required. Impacts,

however, may be viewed by some

individuals as positive while others

view the same effect as contrary to their

interests. Therefore, no adjustment need

be made to accommodate this concern.

One comment noted that ‘‘[i]t is not

clear whether the substantive

determination of materiality (material

effect on employees) is to be a subjective

judgment of the Department or a legal

determination based on specific

standards or precedents.’’ The

Department, however, will consult with

FTA, where necessary, and will

determine which projects have a

‘‘potentially material effect on

employees’’ based on available

applicable precedent and policy.

C. Definition of the Phrase ‘‘Where

Circumstances So Warrant’’

Several comments were made

indicating that the phrase ‘‘where

circumstances so warrant’’ in § 215.3(h)

enables the Department to retain the

right to withhold certification at its

discretion. One saw this as an

expansion of the language of the law

which would give the Department ‘‘veto

authority over the release of grant

funds.’’ The Department intends the

phrase ‘‘where circumstances so

warrant’’ to mean that certification will

not be issued where circumstances

inconsistent with the statute prevent the

Department from certifying. For

instance, in a situation involving the

Metropolitan Atlanta Rapid Transit

Authority (MARTA) in Georgia, the

Department was unable to certify grants

for a short time because state law

prohibited MARTA from providing the

requisite protections. Accordingly,

given that at least one comment

indicated this is an expansion of the

current law, the Department will clarify

the intent of this language by amending

§ 215.3(h) of the guidelines to read:

‘‘Notwithstanding the foregoing, the

Department retains the right to withhold

certification where circumstances

inconsistent with the statute so warrant

until such circumstances have been

resolved.’’

D. Definition of ‘‘Sufficient’’ as Applied

to Objections to Certification

In § 215.3(d)(2)(i), the guidelines

provide that the Department will

‘‘determine whether the objections

raised are sufficient’’ when one party

objects to terms and conditions

proposed by the Department as the basis

for certification of a project. In

§ 215.3(d)(3), the guidelines set forth the

criteria which the Department will

consider in determining whether an

objection will be considered sufficient.

Comments indicated concern that the

transit agencies would not be given the

same opportunity as would be provided

to the employees to object to the

referred terms and conditions, citing as

an example where it believed that

existing protections include provisions

that are no longer legally required or

that are burdensome. Such objections, if

raised by the transit agencies, would

require the Department to make a

determination as to whether they are

sufficient. The definition does not favor

either party over the other.
62966 Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Rules and Regulations

Another comment indicated that, in

order to avoid challenges as to whether

legal or factual circumstances have

changed, the Department should modify

§ 215.3(d)(3) so that it will consider an

objection to be sufficient when: (ii) the

objection ‘‘concerns legal or factual

issues relating to the terms proposed to

be certified that may materially affect

the rights or interests of employees.’’

The current proposed language requires

that the Department consider an

objection to be sufficient when: (ii) the

objection concerns changes in legal or

factual circumstances that materially

affect the rights or interests of

employees.

In response to this comment, the

Department has determined that there is

a need to clarify § 215.3(d)(3)(ii) and

accordingly we have added the word

‘‘may’’ before ‘‘materially affect.’’

E. Definition of the Term ‘‘Appropriate’’

in § 215.3(b)(3)

One comment noted that this section

sets forth procedures where there is a

new applicant or where the previous

arrangements are ‘‘not appropriate to the

current projects’’ without providing

guidance as to what would be

considered ‘‘appropriate.’’ This section

further specifies that the Department

will refer such grants to the parties

based on terms and conditions similar

to either the Model Agreement for

operating projects or the Special

Warranty for capital projects.

There are several situations in which

it would not be appropriate to refer a

project on the basis of previously

certified arrangements. It is not possible

to anticipate all the factual

circumstances where the current terms

would no longer be appropriate.

However, referral on the basis of

existing arrangements is not appropriate

in a situation where the Department is

aware that the terms and conditions of

the existing arrangements do not satisfy

the conditions of the statute in the

circumstances presented, perhaps

because of a change in the state law or

a change in the manner in which the

transit system is operated (e.g., the

public body decides to operate services

previously provided through a

management company drawing into

question how specific protections

required by the statute will be

provided). Another situation might be

one in which the parties have, for

instance, negotiated a capital agreement,

but have not developed an agreement

for application to operating assistance

projects.

