Section 13(c) requires that DOL certify that fair and equitable labor  protection arrangements are in place before DOT makes grants to transit  applicants. Such labor protection arrangements are to provide for (1) the  preservation of rights, privileges, and benefits under existing collective  bargaining agreements; (2) continuation of collective bargaining rights; (3)  protection of employees against a worsening of their positions with respect  to their employment; (4) assurances of employment to employees of  acquired mass transportation systems and priority of reemployment for  employees terminated or laid off; and (5) paid training or retraining  programs. In addition, some critics have stated that Section 13(c) has  caused inflated wages and benefits in the transit industry. However,  85 percent of the transit agencies surveyed reported that, in general,  Section 13(c) did not affect their decisions on whether to adopt new  technologies. Section 13(c) Identified As a Burden Less Often Than Other Federal Grant Requirements

Some of the transit agencies we surveyed indicated that Section 13(c)  requirements for receiving financial assistance were a burden regarding  time, effort, and resources. Observations

The transit agencies we surveyed generally reported that Section 13(c) has  had a minimal impact on labor costs, adoption of technologies, and  operations. However, a notable number of transit agencies reported that  Section 13(c) has discouraged them from contracting for fixed-route transit  services and has delayed their receipt of federal grants.
What GAO Found

Concerns have arisen about the 37-year-old statutory provision commonly known as Section 13(c). Before the Federal Transit Administration (FTA) may make grants to transit applicants, the Department of Labor (DOL) must certify that fair and equitable arrangements are in place to protect mass transit employees affected. Section 13(c) requires that the arrangements provide for continued of collective bargaining rights and protect of employees against a worsening of their positions. Once certified, the arrangements are incorporated into the grant agreement between FTA and the grantee. Critics claim that Section 13(e) greatly increases the cost of transit operations, hinders transit agencies' efforts to adopt new technology, and constrains the efficient operation of transit systems. Supporters counter that Section 13(c) has enhanced labor-management stability and has improved communication and working relationships between management and labor. The transit agencies GAO surveyed reported that Section 13(c) had a minimal impact on their (1) labor costs, (2) ability to adopt new technologies, and (3) ability to modify transit operations. Transit agencies reported that Section 13(c) has delayed the award of federal grants and has presented a burden regarding time, efforts, and resources. Transit officials said that growth in the transit industry may mitigate the effects of Section 13(c).