Legal Aspects Relevant to Outsourcing Transit Functions Not Traditionally Outsourced (2011)

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4 SECTION I. KEY EARLY CONSIDERATIONS: LABOR PROTECTION ISSUES Two key issues in any consideration of outsourcing or contracting out work are 1) whether there are any restrictions on contracting out work that is performed by public employees of the agency under existing collec- tive bargaining agreements, and 2) what issues may be raised under the labor protection provisions of Section 13(c) of the Federal Transit Act. A. Collective Bargaining Restrictions A key question that must be addressed at the outset is whether, under a collective bargaining agreement, a public agency has the ability to outsource or contract out work.4 A review of an agency’s existing collective bargaining agreements will reveal whether there are any restrictions on contracting out work. If a restriction exists, the contracting action would be governed by the specific provision in the labor contract. Challenges to contracting could be contested through the filing of grievances under the terms of the collective bargaining agreement. Some collective bargaining agreements are silent on the issue of contracting, and there is no specific provi- sion restricting contracting out work. In such cases, contracting actions have been contested and, if the par- ties were unable to resolve a dispute, arbitrated. In the absence of express language, the right of management to contract functions has been examined and upheld in many arbitration decisions.5 The standard has been articulated as follows: In the absence of contractual language relating to con- tracting out of work, the general arbitration rule is that management has the right to contract out work as long as the action is performed in good faith, it represents a rea- sonable business decision, it does not result in subversion of the labor agreement, and it does not have the effect of seriously weakening the bargaining unit or important parts of it. The general right to contract out may be ex- panded or restricted by specific contractual language.6 When a collective bargaining agreement is silent on subcontracting, arbitrators balance the interest of man- agement against the interest of the union in actions involving outsourcing. As a policy matter, management has argued it has a justifiable interest in the efficient operation of its enterprise, while the union takes the position it has a legitimate interest in job security and bargaining unit stability. In general, if the subcontract- ing has little or no impact on the collective bargaining unit, it is likely to be upheld in arbitration.7 This may 4 Of course, if an outsourcing were to involve nonunionized workers not party to a collective bargaining agreement, this would not be an issue. 5 ALAN MILES RUBEN, HOW ARBITRATION WORKS 743–44 (6th ed., BNA 2003). 6 Id. at 746 (quoting Shenango Valley Water Co., 53 LA 741, 744–45 (McDermott, 1969)). 7 Id. not be the case if the subcontracting would replace cur- rent workers or not use workers previously laid off. The factors to be considered under this balancing test as articulated in How Arbitration Works are as follows:8 Past practice. Has the company subcontracted work in the past? Justification. Is the subcontracting being done for basic business reasons arising from the economy, or for safety and security measures, emergencies, or other sound busi- ness reasons? Effect on the bargaining unit. Does the subcontracting substantially prejudice the status and integrity of the bargaining unit, or is it being used to discriminate against it? Effect on unit employees. Are members of the bargaining unit being discriminated against, displaced or deprived of jobs previously available to them, or being laid off be- cause of the outsourcing? Type of work involved. Is the work involved usually done by unit employees or has it been subject to subcontracting in the past? Moreover, work that is incidental to the en- tity’s main business focus may more readily be permitted to be outsourced. Availability of properly qualified employees. Are the skills of the current employees sufficient to perform the re- quired work? Availability of equipment and facilities. Another question is whether the entity has the necessary equipment and facilities to perform the required work, or can purchase them cost-effectively. Regularity of subcontracting. This factor looks at whether the work is often or infrequently subcontracted. Duration of subcontracted work. Work performed on a more limited basis would generally be easier to justify that that done in a longer timeframe. Unusual circumstances involved. An emergency may jus- tify subcontracting, as would a time limit for the work to be done. History of negotiations on the right to subcontract. If a union has been unsuccessful in negotiating restrictions on subcontracting, that could be considered in arbitration. Prior notification to the union requesting discussions on the issue can be given when a collective bargaining agreement is silent as to subcontracting. However, some arbitrators have held that no notice is required.9 Additionally, a careful review of the entity’s practices should be undertaken before proceeding with an out- sourcing. The issues referenced above as part of the balancing inquiry should be included as part of that review. B. Section 13(c) Considerations As a condition to the receipt of federal funds from the FTA, public transit agencies are required by federal 8 Id. at 748–52. 9 Id. at 755.

