Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
16988071
label
Mass Transit - Labor Protective Agreements (2)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
16988071
sourceUrl
contentType
document
title
Mass Transit - Labor Protective Agreements (2)
citationUrl
collections
James M. Cannon Files (Ford Administration)
James Cannon's Issues Files
subjects
Industrial relations
Local transit
iiifBase
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
16988071
coverageEndDate
logicalDate
1976-05-31
month
5
year
1976
coverageStartDate
logicalDate
1976-03-01
month
3
year
1976
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
url
mediaId
70d1d75864436044
ocrText
The original documents are located in Box 21, folder "Mass Transit - Labor Protective
Agreements (2)" of the James M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 21 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
DECISION
WASHINGTON
May 28, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
JAMES CANNON
SUBJECT:
POLICY OPTIONS FOR IMPROVING PROCEDURES UNDER
SECTION 13 (c) OF THE URBAN MASS TRANSPORTATION
ACT OF 1964, AS AMENDED
BACKGROUND:
Section 13 (c) of the 1964 UMTA Act (Amended) requires that
before any Federal assistance is granted, The Secretary of
Labor must certify that "fair and equitable" arrangements
have been made for transit employees "affected" by the grant.
There are no published regulations governing 13 (c). The
presumption has developed that each and every grant of Federal
dollars "affects" transit employees, and DOL has adopted a
procedure whereby localities' applications for UMTA funds are
forwarded directly to transit union representatives in the
geographical area requesting funds. The unions and the transit
operators then engage in collective bargaining to arrive at
protective arrangements which the Secretary of Labor can certify
as "fair and equitable." Union rules generally then require that
the agreement be subject to the approval of the International
Union. For this reason, DOL almost never certifies an agreement
unless the International has approved it - but it can do so..
UMTA may not make a grant until the DOL certification is obtained.
Transit operators, city and county officials, and UMTA heads
have consistently expressed dissatisfaction with Section 13 (c),
and complaints from localities, documented as far back as
1967, have become more vehement in recent months. The principal
complaint is that unions use the 13 (c) requirement and management's
need for the UMTA funds to indirectly raise bargaining issues
unrelated to the UMTA grant. This feeling is not well documented,
but then it is not the kind of matter which lends itself to
documentation.
In 1974, an informal DOL-DOT task force was established to
examine 13 (c) procedures and make recommendations. At the staff
level an impasse soon occurred and there was little result
except for an increased tendency on the part of each Department
to blame the other for any problems in the 13 (c) process.
FORD is LIBRARY GERALD
2
Within recent weeks we have heard of Section 13 (c) problems in
such diverse locations as Omaha and Lincoln, Nebraska; Los Angeles,
California; Albuquerque, New Mexico; Nassau County, New York; and
Ocean County, New Jersey. In some instances we have been able
to help expedite the process through Domestic Council inquiries.
On March 9, 1976, the Board of the Southern California Rapid
Transit District "reluctantly" approved a 13 (c) agreement citing
"economic duress. "
On March 30, 1976, the Board of the National Association of
Counties passed a resolution requesting a thorough Federal
review of 13 (c) procedures which were found to "allow labor
organizations to hold hostage needed UMTA grants;' and "make
management of transit operations in an orderly, efficient and
cost effective manner impossible."
A current draft GAO Report, being made at the request of Senator
John Tower, will include the following results of interviews with
12 local grantees on 13 (c) effects. Eight of the 12 feel DOL
procedures put them in an uneven bargaining position with the
unions; none of 26 unions contacted felt they were in an uneven
relationship.
CURRENT ADMINISTRATION ACTIONS:
On March 24, 1976, Jim Connor requested DOL and DOT to prepare a
joint memorandum outlining 13 (c) problems and possible Administration
solutions. The Departments, unable to agree, have submitted
separate papers. (At Tab A: DOT's submissions of April 8, 1976,
and May 28, 1976; at Tab B: DOL's submissions of April 7, 1976 and
April 21, 1976.)
In mid-April the Domestic Council convened a meeting of the
Administrator of UMTA and the Counselor to the Secretary of Labor
in an effort to achieve some agreement on steps which could be
taken. After an hour or more of discussion, it was apparent
that representatives of the two Departments could not even agree
on the issues to be discussed or the facts surrounding the
implementation of 13 (c). The meeting did lead to the second
series of memoranda from the two Secretaries and at least some
clarification of the issues.
Our discussions with all levels of the two Departments, including
the two Secretaries, have been frequent and extensive but I do
not believe Bill Coleman and Bill Usery have ever discussed the
matter with each other.
GERALD FORD LIBRARY
3
In early May the Domestic Council convened separate meetings
with leading transit management representatives and with the
local government groups (National Association of Counties, etc.)
to get first hand descriptions of their perception of the
problems with the implementation of 13 (c).
Since last fall there have also been numerous contacts with
interested local officals, such as Pete Schabarum who serves on
the Board of the Southern California Rapid Transit District.
Transit management and local government officials have expressed
considerable pleasure at our willingness to look into the 13 (c)
process but also some concern at the slow progress they perceive
us to be making.
DISCUSSION:
Although some critics of Section 13 (c) would like us to assault
its philosophic underpinnings, legislative change is clearly
unattainable and probably undesirable. The root of most of
the problem, in any event, is not Section 13 (c) but the way it
has been implemented.
There is little dispute that workers who are adversely affected
by the grant of Federal money should be recompensed. The grants
themselves, however, should not be the vehicles for escalation
of wages and benefits.
Because DOL and DOT have basically not worked together on this
issue, we have been unable to define specific proposed Administration
action. We have, however, identified several steps which we believe
can and should be taken.
RECOMMENDATIONS:
I recommend that you instruct Secretaries Usery and Coleman to
address the specific proposals which follow and, within one week,
to submit final, joint recommendations to you for decision.
AGREE
DISAGREE
GERATE FORD LIBRARY
4
I recommend that the specific proposals to be addressed in-
clude:
1.
Simplification of procedures under existing law. For
example:
-- SET TIME LIMITS
DOL could set time limits for the negotiation of
agreements, after which the Secretary of Labor
could make his own determination of what arrange-
ments constituted "fair and equitable" protection.
DOL could provide conditional certifications so
that UMTA funds could flow before critical deadlines
were reached (end of the fiscal year, or exhaustion
of local operating funds)
-- MULTI-YEAR CERTIFICATIONS
Instead of having each grant of Federal dollars
give rise to a new 13 (c) agreement (often more
than one per year per city) DOL could establish a
policy of granting multi-year certifications which
would be good for all grants made within a specific
period of time (three years) subject to review
based upon the union or an employee showing "adverse
impact.
"
-- SINGLE CERTIFICATION FOR SINGLE GRANT
Only a single certification should be required for
a given capital project, even if such a project is
funded through several successive grants or grant
amendments. (This would be the case for a new
rapid transit system, where UMTA makes a multi-
year commitment of funds and liquidates that
commitment over time with a series of annual
grants. Under present practice each such annual
grant requires a separate 13 (c) agreement, collectively
bargained and certified.)
FORD is LIBRARY GERALD
5
--
NEGATIVE DECLARATIONS WITH CHANGED BURDEN OF PROOF
DOT and DOL could establish categories of capital
grants that historically have had minimal, if any,
adverse impact on transit employees. Such cate-
govies would include bus and rail car purchases
which result in no reduction in fleet size. In
such cases, there could be a simple departmental
declaration that no adverse impact is likely to
occur, and that no specific 13 (c) arrangement need
be negotiated.
This would shift the present burden of proof from
local transit operators (to prove that the Federal
dollars will not harm employees) to the unions (to
prove that there is an adverse impact.)
A review procedure could be provided whereby an
employee or union could ask for special protective
arrangements in connection with any grant based
upon a showing of a substantial prospect of "adverse
impact.
"
AGREE
DISAGREE
2.
Promulgate and Publish Regulations
Regulations were drafted in 1974 and 1975 but never
finalized. Such guidelines would assist all parties in
participating in the 13 (c) process.
AGREE
DISAGREE
3.
I recommend that the Domestic Council be charged with
co-ordinating this effort.
AGREE
DISAGREE
FORD is LIBRARY
DIPARTMENT OF TRA
THE SECRETARY OF TRANSPORTATION
WASHINGTON, D.C. 20590
UNITED
STATES
Of
APR 8 1976
MEMORANDUM FOR: THE PRESIDENT
SUBJECT:
Labor Protective Arrangements Under Section 13(c)
of the Urban Mass Transportation Act
This memorandum is in response to your request for a report
addressing the major problems posed by the implementation of
Section 13 (c) of the Urban Mass Transportation Act. You have
asked that the Secretary of Labor and I jointly analyze the
problems, indicate what actions this Administration might take,
and propose a timetable for action.
I. Background
Section 13 (c) has been a provision of the Urban Mass Transportation
Act since 1964. That provision states:
"It shall be a condition of any assistance under section 3
of this Act that fair and equitable arrangements are made,
as determined by the Secretary of Labor, to protect the
interests of employees affected by such assistance. Such
protective arrangements shall include, without being limited
to, such provisions as may be necessary for (1) the preserva-
tion of rights, privileges, and benefits (including continuation
of pension rights and benefits) under existing collective
bargaining agreements or otherwise; (2) the continuation of
collective bargaining rights; (3) the protection of individual
employees against a worsening of their positions with respect
to their employment; (4) assurances of employment to employees
of acquired mass transportation systems and priority of re-
employment of employees terminated or laid off; and (5) paid
training or retraining programs. Such arrangements shall
include provisions protecting individual employees against
a worsening of their positions with respect to their employment
which shall in no event provide benefits less than those
established pursuant to section 5(2) (f) of the Act of
February 4, 1887 (24 Stat. 379), as amended. The contract
for the granting of any such assistance shall specify the
terms and conditions of the protective arrangements.
FORD
-2-
This language was inspired by a specific anti-labor action taken
in Dade County, Florida, in anticipation of an UMTA grant. The
provision was designed to protect employees of private transit
companies which in 1964 were just beginning to receive Federal
subsidies; at that time, the rush to conversion to public owner-
ship had not yet begun. The statutory reference to the 1887 Act
(as amended in 1940) incorporates the standards regarding worsening
of employees' positions developed by the Interstate Commerce
Commission in the context of mergers and/or consolidations of
rail companies.
