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The original documents are located in Box 22, folder "Mass Transit - Labor Protective
Agreements: Meeting with the President, Secretary Coleman and Secretary Usery, August
2, 1976 (1)" of the James M. Cannon Files at the Gerald R. Ford Presidential Library.
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Digitized from Box 22 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
MEETING WITH THE PRESIDENT &
SECRETARIES COLEMAN & USERY
re: 13 (c)
Monday, August 2, 1976
11:00
Oval Office
J- J -
When is John
WE Collesters letter 1,
FORD is LIBRARY GERALD
[July 1976]
OF TWE
RESIDENT
OF THE
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE
UNITED
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
return to Earnon
MEMORANDUM FOR JIM CANNON
FROM : Daniel P. Kearney
SUBJECT: Report and Recommendation of Secretaries Usery and Coleman regarding
UMTA Section 13(c) Procedures
We compliment you in moving this very difficult issue forward. Each little
step is a major breakthrough in a problem which has been with us for a long
time without being resolved.
In response to your request, OMB recommendations on the proposed options
are:
Option 1. Negative declaration. We recommend 1c (compromise
position). We understand from your staff that they
believe this option will be acceptable to both depart-
ments. If this is true, it will be a significant step
in reducing the cumbersome, time-consuming 13(c) process.
Option 2. Set time limits. We recommend that the two depart-
ments continue to seek a solution between their positions,
but if that is not possible we recommend the DOT position.
Option 3. Multi-year certification. This option is closely tied
to the decision on Option 1 and therefore we recommend
the DOT position.
Option 4. Single certification for single grant. We recommend
"agree."
Option 5. Promulgate and publish request. It does not appear the
two departments are in agreement from the 6-25-76 memo.
We would recommend that the regulations be put into
effect no later than 60 days from now. Labor/DOT should
use the consultative process before the regulations are
final.
Log
172,
THE WHITE HOUSE
WASHINGTON
JUL RECEIVED 56 PM
July 9, 1976
ADMINISTRATIVELY CONFIDENTIAL
MEMORANDUM FOR: PHIL BUCHEN
MAX FREIDERSDORF
ALAN GREENSPAN
ROBERT T. HARTMANN
JIM LYNN
JACK MARSH
BILL SEIDMAN
FROM:
JIM CANNON Jun
SUBJECT:
Report and Recommendations of Secretaries
Usery and Coleman regarding UMTA Section
13 (c) Procedures
I attach for your consideration a Presidential decision
memorandum on simplification of labor protective procedures
under S 13 (c) of the Urban Mass Transit Act of 1964 (as
amended). This section requires that, if a grant of Federal
moneys for transit purposes "adversely affects" local
employees or unions, the Department of Labor must certify
that "fair and equitable" arrangements have been made to
protect such employees. The 13 (c) process has grown
cumbersome, time-consuming and inordinately expensive over
the last decade.
On June 3, 1976, therefore, the President directed Secretaries
Usery and Coleman to comment on 5 specific proposals for
simplification of this process. Their joint memorandum is
attached at Tab A. It shows agreement on 2 proposals, and
disagreement on three. They have requested an opportunity to
meet jointly with the President to discuss these issues.
Before this meeting takes place, could you review and comment
on the options which they have posed so that the President
may have the benefit of your views?
I would appreciate receiving your comments by c.o.b. Tuesday,
July 13.
Thanks.
FORD
BERALD
THE WHITE HOUSE
DECISION
WASHINGTON
July 9, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
JAMES CANNON
SUBJECT:
Report and Recommendations of Secretaries
Usery and Coleman for Improving Procedures
Under Section 13 (c) of the Urban Mass
Transportation Act of 1964, as Amended
BACKGROUND:
As you know section 13 (c) of the 1964 UMTA Act (Amended) requires
that before any Federal assistance for Mass Transit is granted,
the Secretary of Labor must certify that "fair and equitable"
arrangements have been made for transit employees "adversely
affected" by the grant.
Although the intent of this provision of the law was sound, many
believe the procedures have been manipulated so that, even where
there is no "adverse" effect on workers, the process is used to
win higher wages and increased fringe benefits: if transit
operators do not agree to these terms, the unions will not approve
the certification, DOL will not certify under 13 (c), and UMTA
funds will not flow. 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.
On June 2, 1976, you reviewed a May 28, 1976, memorandum
(attached at Tab B) describing the history of the 13 (c) problem
and directed Bill Coleman and Bill Usery to try to reach
agreement on specific proposals for improving the 13 (c) process.
2
SUMMARY OF RECENT DEVELOPMENTS:
After extensive discussions and lengthy exchanges of written
as well as oral views, DOL and DOT reached agreement on two
of the five proposals you made: (1) granting a single certi-
fication for a single Federal grant, and (2) publication of
regulations or guidelines. There was disagreement on three
proposals: (1) Establishing that certain catagories of
grants have no adverse impact, and giving a "negative
declaration" that, since no such impact is likely to occur,
the 13 (c) certification process is unnecessary; (2) setting
time limits for the DOL decision process; and (3) granting a
single multi-year certification for projects which result
from a single, UMTA grant decision. Their joint paper is
attached at Tab A.
Secretaries Usery and Coleman have requested a meeting with
you to discuss this question. We have shared with some of your
senior advisers the respective positions of the two Departments;
their views are noted below.
I recommend that you approve a meeting with the two Secretaries
at your earliest convenience.
APPROVE MEETING
DISAPPROVE MEETING
ISSUES:
1. NEGATIVE DECLARATION WITH CHANGED BURDEN OF PROOF.
Pursuant to your decision on June 3d, you proposed that DOT
and DOL could establish categories of capital and operating
assistance 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, 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.
3
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 also be provided whereby an
employee or union could also ask for special protective
arrangements in connection with any grant based upon a
showing of a substantial prospect of "adverse impact."
OPTIONS:
(a) Department of Labor Position.
The Department of Labor questions the legality of
this "negative declaration," and objects to it from
a national policy standpoint as well. They argue that
the recommended national model agreement for 13 (c)
certification, negotiated a year ago, would be
abrogated by such a procedure. Further, shifting the
present burden of proof from the operators (to prove
there is no adverse impact) to unions and employees
(to prove there is such adverse impact) would be unfair,
and might increase the delays already present in DOL
13 (c) certifications.
(b) Department of Transportation Position.
While DOT urges that 13 (c) requires certification only
where employees are actually "adversely affected,"
Bill Coleman offers a compromise: limit the certification
procedures to standard operating or revenue sharing type
grants. DOT could require that any such operating
assistance funding include a warranty by the transit
district that no "adverse impact" will result, together
with a promise to redress any such grievance if it shows
up later.
(c) Compromise Position.
The DOL-DOT dispute may be a matter of semantics. Rather
than calling this procedure a "negative declaration," a
category could be established called "standardized
approvals." In recurring grants, the Secretary of Labor
on his own initiative, could require that certain Labor
protections be guaranteed in the granting contract,
4
without the need for the collective bargaining
process. DOL did just this on a recent demonstration
project grant for the lower east side of Manhattan,
approval dated June 4.
On this issue, your advisors recommend
.
(a) DOL position
.
(b) DOT position
.
(c) Compromise position
.
2. SET TIME LIMITS
You urged the two Departments to cut the red tape in the
13 (c) process by setting time limits for the negotiation
of agreements.
OPTIONS
(a) Department of Labor Position
The Department of Labor argues that the 13 (c)
process has usually worked well without time limits
but agrees that a limited category of reasonable
time frames should be established.
(b) Department of Transportation Position
DOT disagrees that the 13 (c) process has worked
basically well without time limits. DOT urges
that time limits be set on a case by case basis in
all cases where DOT indicates that there is a
significant possibility of funding.
On this issue, your advisors recommend
.
(a) DOL position
.
(b) DOT position
.
5
3. MULTI-YEAR CERTIFICATIONS
You asked the two Departments to consider granting multi-
year certifications for projects which result from a
single UMTA grant decision.
OPTIONS:
(a) Department of Labor Position
DOL agrees that multi-year certifications would be
useful SO long as the parties agree to their use.
They would limit such certifications to particular
projects involving multi-year funding unless,
through collective bargaining, the parties agree
to broader protections.
(b) Department of Transportation Position
DOT urges that the proposed procedure is merely a
piggy-back or recertification procedure based on
existing agreements already collectively bargained
between the parties. It should apply to three
categories of repetitive grants:
(1) Grants for normal equipment replacement;
(2) Grants for maintenance carried out over a
period of years, such as repairs on rights-
of-way;
(3) Grants for specified multi-year programs on
identifiable projects.
DOT urges that labor protections, once certified by
DOL, should continue to apply to subsequent capital
grants that have basically the same impact.
On this issue, your advisors recommend
.
(a) DOL position
.
(b) DOT position
.
6
4.
SINGLE CERTIFICATIONS FOR SINGLE GRANT
DOL and DOT agree that this should be done, so long as
there is no change in the scope of the project.
On this issue your advisors recommend
AGREE
DISAGREE
5. PROMULGATE AND PUBLISH REGULATIONS
The two Departments basically agree that guidelines for the
13 (c) process, not formal regulations, should be published.
Although clear rules are needed formal regulations would be
complex and might serve only to institutionalize the defects
in the 13 (c) process which are already thorns in the sides
of local officials.
(a) Department of Labor Position
DOL recommends the deferral of formal rule making until
the two Departments can consult with those affected by
13 (c)
(b) Department of Transportation Position
DOT urges that simple guidelines, rather than lengthy
regulations, be published, and that this be done quickly.
DOT questions the need for further delays or consultations,
since all affected parties have been making their views
known for over 8 years. (Simple guidelines could be
published in 60 days.)
On this issue your advisors recommend
AGREE
DISAGREE
THE WHITE HOUSE
ACTION
WASHINGTON
July 9, 1976
ADMINISTRATIVELY CONFIDENTIAL
MEMORANDUM FOR: PHIL BUCHEN
MAX FRIEDERSDORF
ALAN GREENSPAN
ROBERT T. HARTMANN
JIM LYNN
JACK MARSH
BILL SEIDMAN
FROM:
JIM CANNON Jun
SUBJECT:
Report and Recommendations of Secretaries
Usery and Coleman regarding UMTA Section
13 (c) Procedures
I attach for your consideration a Presidential decision
memorandum on simplification of labor protective procedures
under S 13 (c) of the Urban Mass Transit Act of 1964 (as
amended). This section requires that, if a grant of Federal
moneys for transit purposes "adversely affects" local
employees or unions, the Department of Labor must certify
that "fair and equitable" arrangements have been made to
protect such employees. The 13 (c) process has grown
cumbersome, time-consuming and inordinately expensive over
the last decade.
On June 3, 1976, therefore, the President directed Secretaries
Usery and Coleman to comment on 5 specific proposals for
simplification of this process. Their joint memorandum is
attached at Tab A. It shows agreement on 2 proposals, and
disagreement on three. They have requested an opportunity to
meet jointly with the President to discuss these issues.
Before this meeting takes place, could you review and comment
on the options which they have posed SO that the President
may have the benefit of your views?
I would appreciate receiving your comments by c.o.b. Tuesday,
July 13.
Thanks.
THE WHITE HOUSE
WASHINGTON
July 9, 1976
MEMORANDUM FOR:
JIM CANNON
FROM:
JUDITH RICHARDS HOPE
SUBJECT:
UMTA USED 13 (c)
I attach a revised Presidential decision memorandum on UMTA
13 (c) incorporating David Lissy's revisions and suggestions.
The meeting with the President requested by Usery and Coleman
should occur as soon as possible particularly in light of a
GAO study of this problem which is due to be released soon.
Also, Bill Ronan and the head of American Public Transit
Association, Bill Stokes, are meeting with Usery next Wednesday
afternoon to voice loud complaints on DOL's 13 (c) process.
Bill Nicholson advises that 30-60 minutes of Presidential time
would probably be available Wednesday morning, July 14, to meet
on the issue. I think this would be a good time.
CC: Jim Cavanaugh
Art Quern
David Lissy
THE WHITE HOUSE
DECISION
WASHINGTON
July 9, 1976
MEMORANDUM FOR THE PRESIDENT
FROM:
JAMES CANNON
SUBJECT:
Report and Recommendations of Secretaries
Usery and Coleman for Improving Procedures
Under Section 13 (c) of the Urban Mass
Transportation Act of 1964, as Amended
BACKGROUND:
As you know section 13 (c) of the 1964 UMTA Act (Amended) requires
that before any Federal assistance for Mass Transit is granted,
the Secretary of Labor must certify that "fair and equitable"
arrangements have been made for transit employees "adversely
affected" by the grant.
Although the intent of this provision of the law was sound, many
believe the procedures have been manipulated so that, even where
there is no "adverse" effect on workers, the process is used to
win higher wages and increased fringe benefits: if transit
operators do not agree to these terms, the unions will not approve
the certification, DOL will not certify under 13 (c), and UMTA
funds will not flow. 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.
On June 2, 1976, you reviewed a May 28, 1976, memorandum
(attached at Tab B) describing the history of the 13 (c) problem
and directed Bill Coleman and Bill Usery to try to reach
agreement on specific proposals for improving the 13 (c) process.
2
SUMMARY OF RECENT DEVELOPMENTS:
After extensive discussions and lengthy exchanges of written
as well as oral views, DOL and DOT reached agreement on two
of the five proposals you made: (1) granting a single certi-
fication for a single Federal grant, and (2) publication of
regulations or guidelines. There was disagreement on three
proposals: (1) Establishing that certain catagories of
grants have no adverse impact, and giving a "negative
declaration" that, since no such impact is likely to occur,
the 13 (c) certification process is unnecessary; (2) setting
time limits for the DOL decision process; and (3) granting a
single multi-year certification for projects which result
from a single, UMTA grant decision. Their joint paper is
attached at Tab A.
Secretaries Usery and Coleman have requested a meeting with
you to discuss this question. We have shared with some of your
senior advisers the respective positions of the two Departments;
their views are noted below.
I recommend that you approve a meeting with the two Secretaries
at your earliest convenience.
APPROVE MEETING
DISAPPROVE MEETING
ISSUES:
1. NEGATIVE DECLARATION WITH CHANGED BURDEN OF PROOF.
Pursuant to your decision on June 3d, you proposed that DOT
and DOL could establish categories of capital and operating
assistance 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, 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.
3
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 also be provided whereby an
employee or union could also ask for special protective
arrangements in connection with any grant based upon a
showing of a substantial prospect of "adverse impact.'
OPTIONS:
(a) Department of Labor Position.
The Department of Labor questions the legality of
this "negative declaration," and objects to it from
a national policy standpoint as well. They argue that
the recommended national model agreement for 13 (c)
certification, negotiated a year ago, would be
abrogated by such a procedure. Further, shifting the
present burden of proof from the operators (to prove
there is no adverse impact) to unions and employees
(to prove there is such adverse impact) would be unfair,
and might increase the delays already present in DOL
13 (c) certifications.
(b) Department of Transportation Position.
While DOT urges that 13 (c) requires certification only
where employees are actually "adversely affected,"
Bill Coleman offers a compromise: limit the certification
procedures to standard operating or revenue sharing type
grants. DOT could require that any such operating
assistance funding include a warranty by the transit
district that no "adverse impact" will result, together
with a promise to redress any such grievance if it shows
up later.
(c) Compromise Position.
The DOL-DOT dispute may be a matter of semantics. Rather
than calling this procedure a "negative declaration,' a
category could be established called "standardized
approvals." In recurring grants, the Secretary of Labor
on his own initiative, could require that certain Labor
protections be guaranteed in the granting contract,
4
without the need for the collective bargaining
process. DOL did just this on a recent demonstration
project grant for the lower east side of Manhattan,
approval dated June 4.
On this issue, your advisors recommend
.
(a) DOL position
.
(b) DOT position
.
(c) Compromise position
.
2. SET TIME LIMITS
You urged the two Departments to cut the red tape in the
13 (c) process by setting time limits for the negotiation
of agreements.
OPTIONS
(a) Department of Labor Position
The Department of Labor argues that the 13 (c)
process has usually worked well without time limits
but agrees that a limited category of reasonable
time frames should be established.
(b) Department of Transportation Position
DOT disagrees that the 13 (c) process has worked
basically well without time limits. DOT urges
that time limits be set on a case by case basis in
all cases where DOT indicates that there is a
significant possibility of funding.
On this issue, your advisors recommend
.
(a) DOL position
.
(b) DOT position
.
5
3.
MULTI-YEAR CERTIFICATIONS
You asked the two Departments to consider granting multi-
year certifications for projects which result from a
single UMTA grant decision.
OPTIONS:
(a) Department of Labor Position
DOL agrees that multi-year certifications would be
useful SO long as the parties agree to their use.
They would limit such certifications to particular
projects involving multi-year funding unless,
through collective bargaining, the parties agree
to broader protections.
(b) Department of Transportation Position
DOT urges that the proposed procedure is merely a
piggy-back or recertification procedure based on
existing agreements already collectively bargained
between the parties. It should apply to three
categories of repetitive grants:
(1) Grants for normal equipment replacement;
(2) Grants for maintenance carried out over a
period of years, such as repairs on rights-
of-way;
(3) Grants for specified multi-year programs on
identifiable projects.
DOT urges that labor protections, once certified by
DOL, should continue to apply to subsequent capital
grants that have basically the same impact.
On this issue, your advisors recommend
.
(a) DOL position
.
(b) DOT position
.
6
4. SINGLE CERTIFICATIONS FOR SINGLE GRANT
DOL and DOT agree that this should be done, SO long as
there is no change in the scope of the project.
On this issue your advisors recommend
.
AGREE
DISAGREE
5.
PROMULGATE AND PUBLISH REGULATIONS
The two Departments basically agree that guidelines for the
13 (c) process, not formal regulations, should be published.
Although clear rules are needed formal regulations would be
complex and might serve only to institutionalize the defects
in the 13 (c) process which are already thorns in the sides
of local officials.
(a) Department of Labor Position
DOL recommends the deferral of formal rule making until
the two Departments can consult with those affected by
13 (c).
(b) Department of Transportation Position
DOT urges that simple guidelines, rather than lengthy
regulations, be published, and that this be done quickly.
DOT questions the need for further delays or consultations,
since all affected parties have been making their views
known for over 8 years. (Simple guidelines could be
published in 60 days.)
On this issue your advisors recommend
AGREE
DISAGREE
U.S. DEPARTMENT OF LABOR
OFFICE OF THE SECRETARY
WASHINGTON
JUN 25 1976
MEMORANDUM FOR:
THE HONORABLE JAMES CANNON
Assistant to the President
for Domestic Affairs
FROM:
W.J. USERY, JR.
Secretary of Labor
WILLIAM T. COLEMAN,
JR
Secretary of Transportation
This is in response to your memorandum of June 3 transmitting
the President's direction that we address five specific
proposals relating to the administration of Section 13 (c) of
the Urban Mass Transportation Act of 1964. The positions of
the two Departments on each of these five proposals are set
forth in the attachment. We have also attached some tabular
background material.
In view of the potentially controversial nature of some of
these recommendations, we request an opportunity to meet
jointly with the President to discuss these issues prior to
his making any decisions.