5 statute10 to provide “fair and equitable” labor protection for transit employees who may be affected by such as- sistance. The outsourcing and contracting of transit services can become quite controversial among employ- ees, unions, and the public agency, and thus can be a potential source of 13(c) claims and disputes. Whether the service or work being outsourced has been previously contracted out or consists of nontradi- tional functions that are being contracted out by the public entity for the first time, the 13(c) considerations should be the same. The key 13(c) issues that typically arise in an outsourcing effort center on the impact to the employees then performing the work, and on the 13(c) obligations the transit agency has in the applica- ble 13(c) protections. Section 13(c) by statute does not prohibit the contracting of work, but efforts can be made to contest or block the agency’s action through the filing of 13(c) claims seeking 13(c) monetary benefits, job rights with the contractor, and other remedial relief. The following discussion reviews the key 13(c) issues that may arise in the event that a transit agency im- plements a plan to procure a private contractor and outsource work. 1. Statutory Requirements Section 13(c) generally requires, as a precondition to a grant of federal assistance by the FTA, that fair and equitable protective arrangements must be in place to protect employees affected by such assistance. The statute requires the following to be included in such protective arrangements: i. The preservation of rights, privileges, and benefits (in- cluding continuation of pension rights and benefits) under existing collective bargaining agreements or otherwise.11 This provision requires that rights under existing collec- tive bargaining agreements must be preserved and con- tinued. However, it is recognized that these rights may change through the collective bargaining process.12 ii. The continuation of collective bargaining rights.13 This provision requires that the collective bargaining process be preserved and continued. At the time of enactment of 13(c), much congressional debate focused on the issue of collective bargaining by public employees since many pri- vate transit companies were in poor financial condition and federal grants could be utilized by public entities to purchase those failing carriers. Thus, 13(c) sought to en- sure that employees who had collective bargaining rights would continue to have such rights. This did not mean that such rights had to be established, only that existing rights be preserved. Nor did Congress extend a right to strike where no such right previously existed.14 10 Section 13(c) of the Federal Transit Act is codified at 49 U.S.C. § 5333(b). 11 49 U.S.C. § 5333(b)(2)(A). 12 Amalgamated Transit Union v. Donovan, 767 F.2d 939, 953 (D.C. Cir. 1985). 13 49 U.S.C. § 5333(b)(2)(B). 14 G. KENT WOODMAN ET AL., TRANSIT LABOR PROTECTION— A GUIDE TO SECTION 13(C) FEDERAL TRANSIT ACT 5 (Transit iii. The protection of individual employees against a worsening of their positions related to employment.15 The legislative history of 13(c) indicates that there was con- cern that technology and automation would lead to a loss of employment. Thus, section 13(c) provides transit em- ployees 13(c) benefits that are no less than those provided under railroad labor protection16 if the employees’ posi- tions have been “worsened” as a result of federal assis- tance. Such protection includes monetary benefits for em- ployees in the event that the employees’ terms and conditions of employment have been adversely affected as a result of a federal grant. iv. Assurances of employment to employees of acquired public transportation systems.17 If a federally-funded ac- quisition of a transit system occurs, employees of the ac- quired entity are entitled to an assurance of employment. v. Assurances of priority of reemployment to employees whose employment is ended or who are laid off.18 Section 13(c) protections require that employees dismissed as a result of a federal project are provided priority of reem- ployment rights. vi. Paid training or retraining programs.19 In specific cir- cumstances, the employer is required to provide training or retraining of dismissed employees. The statutory language of 13(c) requires “[a]s a con- dition of financial assistance…, the interests of employ- ees affected by the assistance shall be protected under arrangements the Secretary of Labor concludes are fair and equitable.”20 As a result, most capital and operating grants made by FTA must be reviewed and certified by the U.S. Department of Labor (DOL) to assure that fair and equitable arrangements are in place. The DOL cer- tifies FTA grants and requires that the 13(c) protections are incorporated in the FTA grant agreement with the public agency. This DOL process thus certifies 13(c) terms that could be relevant to an outsourcing.21 2. Scope of 13(c) Protection Section 13(c) protection covers employees of the grantee, those of any contractors of the grantee provid- ing transit services, and those of other mass transit providers in the service area. Section 13(c) protection applies to both unionized and nonunionized employees. Therefore, the determination of whether an individual is entitled to 13(c) protection is dependent on 1) whether the employee performs mass transportation services; and 2) whether the employee is the type of employee that is entitled to 13(c) protection.22 Cooperative Research Program, Legal Research Digest No. 4, 1995) (hereinafter “TRANSIT LABOR PROTECTION”). 15 49 U.S.C. § 5333(b)(2)(C). 16 49 U.S.C. § 11326(a). 17 49 U.S.C. § 5333(b)(2)(D). 18 49 U.S.C. § 5333(b)(2)(E). 19 49 U.S.C. § 5333(b)(2)(F). 20 49 U.S.C. § 5333(b)(1). 21 See DOL’s 13(c) Guidelines at 29 C.F.R. pt. 215. 22 TRANSIT LABOR PROTECTION, at 15.