F. Standards for Operating and Capital

Grants Where Protections Do Not

Already Exist

One comment noted that the ‘‘Model

Agreement was developed to provide a

template for parties who wished to use

it, but was never intended to be a

’standard’ or ’default’ option.’’ It was

further suggested that the details of the

protective arrangements should be

largely left to the parties. Another

comment noted that the proposed

§ 215.3(b)(3)(i) references ‘‘terms and

conditions similar to those of the Model

Agreement,’’ and questioned which

‘‘similar’’ terms and conditions would

be specified by the Department. Other

questions included: Will the parties be

given the opportunity to negotiate? Will

the Department abrogate a party’s right

to withdraw from the Model

Agreement?

Although the Model Agreement was

not originally developed for application

to all operating assistance grants, the

agreement has been certified as meeting

the requirements of the statute, and is

applied with the agreement of the

parties in the majority of operating

assistance projects. The Department

intends to expedite the certification

process by basing its initial referral of

operating assistance grants on terms and

conditions similar to those of the Model

Agreement when no other existing

arrangement is applicable. As with

referrals for applicants with previously

certified arrangements, the parties will

have 15 days from the date of the

referral and notification letters to submit

objections to the referred terms. The

parties will be afforded the opportunity

to negotiate alternative terms if the

Department determines an objection to

be sufficient in accordance with

§ 215.3(d)(3).

The Department will not ‘‘abrogate’’

the right of any party to withdraw from

the Model Agreement in a timely

manner. However, if a party withdraws

from the Model Agreement, referral of

the next operating project involving that

party, in accordance with

§ 215.3(b)(3)(i), will be based on terms

and conditions ‘‘similar’’ to the Model

Agreement because there will be no

previously certified arrangements

‘‘appropriate to the current project.’’

The parties will then need to negotiate

terms and conditions, under the

procedures and timeframes outlined in

the guidelines, to substitute for those

which they object to from the Model

Agreement.

Another comment suggested that, in

order to make the standards for

protections required under capital

grants and operating grants conform

with each other, § 215.3(b)(3)(i) should

be redrafted to require that for operating

grants, the terms and conditions will be

based on arrangements no less

protective than those of the Model

Agreement. The Department has

concluded that such consistency could

more appropriately be obtained by

including language in § 215.3(b)(3)(ii),

which indicates that ‘‘for capital grants,

the terms and conditions will be based

on arrangements similar to those of the

Special Warranty applied pursuant to

section 5311.’’ This language affords the

Department greater latitude in

incorporating the language of prior

Departmental determinations into

referrals.

One comment noted that ‘‘one of the

paragraphs ((b)(3)(ii)) cited as being

applicable to (b)(1) projects specifically

states that it applies to grants other than

those referenced in (b)(1).’’ We have

deleted the phrase ‘‘other than those for

replacement equipment or facilities

referenced in paragraph (b)(1) of this

section,’’ from § 215.3(b)(3)(ii) to clarify

that the Special Warranty will be used

for new applicants which apply for

routine replacement of equipment and/

or facilities of like kind and character.

Comments also questioned using the

Special Warranty as the basis for

certification of capital grants. As with

the Model Agreement, the Special

Warranty has been previously certified

by the Department as meeting the

requirements of the statute and will

serve as a starting point for the parties

to develop protections should sufficient

objections be submitted to the proposed

terms. This will expedite the processing

of section 5333(b) certifications while

continuing to ensure the right of the

parties to negotiate appropriate

protective arrangements.

G. Interim Certifications Under

§ 215.3(d)(7)

Several comments noted that the

court has held that the Department does

not have the statutory authority to issue

conditional certifications. These

comments suggest that the proposed

interim certification would be a

conditional certification. The

conditional certifications rejected by the

courts in Amalgamated Transit Union v.

Donovan, 767 F.2d 939 (D.C. Cir. 1985),

however, were not statutorily sufficient

because they did not ensure that all

requirements of the statute were

satisfied prior to certification. In those

instances, the Department had issued

certifications which were lacking

mandatory terms and conditions. The

interim certification provided for in

these guidelines will fully satisfy the

requirements of the statute based upon
Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Rules and Regulations 62967

the information available at the time of

certification. Because the terms of an

interim certification will meet all the

requirements of the statute, the interim

certification does not constitute a

‘‘conditional’’ certification.

Other comments suggested that the

receipt of Federal funds may affect a

transit system’s ability to later challenge

different certification arrangements if

such are subsequently imposed on it by

the Department or that a system may

prefer not to accept an interim

certification because different

arrangements could later be imposed. In

the Department’s view, the vast majority

of applicants will benefit from the

expedited certification procedure. The

interim certification allows the transit

authority to execute its grant contract

with the FTA, thus avoiding, in certain

instances, a potential lapse of funds.