Attachment
6/25/76
MEMORANDUM ON SECTION 13 (c)
1. NEGATIVE DECLARATION WITH CHANGED BURDEN OF PROOF
Proposal from June 3 Memorandum:
"Establish categories of capital grants that historically have
had minimal, if any, adverse impact on transit employees. Such
categories might include bus and rail car purchases which re-
sult 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 procedure would shift the present burden of proof of adverse
impact from local transit operators to the unions or the employees.
Provide a review procedure 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. "
Department of Labor Position:
The Department of Labor questions the legality of establishing
categories of UMTA assistance where prior certification under 13 (c)
would no longer be required. The statute states that each
"
contract for the granting of any such assistance shall specify
the terms and conditions of the protective arrangements. The
Solicitor of Labor has advised that implementation of a negative
declaration procedure would be inconsistent with the statute and
legislative history. His opinion letter is attached at Tab A.
The Department of Labor also objects from a policy standpoint to
the proposed negative declaration procedure. Establishing cate-
gories of projects where individual certifications would not be
required would abrogate the national model agreement which was
negotiated only this past July to be effective through September,
1977. This agreement, negotiated among representatives of the
American Public Transit Association and of the national transporta-
tion unions, set forth a recommended model set of protective con-
ditions for application in individual 13 (c) agreements relating
to operating assistance. A separate memorandum from Lewis M. Gill
(Tab B), who mediated this agreement, sets forth the understanding
of the parties that, while use of this agreement was to be
encouraged, existing Labor Department case-handling procedures
2
including individual project notice and sign-off were to continue.
Existing case-handling procedures were to stay in effect for
capital, operating or demonstration projects not covered by the
agreement. This agreement has served as the basis for approxi-
mately 85 percent of Labor Department certifications for covered
operating assistance projects during 1976. Any unilateral change
in procedures by the Labor Department would contravene the agree-
ment of the parties.
Secondly, the proposed negative declaration procedure would shift
to individual employees or their unions the burden of establishing
adverse impact resulting from Federal assistance. This would be a
radical change from current procedure, since the common practice
under existing agreements is to place the burden of proof upon the
employer. It would be very difficult, if not impossible, for
employees to meet this burden, since proof of causality requires
familiarity with information peculiarly within the knowledge of
the applicant. This shifted burden would detract substantially
from the current level of employee protections, and would in our
view be inconsistent with the purposes of the statute.
Given a major administrative change of this type, we would antici-
pate that unions and individual employees would frequently file
claims of adverse impact. This would trigger a formal review pro-
cedure, possibly including public hearings requiring DOL inquiry
into the specifics of individual employee's cases. This process
could substantially delay the DOL certifications and require a
major increase in DOL staff to handle the workload. It would also
create a burdensome two-step process for the parties: an administra-
tive hearing on adverse impact, then possible grievance proceedings
to determine remedies. Further, as the DOL made determinations re-
garding adverse impact, a body of case law would develop which
could affect labor and management's own decisions under grievance
procedures in existing collective bargaining arrangements. The
end result would be to create yet another area where a Federal
agency would be issuing decisions with a potentially substantial
impact on public and private sector activity.
Department of Transportation Position:
The Department of Transportation considers this a viable, desirable
procedure, and believes that it is allowable within the law.
As a matter of law, Section (c) does not require protective
arrangements in each and every contract for assistance, but rather
only in situations where employees would be adversely "affected by
such assistance." There are classes of projects which do not
3
adversely affect employees, and the Secretary of Labor has
ample administrative authority to so hold. This was, in fact,
the way the provision was administered in 1965. Opinion of
counsel is attached at Tab C.
While we support the application of the negative declaration
approach to a range of projects as the June 3 memorandum suggests
(and we have been assured that the omission of operating assis-
tance from that proposal in your memorandum was an oversight),
we could accept limiting its use to a single category of operating
assistance projects. These would be grants where funds are pro-
vided in the nature of general purpose operating assistance or
revenue sharing, and where the term "project" has no particular
identity but is identified as a certain proportion of the total
sum of money needed to operate an entire system. In such cases,
adverse impacts seem inconceivable and the Secretary of Transporta-
tion should be able to make grants without a 13 (c) certification.
Further, the Secretary of Transportation should require that there
be included in UMTA operating assistance funding contracts a
warranty by the grantee of no adverse impact, together with a
commitment by such grantee to provide redress under Section 13 (c)
upon any subsequent showing of actual adverse impact.
As to the burden of proof problem, while it is difficult for
either party to show that an alleged harm does or does not relate
to the presence of Federal funds which are comingled in the
operator's budget, it certainly seems more equitable for the party
who is charging he has been harmed to have to make that showing.
A shift in the burden of proof to labor should not increase the
filing of claims, but should rather cut down on any filing of
frivolous charges. Once a claim is filed, the Labor Department
will have to make a finding no matter which party has the burden
of proof, so there is no basis for arguing that this proposal will
cause administrative problems.
The presence of a negotiated national model agreement does not
alter the desirability of moving to a negative declaration approach.
That agreement expires in 1977 and was, at best, only a guideline;
the American Public Transit Association (APTA) was not negotiating
as the bargaining representative of transit authorities and never
pretended to be binding them. Moreover, the national model agree-
ment is itself causing substantial problems and perpetuates an
unnecessary collective bargaining procedure in a situation where
that is unnecessary. APTA has now proposed a very different 13 (c)
procedure affecting operating assistance, so the Department of
Labor would not be abrogating the agreement on its own motion.
There is an increasing number of requests for changes in 13 (c)
administration from every level of government; see, for example,
communications from the Governor of Massachusetts and the National
Association of Counties (NACO) at Tab D.
4
2. SET TIME LIMITS
Proposal from June 3 Memorandum:
"DOL could set time limits for the negotiation of agreements,
after which the Secretary of Labor could make his own determin-
ation of what arrangements constituted 'fair and equitable' pro-
tection. 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) "
Department of Labor Position:
The Department of Labor recognizes the advantages of establishing
reasonable time frames for negotiations regarding protective
arrangements in certain project situations. The Department ob-
jects, however, to standardized time limits that would apply
automatically to all projects within a given category. The
circumstances of individual grants and the protective arrangements
that may be required vary considerably, even within a particular
category of grant. The length of time required for both parties
acting in good faith to negotiate an agreement on protective terms
varies accordingly. Unless used selectively, time limits could
thus cut short the bargaining process before agreement has been
reached, even in cases where lack of certification is not delaying
grant approval. In addition, in many cases such time limits will
provide an incentive for one or both parties not to bargain in
good faith, given the prospect that a particular level of protec-
tions would be imposed by the Department of Labor at a certain
point. Rigid time limits would therefore operate, in our view,
to undercut the philosophy of the statute to encourage local col-
lective bargaining. This philosophy is quite clearly stated in the
legislative history. The House Committee Report on the Urban Mass
Transportation Act of 1964 explicitly stated that "specific con-
ditions for worker protection will normally be the product of
local bargaining and negotiation.
There are cases where time limits are advisable, and the Department
of Labor will apply them on a flexible basis. We will ask the
Department of Transportation to identify those high-priority pro-
jects where timely resolution of 13 (c) issues is crucial to the
administration of the mass transportation assistance program.
These projects will be given expedited processing by the Department
of Labor, including the setting of time limits on negotiations
where we consider appropriate. We anticipate that such time limits
will be infrequently imposed, since the 13 (c) process has usually
worked well without such limits in the past. In the great majority
5
of cases, certification occurs before UMTA is ready to approve
the grant. Further, as labor, management and the Department of
Labor have gained more experience under the program, the average
processing time for 13 (c) certifications has decreased substan-
tially. Despite a tripling in case load since Fiscal Year 1974,
average case processing time has been reduced from 3.5 months to
2.5 months.
Department of Transportation Position:
The position of the Department of Labor is not adequately res-
ponsive to the problem or to the White House proposal. It would
make time limits the exception rather than the rule. The
Department of Transportation agrees that time limits can
reasonably vary with the type of grant involved, and if necessary
with local conditions. But time limits should be set, on a case
by case basis, in all cases where we indicate that there is a
significant possibility of funding. In addition, we support the
concept of an expedited processing track for those projects which
DOT indicates to DOL have a high priority.
We cannot agree that the 13 (c) process has worked well without
time limits in the past. Average processing time is deceptive
as a measure, since it lumps the difficult situations in with
routine grants. In fact, the unconstrained procedures currently
followed by DOL have resulted in the documented feeling by grantees
that they are in an uneven bargaining position, and a perception
that unions have a veto over transit grants.
Nor would the introduction of time limits defy the legislative
history. That legislative history makes clear that the Secretary
of Labor is not expected to be guided solely by a devotion to
collective bargaining. For example, the 1963 Report of the
Senate Committee on Banking and Currency on S.6 states:
"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."
Further, 12 years of experience in the program have resulted in
rather standard arrangements, making the risk of injustice owing
to a time constraint minimal.
6
Some procedural hedge against the possibility of failure to
bargain in good faith seems appropriate. That can easily be
accomplished by providing that any party seeking a direct
certification by the Labor Department after expiration of the
time period should have to make a showing that it has sought
to bargain in good faith.
3. MULTI-YEAR CERTIFICATIONS
Proposal from June 3 Memorandum:
"Instead of having each grant of Federal dollars give rise to
a new 13 (c) agreement, DOL could establish a policy of granting
multi-year certifications which would be good for all grants
made within a specific period of time subject to review based
upon the union or an employee showing 'adverse impact.
Department of Labor Position:
The proposal calls for a certification for a particular authority
for a specified period, presumably to cover all forms of operating,
capital or demonstration assistance from UMTA. The Department of
Labor believes that where the parties agree to their use, multi-
year certifications can be a useful mechanism for improved admin-
istration of Section 13 (c), particularly for the operating
assistance grant program. In fact, the model agreement, which
covers a period of three fiscal years, was a positive step in this
direction. Multi-year, and multi-project, arrangements are also
frequently negotiated between the parties under the capital grant
program. Increased utilization of such agreements can and will be
encouraged by the Department of Labor.
The Department of Labor would limit such certifications, however,
to particular identifiable projects involving multi-year funding
unless the applicant and employee representatives were to agree
to a broader protective arrangement. For the government to impose
protective arrangements negotiated in one set of circumstances in
a different set of circumstances runs counter to the basic premise
of the statute that employee protections in individual cases be
determined by collective bargaining. Project circumstances
inevitably differ as a result of routine and recurring technologi-
cal, operational and organizational changes. It is difficult,
if not impossible, to predict what type of protections might be
appropriate in the context of a particular operating, capital or
demonstration project.
7
Any such change in the Secretary of Labor's current certification
practices would be inconsistent with the procedures agreed to and
jointly recommended to him by the parties to the model agreement.
Furthermore, since the proposed procedure contemplates an admin-
istrative mechanism for review of union or employee claims of
adverse impact, a cumbersome administrative procedure could arise,
presenting the same problems discussed under Issue No. 1.
Department of Transportation Position:
The procedure the Department proposes would be better described
as "recertifications based on existing agreements." In the case
of certain categories of grants which are routine and/or repetitive
in nature, the Secretary of Labor should provide automatic certi-
fication based upon the application to that grant of any pre-
existing Section 13 (c) agreement previously agreed to by the parties
for a grant of that type. Such certification should be routinely
made unless the grantee or any affected employee shows cause within
a reasonable period of time as to why some new protective arrange-
ments need to be considered.
This procedure should apply to at least the following categories
of grants:
(a) capital grants for purchase or renovation of vehicles
(including buses, railcars, or other vehicles) based
on a normal equipment replacement or maintenance cycle,
not resulting in a contraction of service levels;
(b) capital grants for refurbishing of rights-of-way,
building, or other real property where the maintenance
activity is closely similar to that carried out over a
period of years;
(c) grants pursuant to specified multi-year programs of
identifiable projects.
The model agreement is irrelevant in the context of this DOT
proposal since that proposal deals only with capital grants
while the model agreement dealt only with operating assistance.
More in point, it can be argued that even though a grant might
have the same content and impact from year to year, the circum-
stances within which the parties might bargain on protective
arrangements can change over time so that annual collective
bargaining cannot be precluded. However, the Department of
8
Transportation does not feel that the law intended to permit or
require an upward ratcheting of protective arrangements year
after year even though the content or impact of the grant assistance
does not vary. Once adequate protections have been certified, they
should continue to apply to subsequent grants that have basically
the same impact.
4. SINGLE CERTIFICATION FOR SINGLE GRANT
Proposal from June 3 Memorandum:
"Only a single certification should be required for a given pro-
ject, even if such a project is funded through several successive
grants or grant amendments."
Department of Labor Position:
The Department of Labor agrees that a single certification is
feasible for a given project which may be funded through several
successive grants or grant amendments as long as there is no change
in the scope of the project. Such a practice is in fact utilized
at present.
The Department of Labor will develop appropriate procedures as
outlined in our position on Issue No. 5.
Department of Transportation Position:
Concur.
5. PROMULGATE AND PUBLISH REGULATIONS
Proposal from June 3 Memorandum:
"To assist all parties in participating in the 13 (c) process,
simple published regulations should be available."
Department of Labor Position:
The Department of Labor will prepare and publish appropriate
guidance for interested parties with respect to the orderly and
timely administration of Section 13 (c). While the Department is
of the view that published regulations are appropriate, it may be
advisable to defer initiating the formal rulemaking process until
the Department has had further opportunity to confer with the
Department of Transportation and with management and labor regarding
9
their current differences over the administration of the 13 (c)
program. The Department of Labor plans to convene the standing
committee contemplated in paragraph 9 of the Gill memorandum to
assist in this consultative process.
Department of Transportation Position:
The Department of Transportation concurs but would urge that
simple guidelines, rather than lengthy regulations issued through
a formal rulemaking, would be a better way to proceed.
TAB A
U.S. DEPARTMENT OF LABOR
OFFICE OF THE SOLICITOR
WASHINGTON, D.C. 20210
STATES OF OF
22 JUN 1976
MEMORANDUM FOR THE SECRETARY
Subject: White House Paper on Section 13(c) of UMTA;
Legal Question concerning Negative Certifications
of Employee Protections
Attached is a paper dealing with the legal question of
whether this Department can issue negative certifications with
respect to the employee protective provisions under Section 13(c)
of UMTA. As you know, this was one of the suggestions in the recent
White House memorandum to this Department and the Department of
Transportation. The paper concludes that such negative certifications
cennot be legally justified.
William 3. Kilberg
Solicitor of Labor
Attachment
U.S. DEPARTMENT OF LABOR
OF
OFFICE OF THE SOLICITOR
LABOR
WASHINGTON, D.C. 20210
AMERICA
STATES
OF
MEMORANDUM OF LAW
SUBJECT: Department of Transportation's Proposal
that the Secretary of Labor provide
a "Negative Declaration" in lieu of
existing certification procedures for
certain project categories.
SOL: 76-22-(UMT)
The Department of Transportation has proposed that the
Secretary of Labor, in processing grant applications involving
certain categories of projects under sections 3, 5 and 6 of
the Act, which have in the past resulted in minimal if any
adverse impact on mass transit employees, need not require
that specific terms and conditions of a protective arrangement
be worked out to certify that fair and equitable arrangements
have been made to protect the interests of employees.
It is the position of the Department of Labor that the
Department of Transportation's proposal concerning negative
declarations, would prohibit the Secretary of Labor from
performing his role as mandated by Congress.
Section 13(c) of the Act provides that "It shall be a con-
dition 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
The contract for the
granting of any such assistance shall specify the terms and
conditions of the protective arrangements." (Emphasis
added.)
Congress in passing the Urban Mass Transportation Act was
aware that the future of the mass transit industry was in
jeopardy without federal assistance. Further, in contemplating
the impact of the Urban Mass Transportation Act Congress
believed that the bill would serve to preserve the jobs of
many workers then engaged in the mass transit industry, and
more importantly Congress envisioned that this bill would in
the long range generate new jobs through the extension of
existing systems and the creation of new systems. While
recognizing the vast potential for improvement in employment
FORD
- 2 -
prospects as a result of this bill, Congress was also aware
of the potential adverse effects on employees as a result of
this bill.
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 a result
of the introduction of new equipment
or the reorganization of existing
transit operation. (2 U.S. Cong. & Adm.
News, 1964, H. Rep. 204, p. 2584.)
Because of this concern, Congress sought to ensure that indi-
vidual workers adversely affected should be fully protected
in a fair and equitable manner and that federal funds would
not be used in a manner that is directly or indirectly
detrimental to the legitimate interests and rights of workers.
Congress intended the means for providing these protections
would be worked out through the local bargaining process.
The committee wishes to point out that
subject to the basic standards set
forth in the bill, specific conditions
for worker protection will normally
be the product of local bargaining
and negotiating. (2 U.S. Cong. & Adm.
News, 1964, H. Rep. 204, p. 25864.)
Further, the committee went on to stress the role of the
Secretary of Labor in assuring that the intent of Congress
be carried out.
The committee also expects the
Secretary of Labor, in addition to
providing the administrator with
technical assistance, will assume
responsibility for developing
criteria as to the types of pro-
visions that may be considered
necessary to ensure that worker
interests are adequately protected
in the different types of situations
that may arise. (2 U.S. Cong. &
Adm. News, p. 2584-2585.)
- 3 -
It is evident that Congress wished the Secretary of Labor to
assume responsibility for determining that employees are
provided fair and equitable protection.
In 1966, when the Act was first amended, Congress again
reiterated its commitment to providing employee protections.
Both the Senate and House Committee reports specifically
stated:
Before Federal assistance may be
provided, the Secretary must determine
that all contracts contain the usual
provisions relating to * * * labor
* * * under criteria specified in the
Act * * * (See Cong. Rec., October
20, 1966, p. 28345, 89th Cong., 2d
Sess.)
Further, in a memorandum, inserted into the Congressional
Record, explaining the technical changes made by the Urban
Mass Transportation Act amendments of 1966 it was stated:
The labor protective provisions
contained in the original Urban Mass
Transportation Act continue to apply
in the case of any project which can
conceivably affect the rights and
interests of employees. (supra,
at p. 28345.)
The Act was amended again in 1974 to authorize grants for
operating subsidies to states and local public bodies and
their agencies. There was no discussion by Congress to
amend or eliminate the need for 13 (c) protections for loans
under section 3. In addition, a new section 5 was added to
the Mass Transportation Act which now provides for the
apportionment of funds on a formula basis. Congress specifi-
cally provided in section 5: " (n) (1) that the provisions of
section 13 (c) and section 3(e) (4) shall apply in carrying
out mass transportation projects under this section."
Therefore, it is perfectly clear from its passage and
through the amendments of 1973, Congress was committed to
providing mass transit employees the protections of section
13 (c). If the Secretary of Labor were to adopt the proposal
put forth by the Department of Transportation the burden of
proof would shift to the individual employee to rebut the
FORD
Secretary's "Negative Declaration" of adverse impact in
order to qualify for the statutory protections. This was
obviously not what Congress intended in establishing protections
- 4 -
for those employees who were adversely affected as a result
of the federal grant.
