[Federal Register Volume 62, Number 29 (Wednesday, February 12, 1997)]
[Proposed Rules]
[Pages 6690-6695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3475]
[[Page 6689]]
_______________________________________________________________________
Part VI
Department of Labor
_______________________________________________________________________
Office of the Secretary
Wage and Hour Division
Occupational Safety and Health Administration
Office of Federal Contract Compliance Programs
_______________________________________________________________________
29 CFR Parts 24, et al.
Expanded Use of Alternative Dispute Resolution in Programs Administered
by the Department of Labor; Proposed Rule
Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 /
Proposed Rules
[[Page 6690]]
DEPARTMENT OF LABOR
Office of the Secretary
Wage and Hour Division
Occupational Safety and Health Administration
Office of Federal Contract Compliance Programs
29 CFR Parts 24, 825, and 1977
29 CFR Chapter V
41 CFR Chapter 60
Expanded Use of Alternative Dispute Resolution in Programs
Administered by the Department of Labor
AGENCY: Office of the Secretary, Wage and Hour Division, Occupational
Safety and Health Administration, Office of Federal Contract Compliance
Programs, Labor.
ACTION: Notice; request for comments.
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SUMMARY: This notice amends the Department of Labor's interim policy on
the use of alternative dispute resolution (ADR), originally published
on February 28, 1992 (57 FR 7292), and revised on June 26, 1992 (57 FR
28701). The Department of Labor (DOL) is interested in expanding the
voluntary use of ADR in programs administered by the Department.
Accordingly, the Department seeks public comment on a proposed pilot
test of voluntary mediation and/or arbitration in six categories of
cases: Discrimination cases arising under Section 11(c) of the
Occupational Safety and Health Act; environmental ``whistleblower''
cases arising under the employee-protection provisions of the Clean Air
Act, the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), the Energy Reorganization Act, the Federal
Water Pollution Control Act, the Safe Drinking Water Act, the Resource
Conservation and Recovery Act, and the Toxic Substances Control Act;
cases arising under the Family and Medical Leave Act; cases arising
under the Fair Labor Standards Act; compliance review cases arising
under Executive Order 11246; and complaint investigation cases under
the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (38
U.S.C. 4212).
DATES: Comments are due by April 14, 1997.
ADDRESSES: Submit written comments to Roland G. Droitsch, Deputy
Assistant Secretary for Policy, U.S. Department of Labor, Room S-2312,
200 Constitution Avenue, N.W., Washington, DC 20210.
The Department is using this notice to experiment with the
electronic filing of comments. Submit comments in electronic format
through the World Wide Web of the Internet at the following Website:
http://www.dol.gov/dol/public/regs/comments/main.htm.
Commenters who file electronically do not need to confirm their
comments by submitting written confirmation copies. Interested parties
will also be able to review comments filed (whether submitted in
written or electronic format) at the same Website.
Questions about or problems with filing electronically should be
submitted to: [email protected].
All of the comments received can be viewed at the Office of the
Assistant Secretary for Policy, U.S. Department of Labor, Room S-2312,
200 Constitution Avenue, N.W., Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Jim Jones, Office of the Assistant
Secretary for Policy, U.S. Department of Labor, Room S-2312, 200
Constitution Avenue, N.W., Washington, DC 20210. Telephone (202) 219-
6026. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: After discussing the legal authority for the
Department's use of ADR, this Notice describes: a prior pilot test of
ADR (the Philadelphia ADR Pilot), the use of ADR by public agencies,
the DOL programs involved in the current pilot test, and the details of
the test. The Department is interested in receiving comments on ADR and
the pilot test generally, as well as on a number of specific issues
identified in the Notice. For example, the Department invites comments
on the use of mediation and arbitration in the pilot test, as well as
on the relationship between these two ADR techniques, including the
issue of whether arbitration (in addition to mediation) should be
offered as an option in all categories of cases included in the pilot
test.
Legal Authority
On February 28, 1992, under the original Administrative Dispute
Resolution Act, Public Law 101-552, which expired on September 30,
1995, the Department published in the Federal Register (57 FR 7292) an
interim policy on the use of ADR in the programs administered by DOL.
On October 19, 1996, President Clinton signed the Administrative
Dispute Resolution Act of 1996 (ADR Act), Public Law 104-320, which
reauthorized alternative means of dispute resolution in the Federal
administrative process.
