Proposed Changes to Arbitration Policies, Functions, and Procedures, 39209-39213 [05-13362]

Agencies

• Federal Mediation and Conciliation Service

[Federal Register Volume 70, Number 129 (Thursday, July 7, 2005)]
[Proposed Rules]
[Pages 39209-39213]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-13362]


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FEDERAL MEDIATION AND CONCILIATION SERVICE

29 CFR Part 1404


Proposed Changes to Arbitration Policies, Functions, and 
Procedures

AGENCY: Federal Mediation and Conciliation Service.

ACTION: Proposed rule.

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SUMMARY: The Federal Mediation and Conciliation Service (FMCS) is 
proposing to amend 29 CFR part 1404, Arbitration Services. The 
amendments are intended to set forth the criteria and procedures for 
listing on the arbitration roster, removal from the arbitration roster, 
and expedited arbitration processing. Other changes include how parties 
may request arbitration lists or panels and fees associated with the 
arbitrators. The purpose of these changes is to facilitate the 
management and administration of the arbitration roster. FMCS is 
soliciting comments on the proposed changes described below.

DATES: Written comments must be submitted to the office listed in the 
address section below on or before August 8, 2005.

ADDRESSES: Submit comments to the Maria A. Fried, General Counsel, 
Federal Mediation and Conciliation Service, 2100 K Street, NW., 
Washington, DC 20427. Comments may be submitted also by fax at (202) 
606-5345 or electronic mail (e-mail) to mfried@fmcs.gov. All comments 
and data in electronic form must be identified by the appropriate 
agency form number.

FOR FURTHER INFORMATION CONTACT: Maria A. Fried, General Counsel and 
Federal Register Liaison, FMCS, 2100 K Street, NW., Washington, DC 
20427. Telephone (202) 606-5444, FAX (202) 606-5345.

SUPPLEMENTARY INFORMATION: FMCS proposes to amend 29 CFR part 1404. The 
original regulation was issued in June 1997. The amendments set forth 
procedures for the listing and removal of arbitrators from the 
arbitration roster maintained by FMCS, procedures for requesting 
arbitration lists and panels, and the nomination of arbitrators.
    Pursuant to 29 U.S.C. 171(b) and 29 CFR part 1404, FMCS offers 
panels of arbitrators for selection by labor and management to resolve 
grievances and disagreements arising under their collective bargaining 
agreements and to deal with the fact finding and interest arbitration 
issues as well.
    Title II of the Labor Management Relations Act of 1947 (Pub. L. 90-
101) as amended in 1959 (Pub. L. 86-257) and 1974 (Pub. L. 93-360), 
states that it is the labor policy of the United States that ``the 
settlement of issues between employers and employees through collective 
bargaining may be advanced by making available full and adequate 
governmental facilities for conciliation, mediation, and voluntary 
arbitration to encourage employers and representatives of their 
employees to reach and maintain agreements concerning rates of pay, 
hours, and working conditions, and to make all reasonable efforts to 
settle their differences by mutual agreement reached through 
conferences and collective bargaining or by such methods as may be 
provided for in any applicable agreement for the settlement of 
disputes.'' Under its regulations at 29 CFR part 1404, FMCS has 
established policies and procedures for its arbitration function 
dealing with all arbitrators listed on the FMCS Roster of Arbitrators, 
all applicants for listing on the Roster, and all person or parties 
seeking to obtain from FMCS either names or panels of names of 
arbitrators listed on the Roster in connection with disputes which are 
to be submitted to arbitration or fact-finding. FMCS strives to 
maintain the highest quality of dispute resolution experts on its 
roster. FMCS now proposes to amend 29 CFR part 1404 to update its 
procedures and facilitate the maintenance and administration of its 
arbitration roster.

Access to Information in Comments

    Information submitted as a comment concerning this document may be 
claimed confidential by marking any part or all of the information as 
``CBI.'' Information so marked will not be disclosed but a copy of the 
comment that does contain CBI must be submitted for inclusion in the 
public record. FMCS may disclose information not marked confidential 
without prior notice. All written comments will be available for 
inspection in Room 704 at the Washington, DC address above from 8:30 
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays.

[[Page 39210]]

Electronic Access and Filing

    All comments and data in electronic form must be identified by the 
appropriate agency form number. No confidential business information 
(CBI) should be submitted through e-mail.