Moreover, the applicants will be aware

of the disputed issues and thus be able

to judge any potential liability if a

project is implemented and the

Department imposes language in the

final certification that differs from that

in the interim certification. In any event,

under the guidelines, final certification

will be issued within 60 days of the

interim certification, thus limiting any

period of uncertainty for transit systems.

H. Time Limits Under § 215.3(d)(1) for

the Parties To Submit Objections

Several comments indicated support

for the Department’s ‘‘progress towards

procedural reform’’ and noted that strict

time limits for processing and issuance

of certifications ‘‘would truly expedite

the grant application and approval

process for many grantees. Still others

commented that ‘‘the proposed changes

are consistent with the basic purposes of

13(c).’’

Comments also suggested that there

should be consequences if the

Department or the parties fail to act

within established timeframes. The

Department recognizes the need to

ensure compliance with the deadlines

established in these guidelines. Funding

cannot be released in the absence of a

certification that employee protections

are in place since the statute mandates

the Department’s certification as a

precondition to the release of Federal

funds.

If objections by the parties are not

timely, the Department will proceed

with certification on the basis proposed

in the referral. To accommodate

objections from multiple parties,

however, the Department has made a

technical correction to § 215.3(d)(2) to

indicate that a determination regarding

the sufficiency of objections will be

made within 10 days of the date for

submitting objections.

I. Procedures Under § 215.3(b)(1) for

Routine Replacement of Equipment

and/or Facilities of Like Kind and

Character Exempting These From

Referral

Section 215.3(b)(1) of the proposed

guidelines specifies that grants for

routine replacement of equipment and/

or facilities of like kind and character

will be certified without a referral to

labor organizations absent a potentially

material effect on employees. Several

comments were made in support of this

proposal. One comment indicated that

eliminating the referral of applications

for grants for routine replacement of

equipment and/or facilities ‘‘would

benefit our agency immediately if

approved and implemented.’’

One comment ‘‘strongly object[ed] to

exempting capital grants for routine

replacement of equipment of like kind

and character and/or facilities of like

kind and character from the modified

procedural requirements.’’ The

comment requested that this exclusion

be removed from the final guidelines

and that routine replacement grants be

processed under the modified grant

procedures applicable to all other

projects.

Three comments indicated that the

proposed guidelines failed to establish a

procedure for the parties to provide

positions on the issue of ‘‘material effect

on employees’’ to the Department and,

also, that the proposed guidelines did

not establish a time frame for the

Department’s determination of whether

a referral would be made.

It is not necessary for labor

organizations to receive referrals of

grants for ‘‘routine replacement’’

projects. In instances where no referral

is made, the Department will apply

existing protective arrangements which

have been deemed satisfactory for

similar projects in the past. For new

applicants seeking ‘‘routine

replacement’’ capital items, the

Department will apply protections

based upon the Special Warranty. The

Department will only proceed with a

certification in such instances where all

capital items are clearly ‘‘routine

replacement’’ items of like kind and

character. The Department will consult

with the FTA if necessary to determine

whether a grant includes only routine

replacement items.

No opportunity has been provided in

the guidelines for input from the parties

with regard to any ‘‘potentially material

effect’’ on employees. However, where

there is routine replacement of capital

items, which will be used in the same

locations and in the same manner as the

original capital items, it is unlikely that

there will be an impact upon employees

which would not be covered by the

existing protective arrangements.

Routinely seeking input on this issue

from the parties in advance of the

Department’s determination would

require nearly as much time as a routine

referral. Should the Department deem it

necessary, however, the Department

could seek the input of the parties on

the issue of ‘‘potentially material

effect.’’

It is not necessary for the guidelines

to include a time frame for the

Department’s determination of whether

a referral would be made. FTA is

responsible for identifying in its

transmittal to the Department that a

grant application is for the purpose of

purchasing routine replacement

equipment and/or facilities of like kind

and character. If the information in the

grant application is sufficient for the

Department to concur in this

designation, the Department will

promptly proceed with its certification,

absent a finding of ‘‘potentially material

effect’’ pursuant to § 215.3(b)(1). If the

information in the grant application

does not support a conclusion that the

project is for routine replacement

equipment and/or facilities of like kind

and character, the Department will refer

the project to the appropriate parties in

accordance with the procedures in

§ 215.3(b) within 5 days of receipt from

the FTA.

For information purposes only,

applications for ‘‘routine replacement’’

items will continue to be transmitted to

the labor organizations representing

employees in the service area of the

projects.

