05/24/2010

Labor and Employment Alert: New Employee Notification Requirements for Federal Contractors and Subcontractors

On May 20, 2010, the U.S. Department of Labor (DOL) has issued its final rule regarding the new workplace notice about employees' rights to organize and bargain collectively and to engage in other protected activity under the National Labor Relations Act (NLRA), as required by Executive Order 13496. The rule requires all applicable federal contracts and modifications entered after June 19th to include a provision obligating federal contractors to post the new notice and to include the posting provisions in subcontracts (flow down clauses). The rule replaces the Bush Administration's "Beck notice" posting requirement. In addition, federal contractors generally must change their contracting procedures to add the posting requirement contact provisions in federal subcontracts. The new posting rule becomes effective June 19, 2010.

How the new posting rule operates:
The rule requires all applicable federal contracts and modifications entered after June 19th to include a provision obligating federal contractors to post the new notice and to include the posting provisions in subcontracts (flow down clauses). Once the required contract clause is included in the government contract, contractors then begin to assume the burdens associated with compliance. Those obligations include posting the required notice and incorporating the contract clause into all covered subcontracts, thus making the same obligations binding on covered subcontractors.

Posting may be done by using physical notices or electronic postings. The contractor (or subcontractor) generally must follow the same posting rules as for other DOL employee notices. These include, for those posting physical notices, that the notice be the required size (11x17 inches or larger) and be placed conspicuously where the contract work is being done, and in appropriate languages. 

Notices are available on the DOL website. The DOL also will print posters that can be obtained from contracting agencies or from the DOL's Office of Labor-Management Standards (OLMS). The DOL also will provide translations to those required to post in another language. Employers who customarily post notices to employees electronically must also post the required notice electronically. One method is to provide a link to the DOL website's full text of the notice, with the link reading "Important Notice about Employee Rights to Organize and Bargain Collectively with Their Employers." 

Compliance and enforcement procedures:
The rule provides that employees may file complaints with the DOL and that the DOL's Office of Federal Contract Compliance Programs (OFCCP) may conduct compliance evaluations and investigations. If a contractor fails to comply, after a hearing, DOL's Director of OLMS may order that the contract be canceled, terminated, or suspended absolutely, or continued conditioned upon compliance. OLMS may also issue an order of debarment. 

Some contracts will be exempt:
The key exemptions include contracts resulting from solicitations issued before this rule becomes effective; contracts involving purchases below the simplified acquisition threshold under the Office of Federal Procurement Policy Act; subcontracts of $10,000 or less; contracts for work performed exclusively outside the territorial U.S.; and contracts receiving special exemptions as determined by the OLMS Director. In addition, certain employers are excluded, including carriers subject to the Railway Labor Act, labor organizations, and those exclusively employing workers excluded by the NLRA and other labor statutes.

For additional information regarding these new postings and contracting requirements, or employment and labor law issues in general, please contact Kathie Haley or Stephanie Scheck.