The legislative history of Section 13(c) clearly indicates that
Congress contemplated collective bargaining as a method of arriving
at the labor protective arrangements to be followed in the transit
industry, although the statute calls for "arrangements" not
"agreements". The Secretary of Labor, in reliance on this legis-
lative history, has followed a procedure under which DOL staff
forwards applications for UMTA assistance to national transit
union representatives who then forward them to local unions. The
unions and transit operators then engage in collective bargaining
to arrive at the protective arrangements which the Secretary of
Labor certifies as fair and equitable within the meaning of the
law. The national union typically plays a more dominant role in
this bargaining than the local, such that local desires to settle
are sometimes subverted. UMTA does not make a grant until the
DOL certification is obtained.
While the 1964 Act covered principally capital grants under
Section 3, the 1974 Act extended Section 13(c) to capital and
operating assistance formula grants under Section 5. Having seen
13(c) operate from the local level, when I became Secretary of
Transportation in March of 1975, I raised the issue with Domestic
Council staff and with Secretary of Labor Dunlop. The Secretary
of Labor responded affirmatively and used his good offices in the
Spring of 1975 to develop a model agreement which could apply to
the formula grants, including those for operating assistance. This
National Agreement was negotiated by transit union representatives
and representatives of the American Public Transit Association,
and was signed in July of 1975. The National Agreement is a useful
step toward simplification of Section 13(c) administration, but its
provisions are now raising problems of their own.
II. Problems
The problems with the operation of Section 13(c) might be
categorized as follows:
FORD
-3-
1. Applicability. As a general matter, there is a substantial
question as to whether protective arrangements developed in the con-
text of public subsidies to privately owned transit companies and of
railroad mergers and consolidations are appropriately applied to
what is now a publicly owned transit industry. We now know, through
twelve years of experience with the UMTA program, that the charac-
teristic result of UMTA grants has been to expand, not contract, the
labor force involved in mass transportation. The potential for
employee displacement and disadvantage as a result of most UMTA
grants is slight, as demonstrated by the small number of claims for
benefits under the protective arrangements which have been negotiated.
Therefore, Section 13(c) is probably producing very little in terms of
necessary protection, while its operation is causing significant
frustration, red tape, and intrusion on labor-management relation-
ships as summarized below.
2. Labor union veto. A major problem with the operation of
13(c) has been the fact that it gives labor unions an effective veto
power over UMTA grants, and thereby upsets the balance of power
between labor and management.
This arises, in part, because Secretaries of Labor have been unwilling
to determine, on their own motion, what arrangements are "fair and
equitable" and have instead left the matter to collective bargaining
between the parties. However, DOL sets no time constraints on the
collective bargaining process and has issued no regulations to guide
the operation of the law. From the transit authorities' point of view,
collective bargaining under such conditions is unrealistic since,
while the unions can bargain indefinitely, management has to get the
UMTA capital grant before the end of the fiscal year (or UMTA will
reallocate the funds elsewhere to prevent their Tapse) or before
shut-downs of service occur in the case of operating assistance
grants. The problem is complicated by the fact that the bargaining
is really done by the national unions, which have no real stake in
the specific community's receipt of the UMTA funds.
Some transit operators have further alleged that labor's effective
veto over UMTA grants gives labor an important hostage in collective
bargaining on issues unrelated to labor protection--e.g. wages,
working conditions, etc. While such abuses have not been documented
by transit operators, such a prospect certainly exists.
3. Impression of clumsy management. The operation of Section
13(c) also creates a strong public impression of Federal intervention
in local affairs and of clumsily managed Federal programs. From the
point of view of good program management, UMTA cannot reliably plan
which capital projects will receive funding in any given year because
FORD
-4-
of the uncertainties of Section 13(c) negotiations, especially
toward the close of the fiscal year.
4. Burden of proof. Another problem arises out of the fact
that DOL has followed Interstate Commerce Commission practice in
requiring the transit authority to sustain the burden of proof that
an UMTA grant will not have an adverse effect on labor, rather than
placing that burden on labor to demonstrate some potential harm.
In the context of operating assistance funding, where the UMTA
subsidy funds have a pervasive effect in support of the entire
program of the transit authority, it is completely impossible to
disprove any relationship between a specific management action and
the general UMTA subsidy. Thus, practically any employee who
receives less pay for instance, due to an adjustment in service--
could make a claim for displacement benefits, and the operator
would have an extremely difficult burden of proof to carry in
rebuttal.
5. National Agreement. A number of specific problems are
cited by transit authorities as a. result of the operation of the
National Agreement associated with operating assistance grants.
They argue that, at the very most, it should only serve as a guide
and that no such agreement should be made rigidly applicable
nationwide; they allege that the Department of Labor has been
unwilling to accommodate specific geographic differences. They
further argue that the National Agreement contains a great number
of specific provisions that overly constrain management decisions--
for example, a requirement that a 60-day notice plus 80-day
appeals/arbitration period be given to local unions before any
schedule or route modification can be implemented.
6. Stifling innovation. A final problem has to do with the
impact of 13(c) in terms of limiting development of service
mechanisms in transit which do not involve the use of salaried union
drivers. For example, there is much interest in exploring the use
of "paratransit" shared ride taxis, vanpools, jitneys, subscription
buses, etc as an adjunct to normal transit service. But any use
of UMTA funds to support such services, even if the funds pass
through the transit operator by subcontract, can be vetoed by the
national and local unions which may view paratransit as a threat
to maintenance and expansion of the transit authority labor force.
Not only can this have a seriously inhibiting effect on innovation
in the transit industry, but it perils the continued survival of
the private taxi industry which would likely benefit from paratransit
development. Taxi operators see some of their business undercut by
-5-
government subsidized public and private non-profit organizations,
and yet cannot themselves gain access to the public funds in
appropriate cases.
III. Proposed Remedies
A number of options for administrative action are available which
might alleviate the problems cited.
As an initial matter, however, it is clear that Section 13(c) is
being misapplied in connection with Section 5 grants for operating
assistance, as opposed to capital grants under that Section. It
is self-evident that making Federal funds available for operating
subsidies to deficit-ridden public transit authorities can only
help, not hurt, the employment status of transit employees. In
fact, it is the availability of the Federal money which itself is
forestalling curtailments of service and job terminations in a
great many cases.
Therefore, I believe that the Secretary of Labor should provide an
immediate "negative declaration" to cover UMTA Section 5 operating
assistance grants. Under such a procedure, borrowing the practice
used in connection with environmental clearances, the Federal official
determines in advance that there is no significant likelihood of
adverse impact as a result of the Federal grant, and a lot of needless
red tape is by-passed.
This is wholly consistent with the statute, since Section 5 funds are
available at local option for either capital or operating assistance.
Congress had to apply 13(c) to Section 5 in order to cover the
capital grant aspect.
What follows, then, is a set of options in generally ascending
order of departure from current practice to rectify the problems
of 13 (c) as they apply to all categories of UMTA capital grants.
1. Multi-year certifications, with stronger DOL role. DOL
could provide that its certification would be good for all grants
made within a specific period of time, say, three years, subject to
review based upon an employee showing that a specific grant raised
a substantial prospect of adverse impact that could not reasonably
have been foreseen at the time the Section 13(c) agreement was
negotiated. In addition, DOL would set time limits for the
negotiation of agreements, after which the Secretary of Labor
would make his own determination of what arrangements constituted
FCAD
-6--
fair and equitable protection. Further, DOL would provide con-
ditional certifications, based perhaps upon an extension of the
existing (c) agreement then in force with that transit property,
SO that UMTA funds could flow before critical deadlines were reached
(end of the fiscal year, or exhaustion of local operating funds).
During the period of the conditional certification, collective
bargaining could continue or the Secretary of Labor could review
the facts and make his own determination.
Further, only a single certification should be required of a given
capital project, even if such a project is funded through several
successive grants or grant amendments. This would be the case for a
new rapid transit system, where UMTA makes a multi-year commitment
of funds and liquidates that commitment over time with a series of
annual grants.
2. Negative declarations with changed burden of proof.
Alternatively, DOT and DOL could establish categories of capital
grants that historically have had minimal, if any, adverse impact
on transit employees. Such categories would include bus and rail
car purchases which result in no reduction in fleet size. In
such cases, the Secretary of Labor would make a blanket negative
declaration--as suggested above for operating assistance grants--
that no adverse impact is likely to occur, and that no specific
13(c) arrangement need be negotiated. A review procedure would
be provided whereby an employee or union could ask for special
protective arrangements in connection with any grant based upon
a showing of a substantial prospect of adverse impact. As an
additional protection, the standard UMTA capital grant contract
could require a certification by the transit authority that no
adverse employee impact would result from the grant. This cer-
tification could be specific as to lack of adverse impact--i.e.,
no loss of pension rights, protection of collective bargaining
rights, etc.
For categories of capital grants for which such negative declarations
were not appropriate, the streamlined approach described under
option 1., above, would pertain--i.e., three-year certifications,
time limits on negotiations, and conditional certifications as
funding deadlines approach.
3. Federal definition of fair and reasonable arrangements.
As an alternative to the above options, DOL and DOT could collaborate
to identify labor protective arrangements for capital grants which
would be enforced through the UMTA grant contract. This would observe
-7-
the strict requirement of the law, which does not in fact speak
to "agreements" at the local level but only "arrangements" certified
by the Secretary of Labor. Previous collective bargaining experience
provides ample basis for identifying a set of reasonable protections;
a limited appeal procedure might be made available to handle par-
ticular local conditions.
Such federally determined protective arrangements would be carefully
drawn to ensure that productivity improvements remained possible,
subject to whatever constraints on them were forthcoming from normal
collective bargaining. I strongly believe that it is inappropriate
for the Federal Government to enforce the Section 13(c) provision
in a way that limits public transit authority management prerogatives
to make productivity improvements. I find no basis for believing that
the Congress intended otherwise. In fact, for us to take any other
position would run counter to the recent collectively bargained
contract settlement in New York City where cost-of-living increases
are to be financed by productivity improvements. Federal requirements
can hardly be more restrictive in this regard than such a labor
management settlement.
