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Employment Law
Alert February 4, 2009
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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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PRESIDENT OBAMA
SIGNS EXECUTIVE ORDERS LIMITING USE OF FEDERAL FUNDS TO OPPOSE UNION
ORGANIZING
By: David
Cessante
On January 30,
2009, President Obama signed three Executive Orders relating to
federal contractors. All of the Orders are effective
immediately. Two of these Orders, which are the subject of this
webblast, require federal contractors to post a notice informing
employees of their rights under the National Labor Relations Act and
limit federal contractor's use of federal funds to oppose union
organizing campaigns.
Notification of Employee Rights
Under Federal Labor Law
The purpose of
this Executive Order is to ensure that employees are informed of
their rights under federal labor laws, including the NLRA. The
Order requires federal contractors to post a Notice "in
conspicuous places in and about [their] plants and offices where
employees covered by the National Labor Relations Act engage in
activities relating to performance of the contract." The
Notice must include all information "contained in the notice
published by the Secretary of Labor in the Federal Register."
Unfortunately, this Notice has not yet been published. The
Secretary of Labor has 120 days from January 30, 2009 to draft the
Notice.
Federal
contractors may be exempt from the posting requirement if the
Secretary of Labor finds that posting of the Notice "would not
serve the purposes of this order or would impair the ability of the
Government to procure goods or services on an economical and
efficient basis."
Federal
contractors that fail to post the Notice may have their contracts
cancelled, terminated or suspended, and may become ineligible for
further government contracts.
The Order
applies to all federal contracts "resulting from
solicitations" issued on or after the date the Secretary of
Labor publishes the final rule setting forth the notice requirements.
The Order also
revokes Executive Order 13201, which required federal contractors to
post workplace notices informing them their rights under and Communications Workers of America v. Beck,
not to join a union and not to pay agency fees for
nonrepresentational union expenditures.
Economy in Government
Contracting
This Executive
Order restricts a federal contractor's use of federal funds to
persuade employees not to join and/or form a union.
Specifically, the Order states that if a federal contract treats
certain costs as unallowable, the government agency "shall treat
as unallowable the costs of any activities undertaken to persuade
employees - - whether employees of the recipient of the Federal
disbursements or of any other entity - - to exercise or not to
exercise, or concerning the manner of exercising, the right to
organize and bargain collectively through representatives of the
employees' own choosing."
The Executive
Order provides examples of activities for which a federal contractor
may not use federal funds if the activities are for the purpose of
persuading employees to exercise or not to exercise, or concern the
manner of exercising, their rights to organize and bargain
collectively. The examples include:
·
To pay for the creation or distribution of any
anti-union material;
·
Hiring or consulting legal counsel or consultants to
oppose union organizing;
·
Holding captive audience meetings to inform the
employees of the employer's position on the union organizing
campaign;
·
Planning or conducting activities by managers,
supervisors, or union representatives during work hours.
It appears from
the Order that the federal contractor must pay for these activities
with its own funds.
The Order
states that costs incurred by the contractor "in maintaining
satisfactory relations between the contractor and its employees,
including costs of labor-management committees, employee publications
... other related activities" are "allowable."
The Order
applies to all federal contracts "resulting from
solicitations" issued on or after the date the Federal
Acquisition Regulatory Council (FAR Council) revises its regulations
to carry out the Executive Order. The FAR Council has 150 days
from January 30, 2009 to implement its revisions.
We will send a
follow-up communication once the Secretary of Labor and FAR Council
publish their respective rules under the Executive Orders. In
the interim, it is critical that federal contractors begin to audit
their current practices and procedures and develop a strategy for
communicating with employees after the Orders take full effect.
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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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