As of June 21, 2010, an Executive Order governing federal contractors and subcontractors and their obligation to post information in the workplace about union-organizing rights is in effect.

President Barack Obama signed Executive Order 13496 on January 30, 2009, requiring the U.S. Secretary of Labor to initiate rulemaking to establish the content of the employee notice and to implement the other provisions of the Order. On May 20, 2010, the Department of Labor's Office of Labor Management Standards (OLMS) issued final regulations implementing the Order. Under the regulations, solicitations for contracts issued on or after June 21, 2010, must comply.

The implementing regulations require federal contractors and subcontractors to inform employees of their rights under the National Labor Relations Act. Federal contractors and subcontracts are required to do this in two ways: (1) insert employee notice language, prescribed in the implementing regulations, into all covered contracts based on solicitations after June 21, 2010; and (2) post the employee notice of rights in accordance with the implementing regulations.

The prescribed notice informs employees of contractors and subcontractors of their rights under the NLRA to organize and bargain collectively with their employers and to engage in other protected concerted activity. Additionally, the notice provides examples of illegal conduct by employers and unions, and it provides contact information to the National Labor Relations Board. The implementing regulations permit a federal contractor or subcontractor to incorporate the employee notice language by reference to the Appendix in the regulations where it is found in lieu of copying the language verbatim into the contract.

According to the implementing regulations, covered contractors and subcontractors are required to post the prescribed employee notice conspicuously in plants and offices so that it is readily seen by employees, including all places where notices to employees are customarily posted both physically and electronically. Examples of such conspicuous places are those where the employer typically posts information to employees relating to their terms and conditions of employment. Posters containing the required employee notice can be found on the OLMS Web site (click here) and printed out. In cases where a significant portion of the employer’s workforce does not speak English, the burden is on the employer to request a translated notice from either the Division of Interpretations and Standards of OLMS, a field office of the OLMS, or the Office of Federal Contract Compliance Programs (OFCCP).

If employees typically receive information about the terms and conditions of their employment via electronic means, such as a company network or Web site, the employer also must provide the prescribed notice electronically. The employer must prominently display, on the site used by employees, a link to the DOL's Web site that contains the full text of the poster, and the link must read "Important Notice about Employee Rights to Organize and Bargain Collectively with Their Employers."

The regulations specifically exempt government contracts for purchases under the simplified acquisitions threshold established by the Office of Federal Procurement Policy Act, which is $100,000, as well as subcontracts of $10,000 or less in value. Also exempted are contracts and subcontracts for work performed exclusively outside the territorial United States.

The OFCCP and the OLMS share enforcement responsibility for the new regulations. On June 15, 2010, the OFCCP issued instructions for on-site investigations of contractors. The OFCCP will audit to ensure that a contractor is properly displaying the required poster. The OFCCP also indicated it may request three samples of contracts, subcontracts, or purchase orders resulting from solicitations issued on or after the June 21 effective date to ensure that the correct language is included. Contractors will be expected to make such documentation "readily available." Penalties for noncompliance with the Order and regulations include suspension or cancellation of existing contracts and/or debarment by the contracting agency or all federal agencies.

In light of these new requirements, employers wishing to maintain their union-free status should review workplace programs and policies, including union-free training for their supervisory employees and rank and file. Ballard Spahr is prepared to assist with compliance issues under the new regulations, as well as workforce preparedness issues related to the Executive Order and the obligations it creates. Please contact Brian D. Pedrow at 215.864.8108 or pedrow@ballardspahr.com or any member of Ballard Spahr’s Labor and Employment Group for more information.


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