Moreover, section 13 (c) specifically provides that pro-
tective arrangements under the Urban Mass Transportation Act
shall provide benefits no less than those established pursuant
to section (2) (f) of the Interstate Commerce Act (29 U.S.C.
5(2)(f)). The United States Supreme Court, in Norfolk and
Western Railway Co. V. Nemitz, et al. (92 S.Ct. 185 (1971))
a decision concerning the application of section 5(2) (f)
stated as follows:
We reviewed the history of
$5(2)(f) in Railway Executives
Assn. V. United States, 339 U.S.
142, and said that 'one of its
principal purposes was to provide
mandatory protection for the
interests of employees affected by
railroad consolidations.' Id., at
148. That 'mandatory protection' can
be accorded by terms provided by the
Commission, or, as is more likely,
by provisions of a collective agree-
ment which the Commission adopts or
approves as adequate for a minimum
of four years (as required by the
second sentence) or longer (as
allowed by the first sentence) if
the Commision SO provides. (supra,
at p. 188.)
The Supreme Court clearly interpreted section 5(2) (f) as
requiring the development of the terms and conditions of
arrangements intended for employee protection. Section
13 (c) requires that employees be afforded no less.
Further, as a practical matter, the proposal as suggested by
the Department of Transportation, creates more problems than it
cures. The proposal appears to envision a procedure by
which certain types of projects would be categorized as
presumed to result in minimal, if any, adverse impact on
mass transportation employees. Accordingly, when a grant
application in one of these specified categories, is pre-
sented to the Department of Labor the Secretary would simply
make a departmental declaration that no adverse impact is
likely to occur and therefore no specific 13 (c) arrangement
need be negotiated.
GENERAL FORD
- 5 -
However, the Department of Transportation has not specified
how these categories are to be established. Proposed
projects under section 5 are of such a broad nature and
involve such large sums of money that it would appear to be
impossible, absent a crystal ball, for the Secretary of
Labor to say these projects could not conceivably have an
adverse impact on transit employees.
It would appear that the Department of Transportation is
proposing that the Secretary of Labor rely solely on an
applicant's assurance that the envisioned project would not
impact adversely upon mass transit employees in the area.
Such a proposal flies directly in the face of the congressional
intent that the Secretary of Labor use his expertise and the
auspices of his office to ensure employee protections.
If the proposal, as suggested, were adopted the Secretary of
Labor would have no way of confirming or refuting the
applicants' assurances based on information supplied by the
applicant. Such decisions, made in a one-sided vacuum, do
not begin to fulfill the responsibility placed on the
Secretary of Labor by Congress. Therefore, new procedures
would necessarily have to be devised by which the Secretary
could obtain sufficient information about a particular
project before considering the question of who may be
adversely affected by the project.
Under existing procedures the employee has the burden of
showing that his position has been adversely affected. The
burden of proof then shifts to the applicant to show that
the adverse impact was not a result of the federal grant.
The DOT proposal would shift the total burden onto the
employee although the applicant would be in a far better
position to trace the use of the federal funds. Therefore
the employee would be faced with the virtually impossible
task of rebutting the Secretary's Negative Declaration.
Accordingly, the proposal as suggested by the Department of
Transportation neither fulfills the statutory mandate of the
Act, to provide fair and equitable protections for mass
transit employees, nor would it simplify procedures as
intended.
William J. Kilberg
Solicitor of Labor
is
FORD
GERALD
MEMORANDUM TO.THE SECRETARY OF LABOR
The parties have agreed on the following proposals as to adminis-
trative use of the national agreement in processing applications
for operating assistance under Section 13(c) of the Urban Mass
Transportation Act of 1964, as amended:
1. Immediately upon execution of the agreement by the
national officers, they and the Secretary should
urge the local parties to sign the agreement as
promptly as possible.
2. Local parties who nevertheless elect not to sign
the agreement will not be legally bound by it; in
processing any cases involving such non-signatory
parties, it will be discretionary with the Secretary
as to how he will utilize the standards set forth in
the national agreement as guidelines. The failure
of local parties to sign the agreement may be a
factor to be considered by the Secretary in deter-
mining whether there are special circumstances
under paragraph 5 below. Similarly, the existence
of any legal disabilities preventing a recipient from
complying with portions of the agreement, or other
special questions of application of Section 13(c), may
be factors to be considered under paragraph 5.
3. The protective arrangements set forth in the
national agreement shall be available to all
affected employees and binding on all such
employees covered by the agreement.
4. Individual project notices, full documentation,
and individual project sign-off procedures, under
current practices and policies of the Department
of Labor, should continue.
5. Individual project review by the Secretary of
Labor shall be given at the request of any
interested party, to determine whether special
FORD i LIBRARY GERALD
2.
circumstances are presented by the project
which require changes in the master agreement
or supplemental arrangements, as applied to
the particular project.
6. In the event it is determined by the Secretary
that changes or supplemental arrangements are
required, there should be an opportunity to
negotiate such arrangements and changes in
accordance with existing case-handling
procedures prior to any Secretarial determination
of the disputed issues.
7. The scope of the master agreement shall not
include federal operating assistance for dial-a-ride,
taxi, jitney, van pooling, car pooling, subscription
service, or other forms of paratransit services. The
master agreement shall similarly not cover or be
applied to special operating assistance for projects
for the elderly and handicapped.
8. In regard to any other non-covered capital,
operating, or demonstration project, the interested
parties shall retain their right to individual
negotiation of fair and equitable employee protec-
tive arrangements for the particular project under
existing case-handling procedures wherein the
interested parties will determine for themselves
whether and to what extent the master agreement
shall be made applicable to such project; if no
agreement is reached by the parties, the Secre-
tary's regular case-handling procedures shall be
utilized.
9. The parties will set up an appropriate standing
committee to consult with and assist the Secretary
and his staff on problems which arise in the admin-
istrative use of the national agreement.
Lumsth Lewis M. Gill
Gill
Special Mediator
July 13, 1975
FORD & LIBRARY GERALD
TAB C
FORD & 113 07V03
DEPARTMENT OF TRANSPORTATION
DEPARTMENT OF TRANSPORTATION
URBAN MASS TRANSPORTATION ADMINISTRATION
UNITED STATES OF AMERICA
WASHINGTON, D.C. 20590
June 28, 1976
MEMORANDUM FOR:
THE HONORABLE JAMES CANNON
Assistant to the President
for Domestic Affairs
SUBJECT
:
Section 13(c)
Attached is the legal opinion of the UMTA Chief Counsel on the
question of negative declarations under Section 13(c), to
complete the June 25 response from the Departments of Labor
and Transportation. The opinion should appear at Tab C in the
submission.
RMMc Manus
Robert H. McManus
Associate Administrator for
Transportation Management
and Demonstrations
Attachment
OF
DEPARTMENT
DEPARTMENT OF TRANSPORTATION
URBAN MASS TRANSPORTATION ADMINISTRATION
UNITED STATES OF AMERICA
WASHINGTON, D.C. 20590
June 25, 1976
MEMORANDUM
TO
: Administrator
UOA-1
FROM
:
Acting Chief Counsel
UCC-1
SUBJECT: Legal Opinion: Authority of the Secretary of
Labor to determine that certain categories of
projects funded under the Urban Mass Trans-
portation Act of 1964, as amended (the Act),
are not required to have protective arrange-
ments negotiated and certified prior to
extending financial assistance for such
projects.
Section 13 (c) of the Act provides as follows:
" (c) It shall be a condition of any assistance
under section 3 1/ 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 preservation of rights, privileges, and
benefits (including continuation of pension rights
and benefits) under existing collective bargaining
agreements or otherwise; (2) the continuation of
1/ Section 2 (b) (2) of Public Law 89-562 amended section 13 (c)
by substituting the words "under section 3 of this Act"
for the words "under this Act." Subsequently, Chairmen
of the Committees on Banking and Currency of the House
and of the Senate inserted in the Congressional Record
statements indicating that there was no intent to exclude
the urban mass transportation demonstration program under
section 6 (a) from the labor-protective requirements of
section 13 (c). See Congressional Record, October 20,
1966, p. 28344, and October 22, 1966, p. 28826 (89th
Congress, 2d Session).
2.
collective bargaining rights; (3) the protec-
tion of individual employees against a worsening
of their positions with respect to their employ-
ment; (4) assurances of employment to employees
of acquired mass transportation systems and
priority of reemployment 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 estab-
lished 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."
Under current practice, all applications for assistance
under sections 3 and 5, and those applications involving
operations under section 6, are submitted to the Department
of Labor (DOL) for certification that fair and equitable
arrangements exist to protect the interests of employees
affected by such assistance. The DOL then has the parties
negotiate by collective bargaining the terms and conditions
of such arrangements. The usual parties in interest are
the affected unions and the recipient of grant funds.
In order to provide for the more orderly and efficient
management of the programs of the Urban Mass Transportation
Administration (UMTA), the Department of Transportation (DOT)
has proposed a procedure pursuant to which the Secretary of
Labor would determine that there are classes of projects
which do not adversely affect employees. It is proposed
that DOT would limit this negative declaration procedure
to general purpose operating assistance projects under
section 5 of the Act, a category under which adverse impact
is unlikely. Section 5 2/ funds are provided to urbanized
areas on the basis of a statutory formula; so long as the
relevant statutory and administrative requirements are met,
decisions as to the disbursement of section 5 funds are vested
in State and local processes. Once these local decisions are
made and the statutory and administrative requirements are met,
Federal operating assistance is applied to a certain proportion
of the eligible operating expenses needed to operate a transit
system. Thus, the Federal "project" can be identified only
2
Section 5 funds may also be used for capital projects;
any such projects would not be subject to this proposal.
3.
as a payment for a portion of undifferentiated transit
operating expenses. In such cases, the Secretary of
Transportation should be able to make grants without a
13 (c) certification. However, the Secretary of Labor
should have the ability to concur in or contest an UMTA
determination that certain proposed projects fall under
such a category. Further, the Secretary of Transportation
would require that there be included in UMTA operating
assistance grant contracts a warranty by the grantee of
no adverse impact, together with a commitment by such
grantee to provide redress under section 13 (c) upon any
subsequent showing of actual adverse impact.
DOT has identified other classifications of projects--
certain types of capital grants-which would also lend
themselves to this procedure, but for purposes of this
opinion the Department is limiting the discussion to
the general operating assistance category.
Warranty - The Public Body (Grantee) warrants that
the Project will not adversely affect the employment
and working conditions of any mass transportation
employees within the project area. The Public Body
(Grantee) agrees that in the event any such employees
are so affected, UMTA may suspend assistance under
this contract pending correction of the adverse affect,
the Public Body (Grantee) and the representative of
the affected employee (s) may be requested by the
Secretary of the Department of Labor to negotiate an
agreement which the Secretary will certify as meeting
the requirements of 13 (c) of the Act, and the Secretary
of Labor may on his own motion set such protective
arrangements as he deems appropriate to protect the
interest of adversely affected, employees. The Public
Body (Grantee) agrees to make redress to adversely
affected employees pursuant to the conditions of such
protective arrangements as may be negotiated by the
parties or set by the Secretary of Labor.
4.
CONCLUSION
Upon review of the language of section 13 (c) of the Act,
the legislative intent of section 13 (c) and the discre-
tionary powers of the Secretary of Labor, I am of the
opinion that there is no mandatory requirement that
"fair and equitable arrangements" be negotiated by the
collective bargaining process in advance of grants or
any category of grants where there is no evidence and
little possibility that such grant assistance would
adversely affect mass transportation employees.
RATIONALE
The Act -- 13 (c) only applies where there are adverse
effects.
The language of section 13(c) cited above is clear. The
operative language is the first sentence which reads:
"It should 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.'
The clear intent of this sentence is that transportation
employees affected adversely by UMTA assistance be protected.
The DOL does not appear to dispute this. (See Solicitor,
DOL, Memorandum of Law, dated June 22, 1976, at pp. 2 and 4.)
The relevant reports of Congress are replete with the
reference to 13 (c) providing protection for employees who
may be adversely affected by a project. For example:
"Although the problem of worker protection may
arise in only a limited number of cases, the
committee nevertheless believes that the over-
all 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 a result of the introduction
of new equipment or the reorganization of existing
transit operation." (2 U.S. Cong. & Adm. News,
1964, H. Rep. 204, p. 2584.) (Emphasis supplied)
See Footnote 1/.
5.
To construe the sentence otherwise would be in error. To
date, to my knowledge, no collectively bargained agreements
have been designed to come into play when an employee is
not affected or when he is beneficially affected. It is
not consistent to agree there is little or no chance of
adverse effects and then require the parties to negotiate
an agreement that provides protections against such effects.
The DOL has argued that the last sentence of 13 (c) is
operative and requires all contracts to specify the
protective arrangements. This sentence reads:
"The contract for the granting of any such
assistance shall specify the terms and
conditions of the protective arrangements. "
(Emphasis supplied)
The word "such" relates back to assistance which adversely
affects employees, so that this final sentence is con-
sistent with the DOT proposal. In any case, the DOT
proposal would include in all contracts of assistance the
warranty referred to above. It is not a case of leaving
an adversely affected employee without redress or remedy.
Even if it should be found that the Secretary of Labor
cannot proceed in any project situation without advance
assurance that protective provisions are in place, the
proposed grantee warranty provides such protective
provisions and advance assurance.
13 (c) contains no mandatory requirement for collectively
bargained agreements.
The DOL cites "Legislative History" as requiring collectively
bargained agreements in each and every case and indicating
that the DOL Secretary's hands are tied. The first sentence
of 13 (c) cited above is operative and puts the burden of
determining fair and equitable arrangements in the hands
of the Secretary and not in the hands of legislative history.
Legislative history favoring collective bargaining to
determine "fair and equitable arrangements" where there is
likelihood of adverse effects does not remove the Secretary's
threshhold authority to determine that there is no such
reasonable likelihood. Further, the legislative history
on collective bargaining can be read both ways.
6.
The DOL has in the past referred to 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 Report
quoted this is said: "The Committee expects that the
Secretary of Labor, in addition to providing the Adminis-
trator with technical assistance, will assume responsi-
bility for developing criteria as to the types of
provisions that may be considered as necessary to insure
that worker interests are adequately protected against
the kinds of adverse effects that may reasonably be
anticipated in different types of situations.' (Emphasis
supplied).
There is precedent for negative declaration procedures
although not expressly authorized by statute. An example
supporting the DOT approach may be found under Section
102 (C) of the National Environmental Policy Act of 1969
(NEPA) (P.L. 91-190, 81 Stat. 852, 42 U.S.C.A. 4321)
which provides, in part, that Federal agencies must prepare
detailed environmental statements on proposals for legis-
lation and other major Federal actions significantly affect-
ing the quality of the human environment. The guidelines
prepared pursuant to NEPA by the Council on Environmental
Quality (CEQ) provide, inter alia, for an agency deter-
mination that under certain circumstances an environmental
statement is not necessary for a proposed action. (See
§ 1500.6, 40 CFR). In such cases, the agency must prepare
an environmental assessment and a publicly-available record
briefly. setting forth the reasons for its "negative"
determination. While NEPA does not provide for such
"negative" agency determinations, the CEQ guidelines
establish procedures which interpret NEPA to permit such
determinations so long as they are adequately documented
and made in conformance with those procedures. It is my
opinion that the Secretary of Labor may exercise similar
discretion and judgment under section 13 (c) of the Act.
7.
The suggested procedure would allow UMTA projects to be
classified by category and those falling within a "no
impact" category would not be subject to the normal 13(c)
process but would be subject to the warranty. The Depart-
ment of Labor would, of course, review and concur in each
grant determined by UMTA to fall within the "no impact"
category or any other category. While 13(c) of the Act
does not expressly provide for this approach, I believe
that, similar to the NEPA example discussed above, it
can be accomplished without violating the spirit of the
Act by development, with the Department of Labor, of a
sufficiently detailed set of regulations or guidelines.
A mandatory collective bargaining requirement could have
widespread policy implications.
Many other pieces of social legislation now contain labor
protective provisions and the administrative practices
implementing them are evolving. As a matter of policy,
requiring collective bargaining in each and every case,
regardless of the likelihood of adverse impact would
result and has resulted in delay, constant upward
ratcheting of protections, and the extension of protections
to employees who are not directly affected by the assistance.
For example, the Juvenile Justice and Delinquency Prevention
Act of 1974 (P.L. 93-415) and the Special Health Revenue
Sharing Act of 1975 (P.L. 94-63) contain requirements that
fair and equitable arrangements be made to protect employees
affected by the new programs. The Developmentally Disabled
Assistance and Bill of Rights Act of 1975 (P.L. 94-103) has
a Davis-Bacon type provision. In 1974, the National Labor
Relations Act was amended to extend coverage under that
act to employees of nonprofit hospitals and nursing homes
(P.L. 93-360).
Such recent railroad legislation as the Rail Passenger
Service Act of 1970 (P.L. 91-518) and the Regional Rail
Reorganization Conservation Act of" 1973 (P.L. 93-236)
contain extensive employee protection provisions and
require that such arrangements be made prior to entering
into certain activities under the act. However, we are
unaware of any requirement under these laws that continual
or periodic renegotiations of these agreements must be
undertaken through the collective bargaining process.
8.
These acts are all administered somewhat differently but
as a whole they give selected groups of local employees
protections against adverse effects of Federal assistance.
If it is determined that the only way to assure protections,
even where there is no adverse effect, is by collective
bargaining without exercise of Federal discretion these
programs could all become subject to the will of organized
labor. Organized labor would certainly press for all of
its employees to have like protections and benefits.
Those public employees not covered by an agreement in one
program will either obtain it through another or will
assert their right to it by their presence as part of a
public work force that is not being given the same rights
as the rest of the work force.
Throdoce a.Munter
Theodore A. Munter
TAB D
LIBRARY
FORD
SERALD
association
counties
1735 new york avenue, n.w., washington, d.c. 20006
(202) 785-9577
April 8, 1976
Dear Friend:
County governments have been involved in public transportation for
years. Since passage of the landmark $11.8 billion National Mass Transpor-
tation Assistance Act of 1974, county governments have become even more
involved.
In many areas, county elected officials make vital decisions affecting
financial support for existing and new systems, allocation of Section 5
formula funds among transit operators in urbanized areas, appointment of
transit board members, and other major policy issues.
One matter which seriously concerns them is the manner in which the labor-
protective requirements of Section 13(c) of the 1964 Urban Mass Transportation
Act are administered. We enclose, for your information, a resolution adopted
by the National Association of Counties' Board of Directors on March 30, 1976.
This resolution was recommended to the Board by unanimous vote of the
NACo Urban Affairs Committee and our Transportation and Labor-Management
Steering Committees.
We would welcome your comments and/or support for our position. If you
write to the President, the Secretaries of Transportation or Labor, the
Urban Mass Transportation Administrator, or Congressional leaders, we
would be interested in receiving a copy of your comments.