6 As to the first issue, the legislative history indicates that Congress only intended for employees engaged in mass transit operations to be entitled to 13(c) protec- tion.23 Thus employees of the FTA grantee and mass transit service area providers employed in operations, maintenance, and administrative positions in the provi- sion of mass transit24 services would typically be cov- ered by 13(c). As to the second issue regarding the type of employ- ees entitled to 13(c) protection, the term “employee” is not specifically defined in Section 13(c) or in other parts of the Federal Transit Act, and the legislative history indicates that this omission was intentional.25 The term “employee” has been interpreted in cases involving la- bor protection for rail employees to mean all but top- level individuals in policy-making positions.26 This in- cludes making basic policy decisions or having signifi- cant influence on management policy. The DOL uses a similar analysis under 13(c), finding that employees who serve in policy-making positions or have a position on the board of directors are not covered by 13(c).27 Whether an individual is a covered employee is deter- mined on a case-by-case basis, and an individual’s job title is not determinative in making such an inquiry. Nontraditional outsourcings could involve non- unionized employees in certain instances, and it thus is important to note that Section 13(c) protection also ap- plies to nonunionized employees. In some nonunionized situations, DOL uses a “nonunion” certification to pro- vide protection for those employees.28 Coverage of non- unionized employees is also typically included in DOL certifications for FTA grants. DOL’s certification letter routinely provides that non-unionized employees are entitled to “substantially the same levels of” protection to that afforded in the 13(c) protections in the certified arrangement. DOL’s language states: 23 “The bill, accordingly, contains a specific provision that in communities where projects are to be assisted under the bill, fair and equitable arrangements, as determined by the Admin- istrator, must be made to protect the interests of affected transit employees.” H.R. REP. NO. 88-204, 2d Sess., reprinted in 1964 U.S.C.C.A.N. 2584 (emphasis added). 24 The Federal Transit Act defines mass transportation as “transportation by bus, or rail, or other conveyance, either publicly or privately owned, which provides to the public gen- eral or special service on a regular and continuing basis.” 49 U.S.C. App. § 1608(c)(6). 25 TRANSIT LABOR PROTECTION, at 15. 26 See Edwards v. So. Ry. Co., 376 F.2d 665, 668 (4th Cir. 1967) (finding that a stockholder and chief engineer of a rail- road were not employees entitled to labor protection because the term “as used in the present context by Congress and the ICC surely does not include the principal managers of a rail- road who are ordinarily in a position to protect themselves from the consequences of consolidation”). 27 Barnes v. Tidewater Transp. Comm’n, DEP Case No. 77- 13c-31 (1980); King v. Conn. Transit Mgmt., DEP Case No. 78- 13c-1 (1978). 28 29 C.F.R. § 215.4(a). Employees of mass transportation providers in the service area of the project who are not represented by a union designated above shall be afforded substantially the same levels of protections as are afforded to the employees rep- resented by the union(s) under the above referenced pro- tective arrangements and this certification. Such protec- tions include procedural rights and remedies as well as protections for individual employees affected by the pro- ject. 3. 