4. Limitation of Section 13(c) to public takeovers. A further
alternative might be to limit the operation of Section 13 (c) to the
protection of employee rights during the period of public takeover
from private transit companies. This approach finds a basis in the
origin of the legislative language in the history of railroad merger
and consolidation practice. Accordingly, any UMTA capital grant
made, say, three years after the time of public acquisition would
be deemed to require no further protective arrangements.
5. Legislative approaches. As an alternative to the above
options which might be pursued by administrative action, we might
elect to seek legislation which would constrain the impact of
Section 13 (c) in capital grant situations. Such legislation
might, for example, limit the impact of the provision to public
takeover situations as suggested in option 4. Outright repeal
of (c) is deemed very unlikely.
IV. Next Steps and Timetable
This memorandum has outlined the major issues and suggested actions
which I have wanted to present, and I have welcomed the opportunity
to do SO. However, there remains the task of bringing about some
-8-
effective resolution of the positions of the Departments of
Transportation and Labor.
I suggest that this can best occur by your designating someone
to oversee a thorough interaction between representatives of the
two Departments, and to stick with it until something is accomplished.
Past efforts have not been particularly effective. I believe the
missing ingredient may have been a persistent White House convenor
or mediator to ensure results.
It would seem to me that a month to negotiate would be enough to
identify both common ground and sharp differences. I consider
all of my suggested remedies except the fifth (legislative
approaches) do-able within three months, if agreed to during
the first month.
Evilliam T.Cheman I
William T. Coleman, Jr.
R.FORM
MEMORANDUM FOR THE PRESIDENT
ATTENTION: James E. Connor
Secretary to the Cabinet
Subject : Section 13(c) of the Urban Mass Transportation Act,
Labor Protective Arrangements
This is in reply to Bill Usery's April 21, 1976 memorandum which
commented on the review of problems and proposed actions in my
April 8, 1976 memorandum.
The DOL reply followed the organization of our initial memorandum.
We will adhere to that format in this commentary, for ease in tracking
the written dialogue.
The DOL memorandum made two initial comprehensive observations before
commenting on individual problems and proposed remedies. The first
was that there is on the part of public bodies and transit systems a
widespread lack of understanding of the employee protection requirements
and the procedures utilized by the Department of Labor in processing
grant applications for certification purposes, as well as some opposition
to the specific letter of the law or its intent. It is said that as a
result many of the DOT proposals are contrary to the law, and that
"DOT's position on these matters cannot be accomplished through
administrative action, but instead would require amendment to the existing
legislative requirements."
FORD
-2-
All that merely begs the question as to what the law intends or
requires. We suggest there is considerably more administrative
license than DOL indicates. As far as lack of understanding is
concerned, we believe the Department of Labor can help minimize
this problem by taking certain steps recommended by consultants to
DOL and by others as will be cited later--steps to issue guidelines
and criteria or boundary conditions to assist the collective
bargaining process.
The second initial observation emphasizes that since the passage of
the Act DOL has made over 1350 certifications, and was unable to do so
in only a handful of cases. A comment by a consultant to DOL that the
Department's performance had been "uniformly excellent" was mentioned.
We do not wish to or intend to detract from the Department's record,
measured statistically. However, the same consultant who commended the
Department also noted that "the statistical record does not tell the
whole story", and made recommendations based on their conclusion to
"surface the problems inherent in the present administrative practices
with a view to strengthening them." The problems cited by the consultant
(Jefferson Associates, January, 1972) were:
FORD
-3-
11 The delay in reaching agreements as required by 13(c)
of the Urban Mass Transportation Act, which critically affects
other aspects of the grant process.
II Poor initial understanding of the requirements of 13(c) on
the part of grant applicants.
II Poor communication between the Department of Labor and the
Department of Transportation in coordinating the needs of grant
applicants.
II Reluctance of the Secretary of Labor or his designated
representatives to assume affirmative responsibility for developing
criteria with respect to the types of provisions that may be necessary
to insure that workers' interests are adequately protected in the
different types of situations that may arise. This may be caused by
the Secretary's historic reluctance to pin down relevant criteria for
fear of limiting the bargaining process, or it may be simply a failure
to properly disseminate developed criteria for the guidance of the
parties. In either case, the result is the same.
The unwillingness of the Department of Labor to limit by
practice the amount of time given to the parties for voluntarily
reaching agreement and relating that time frame to the overall objectives
of the grant program. Although it is understandable that the Secretary
would not normally wish to intervene in the informal pro S if it is
working well, in cases where the parties clearly are at
impasse, he
should move more forthrightly and expeditiously.
11
- The failure of the Department of Transportation properly
inform grant applicants of their full responsibilities under 13(c) in
a complete, accurate and timely fashion, as the application proceeds
through DOT and other departments.
These are quite similar to the types of problems we have cited, and
to which our proposed remedies are addressed.
PROBLEMS
This discussion will follow the six problems cited in our initial
memorandum, and DOL's April 21 reply.
1. Applicability
DOL's counterpoint, that the lack of large numbers of employee claims
is no indication that Section 13(c) is producing little in terms of
-4-
necessary protection, is probably right. At least it's not an
unqualified indication. We would concede that the development of
specific protective arrangements for particular project situations
can resolve many issues that would otherwise lead to claims, that
claims are in effect resolved by the parties in advance.
We strongly disagree with DOL's statement that it is "simply not true"
that 13(c) has caused "significant frustration, red tape and intrusion
on labor management relationships." Reports of interviews by third
parties (e.g., GAO and Jefferson Associates), correspondence,
newspaper aditorials, and a recent NACO resolution (attached) attest
to these Toblems. Some of this is cited further on. DOL suggests
that any oblems arise out of "the labor management and collective
bargaining relationships which are allowed to operate and not from
any Federal instrusion on these relationships." This avoids the
basic criticism that DOL has essentially abdicated its responsibility
to the unions, permitting the collective bargaining process to run
altogether too long and without sufficient guidance.
With reference to the quote from the report prepared by UMTA staff fol-
lowing a November 20, 1975 Conference and Symposium on Transit Industry
Labor-Management Research, it must be said that this was merely a staff summary
GERALD ANNUALT R. FORD
-5-
of a meeting attended heavily by academic researchers, and does not
represent an UMTA position. Furthermore, in a February 9, 1976 letter
to UMTA in behalf of the American Public Transit Association, David E.
Fox, Staff Attorney, stated that "the conclusions
regarding the
attendees' agreement relative to the effect and importance of 13(c) is
inaccurate. The APTA representatives were not panelists and did not
comment on this point. To construe this silence as agreement would be
incorrect." Fox asked that his letter be made part of the official
UMTA files relative to the November 20, 1975 seminar.
Nevertheless, we by no means allege that 13(c) is the main cause of the
magnitude and general composition of the problems and issues facing the
industry in the area of labor relations. Our principal focus is the
effect of the provision, and its implementation, on effective management
of the UMTA grant-in-aid programs.
2. Labor union veto
The DOL memorandum, in reenforcing the point (with which we agree) that
Congress contemplated collective bargaining as a method of arriving at
the protective arrangements to be followed, quoted from the March 28,
1963 Report of the Senate Committee on Banking and Currency to the
effect that "it is expected that specific conditions normally will be
the product of local bargaining and negotiations, subject to the basic
standard of fair and equitable treatment." However, the Committee also
indicated that the Secretary of Labor was expected to develop criteria
for the administration of the law. In the very next sentence of the
GERALD R. FORD
-6-
Report quoted this is said: "The Committee expects that the Secretary
of Labor in addition to providing the Administrator with technical
assistance will assume responsibility for developing criteria as to the
types of provisions that may be considered as necessary to insure that
workers' interests are adequately protected against the kinds of adverse
effects that may reasonably be anticipated in different types of
situations."
The DOL memorandum cites the five cases (Denver, Delaware, Chicago,
Detroit, Boston) in which determinations of protective arrangements were
made by the Secretary over union objections. It is said that "this
fact tends to discredit the'union veto power' charge." Frankly, when
one realizes that this is less than one-half of one percent of the total
certification actions considered by DOL, it may be thought that the fact
reenforces the assertion that the Department is essentially a conduit of
applications to appropriate unions, and lets the process continue unduly
unconstrained. Further, in these five cases, which were extreme, the
intervention by DOL was not self-generated; it was urged by UMTA.
With reference to regulations to guide the operation of the law, the
DOL memorandum states that "with cooperation and involvement by repre-
sentatives from UMTA, regulations in the form of guidelines were drafted
during calendar years 1974 and 1975"; further that the proposed regulations
had the internal approval of DOL officials, but "when final UMTA concurrence
and/or comment was sought, none could be obtained and the proposed
regulations were never finalized." The implication seems to be that
FORD & LIBRARY 0ERALD
-7-
negotiations were doing well up to the point of obtaining a final
DOT clearance or comment, which never came.
It is important that the circumstances of that interaction be made
more clear. The negotiations were undertaken as a result of a meeting
between former UMTA Administrator Frank Herringer and DOL Under Secretary
Schubert. An informal task force was established in 1974 to look into
13(c) procedures and recommendations. After much time and discussion,
UMTA staff eventually took the initiative and drafted a suggested
regulation in November of 1974 providing much discretion to the
Secretary of Labor with respect to particular projects while providing
a definite procedure, with time limits, for the certification of all
projects. The regulation also sought to open the question of classi-
fication of projects. It would have allowed UMTA to forecast approvals,
as well as give timely assurance to applicants that their funding needs could
be met.
DOL did not critique the UMTA draft, but submitted its own proposed
regulation, which was quite similar to one it proposed in 1971-72 following
a
an OMB report (May 20, 1971) on 13(c) issues. It called for/more burdensome
formal procedure than now exists, was without meaningful time limits, and
made no distinction between the various types of projects administered
by UMTA. In effect, the negotiations were seen by UMTA staff to be at
an impasse, and guidance was sought on a course to take. It is conceded
that there was no formal response, though the impasse condition was
communicated and understood at the staff level.
FORD i LIBRARY 078870
-8-
The issues are the same we are reviewing at the present time. Hopefully,
the involvement of a third party convenor will help us see the issues
through to some conclusions.