Sincerely,
Sandy Spence
Sandra Spence
Legislative Representative
Transportation
association
counties
1735 new york avenue, n.w., washington, d.c. 20006
(202) 785-9577
NACo POLICY RESOLUTION
TRANSPORTATION LABOR PROTECTIVE AGREEMENTS SECTION 13 (c)
Adopted by NACo Board of Directors
March 30, 1976
WHEREAS, Section 13 (c) of the Urban Mass Transportation Act of 1964 requires
as a precondition to UMTA assistance, "fair and equitable" arrangements to protect
the interests of employees by such assistance; and
WHEREAS, the determination of what is "fair and equitable" is made only by
the Secretary of Labor without benefit of written regulations; and
WHEREAS, before making this determination, the Secretary of Labor submits
proposed labor protective agreements to unions representing affected employees; and
WHEREAS, the Secretary of Labor typically submits such proposals to many
labor organizations, even where there is only a very minimal potential interest
involved; and
WHEREAS, the Secretary of Labor sets no limit on the length of time such
organizations may take to review the proposed agreemnt and such review often results
in unreasonable and unnecessary delays in funding; and
WHEREAS, the effect of this practice is to allow labor organizations to hold
hostage needed UMTA grants; and
WHEREAS, the pressure on transit officials to sign these agreements in order
to assure continuity of public transportation service cannot realistically be
ignored; and
WHEREAS, these pressures make management of transit operations in an orderly,
efficient and cost-effective manner impossible;
NACo URGES THAT
the Congress and the Department of Transportation and the Department
of Labor conduct a thorough review, study and reconsideration of the admin-
istrative procedures currently utilized in achieving compliance with Section
-2-
13 (c) of the Urban Mass Transportation Act of 1964. Particular attention
should be given to the effect of the general provisions and administrative
procedures of 13(c) as they impact on the provision of public transportation
services
the study should also include but not be restricted to considerations
such as:
The relevance and effectiveness of 13(c) in assuring agreements which
are fair and equitable to public transportation users and taxpayers at the
federal, state and local levels.
A limitation of 13(c) review provisions to these unions having a direct
interest in them.
A limitation of the amount of time affected unions may be permitted
in their review of labor protective agreements.
The need for written regulations to guide the Department of Labor in
its administration of 13(c).
The need for a review of the appropriateness and relevance of the pro-
visions and use of the so-called "model agreement" negotiated and signed by
the American Public Transit Association (representing management) and the
Amalgamated Transit Union and Transport Workers Union of America.
The need to separate application of agreement provisions appropriate
for rail transit employees which are based upon 19th century rail provisions
from those appropriate for modern transit system employees.
The need to ensure that state collective bargaining laws will apply
to local transit public employee labor relations and shall not be prempted
by the Secretary of Labor.
FORD
THE COMMONWEALTH OF MASSACHUSETTS
EXECUTIVE DEPARTMENT
STATE HOUSE
BOSTON 02133
MICHAEL S. DUKAKIS
GOVERNOR
June 11, 1976
The Honorable William T. Coleman, Jr.
Secretary of Transportation
U.S. Department of Transportation
Washington, D.C. 20590
Dear Secretary Coleman:
It is my understanding that you and Secretary of Labor W. J. Usery, Jr.
are currently working to mitigate the adverse effects of the administra-
tion of Section 13(c), the so-called labor protection clause, of the
Urban Mass Transportation Act of 1964 as amended. I am writing to you
today to express my deep concern over the negative impact which Section
13 (c) has been having on transit operations in the Commonwealth of
Massachusetts. Even more severe than any actual cost experience is the
hesitancy of many communities to become involved in public transportation
because of their fears of open-ended liabilities which the provisions of
Section 13 (c) as currently implemented seem to involve. I understand
also that Massachusetts is not unique in this regard. Therefore, I urge
you to continue your efforts to deal with the "13(c) problem" on behalf
of public mass transportation in this nation.
I am enclosing a copy of a letter from my Secretary of Transportation,
Frederick Salvucci, to you referring to a proposed UMTA Section 5 opera-
ting assistance 13 (c) agreement submitted by the Pioneer Valley Regional
Transit Authority (Springfield, Massachusetts area). The latter proposed
agreement is also enclosed. Secretary Salvucci's letter states fairly
my views on the subject. The potential liability to the taxpayer of
signing federally required 13 (c) agreement must be better defined.
Accepting federal money for continuing and improving local transit
services, including routine transit vehicle and other equipment replace-
ment must not be accompanied by fantastically complicated agreements
whose potential costs to the taxpayer cannot even be explained by the
lawyers drafting the agreements much less understood by the public
officials who must sign them.
I, therefore, urge you to continue your work with Secretary Usery to
arrive at a new method of administering Section 13(c) of the UMTA Act
The Honorable William T. Coleman, Jr. -2-
June 11, 1976
which is fair and equitable for all parties involved in using, operating,
and paying for the excellent public mass transportation system which
this nation needs and deserves.
Sincerely,
Michael S. Dukakis
MSD:sjs
CC: Mr. Robert E. Patricelli, Administrator, UMTA
Mr. Stephen G. McConahey, Asst. to the President for
Intergovernmental, Relations
Lt. Governor Thomas P. O'Neill, 111
Secretary Frederick P. Salvucci
FORD
The Commonwealth of Massachusetts
Executive Office of Transportation & Construction
One Ashburton Place
FREDERICK P. SALVUCCI
Boston. Massachusetts 02108
SECRETARY
March 8, 1976
Secretary William T. Coleman, Jr.
U.S. Department of Transportation
400 7th Street, S.W.
Washington, D.C. 20590
Re: 13(c)/Section 5 - Springfield
Dear Secretary Coleman:
I am writing to ask for your support of the attached UMTA
Section 5 operating assistance (c) statement submitted to Mr. Patricelli,
Urban Mass Transportation Administrator, by the Lower Pioneer Valley Regional
Transit Authority (Springfield, Massachusetts area). In my view the proposed
statement clearly shows that there can be no adverse effect on employees of
the Regional Transit Authority's private carriers as a result of the receipt
of federal Section 5 operating subsidies for a portion of the RTA's transit
deficit.
^ key fact underlying our effort in this regard is that we are
attempting to expand the capability of our transit authorities to provide
public transportation services. We are encountering, however, resistance
on the part of many communities which might otherwise join in the transit
authorities' program. Their resistance is grounded in their fear that
federal transportation aid programs -- which they see as essential to
providing expanded services -- will bring with them a host of undefined
labor protective requirements which have unforeseen yet ever growing
financial costs to the taxpayers of their communities. A clarification
from the federal government that no such undefined and costly requirements
exist in the Section 5 operating subsidy program as a result of the inter-
pretation of Section 13(c) would be a tremendous aid in our effort.
I therefore hope that you will find the proposed 13 (c) statement
entirely satisfactory and I ask that you strongly represent the interests
of the transit organization involved in this before the Secretary of Labor.
Your involvement and the vigorous support of the DOT and UNTA are essential
to the success of this approach to the 13(c)--Section 5 operating aid question.
Yours sincerely,
Frederick P. Salvucci
CC: Mr. Robert E. Patricelli
TORD
Urban Mass Transportation Wainistrator
CHICOPEE
LONGMEADOW
WESTHELD
EASTHAMPTON
LUDLOW
W SPRINGFIELD
E. LONGMEADOW
NORTHAMPTON
WILBRAHAM
PIONEER VALLEY TRANSIT AUTHORITY
February 18, 1976
RECEIVED
Mr. Robert E. Patricelli, Administrator
Urban Mass Transportation Administration
FEB 2 0 1976
400 7th Street SW, Room 9324
Washington, D. C. 20590
OFFICE OF THE SECRETARY OF
TRANS. & CONST.
Re: Lower Pioneer Valley Regional Transit Authority
Application for Section 5 Operating Assistance
for Fiscal Year 1976 Protecting the Interests
of Employees
Dear Mr. Patricelli:
I have carefully examined Sections (e) (4), 5(n) (1) and 13 (c)
of the Urban Mass Transportation Act of 1964, as amended. In its
application for operating assistance under Section 5 of said Act,
for fiscal year 1976, this Authority is required to agree to
protect the interests of employees affected by such assistance. The
employees concerned are those of private carriers, which carriers
have contracted, or which may in the future contract, with this
Authority to supply the public mass transportation service which this
Authority provides to the people of the Lower Pioneer Valley Region.
In this regard, I note that Section (d) (1) of said Act allows
the Secretary of Transportation to approve, as an operating assistance
project, "the payment of operating expenses to improve or continue
such service.' The Authority's application for Section 5 operating
assistance will be made on this condition that the project will be for
the payment of operating expenses to improve or continue the mass
transportation service provided by this Authority under contract with
private carriers.
In fulfillment of the above mentioned conditions of your Act
regarding employee protections, I submit that our proposed operating
assistance project cannot, as a project, result in conditions contrary
to the requirements of said Act. In that respect, I certify that such
project and the receipt of Federal operating assistance under it cannot
result in any of the following: (1) the modification or termination
of rights, privileges or benefits, including pension rights and benefits,
under existing collective bargaining agreements or otherwise; (2) the
modification or termination of collective bargaining rights; (3) a
worsening of the positions of individual employees with respect to their
employment; (4) a failure to provide assurances of employment to
employees of acquired mass transportation systems and priority of
ROOM 422 31 ELM ST SPRINGFIELD.MASS. 01103
TELEPHONE: 413-732 6248
Mr. Robert E. Patricelli, Administrator
Urban Mass Transportation Administration
February 18, 1976
Page Two
re-employment of employees terminated or laid off; or (5) the failure
to provide training or retraining programs.
I should appreciate your early response with regard to such
application. If you have any questions concerning the foregoing, I
should be pleased to discuss them with you.
Very truly yours,
Janan t TOMER
TERRY E. TORNEK, Administrator
Lower Pioneer Valley Regional
Transit Authority
FORD
FORD is LIBRAR 076825
file
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.
GERALE FORD VIBRARY
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.
FORD is LIBRARY 078835
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
FORD is 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 LIBRARY if BERALD
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-
gories 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 & LIBRARY 03RALD
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"ocrText": "The original documents are located in Box 22, folder \"Mass Transit - Labor Protective\nAgreements: Meeting with the President, Secretary Coleman and Secretary Usery, August\n2, 1976 (1)\" of the James M. Cannon Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 22 of the James M. Cannon Files at the Gerald R. Ford Presidential Library\nMEETING WITH THE PRESIDENT &\nSECRETARIES COLEMAN & USERY\nre: 13 (c)\nMonday, August 2, 1976\n11:00\nOval Office\nJ- J -\nWhen is John\nWE Collesters letter 1,\nFORD is LIBRARY GERALD\n[July 1976]\nOF TWE\nRESIDENT\nOF THE\nEXECUTIVE OFFICE OF THE PRESIDENT\nOFFICE\nUNITED\nOFFICE OF MANAGEMENT AND BUDGET\nWASHINGTON, D.C. 20503\nreturn to Earnon\nMEMORANDUM FOR JIM CANNON\nFROM : Daniel P. Kearney\nSUBJECT: Report and Recommendation of Secretaries Usery and Coleman regarding\nUMTA Section 13(c) Procedures\nWe compliment you in moving this very difficult issue forward. Each little\nstep is a major breakthrough in a problem which has been with us for a long\ntime without being resolved.\nIn response to your request, OMB recommendations on the proposed options\nare:\nOption 1. Negative declaration. We recommend 1c (compromise\nposition). We understand from your staff that they\nbelieve this option will be acceptable to both depart-\nments. If this is true, it will be a significant step\nin reducing the cumbersome, time-consuming 13(c) process.\nOption 2. Set time limits. We recommend that the two depart-\nments continue to seek a solution between their positions,\nbut if that is not possible we recommend the DOT position.\nOption 3. Multi-year certification. This option is closely tied\nto the decision on Option 1 and therefore we recommend\nthe DOT position.\nOption 4. Single certification for single grant. We recommend\n\"agree.\"\nOption 5. Promulgate and publish request. It does not appear the\ntwo departments are in agreement from the 6-25-76 memo.\nWe would recommend that the regulations be put into\neffect no later than 60 days from now. Labor/DOT should\nuse the consultative process before the regulations are\nfinal.\nLog\n172,\nTHE WHITE HOUSE\nWASHINGTON\nJUL RECEIVED 56 PM\nJuly 9, 1976\nADMINISTRATIVELY CONFIDENTIAL\nMEMORANDUM FOR: PHIL BUCHEN\nMAX FREIDERSDORF\nALAN GREENSPAN\nROBERT T. HARTMANN\nJIM LYNN\nJACK MARSH\nBILL SEIDMAN\nFROM:\nJIM CANNON Jun\nSUBJECT:\nReport and Recommendations of Secretaries\nUsery and Coleman regarding UMTA Section\n13 (c) Procedures\nI attach for your consideration a Presidential decision\nmemorandum on simplification of labor protective procedures\nunder S 13 (c) of the Urban Mass Transit Act of 1964 (as\namended). This section requires that, if a grant of Federal\nmoneys for transit purposes \"adversely affects\" local\nemployees or unions, the Department of Labor must certify\nthat \"fair and equitable\" arrangements have been made to\nprotect such employees. The 13 (c) process has grown\ncumbersome, time-consuming and inordinately expensive over\nthe last decade.\nOn June 3, 1976, therefore, the President directed Secretaries\nUsery and Coleman to comment on 5 specific proposals for\nsimplification of this process. Their joint memorandum is\nattached at Tab A. It shows agreement on 2 proposals, and\ndisagreement on three. They have requested an opportunity to\nmeet jointly with the President to discuss these issues.\nBefore this meeting takes place, could you review and comment\non the options which they have posed so that the President\nmay have the benefit of your views?\nI would appreciate receiving your comments by c.o.b. Tuesday,\nJuly 13.\nThanks.\nFORD\nBERALD\nTHE WHITE HOUSE\nDECISION\nWASHINGTON\nJuly 9, 1976\nMEMORANDUM FOR THE PRESIDENT\nFROM:\nJAMES CANNON\nSUBJECT:\nReport and Recommendations of Secretaries\nUsery and Coleman for Improving Procedures\nUnder Section 13 (c) of the Urban Mass\nTransportation Act of 1964, as Amended\nBACKGROUND:\nAs you know section 13 (c) of the 1964 UMTA Act (Amended) requires\nthat before any Federal assistance for Mass Transit is granted,\nthe Secretary of Labor must certify that \"fair and equitable\"\narrangements have been made for transit employees \"adversely\naffected\" by the grant.\nAlthough the intent of this provision of the law was sound, many\nbelieve the procedures have been manipulated so that, even where\nthere is no \"adverse\" effect on workers, the process is used to\nwin higher wages and increased fringe benefits: if transit\noperators do not agree to these terms, the unions will not approve\nthe certification, DOL will not certify under 13 (c), and UMTA\nfunds will not flow. Transit operators, city and county officials,\nand UMTA heads have consistently expressed dissatisfaction with\nSection 13 (c), and complaints from localities, documented as far\nback as 1967, have become more vehement in recent months.\nOn June 2, 1976, you reviewed a May 28, 1976, memorandum\n(attached at Tab B) describing the history of the 13 (c) problem\nand directed Bill Coleman and Bill Usery to try to reach\nagreement on specific proposals for improving the 13 (c) process.\n2\nSUMMARY OF RECENT DEVELOPMENTS:\nAfter extensive discussions and lengthy exchanges of written\nas well as oral views, DOL and DOT reached agreement on two\nof the five proposals you made: (1) granting a single certi-\nfication for a single Federal grant, and (2) publication of\nregulations or guidelines. There was disagreement on three\nproposals: (1) Establishing that certain catagories of\ngrants have no adverse impact, and giving a \"negative\ndeclaration\" that, since no such impact is likely to occur,\nthe 13 (c) certification process is unnecessary; (2) setting\ntime limits for the DOL decision process; and (3) granting a\nsingle multi-year certification for projects which result\nfrom a single, UMTA grant decision. Their joint paper is\nattached at Tab A.\nSecretaries Usery and Coleman have requested a meeting with\nyou to discuss this question. We have shared with some of your\nsenior advisers the respective positions of the two Departments;\ntheir views are noted below.\nI recommend that you approve a meeting with the two Secretaries\nat your earliest convenience.\nAPPROVE MEETING\nDISAPPROVE MEETING\nISSUES:\n1. NEGATIVE DECLARATION WITH CHANGED BURDEN OF PROOF.\nPursuant to your decision on June 3d, you proposed that DOT\nand DOL could establish categories of capital and operating\nassistance grants that historically have had minimal, if any,\nadverse impact on transit employees. Such categories would\ninclude bus and rail car purchases which result in no\nreduction in fleet size. In such cases, there could be a\nsimple departmental declaration that no adverse impact is\nlikely to occur, and that no specific 13 (c) arrangement need\nbe negotiated.\n3\nThis would shift the present burden of proof from local\ntransit operators (to prove that the Federal dollars\nwill not harm employees) to the unions (to prove that\nthere is an adverse impact.)\nA review procedure could also be provided whereby an\nemployee or union could also ask for special protective\narrangements in connection with any grant based upon a\nshowing of a substantial prospect of \"adverse impact.\"\nOPTIONS:\n(a) Department of Labor Position.\nThe Department of Labor questions the legality of\nthis \"negative declaration,\" and objects to it from\na national policy standpoint as well. They argue that\nthe recommended national model agreement for 13 (c)\ncertification, negotiated a year ago, would be\nabrogated by such a procedure. Further, shifting the\npresent burden of proof from the operators (to prove\nthere is no adverse impact) to unions and employees\n(to prove there is such adverse impact) would be unfair,\nand might increase the delays already present in DOL\n13 (c) certifications.\n(b) Department of Transportation Position.\nWhile DOT urges that 13 (c) requires certification only\nwhere employees are actually \"adversely affected,\"\nBill Coleman offers a compromise: limit the certification\nprocedures to standard operating or revenue sharing type\ngrants. DOT could require that any such operating\nassistance funding include a warranty by the transit\ndistrict that no \"adverse impact\" will result, together\nwith a promise to redress any such grievance if it shows\nup later.\n(c) Compromise Position.\nThe DOL-DOT dispute may be a matter of semantics. Rather\nthan calling this procedure a \"negative declaration,\" a\ncategory could be established called \"standardized\napprovals.\" In recurring grants, the Secretary of Labor\non his own initiative, could require that certain Labor\nprotections be guaranteed in the granting contract,\n4\nwithout the need for the collective bargaining\nprocess. DOL did just this on a recent demonstration\nproject grant for the lower east side of Manhattan,\napproval dated June 4.\nOn this issue, your advisors recommend\n.\n(a) DOL position\n.\n(b) DOT position\n.\n(c) Compromise position\n.\n2. SET TIME LIMITS\nYou urged the two Departments to cut the red tape in the\n13 (c) process by setting time limits for the negotiation\nof agreements.\nOPTIONS\n(a) Department of Labor Position\nThe Department of Labor argues that the 13 (c)\nprocess has usually worked well without time limits\nbut agrees that a limited category of reasonable\ntime frames should be established.\n(b) Department of Transportation Position\nDOT disagrees that the 13 (c) process has worked\nbasically well without time limits. DOT urges\nthat time limits be set on a case by case basis in\nall cases where DOT indicates that there is a\nsignificant possibility of funding.\nOn this issue, your advisors recommend\n.\n(a) DOL position\n.\n(b) DOT position\n.\n5\n3. MULTI-YEAR CERTIFICATIONS\nYou asked the two Departments to consider granting multi-\nyear certifications for projects which result from a\nsingle UMTA grant decision.