J. Procedures for Protective

Arrangements as to States That Pass

Through Funds to Subrecipients

Two comments indicate that the

Department has previously introduced

policies and procedures for processing

of statewide grant applications which

are not reflected in its earlier guidelines.

They further suggest that procedures

recently developed by the Department

for processing of grants to States which

pass through funds to subrecipients,

particularly to small urban and rural

recipients, be reflected in the new

guidelines in a separate section. In

response to these comments, the

Department has determined that it

would be appropriate to add a new

§ 215.3(a)(3) to clarify that protections

generally will be provided by the

subrecipients which receive funds

through a State administrative agency.
62968 Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Rules and Regulations

Accordingly, the following section has

been added:

215.3(a)(3) If an application involves a grant

to a state administrative agency which will

pass through assistance to subrecipients, the

Department of Labor will refer and process

each subrecipient’s respective portion of the

project in accordance with this section. If a

state administrative agency has previously

provided employee protections on behalf of

subrecipients, the referral will be based on

those terms and conditions. These

procedures are not applicable to grants under

section 5311.

It was also suggested that the

Department should automatically certify

section 5309 (formerly section 3)

projects for rural providers on the basis

of the Special Warranty. Under the

guidelines, referrals for rural providers

receiving funds under section 5309 will

be based upon terms and conditions

similar to those of the Special Warranty,

unless there are previously certified

arrangements which have been applied

to the section 5309 projects. However,

although the guidelines at

§ 215.3(b)(3)(iii) indicated that referrals

for projects under section 5311

(formerly section 18) will be made on

the basis of the Special Warranty, the

Department will amend the proposed

guidelines to continue to provide for

automatic certification of applications

pursuant to section 5311 for rural

providers.

K. Procedure for Dispute Resolution to

Determine Terms and Conditions of

Final Certifications, § 215.3(e)(4)

One comment stated that ‘‘[t]he

regulations explicitly decline to

establish the manner of dispute

resolution by the Department of Labor.’’

Another indicated that § 215.3(e)(4)

appears to give the Department the

authority to utilize alternative methods

of dispute resolution, noting that the

statute does not allow the Department to

delegate this authority to a third party.

Section 215.3(e)(4) specifically reserves

to the Department the sole authority to

render the final determination. The

statute does not mandate that the

Department use a specific dispute

resolution procedure.

L. Protections for Employees Not

Represented by a Labor Organization

One comment indicated that § 215.4

improperly expands the protections

afforded to employees not represented

by a labor organization by affording

such employees ‘‘the same protections’’

as those afforded to employees

represented by a labor organization

rather than ‘‘substantially the same

protections.’’

The concerns raised by this comment

that rights have been expanded have

been clarified by amending the language

in § 215.4(b) to eliminate any reference

to the terms and conditions authorized

in § 215.3(b). Instead, § 215.4(b) will

provide, as in the prior guidelines, that

the protective terms and conditions in

the letter of certification will be set forth

by the Department. There is no

expansion of rights provided in these

guidelines.

M. Procedures for Processing

Amendatory Grant Applications

One comment suggested that ‘‘[t]he

special processing exemption for

’amendatory applications’ in § 215.3(c)

as amplified in § 215.5 should be

eliminated in its entirety.’’ It argued

that, since all grants are subject to only

a 15 day review period for the purpose

of filing any objections, and any grant

amendment which revises a project in

only ‘‘immaterial respects’’ would not

give rise to an objection considered

sufficient under the new procedures,

turnaround is expedited and employee

representatives should have the

opportunity ‘‘to provide their views

within the narrow time frame specified

to ensure that the agency is fully

informed regarding the potential effects

of each project.’’

The automatic certification of

amendatory grants is limited to those

where changes are immaterial. If there is

a change in the scope of a project,

amendatory grants should not and will

not be processed under this expedited

procedure. The revised procedures for

processing other grants should not give

rise to new procedures for processing of

amendatory grants containing

immaterial changes which would have

the potential for delaying their approval.

Thus, the suggested changes to the

proposed guidelines are not necessary.

N. Other Comments

1. One comment suggested that the

proposed guidelines be withdrawn

because they appear to draw substantial

content from union proposed reforms.

Another comment indicated that the

‘‘proposed rule has been undertaken

without the input of the transit

industry’’ and that State and local

public body transit systems were not

involved in the development of the

NPRM. Several comments suggested

that the regulations be withdrawn and

that the rulemaking process be

undertaken with greater consideration

for the procedures set forth in Executive

Order 12866 which ‘‘provides that

interested parties should be involved

prior to issuance of a proposed rule.’’

The Department’s decision to provide

30 days rather than 60 days for a

comment period was also raised.