Finally, with respect to the "union veto" issue, though the documentation
on labor's holding the 13(c) agreement hostage to issues unrelated to
labor protection is sketchy, there is a more definite record on the
extent to which an unequal bargaining relationship may exist between
the unions and grantees in negotiating employee protection agreements.
This situation is discussed pointedly in a May 20, 1971 report of
Vincent Puritano, Program Coordination Division, OMB, to Associate
Director Arnold R. Weber. Referring to interviews with city officials
in five cities, Puritano reported: "They claim, unanimously, that the
city not only was forced in each case to either agree to the union's
interpretation of 13(c) requirements or lose the grant but that DOL
officials provided minimum help and guidance and backed the union
position in no uncertain terms and always over that of the cities."
A GAO Report being made at the request of Senator John Tower, and still
in draft, will report on the results of interviews with 12 grantees on
this issue, among others. The draft reports that in eight of the 12
places, the grantees felt in an uneven bargaining position because of
the procedures being followed. None of 26 unions contacted felt they
were in an uneven relationship.
FORD & LIBRARY GERALD
-9-
3. Impression of clumsy management
The point we are interacting on under this heading essentially is
that of unconstrained time for collective bargaining, and the
difficulty this presents in program management with respect to planning
which capital projects will receive funding, especially toward the
close of the fiscal year. The DOL memorandum suggests there always
will be fiscal year-end crises, and that avoidance of them "seems to
be most within the control of applicants and UMTA." Some such
crises are within UMTA's control; this set of problems is controlable
by DOL.
We think that the concluding statement in Chapter V, Recommendations,
of the Jefferson Associates Report is constructive on this point. It
reads:
"The Department of Labor should make it clear to grant
applicants and to the unions in its information bulletins
and in its education program that the Secretary will
exercise his power to certify 13(c) agreements in cases
where the parties are unable to reach an agreement by
themselves or with the help of third parties. The
parties should be reminded that the bargaining process
cannot be endless, that time limits are important and that
these time limits are tied closely to the timing of the
total grant application process. It is the duty of the
Secretary to affirmatively develop the conduct of the
bargaining to complement the total needs of the grant
applicant without endangering the rights of individual
employees as guaranteed by the provisions of 13(c). All
participants should always keep in mind that the purpose
of the Urban Mass Transportation Act of 1964 was and is to
encourage the development and growth of mass transit systems
across the country. Participants have a responsibility to make
this legislation work. There are problems to be solved. If
the systems are not improved, and they will not be improved
without Federal assistance, employee protection agreements
FORD i LIBRARY GERALD
-10-
will be meaningless. If pressing for legislative rights
ignores realities and frustrates change, little will be gained.
If local bargaining, which the Congress chose to rely on, is
to have any meaning the parties themselves must give it meaning.
The Department of Labor can be a catalyst, a resource and even
a broker in certain situations. But if one or the other party
chooses to press the most it can out of the legislation and to
ignore real problems, the employees and the public will be
the losers."
4. Burden of proof
Though we thought we were only making one point (the second, below)
under this heading, the DOL sees us attempting to make two points:
first, that the DOL requires development of protective arrangements
even if there is little likelihood of adverse impact on employees;
and second, the impossibility of grantees carrying the burden of
proof in operating assistance cases that the commingled Federal funds
were not the "cause" of some specific employee grievance.
With reference to the first point, the DOL memorandum cites the last
sentence of 13(c) requiring the grant contract to "specify the
terms and conditions of the protective arrangements", and interprets
this to clearly contemplate the development of specific arrangements
in each and every project situation. This is an obvious non sequitur.
Our position is that case-specific collectively bargained arrangements
are appropriate in each project situation in which it can be expected that
negative declarations should be made or
employees will be affected as a result of a project; in other cases, /
standard form protective arrangements can be included in the grant
contract without need for a new round of clearances and collective
bargaining.
FORD if LIBRARY GERALD
-11-
With respect to the second point, the DOL memorandum quotes the
definition of "project" as used in the National Agreement for
Section 5 protective arrangements, and concludes that employees
are not in fact provided protection against adverse effects unrelated
to the Federal assistance. We cannot agree with DOL.
The definition of "project" in the National Agreement does not conform
to the definition of "project" as used in the grant contract. In fact,
the definition in the National Agreement specifically compounds the
problem we are pointing to: The term "Project,
shall not be
limited to the particular facility, service, or operation assisted
but shall include any changes
which are a result of the
assistance provided." The very issue is--what is a "result" of the
Federal operating assistance?
Under the Section 5 grant contract, when the funds are used only to
financially assist operating costs, the term "project" has no particular
identity. It is defined simply as a certain sum of money which is part
of the total sum of money needed to operate an entire system. No
particular services or parts of the operation are described as the
project. The project is money, a proportion of total costs. Therefore,
the "burden of proof" provision is simply not operational. It is
impossible to administer, unless one concludes either that everything
done by the system manager is a result of the "project" (money accepted)
or that nothing is.
FORD is LIBRARY GERALD
-12-
We believe that our April 8, 1976 memorandum recognizes this reality
in describing a possible "negative declaration" procedure for Section 5
operating assistance grants, with a changed burden of proof leaving
it to the employee to show how he was harmed as a result of the grant.
Perhaps the negative declaration should be used for operating assistance
grants unless a specific or discrete service or operation is described
as being the subject of the grant. In the latter cases, protective
arrangements would be specified.
5. National Agreement
Our basic point with reference to the National Agreement for Section 5
was that it is a useful step toward simplification of Section 13(c)
administration, but its provisions are now raising problems of their
own. DOL takes exception to our statement that grantees allege that the
DOL has been unwilling to accommodate specific geographic differences,
stating that the agreement has been applied in a number of instances,
both with and without modification; and that arrangements other than
the National Agreement have also been utilized.
The spirit of our comment is to encourage such flexibility. Notwith-
standing the DOL's counterpoints, some large transit systems have been
quite critical of the lack of DOL flexibility, and the less sophisticated
smaller properties in particular need some guidance in the use of such
an agreement.
BERALD FORD LIBRARY
-13-
With specific reference to the Los Angeles complaint about the provision
in the Agreement requiring a 60-day notice plus 80-day appeals period
before schedule or route modifications can be implemented, the DOL
memorandum cites its letter of determination that the provision clearly
was not intended to apply to normal schedule and route modifications.
This is a reasonable and helpful ruling, but the broadness of the
Agreement language is causing problems.
6. Stifling innovation
The DOL memorandum takes exception to our statement that 13(c) has a
"seriously inhibiting effect on innovation in the transit industry",
and that it "perils the continued survival of the private taxi industry
which would likely benefit from paratransit development." It is said
that DOT determines the projects which are eligible for Federal funds,
and that certain taxi or taxi-related projects have already been funded.
The taxi/paratransit issue is a serious one. The National Agreement
for Section 5, which was spawned by the 13(c) requirement, contains a
provision which practically closes off the use of Section 5 funds to
finance service contracts between transit systems and taxi and paratransit
operators. It provides that the designated recipient of funds (i.e.,
commonly transit authorities) must use its own labor force in offering
services financially assisted by Section 5 funds. Transit management
thereby foregoes options for innovation in the nature of integrated
fixed route bus service and shared-ride demand responsive taxi service.
GERALD FORD LIBRART
-14-
And taxicab companies are foreclosed from assistance which could mean
the critical difference in their survival as private enterprises and in cases
where taxi operation would be most cost effective. This is just one
example, and it has occurred in practice on several occasions.
A few paratransit demonstrations have been developed, and more are
needed. So far, however, the city governments, not transit authorities,
have been doing the contracting with taxi companies, thereby avoiding the
prevailing wage rate issue and similar controversies which will be
present when transit authorities and paratransit operators have to
confront one another.
Indicative of the growing awareness of the complexity of emerging issues
is the following excerpt from the March 16, 1976 address of Dan V.
Maroney, Jr., International President Amalgamated Transit Union, to the
TRB Meeting on Paratransit Development:
"The labor policy issues presented by group-ride taxi
services, especially if operating or capital assistance
to such services is provided under the Urban Mass Trans-
portation Act, are even more difficult and complex, because
taxi and transit operations are typically coextensive and
competitive in their coverage. It has recently been
recognized that the emergence of shared-ride taxi services
as a form of paratransit eligible for funding under the Urban
Mass Transportation Act, poses the issue of taxi-transit
competition in a very direct manner. As stated by Professor
Altschuler's paper presented at the October 1975 Williamsburg
conference on paratransit, such group-ride taxi services bring
into question the legal and policy definitions of the term
'mass transportation' and 'affected employee' that have guided
Federal policy over the past dozen years. A host of extremely
difficult questions are presented, such as how to integrate
taxicabs into transit planning, transit subsidy policy, and
publicly subsidized competition. Finding an appropriate labor
policy to govern the various applications of such shared-ride
taxi services will also be difficult. From the viewpoint of
organized transit labor, the introduction of shared-ride taxi
FORD & LIBRARY GERALD
-15-
service into the various UMTA programs gives rise to a serious
concern that the ultimate effect may be to destroy conventional
transit jobs and to undercut the transit worker's earnings'
potential, by substituting low wage non-unionized taxi drivers
for the better paid organized transit worker.
"What, then, should be the government's labor policy where
such shared-ride taxi services are to be integrated into
the regional multimodal public transportation system, in
accordance with current planning requirements and other
UMTA policy statements and directives?"
We need to be mindful that these are tough issues, and also that
collective bargaining will inevitably tend to protect the status quo.
Best results may not be possible in the absence of appropriate guide-
lines and criteria which permit and encourage innovation.
PROPOSED REMEDIES
In the discussion under "burden of proof" above, we took up the subject
originally discussed at this point in our April 8 memorandum--the
suggestion of a "negative declaration" procedure with respect to
Section 5 operating assistance grants. We think this is a viable and
permissable administrative option for the typical Section 5 grant and is
consistent with the law. The statute requires DOL to certify that labor
protections are in place for employees "affected by such assistance."
We read this to mean "adversely affected," and that DOL should make a
negative declaration, subject to rebuttal, that the typical Section 5
grant involves no adverse impact. Protection arrangements could be
appropriate when the project is defined discretely, as a particular
service or operation.