As did its predecessor statute (codified at 5 USC 575-580), the ADR
Act of 1996 authorizes and encourages federal agencies to use
arbitration, mediation, negotiated rulemaking, and other consensual
methods of dispute resolution. With respect to arbitration, the ADR
Act, in conjunction with the Federal Arbitration Act (9 USC 1-16):
Provides for federal judicial enforcement of arbitration agreements;
provides for judicial review and enforcement of arbitration awards;
specifies the authority of the arbitrator; and establishes rules for
arbitration proceedings, as well as rules governing the effect of
arbitration awards.
The pilot test includes, among other methods of ADR, voluntary
arbitration to which the Department would be a party. The Department
believes that the arbitration procedure described in this Notice would
be consistent with the Constitution, as currently interpreted by the
Department of Justice.1 In compliance with Section 8 of the ADR
Act of 1996, before participating in binding arbitration, the
Department will consult with the Attorney General and will issue
guidance on the appropriate use of arbitration and when Department
staff are authorized to use arbitration.
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\1\ The most recent views of the Department of Justice are
reflected in a September 7, 1995 memorandum from Walter Dellinger,
Assistant Attorney General, Office of Legal Counsel, to John
Schmidt, Associate Attorney General (``Constitutional Limitations on
Federal Government Participation in Binding Arbitration'').
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The Department also believes that the pilot test would advance the
goals of Executive Order 12988 on Civil Justice Reform, issued by the
President on February 5, 1996 (61 FR 4729). Section 1(c) of the
Executive Order encourages the use of ADR techniques and processes by
litigation counsel for federal agencies, if the ``use of a particular
technique is warranted in the context of a particular claim or claims,
and * * * such use will materially contribute to the prompt, fair,
and efficient resolution of the claims.''
The Philadelphia ADR Pilot
The Department issued its 1992 interim ADR policy in conjunction
with the start of a pilot test in the Philadelphia Region in which DOL
managers served as mediators for enforcement cases that were awaiting
litigation. The results of the Philadelphia ADR Pilot were encouraging.
Of the 27 cases mediated in the pilot, 22 (81 per cent) were settled,
and most were resolved in a single mediation session. The DOL
participants independently concluded that the settlements were at least
comparable to the likely outcome of litigation. Some of the cases were
[[Page 6691]]
complex and would have cost the Department and the outside parties
substantial time and resources to litigate.
Public Agency Use of ADR
In 1993, a National Performance Review report strongly endorsed ADR
as a means of reducing governments costs and improving efficiency.
Today, the use of ADR by public agencies is growing.
In the federal government, for example, the Equal Employment
Opportunity Commission (with the assistance of the Federal Mediation
and Conciliation Service) and the National Labor Relations Board are
exploring various ADR techniques for employment-related disputes
brought before those agencies. The Department of Justice (DOJ), in
turn, has begun a program to facilitate mediation in civil litigation
handled by DOJ. A pilot test of mediation to resolve complaints under
the Americans with Disabilities Act is also underway at DOJ.
The States have begun to expand their use of alternative dispute
resolution as well. On February 16, 1996, for example, the
Massachusetts Commission against Discrimination (MCAD) launched an ADR
program that will offer voluntary arbitration of employment
discrimination disputes. The MCAD program will operate under a new due-
process protocol to assure that the arbitration process is fair.
The December 1994 Report and Recommendations of the Commission on
the Future of Worker-Management Relations (the Dunlop Commission) urged
the Department to expand the Philadelphia ADR Pilot to the remaining
DOL regions and to enlarge the mix of cases submitted to mediation. The
Dunlop Commission also advised DOL to ``explore the use of different
forms of ADR, including mini trials, early neutral evaluation, and
arbitration to determine which processes are most effective for
different kinds of cases.''
Proposed Pilot Test
In light of the enactment of the ADR Act of 1996, the
recommendations of the National Performance Review and the Dunlop
Commission, as well as the ADR initiatives of federal and state
agencies, the Department is interested in building on its past use of
mediation and in exploring the possible benefits of arbitration, under
appropriate circumstances. After inviting and considering public
comments, the Department therefore plans to proceed with a pilot test
to help determine whether private, voluntary mediation and/or
arbitration can achieve the goals of (1) resolving disputes faster and
more cheaply than conventional litigation; (2) producing resolutions
that satisfy the parties and DOL; and (3) using the enforcement and
litigation resources of DOL more effectively. (The Department will
continue to consider, on a case-by-case basis, other opportunities to
participate in ADR, either when DOL is asked to do so by an outside
party or by a court or other adjudicative authority, or when a DOL
agency otherwise believes that ADR would be effective in resolving a
particular dispute.)