The Department developed language

based on concepts favored by both

unions and transit management. As

demonstrated by the numerous

comments received from interested

parties from across the country, the

rulemaking process in this instance has

afforded all the interested parties with

ample opportunity to provide comments

and input on the procedural issues

which are the subject of these

guidelines.

2. One comment noted that the

Department may view these procedures

as ‘‘guidelines’’ rather than ‘‘rules.’’ The

comment further notes that ‘‘rules are

binding on parties, including Federal

agencies, and subject to specific

rulemaking procedures; in contrast,

‘‘guidelines’’ are generally considered

informal in nature and presumably are

not binding on parties.’’ There is no

statutory authority to issue regulations

under section 5333(b). The guidelines,

however, are intended to be binding in

administering this employee protection

program.

3. Numerous comments addressed

administrative processes followed by

the Department and raised matters

concerning the Administrative

Procedures Act. It was suggested that

procedural safeguards against what the

parties characterize as ‘‘ex parte

contacts’’ with labor representatives in

pending matters should be addressed in

the guidelines. Similarly, comments

proposed that the guidelines address

how final decisions on disputed issues

would be made available under

§ 215.3(e)(5) and address the matter of

the procedural ability to have access to

and to rely on matters previously ruled

upon by the Department. Finally,

comments indicated that the proposed

guidelines did not require the

Department to ‘‘articulate the

underlying legal rationale for its

decisions’’ nor did they provide for

meaningful judicial review for parties

who receive an adverse ruling from the

Department.

The Department does not believe that

it is appropriate to restrict contacts with

individual parties in the processing of

certifications of employee protections.

In processing FTA grant applications,

the Department’s role includes

providing technical and mediatory

assistance to the parties. As

contemplated by the legislative history,

the efforts of the Department are

directed toward facilitating an

agreement between the transit authority

and the union in order to ensure that the

requirements of the statute are satisfied.

During mediation the Department’s
Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Rules and Regulations 62969

representative may discuss issues

separately with each party, suggest

bases for settlement in an effort to

resolve the dispute, and respond to

requests for technical assistance. If the

parties do not reach an agreement and

the Department must make a

determination of the terms and

conditions upon which a certification

will be based, the standard for

communications with the parties shifts

to a more formal process, where

outstanding issues are specified and

schedules for briefs and counterbriefs

are committed to written instructions.

No exploration of options or issues

occurs at this time absent the initiation

or consent of the other party.

Under the guidelines, the Department

will take steps pursuant to § 215.3(e)(5)

to assure the parties’ access to the final

decisions it renders on disputed issues.

The Department will continue to send

copies of its final decisions to the FTA

and the affected applicant and labor

organizations. Similarly, the guidelines

address the matter of access to

Departmental decisions by making

available the Department’s final

determinations on disputed issues. In

fact, during efforts to facilitate

agreement, these decisions are regularly

provided to parties involved in

negotiations when their negotiations

have addressed related subjects.

The parties will continue to be able to

rely on previously issued

determinations to the extent that

circumstances are similar to those in the

prior determinations. Certifications will

continue to be developed on a case by

case basis to ensure that protections are

statutorily sufficient in the

circumstances presented by the specific

project and under any applicable state

law.

In establishing ‘‘fair and equitable’’

protections under the statute in those

circumstances where the parties are

unable to reach agreement, the

Department provides the underlying

rationale for the terms and conditions

upon which certification is based. The

Department will continue to provide the

rationale in these cases to explain the

basis of its decisions to the parties and

to facilitate other parties’ efforts to reach

agreement in cases where the

circumstances are comparable. In

addition, judicial review of the

Department’s certification is available to

the parties. See, e.g., Amalgamated

Transit Union v. Donovan, 767 F.2d 939

(D.C. Cir. 1985).

4. One comment indicated that the

guidelines do not define whether the

‘‘days’’ referred to in the various

deadlines means calendar or business

days. The Department intends for the

term ‘‘days’’ to refer to calendar days.

When a deadline expires on a date that

is not a business day, the deadline will

then be considered to be the next

business day.

5. One comment suggests that, to

minimize legal expenses, the briefing

schedule, if one is adopted, should be

shortened and a one-step process

instituted rather than requiring reply

briefs. The guidelines at § 215.3(e)(3)

provide for some flexibility in

determining the briefing schedule. In

the past, the Department has typically

provided up to 30 days for briefs and for

reply briefs, which were routinely

required, up to 10 days. The proposed

guidelines specify ‘‘no more than

twenty (20) days for opening briefs and

no more than ten (10) days for reply

briefs, when the Department deems

reply briefs to be beneficial.’’ (Emphasis

added.) The guidelines, therefore,

already provide for an expedited

process which the Department can

accelerate when appropriate. The

guidelines balance the need for an

expedited process with the need for a

full disclosure of pertinent information

to facilitate the determination process.