FORD i LIBRARY 038420
-16-
1. Multi-year certifications, with stronger DOL role
The DOL memorandum comments that "applicants can seek to and do
negotiate multi-year project, multi-year protective agreements"
and that this is in keeping with the "spirit of the development of
protective arrangements through collective bargaining." We believe
that under this heading we are essentially suggesting some variations
on this theme, with DOL encouragement. In particular, we think it
appropriate to settle for a single certification for a given capital
project funded through several successive grants or grant amendments.
Under this topic, the DOL memorandum reiterates "that it is neither
appropriate nor useful to set fixed time limits on negotiations. =
As stated in other parts of this memorandum, we take exception to
this position, and believe DOL is in a minority opinion on this point
among evaluators of the 13(c) process. The problem with the
option, however, is that it does not go far enough.
2. Negative declarations with changed burden of proof
The DOL memorandum calls our suggested categorization of projects and
use of a negative declaration of impact statement a questionable practice
under the statutory language which states that "the contract for the
granting of any such assistance shall specify the terms and conditions
of the protective arrangements."
GERALD FORD LIBRARY
-17-
We simply can't agree with such a narrow construction of the
Department's administrative license. With respect to our suggestions
for categorizing projects by level of impacts, and developing
commensurate certification procedures, it is interesting to note
that the administration of Section 13(c) began in this manner.
A January 7, 1965 letter and memorandum from John C. Kohl (first
Administrator of the mass transportation program) to James J. Reynolds,
Assistant Secretary of Labor confirmed their agreement about such a
system and described it. This procedure was abandoned at an early
date by DOL in favor of the current method of operating; in view of
several years' experience, we think it is worth reviving.
FORD & LIBRARY GERALD
3. Federal definition of fair and reasonable arrangements
As an alternative to the above options, our April 8 memorandum suggested
that DOL and DOT could collaborate to identify labor protective arrange-
ments for UMTA grants which would be enforced through the grant contract.
The DOL memorandum considers this contrary to the expressed congressional
intent regarding collective bargaining, and cites the negotiated National
Agreement as an approach reflecting the spirit of the legislative intent.
It seems apparent that there are alternative means to keep faith with
legislative intent. Surely, years of collectively bargained agreements
could serve as a basis for standard protections to be included in UMTA
contracts--an approach well within the legislative intent. On the point
of the ability of the Secretary of Labor to act on his own motion in
defining acceptable arrangements, a January 19, 1967 letter to Mr. George
O'Brien, Bus. Agent, Div. 589 (a Boston local) from John M. Elliott,
-18-
International President, Amalgamated Transit Union, makes very clear
the Union's understanding of the law. Excerpt:
"In other words, Sec. 13(c) of the Act merely requires the
Secretary of Labor to determine what is fair and equitable
to employees and to specify what protections shall be in-
cluded in the contract between the Federal Government and
the applicant for Federal assistance. An employee pro-
tection agreement between the union and the applicant is
not a requirement of the Act. The failure to reach such
an agreement will not prevent the Authority from obtaining
Federal funds.
"The second point to keep in mind is that in the absence of
any agreement with Division 589, the Secretary of Labor will
decide what is required to protect the members of Division 589.
The Secretary will simply make the determinations required
by law, irrespective of the views of the union, and these
will be incorporated in the contract of assistance between
the Authority and the Federal Government. Division 589
will not be a party to this contract and may not be able
to enforce these protections without the intervention and
assistance of the Federal Government. There can be little
doubt that any protections awarded by the Secretary of
Labor will not be as good as the union-negotiated pro-
GERALD FORD LIBRARY
tections contained in an agreement between the Authority
and Division 589."
The DOL memorandum suggests a lack of clarity in our intent in a
paragraph in which we discussed the need to ensure that 13(c) protective
arrangements should not preempt productivity improvements, subject to
whatever constraints on them were forthcoming from normal collective
bargaining. We do not know how to be more clear about this, except
to relate the discussion to that under the "burden of proof" problem--i.e.,
all adverse effects should not be able to be attributed to operating
assistance grants, as seems possible under the National Agreement language.
4. Limitation of Section 13(c) to public takeovers
The DOL memorandum, in contending that our suggested limitation of the
application of 13(c) would violate congressional intent, quotes a paragraph
-19-
of the 1963 Report of the House Banking and Currency Committee on the
transportation legislation. The Report referred to recognizing that
workers may be "adversely affected as the result of the introduction
of new equipment or the reorganization of existing transit operations."
It also contained other language generally supportive of DOL's
position.
We agree that the DOL counter-argument on this proposed remedy is well
taken, though we also think the mainstream of the legislative history
provides a basis for our proposal. In any case, 12 years' experience
with the application of 13(c) could now be a basis for reconsideration
of intent.
5. Legislative approaches
Under this heading we noted the option of accomplishing the preceding
clarification or amendment of intent through legislation. The five
proposed categories of remedies in our memorandum were in an ascending
order of departure from current practice. We stated our view that
legislative amendment would be the least likely option to succeed.
However, we do not rule it out as a possibility, particularly with
respect to Section 5 problems, if it is thought that there is no
administrative remedy.
FORD i LIBRARY GERALD
NEXT STEPS AND TIMETABLE
The DOL memorandum suggests, "If the Section 13(c) program operated as
has been alleged by DOT and others, modification would be called for."
This is the question, to be sure, and we trust these written exchanges
are helpful in shedding light on it.
-20-
Finally, in referring to studies currently underway (some funded by
DOT), the DOL memorandum suggests it would not be appropriate to
modify the Section 13(c) program until the results are known. We
disagree. The problems are well known, and solutions are readily
available through early administrative action.
We look forward to the opportunity to confer on this subject.
William T. Coleman, Jr.
Attachments
FORD & LIBRARY QERALD
DRAFT
MEMORANDUM FOR THE PRESIDENT
ATTENTION: JAMES E. CONNOR
SECRETARY TO THE CABINET
SUBJECT: SECTION 13(c), URBAN MASS TRANSPORTATION ACT OF 1964,
AS AMENDED
This responds to Mr. Connor's memorandum of March 24, 1976, requesting
a status report on Section 13(c) of the Urban Mass Transportation Act
of 1964, as amended.
Section 13(c) requires that, prior to the Secretary of Transportation's
approval of grants under the Act, the Secretary of Labor must certify
that fair and equitable arrangements have been made to protect the
interests of employees affected by such assistance. Minimum provi-
sions that must be included in such arrangements are stipulated in the
statute. In addition, the Senate and House reports on the legislation
expressed the intent of Congress that wherever possible specific pro-
tective arrangements should be developed through local negotiations
and collective bargaining.
Section 13(c) is based on the principle that employees in an industry
should be afforded a measure of protection from adverse affects on their
employment which result from organizational and technological adjustments
carried out under the aegis of Federal law and with the support of public
funds.
Major Problems
From the point of view of the Department of Labor, the major adminis-
trative problems involve coordination of Department of Labor certifi-
cation activity with Department of Transportation project priorities
and the lack of understanding of and knowledge about employee protec-
tion requirements and procedures on the part of many grant applicants.
The first problem is a matter which is repeatedly addressed by the
two Departments with varying degrees of success. The second problem
can be ameliorated by the preparation and dissemination of informa-
tional material concerning Section 13(c).
The Department of Labor understands that the current controversy
concerning Section 13(c) is not normally presented in the context of
the above cited problems. Rather, there is strong opposition to the
terms and conditions required in order that the statutory employee
GERALD FORD LIBRARY
DRAFT
Page Two
protective provision be satisfied and, further, substantial resistance
by some--particularly public bodies without experience in collective
bargaining--to the procedure. (collective bargaining) used to arrive at
specific protective arrangements. : This opposition and resistance
breeds conflict in the processing of projects for protective arrange-
ment certification purposes.
The opposition to the type of protective terms and conditions required
is primarily directed at the so-called 5(2) (f)-type benefits. The
reference is to Section 5(2) (f) of the Interstate Commerce Act, which
requires the development of arrangements to protect the interests of
employees affected by railroad consolidations. Section 13(c), UMTA,
requires that protective arrangements thereunder "include provisions
protecting individual employees against a worsening of their positions
which shall in no event provide benefits less than those established
pursuant to section 5(2) (f)
=
The resistance to the procedure used in the development of protective
arrangements is to a large degree an expression of opposition to
public employee collective bargaining. In an attempt to remove the
strain from individual applicant bargaining situations, and also to
better enable the program to cope with the high volume of applications
anticipated under the operating assistance formula grant program
enacted in 1974, the Department of Labor supported and encouraged
an industry-initiated effort to develop a "model" protective agreement.
This effort proved successful with the consummation of such an agree-
ment in July, 1975, between the American Public Transit Association
whose membership carries some 90+ percent of transit riders and six
national union or union affiliated organizations representing the
great majority of transit employees.
The industry was apparently quite divided in its support of the "model"
agreement prior to its approval by the Association's governing body and,
unfortunately, has become even more fragmented since with the
"model" agreement becoming a focus for both internal industry debate and
an attack on Section 13(c).
Analysis of Problems
The record of achievement of certification action under Section 13(c)
belies the charges leveled against its administration. Since the
passage of the Act, the Department of Labor has made in excess of 1350
certifications, including almost 250 under the new operating assistance
grant program. In only a handful of cases has the Department been
unable to make the required certification. Billions of dollars of
Federal funds have been made available under the grant program for
the improvement of public mass transportation; expenditures for
employee claims have been minimal.
FORD i LIBRARY GERALD
DRAFT
Page Three
Many of the objections voiced about Section 13(c) go to its specific
requirements (particularly the 5(2)(f)-type protection benefits) and
as such would require legislative action to change. The Department
of Labor does not believe such action is appropriate, nor is it likely
that the Congress would be receptive to any proposed amendment to
Section 13(c).
Following a Conference and Symposium on Transit Industry Labor-Management
Relations Research held at the Department of Transportation on November
20, 1975, the following summary and conclusions were prepared by staff
of the Urban Mass Transportation Administration:
1. Of the many factors which affect transit
industry labor-management relationships, the
provisions and implementation of Section 13(c)
of the UMTA Act appear to be among the least
significant, either in arriving at contractual
agreements or in the substance of those agree-
ments. Although the perception by those not
involved in collective bargaining of the
influence of 13(c) ranges from 'no effect' to
'blackmail,' the perception by the parties
themselves is that 13(c) is not a significant
issue in negotiations. It was the judgment
of the researchers and most of the partici-
pants that if 13(c) had never been enacted, the
problems and issues facing the industry in the
area of labor relations would be similar, if
not identical in magnitude and composition.