Regulatory Flexibility Act

    The Director, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 606(b)), has reviewed this regulation and by approving it 
certifies that this regulation will not have a significant economic 
impact on a substantial number of small entities. The fees assessed by 
FMCS for requests for panels are nominal and should not cause any 
significant economic effect on small entities which may request 
arbitration panels.

Executive Order 12866

    This regulation has been deemed significant under Section 3(f)(3) 
of E.O. 12866 and as such has been submitted to and reviewed by the 
Office of Management and Budget.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local and 
tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule 
will not result in an annual effect on the economy of $100,000,000 or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of the United States-based companies to 
compete with Foreign based companies in domestic and export markets.

List of Subjects in 29 CFR Part 1404

    Administrative practice and procedure, Labor management relations.

    For the reasons stated in the preamble, the Federal Mediation and 
Conciliation Service proposes to amend 29 CFR Part 1404 as follows:

PART 1404--ARBITRATION SERVICES

Subpart A--Arbitration Policy: Administration of Roster

    1. The authority citation for part 1404 continues to read as 
follows:

    Authority: 29 U.S.C. 172 and 29 U.S.C. 173 et. seq.

    2. In Sec.  1404.3, paragraph (c)(1)(iv) is revised and (v) is 
added to read as follows:


Sec.  1404.3  Administrative responsibilities.

* * * * *
    (c) Arbitrator Review Board. The Arbitrator Review Board (Board) 
shall consist of a chairperson and members appointed by the Director 
who shall serve at the Director's pleasure.
    (1) Duties of the Board. The Board shall:
* * * * *
    (iv) At the request of the Director of FMCS, or upon its own 
volition, review arbitration policies and procedures, including all 
regulations and written guidance regarding the use of the FMCS 
arbitrators, and make recommendations regarding such policies and 
procedures to the Director; and
    (v) Review the qualifications of all persons who request a review 
in anticipation of attending the FMCS-sponsored labor arbitrator 
training course, interpreting and applying the criteria set forth in 
Sec.  1404.5.
* * * * *

Subpart B--Roster of Arbitrators: Admission and Retention

    3. In Sec.  1404.4, paragraphs (b) and (e) are revised to read as 
follows:


Sec.  1404.4  Roster and status of members.

* * * * *
    (b) Adherence of Standards and Requirements. Persons listed on the 
Roster shall comply with FMCS rules and regulations pertaining to 
arbitration and with such guidelines and procedures as may be issued by 
the OAS pursuant to Subpart C of this Part. Arbitrators shall conform 
to the ethical standards and procedures set forth in the Code of 
Professional Responsibility for Arbitrators of Labor Management 
Disputes, as approved by the National Academy of Arbitrators, Federal 
Mediation and Conciliation Service, and the American Arbitration 
Association (Code).
* * * * *
    (e) Nominations and Panels. On request of the parties to an 
agreement to arbitrate or engage in fact-finding, or where arbitration 
or fact-finding may be provided for by statute, OAS will provide names 
or panels of names for a fee. Procedures for obtaining these services 
are outlined in subpart C of this part. Neither the submission of a 
nomination or panel nor the appointment of an arbitrator constitutes a 
determination by FMCS that an agreement to arbitrate or enter fact-
finding proceedings exists; nor does such action constitute a ruling 
that the matter in controversy is arbitrable under any agreement.
* * * * *
    4. In Sec.  1404.5, the section heading, the introductory text, 
paragraphs (a), (b), (c), (d) introductory text, (d)(5), (d)(6), 
(d)(7), (e) and (f) are revised to read as follows:


Sec.  1404.5  Listing on the roster, criteria for listing and removal, 
procedure for removal.

    Persons seeking to be listed on the Roster must complete and submit 
an application form that may be obtained from OAS. Upon receipt of an 
executed application, OAS will review the application, assure that it 
is complete, make such inquiries as are necessary, and submit the 
application to the Board. The Board will review the completed 
application under the criteria in paragraphs (a), (b) and (c) of this 
section, and will forward to the FMCS Director its recommendation as to 
whether or not the applicant meets the criteria for listing on the 
Roster. The Director shall make all final decisions as to whether an 
applicant may be listed on the Roster. Each applicant shall be notified 
in writing of the Director's decision and the reasons therefore.
    (a) General Criteria. (1) Applicants will be listed on the Roster 
upon a determination that he or she:
    (i) Is experienced, competent and acceptable in decision-making 
roles in the resolution of labor relations disputes; or
    (ii) Has extensive and recent experience in relevant positions in 
collective bargaining; and
    (iii) Is capable of conducting an orderly hearing, can analyze 
testimony and exhibits and can prepare clear and concise findings and 
awards within reasonable time limits.
    (iv) For applicants who are governmental employees, the following 
criteria shall also apply:
    (A) Federal Employees: These applicants must provide the OAS with 
written permission from their employer to work as an arbitrator. 
Federal employees will not be assigned to panels involving the Federal 
Government.
    (B) Governmental Employees other than Federal: These applicants 
must provide the OAS with written