6. One comment requested that the

Department address the procedures for

processing claims determinations under

the statute. This is not an appropriate

issue to be addressed under these

guidelines. These are procedural

guidelines and thus not the appropriate

forum for resolution of such issues.

III. Administrative Notices

A. Executive Order 12866

These guidelines have been reviewed

by the Office of Management and

Budget in accordance with Executive

Order 12866.

B. Regulatory Flexibility Act

The Agency Head has certified that

these guidelines are not expected to

have a significant impact on a

substantial number of small entities as

defined in the Regulatory Flexibility

Act.

C. Paperwork Reduction Act

These guidelines contain no

information collection requirements for

purposes of the Paperwork Reduction

Act of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 29 CFR Part 215

Grant administration; Grants—

transportation; Labor-management

relations; Labor unions; Mass

transportation.

Signed at Washington, DC this ——— day

of ———————, 1995.

Charles L. Smith,

Deputy Assistant Secretary.

Accordingly, 29 CFR Chapter II is

amended by revising Part 215 to read as

follows:

PART 215—GUIDELINES, SECTION

5333(b), FEDERAL TRANSIT LAW

Sec.

215.1 Purpose.

215.2 General.

215.3 Employees represented by a labor

organization.

215.4 Employees not represented by a labor

organization.

215.5 Processing of amendatory

applications.

215.6 The Model Agreement.

215.7 The Speciality Warranty.

215.8 Department of Labor contact.

Authority: Secretary’s Order No. 2–93, 58

FR 42578, August 10, 1993.

§ 215.1 Purpose.

(a) The purpose of these guidelines is

to provide information concerning the

Department of Labor’s administrative

procedures in processing applications

for assistance under the Federal Transit

law, as codified at 49 U.S.C. chapter 53.

(b) Section 5333(b) of title 49 of the

United States Code reads as follows:

Employee protective arrangements.—(1) As

a condition of financial assistance under

sections 5307–5312, 5318(d), 5323 (a)(1), (b),

(d), and (e), 5328, 5337, and 5338(j)(5) of this

title, the interests of employees affected by

the assistance shall be protected under

arrangements the Secretary of Labor

concludes are fair and equitable. The

agreement granting the assistance under

sections 5307–5312, 5318(d), 5323 (a)(1), (b),

(d), and (e), 5328, 5337, and 5338(j)(5) shall

specify the arrangements.

(2) Arrangements under this subsection

shall include provisions that may be

necessary for—

(A) the preservation of rights, privileges,

and benefits (including continuation of

pension rights and benefits) under existing

collective bargaining agreements or

otherwise;

(B) the continuation of collective

bargaining rights;

(C) the protection of individual employees

against a worsening of their positions related

to employment;

(D) assurances of employment to

employees of acquired mass transportation

systems;

(E) assurances of priority of reemployment

of employees whose employment is ended or

who are laid off; and

(F) paid training or retraining programs.

(3) Arrangements under this subsection

shall provide benefits at least equal to

benefits established under section 11347 of

this title.
62970 Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Rules and Regulations

§ 215.2 General.

Upon receipt of copies of applications

for Federal assistance subject to 49

U.S.C. 5333(b), together with a request

for the certification of employee

protective arrangements from the

Department of Transportation, the

Department of Labor will process those

applications, which may be in either

preliminary or final form. The Federal

Transit Administration will provide the

Department with the information

necessary to enable the Department to

certify the project.

§ 215.3 Employees represented by a labor

organization.

(a)(1) If affected employees are

represented by a labor organization, it is

expected that where appropriate,

protective arrangements shall be the

product of negotiation/discussion,

pursuant to these guidelines.

(2) In instances where states or

political subdivisions are subject to

legal restrictions on bargaining with

employee organizations, the Department

of Labor will utilize special procedures

to satisfy the Federal statute in a manner

which does not contravene state or local

law. For example, employee protective

terms and conditions, acceptable to both

employee and applicant representatives,

may be incorporated into a resolution

adopted by the involved local

government.

(3) If an application involves a grant

to a state administrative agency which

will pass assistance through to

subrecipients, the Department of Labor

will refer and process each

subrecipient’s respective portion of the

project in accordance with this section.