Under the proposed pilot test, the Department will continue to
fully investigate employees' complaints of violations of the laws
covered by this pilot test, as warranted. In selected cases, as
described below, employees and employers will be offered the option to
mediate and/or arbitrate disputes under the Department's auspices. In
these cases, the Solicitor's Office may provide legal representation to
employees. In other types of cases, as indicated, the Department would
offer an employer/contractor the option of mediation or arbitration,
and the Department itself would be a party to the proceeding. The pilot
test will not include disputes in which private parties entered into an
arbitration or mediation agreement prior to the dispute.
The Department recognizes that Federal agencies acquired little if
any experience with arbitration during the five-year life of the
original ADR Act (1990-1995) and thus intends to proceed carefully in
this area. For example, the Department is committed to following proper
due process safeguards in any use of ADR techniques. In proposing the
pilot test described in this Notice, the Department reviewed the ``Due
Process Protocol for Mediation and Arbitration of Statutory Disputes
Arising out of the Employment Relationship'' issued by the Task Force
on Alternative Dispute Resolution in Employment. (The Task Force, an
outgrowth of the Dunlop Commission, included representatives of diverse
organizations involved in labor and employment law.) In addition to
developing fair ADR procedures, the Department would also make
arbitrators' decisions available to the public.
The Department's proposed pilot test will be limited to six types
of cases, described below. These programs were selected because they
seem to present promising opportunities for effective use of voluntary
ADR. The results of the proposed pilot test will guide DOL in future
ADR initiatives, including the possible expansion of voluntary
mediation and/or arbitration to other types of cases. The Department
invites comment on its selection of programs for the proposed pilot
test and on possible alternatives or additions to the programs
selected.
The six types of cases that would be included in the Department's
pilot test are: (1) Discrimination cases under Section 11(c) of the
Occupational Safety and Health Act (OSH Act), 29 U.S.C. 660(c); (2)
environmental whistleblower cases under the employee-protection
provisions of seven separate environmental safety and health statutes;
2 (3) cases under the Family and Medical Leave Act of 1993 (FMLA),
29 U.S.C. 2601 et seq.; (4) cases under the Fair Labor Standards Act of
1938 (FLSA), 29 U.S.C. 201 et seq.; (5) compliance review cases under
Executive Order 11246; and (6) complaint investigation cases under the
Vietnam Era Veterans' Readjustment Assistance Act, 38 U.S.C. 4212.
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\2\ The statutes are: the Clean Air Act, 42 U.S.C. 7622; the
Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA), 42 U.S.C. 9610; the Energy Reorganization Act, 42
U.S.C. 5821; the Federal Water Pollution Control Act, 33 U.S.C.
1367; the Safe Drinking Water Act, 42 U.S.C. 300j-9(I); the Resource
Conservation and Recovery Act, 42 USC 6971; and the Toxic Substances
Control Act, 15 U.S.C. 2622.
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OSH Act Discrimination Cases: Section 11(c) of the OSH Act
prohibits employers from discharging or discriminating against
employees for engaging in protected, safety-related activity under the
Act. Discrimination cases under Section 11(c) are initiated by an
employee filing a complaint with the Occupational Safety and Health
Administration (OSHA). OSHA investigates such complaints. Meritorious
complaints which OSHA cannot settle administratively are referred to
the Solicitor's Office for legal action. The OSH Act authorizes the
Secretary of Labor to file suit in federal district court to enforce
Section 11(c). The statute does not create a private right of action
for employees. (The Department's regulations interpreting OSH Act
Section 11(c) appear at 29 CFR Part 1977.)
In recent years, OSHA has been receiving approximately 3,200-3,300
complaints under Section 11(c) annually. The great majority of these
complaints are either determined to be meritless or are settled
administratively. On average, about 120 cases per year are referred to
the Solicitor's Office, which in turn files about 20 cases per year in
federal district court. Because of heavy caseloads in the courts, these
cases can be subject to significant delays.
[[Page 6692]]
Environmental Whistleblower Cases: The Secretary of Labor is
responsible for administering the employee-protection provisions of
several environmental safety and health statutes (identified above).
