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Labor and
Employment Practice Group Leaders
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Practice Group
James E. Baiers
Connie M. Cessante
Anne-Marie Vercruysse Welch
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Department of Labor Issues Proposed Rule Requiring
Contractors To Notify Employees of Their Rights Under the National
Labor Relations Act
by Kurt M.
Graham
On January 30, 2009, President Obama signed Executive
Order 13496 entitled "Notification of Employee Rights' Under
Federal Labor Laws." The Executive Order requires
non-exempt federal departments and agencies to include in their
government contracts, and purchase orders a standard clause requiring
all contractors and subcontractors to conspicuously post a notice in
their workplaces informing employees of their rights under the
National Labor Relations Act ("NLRA"). The Executive
Order also requested the Secretary of Labor to draft rules as necessary
and appropriate to implement the terms and purposes of the Order.
On August 3, 2009, the U.S. Department of Labor ("DOL")
issued its proposed rule establishing the content of the required
Employee Rights Notice and implementing other provisions of the
Executive Order, including sanctions, penalties, and remedies that
may be imposed upon a contractor or subcontractor if they do not post
the required Employee Rights Notice, or otherwise fail to comply with
the terms of the Executive Order. Comments on the proposed rule
must be received within 30 days from its publication and can be
electronically submitted to the DOL at
http://www.regulations.gov. The DOL will then consider all
public comments and make any necessary changes before issuing its
final rule.
Employee Notice Clause
The proposed rule requires federal government contracts and purchase
orders to include an employee notice clause requiring a contractor or
subcontractor to post an Employee Rights Notice in its
workplace. The employee notice clause consists of four
paragraphs and the full text of the clause is included in the
Executive Order. The DOL is requiring the clause to be included
verbatim in any federal government contract, subcontract, or purchase
order. It cannot be incorporated by reference. There are
three exceptions to the employee notice clause requirement,
however: 1) collective bargaining agreements; 2)
government contracts involving purchases below the simplified
acquisition threshold, which is currently set at $100,000; and 3)
government contracts resulting from solicitations issued before the
effective date of the final DOL rule. The proposed rule also
states that the DOL can waive the requirement, upon written request,
in any instance where compliance with its rule would impair the
ability of the government to procure goods or services on an
economical and efficient basis.
Posting and Content of
Employee Rights Notice
The DOL has taken the position that the obligation to post an
Employee Rights Notice is not only binding upon the prime contractor,
but each subcontractor that is performing work necessary to the
performance of a government contract. The content of the notice
proposed by the DOL is very broad. It advises employees of
their rights' under the NLRA, advises them that it is the policy of
the United States to encourage collective bargaining and have
employees choose a collective bargaining representative for purposes
of negotiating their terms and conditions of employment. The
notice also contains a detailed description of the possible remedies
under the NLRA, contact information for the National Labor Relations
Board, and information on how employees may file a complaint if they
feel their statutory rights have been violated.
The proposed rule requires a contractor and subcontractor to post the
Employee Rights Notice in conspicuous places in and about their
workplaces where employees covered by the NLRA are likely to see
it. Since the posting requirement only applies to employers
covered by the NLRA, public sector employers and other employers not
subject to the NLRA are not obligated to post the Employee Rights
Notice. Contractors and subcontractors who customarily provide
electronic notices to their employees must also post the Employee
Rights Notice electronically by providing a prominently displayed
link to the DOL webpage that contains the full text of the notice.
Enforcement and Remedies
An employee of a covered contractor may file a written complaint with
either the Office of Labor-Management Standards or the Office of Federal
Contract Compliance Programs (OFCCP).
The OFCCP is responsible for investigating
any complaints alleging non-compliance (i.e. not including the
employee notice clause in a government contract, or failing to post
the Employee Rights Notice) by a contractor or subcontractor.
If a violation is found, the OFCCP will
order the contractor, or subcontractor to correct the violation by
posting the Employee Rights Notice, and/or amending the government
contract, or purchase order to include the appropriate employee
notice clause. The contractor, or subcontractor must also
commit in writing to not repeat the violation.
If a violation
is not corrected, the OFCCP will refer the
complaint to a hearing before an Administrative Law Judge. If a
violation is found, the DOL has the authority to: 1)
cancel, terminate, or suspend any contract, or portion thereof;
and 2) issue an order of debarment requiring government
agencies to refrain from entering into any further contracts with the
non-complying contractor, or subcontractor. The DOL will also
periodically publish the names of contractors or subcontractors that
have been debarred for noncompliance. A contractor or
subcontractor does, however, have the right to a hearing before any
of its government contracts are suspended, it is debarred, or its
name is published on the list of non-compliant contractors. A
contractor or subcontractor can also obtain reinstatement by
demonstrating that its conduct has come into compliance, and showing
that it intends to carry out its responsibilities in the future.
Finally, the DOL rule prohibits a contractor and subcontractor from
threatening, intimidating or interfering with an employee's exercise
of his/her legal rights, such as filing a complaint, furnishing
information relating to enforcement of the proposed rule, or
participating in an investigation.
Conclusion
Contractors and subcontractors that perform work on federal
government contracts should take heed of the proposed DOL rule and
become prepared for issuance of the final rule in the next few
months. Once the final rule is issued, they can expect to be
required to execute contracts that contain the employee notice clause
and post notices in their workplaces advising employees of their
legal rights under the NLRA. Failure to do so may result in the
cancellation of future government contracts, and an inability to
secure such contracts in the future.
If you have any questions about the proposed DOL rules, please
contact Kurt Graham at (616) 608-1144, or kgraham@clarkhill.com, or your Clark Hill Labor and Employment attorney.
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To find out
more about Clark Hill and our Labor and Employment Practice Group,
visit clarkhill.com
or call 800.949.3124
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