\nOPTIONS:\n(a) Department of Labor Position\nDOL agrees that multi-year certifications would be\nuseful SO long as the parties agree to their use.\nThey would limit such certifications to particular\nprojects involving multi-year funding unless,\nthrough collective bargaining, the parties agree\nto broader protections.\n(b) Department of Transportation Position\nDOT urges that the proposed procedure is merely a\npiggy-back or recertification procedure based on\nexisting agreements already collectively bargained\nbetween the parties. It should apply to three\ncategories of repetitive grants:\n(1) Grants for normal equipment replacement;\n(2) Grants for maintenance carried out over a\nperiod of years, such as repairs on rights-\nof-way;\n(3) Grants for specified multi-year programs on\nidentifiable projects.\nDOT urges that labor protections, once certified by\nDOL, should continue to apply to subsequent capital\ngrants that have basically the same impact.\nOn this issue, your advisors recommend\n.\n(a) DOL position\n.\n(b) DOT position\n.\n6\n4.\nSINGLE CERTIFICATIONS FOR SINGLE GRANT\nDOL and DOT agree that this should be done, so long as\nthere is no change in the scope of the project.\nOn this issue your advisors recommend\nAGREE\nDISAGREE\n5. PROMULGATE AND PUBLISH REGULATIONS\nThe two Departments basically agree that guidelines for the\n13 (c) process, not formal regulations, should be published.\nAlthough clear rules are needed formal regulations would be\ncomplex and might serve only to institutionalize the defects\nin the 13 (c) process which are already thorns in the sides\nof local officials.\n(a) Department of Labor Position\nDOL recommends the deferral of formal rule making until\nthe two Departments can consult with those affected by\n13 (c)\n(b) Department of Transportation Position\nDOT urges that simple guidelines, rather than lengthy\nregulations, be published, and that this be done quickly.\nDOT questions the need for further delays or consultations,\nsince all affected parties have been making their views\nknown for over 8 years. (Simple guidelines could be\npublished in 60 days.)\nOn this issue your advisors recommend\nAGREE\nDISAGREE\nTHE WHITE HOUSE\nACTION\nWASHINGTON\nJuly 9, 1976\nADMINISTRATIVELY CONFIDENTIAL\nMEMORANDUM FOR: PHIL BUCHEN\nMAX FRIEDERSDORF\nALAN GREENSPAN\nROBERT T. HARTMANN\nJIM LYNN\nJACK MARSH\nBILL SEIDMAN\nFROM:\nJIM CANNON Jun\nSUBJECT:\nReport and Recommendations of Secretaries\nUsery and Coleman regarding UMTA Section\n13 (c) Procedures\nI attach for your consideration a Presidential decision\nmemorandum on simplification of labor protective procedures\nunder S 13 (c) of the Urban Mass Transit Act of 1964 (as\namended). This section requires that, if a grant of Federal\nmoneys for transit purposes \"adversely affects\" local\nemployees or unions, the Department of Labor must certify\nthat \"fair and equitable\" arrangements have been made to\nprotect such employees. The 13 (c) process has grown\ncumbersome, time-consuming and inordinately expensive over\nthe last decade.\nOn June 3, 1976, therefore, the President directed Secretaries\nUsery and Coleman to comment on 5 specific proposals for\nsimplification of this process. Their joint memorandum is\nattached at Tab A. It shows agreement on 2 proposals, and\ndisagreement on three. They have requested an opportunity to\nmeet jointly with the President to discuss these issues.\nBefore this meeting takes place, could you review and comment\non the options which they have posed SO that the President\nmay have the benefit of your views?\nI would appreciate receiving your comments by c.o.b. Tuesday,\nJuly 13.\nThanks.\nTHE WHITE HOUSE\nWASHINGTON\nJuly 9, 1976\nMEMORANDUM FOR:\nJIM CANNON\nFROM:\nJUDITH RICHARDS HOPE\nSUBJECT:\nUMTA USED 13 (c)\nI attach a revised Presidential decision memorandum on UMTA\n13 (c) incorporating David Lissy's revisions and suggestions.\nThe meeting with the President requested by Usery and Coleman\nshould occur as soon as possible particularly in light of a\nGAO study of this problem which is due to be released soon.\nAlso, Bill Ronan and the head of American Public Transit\nAssociation, Bill Stokes, are meeting with Usery next Wednesday\nafternoon to voice loud complaints on DOL's 13 (c) process.\nBill Nicholson advises that 30-60 minutes of Presidential time\nwould probably be available Wednesday morning, July 14, to meet\non the issue. I think this would be a good time.\nCC: Jim Cavanaugh\nArt Quern\nDavid Lissy\nTHE WHITE HOUSE\nDECISION\nWASHINGTON\nJuly 9, 1976\nMEMORANDUM FOR THE PRESIDENT\nFROM:\nJAMES CANNON\nSUBJECT:\nReport and Recommendations of Secretaries\nUsery and Coleman for Improving Procedures\nUnder Section 13 (c) of the Urban Mass\nTransportation Act of 1964, as Amended\nBACKGROUND:\nAs you know section 13 (c) of the 1964 UMTA Act (Amended) requires\nthat before any Federal assistance for Mass Transit is granted,\nthe Secretary of Labor must certify that \"fair and equitable\"\narrangements have been made for transit employees \"adversely\naffected\" by the grant.\nAlthough the intent of this provision of the law was sound, many\nbelieve the procedures have been manipulated so that, even where\nthere is no \"adverse\" effect on workers, the process is used to\nwin higher wages and increased fringe benefits: if transit\noperators do not agree to these terms, the unions will not approve\nthe certification, DOL will not certify under 13 (c), and UMTA\nfunds will not flow. Transit operators, city and county officials,\nand UMTA heads have consistently expressed dissatisfaction with\nSection 13 (c), and complaints from localities, documented as far\nback as 1967, have become more vehement in recent months.\nOn June 2, 1976, you reviewed a May 28, 1976, memorandum\n(attached at Tab B) describing the history of the 13 (c) problem\nand directed Bill Coleman and Bill Usery to try to reach\nagreement on specific proposals for improving the 13 (c) process.\n2\nSUMMARY OF RECENT DEVELOPMENTS:\nAfter extensive discussions and lengthy exchanges of written\nas well as oral views, DOL and DOT reached agreement on two\nof the five proposals you made: (1) granting a single certi-\nfication for a single Federal grant, and (2) publication of\nregulations or guidelines. There was disagreement on three\nproposals: (1) Establishing that certain catagories of\ngrants have no adverse impact, and giving a \"negative\ndeclaration\" that, since no such impact is likely to occur,\nthe 13 (c) certification process is unnecessary; (2) setting\ntime limits for the DOL decision process; and (3) granting a\nsingle multi-year certification for projects which result\nfrom a single, UMTA grant decision. Their joint paper is\nattached at Tab A.\nSecretaries Usery and Coleman have requested a meeting with\nyou to discuss this question. We have shared with some of your\nsenior advisers the respective positions of the two Departments;\ntheir views are noted below.\nI recommend that you approve a meeting with the two Secretaries\nat your earliest convenience.\nAPPROVE MEETING\nDISAPPROVE MEETING\nISSUES:\n1. NEGATIVE DECLARATION WITH CHANGED BURDEN OF PROOF.\nPursuant to your decision on June 3d, you proposed that DOT\nand DOL could establish categories of capital and operating\nassistance grants that historically have had minimal, if any,\nadverse impact on transit employees. Such categories would\ninclude bus and rail car purchases which result in no\nreduction in fleet size. In such cases, there could be a\nsimple departmental declaration that no adverse impact is\nlikely to occur, and that no specific 13 (c) arrangement need\nbe negotiated.\n3\nThis would shift the present burden of proof from local\ntransit operators (to prove that the Federal dollars\nwill not harm employees) to the unions (to prove that\nthere is an adverse impact.)\nA review procedure could also be provided whereby an\nemployee or union could also ask for special protective\narrangements in connection with any grant based upon a\nshowing of a substantial prospect of \"adverse impact.'\nOPTIONS:\n(a) Department of Labor Position.\nThe Department of Labor questions the legality of\nthis \"negative declaration,\" and objects to it from\na national policy standpoint as well. They argue that\nthe recommended national model agreement for 13 (c)\ncertification, negotiated a year ago, would be\nabrogated by such a procedure. Further, shifting the\npresent burden of proof from the operators (to prove\nthere is no adverse impact) to unions and employees\n(to prove there is such adverse impact) would be unfair,\nand might increase the delays already present in DOL\n13 (c) certifications.\n(b) Department of Transportation Position.\nWhile DOT urges that 13 (c) requires certification only\nwhere employees are actually \"adversely affected,\"\nBill Coleman offers a compromise: limit the certification\nprocedures to standard operating or revenue sharing type\ngrants. DOT could require that any such operating\nassistance funding include a warranty by the transit\ndistrict that no \"adverse impact\" will result, together\nwith a promise to redress any such grievance if it shows\nup later.\n(c) Compromise Position.\nThe DOL-DOT dispute may be a matter of semantics. Rather\nthan calling this procedure a \"negative declaration,' a\ncategory could be established called \"standardized\napprovals.\" In recurring grants, the Secretary of Labor\non his own initiative, could require that certain Labor\nprotections be guaranteed in the granting contract,\n4\nwithout the need for the collective bargaining\nprocess. DOL did just this on a recent demonstration\nproject grant for the lower east side of Manhattan,\napproval dated June 4.\nOn this issue, your advisors recommend\n.\n(a) DOL position\n.\n(b) DOT position\n.\n(c) Compromise position\n.\n2. SET TIME LIMITS\nYou urged the two Departments to cut the red tape in the\n13 (c) process by setting time limits for the negotiation\nof agreements.\nOPTIONS\n(a) Department of Labor Position\nThe Department of Labor argues that the 13 (c)\nprocess has usually worked well without time limits\nbut agrees that a limited category of reasonable\ntime frames should be established.\n(b) Department of Transportation Position\nDOT disagrees that the 13 (c) process has worked\nbasically well without time limits. DOT urges\nthat time limits be set on a case by case basis in\nall cases where DOT indicates that there is a\nsignificant possibility of funding.\nOn this issue, your advisors recommend\n.\n(a) DOL position\n.\n(b) DOT position\n.\n5\n3.\nMULTI-YEAR CERTIFICATIONS\nYou asked the two Departments to consider granting multi-\nyear certifications for projects which result from a\nsingle UMTA grant decision.\nOPTIONS:\n(a) Department of Labor Position\nDOL agrees that multi-year certifications would be\nuseful SO long as the parties agree to their use.\nThey would limit such certifications to particular\nprojects involving multi-year funding unless,\nthrough collective bargaining, the parties agree\nto broader protections.\n(b) Department of Transportation Position\nDOT urges that the proposed procedure is merely a\npiggy-back or recertification procedure based on\nexisting agreements already collectively bargained\nbetween the parties. It should apply to three\ncategories of repetitive grants:\n(1) Grants for normal equipment replacement;\n(2) Grants for maintenance carried out over a\nperiod of years, such as repairs on rights-\nof-way;\n(3) Grants for specified multi-year programs on\nidentifiable projects.\nDOT urges that labor protections, once certified by\nDOL, should continue to apply to subsequent capital\ngrants that have basically the same impact.\nOn this issue, your advisors recommend\n.\n(a) DOL position\n.\n(b) DOT position\n.\n6\n4. SINGLE CERTIFICATIONS FOR SINGLE GRANT\nDOL and DOT agree that this should be done, SO long as\nthere is no change in the scope of the project.\nOn this issue your advisors recommend\n.\nAGREE\nDISAGREE\n5.\nPROMULGATE AND PUBLISH REGULATIONS\nThe two Departments basically agree that guidelines for the\n13 (c) process, not formal regulations, should be published.\nAlthough clear rules are needed formal regulations would be\ncomplex and might serve only to institutionalize the defects\nin the 13 (c) process which are already thorns in the sides\nof local officials.\n(a) Department of Labor Position\nDOL recommends the deferral of formal rule making until\nthe two Departments can consult with those affected by\n13 (c).\n(b) Department of Transportation Position\nDOT urges that simple guidelines, rather than lengthy\nregulations, be published, and that this be done quickly.\nDOT questions the need for further delays or consultations,\nsince all affected parties have been making their views\nknown for over 8 years. (Simple guidelines could be\npublished in 60 days.)\nOn this issue your advisors recommend\nAGREE\nDISAGREE\nU.S. DEPARTMENT OF LABOR\nOFFICE OF THE SECRETARY\nWASHINGTON\nJUN 25 1976\nMEMORANDUM FOR:\nTHE HONORABLE JAMES CANNON\nAssistant to the President\nfor Domestic Affairs\nFROM:\nW.J. USERY, JR.\nSecretary of Labor\nWILLIAM T. COLEMAN,\nJR\nSecretary of Transportation\nThis is in response to your memorandum of June 3 transmitting\nthe President's direction that we address five specific\nproposals relating to the administration of Section 13 (c) of\nthe Urban Mass Transportation Act of 1964. The positions of\nthe two Departments on each of these five proposals are set\nforth in the attachment. We have also attached some tabular\nbackground material.\nIn view of the potentially controversial nature of some of\nthese recommendations, we request an opportunity to meet\njointly with the President to discuss these issues prior to\nhis making any decisions.\nAttachment\n6/25/76\nMEMORANDUM ON SECTION 13 (c)\n1. NEGATIVE DECLARATION WITH CHANGED BURDEN OF PROOF\nProposal from June 3 Memorandum:\n\"Establish categories of capital grants that historically have\nhad minimal, if any, adverse impact on transit employees. Such\ncategories might include bus and rail car purchases which re-\nsult in no reduction in fleet size. In such cases, there could\nbe a simple departmental declaration that no adverse impact is\nlikely to occur, and that no specific 13 (c) arrangement need be\nnegotiated.\nThis procedure would shift the present burden of proof of adverse\nimpact from local transit operators to the unions or the employees.\nProvide a review procedure whereby an employee or union could ask\nfor special protective arrangements in connection with any grant\nbased upon a showing of a substantial prospect of 'adverse impact. \"\nDepartment of Labor Position:\nThe Department of Labor questions the legality of establishing\ncategories of UMTA assistance where prior certification under 13 (c)\nwould no longer be required. The statute states that each\n\"\ncontract for the granting of any such assistance shall specify\nthe terms and conditions of the protective arrangements. The\nSolicitor of Labor has advised that implementation of a negative\ndeclaration procedure would be inconsistent with the statute and\nlegislative history. His opinion letter is attached at Tab A.\nThe Department of Labor also objects from a policy standpoint to\nthe proposed negative declaration procedure. Establishing cate-\ngories of projects where individual certifications would not be\nrequired would abrogate the national model agreement which was\nnegotiated only this past July to be effective through September,\n1977. This agreement, negotiated among representatives of the\nAmerican Public Transit Association and of the national transporta-\ntion unions, set forth a recommended model set of protective con-\nditions for application in individual 13 (c) agreements relating\nto operating assistance. A separate memorandum from Lewis M. Gill\n(Tab B), who mediated this agreement, sets forth the understanding\nof the parties that, while use of this agreement was to be\nencouraged, existing Labor Department case-handling procedures\n2\nincluding individual project notice and sign-off were to continue.\nExisting case-handling procedures were to stay in effect for\ncapital, operating or demonstration projects not covered by the\nagreement. This agreement has served as the basis for approxi-\nmately 85 percent of Labor Department certifications for covered\noperating assistance projects during 1976. Any unilateral change\nin procedures by the Labor Department would contravene the agree-\nment of the parties.\nSecondly, the proposed negative declaration procedure would shift\nto individual employees or their unions the burden of establishing\nadverse impact resulting from Federal assistance. This would be a\nradical change from current procedure, since the common practice\nunder existing agreements is to place the burden of proof upon the\nemployer. It would be very difficult, if not impossible, for\nemployees to meet this burden, since proof of causality requires\nfamiliarity with information peculiarly within the knowledge of\nthe applicant. This shifted burden would detract substantially\nfrom the current level of employee protections, and would in our\nview be inconsistent with the purposes of the statute.\nGiven a major administrative change of this type, we would antici-\npate that unions and individual employees would frequently file\nclaims of adverse impact. This would trigger a formal review pro-\ncedure, possibly including public hearings requiring DOL inquiry\ninto the specifics of individual employee's cases. This process\ncould substantially delay the DOL certifications and require a\nmajor increase in DOL staff to handle the workload. It would also\ncreate a burdensome two-step process for the parties: an administra-\ntive hearing on adverse impact, then possible grievance proceedings\nto determine remedies. Further, as the DOL made determinations re-\ngarding adverse impact, a body of case law would develop which\ncould affect labor and management's own decisions under grievance\nprocedures in existing collective bargaining arrangements. The\nend result would be to create yet another area where a Federal\nagency would be issuing decisions with a potentially substantial\nimpact on public and private sector activity.\nDepartment of Transportation Position:\nThe Department of Transportation considers this a viable, desirable\nprocedure, and believes that it is allowable within the law.\nAs a matter of law, Section (c) does not require protective\narrangements in each and every contract for assistance, but rather\nonly in situations where employees would be adversely \"affected by\nsuch assistance.\" There are classes of projects which do not\n3\nadversely affect employees, and the Secretary of Labor has\nample administrative authority to so hold. This was, in fact,\nthe way the provision was administered in 1965. Opinion of\ncounsel is attached at Tab C.\nWhile we support the application of the negative declaration\napproach to a range of projects as the June 3 memorandum suggests\n(and we have been assured that the omission of operating assis-\ntance from that proposal in your memorandum was an oversight),\nwe could accept limiting its use to a single category of operating\nassistance projects. These would be grants where funds are pro-\nvided in the nature of general purpose operating assistance or\nrevenue sharing, and where the term \"project\" has no particular\nidentity but is identified as a certain proportion of the total\nsum of money needed to operate an entire system. In such cases,\nadverse impacts seem inconceivable and the Secretary of Transporta-\ntion should be able to make grants without a 13 (c) certification.\nFurther, the Secretary of Transportation should require that there\nbe included in UMTA operating assistance funding contracts a\nwarranty by the grantee of no adverse impact, together with a\ncommitment by such grantee to provide redress under Section 13 (c)\nupon any subsequent showing of actual adverse impact.\nAs to the burden of proof problem, while it is difficult for\neither party to show that an alleged harm does or does not relate\nto the presence of Federal funds which are comingled in the\noperator's budget, it certainly seems more equitable for the party\nwho is charging he has been harmed to have to make that showing.\nA shift in the burden of proof to labor should not increase the\nfiling of claims, but should rather cut down on any filing of\nfrivolous charges. Once a claim is filed, the Labor Department\nwill have to make a finding no matter which party has the burden\nof proof, so there is no basis for arguing that this proposal will\ncause administrative problems.\nThe presence of a negotiated national model agreement does not\nalter the desirability of moving to a negative declaration approach.\nThat agreement expires in 1977 and was, at best, only a guideline;\nthe American Public Transit Association (APTA) was not negotiating\nas the bargaining representative of transit authorities and never\npretended to be binding them. Moreover, the national model agree-\nment is itself causing substantial problems and perpetuates an\nunnecessary collective bargaining procedure in a situation where\nthat is unnecessary. APTA has now proposed a very different 13 (c)\nprocedure affecting operating assistance, so the Department of\nLabor would not be abrogating the agreement on its own motion.