(The Environmental Protection Agency, the Nuclear Regulatory
Commission, or the Department of Energy otherwise administer and
enforce these laws.) These laws protect employees against discharge or
discrimination for certain conduct, such as testifying in a statutory
enforcement proceeding.
Environmental whistleblower cases are handled in an administrative
process which results in a determination by the Department's
Administrative Review Board (ARB). Employees who believe that they have
been discriminated against may file complaints with the Occupational
Safety and Health Administration. (Under Secretary's Order 6-96, issued
on December 27, 1996, responsibility for handling these cases was
transferred to OSHA, from the Wage and Hour Division of the Employment
Standards Division.)
Under DOL regulations (29 CFR Part 24), within 30 days, the
Department must complete an investigation, determine whether the
alleged violation occurred, and notify the parties. That determination
becomes final unless the employee or the employer seeks a hearing
before the Department's Office of Administrative Law Judges. After the
hearing, the administrative law judge (ALJ) will issue a recommended
decision, which is forwarded to the ARB for a final order. Final orders
may be appealed to the federal courts of appeals. The DOL Solicitor's
Office does not represent employees in the administrative hearing
process, nor does DOL typically participate in the administrative
adjudication. Employees must secure their own legal representation.
In recent years, the Department has received about 90 environmental
whistleblower complaints every year. The Department's Office of
Administrative Law Judges (OALJ) conducts about 80 hearings each year
in this type of case, resulting in 30 to 40 final decisions of the ARB.
In the past, there have been significant delays in the administrative
adjudication process. Most recently, cases have been adjudicated or
resolved more promptly. The OALJ has instituted a ``settlement judge''
procedure, in which cases may be temporarily transferred from the
presiding judge to another judge, whose role is to explore the
possibility of settling the case.
Family and Medical Leave Act Cases: Under the recently-enacted
FMLA, the Department's Wage and Hour Division is authorized to receive,
investigate, and attempt to resolve complaints of statutory violations.
The Wage and Hour Division first seeks to resolve complaints by
conciliation. If that effort is unsuccessful, the Division may choose
to conduct a complete investigation. Meritorious complaints that cannot
be settled administratively are referred to the Solicitor's Office,
which may bring suit in federal district court. The FMLA also creates a
private right of action for employees, who may bring suit themselves in
either state or federal court.
Since the FMLA was enacted in 1993, the Department has received
more than 6,300 employee complaints, through September 30, 1996. The
great majority of these complaints were resolved through conciliation,
many without the need for a full investigation by the Wage and Hour
Division. The Solicitor's Office has filed fifteen lawsuits to enforce
the FMLA. Federal courts have issued preliminary or final rulings in
more than twenty FMLA cases brought directly by individual employees
against their employers.
Fair Labor Standards Act Cases: Under the Fair Labor Standards Act,
which establishes minimum-wage and overtime compensation standards (as
well as other employee protections), the Wage and Hour Division is
authorized to receive, investigate, and attempt to resolve complaints
of statutory violations. Meritorious complaints that cannot be settled
in conciliation are referred to the Solicitor's Office, which may bring
suit in federal court. The FLSA also creates a private right of action
for employees, who may file suit in either state or federal court. The
vast majority of cases under the FLSA are brought by private employees
directly against their employers.
Compliance Review Cases under Executive Order 11246 and Complaint
Investigation Cases under the Vietnam Era Veterans'' Readjustment
Assistance Act: The Department's Office of Federal Contract Compliance
Programs (OFCCP) administers three equal employment opportunity
programs applicable to Federal contractors and subcontractors:
Executive Order 11246, Section 503 of the Rehabilitation Act, and the
affirmative action provisions of the Vietnam Era Veterans''
Readjustment Assistance Act (VEVRAA). Taken together, these laws
require covered contractors and subcontractors to refrain from
discrimination and to take affirmative action to ensure equal
employment opportunity without regard to race, color, sex, national
origin, religion, or status as an individual with disabilities, a
Vietnam era veteran, or a special disabled veteran.
OFCCP conducts compliance reviews of covered contractors and
subcontractors, and investigates and attempts to resolve complaints
received from employees and job applicants who allege that there have
been violations of these laws. OFCCP first seeks to resolve complaints
and issues revealed during a compliance review by conciliation. If that
effort is unsuccessful, OFCCP refers the matter to the Solicitor's
Office, which is authorized to institute administrative enforcement
proceedings.