If a state administrative agency has

previously provided employee

protections on behalf of subrecipients,

the referral will be based on those terms

and conditions. These procedures are

not applicable to grants under section

5311.

(b) Upon receipt of an application

involving affected employees

represented by a labor organization, the

Department of Labor will refer a copy of

the application to that organization and

notify the applicant of referral.

(1) If an application involves only a

capital grant for routine replacement of

equipment of like kind and character

and/or facilities of like kind and

character, the procedural requirements

set forth in §§ 215.3(b)(2) through

215.3(h) of these guidelines will not

apply absent a potentially material

effect on employees. Where no such

effect is found, the Department of Labor

will certify the application based on the

terms and conditions as referenced in

§§215.3(b)(2) or 215.3(b)(3)(ii).

(2) For applicants with previously

certified arrangements, the referral will

be based on those terms and conditions.

(3) For new applicants and applicants

for which previously certified

arrangements are not appropriate to the

current project, the referral will be

based on appropriate terms and

conditions specified by the Department

of Labor, as follows:

(i) for operating grants, the terms and

conditions will be based on

arrangements similar to those of the

Model Agreement (referred to also as the

National Agreement);

(ii) for capital grants, the terms and

conditions will be based on

arrangements similar to those of the

Special Warranty applied pursuant to

section 5311.

(c) Following referral and notification

under paragraph (b) of this section, and

subject to the exceptions defined in

§ 215.5, parties will be expected to

engage in good faith efforts to reach

mutually acceptable protective

arrangements through negotiation/

discussion within the timeframes

designated under paragraphs (d) and (e)

of this section.

(d) As part of the Department of

Labor’s review of an application, a time

schedule for case processing will be

established by the Department of Labor

and specified in its referral and

notification letters under paragraph

215.3(b) or subsequent written

communications to the parties.

(1) Parties will be given fifteen (15)

days from the date of the referral and

notification letters to submit objections,

if any, to the referred terms. The parties

are encouraged to engage in

negotiations/discussions during this

period with the aim of arriving at a

mutually agreeable solution to

objections any party has to the terms

and conditions of the referral.

(2) Within ten (10) days of the date for

submitting objections, the Department

of Labor will:

(i) Determine whether the objections

raised are sufficient; and

(ii) Take one of the two steps

described in paragraphs (d)(5) and (6) of

this section, as appropriate.

(3) The Department of Labor will

consider an objection to be sufficient

when:

(i) The objection raises material issues

that may require alternative employee

protections under 49 U.S.C. 5333(b); or

(ii) The objection concerns changes in

legal or factual circumstances that may

materially affect the rights or interests of

employees.

(4) The Department of Labor will

consult with the Federal Transit

Administration for technical advice as

to the validity of objections.

(5) If the Department of Labor

determines that there are no sufficient

objections, the Department will issue its

certification to the Federal Transit

Administration.

(6) If the Department of Labor

determines that an objection is

sufficient, the Department, as

appropriate, will direct the parties to

commence or continue negotiations/

discussions, limited to issues that the

Department deems appropriate and

limited to a period not to exceed thirty

(30) days. The parties will be expected

to negotiate/discuss expeditiously and

in good faith. The Department of Labor

may provide mediation assistance

during this period where appropriate.

The parties may agree to waive any

negotiations/discussions if the

Department, after reviewing the

objections, develops new terms and

conditions acceptable to the parties. At

the end of the designated negotiation/

discussion period, if all issues have not

been resolved, each party must submit

to the Department its final proposal and

a statement describing the issues still in

dispute.

(7) The Department will issue a

certification to the Federal Transit

Administration within five (5) days after

the end of the negotiation/discussion

period designated under paragraph

(d)(6) of this section. The certification

will be based on terms and conditions

agreed to by the parties that the

Department concludes meet the

requirements of 49 U.S.C. 5333(b). To

the extent that no agreement has been

reached, the certification will be based

on terms and conditions determined by

the Department which are no less

protective than the terms and conditions

included in the referral pursuant to

§§ 215.3(b)(2) and 215.3(b)(3).

(8) Notwithstanding that a

certification has been issued to the

Federal Transit Administration

pursuant to paragraph (d)(7) of this

section, no action may be taken which

would result in irreparable harm to

employees if such action concerns

matters subject to the steps set forth in

paragraph (e) of this section.