\nThere is an increasing number of requests for changes in 13 (c)\nadministration from every level of government; see, for example,\ncommunications from the Governor of Massachusetts and the National\nAssociation of Counties (NACO) at Tab D.\n4\n2. SET TIME LIMITS\nProposal from June 3 Memorandum:\n\"DOL could set time limits for the negotiation of agreements,\nafter which the Secretary of Labor could make his own determin-\nation of what arrangements constituted 'fair and equitable' pro-\ntection. DOL could provide conditional certifications so that\nUMTA funds could flow before critical deadlines were reached\n(end of the fiscal year, or exhaustion of local operating funds) \"\nDepartment of Labor Position:\nThe Department of Labor recognizes the advantages of establishing\nreasonable time frames for negotiations regarding protective\narrangements in certain project situations. The Department ob-\njects, however, to standardized time limits that would apply\nautomatically to all projects within a given category. The\ncircumstances of individual grants and the protective arrangements\nthat may be required vary considerably, even within a particular\ncategory of grant. The length of time required for both parties\nacting in good faith to negotiate an agreement on protective terms\nvaries accordingly. Unless used selectively, time limits could\nthus cut short the bargaining process before agreement has been\nreached, even in cases where lack of certification is not delaying\ngrant approval. In addition, in many cases such time limits will\nprovide an incentive for one or both parties not to bargain in\ngood faith, given the prospect that a particular level of protec-\ntions would be imposed by the Department of Labor at a certain\npoint. Rigid time limits would therefore operate, in our view,\nto undercut the philosophy of the statute to encourage local col-\nlective bargaining. This philosophy is quite clearly stated in the\nlegislative history. The House Committee Report on the Urban Mass\nTransportation Act of 1964 explicitly stated that \"specific con-\nditions for worker protection will normally be the product of\nlocal bargaining and negotiation.\nThere are cases where time limits are advisable, and the Department\nof Labor will apply them on a flexible basis. We will ask the\nDepartment of Transportation to identify those high-priority pro-\njects where timely resolution of 13 (c) issues is crucial to the\nadministration of the mass transportation assistance program.\nThese projects will be given expedited processing by the Department\nof Labor, including the setting of time limits on negotiations\nwhere we consider appropriate. We anticipate that such time limits\nwill be infrequently imposed, since the 13 (c) process has usually\nworked well without such limits in the past. In the great majority\n5\nof cases, certification occurs before UMTA is ready to approve\nthe grant. Further, as labor, management and the Department of\nLabor have gained more experience under the program, the average\nprocessing time for 13 (c) certifications has decreased substan-\ntially. Despite a tripling in case load since Fiscal Year 1974,\naverage case processing time has been reduced from 3.5 months to\n2.5 months.\nDepartment of Transportation Position:\nThe position of the Department of Labor is not adequately res-\nponsive to the problem or to the White House proposal. It would\nmake time limits the exception rather than the rule. The\nDepartment of Transportation agrees that time limits can\nreasonably vary with the type of grant involved, and if necessary\nwith local conditions. But time limits should be set, on a case\nby case basis, in all cases where we indicate that there is a\nsignificant possibility of funding. In addition, we support the\nconcept of an expedited processing track for those projects which\nDOT indicates to DOL have a high priority.\nWe cannot agree that the 13 (c) process has worked well without\ntime limits in the past. Average processing time is deceptive\nas a measure, since it lumps the difficult situations in with\nroutine grants. In fact, the unconstrained procedures currently\nfollowed by DOL have resulted in the documented feeling by grantees\nthat they are in an uneven bargaining position, and a perception\nthat unions have a veto over transit grants.\nNor would the introduction of time limits defy the legislative\nhistory. That legislative history makes clear that the Secretary\nof Labor is not expected to be guided solely by a devotion to\ncollective bargaining. For example, the 1963 Report of the\nSenate Committee on Banking and Currency on S.6 states:\n\"The Committee expects that the Secretary of Labor in\naddition to providing the Administrator with technical\nassistance will assume responsibility for developing\ncriteria as to the types of provisions that may be\nconsidered as necessary to insure that workers' interests\nare adequately protected against the kinds of adverse\neffects that may reasonably be anticipated in different\ntypes of situations.\"\nFurther, 12 years of experience in the program have resulted in\nrather standard arrangements, making the risk of injustice owing\nto a time constraint minimal.\n6\nSome procedural hedge against the possibility of failure to\nbargain in good faith seems appropriate. That can easily be\naccomplished by providing that any party seeking a direct\ncertification by the Labor Department after expiration of the\ntime period should have to make a showing that it has sought\nto bargain in good faith.\n3. MULTI-YEAR CERTIFICATIONS\nProposal from June 3 Memorandum:\n\"Instead of having each grant of Federal dollars give rise to\na new 13 (c) agreement, DOL could establish a policy of granting\nmulti-year certifications which would be good for all grants\nmade within a specific period of time subject to review based\nupon the union or an employee showing 'adverse impact.\nDepartment of Labor Position:\nThe proposal calls for a certification for a particular authority\nfor a specified period, presumably to cover all forms of operating,\ncapital or demonstration assistance from UMTA. The Department of\nLabor believes that where the parties agree to their use, multi-\nyear certifications can be a useful mechanism for improved admin-\nistration of Section 13 (c), particularly for the operating\nassistance grant program. In fact, the model agreement, which\ncovers a period of three fiscal years, was a positive step in this\ndirection. Multi-year, and multi-project, arrangements are also\nfrequently negotiated between the parties under the capital grant\nprogram. Increased utilization of such agreements can and will be\nencouraged by the Department of Labor.\nThe Department of Labor would limit such certifications, however,\nto particular identifiable projects involving multi-year funding\nunless the applicant and employee representatives were to agree\nto a broader protective arrangement. For the government to impose\nprotective arrangements negotiated in one set of circumstances in\na different set of circumstances runs counter to the basic premise\nof the statute that employee protections in individual cases be\ndetermined by collective bargaining. Project circumstances\ninevitably differ as a result of routine and recurring technologi-\ncal, operational and organizational changes. It is difficult,\nif not impossible, to predict what type of protections might be\nappropriate in the context of a particular operating, capital or\ndemonstration project.\n7\nAny such change in the Secretary of Labor's current certification\npractices would be inconsistent with the procedures agreed to and\njointly recommended to him by the parties to the model agreement.\nFurthermore, since the proposed procedure contemplates an admin-\nistrative mechanism for review of union or employee claims of\nadverse impact, a cumbersome administrative procedure could arise,\npresenting the same problems discussed under Issue No. 1.\nDepartment of Transportation Position:\nThe procedure the Department proposes would be better described\nas \"recertifications based on existing agreements.\" In the case\nof certain categories of grants which are routine and/or repetitive\nin nature, the Secretary of Labor should provide automatic certi-\nfication based upon the application to that grant of any pre-\nexisting Section 13 (c) agreement previously agreed to by the parties\nfor a grant of that type. Such certification should be routinely\nmade unless the grantee or any affected employee shows cause within\na reasonable period of time as to why some new protective arrange-\nments need to be considered.\nThis procedure should apply to at least the following categories\nof grants:\n(a) capital grants for purchase or renovation of vehicles\n(including buses, railcars, or other vehicles) based\non a normal equipment replacement or maintenance cycle,\nnot resulting in a contraction of service levels;\n(b) capital grants for refurbishing of rights-of-way,\nbuilding, or other real property where the maintenance\nactivity is closely similar to that carried out over a\nperiod of years;\n(c) grants pursuant to specified multi-year programs of\nidentifiable projects.\nThe model agreement is irrelevant in the context of this DOT\nproposal since that proposal deals only with capital grants\nwhile the model agreement dealt only with operating assistance.\nMore in point, it can be argued that even though a grant might\nhave the same content and impact from year to year, the circum-\nstances within which the parties might bargain on protective\narrangements can change over time so that annual collective\nbargaining cannot be precluded. However, the Department of\n8\nTransportation does not feel that the law intended to permit or\nrequire an upward ratcheting of protective arrangements year\nafter year even though the content or impact of the grant assistance\ndoes not vary. Once adequate protections have been certified, they\nshould continue to apply to subsequent grants that have basically\nthe same impact.\n4. SINGLE CERTIFICATION FOR SINGLE GRANT\nProposal from June 3 Memorandum:\n\"Only a single certification should be required for a given pro-\nject, even if such a project is funded through several successive\ngrants or grant amendments.\"\nDepartment of Labor Position:\nThe Department of Labor agrees that a single certification is\nfeasible for a given project which may be funded through several\nsuccessive grants or grant amendments as long as there is no change\nin the scope of the project. Such a practice is in fact utilized\nat present.\nThe Department of Labor will develop appropriate procedures as\noutlined in our position on Issue No. 5.\nDepartment of Transportation Position:\nConcur.\n5. PROMULGATE AND PUBLISH REGULATIONS\nProposal from June 3 Memorandum:\n\"To assist all parties in participating in the 13 (c) process,\nsimple published regulations should be available.\"\nDepartment of Labor Position:\nThe Department of Labor will prepare and publish appropriate\nguidance for interested parties with respect to the orderly and\ntimely administration of Section 13 (c). While the Department is\nof the view that published regulations are appropriate, it may be\nadvisable to defer initiating the formal rulemaking process until\nthe Department has had further opportunity to confer with the\nDepartment of Transportation and with management and labor regarding\n9\ntheir current differences over the administration of the 13 (c)\nprogram. The Department of Labor plans to convene the standing\ncommittee contemplated in paragraph 9 of the Gill memorandum to\nassist in this consultative process.\nDepartment of Transportation Position:\nThe Department of Transportation concurs but would urge that\nsimple guidelines, rather than lengthy regulations issued through\na formal rulemaking, would be a better way to proceed.\nTAB A\nU.S. DEPARTMENT OF LABOR\nOFFICE OF THE SOLICITOR\nWASHINGTON, D.C. 20210\nSTATES OF OF\n22 JUN 1976\nMEMORANDUM FOR THE SECRETARY\nSubject: White House Paper on Section 13(c) of UMTA;\nLegal Question concerning Negative Certifications\nof Employee Protections\nAttached is a paper dealing with the legal question of\nwhether this Department can issue negative certifications with\nrespect to the employee protective provisions under Section 13(c)\nof UMTA. As you know, this was one of the suggestions in the recent\nWhite House memorandum to this Department and the Department of\nTransportation. The paper concludes that such negative certifications\ncennot be legally justified.\nWilliam 3. Kilberg\nSolicitor of Labor\nAttachment\nU.S. DEPARTMENT OF LABOR\nOF\nOFFICE OF THE SOLICITOR\nLABOR\nWASHINGTON, D.C. 20210\nAMERICA\nSTATES\nOF\nMEMORANDUM OF LAW\nSUBJECT: Department of Transportation's Proposal\nthat the Secretary of Labor provide\na \"Negative Declaration\" in lieu of\nexisting certification procedures for\ncertain project categories.\nSOL: 76-22-(UMT)\nThe Department of Transportation has proposed that the\nSecretary of Labor, in processing grant applications involving\ncertain categories of projects under sections 3, 5 and 6 of\nthe Act, which have in the past resulted in minimal if any\nadverse impact on mass transit employees, need not require\nthat specific terms and conditions of a protective arrangement\nbe worked out to certify that fair and equitable arrangements\nhave been made to protect the interests of employees.\nIt is the position of the Department of Labor that the\nDepartment of Transportation's proposal concerning negative\ndeclarations, would prohibit the Secretary of Labor from\nperforming his role as mandated by Congress.\nSection 13(c) of the Act provides that \"It shall be a con-\ndition of any assistance under section 3 of this Act that\nfair and equitable arrangements are made, as determined by\nthe Secretary of Labor, to protect the interests of employees\naffected by such assistance\nThe contract for the\ngranting of any such assistance shall specify the terms and\nconditions of the protective arrangements.\" (Emphasis\nadded.)\nCongress in passing the Urban Mass Transportation Act was\naware that the future of the mass transit industry was in\njeopardy without federal assistance. Further, in contemplating\nthe impact of the Urban Mass Transportation Act Congress\nbelieved that the bill would serve to preserve the jobs of\nmany workers then engaged in the mass transit industry, and\nmore importantly Congress envisioned that this bill would in\nthe long range generate new jobs through the extension of\nexisting systems and the creation of new systems. While\nrecognizing the vast potential for improvement in employment\nFORD\n- 2 -\nprospects as a result of this bill, Congress was also aware\nof the potential adverse effects on employees as a result of\nthis bill.\nAlthough the problem of worker protection\nmay arise in only a limited number of\ncases, the committee nevertheless\nbelieves that the overall impact of the\nbill should not be permitted to obscure\nthe fact that in certain communities\nindividual workers or groups of workers\nmay be adversely affected as a result\nof the introduction of new equipment\nor the reorganization of existing\ntransit operation. (2 U.S. Cong. & Adm.\nNews, 1964, H. Rep. 204, p. 2584.)\nBecause of this concern, Congress sought to ensure that indi-\nvidual workers adversely affected should be fully protected\nin a fair and equitable manner and that federal funds would\nnot be used in a manner that is directly or indirectly\ndetrimental to the legitimate interests and rights of workers.\nCongress intended the means for providing these protections\nwould be worked out through the local bargaining process.\nThe committee wishes to point out that\nsubject to the basic standards set\nforth in the bill, specific conditions\nfor worker protection will normally\nbe the product of local bargaining\nand negotiating. (2 U.S. Cong. & Adm.\nNews, 1964, H. Rep. 204, p. 25864.)\nFurther, the committee went on to stress the role of the\nSecretary of Labor in assuring that the intent of Congress\nbe carried out.\nThe committee also expects the\nSecretary of Labor, in addition to\nproviding the administrator with\ntechnical assistance, will assume\nresponsibility for developing\ncriteria as to the types of pro-\nvisions that may be considered\nnecessary to ensure that worker\ninterests are adequately protected\nin the different types of situations\nthat may arise. (2 U.S. Cong. &\nAdm. News, p. 2584-2585.)\n- 3 -\nIt is evident that Congress wished the Secretary of Labor to\nassume responsibility for determining that employees are\nprovided fair and equitable protection.\nIn 1966, when the Act was first amended, Congress again\nreiterated its commitment to providing employee protections.\nBoth the Senate and House Committee reports specifically\nstated:\nBefore Federal assistance may be\nprovided, the Secretary must determine\nthat all contracts contain the usual\nprovisions relating to * * * labor\n* * * under criteria specified in the\nAct * * * (See Cong. Rec., October\n20, 1966, p. 28345, 89th Cong., 2d\nSess.)\nFurther, in a memorandum, inserted into the Congressional\nRecord, explaining the technical changes made by the Urban\nMass Transportation Act amendments of 1966 it was stated:\nThe labor protective provisions\ncontained in the original Urban Mass\nTransportation Act continue to apply\nin the case of any project which can\nconceivably affect the rights and\ninterests of employees. (supra,\nat p. 28345.)\nThe Act was amended again in 1974 to authorize grants for\noperating subsidies to states and local public bodies and\ntheir agencies. There was no discussion by Congress to\namend or eliminate the need for 13 (c) protections for loans\nunder section 3. In addition, a new section 5 was added to\nthe Mass Transportation Act which now provides for the\napportionment of funds on a formula basis. Congress specifi-\ncally provided in section 5: \" (n) (1) that the provisions of\nsection 13 (c) and section 3(e) (4) shall apply in carrying\nout mass transportation projects under this section.\"\nTherefore, it is perfectly clear from its passage and\nthrough the amendments of 1973, Congress was committed to\nproviding mass transit employees the protections of section\n13 (c). If the Secretary of Labor were to adopt the proposal\nput forth by the Department of Transportation the burden of\nproof would shift to the individual employee to rebut the\nFORD\nSecretary's \"Negative Declaration\" of adverse impact in\norder to qualify for the statutory protections. This was\nobviously not what Congress intended in establishing protections\n- 4 -\nfor those employees who were adversely affected as a result\nof the federal grant.\nMoreover, section 13 (c) specifically provides that pro-\ntective arrangements under the Urban Mass Transportation Act\nshall provide benefits no less than those established pursuant\nto section (2) (f) of the Interstate Commerce Act (29 U.S.C.\n5(2)(f)). The United States Supreme Court, in Norfolk and\nWestern Railway Co. V. Nemitz, et al. (92 S.Ct. 185 (1971))\na decision concerning the application of section 5(2) (f)\nstated as follows:\nWe reviewed the history of\n$5(2)(f) in Railway Executives\nAssn. V. United States, 339 U.S.\n142, and said that 'one of its\nprincipal purposes was to provide\nmandatory protection for the\ninterests of employees affected by\nrailroad consolidations.' Id., at\n148. That 'mandatory protection' can\nbe accorded by terms provided by the\nCommission, or, as is more likely,\nby provisions of a collective agree-\nment which the Commission adopts or\napproves as adequate for a minimum\nof four years (as required by the\nsecond sentence) or longer (as\nallowed by the first sentence) if\nthe Commision SO provides. (supra,\nat p. 188.)\nThe Supreme Court clearly interpreted section 5(2) (f) as\nrequiring the development of the terms and conditions of\narrangements intended for employee protection. Section\n13 (c) requires that employees be afforded no less.\nFurther, as a practical matter, the proposal as suggested by\nthe Department of Transportation, creates more problems than it\ncures. The proposal appears to envision a procedure by\nwhich certain types of projects would be categorized as\npresumed to result in minimal, if any, adverse impact on\nmass transportation employees. Accordingly, when a grant\napplication in one of these specified categories, is pre-\nsented to the Department of Labor the Secretary would simply\nmake a departmental declaration that no adverse impact is\nlikely to occur and therefore no specific 13 (c) arrangement\nneed be negotiated.\nGENERAL FORD\n- 5 -\nHowever, the Department of Transportation has not specified\nhow these categories are to be established. Proposed\nprojects under section 5 are of such a broad nature and\ninvolve such large sums of money that it would appear to be\nimpossible, absent a crystal ball, for the Secretary of\nLabor to say these projects could not conceivably have an\nadverse impact on transit employees.\nIt would appear that the Department of Transportation is\nproposing that the Secretary of Labor rely solely on an\napplicant's assurance that the envisioned project would not\nimpact adversely upon mass transit employees in the area.