[[Page 39211]]

permission from their employer to work as an arbitrator as well as a 
statement of the jurisdiction(s) in which the applicant is permitted to 
do this work.
    (2) FMCS may identify certain positions relating to collective 
bargaining that will substitute for the General Criteria. FMCS may also 
identify periodic educational requirements for remaining on the Roster.
    (b) Proof of Qualification. The qualifications listed in paragraph 
(a) of this section are preferably demonstrated by the submission of 
five recent arbitration awards prepared by the applicant while serving 
as an impartial arbitrator of record chosen by the parties to labor 
relations disputes arising under collective bargaining agreements, or 
the successful completion of the FMCS labor arbitrator training course 
plus three awards as described above, and the submission of information 
demonstrating extensive and recent experience in collective bargaining, 
including at least the position or title held, duties or 
responsibilities, the name and location of the company or organization, 
and the dates of employment.
    (c) Advocacy. Any person who at the time of application is an 
advocate as defined in paragraph (c)(1) of this section, must agree to 
cease such activity before being recommended for listing on the Roster 
by the Board. Except in the case of persons listed on the Roster as 
advocates before November 17, 1976, any person who did not divulge his 
or her advocacy at the time of listing or who becomes an advocate while 
listed on the Roster and who did not request to be placed on inactive 
status pursuant to Sec.  1404.6 prior to becoming an advocate, shall be 
recommended for removal by the Board after the fact of advocacy is 
revealed.
    (1) Definition of Advocacy. An advocate is a person who represents 
employers, labor organizations, or individuals as an employee, 
attorney, or consultant, in matters of labor relations or employment 
relations, including but not limited to the subjects of union 
representation and recognition matters, collective bargaining, 
arbitration, unfair labor practices, equal employment opportunity, and 
other areas generally recognized as constituting labor or employment 
relations. The definition includes representatives of employers or 
employees in individual cases or controversies involving worker's 
compensation, occupational health or safety, minimum wage, or other 
labor standards matters.
    (2) This definition of advocate also includes a person who is 
directly or indirectly associated with an advocate in a business or 
professional relationship as, for example, partners or employees of a 
law firm. Individuals engaged only in joint education or training or 
other non-adversarial activities will not be deemed as advocates.
    (d) Listing on Roster, Removal. Listing on the Roster shall be by 
decision of the Director of FMCS based upon the recommendations of the 
Board or upon the Director's own initiative. The Board may recommend 
for removal, and the Director may remove, any person listed on the 
Roster, for violation of this Part and/or the Code. The reasons for 
removal include whenever a member of the Roster:
* * * * *
    (5) Has been the subject of a complaint by parties who use FMCS 
services and the Board, after appropriate inquiry, concludes that cause 
for removal has been shown;
    (6) Is determined to be unacceptable to the parties who use FMCS 
arbitration services. Such a determination of unacceptability may be 
based on FMCS records which show the number of times the arbitrator's 
name has been proposed to the parties and the number of times he or she 
has been selected. Such cases will be reviewed for extenuating 
circumstances, such as length of time on the Roster or prior history;
    (7) Has been in an inactive status pursuant to Sec.  1404.6 for 
longer than two years.
    (e) Procedure for Removal. Prior to any recommendation by the Board 
to remove an arbitrator from the Roster, the Board shall conduct an 
inquiry into the facts of any such recommended removal. When the Board 
recommends removal of an arbitrator, it shall send the arbitrator a 
written notice. This notice shall inform the arbitrator of the Board's 
recommendation and the basis for it, and that he or she has 60 days 
from the date of such notice to submit a written response or 
information showing why the arbitrator should not be removed. When the 
Director removes an arbitrator from the Roster, he or she shall inform 
the arbitrator of this in writing, stating the effective date of the 
removal and the length of time of the removal if it is not indefinite. 
An arbitrator so removed may seek reinstatement to the Roster by making 
written application to the Director no earlier than two years after the 
effective date of his or her removal.
    (f) Suspension. The director of OAS may suspend for a period not to 
exceed 180 days any person listed on the Roster who has violated any of 
the criteria in paragraph (d) of this section. Arbitrators shall be 
promptly notified of a suspension. The arbitrator may appeal a 
suspension to the Board, which shall make a recommendation to the 
Director of FMCS. The decision of the Director of FMCS shall constitute 
the final action of the agency.
    5. Section 1404.6 is revised to read as follows:


Sec.  1404.6  Inactive status.