After a full evidentiary hearing, a Department of Labor
Administrative Law Judge issues a recommended decision. On the basis of
the entire record, the Department's Administrative Review Board issues
a final administrative order. Contractors may appeal final adverse
orders to the Federal district courts. The laws administered by OFCCP
do not create a private right of action for contractors'' employees or
job applicants. (OFCCP regulations implementing contract compliance
laws are published at 41 CFR Chapter 60.)
About 4,000 compliance reviews are closed by OFCCP annually. About
3,000 reviews result in findings of violations. About 200 complaints
per year alleging violations of the affirmative action provisions of
VEVRAA are filed with OFCCP. On average, OFCCP refers 20 cases a year
to the Solicitor's Office, which in turn files about 10 administrative
complaints annually. Lengthy delays may occur in cases resolved through
the complete formal enforcement process.
Scope of Mediation or Arbitration Under the Proposed Pilot
The Department invites comment on the scope of mediation and
arbitration under the proposed pilot test. In DOL's experience,
employment disputes that involve laws enforced by the Department often
implicate other statutory, common-law, or other legal rights, outside
of DOL's jurisdiction. For example, an employee with a colorable claim
under the Family and Medical Leave Act or Section 503 of the
Rehabilitation Act may also have a claim under the Americans with
Disabilities Act. An employee with a colorable OSH Act discrimination
claim or environmental whistleblower claim may also have claims under
the National Labor Relations Act, a private collective bargaining
agreement, or state common law.
[[Page 6693]]
An ADR proceeding that addresses only claims under DOL-administered
laws may not resolve the entire dispute between an employee and an
employer. Employers may be reluctant to participate in a process that
leaves some employee claims outstanding. The Department's authority,
however, is limited to the laws it administers and enforces. DOL
invites comments on how best to ensure that the pilot test
appropriately addresses the full range of employees' legal rights and
remedies.
Case Selection Process
Cases for the proposed pilot test will be selected from the six
categories described. After a complaint has been investigated and found
to have merit (or violations have been identified during a compliance
review), and after efforts to settle the case administratively have
failed, cases will be screened for ADR suitability by the local office
of the program agency (e.g., OSHA), in consultation with the regional
office of the Solicitor. (The criteria for case selection are described
below.) Employers who agreed to mediate or arbitrate a dispute would be
expected to waive any applicable statute of limitations.
OSH Act Discrimination Cases: As explained, Section 11(c) of the
OSH Act creates no private right of action for employees. The
Department thus anticipates that in OSHA discrimination cases, the
Department would decide whether to seek mediation or arbitration.
This decision would be made after an employee's complaint was
investigated, but before suit was filed in federal district court. In
selecting cases for mediation or arbitration, the Department would be
governed by the case selection criteria set forth in this Notice. The
Department would consult the complaining employee, as well as the
National Labor Relations Board (NLRB) if the employee has filed a
related complaint with the NLRB. The Department invites comment on
whether it should ever pursue mediation or arbitration without the
agreement of the complaining employee.
DOL would be a party to the subsequent mediation or arbitration
proceeding, and the Solicitor's Office would represent the public
interest and the interests of the employee. The Department would be
bound by the results of the ADR proceedings, except as otherwise
provided by law. The Department invites comment on whether employees'
own attorneys or other representatives should ordinarily be permitted
to participate in a mediation or arbitration proceeding.
Alternatively, if the Department determined that a case is suitable
for ADR under the criteria described below, DOL could invite the
employee and the employer to participate in a mediation or arbitration
proceeding. DOL would not be a party or a participant, nor would it
necessarily be bound by a settlement or an arbitrator's decision.
Rather, the Department would determine whether to defer to the parties'
resolution by foregoing its exclusive right to bring suit under Section
11(c) of the OSHA Act. (The Department's current policy on deferral to
the outcome of other proceedings initiated by a complainant appears at
29 CFR 1977.18(c).) The Department invites comment on this alternative
approach.
Only the OSH Act discrimination complaint would be subject to
mediation or arbitration. Consistent with longstanding OSHA practice,
the underlying allegation of a safety or health standard violation
would be handled separately in administrative proceedings prescribed by
the OSH Act.
The Department would revise or supplement its existing regulations
for OSHA discrimination cases (29 CFR Part 1977), as necessary, to
incorporate the procedures described here.