2. It was generally agreed that the attention
and level of importance given to the ramifications
of the jurisdictional dispute /DOT-DOL7 involving
13(c) is misplaced and unwarranted. Such a con-
frontation takes out of context the overriding
concern of the Act as a whole, which must be the
Federal interest and the public interest in assuring
a viable and a responsive mass transit system. It is
in this framework that labor's and management's
responsibilities, whether on the 13(c) issue or in
the broader content of labor-management relations,
should be assessed.
The Department of Labor subscribes to the above statements.
At the moment, there are at least five major studies at varying degrees
of completion which are directed at or touch on Section 13(c). These
studies are as follows:
FORD is LIBRARY GERALD
Page Four
1. Labor Relations Problems, Practices, and
Policies in the Transit Industry
DOT funded: University of Wisconsin
Final report date: September, 1976
2. Improving Urban Transit Productivity
UMTA funded: Harvard University
Final report date: September, 1976
3. Analysis of Unions, Management Rights, and
the Public Interest in Mass Transit
UMTA funded: University of North Florida
Final report date: June, 1976
4. Study of cost impact of Section 13(c),
to include impact on collective bargaining
and technological change.
DOL Office of the Assistant Secretary for
Policy, Evaluation and Research
Final report date: December, 1976
5. General Accounting Office review of
DOL's administration of Section 13(c)
undertaken at request of Senator Tower
Final report expected: June, 1976
Recommended Action
Given the amount and scope of research efforts currently underway,
there is certainly no need for further study at this time. The
results of current studies will produce a data and information base
upon which any necessary decisions can be made.
Action can be taken now to prepare for the receipt and review of
information generated by the current studies. Also, prior to the
availability of that information in final report form, efforts can
be directed to promoting more effective program coordination
between DOT and DOL. Because we believe the Section 13(c) controversy
is symptomatic of broader based labor-management problems in the
transit industry, the action recommended below is directed at that
broad base.
The Department of Labor recommends the creation of a permanent DOL-DOT
committee with the major purpose of promoting improved labor-management
relations in the transit industry. In addition to this major purpose,
the committee should be responsible for coordination between DOT and
DOL on priorities concerning the UMTA grant program and review of the
results of current research efforts as they relate to Section 13(c)
for the purpose of determining whether any recommendations should be
made concerning the administration of Section 13(c).
FORD i LIBRARY GENALD
Page Five
DRAFT
Following creation of the committee, consideration should be given to
establishing a direct and continuing liaison with the industry and
:
organized labor, perhaps through an advisory committee.
Timetable
Although the committee recommended herein is intended to be permanent,
a specific deadline may be set for a report on Section 13(c) if
necessary. Inasmuch as current research will not produce final
reports until as late as December, 1976, it is proposed that the
committee have until March, 1977, to review study results and arrive
at any recommendations.
FORD & LIBRARY SERVID
U.S. DEPARTMENT OF LABOR
OFFICE OF THE SECRETARY
WASHINGTON
April 21, 1976
MEMORANDUM FOR THE PRESIDENT
ATTENTION: James E. Connor
Secretary to the Cabinet
SUBJECT: Section 13(c), Urban Mass Transportation Act of 1964,
as amended
This memorandum follows up on a meeting held on Tuesday, April 13,
1976, between David H. Lissy of the Domestic Council Staff, Adminis-
trator Robert E. Patricelli and Robert McManus of the U.S. Depart-
ment of Transportation's Urban Mass Transportation Administration,
and John C. Read, Executive Assistant/Counselor to the Secretary
of Labor. At the conclusion of the meeting it was agreed that the
Department of Labor would prepare a memorandum in response to
the DOT Memorandum for the President dated April 8, 1976, concern-
ing Section 13(c) of the Urban Mass Transportation Act of 1964, as
amended. A copy of DOT's April 8, 1976 memorandum is attached.
Prior to commenting on individual items in the DOT memorandum,
there are some initial comprehensive observations that must be
made. First, we believe that there is among public bodies, transit
systems, and others who become involved in the UMTA grant process
a widespread lack of understanding of the employee protection require-
ments and the procedures utilized by the Department of Labor in
processing grant applications for certification purposes. There also
is a strongly-felt opposition by some to the specific statutory protec-
tion requirements. This lack of understanding and opposition is
reflected in the overall thrust of the DOT memorandum. Thus,
many of the proposals set forth therein are contrary to the specific
letter of the law. Others run counter to the statute's spirit and intent.
Accommodation of DOT's position on these matters cannot be
accomplished through administration action, but instead would require
amendment to the existing legislative requirements.
FORD
- 2 -
As a second initial observation, we would emphasize that since the
passage of the Act, the Department of Labor has made in excess of
1350 certifications. In only a handful of cases has the Department
been unable to make the required certification. Given the many
diverse and complex situations in which the protection requirements
must be implemented, we believe that this record is commendable.
A 1971 evaluation by an outside contractor concluded that the Depart-
ment of Labor's performance in administering Section 13(c) had been
"uniformly excellent. 11
PROBLEMS
Six problem areas are cited in the DOT memorandum, as follows:
1. Applicability.
DOT questions whether "protective arrangements developed in the
context of public subsidies to privately owned transit companies and
of railroad mergers and consolidations are appropriately applied to
what is now a publicly owned transit industry. 11
There is very little room for administrative discretion under Section 13(c)
in this area. Section 13(c) requires that protective arrangements cer-
tified thereunder "shall include provisions protecting individual employees
against a worsening of their positions which shall in no event provide
benefits less than those established pursuant to Section 5(2)(f) 11 of the
Interstate Commerce Act. (Underscoring added.) This language
could not be more clear. The Secretary of Labor cannot certify protec-
tive arrangements under Section 13(c), UMTA, which do not include
Section 5(2)(f), ICA, benefits or the equivalent thereof. Moreover, we
believe it appropriate that a uniform level of protections apply to
employees who are affected by Federally sponsored and/or funded
activity, no matter what particular industry is involved. What should
vary from industry to industry is the application of the required levels
of protection to place them in harmony with particular industry and
area practices. This can be and is best accomplished through negotia-
tions between industry and employee representatives.
Interestingly, no Federal funds are involved in normal Section 5(2)(f)
applications, merely the Federal (ICC) approval of a private industry
"consolidation". In the transit industry application on the other hand,
FORD
- 3 -
substantial Federal grant money accompanies the employee protection
requirements, and under the UMTA operating assistance program,
grant money can be used to pay employee protection costs.
DOT's memorandum acknowledges that employee claims for benefits
under Section 13(c) have been small in number and states "[T]herefore,
Section 13(c) is probably producing very little in terms of necessary
protection, while its operation is causing significant frustration, red
tape, and intrusion on labor-management relations
" The lack of
large numbers of employee claims is no indication that Section 13(c)
is producing "little in terms of necessary protection". The develop-
ment of the specific protective arrangement for application to a
particular project situation resolves many issues that would other-
wise lead to claims. This is particularly true in the area of preserva-
tion of pension and other fringe benefit programs. Claims for protection
of such benefits are in effect resolved by the parties in advance.
Similarly, arrangements to give retraining and priority employment
rights to employees who would otherwise be deprived of employment
as a result of the Federal assistance reduce the number of future
claims.
The claim that Section 13 (c) causes "significant frustration, red tape,
and intrusion on labor-management relationships" simply is not true
as a general proposition. Comments on specific points raised in the
DOT memorandum with respect to this theme are set forth below.
We would merely point out here that no evidence or documentation
has been offered in its support. Also, we would cite the following
two statements concerning Section 13(c) contained in a report prepared
by UMTA staff following a November 20, 1975 Conference and Symposium
on Transit Industry Labor-Management Relations Research:
1. Of the many factors which affect transit industry
labor-management relationships, the provisions
and implementation of Section 13(c) of the UMTA
Act appear to be among the least significant, either
in arriving at contractual agreements or in the
substance of those agreements. Although the
perception by those not involved in collective bar-
gaining of the influence of 13(c) ranges from 'no
effect' to 'blackmail, the perception by the parties
- 4 -
themselves is that 13(c) is not a significant issue in
negotiations. It was the judgment of the researchers
and most of the participants that if 13(c) had never
been enacted, the problems and issues facing the
industry in the area of labor relations would be
similar, if not identical in magnitude and composi-
tion.
2. It was generally agreed that the attention and level
of importance given to the ramifications of the
jurisdictional dispute [DOT-DOL] involving 13(c)
is misplaced and unwarranted. Such a confronta-
tion takes out of context the overriding concern of
the Act as a whole, which must be the Federal
interest and the public interest in assuring a
viable and a responsive mass transit system. It
is in this framework that labor's and management's
responsibilities, whether on the 13 (c) issue or in
the broader content of labor-management relations,
should be assessed.
Whatever frustrations and red tape exist in the process arise out
of the labor-management and collective bargaining relationships
which are allowed to operate and not from any Federal intrusion
on these relationships.
2. Labor unions veto.
The DOT memorandum states that the operation of Section 13(c)
"gives labor unions an effective veto power over UMTA grants. "
The memorandum then goes on to expand on the problems which
arise for grant applicants in the bargaining process utilized by
Secretaries of Labor in the development of protective arrangements
under Section 13(c).
The DOT memorandum itself states that "[T]he legislative history
of Section 13 (c) clearly indicates that Congress contemplated col-
lective bargaining as a method of arriving at the labor protective
arrangements to be followed in the transit industry
11 To quote
- 5 -
from the Report of the Senate Committee on Banking and Currency
dated March 28, 1963: "The committee does not believe that it is
feasible to enumerate or set forth in great detail the provisions that
may be necessary to assure the fair and equitable treatment of
employees in each case. In this regard, it is expected that specific
conditions will be the product of local bargaining and negotiation,
subject to the basic standard of fair and equitable treatment. "
(underscoring added)
In point of fact, we would note that we have had to make "determina-
tions" of protective arrangements over union objections in project
situations in Denver, Delaware, Chicago, Detroit, and Boston. This
fact certainly tends to discredit the "union veto power" charge
The DOT memorandum states that the Department of Labor "has
issued no regulations to guide the operation of law". With coopera-
tion and involvement by representatives from UMTA, regulations in
the form of guidelines were drafted during calendar years 1974 and
1975. Those regulations received the internal approval of Department
of Labor officials. However, when final UMTA concurrence and/or
comment was sought, none could be obtained and the proposed regula-
tions were never finalized.