\nSuch a proposal flies directly in the face of the congressional\nintent that the Secretary of Labor use his expertise and the\nauspices of his office to ensure employee protections.\nIf the proposal, as suggested, were adopted the Secretary of\nLabor would have no way of confirming or refuting the\napplicants' assurances based on information supplied by the\napplicant. Such decisions, made in a one-sided vacuum, do\nnot begin to fulfill the responsibility placed on the\nSecretary of Labor by Congress. Therefore, new procedures\nwould necessarily have to be devised by which the Secretary\ncould obtain sufficient information about a particular\nproject before considering the question of who may be\nadversely affected by the project.\nUnder existing procedures the employee has the burden of\nshowing that his position has been adversely affected. The\nburden of proof then shifts to the applicant to show that\nthe adverse impact was not a result of the federal grant.\nThe DOT proposal would shift the total burden onto the\nemployee although the applicant would be in a far better\nposition to trace the use of the federal funds. Therefore\nthe employee would be faced with the virtually impossible\ntask of rebutting the Secretary's Negative Declaration.\nAccordingly, the proposal as suggested by the Department of\nTransportation neither fulfills the statutory mandate of the\nAct, to provide fair and equitable protections for mass\ntransit employees, nor would it simplify procedures as\nintended.\nWilliam J. Kilberg\nSolicitor of Labor\nis\nFORD\nGERALD\nMEMORANDUM TO.THE SECRETARY OF LABOR\nThe parties have agreed on the following proposals as to adminis-\ntrative use of the national agreement in processing applications\nfor operating assistance under Section 13(c) of the Urban Mass\nTransportation Act of 1964, as amended:\n1. Immediately upon execution of the agreement by the\nnational officers, they and the Secretary should\nurge the local parties to sign the agreement as\npromptly as possible.\n2. Local parties who nevertheless elect not to sign\nthe agreement will not be legally bound by it; in\nprocessing any cases involving such non-signatory\nparties, it will be discretionary with the Secretary\nas to how he will utilize the standards set forth in\nthe national agreement as guidelines. The failure\nof local parties to sign the agreement may be a\nfactor to be considered by the Secretary in deter-\nmining whether there are special circumstances\nunder paragraph 5 below. Similarly, the existence\nof any legal disabilities preventing a recipient from\ncomplying with portions of the agreement, or other\nspecial questions of application of Section 13(c), may\nbe factors to be considered under paragraph 5.\n3. The protective arrangements set forth in the\nnational agreement shall be available to all\naffected employees and binding on all such\nemployees covered by the agreement.\n4. Individual project notices, full documentation,\nand individual project sign-off procedures, under\ncurrent practices and policies of the Department\nof Labor, should continue.\n5. Individual project review by the Secretary of\nLabor shall be given at the request of any\ninterested party, to determine whether special\nFORD i LIBRARY GERALD\n2.\ncircumstances are presented by the project\nwhich require changes in the master agreement\nor supplemental arrangements, as applied to\nthe particular project.\n6. In the event it is determined by the Secretary\nthat changes or supplemental arrangements are\nrequired, there should be an opportunity to\nnegotiate such arrangements and changes in\naccordance with existing case-handling\nprocedures prior to any Secretarial determination\nof the disputed issues.\n7. The scope of the master agreement shall not\ninclude federal operating assistance for dial-a-ride,\ntaxi, jitney, van pooling, car pooling, subscription\nservice, or other forms of paratransit services. The\nmaster agreement shall similarly not cover or be\napplied to special operating assistance for projects\nfor the elderly and handicapped.\n8. In regard to any other non-covered capital,\noperating, or demonstration project, the interested\nparties shall retain their right to individual\nnegotiation of fair and equitable employee protec-\ntive arrangements for the particular project under\nexisting case-handling procedures wherein the\ninterested parties will determine for themselves\nwhether and to what extent the master agreement\nshall be made applicable to such project; if no\nagreement is reached by the parties, the Secre-\ntary's regular case-handling procedures shall be\nutilized.\n9. The parties will set up an appropriate standing\ncommittee to consult with and assist the Secretary\nand his staff on problems which arise in the admin-\nistrative use of the national agreement.\nLumsth Lewis M. Gill\nGill\nSpecial Mediator\nJuly 13, 1975\nFORD & LIBRARY GERALD\nTAB C\nFORD & 113 07V03\nDEPARTMENT OF TRANSPORTATION\nDEPARTMENT OF TRANSPORTATION\nURBAN MASS TRANSPORTATION ADMINISTRATION\nUNITED STATES OF AMERICA\nWASHINGTON, D.C. 20590\nJune 28, 1976\nMEMORANDUM FOR:\nTHE HONORABLE JAMES CANNON\nAssistant to the President\nfor Domestic Affairs\nSUBJECT\n:\nSection 13(c)\nAttached is the legal opinion of the UMTA Chief Counsel on the\nquestion of negative declarations under Section 13(c), to\ncomplete the June 25 response from the Departments of Labor\nand Transportation. The opinion should appear at Tab C in the\nsubmission.\nRMMc Manus\nRobert H. McManus\nAssociate Administrator for\nTransportation Management\nand Demonstrations\nAttachment\nOF\nDEPARTMENT\nDEPARTMENT OF TRANSPORTATION\nURBAN MASS TRANSPORTATION ADMINISTRATION\nUNITED STATES OF AMERICA\nWASHINGTON, D.C. 20590\nJune 25, 1976\nMEMORANDUM\nTO\n: Administrator\nUOA-1\nFROM\n:\nActing Chief Counsel\nUCC-1\nSUBJECT: Legal Opinion: Authority of the Secretary of\nLabor to determine that certain categories of\nprojects funded under the Urban Mass Trans-\nportation Act of 1964, as amended (the Act),\nare not required to have protective arrange-\nments negotiated and certified prior to\nextending financial assistance for such\nprojects.\nSection 13 (c) of the Act provides as follows:\n\" (c) It shall be a condition of any assistance\nunder section 3 1/ of this Act that fair and\nequitable arrangements are made, as determined\nby the Secretary of Labor, to protect the interests\nof employees affected by such assistance. Such\nprotective arrangements shall include, without\nbeing limited to, such provisions as may be necessary\nfor (1) the preservation of rights, privileges, and\nbenefits (including continuation of pension rights\nand benefits) under existing collective bargaining\nagreements or otherwise; (2) the continuation of\n1/ Section 2 (b) (2) of Public Law 89-562 amended section 13 (c)\nby substituting the words \"under section 3 of this Act\"\nfor the words \"under this Act.\" Subsequently, Chairmen\nof the Committees on Banking and Currency of the House\nand of the Senate inserted in the Congressional Record\nstatements indicating that there was no intent to exclude\nthe urban mass transportation demonstration program under\nsection 6 (a) from the labor-protective requirements of\nsection 13 (c). See Congressional Record, October 20,\n1966, p. 28344, and October 22, 1966, p. 28826 (89th\nCongress, 2d Session).\n2.\ncollective bargaining rights; (3) the protec-\ntion of individual employees against a worsening\nof their positions with respect to their employ-\nment; (4) assurances of employment to employees\nof acquired mass transportation systems and\npriority of reemployment of employees terminated\nor laid off; and (5) paid training or retraining\nprograms. Such arrangements shall include\nprovisions protecting individual employees\nagainst a worsening of their positions with\nrespect to their employment which shall in no\nevent provide benefits less than those estab-\nlished pursuant to section 5 (2) (f) of the Act\nof February 4, 1887 (24 Stat. 379), as amended.\nThe contract for the granting of any such\nassistance shall specify the terms and conditions\nof the protective arrangements.\"\nUnder current practice, all applications for assistance\nunder sections 3 and 5, and those applications involving\noperations under section 6, are submitted to the Department\nof Labor (DOL) for certification that fair and equitable\narrangements exist to protect the interests of employees\naffected by such assistance. The DOL then has the parties\nnegotiate by collective bargaining the terms and conditions\nof such arrangements. The usual parties in interest are\nthe affected unions and the recipient of grant funds.\nIn order to provide for the more orderly and efficient\nmanagement of the programs of the Urban Mass Transportation\nAdministration (UMTA), the Department of Transportation (DOT)\nhas proposed a procedure pursuant to which the Secretary of\nLabor would determine that there are classes of projects\nwhich do not adversely affect employees. It is proposed\nthat DOT would limit this negative declaration procedure\nto general purpose operating assistance projects under\nsection 5 of the Act, a category under which adverse impact\nis unlikely. Section 5 2/ funds are provided to urbanized\nareas on the basis of a statutory formula; so long as the\nrelevant statutory and administrative requirements are met,\ndecisions as to the disbursement of section 5 funds are vested\nin State and local processes. Once these local decisions are\nmade and the statutory and administrative requirements are met,\nFederal operating assistance is applied to a certain proportion\nof the eligible operating expenses needed to operate a transit\nsystem. Thus, the Federal \"project\" can be identified only\n2\nSection 5 funds may also be used for capital projects;\nany such projects would not be subject to this proposal.\n3.\nas a payment for a portion of undifferentiated transit\noperating expenses. In such cases, the Secretary of\nTransportation should be able to make grants without a\n13 (c) certification. However, the Secretary of Labor\nshould have the ability to concur in or contest an UMTA\ndetermination that certain proposed projects fall under\nsuch a category. Further, the Secretary of Transportation\nwould require that there be included in UMTA operating\nassistance grant contracts a warranty by the grantee of\nno adverse impact, together with a commitment by such\ngrantee to provide redress under section 13 (c) upon any\nsubsequent showing of actual adverse impact.\nDOT has identified other classifications of projects--\ncertain types of capital grants-which would also lend\nthemselves to this procedure, but for purposes of this\nopinion the Department is limiting the discussion to\nthe general operating assistance category.\nWarranty - The Public Body (Grantee) warrants that\nthe Project will not adversely affect the employment\nand working conditions of any mass transportation\nemployees within the project area. The Public Body\n(Grantee) agrees that in the event any such employees\nare so affected, UMTA may suspend assistance under\nthis contract pending correction of the adverse affect,\nthe Public Body (Grantee) and the representative of\nthe affected employee (s) may be requested by the\nSecretary of the Department of Labor to negotiate an\nagreement which the Secretary will certify as meeting\nthe requirements of 13 (c) of the Act, and the Secretary\nof Labor may on his own motion set such protective\narrangements as he deems appropriate to protect the\ninterest of adversely affected, employees. The Public\nBody (Grantee) agrees to make redress to adversely\naffected employees pursuant to the conditions of such\nprotective arrangements as may be negotiated by the\nparties or set by the Secretary of Labor.\n4.\nCONCLUSION\nUpon review of the language of section 13 (c) of the Act,\nthe legislative intent of section 13 (c) and the discre-\ntionary powers of the Secretary of Labor, I am of the\nopinion that there is no mandatory requirement that\n\"fair and equitable arrangements\" be negotiated by the\ncollective bargaining process in advance of grants or\nany category of grants where there is no evidence and\nlittle possibility that such grant assistance would\nadversely affect mass transportation employees.\nRATIONALE\nThe Act -- 13 (c) only applies where there are adverse\neffects.\nThe language of section 13(c) cited above is clear. The\noperative language is the first sentence which reads:\n\"It should be a condition of any assistance\nunder section 3 of this Act that fair and\nequitable arrangements are made, as determined\nby the Secretary of Labor, to protect the\ninterests of employees affected by such\nassistance.'\nThe clear intent of this sentence is that transportation\nemployees affected adversely by UMTA assistance be protected.\nThe DOL does not appear to dispute this. (See Solicitor,\nDOL, Memorandum of Law, dated June 22, 1976, at pp. 2 and 4.)\nThe relevant reports of Congress are replete with the\nreference to 13 (c) providing protection for employees who\nmay be adversely affected by a project. For example:\n\"Although the problem of worker protection may\narise in only a limited number of cases, the\ncommittee nevertheless believes that the over-\nall impact of the bill should not be permitted\nto obscure the fact that in certain communities\nindividual workers or groups of workers may be\nadversely affected as a result of the introduction\nof new equipment or the reorganization of existing\ntransit operation.\" (2 U.S. Cong. & Adm. News,\n1964, H. Rep. 204, p. 2584.) (Emphasis supplied)\nSee Footnote 1/.\n5.\nTo construe the sentence otherwise would be in error. To\ndate, to my knowledge, no collectively bargained agreements\nhave been designed to come into play when an employee is\nnot affected or when he is beneficially affected. It is\nnot consistent to agree there is little or no chance of\nadverse effects and then require the parties to negotiate\nan agreement that provides protections against such effects.\nThe DOL has argued that the last sentence of 13 (c) is\noperative and requires all contracts to specify the\nprotective arrangements. This sentence reads:\n\"The contract for the granting of any such\nassistance shall specify the terms and\nconditions of the protective arrangements. \"\n(Emphasis supplied)\nThe word \"such\" relates back to assistance which adversely\naffects employees, so that this final sentence is con-\nsistent with the DOT proposal. In any case, the DOT\nproposal would include in all contracts of assistance the\nwarranty referred to above. It is not a case of leaving\nan adversely affected employee without redress or remedy.\nEven if it should be found that the Secretary of Labor\ncannot proceed in any project situation without advance\nassurance that protective provisions are in place, the\nproposed grantee warranty provides such protective\nprovisions and advance assurance.\n13 (c) contains no mandatory requirement for collectively\nbargained agreements.\nThe DOL cites \"Legislative History\" as requiring collectively\nbargained agreements in each and every case and indicating\nthat the DOL Secretary's hands are tied. The first sentence\nof 13 (c) cited above is operative and puts the burden of\ndetermining fair and equitable arrangements in the hands\nof the Secretary and not in the hands of legislative history.\nLegislative history favoring collective bargaining to\ndetermine \"fair and equitable arrangements\" where there is\nlikelihood of adverse effects does not remove the Secretary's\nthreshhold authority to determine that there is no such\nreasonable likelihood. Further, the legislative history\non collective bargaining can be read both ways.\n6.\nThe DOL has in the past referred to the March 28, 1963\nReport of the Senate Committee on Banking and Currency\nto the effect that \"it is expected that specific\nconditions normally will be the product of local\nbargaining and negotiations, subject to the basic\nstandard of fair and equitable treatment.\" However,\nthe Committee also indicated that the Secretary of Labor\nwas expected to develop criteria for the administration\nof the law. In the very next sentence of the Report\nquoted this is said: \"The Committee expects that the\nSecretary of Labor, in addition to providing the Adminis-\ntrator with technical assistance, will assume responsi-\nbility for developing criteria as to the types of\nprovisions that may be considered as necessary to insure\nthat worker interests are adequately protected against\nthe kinds of adverse effects that may reasonably be\nanticipated in different types of situations.' (Emphasis\nsupplied).\nThere is precedent for negative declaration procedures\nalthough not expressly authorized by statute. An example\nsupporting the DOT approach may be found under Section\n102 (C) of the National Environmental Policy Act of 1969\n(NEPA) (P.L. 91-190, 81 Stat. 852, 42 U.S.C.A. 4321)\nwhich provides, in part, that Federal agencies must prepare\ndetailed environmental statements on proposals for legis-\nlation and other major Federal actions significantly affect-\ning the quality of the human environment. The guidelines\nprepared pursuant to NEPA by the Council on Environmental\nQuality (CEQ) provide, inter alia, for an agency deter-\nmination that under certain circumstances an environmental\nstatement is not necessary for a proposed action. (See\n§ 1500.6, 40 CFR). In such cases, the agency must prepare\nan environmental assessment and a publicly-available record\nbriefly. setting forth the reasons for its \"negative\"\ndetermination. While NEPA does not provide for such\n\"negative\" agency determinations, the CEQ guidelines\nestablish procedures which interpret NEPA to permit such\ndeterminations so long as they are adequately documented\nand made in conformance with those procedures. It is my\nopinion that the Secretary of Labor may exercise similar\ndiscretion and judgment under section 13 (c) of the Act.\n7.\nThe suggested procedure would allow UMTA projects to be\nclassified by category and those falling within a \"no\nimpact\" category would not be subject to the normal 13(c)\nprocess but would be subject to the warranty. The Depart-\nment of Labor would, of course, review and concur in each\ngrant determined by UMTA to fall within the \"no impact\"\ncategory or any other category. While 13(c) of the Act\ndoes not expressly provide for this approach, I believe\nthat, similar to the NEPA example discussed above, it\ncan be accomplished without violating the spirit of the\nAct by development, with the Department of Labor, of a\nsufficiently detailed set of regulations or guidelines.\nA mandatory collective bargaining requirement could have\nwidespread policy implications.\nMany other pieces of social legislation now contain labor\nprotective provisions and the administrative practices\nimplementing them are evolving. As a matter of policy,\nrequiring collective bargaining in each and every case,\nregardless of the likelihood of adverse impact would\nresult and has resulted in delay, constant upward\nratcheting of protections, and the extension of protections\nto employees who are not directly affected by the assistance.\nFor example, the Juvenile Justice and Delinquency Prevention\nAct of 1974 (P.L. 93-415) and the Special Health Revenue\nSharing Act of 1975 (P.L. 94-63) contain requirements that\nfair and equitable arrangements be made to protect employees\naffected by the new programs. The Developmentally Disabled\nAssistance and Bill of Rights Act of 1975 (P.L. 94-103) has\na Davis-Bacon type provision. In 1974, the National Labor\nRelations Act was amended to extend coverage under that\nact to employees of nonprofit hospitals and nursing homes\n(P.L. 93-360).\nSuch recent railroad legislation as the Rail Passenger\nService Act of 1970 (P.L. 91-518) and the Regional Rail\nReorganization Conservation Act of\" 1973 (P.L. 93-236)\ncontain extensive employee protection provisions and\nrequire that such arrangements be made prior to entering\ninto certain activities under the act. However, we are\nunaware of any requirement under these laws that continual\nor periodic renegotiations of these agreements must be\nundertaken through the collective bargaining process.\n8.\nThese acts are all administered somewhat differently but\nas a whole they give selected groups of local employees\nprotections against adverse effects of Federal assistance.\nIf it is determined that the only way to assure protections,\neven where there is no adverse effect, is by collective\nbargaining without exercise of Federal discretion these\nprograms could all become subject to the will of organized\nlabor. Organized labor would certainly press for all of\nits employees to have like protections and benefits.\nThose public employees not covered by an agreement in one\nprogram will either obtain it through another or will\nassert their right to it by their presence as part of a\npublic work force that is not being given the same rights\nas the rest of the work force.\nThrodoce a.Munter\nTheodore A. Munter\nTAB D\nLIBRARY\nFORD\nSERALD\nassociation\ncounties\n1735 new york avenue, n.w., washington, d.c. 20006\n(202) 785-9577\nApril 8, 1976\nDear Friend:\nCounty governments have been involved in public transportation for\nyears. Since passage of the landmark $11.8 billion National Mass Transpor-\ntation Assistance Act of 1974, county governments have become even more\ninvolved.