(e) If the certification referred to in

paragraph (d)(7) of this section is not

based on full mutual agreement of the

parties, the Department of Labor will

take the following steps to resolve

outstanding differences:

(1) The Department will set a

schedule that provides for final

resolution of the disputed issue(s)

within sixty (60) days of the

certification referred to in paragraph

(d)(7) of this section.
Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Rules and Regulations 62971

(2) Within ten (10) days of the

issuance of the certification referred to

in paragraph (d)(7) of this section, and

after reviewing the parties’ descriptions

of the disputed issues, the Department

will define the issues still in dispute

and set a schedule for final resolution of

all such issues.

(3) The Department may establish a

briefing schedule, usually allowing no

more than twenty (20) days for opening

briefs and no more than ten (10) days for

reply briefs, when the Department

deems reply briefs to be beneficial. In

either event, the Department will issue

a final certification to the Federal

Transit Administration no later than

thirty (30) days after the last briefs are

due.

(4) The Department of Labor will

decide the manner in which the dispute

will be resolved. In making this

decision, the Department may consider

the form(s) of dispute resolution

employed by the parties in their

previous dealings as well as various

forms of third party dispute resolution

that may be appropriate. Any dispute

resolution proceedings will normally be

expected to commence within thirty

(30) days of the certification referred to

in paragraph (d)(7) of this section, and

the Department will render a final

determination, including the bases

therefor, within thirty (30) days of the

commencement of the proceedings.

(5) The Department will make

available final decisions it renders on

disputed issues.

(f) Nothing in these guidelines

restricts the parties from continuing to

negotiate/discuss over final terms and

conditions and seeking a final

certification of an agreement that meets

the requirements of the Act prior to the

issuance of a final determination by the

Department.

(g) If, subsequent to the issuance of

the certification referred to in paragraph

(d)(7) of this section, the parties reach

an agreement on one or more disputed

issues that meets the requirements of

the Act, and/or the Department of Labor

issues a final decision containing

revised terms and conditions, the

Department will take appropriate steps

to substitute the new terms and

conditions for those previously certified

to the Federal Transit Administration.

(h) Notwithstanding the foregoing, the

Department retains the right to withhold

certification where circumstances

inconsistent with the statute so warrant

until such circumstances have been

resolved.

§ 215.4 Employees not represented by a

labor organization.

(a) The certification made by the

Department of Labor will afford the

same level of protection to those

employees who are not represented by

labor organizations.

(b) If there is no labor organization

representing employees, the Department

of Labor will set forth the protective

terms and conditions in the letter of

certification.

§ 215.5 Processing of amendatory

applications.

When an application is supplemental

to or revises or amends in immaterial

respects an application for which the

Department of Labor has already

certified that fair and equitable

arrangements have been made to protect

the interests of mass transit employees

affected by the subject project the

Department of Labor will on its own

initiative apply to the supplemental or

other amendatory application the same

terms and conditions as were certified

for the subject project as originally

constituted. The Department of Labor’s

processing of these applications will be

expedited.

§ 215.6 The Model Agreement.

The Model (or National) Agreement

mentioned in paragraph (b)(3)(i) of

§ 215.3 refers to the agreement executed

on July 23, 1975 by representatives of

the American Public Transit Association

and the Amalgamated Transit Union

and Transport Workers Union of

America and on July 31, 1975 by

representatives of the Railway Labor

Executives’ Association, Brotherhood of

Locomotive Engineers, Brotherhood of

Railway and Airline Clerks and

International Association of Machinists

and Aerospace Workers. The agreement

is intended to serve as a ready-made

employee protective arrangement for

adoption by local parties in specific

operating assistance project situations.

The Department has determined that

this agreement provides fair and

equitable arrangements to protect the

interests of employees in general

purpose operating assistance project

situations and meets the requirements of

49 U.S.C. 5333(b).

§ 215.7 The Special Warranty.

The Special Warranty mentioned in

paragraph (b)(3)(ii) of § 215.3 refers to

the protective arrangements developed

for application to the small urban and

rural program under section 5311 of the

Federal Transit statute. The warranty

arrangement represents the

understandings of the Department of

Labor and the Department of

Transportation, reached in May 1979,

with respect to the protections to be

applied for such grants. The Special

Warranty provides fair and equitable

arrangements to protect the interests of

employees and meets the requirements

of 49 U.S.C. 5333(b).

§ 215.8 Department of Labor contact.

Questions concerning the subject

matter covered by this part should be

addressed to Statutory Programs, U.S.

Department of Labor, Suite N5411, 200

Constitution Avenue, NW., Washington,

DC 20210; phone number 202–219–

4473. (Secretary’s Order 2–93, 58 FR

42578, August 10, 1993.)

[FR Doc. 95–29752 Filed 12–6–95; 8:45 am]

BILLING CODE 4510–86–P