Labor & Employment Alert: Federal Government Contractors Must Post Notice of Employee Rights to Organize

Department of Labor Implements Final Rule on Federal Contractor Posters

Beginning June 19, 2010, most government contractors and subcontractors will be required to post a notice informing their employees of their right to engage, or refuse to engage, in union activities. On January 30, 2009, President Barack Obama signed Executive Order 13496, entitled "Notification of Employee Rights Under Federal Labor Laws," which requires certain federal departments and agencies to include specific provisions in their contracts with contractors and subcontractors requiring these government contractors and subcontractors to inform their employees of their rights under the National Labor Relations Act ("NLRA"). On May 20, 2010, the Office of Labor Management Standards ("OLMS"), part of the U.S. Department of Labor, published a final regulation implementing Executive Order 13496 in the Federal Register at 75 Fed. Reg. 28367 (May 20, 2010) (to be codified at 29 C.F.R. Part 471). The final regulation, which becomes effective on June 19, 2010, requires federal contractors to display a poster explaining employees' rights to join or not join a union and describing unlawful union and employer conduct.

Effective June 19, 2010, Contractors Must Post Notice of Employee Rights to Organize

Under the Final Rule, which will go into effect June 19, 2010, federal contractors and subcontractors are required to inform employees of their rights under the NLRA to organize and bargain collectively with their employers and to engage in other protected concerted activity. To meet this notice requirement, the Final Rule requires federal contractors and subcontractors to conspicuously post an employee notice, prescribed by the DOL and available on the DOL's web site, in locations where employees "perform work that contributes to or furthers the performance of the contract, or whose omissions would impede the contractor's performance," including all places where employee notices are customarily posted physically and electronically. The Notice explains that under the NLRA, employees have the right to:

• Organize a union to negotiate with [their] employer concerning [their] wages, hours, and other terms and conditions of employment.
• Form, join, or assist a union.
• Bargain collectively through representatives of employees' own choosing for a contract with [their] employer setting [their] wages, benefits, hours, and other working conditions.
• Discuss [their] terms and conditions of employment or union organizing with [their] coworkers or a union.
• Take action with one or more co-workers to improve [their] working conditions by, among other means, raising work-related complaints directly with [their] employer or with a government agency, and seeking help from a union.
• Strike and picket, depending on the purpose or means of the strike or the picketing.
• Choose not to do any of these activities, including joining or remaining a member of a union.

Notice Describes Unlawful Conduct by Employers and Unions

In addition to informing employees of their specific rights under the NLRA, the notice provides examples of illegal conduct by employers and unions. Specifically, the notice informs employees that it is illegal for an employer to:

• Prohibit [employees] from soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms.
• Question [employees] about [their] union support or activities in a manner that discourages [them] from engaging in that activity.
• Fire, demote, or transfer [employees], or reduce [their] hours or change [their] shift[s], or otherwise take adverse action against [them], or threaten to take any of these actions, because [employees] join or support a union, or because [employees] engage in concerted activity for mutual aid and protection, or because [employees] choose not to engage in any such activity.
• Threaten to close [the] workplace if workers choose a union to represent them.
• Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
• Prohibit [employees] from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
• Spy on or videotape peaceful union activities and gatherings or pretend to do so.

With regard to unlawful union conduct, the final notice—which differs from the proposed notice in that the proposed notice contained only one example of illegal union conduct—contains five example of union conduct that violates the NLRA. The notice states that a union cannot:

• Threaten [employees] that [they] will lose [their] job[s] unless [they] support the union.
• Refuse to process a grievance because [employees] have criticized union officials or because [employees] are not [members] of the union.

• Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
• Cause or attempt to cause an employer to discriminate against [employees] because of [their] union-related activity.
• Take other adverse action against [employees] based on whether [they] have joined or support the union.

Contract Clause Will Require Posting of Notice

Moreover, federal contracting departments and agencies, in every nonexempt government contract, must include provisions requiring federal contractors and subcontractors to post the prescribed notice. The Final Rule excludes certain types of contracts, including collective bargaining agreements entered into by a federal agency and contracts for purchases under the Simplified Acquisition Threshold, currently set at $100,000, and de minimus subcontracts valued at less that $10,000. Specifically, the following language must be included in every nonexempt government contract:

During the term of this contract, the contractor agrees to post a notice, of such size and in such form, and containing such content as the Secretary of Labor shall prescribe, in conspicuous places in and about its plants and offices where employees covered by the National Labor Relations Act engage in activities relating to the performance of the contract, including all places where notices to employees are customarily posted both physically and electronically.

With respect to subcontracts, the required contractual language may be included in its entirety or incorporated by reference.

Enforcing the Final Rule

Enforcement responsibilities for the notice requirements will be shared by the Office of Federal Contract Compliance Programs ("OFCCP") and the OLMS. The OFCCP is responsible for investigation of complaints, compliance evaluations, and conciliation. If violations are discovered, the OFCCP will refer them to the OLMS for enforcement. The sanctions, penalties, and remedies for noncompliance with the notice requirements include the suspension or cancellation of an existing government contract, debarment from future government contracts and subcontracts, and inclusion on a list distributed by the OLMS to all executive agencies listing the names of contractors and subcontractors declared ineligible for future government contracts as a result of noncompliance with the Final Rule. Before the imposition of sanctions, contractors and subcontracts will have an opportunity for a hearing and an appeal.

Lawyer Contacts

For further information, please contact your principal Firm representative or one of the lawyers listed below. General email messages may be sent using our "Contact Us" form, which can be found at www.jonesday.com.

Brian W. Easley

Chicago

+1.312.269.4230

beasley@jonesday.com

George S. Howard, Jr.

San Diego

+1.858.314.1166

gshoward@jonesday.com

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