    A member of the Roster who continues to meet the criteria for 
listing on the Roster may request that he or she be put in an inactive 
status on a temporary basis because of ill health, vacation, schedule, 
or other reasons. If the inactive status lasts longer than two (2) 
years and the arbitrator has not paid the annual listing fee, the 
arbitrator will then be removed from the Roster.

Subpart C--Procedures for Arbitration Services

    6. In Sec.  1404.9, paragraphs (a), (b), (e) and (f) are revised 
and paragraph (h) is added to read as follows:


Sec.  1404.9  Procedures for requesting arbitration lists and panels.

    (a) The Office of Arbitration Services (OAS) has been delegated the 
responsibility for administering all requests for arbitration services. 
Requests should be addressed to the Federal Mediation and Conciliation 
Service, Office of Arbitration Services, 2100 K Street, NW., 
Washington, DC 20427.
    (b) The OAS will refer a panel of arbitrators to the parties upon 
request. The parties are encouraged to make joint requests. In the 
event, however, that the request is made by only one party, the OAS 
will submit a panel of arbitrators. However, the issuance of a panel--
pursuant to either joint or unilateral request--is nothing more than a 
response to a request. It does not signify the adoption of any position 
by the FMCS regarding the arbitrability of any dispute or the terms of 
the parties' contract.
* * * * *
    (e) The parties are required to use the Request for Arbitration 
Panel (Form R-43), which has been prepared by the OAS and is available 
upon request to the Federal Mediation and Conciliation Service, Office 
of Arbitration Services, Washington, DC 20427, or by calling (202) 606-
5111. Form R-43 is also available on the FMCS Internet Web site, http:/
/www.fmcs.gov. Requests that do not contain all required information 
requested on Form R-43 in typewritten

[[Page 39212]]

form or legible handwriting may be rejected.
    (f) Parties may submit requests for any standard geographical 
arbitration panels electronically by accessing the agency's Internet 
Web site, https://www.fmcs.gov, and receive panels via e-mail, fax or 
mail. Panel requests that contain certain special requirements may not 
be processed via the agency's internet system. Parties must provide all 
required information and must pay the cost of such panels using methods 
of payment that are accepted by the agency.
* * * * *
    (h) The OAS will charge a fee for all requests for lists, panels, 
and other major services. Payments for these services must be received 
with the request for services before the service is delivered and may 
be paid by either labor or management or both. A schedule of fees is 
listed in the appendix to this part.
    7. In Sec.  1404.11, paragraphs (c) introductory text, (c)(2) and 
(d) are revised to read as follows:


Sec.  1404.11  Nominations of arbitrators.

* * * * *
    (c) The OAS will provide a randomly selected panel of arbitrators 
located in geographical areas in proximity of the hearing site. The 
parties may request special qualification of arbitrators experienced in 
certain issues or industries or that possess certain backgrounds. The 
OAS has no obligation to put an individual on any given panel or on a 
minimum number of panels in any fixed period. In general:
* * * * *
    (2) If at any time both parties request that a name or names be 
included, or omitted, from a panel, such name or names will be 
included, or omitted, unless the number of names is excessive. These 
inclusions/exclusions may not discriminate against anyone because of 
age, race, gender, national origin, disability, or religion.
    (d) If the parties do not agree on an arbitrator from the first 
panel, the OAS will furnish second and third panels to the parties upon 
joint request, or upon a unilateral request if authorized by the 
applicable collective bargaining agreement, and payment of additional 
fees. Requests for second or third panels should be accompanied by a 
brief explanation as to why the previous panel(s) was inadequate. In 
addition, if parties are unable to agree on a selection after having 
received three panels, the OAS will make a direct appointment upon 
joint request.
    8. In Sec.  1404.12, paragraphs (a) and (c) introductory text are 
revised to read as follows:


Sec.  1404.12  Selection by parties and appointments of arbitrators.