13(c) Carryover Rights When a public transit agency is considering out- sourcing or contracting out work, one of the issues that may arise under 13(c) could be a claim for “carryover” protection. The basic issue is whether 13(c) requires, in a transition from public to private employment or from one service provider to another, that the existing em- ployees be given a guarantee or assurance of employ- ment with the contractor and whether that contractor must assume the terms and conditions of the existing collective bargaining agreement. A review of the applicable 13(c) provisions will pro- vide guidance as to whether the 13(c) protective terms contain carryover rights. Typically, such provisions are included if a federally-funded acquisition occurred. Spe- cifically, 13(c) requires that when a public agency uses federal grant funds to acquire a private mass transpor- tation company and take over its transit operations, the existing employees must be given assurances of em- ployment, in accordance with section 13(c)(4).29 In di- rect, federally-funded acquisitions (most of which oc- curred in the early days of the federal transit program), there was a 13(c) duty to provide employment for the existing workforce and to honor the existing terms and conditions of employment. This right is, however, lim- ited to acquisition situations. It has also been argued that 13(c)(1) and (2) in es- sence require this carryover right in a contracting situation and that contractors are bound by 13(c) agree- ments under the successor clause. However, DOL has ruled that a contractor has no 13(c) carryover obliga- tions to the existing workforce in the absence of a fed- erally-assisted acquisition. In the DOL’s Certification for the Regional Transportation Commission (RTC) of Clark County, Nevada, DOL determined that no job right exists unless a federally-assisted acquisition has occurred.30 The Department stated: Section 13(c)(1) and (2), which require the preservation of rights, privileges, and benefits and the continuation of collective bargaining rights, are not, in and of themselves, sufficient to ensure a right to jobs. In other words, no ex- clusive job right or preference is derived solely from (c)(1) and (2) absent the protections afforded by 13(c)(4) under an acquisition.31 Further, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users 29 Now codified at 49 U.S.C. § 5333(b)(2)(D). 30 DOL, Sept. 21, 1994, Certification at 4–5. 31 Id.

7 (SAFETEA-LU)32 codified the RTC decision. SAFETEA- LU added Section 5333(b)(4), which provides as follows: When the Secretary is called upon to issue fair and equi- table determinations involving assurances of employment when one private transit bus service contractor replaces another through competitive bidding, such decisions shall be based on the principles set forth in the Department of Labor’s decision of September 21, 1994, as clarified by the supplemental ruling of November 7, 1994, with respect to grant NV-90-X021. This paragraph shall not serve as a basis for objections under section 215.3(d) of title 29, Code of Federal Regulations.33 This provision in effect confirms that the principles of the RTC decision should be followed when one pri- vate contractor is replaced by another through the com- petitive bidding process. 4. 13(c) Protective Benefits Section 13(c) labor protection provides benefits for employee dismissals, displacements, and “worsenings” that occur in employment as a result of a federal pro- ject. Thus, public transit agencies may be faced with 13(c) claims for layoffs and worsenings in employment that occur in a contracting action. Section 13(c) protections include standard provisions that provide for dismissal and displacement allowances for employees who are adversely affected as a result of a federal project.34 Employees who are dismissed as a re- sult of a federal project are entitled to dismissal allow- ances.35 Employees who experience a reduction in wages or benefits (or are “displaced”) as a result of a federal project may be eligible for a displacement allowance.36 These 13(c) benefits provide for monthly compensation to be paid to the employee, which in the case of a dis- missal is based on the employee’s compensation in the year prior to the adverse effect.37 Displacement allow- ances similarly provide a monthly compensation, which