Environmental Whistleblower Cases: Environmental whistleblower
cases are handled through an administrative process (described above)
in which employees are responsible for securing their own
representation or proceeding pro se. Under the proposed pilot test,
after an employee's complaint had been investigated by the Department,
DOL would determine whether the case was suitable for ADR under the
criteria described in this Notice. If ADR was appropriate, the
Department would offer the employer and the employee the option of
mediation and/or arbitration, conducted either by a Settlement Judge in
DOL's Office of Administrative Law Judges or by a private mediator or
arbitrator. The Department would not be a party to, or participant in,
this mediation or arbitration. The Department invites comment on how
best to coordinate the pilot test with OALJ's existing settlement judge
process.
The Administrative Review Board would not be bound by any
resolution reached by the parties, but instead would review the results
of mediation or arbitration. If appropriate (using the same standard
now applied in ARB review of certain environmental-whistleblower
settlements between employees and employers), the parties' mediated
settlement or the arbitrator's decision would be embodied in a final
order of the Administrative Review Board. The Department would revise
or supplement its existing regulations for environmental whistleblower
cases (29 CFR Part 24), as necessary, to incorporate these procedures.
Family and Medical Leave Act Cases: Under the pilot test, after an
employee's FMLA complaint was investigated and found to be meritorious,
and after administrative efforts to settle the case had failed, the
Department would determine whether the case was suitable for ADR under
the criteria described in this Notice. (The Department would consult
the complaining employee in making this determination.) If ADR was
appropriate, the Department would offer the employer and the employee
the option of mediation.
If requested by the employee, the DOL Solicitor's Office would
represent the employee in mediation. The employee would be free to
choose other representation (including representation by non-lawyers)
at the employee's expense, or to proceed individually. Whether or not
an employee was represented by the Solicitor's Office in mediation, the
employee would be free to resolve the dispute on terms acceptable to
the employee. If a mediated settlement were reached, the Department
ordinarily would close its file on the matter.
Because only a few judicial decisions have been issued under the
FMLA, the need to develop authoritative precedent on many issues
remains. This consideration will guide the Department's use of ADR.
Moreover, about ninety per cent of the FMLA complaints that the
Department finds to be meritorious are resolved in conciliation.
Therefore, the pool of cases that are appropriate for ADR may be quite
small. The Department invites comment on the types of FMLA cases that
are most likely to be appropriate for mediation.
Fair Labor Standards Act Cases: Under the pilot test, after an
employee's FLSA complaint was investigated and found to be meritorious,
and after administrative efforts to settle the case had failed, the
Department would determine whether the case was suitable for ADR under
the criteria described in this Notice. (The Department would consult
the complaining employees in making this determination.) If ADR was
appropriate, the Department would offer the employer and the employee
the option of mediation.
If requested by the employee, the DOL Solicitor's Office would
represent the employee in mediation. The employee would be free to
choose other representation (including representation
[[Page 6694]]
by non-lawyers) at the employee's expense, or to proceed individually.
Whether or not an employee was represented by the Solicitor's Office in
mediation, the employee would be free to resolve the dispute on terms
acceptable to the employee. If a mediated settlement were reached, the
Department ordinarily would close its file on the matter.
Executive Order 11246 Compliance Review Cases and Complaint
Investigation Cases under the Vietnam Era Veterans' Readjustment
Assistance Act (38 U.S.C. 4212): As explained, there is no private
right of action under the laws administered by OFCCP. Under the pilot
test, after an Executive Order 11246 compliance review or a Vietnam Era
Veterans' Readjustment Assistance Act discrimination complaint
investigation are completed, violations have been identified, and
administrative efforts to resolve the case have failed, the Department
would determine whether the case was suitable for ADR under the
criteria described in this Notice. If ADR was appropriate, the
Department would offer the contractor the option of mediation. If the
contractor agreed to mediation, the Department's OFCCP staff would
represent the interests of the Department in the mediation process. The
Department would revise or supplement its existing regulations (41
C.F.R. Chapter 60), as necessary, to incorporate these procedures.
Case Selection Criteria
Whether or not DOL is a party to an arbitration or mediation
proceeding, the Department will use, encourage, or defer to ADR only
when it is consistent with existing law. The Department will not use,
encourage, or defer to ADR when it believes (1) That the need for
injunctive relief makes ADR inappropriate; or (2) based on consultation
with the Department of Justice or other concerned government agencies,
that the dispute involves a criminal violation; or (3) that the dispute
implicates the authority of the DOL Inspector General. Nor will the
Department recognize any prior agreement that makes the use of
mediation or arbitration a condition of employment or otherwise
prospectively requires the use of ADR in an employment dispute.