    (a) After receiving a panel of names, the parties must notify the 
OAS of their selection of an arbitrator or of the decision not to 
proceed with arbitration. Upon notification of the selection of an 
arbitrator, the OAS will make a formal appointment of the arbitrator. 
The arbitrator, upon notification of appointment, shall communicate 
with the parties within 14 days to arrange for preliminary matters, 
such as the date and place of hearing. Should an arbitrator be notified 
directly by the parties that he or she has been selected, the 
arbitrator must promptly notify the OAS of the selection and his or her 
willingness to serve. If the parties settle a case prior to the 
hearing, the parties must inform the arbitrator as well as the OAS. 
Consistent failure to follow these procedures may lead to a denial of 
future OAS service.
* * * * *
    (c) Where the parties' collective bargaining agreement is silent on 
the manner of selecting arbitrators, the parties may wish to consider 
any jointly determined or one of the following methods for selection of 
an arbitrator from a panel:
* * * * *
    9. In Sec.  1404.14, paragraph (c) is revised to read as follows:


Sec.  1404.14  Decision and award.

* * * * *
    (c) Within 15 days after an award has been submitted to the 
parties, the arbitrator shall submit an Arbitrator's Report and Fee 
Statement (Form R-19) to OAS showing a breakdown of the fee and expense 
charges for use in the event the OAS decides to review conformance with 
the basis for the arbitrator's fees and expenses as stated in the 
biographical sketch.
* * * * *
    10. Section 1404.15 is revised to read as follows:


Sec.  1404.15  Fees and charges of arbitrators.

    (a) Fees to Parties. Prior to appointment, the parties should be 
aware of all significant aspects of the bases for an arbitrator's fees 
and expenses. Each arbitrator's biographical sketch shall include a 
statement of the bases for the arbitrator's fees and expenses, which 
shall conform to this part and the Code. The parties and the arbitrator 
shall be bound by the arbitrator's statement of the bases for fees and 
expenses in the biographical sketch unless they mutually agree 
otherwise in writing. Arbitrators listed on the Roster may change the 
bases for their fees and expenses if they provide them in writing to 
OAS at least 30 days in advance.
    (b) Dual Addresses. Arbitrators with dual business addresses must 
bill the parties for expenses from the lesser expensive business 
address to the hearing site.
    (c) Additional Administrative Fee. In cases involving unusual 
amounts of time and expense relative to the pre-hearing and post-
hearing administration of a particular case, the arbitrator may charge 
an administrative fee. This fee shall be disclosed to the parties as 
soon as it is foreseeable by the arbitrator.
    (d) Fee Disputes. The OAS requests that it be notified of an 
arbitrator's deviation from this Part. While the OAS does not resolve 
individual fee disputes, repeated complaints concerning the fees 
charged by an arbitrator will be brought to the attention of the Board 
for consideration. Similarly, complaints by arbitrators concerning non-
payment of fees by the parties may lead to the denial of services or 
other actions by the OAS.
    11. In Sec.  1404.16, paragraph (b) is revised to read as follows:


Sec.  1404.16  Reports and biographical sketches.

* * * * *
    (b) The OAS will provide parties with biographical sketches for 
each arbitrator on the Roster from information supplied by the 
arbitrator in conformance with this section and Sec.  1404.15. The OAS 
reserves the right to decide and approve the format and content of 
biographical sketches.

Subpart D--Expedited Arbitration

    12. Sec. 1404.17 is revised to read as follows:


Sec.  1404.17  Policy.

    In an effort to reduce the time and expense of some grievance 
arbitrations, FMCS offers expedited procedures that may be appropriate 
in certain non-precedential cases or those that do not involve complex 
or unique issues. Expedited arbitration is intended to be a mutually 
agreed-upon process whereby arbitrator appointments, hearings and 
awards are acted upon quickly by the parties, FMCS, and the 
arbitrators. Mandating short deadlines and eliminating requirements for 
transcripts, briefs and lengthy opinions streamline the process.
    13. In Sec.  1404.18, paragraph (b) is revised to read as follows:

[[Page 39213]]

Sec.  1404.18  Procedures for requesting expedited panels.

* * * * *
    (b) Upon receipt of a joint Request for Arbitration Panel (Form R-
43) indicating that both parties desire expedited services, the OAS 
will refer a panel of arbitrators.
* * * * *


Sec.  1404.20  [Removed]

    14. Section 1404.20 is removed.


Sec.  1404.21  [Redesignated as Sec.  1404.20]

    15. Section 1404.21 is redesignated as Sec.  1404.20.

    Dated: June 27, 2005.
Maria A. Fried,
General Counsel and Federal Register Contact.
[FR Doc. 05-13362 Filed 7-6-05; 8:45 am]
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