is based on the difference between the amount of com- pensation prior to and after the adverse impact.38 These benefits are generous—both are payable for the em- ployee’s “protective period,” which is 6 years for an em- ployee who has been employed for 6 years or more or the period of employment for an employee who has been employed for less than 6 years. These 13(c) benefits are not available in the event of any adverse impact on employment, but rather apply only if the harm in employment is shown to be “as a result of” a federal project. The terms “project” and “as a result of a project” are defined in the 13(c) protec- 32 109 Pub. L. No. 59, 119 Stat. 1714 (2005). 33 49 U.S.C. § 5333(b)(4). 34 The latest version of the UPA is dated Dec. 23, 2008, http://www.dol.gov/olms/regs/compliance/transit/6_UPA-12-23- 08.pdf. 35 Id., para. 7(a). 36 Id., para. 6(a). 37 Id., para. 7(a). 38 Id., para. 6(b). tions.39 To prevail on a 13(c) claim for dismissal or dis- placement benefits, there thus needs to be a showing that the harm in employment was caused by a federal project or grant. If the harm was caused by other fac- tors and not by a federal project, then there should be no 13(c) liability and no entitlement to 13(c) benefits. This causation principle is based on the specific statutory language of 13(c)40 and the language of the 13(c) provisions themselves, and requires a showing of causal connection between the employee harm and a federal grant. In ruling on a 13(c) claim, DOL stated that “[i]t is not sufficient for a claimant to merely iden- tify an UMTA [FTA] project and a worsening of posi- tion…the claimant must also show that there is a causal connection between the UMTA [FTA] project and a worsening of his employment position.”41 In a case involving the Massachusetts Bay Transpor- tation Authority (MBTA), 13(c) claims were filed in a change of commuter rail contractors. The claimants were held to not be entitled to 13(c) protection because the loss of particular benefits did not occur “as a result of” a federal project.42 Specifically, the arbitrator found that “even if the free passage for spouses and depend- ents of commuter rail employees constituted a ‘right’ or ‘benefit’ subject to protection by Section 13(c), the re- cord fails to support any finding that this ‘right/benefit’ was lost or otherwise adversely affected as a result of a Federal project.”43 The DOL used similar rationale in ATU Local 1146 v. MBTA,44, in which the Department dismissed the union’s 13(c) claims in a bus contracting case, and found that the union had “not specified facts that would show an arguable causal relation between the grants and job loss, and therefore has not satisfied its burden of proof.” The outcome of 13(c) claims is somewhat dependent on the particular decision maker’s view of the causation 39 The UPA defines “Project” as not “…limited to the par- ticular facility, service, or operation assisted by federal funds, but shall include any changes, whether organization, opera- tional, technological, or otherwise, which are a result of the assistance provided.” The UPA defines “as a result of the Pro- ject” to …include events occurring in anticipation of, during, and sub- sequent to the Project and any program of efficiencies or econo- mies related thereto; provided, however, that volume rises and falls of business, or changes of volume and character of employ- ment brought about by causes other than the Project (including any economies or efficiencies unrelated to the Project) are within the purview of this agreement. Id., para. 1. 40 “The interests of employees affected by the assistance shall be protected under arrangements the Secretary of Labor concludes are fair and equitable.” 49 U.S.C. § 5333(b)(1). 41 Smith v. Mid Mon Valley Transit Auth., OSP Case No. 91-13c-19 (1922). 42 Rail Unions v. MBTA, Oct. 17, 2005, H. Fishgold, Arbitra- tor. 43 Id. at 8. 44 Amalg. Transit Union, Local 1146 v. MBTA, at 16, Apr. 30, 2001.