The DOT memorandum alleges that "labor's effective veto over UMTA
grants gives labor an important hostage in collective bargaining on
issues unrelated to labor protection
11 However, the memorandum
admits that "such abuses have not been documented. 11 We of course
would be interested in reviewing any factual situation supporting this
allegation, however it is our belief based on twelve years' experience
under the statute and over 1350 certification actions that abuses of the
process have been virtually nonexistent.
3. Impression of clumsy management.
The basis for this problem area is that "UMTA cannot reliably plan
which capital projects will receive funding in any given year because
of the uncertainties of Section 13(c) negotiations. "
We would point out here that UMTA and the applicants for assistance
always have the most control over timing of grant application processing
and 13(c) negotiations. At the request of certain applicants, we have
commenced negotiations prior to submission of a project application to
UMTA and occasionally have been in a position to certify a project
prior to UMTA's formal referral of it to us.
- 6 -
There are and always will be certain fiscal year-end crises.
However, avoidance of such crises seems to be most within
the control of applicants and UMTA.
4. Burden of proof.
The DOT memorandum apparently seeks to make two points under
this heading: first, that the Department of Labor requires that
protective arrangements be developed even if there is little likeli-
hood of adverse impact on employees and secondly, that grant
recipients must carry the burden of proof in claims cases and
are therefore at a disadvantage, particularly in the context of an
operating assistance grant situation.
With respect to the first point, we would refer to the last sentence
of Section 13(c), which states that "[T]he contract for the granting
of any such assistance shall specify the terms and conditions of
the protective arrangements. " (underscoring added) Interpreted
in the context of the legislative history, we believe that this language
clearly contemplates the development of specific protective arrange-
ments in each project situation. The Department of Labor has
continually interpreted Section 13(c) as requiring the development
of protective arrangements in advance of final project approval, so
that all parties will be aware of their rights and obligations thereunder.
Also, in the event of disputes as to whether valid claims exist, or as
to the proper administration of those claims, procedures will be
available in the protective arrangement for the orderly resolution of
such disputes.
With respect to the second point raised in the DOT memorandum
under the "Burden of proof" heading, it would seem that DOT is
concerned that employees may now be protected against any adverse
effect that takes place during the course of UMTA assistance, whether
or not the adverse effect is a result of that assistance. The model
agreement, which was negotiated for specific application to operating
assistance projects, defines the terms "Project" and "as a result of
the Project" as follows:
The term "Project", as used in this agreement,
shall not be limited to the particular facility, service,
or operation assisted by Federal funds, but shall
include any changes, whether organizational,
operational, technological, or otherwise, which
are a result of the assistance provided. The phrase
- 7 -
"as a result of the Project" shall, when used in
this agreement, include events occurring in
anticipation of, during, and subsequent to the
Project and any program of efficiencies or
economies related thereto; provided, however,
that volume rises and falls of business, or changes
in volume and character of employment brought
about by causes other than the Project (including
any economies or efficiencies unrelated to the
Project) are not within the purview of this agreement.
(underscoring added)
On the basis of the underscored language, it is clear that employees
are not provided protection against adverse effects unrelated to the
Federal assistance.
Finally, we would point out that under most protective arrangements
claiming employees have an obligation to identify the project and
specify the pertinent facts of the project relied upon. The burden
is then placed on the grant recipient to prove that factors other than
the project affected the employee. The rationale for this arrange-
ment is that normally only the grant recipient possesses the informa-
tion necessary to establish the validity of or disprove an individual
employee's claim. Were the burden of proof on the employee, he
would find it impossible to meet in virtually every case because of
the lack of availability of necessary factual information to him.
5. National Agreement.
The DOT memorandum states incorrectly that the "Department of
Labor has been unwilling to accommodate specific geographic
differences" in connection with the operation of the so-called
National Agreement. At the time the industry and union representa-
tives who negotiated the National Agreement presented that agreement
to the Secretary of Labor, they also proposed the utilization of certain
specific procedures which themselves contemplated possible modifi-
cations to the National Agreement. The National Agreement has been
applied in a number of instances both with and without modification.
In still other instances, other arrangements than the National
Agreement have been utilized.
The DOT memorandum then states that the "National Agreement
contains a great number of specific provisions that overly constrain
management decisions--for example, a requirement that a 60-day
FORD is LIBRARY GERALD
- 8 -
notice plus 80-day appeals/arbitration period be given to local
unions before any schedule or route modification can be imple-
mented. 11
The National Agreement was negotiated by highly skilled and
capable negotiators on the industry side. In toto, we believe
that it compares quite favorably from the applicant side with
previously negotiated Section 13(c) agreements.
The specific National Agreement provision cited in the DOT
memorandum--and interpreted therein as requiring that "a 60-day
notice plus 80-day appeals/arbitration period be given to local
unions before any schedule or route modification can be imple-
mented" was addressed and highlighted by the Department of
Labor in the context of a recent proceeding to determine its
appropriate application to a Los Angeles, California operating
assistance grant. In its January 29, 1976 letter of determination
in that case, the Department of Labor found that the notice pro-
vision clearly was not intended to apply to normal schedule and
route modifications. To quote from the Department of Labor's
determination:
"Indeed, it is difficult to construe any events arising
'as a result of' an operating assistance project which
would require notice and negotiation of what are commonly
called implementing agreements. The mere acceptance of
Federal operating assistance funds certainly does not
make every action of the District 'a result of the Project'. 11
6. Stifling innovation.
The DOT memorandum states that Section 13(c) has a "seriously
inhibiting effect on innovation in the transit industry. "
We are aware of no idea or experimental method of operation
jeopardized or prevented by Section 13(c). Over the past year we
have been able to develop protections for novel and experimental
endeavors such as the Knoxville van pooling and Rochester dial-a-
ride projects. To quote Daniel Roos of MIT who studied the
application of Section 13(c) to para-transit projects: "Many labor
FORD & LIBRARY GERALD
- 9 -
difficulties arise from approaching labor unions with suspicion
and mistrust. " Professor Roos noted that problems existed;
he stated that "[w]e tend, however, to exaggerate those labor
problems and thus establish potential conflict situations between
labor and management."
We do not understand the statement that Section 13(c) "perils the
continued survival of the private taxi industry which would likely
benefit from paratransit development. 11 DOT determines the
projects and applicants which are eligible for Federal funds and
it is our understanding that certain taxi or taxi-related projects
have already been funded.
Proposed Remedies
DOT proposes six remedies "to rectify the problems of 13(c) as they
apply to all categories of UMTA capital grants. " Prior to listing
those remedies, however, the DOT memorandum states that "it is
clear that Section 13(c) is being misapplied in connection with
Section 5 grants for operating assistance
" The DOT memorandum
suggests that the Secretary of Labor use alternative administrative
practices from those used in capital grant situations in applying
Section 13(c) to operating assistance grant applications. It is stated
that this is "wholly consistent with the statute" and that "Congress
had to apply 13(c) to Section 5 in order to cover the capital grant
aspect, apparently suggesting that Congress may not have intended
that 13(c) apply to operating assistance grants under the Section 5
formula grant program.
We would point out here that during the consideration of the legislation
which eventually became the National Mass Transportation Assistance
Act of 1974, and provided Federal money for the first time for the sub-
sidization of operating expenses, DOT proposed a "technical revision"
to a pending bill which would amend it so as to make Section 13(c)
inapplicable to operating subsidy grants. The Department of Labor
opposed the proposed revision and it apparently was not seriously
considered by the Congress. The language of the statute in Section
5(n)(1) clearly applies Section 13(c) to operating assistance projects
and the legislative history supports its application just as for the
capital grant program.
GERALD FORD LIBRARY
- 10 -
The Department of Labor's comments on the six options set forth
in the DOT memorandum follow under the same headings as used
by DOT:
1. Multi-year certifications, with stronger DOL role
In accordance with what we interpret to be the legislative mandate,
the Department of Labor approaches the development of protective
arrangements on a project by project basis. For many applicants
and projects, this produces a multi-year certification. The model
agreement is in effect a multi-year protective arrangement for
application to operating assistance grants.
In the light of a legislative history calling for the development of
specific protective arrangements through collective bargaining in
the context of particular projects it is inappropriate for the Depart-
ment of Labor to attempt to predetermine such arrangements.
Applicants can seek to and do negotiate multi-project, multi-year
protective agreements. This is in keeping with the spirit of the
development of protective arrangements through collective bargain-
ing. It appropriately limits such arrangements, however, to
specifically anticipated project situations.
The Department of Labor continues to feel that it is neither appropriate
nor useful to set fixed time limits on negotiations. Instead, the
Department expects involved parties to make a good faith effort to
reach agreement on appropriate and mutually acceptable protective
arrangements. If, having made a good faith effort to reach agree-
ment, the parties find themselves unable to consummate an agreement,
either party may request that the Secretary of Labor determine the
terms and conditions upon which he will base his certification. As
pointed out earlier, this is a process that is most in the control of
applicants and the Department of Transportation.
2. Negative declarations with changed burden of proof.
The DOT suggested categorization of projects and use of a negative
declaration of impact statement is a questionable practice under the
statutory language, which states that "[T]he contract for the granting
of any such assistance shall specify the terms and conditions of the
protective arrangements. 11 (underscoring added) Attempts to develop
specific protections only after claims of adverse impact are made
FORD is LIBRARY GERALD
the 11 -
would obviously be difficult. We have repeatedly interpreted
as requiring protective arrangements in advance of project approval
so that all parties will be aware of their rights and obligations
thereunder. Also, should disagreements arise as to whether valid
claims exist, procedures are already in place for the resolution of
such disputes.
