.

    (a) In General.--Section 40122(a) of title 49, United States Code, 
is amended--
            (1) by redesignating paragraphs (3) and (4) as paragraphs 
        (5) and (6), respectively; and
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Dispute resolution.--
                    ``(A) Mediation.--If the Administrator does not 
                reach an agreement under paragraph (1) or the 
                provisions referred to in subsection (g)(2)(C) with the 
                exclusive bargaining representative of the employees, 
                the Administrator and the bargaining representative--
                            ``(i) shall use the services of the Federal 
                        Mediation and Conciliation Service to attempt 
                        to reach such agreement, in accordance with 
                        part 1425 of title 29, Code of Federal 
                        Regulations; or
                            ``(ii) may, by mutual agreement, adopt 
                        alternative procedures for the resolution of 
                        disputes or impasses arising in the negotiation 
                        of the collective-bargaining agreement.
                    ``(B) Binding arbitration.--
                            ``(i) Assistance from federal service 
                        impasses panel.--If the services of the Federal 
                        Mediation and Conciliation Service under 
                        subparagraph (A)(i) do not lead to an 
                        agreement, the Administrator and the exclusive 
                        bargaining representative of the employees 
                        (referred to in this subparagraph as the 
                        `parties') shall submit their issues in 
                        controversy to the Federal Service Impasses 
                        Panel, which shall assist the parties in 
                        resolving the impasse by asserting jurisdiction 
                        and ordering binding arbitration by a private 
                        arbitration board appointed pursuant to clause 
                        (ii).
                            ``(ii) Appointment of arbitration board.--
                                    ``(I) List of arbitrators.--The 
                                Executive Director of the Federal 
                                Service Impasses Panel shall provide 
                                for the appointment of 3 members to the 
                                private arbitration board described in 
                                clause (i) by requesting the Director 
                                of the Federal Mediation and 
                                Conciliation Service to prepare a list 
                                of not fewer than 15 names of 
                                arbitrators with Federal sector 
                                experience and by providing the list to 
                                the parties.
                                    ``(II) Selection of arbitrators.--
                                Not later than 10 days after receiving 
                                the list described in subclause (I), 
                                each party shall select 1 arbitrator 
                                from the list. Not later than 7 days 
                                after these 2 arbitrators are selected 
                                by the parties, the arbitrators shall 
                                select a third arbitrator from the 
                                list.
                                    ``(III) Alternative selection of 
                                arbitrators.--If either party fails to 
                                select an arbitrator or if the 2 
                                selected arbitrators are unable to 
                                agree on the selection of the third 
                                arbitrator within 7 days, the parties 
                                shall make the selection by alternately 
                                striking names off the list until 1 
                                arbitrator remains.
                            ``(iii) Framing issues in controversy.--If 
                        the parties do not agree on the framing of the 
                        issues to be submitted for arbitration, the 
                        arbitration board shall frame the issues.
                            ``(iv) Hearings.--The arbitration board 
                        shall give the parties a full and fair hearing, 
                        including an opportunity for each party to--
                                    ``(I) present evidence in support 
                                of the party's claims; and
                                    ``(II) present the case in person, 
                                by counsel, or by other representative 
                                selected by the party.
                            ``(v) Decisions.--The arbitration board 
                        shall render its decision not later than 90 
                        days after the date on which its final member 
                        is appointed. Decisions of the arbitration 
                        board shall be conclusive and binding upon the 
                        parties.
                            ``(vi) Costs.--The parties shall equally 
                        share the costs of the arbitration.
            ``(3) Ratification of agreements.--Upon reaching a 
        voluntary agreement or at the conclusion of the binding 
        arbitration under paragraph (2)(B), the final agreement, except 
        for those matters decided by the arbitration board, shall be 
        subject to--
                    ``(A) ratification by the exclusive bargaining 
                representative of the employees, if so requested by the 
                bargaining representative; and
                    ``(B) approval by the head of the agency, in 
                accordance with the provisions referred to in 
                subsection (g)(2)(C).
            ``(4) Enforcement.--
                    ``(A) Enforcement actions in united states 
                courts.--
                            ``(i) Jurisdiction.--Each United States 
                        district court and each United States court of 
                        a place subject to the jurisdiction of the 
                        United States shall have jurisdiction to 
                        adjudicate enforcement actions brought under 
                        this section.
                            ``(ii) Judicial district.--An enforcement 
                        action may be brought under this section in--
                                    ``(I) any judicial district in the 
                                State in which the violation of this 
                                section is alleged to have been 
                                committed;
                                    ``(II) the judicial district in 
                                which the Federal Aviation 
                                Administration has its principal 
                                office; or
                                    ``(III) the District of Columbia.
                    ``(B) Attorney fees.--The court may assess against 
                the Federal Aviation Administration reasonable attorney 
                fees and other litigation costs reasonably incurred in 
                any case under this section in which the complainant 
                has substantially prevailed.''.
    (b) Effect of Changes; Negotiations.--Any changes to the personnel 
management system implemented by the Administrator of the Federal 
Aviation Administration on or after July 10, 2005, under section 
40122(a) of title 49, United States Code (as in effect on the day 
before the date of the enactment of this Act), without the agreement of 
the exclusive bargaining representative of the employees of the Federal 
Aviation Administration certified under section 7111 of title 5, United 
States Code, shall be null and void. The Administrator and the 
bargaining representative shall resume negotiations promptly, and, 
subject to subsection (d), the last mutual agreement before the 
implementation of such changes shall be in effect until a new contract 
is adopted by the Administrator and the bargaining representative.
    (c) Arbitration.--If a new agreement is not reached 45 days after 
the date on which negotiations resume under subsection (b), the 
Administrator and the bargaining representative shall submit their 
issues in controversy to the Federal Service Impasses Panel, in 
accordance with section 7119 of title 5, United States Code, for 
binding arbitration in accordance with paragraphs (2)(B), (3), and (4) 
of section 40122(a) of title 49, United States Code.
    (d) Interim Agreement.--If the Administrator and the exclusive 
bargaining representative of the employees subject to the changes 
referred to in subsection (b) reach a final and binding agreement with 
respect to such changes before the date of the enactment of this Act,--
            (1) such agreement shall supersede any changes implemented 
        by the Administrator under section 40122(a) of title 49, United 
        States Code (as in effect on the day before such date of 
        enactment) without the agreement of the bargaining 
        representative; and
            (2) subsections (b) and (c) shall not take effect.
Output: Federal Aviation Administration Employee Retention Act - Revises requirements for the dispute resolution process of the Federal Aviation Administration (FAA) regarding negotiations with the exclusive bargaining representative of FAA employees over proposed changes to the FAA personnel management system.

Requires submission of issues in controversy to the Federal Service Impasses Panel (FSIP) for binding arbitration if the services of the Federal Mediation and Conciliation Service (FMCS, required by current law) have led to an impasse between the FAA and its employees in reaching an agreement. Prescribes a procedure for the appointment of a three-member arbitration board by the FSIP Executive Director.

Repeals the current requirement that, if the services of the FMCS do not lead to an agreement, the Administrator's proposed change to the personnel management system shall not take effect until 60 days have elapsed after the Administrator has transmitted the proposed changes, along with the objections of the employees to the changes, and the reasons for such objections, to Congress.

Provides a dispute resolution process alternative to the existing requirement to use FMCS services. Authorizes the FAA Administrator and the exclusive bargaining representative of FAA employees, by mutual agreement, to adopt alternative procedures for the resolution of disputes or impasses arising in the negotiation of a collective-bargaining agreement.