8 issue—is there a connection between a federal project and the harm in employment sufficient to sustain a claim—and the factual circumstances involved. 5. Implementing Agreements In cases in which transit agencies seek to contract out work, the implementing agreement clause can be one of the first 13(c) issues raised. The implementing agreement provision is routinely found in 13(c) protec- tions45 and is a vestige of railroad labor protection. It requires that advance notice must be given in the event of a proposed change in the organization or operation of the transit system or a rearrangement of the working forces that occurs as a result of a federal project.46 If the implementing agreement obligation is “triggered,” the transit agency must negotiate an implementing agree- ment with the union. Implementing agreements apply 13(c) protections to the proposed change and can pro- vide for the assignment of employees. A key issue then is whether the proposed change is occurring as a result of a federal grant—if not, no implementing agreement obligation is evoked. Some 13(c) implementing agreement provisions in- clude a “preconsummation” requirement that prohibits the proposed change from occurring, in circumstances where the impact of the change on employees is signifi- cant, until the implementing agreement process is com- pleted, either through agreement of the parties or through arbitration. Arguments have been made that this restriction prohibits the contracting action from going forward until an implementing agreement is com- pleted. One of the issues that public transit agencies are faced with then is whether the purposed action can proceed before an implementing agreement is devel- oped. 6. Reemployment Rights Another 13(c) claim for protection that may arise in the event of an outsourcing of services is the statutorily- based requirement47 for reemployment for dismissed employees. Specifically, an employee who is terminated or laid off “as a result” of a project is entitled to a prior- ity of reemployment to fill vacancies within the jurisdic- tion and control of the transit agency for which the em- ployee is or, through training or retraining, can become qualified.48 This right only exists, however, if the em- ployee is determined to be dismissed as a result of a federal project. The scope of this reemployment right has been argued to extend to jobs with contractors to the transit agency, and DOL has in some cases imposed such a requirement.49 However, since this right only applies to dismissed employees, it requires a showing that the dismissal was caused by a federal grant. 45 Para. 5(c)-(d) of the UPA. 46 Para. 5(c) of the UPA. 47 49 U.S.C. § 5333(b)(2)(E). 48 See para. 18 of the UPA. 49 In re L.A. County Metro. Transp. Auth., Aug. 13, 1997, DOL Certification, at 3. 7. Sole Provider Clause DOL has determined that the statutory language of Section 13(c) does not prohibit the contracting out of transit services. Rejecting a proposed provision that would restrict subcontracting, DOL stated, “Section 13(c) of the Act does not dictate whether or not service can be contracted out. Rather, it preserves existing col- lective bargaining rights during the term of contract without precluding the parties from negotiating subse- quent agreements.”50 However, some 13(c) protections may include clauses that limit or affect a transit sys- tem’s ability to contract out service. One example is the sole provider clause included in the Model 13(c) Agree- ment. It states: The…Recipient…shall be the sole provider of mass trans- portation services to the Project and such services shall be provided exclusively by employees of the Recipient covered by this agreement, in accordance with this agreement and any applicable collective bargaining agreement. The parties recognize, however, that certain of the recipients signatory hereto, providing urban mass transportation services, have heretofore provided such services through contracts by purchase, leasing, or other arrangements and hereby agree that such practices may continue. Whenever any other employer provides such services through contracts by purchase, leasing, or other arrangements with the Recipient, or on its behalf, the provisions of this agreement shall apply.51 Arbitration decisions interpreting the sole provider clause are mixed. The clause has been read as preclud- ing any contracting out by a public transit agency on the basis that services are to be provided “exclusively” by employees of the recipient.52 However, because the language also states that services must be “in accor- dance” with applicable collective bargaining agree- ments, some arbitrators have looked instead at the ap- plicable terms of labor contracts as governing the propriety of the contracting action53 In addition, the sole provider clause recognizes through its express language that in instances where services have been previously provided through contracting, such practices may be continued and are not restricted by the clause. When the DOL recently formulated the United Pro- tective Arrangement (UPA), it did not include the sole provider clause.54 This action is consistent with prior Department precedent that the clause is not legally required as a part of 13(c) protections.55 50 In re South Bend Pub. Transp. Corp., Mar. 29, 1993, DOL Certification, at 3. 51 See Model 13(c) Agreement, para. 23, available at http://www.dol.gov/olms/regs/compliance/agreement.htm. 52 In the Matter of Transp. Mgmt. of Tenn. (TMT) and ATU, Local 1235 (Dec. 31, 1987) (Clarke, Neutral Arb.). 53 Amalg. Transit Union, Local 1212 and Chattanooga Area Reg’l Transp. Auth. (Oct. 1987). 54 73 Fed. Reg. 47046 (Aug. 13, 2008). 55 In the Matter of L.A. County Metro. Transit Auth., Aug. 13, 1997, DOL Certification, at 11.