\nIn many areas, county elected officials make vital decisions affecting\nfinancial support for existing and new systems, allocation of Section 5\nformula funds among transit operators in urbanized areas, appointment of\ntransit board members, and other major policy issues.\nOne matter which seriously concerns them is the manner in which the labor-\nprotective requirements of Section 13(c) of the 1964 Urban Mass Transportation\nAct are administered. We enclose, for your information, a resolution adopted\nby the National Association of Counties' Board of Directors on March 30, 1976.\nThis resolution was recommended to the Board by unanimous vote of the\nNACo Urban Affairs Committee and our Transportation and Labor-Management\nSteering Committees.\nWe would welcome your comments and/or support for our position. If you\nwrite to the President, the Secretaries of Transportation or Labor, the\nUrban Mass Transportation Administrator, or Congressional leaders, we\nwould be interested in receiving a copy of your comments.\nSincerely,\nSandy Spence\nSandra Spence\nLegislative Representative\nTransportation\nassociation\ncounties\n1735 new york avenue, n.w., washington, d.c. 20006\n(202) 785-9577\nNACo POLICY RESOLUTION\nTRANSPORTATION LABOR PROTECTIVE AGREEMENTS SECTION 13 (c)\nAdopted by NACo Board of Directors\nMarch 30, 1976\nWHEREAS, Section 13 (c) of the Urban Mass Transportation Act of 1964 requires\nas a precondition to UMTA assistance, \"fair and equitable\" arrangements to protect\nthe interests of employees by such assistance; and\nWHEREAS, the determination of what is \"fair and equitable\" is made only by\nthe Secretary of Labor without benefit of written regulations; and\nWHEREAS, before making this determination, the Secretary of Labor submits\nproposed labor protective agreements to unions representing affected employees; and\nWHEREAS, the Secretary of Labor typically submits such proposals to many\nlabor organizations, even where there is only a very minimal potential interest\ninvolved; and\nWHEREAS, the Secretary of Labor sets no limit on the length of time such\norganizations may take to review the proposed agreemnt and such review often results\nin unreasonable and unnecessary delays in funding; and\nWHEREAS, the effect of this practice is to allow labor organizations to hold\nhostage needed UMTA grants; and\nWHEREAS, the pressure on transit officials to sign these agreements in order\nto assure continuity of public transportation service cannot realistically be\nignored; and\nWHEREAS, these pressures make management of transit operations in an orderly,\nefficient and cost-effective manner impossible;\nNACo URGES THAT\nthe Congress and the Department of Transportation and the Department\nof Labor conduct a thorough review, study and reconsideration of the admin-\nistrative procedures currently utilized in achieving compliance with Section\n-2-\n13 (c) of the Urban Mass Transportation Act of 1964. Particular attention\nshould be given to the effect of the general provisions and administrative\nprocedures of 13(c) as they impact on the provision of public transportation\nservices\nthe study should also include but not be restricted to considerations\nsuch as:\nThe relevance and effectiveness of 13(c) in assuring agreements which\nare fair and equitable to public transportation users and taxpayers at the\nfederal, state and local levels.\nA limitation of 13(c) review provisions to these unions having a direct\ninterest in them.\nA limitation of the amount of time affected unions may be permitted\nin their review of labor protective agreements.\nThe need for written regulations to guide the Department of Labor in\nits administration of 13(c).\nThe need for a review of the appropriateness and relevance of the pro-\nvisions and use of the so-called \"model agreement\" negotiated and signed by\nthe American Public Transit Association (representing management) and the\nAmalgamated Transit Union and Transport Workers Union of America.\nThe need to separate application of agreement provisions appropriate\nfor rail transit employees which are based upon 19th century rail provisions\nfrom those appropriate for modern transit system employees.\nThe need to ensure that state collective bargaining laws will apply\nto local transit public employee labor relations and shall not be prempted\nby the Secretary of Labor.\nFORD\nTHE COMMONWEALTH OF MASSACHUSETTS\nEXECUTIVE DEPARTMENT\nSTATE HOUSE\nBOSTON 02133\nMICHAEL S. DUKAKIS\nGOVERNOR\nJune 11, 1976\nThe Honorable William T. Coleman, Jr.\nSecretary of Transportation\nU.S. Department of Transportation\nWashington, D.C. 20590\nDear Secretary Coleman:\nIt is my understanding that you and Secretary of Labor W. J. Usery, Jr.\nare currently working to mitigate the adverse effects of the administra-\ntion of Section 13(c), the so-called labor protection clause, of the\nUrban Mass Transportation Act of 1964 as amended. I am writing to you\ntoday to express my deep concern over the negative impact which Section\n13 (c) has been having on transit operations in the Commonwealth of\nMassachusetts. Even more severe than any actual cost experience is the\nhesitancy of many communities to become involved in public transportation\nbecause of their fears of open-ended liabilities which the provisions of\nSection 13 (c) as currently implemented seem to involve. I understand\nalso that Massachusetts is not unique in this regard. Therefore, I urge\nyou to continue your efforts to deal with the \"13(c) problem\" on behalf\nof public mass transportation in this nation.\nI am enclosing a copy of a letter from my Secretary of Transportation,\nFrederick Salvucci, to you referring to a proposed UMTA Section 5 opera-\nting assistance 13 (c) agreement submitted by the Pioneer Valley Regional\nTransit Authority (Springfield, Massachusetts area). The latter proposed\nagreement is also enclosed. Secretary Salvucci's letter states fairly\nmy views on the subject. The potential liability to the taxpayer of\nsigning federally required 13 (c) agreement must be better defined.\nAccepting federal money for continuing and improving local transit\nservices, including routine transit vehicle and other equipment replace-\nment must not be accompanied by fantastically complicated agreements\nwhose potential costs to the taxpayer cannot even be explained by the\nlawyers drafting the agreements much less understood by the public\nofficials who must sign them.\nI, therefore, urge you to continue your work with Secretary Usery to\narrive at a new method of administering Section 13(c) of the UMTA Act\nThe Honorable William T. Coleman, Jr. -2-\nJune 11, 1976\nwhich is fair and equitable for all parties involved in using, operating,\nand paying for the excellent public mass transportation system which\nthis nation needs and deserves.\nSincerely,\nMichael S. Dukakis\nMSD:sjs\nCC: Mr. Robert E. Patricelli, Administrator, UMTA\nMr. Stephen G. McConahey, Asst. to the President for\nIntergovernmental, Relations\nLt. Governor Thomas P. O'Neill, 111\nSecretary Frederick P. Salvucci\nFORD\nThe Commonwealth of Massachusetts\nExecutive Office of Transportation & Construction\nOne Ashburton Place\nFREDERICK P. SALVUCCI\nBoston. Massachusetts 02108\nSECRETARY\nMarch 8, 1976\nSecretary William T. Coleman, Jr.\nU.S. Department of Transportation\n400 7th Street, S.W.\nWashington, D.C. 20590\nRe: 13(c)/Section 5 - Springfield\nDear Secretary Coleman:\nI am writing to ask for your support of the attached UMTA\nSection 5 operating assistance (c) statement submitted to Mr. Patricelli,\nUrban Mass Transportation Administrator, by the Lower Pioneer Valley Regional\nTransit Authority (Springfield, Massachusetts area). In my view the proposed\nstatement clearly shows that there can be no adverse effect on employees of\nthe Regional Transit Authority's private carriers as a result of the receipt\nof federal Section 5 operating subsidies for a portion of the RTA's transit\ndeficit.\n^ key fact underlying our effort in this regard is that we are\nattempting to expand the capability of our transit authorities to provide\npublic transportation services. We are encountering, however, resistance\non the part of many communities which might otherwise join in the transit\nauthorities' program. Their resistance is grounded in their fear that\nfederal transportation aid programs -- which they see as essential to\nproviding expanded services -- will bring with them a host of undefined\nlabor protective requirements which have unforeseen yet ever growing\nfinancial costs to the taxpayers of their communities. A clarification\nfrom the federal government that no such undefined and costly requirements\nexist in the Section 5 operating subsidy program as a result of the inter-\npretation of Section 13(c) would be a tremendous aid in our effort.\nI therefore hope that you will find the proposed 13 (c) statement\nentirely satisfactory and I ask that you strongly represent the interests\nof the transit organization involved in this before the Secretary of Labor.\nYour involvement and the vigorous support of the DOT and UNTA are essential\nto the success of this approach to the 13(c)--Section 5 operating aid question.\nYours sincerely,\nFrederick P. Salvucci\nCC: Mr. Robert E. Patricelli\nTORD\nUrban Mass Transportation Wainistrator\nCHICOPEE\nLONGMEADOW\nWESTHELD\nEASTHAMPTON\nLUDLOW\nW SPRINGFIELD\nE. LONGMEADOW\nNORTHAMPTON\nWILBRAHAM\nPIONEER VALLEY TRANSIT AUTHORITY\nFebruary 18, 1976\nRECEIVED\nMr. Robert E. Patricelli, Administrator\nUrban Mass Transportation Administration\nFEB 2 0 1976\n400 7th Street SW, Room 9324\nWashington, D. C. 20590\nOFFICE OF THE SECRETARY OF\nTRANS. & CONST.\nRe: Lower Pioneer Valley Regional Transit Authority\nApplication for Section 5 Operating Assistance\nfor Fiscal Year 1976 Protecting the Interests\nof Employees\nDear Mr. Patricelli:\nI have carefully examined Sections (e) (4), 5(n) (1) and 13 (c)\nof the Urban Mass Transportation Act of 1964, as amended. In its\napplication for operating assistance under Section 5 of said Act,\nfor fiscal year 1976, this Authority is required to agree to\nprotect the interests of employees affected by such assistance. The\nemployees concerned are those of private carriers, which carriers\nhave contracted, or which may in the future contract, with this\nAuthority to supply the public mass transportation service which this\nAuthority provides to the people of the Lower Pioneer Valley Region.\nIn this regard, I note that Section (d) (1) of said Act allows\nthe Secretary of Transportation to approve, as an operating assistance\nproject, \"the payment of operating expenses to improve or continue\nsuch service.' The Authority's application for Section 5 operating\nassistance will be made on this condition that the project will be for\nthe payment of operating expenses to improve or continue the mass\ntransportation service provided by this Authority under contract with\nprivate carriers.\nIn fulfillment of the above mentioned conditions of your Act\nregarding employee protections, I submit that our proposed operating\nassistance project cannot, as a project, result in conditions contrary\nto the requirements of said Act. In that respect, I certify that such\nproject and the receipt of Federal operating assistance under it cannot\nresult in any of the following: (1) the modification or termination\nof rights, privileges or benefits, including pension rights and benefits,\nunder existing collective bargaining agreements or otherwise; (2) the\nmodification or termination of collective bargaining rights; (3) a\nworsening of the positions of individual employees with respect to their\nemployment; (4) a failure to provide assurances of employment to\nemployees of acquired mass transportation systems and priority of\nROOM 422 31 ELM ST SPRINGFIELD.MASS. 01103\nTELEPHONE: 413-732 6248\nMr. Robert E. Patricelli, Administrator\nUrban Mass Transportation Administration\nFebruary 18, 1976\nPage Two\nre-employment of employees terminated or laid off; or (5) the failure\nto provide training or retraining programs.\nI should appreciate your early response with regard to such\napplication. If you have any questions concerning the foregoing, I\nshould be pleased to discuss them with you.\nVery truly yours,\nJanan t TOMER\nTERRY E. TORNEK, Administrator\nLower Pioneer Valley Regional\nTransit Authority\nFORD\nFORD is LIBRAR 076825\nfile\nTHE WHITE HOUSE\nDECISION\nWASHINGTON\nMay 28, 1976\nMEMORANDUM FOR THE PRESIDENT\nFROM:\nJAMES CANNON\nSUBJECT:\nPOLICY OPTIONS FOR IMPROVING PROCEDURES UNDER\nSECTION 13 (c) OF THE URBAN MASS TRANSPORTATION\nACT OF 1964, AS AMENDED\nBACKGROUND:\nSection 13 (c) of the 1964 UMTA Act (Amended) requires that\nbefore any Federal assistance is granted, The Secretary of\nLabor must certify that \"fair and equitable\" arrangements\nhave been made for transit employees \"affected\" by the grant.\nThere are no published regulations governing 13 (c). The\npresumption has developed that each and every grant of Federal\ndollars \"affects\" transit employees, and DOL has adopted a\nprocedure whereby localities' applications for UMTA funds are\nforwarded directly to transit union representatives in the\ngeographical area requesting funds. The unions and the transit\noperators then engage in collective bargaining to arrive at\nprotective arrangements which the Secretary of Labor can certify\nas \"fair and equitable.\" Union rules generally then require that\nthe agreement be subject to the approval of the International\nUnion. For this reason, DOL almost never certifies an agreement\nunless the International has approved it but it can do so.\nUMTA may not make a grant until the DOL certification is obtained.\nTransit operators, city and county officials, and UMTA heads\nhave consistently expressed dissatisfaction with Section 13 (c),\nand complaints from localities, documented as far back as\n1967, have become more vehement in recent months. The principal\ncomplaint is that unions use the 13 (c) requirement and management's\nneed for the UMTA funds to indirectly raise bargaining issues\nunrelated to the UMTA grant. This feeling is not well documented,\nbut then it is not the kind of matter which lends itself to\ndocumentation.\nIn 1974, an informal DOL-DOT task force was established to\nexamine 13 (c) procedures and make recommendations. At the staff\nlevel an impasse soon occurred and there was little result\nexcept for an increased tendency on the part of each Department\nto blame the other for any problems in the 13 (c) process.\nGERALE FORD VIBRARY\n2\nWithin recent weeks we have heard of Section 13 (c) problems in\nsuch diverse locations as Omaha and Lincoln, Nebraska; Los Angeles,\nCalifornia; Albuquerque, New Mexico; Nassau County, New York; and\nOcean County, New Jersey. In some instances we have been able\nto help expedite the process through Domestic Council inquiries.\nOn March 9, 1976, the Board of the Southern California Rapid\nTransit District \"reluctantly\" approved a 13 (c) agreement citing\n\"economic duress. \"\nOn March 30, 1976, the Board of the National Association of\nCounties passed a resolution requesting a thorough Federal\nreview of 13 (c) procedures which were found to \"allow labor\norganizations to hold hostage needed UMTA grants;\" and \"make\nmanagement of transit operations in an orderly, efficient and\ncost effective manner impossible.\"\nA current draft GAO Report, being made at the request of Senator\nJohn Tower, will include the following results of interviews with\n12 local grantees on 13 (c) effects. Eight of the 12 feel DOL\nprocedures put them in an uneven bargaining position with the\nunions; none of 26 unions contacted felt they were in an uneven\nrelationship.\nCURRENT ADMINISTRATION ACTIONS:\nOn March 24, 1976, Jim Connor requested DOL and DOT to prepare a\njoint memorandum outlining 13 (c) problems and possible Administration\nsolutions. The Departments, unable to agree, have submitted\nseparate papers. (At Tab A: DOT's submissions of April 8, 1976,\nand May 28, 1976; at Tab B: DOL's submissions of April 7, 1976 and\nApril 21, 1976.)\nIn mid-April the Domestic Council convened a meeting of the\nAdministrator of UMTA and the Counselor to the Secretary of Labor\nin an effort to achieve some agreement on steps which could be\ntaken. After an hour or more of discussion, it was apparent\nthat representatives of the two Departments could not even agree\non the issues to be discussed or the facts surrounding the\nimplementation of 13 (c). The meeting did lead to the second\nseries of memoranda from the two Secretaries and at least some\nclarification of the issues.\nOur discussions with all levels of the two Departments, including\nthe two Secretaries, have been frequent and extensive but I do\nnot believe Bill Coleman and Bill Usery have ever discussed the\nmatter with each other.\nFORD is LIBRARY 078835\n3\nIn early May the Domestic Council convened separate meetings\nwith leading transit management representatives and with the\nlocal government groups (National Association of Counties, etc.)\nto get first hand descriptions of their perception of the\nproblems with the implementation of 13 (c).\nSince last fall there have also been numerous contacts with\ninterested local officals, such as Pete Schabarum who serves on\nthe Board of the Southern California Rapid Transit District.\nTransit management and local government officials have expressed\nconsiderable pleasure at our willingness to look into the 13 (c)\nprocess but also some concern at the slow progress they perceive\nus to be making.\nDISCUSSION:\nAlthough some critics of Section 13 (c) would like us to assault\nits philosophic underpinnings, legislative change is clearly\nunattainable and probably undesirable. The root of most of\nthe problem, in any event, is not Section 13 (c) but the way it\nhas been implemented.\nThere is little dispute that workers who are adversely affected\nby the grant of Federal money should be recompensed. The grants\nthemselves, however, should not be the vehicles for escalation\nof wages and benefits.\nBecause DOL and DOT have basically not worked together on this\nissue, we have been unable to define specific proposed Administration\naction. We have, however, identified several steps which we believe\ncan and should be taken.\nRECOMMENDATIONS:\nI. recommend that you instruct Secretaries Usery and Coleman to\naddress the specific proposals which follow and, within one week,\nto submit final, joint recommendations to you for decision.\nAGREE\nDISAGREE\nFORD is LIBRARY\n4\nI recommend that the specific proposals to be addressed in-\nclude:\n1.\nSimplification of procedures under existing law. For\nexample:\n-- SET TIME LIMITS\nDOL could set time limits for the negotiation of\nagreements, after which the Secretary of Labor\ncould make his own determination of what arrange-\nments constituted \"fair and equitable\" protection.\nDOL could provide conditional certifications so\nthat UMTA funds could flow before critical deadlines\nwere reached (end of the fiscal year, or exhaustion\nof local operating funds).\n-- MULTI-YEAR CERTIFICATIONS\nInstead of having each grant of Federal dollars\ngive rise to a new 13 (c) agreement (often more\nthan one per year per city) DOL could establish a\npolicy of granting multi-year certifications which\nwould be good for all grants made within a specific\nperiod of time (three years) subject to review\nbased upon the union or an employee showing \"adverse\nimpact.\n\"\n-- SINGLE CERTIFICATION FOR SINGLE GRANT\nOnly a single certification should be required for\na given capital project, even if such a project is\nfunded through several successive grants or grant\namendments. (This would be the case for a new\nrapid transit system, where UMTA makes a multi-\nyear commitment of funds and liquidates that\ncommitment over time with a series of annual\ngrants. Under present practice each such annual\ngrant requires a separate 13 (c) agreement, collectively\nbargained and certified.)\nFORD LIBRARY if BERALD\n5\n--\nNEGATIVE DECLARATIONS WITH CHANGED BURDEN OF PROOF\nDOT and DOL could establish categories of capital\ngrants that historically have had minimal, if any,\nadverse impact on transit employees. Such cate-\ngories would include bus and rail car purchases\nwhich result in no reduction in fleet size. In\nsuch cases, there could be a simple departmental\ndeclaration that no adverse impact is likely to\noccur, and that no specific 13 (c) arrangement need\nbe negotiated.\nThis would shift the present burden of proof from\nlocal transit operators (to prove that the Federal\ndollars will not harm employees) to the unions (to\nprove that there is an adverse impact.)\nA review procedure could be provided whereby an\nemployee or union could ask for special protective\narrangements in connection with any grant based\nupon a showing of a substantial prospect of \"adverse\nimpact.\"\nAGREE\nDISAGREE\n2.\nPromulgate and Publish Regulations\nRegulations were drafted in 1974 and 1975 but never\nfinalized. Such guidelines would assist all parties in\nparticipating in the 13 (c) process.\nAGREE\nDISAGREE\n3.\nI recommend that the Domestic Council be charged with\nco-ordinating this effort.\nAGREE\nDISAGREE\nFORD & LIBRARY 03RALD"
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