In selecting cases for possible voluntary mediation or arbitration,
the Department will follow the ADR Act, which provides that:
An agency shall consider not using a dispute resolution proceeding
if--
(1) a definitive or authoritative resolution of the matter is
required for precedential value, and such a proceeding is not likely
to be accepted generally as an authoritative precedent;
(2) the matter involves or may bear upon significant questions
of Government policy that require additional procedures before a
final resolution may be made, and such a proceeding would not likely
serve to develop a recommended policy for the agency;
(3) maintaining established policies is of special importance,
so that variations among individual decisions are not increased and
such a proceeding would not likely reach consistent results among
individual decisions;
(4) the matter significantly affects persons or organizations
who are not parties to the proceeding;
(5) a full public record of the proceeding is important, and a
dispute resolution proceeding cannot provide such a record; and
(6) the agency must maintain continuing jurisdiction over the
matter with authority to alter the disposition of the matter in
light of changed circumstances, and a dispute resolution proceeding
would interfere with the agency's fulfilling that requirement.
5 U.S.C. 572.
The Department invites comment on appropriate case-selection
criteria. In particular, the Department invites comment on the
suitability of ADR proceedings, especially arbitration, in cases in
which an employee-complainant lacks legal or other representation. The
Department is advised that some court-sponsored ADR programs exclude
unrepresented persons.
Selection of Mediators and Arbitrators
Mediators and arbitrators under the proposed pilot test will be
selected consistent with all applicable legal requirements.
The Department intends for mediation and arbitration to be
conducted only by impartial, experienced, and qualified persons.
Mediators and arbitrators who participate in the pilot test would be
required to disclose to the parties and to the Department any
relationship that might reasonably constitute or be perceived as a
conflict of interest. The Department invites comment on appropriate
conflict-of-interest standards.
The Department also invites comment on the best means of selecting
suitable mediators and arbitrators. DOL anticipates that it will
maintain a roster of qualified persons. Parties to a mediation or
arbitration proceeding would be provided with a panel of mediators and
arbitrators from which they could make a selection.
The Department is considering entering into an agreement with a
qualified nation-wide contractor who would serve as a sponsor of
mediators and arbitrators and who would handle the administration of
the roster. The Department would reserve the right to set standards for
inclusion on the roster and to oversee its final composition. DOL
invites comment on this approach.
The Department also invites comment on the specific qualifications
that should be required for mediators and arbitrators. DOL believes
that only mediators and arbitrators who are able to provide evidence of
an established part-time or full-time practice in mediation or
arbitration, and to complete a DOL classroom training course in the
relevant statutes and ADR procedures, should be eligible for the pilot-
test roster. In addition, DOL believes that the following factors,
among others, should be considered: (1) Professional standing and good
character; (2) experience as an arbitrator, mediator, adjudicator, or
litigator of employment-related disputes, particularly in the areas
covered by the pilot test; and (3) other experience in the fields of
labor and employment law, industrial relations, or dispute resolution.
Compensation of Mediators and Arbitrators
Mediators and arbitrators who participate in the proposed pilot
test would be compensated by the parties to the proceeding (including
the Department), according to their agreement. The parties themselves
would determine how to fairly allocate the fees and expenses of a
mediator or arbitrator.
The Department believes that requiring the parties to share the
fees and expenses of the mediator or arbitrator helps ensure
impartiality. In cases in which the Department is a party or a
participant, DOL generally expects that it would pay one-half of the
mediator or arbitrator's fees and expenses. The Department invites
comment on whether permitting the negotiation of a different
arrangement is advisable. To reduce the possibility of bias based on
disparate contributions, payment would be forwarded to the mediator or
arbitrator by the sponsor of the roster (or by the Department, when it
is not a party or participant), without disclosing the parties'
respective shares.
One of the potential benefits of using ADR is lower litigation
costs to the parties and, in the case of government agencies, the
ability to resolve more cases with the same resources. Based on its
experience with the Philadelphia ADR pilot test, the Department
believes that ADR can reduce enforcement and litigation costs per case.
In this pilot test, the threshold questions of who
[[Page 6695]]
pays the private mediator or arbitrator (the neutral) and how much the
neutral is paid are central to the evaluation of the program's costs
and benefits.