9 8. Successor Clauses Another issue that has arisen in outsourcings is the successor clause, which is often found in 13(c) agree- ments.56 Such clauses provide that the 13(c) agreement is binding on the successors and assigns of the parties. Successor clauses in 13(c) protections also often state that an entity that undertakes the management or op- eration of a transit system agrees to be bound to the terms of its 13(c) arrangements and requires such an entity to comply with the obligations of the 13(c) protec- tions. The DOL has taken the position that 13(c) protec- tions must include successor clauses to assure the con- tinuity of 13(c) protections, and that such clauses do in fact operate to bind nonsignatory successors.57 This con- cept is inconsistent with the basic notion of contract law that a party is not bound by an agreement to which it did not consent.58 As such, issues regarding the enforce- ability of a successor clause have arisen. A Massachu- setts court held that a contractor was not a signatory to the agreement and had no contractual obligations un- der it.59 Some successor clauses can, however, place an affirmative duty on a transit system to bind a contrac- tor to the 13(c) protections. The net effect is to impose an obligation on the grantee to bind certain contractors to the 13(c) protective agreement.60 56 See DOL’s UPA, para. (21). 57 In the Matter of Mass. Bay Transp. Auth., May 29, 1997, DOL Certification, at 3. 58 It is a general principle of contract law that “a person is not bound by contract to which he did not agree.” RICHARD A. LORD, WILLISTON ON CONTRACTS § 3:5 (4th ed., Thomson West 2007). 59 Transp. Workers Union of Am. v. MBTA, No. SJ- 19990051, at 10 (Mass. Dec. 20, 1999). 60 This language can read as follows: Any person, enterprise, body, or agency, whether publicly or privately owned, which shall undertake the management, provi- sion and/or operation of the Project services, or any part or por- tion thereof, under contractual arrangements of any form with the Public Body, or its successors or assigns, shall agree, and as a condition precedent to such contractual arrangements, the Public Body, its successors or assigns shall require such person, enterprise, body, or agency to agree, to be bound by the terms of this arrangement and accept the responsibility for full perform- ance of these conditions. 9. The Section 13(c) Process and Section 13(c) Disputes i. DOL 13(c) Process.—DOL has issued 13(c) Guide- lines61 that set forth the process DOL uses to refer FTA grant applications, address objections to the proposed 13(c) protective terms, and certify grants. After FTA sends a grant application to DOL for 13(c) review and certification, DOL refers that application to the transit agency and the unions identified in the grant applica- tion. DOL may also refer the application to the unions that represent employees of mass transportation pro- viders in the service area of the project. Referrals typically contain the existing Section 13(c) protections and propose to use those protections as the basis of certification of the grant. After referral, the parties have 15 days in which to file any objections to the proposed certification terms.62 If no objection is filed, DOL will certify the grant under the proposed referral terms. For an objection to be found sufficient, it must show that either the “objection raises material issues that may require alternative employee protections un- der 49 U.S.C. 5333(b)”; or “the objection concerns changes in legal or factual circumstances that may ma- terially affect the rights or interests of employees.”63 DOL will then rule on the “sufficiency” of an objection. If an objection is found sufficient, the parties are ex- pected to begin good faith negotiations over new or amended Section 13(c) terms and conditions.64 DOL’s 13(c) Guidelines contain a process for setting time limits on negotiations.65 If, after good faith negotia- tions the parties reach an impasse, the parties may re- quest DOL assistance.66 DOL may provide technical assistance on Section 13(c) requirements and process. If the parties still fail to reach agreement, the next step is impasse resolution.67 DOL will typically require written submissions to be made in the form of briefs and reply briefs. DOL will then rule on the disputed issues and issue a 13(c) certification imposing 13(c) terms. Disputes over contracting actions can be raised in the 13(c) certification process. When contracting issues have been raised in objections, DOL considers and de- termines the sufficiency of such objections. Certification disputes no longer lead to delays in the receipt of FTA funds, since DOL can issue interim certifications releas- ing funds while disputes are pending.68 However, the Guidelines do provide that “no action may be taken which would result in irreparable harm to employees.”69 61 29 C.F.R. pt. 215. 62 29 C.F.R. § 215.3(d)(1). 63 29 C.F.R. § 215.3(d)(3). 64 29 C.F.R. § 215.3(d)(6). 65 29 C.F.R. § 215.3(d). 66 Id. 67 29 C.F.R. § 215.3(e). 68 29 C.F.R. § 215.3(d)(3)(ii)(7). 69 29 C.F.R. § 215.3(d)(3)(ii)(8).