3. Federal definition of fair and reasonable arrangements
This DOT suggestion is in our view contrary to the expressed
congressional intent. The recently negotiated national or model
agreement, on the other hand, is an approach which reflects the
spirit of the legislative intent and sets forth a set of presumably
reasonable protections for application in the majority of project
situations while allowing for modification to accommodate special
local circumstances.
Both industry and union representatives have raised the possible
future development of other model agreements for application to
other types of UMTA projects. This approach is in keeping with the
spirit of the development of specific protective arrangements through
collective bargaining as opposed to by Government fiat.
The DOT memorandum at this point devotes a paragraph to the
relationship of employee protective arrangements and productivity
improvements.
We are not completely clear as to the intent of this paragraph.
However, the Report of the House of Representatives Committee
on Banking and Currency when it reported out the Urban Mass
Transportation Act of 1963 bears on this point in attempting to
strike a balance between public and private interests:
Although the problem of worker protection may arise
in only a limited number of cases, the committee
nevertheless believes that the overall impact of the
bill should not be permitted to obscure the fact that
in certain communities individual workers or groups
of workers may be adversely affected as the result of
the introduction of new equipment or the reorganization
of existing transit operations. The principle of protecting
workers affected as a result of adjustments in an
industry carried out under the aegis of Federal law
FORD is LIBRARY GERALD
- 12 -
is not new, particularly in the transportation industry.
Thus, railroad employees for years have enjoyed
Federal protection against adverse effects attendant
upon railroad consolidations. The problems of worker
protection presented by the bill are not necessarily
identical to those presented under other laws. The
committee believes, however, that workers for whom
a standard of benefits has already been established
under other laws should receive equally favorable
treatment under the proposed new program. The
committee also believes that all workers adversely
affected by adjustments effected under the bill should
be fully protected in a fair and equitable manner, and
that Federal funds should not be used in a manner that
is directly or indirectly detrimental to legitimate
interests and rights of such workers.
4. Limitation of Section 13(c) to public takeovers.
DOT's proposal here would clearly violate the Congressional intent.
Note the reference in the House report cited immediately above to
workers "adversely affected as the result of the introduction of new
equipment or the reorganization of existing transit operations. 11
5. Legislative approaches
The Department of Labor does not believe that efforts to amend or
repeal the employee protection provisions of the Urban Mass
Transportation Act are appropriate. Moreover, it is highly unlikely
that the Congress will be receptive to any proposed amendment to
Section 13(c).
NEXT STEPS AND TIMETABLE
DOT's memorandum proposes steps to achieve the "effective resolution
of the positions of the Departments of Transportation and Labor. 11 As
suggested at the outset, the Department of Labor seriously questions
whether problems exist to the extent one would be lead to believe by
the DOT memorandum. If the Section 13(c) program operated as has
been alleged by DOT and others, modification would be called for.
FORD :- LIBRARY GERALD
- 13 -
However, the record of more than 1350 successful certifications
during the past twelve years does not support the modification
proposals.
The DOL memorandum forwarded to Dr. Connor on April 7, 1976
listed some five current studies underway which are directed at or
touch on Section 13(c). Three of those studies are DOT funded. A
fourth is being conducted by the General Accounting Office. It would
not be appropriate to modify the Section 13(c) program until the
results of these studies are known.
Secretary of Labor
Attachment
CC: James Cannon
Secretary Coleman
FORD is LIBRARY QERALD
THE WHITE HOUSE
WASHINGTON
Mr. Cannon:
This is the letter
Congressman Rousellot was
referring to in the meeting
this morning.
Letter was from:
American Public Transit
Association
FORD
V
GERALD
k
william L ronan, chairman
stanley h gates. jr., president
pcul 1 kole, secretary-treasurer
american public transit association
vice presidents
richard d buck
jack f. gils
b. Γ. stokes
joe V. acrvey
f. norma
executive director
p.j. giacoma
james C. mccor
May 28, 1976
Honorable W. J. Usery, Jr.
Secretary
U. S. Department of Labor
Labor Building
200 Constitution Avenue, N. W.
Washington, D. C. 20210
Honorable William T. Coleman, Jr.
Secretary
Department of Transportation
Nassif Building
400 7th Street, S. W.
Washington, D. C. 20590
Re: (c) Labor Protective Provisions
of the Urban Mass Transportation Act
Dear Sirs:
The American Public Transit Association (APTA) has
completed a careful and thorough review of the present administrative
procedures utilized in implementing the requirements set forth in
Section 13 (c) of the Urban Mass Transportation Act of 1964 as
amended, 49 U.S.C. Section 1601 et seq. (the"Act").
Accordingly, we have determined that the present procedures
with respect to 13(c) certification are totally inadequate, burdensome,
and unduly time consuming, notwithstanding the adoption of the
National Mcdel Agreement negotiated by and between APTA and various
labor organizations. Indeed, the present procedures are heavily
balanced in favor of the unions' considerations with little more than
cursory consideration being given to the problems facing the particular
transit property.
More often than not, and in an alarmingly increasing number
of circumstances, the issues raised do not touch upon the question
of whether the employee protections are fair and equitable but instead
involve determinations by the union as to whether they have enough
leverage in dealing with the particular transit property. Clearly,
this was not intended by the framers of the Act.
APTA has learned that many of its members have existing
fully integrated 13 (c) Agreements, applicable to both capital
projects and operating assistance. Nevertheless, many unions have
Honorable W. J. Usery, Jr.
Honorable William T. Coleman, Jr.
Page Two
insisted upon ever increasing levels of protections, without offering
any concrete reasons or explanations therefor. Indeed, we have learned
that even in circumstances where a transit property has been willing
to sign the National Agreement, some unions are insisting that even
this is inadequate, again without focusing on the question of whether
the levels of protections are unfair or inadequate. We respectfully
submit that activity such as this clearly flies in the face of the
language, spirit and intent of the Act. As a result of the above
abuses, and others like them, our membership very often is faced with
bearing the burdens and pressures of uncertainty not only as to whether
UMTA funds will be forthcoming in time, but indeed whether UMTA funds
will be forthcoming at all.
It was hoped by many that the execution of the National
Model 13 (c) Agreement would ameliorate the procedural problems that
traditionally have been present. Unfortunately, this has not
occurred. The problems are just as severe. The only significant
difference is that the crises are spaced intermittently throughout
the year, due to the particular local funding problems, rather than
all coming at once at the end of the fiscal year. A uniform approach
seems to ignore or make light of the complexities of the local problems
facing the various transit properties. Few transit properties are
faced with similar sets of circumstances. Obviously there are varying
local funding considerations, different geographic factors, separate
and distinct operating considerations, unique local collective bargain-
ing considerations, as well as different existing 13(c) Agreements.
For some the model agreement fits well into the transit property's
overall picture, but for others numerous details and considerations
such as those mentioned above, must come into play. It is clear that
a uniform approach, while of great aid to many, is not in the best
interests to all.
Accordingly, to prevent these abuses, to provide for more
orderly and timely certifications, to alleviate the uncertainties
presently facing the transit properties, and to take into consider-
ation the complexities of the various local issues, we respectfully
request that UMTA and/or DOL implement administrative changes
immediately establishing a more orderly and simplified procedure
for automatic and/or semi-automatic (c) certification, as long as
the particular transit property already has in force a valid and
binding 13(c) Agreement. (We also respectfully request that this be
done with a view toward UMTA and/or DOL ultimately issuing formal
guidelines and/or regulations regarding 13(c) certification.) Thus,
unless an interested party can affirmatively demonstrate the need for
a change in said prior agreement, certification should issue. We
submit the following suggestions:
1. Certain capital grants (such as equipment purchase grants)
and operating grants that are designed as routine by UMTA should
receive automatic certification as long as the transit property already
has an existing valid and binding 13(c) Agreement. UMTA should compile
a list of examples of what it considers to be such routine grant
applications.
Honorable W.J. Usery, Jr.
Honorable William T. Coleman, Jr.
Page Three
2. With all other grant applications the following procedure
should be implemented:
a. The applicant should be required to submit its final application
including the applicant's negative declaration that the use of the funds
will not result in the dismissal or displacement of employees, and an
additional declaration that if a dismissal or displacement should
nevertheless occur, it will abide by its existing 13 (c) Agreement to
the local union or unions 10 days prior to filing the application with
UMTA.
b. After the filing with UMTA, 13(c) certification should be
automatic after thirty (30) days unless one of the interested parties
petitions the Secretary of Labor that there is sufficient cause to
reopen the matter and sets forth in said petition the reasons for
believing sufficient cause to exist, carefully defining the issue (s)
in dispute.
C. Even if a party were to so petition the Secretary, certification
ought not to be held up. Instead, provisional certification should be
granted with notice to the parties to attempt to resolve the defined
issues, but under a strict time limit of thirty (30) days within which
to reach agreement or reach an impasse. If, after 30 days, the
parties have reached an impasse, the Secretary of Labor and the
Secretary of Transportation then should utilize their discretionary
powers by implementing the processes of hearings, fact-finding,
mediation and conciliation, arbitration and recommendation in order
to resolve the defined issue(s). Then the Secretarys' determination,
or that of their designee, on the specific issue (s) in dispute shall
be deemed final and binding.
We believe that the above procedures are fair and
equitable to all interested parties. Thus, we respectfully request
that UMTA and DOL promulgate and immediately implement such regulations.
Very truly yours,
By B. R. Stokes
Executive Director
BRS:ef
American Public Transit Association
cc: Bernard DeLury, Assistant Secretary for Labor Management Relations
Robert E. Patricelli, Administrator, UMTA
Dan V. Maroney, President, Amalgamated Transit Union
Matthew Guinan, President, Transit Workers Union
William Hickey, Esq., Mulholland, Hickey and Lyman
Earle Putnam, Esq., Amalgamated Transit Union
GERALD
William G. Mahoney, Esq., Highwaw, Mahoney, Friedman
Malcolm Goldstein, Esq., O'Donnel & Schwartz
William Skutt, Brotherhood of Railroad Engineers
Judith Hope, Associate Director, Domestic Council
Rousedut
1/28/76
letter To asky
column
RDD
within a
megnt -
week -
Name in
W Ausiles
country -
Bart?
13.C -
+ Speren
clurery Sunder itors
will
california
FORD & LIBRARY BERALD