DOL tentatively estimates that the typical neutral's fees in cases
under the proposed pilot test will be in the range of $1,000 to $1,500
per case. (The Department invites comment on this estimate.) If the
Department pays these fees, the opportunity to reduce agency costs per
case (and to increase DOL's ability to process more cases with the same
resources) will be greatly diminished. At the same time, the Department
recognizes both that employer payment of the arbitrator or mediator
raises conflict-of-interest concerns, and that in many cases employees
will be unable or unwilling to pay half of the neutral's fee.
Accordingly, the Department invites comment on the best mechanism
for compensating mediators and arbitrators, as well as on the following
specific issues: (1) Whether the Department should consider making a
contribution toward the fees of a mediator or arbitrator in cases
involving a low-income complainant; and (2) whether to authorize
arbitrators to tax attorney's fees and costs to the losing party (if
lawful) and/or to apportion the arbitrator's fees and costs equitably.
Authority of the Mediator or Arbitrator; Arbitration Proceedings
The authority of mediators and arbitrators under the proposed pilot
test, as well as the rules for arbitration proceedings, would be
determined largely by the ADR Act.
The Department anticipates that consistent with the ADR Act, DOL
would draft standard mediation and/or arbitration agreements
recognizing the authority of mediators and arbitrators under the pilot
test. Parties who agreed to mediation or arbitration would be expected
to sign such a standard agreement.
Under Section 8 of the ADR Act of 1996, arbitration agreements
``shall specify a maximum award that may be issued by the arbitrator
and may specify other conditions limiting the range of possible
outcomes.'' DOL anticipates that arbitrators would be authorized to
make awards imposing the full range of remedies provided by the
statutes involved in the pilot test.
Consistent with the ADR Act, arbitrators would have the authority
to regulate the course of and conduct hearings, to administer oaths and
affirmations, and to compel the attendance of witnesses and the
production of evidence to the extent permitted by law. The Department
also expects to authorize pre-hearing discovery by the parties, such as
the production of documents.
With the consent of the parties, arbitrators would be responsible
for ensuring that a record (stenographic or tape recording) of the
proceeding was made. Arbitrators would also be required to issue a
written opinion and award within 30 days of the close of the
proceeding. Copies of the opinion and award would be provided to the
parties and to the Department and would be made available to the
public.
The Department invites comment on the relationship between
mediation and arbitration proceedings. In some instances, the parties
may wish to attempt mediation and proceed to arbitration only if
mediation fails. In those cases, it may be inappropriate for the
mediator to serve as an arbitrator of the dispute.
Effect of an Arbitrator's Award
If a case were mediated to a successful conclusion or arbitrated
under the proposed pilot test, the Department would ordinarily close
its file on the matter at the conclusion of the proceeding. In
environmental whistleblower cases (as described above), an arbitrator's
award would, if appropriate, be incorporated in a final order of the
Administrative Review Board.
The binding effect of an arbitrator's award under the pilot test
will be determined by the ADR Act, which provides that an award becomes
final 30 days after service on all parties, that a final award is
binding on the parties, and that a final award may be enforced pursuant
to the provisions of the Federal Arbitration Act (9 USC 9-13).
The Federal Arbitration Act (9 USC 10) specifies the circumstances
under which a federal court may vacate an arbitration award. They
include cases: where there has been dishonesty by a party or an
arbitrator, where there has been prejudicial misconduct by the
arbitrator, or where the arbitrator has exceeded his authority or
failed to make a definite award. Only in such cases would the
Department choose not to recognize an arbitration award issued under
the pilot test.
The Department invites comment on its appropriate role in reviewing
the results of ADR proceedings to ensure fairness to the parties and
conformity with the law.
Evaluation
The Department has not yet established a time-table for the
proposed pilot and invites comment on this issue. DOL does intend to
carefully evaluate the results of the pilot test described in this
Notice. This evaluation would be conducted by a working group drawn
from participating DOL agencies and from the Solicitor's Office,
comprised of both field and national office staff members. The
Department also contemplates a review of the pilot test by
representatives of employees, employers, and the public. Comments and
suggestions on the implementation of the Department's ADR policy are
welcome.
Signed at Washington, DC this 6th day of February, 1997.
Cynthia A. Metzler,
Acting Secretary of Labor.
[FR Doc. 97-3475 Filed 2-11-97; 8:45 am]
BILLING CODE 4510-23-P