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DOL Requires Federal Contractors and Subcontractors to Post Notice Informing Employees of Their Rights to Join a Union and Engage in Concerted Activity

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June 22, 2010

By Jeff Nowak and Allison Goico

Effective June 21, 2010, employers who conduct business with the federal government or who perform work essential to a federal contract now must post a notice informing their employees of their right to join a union and engage in concerted activity.

Days after he took office last year, President Obama signed Executive Order 13496, which requires federal contractors and subcontractors to: (1) post a notice informing their employees of their rights under the National Labor Relations Act (NLRA); and (2) include in any subcontract or purchase order (made in connection with a covered government contract) the requirement that the subcontractor must comply with the notice obligation.  On May 20, 2010, the Department of Labor (DOL) published a final rule implementing this Executive Order.

What’s Contained in the Notice?

The DOL’s Notice lists employees’ rights under the NLRA to form, join and support a union, and to bargain collectively with their employer. The notice also includes several examples of unlawful conduct by either an employer or a union that would interfere with employees’ rights under the NLRA. The Notice finally directs employees to contact the National Labor Relations Board if they believe their rights under the NLRA have been violated. The poster is available online for employers.

Which Employers Are Required to Post?

The Notice and posting requirements apply to all federal government contracts and subcontracts resulting from solicitations issued on or after June 21, 2010. In other words, any employers who enter into or renew federal contracts or subcontracts as of this date are obligated to post the new DOL Notice. Notably, four types of contracts are exempt from this requirement: (1) prime federal contracts under the simplified acquisition threshold ($100,000); (2) federal subcontracts below $10,000; (3) federal contracts resulting from solicitations issued before the effective date of the final rule; and (4) federal contracts and subcontracts for work performed exclusively outside of the territorial United States.

Where Must an Employer Post the Notice?

According to the final rule, employers must post the DOL-required Notice in “conspicuous places in and about the contractor’s plants and offices so that the notice is prominent and readily seen by employees,” and “where employees covered by the NLRA engage in activities relating to the performance of the contract.” Furthermore, if a significant portion of the employer’s workforce is not proficient in English, the notice must be provided in the language(s) spoken by the employees. Finally, where an employer customarily posts notices to employees electronically, the Notice must be posted both electronically and physically in the workplace. The electronic notice may include a link to the DOL’s website that contains the full text of the poster. Such a link must read, “Important Notice about Employee Rights to Organize and Bargain Collectively with Their Employers.”

How Do Employers Respond to this Executive Order?

Executive Order 13496 – which revokes the previous Bush-era “Beck notice” – clearly is intended to increase employee interest in union representation and educate employees about their rights under federal labor laws. Moreover, reports from our federal contractor clients indicate that the DOL already is seeking to enforce this final rule.

As a result, employers should promptly analyze their obligations and determine whether they maintain federal contracts or subcontracts. If they do, they are well advised to seek legal counsel as what DOL postings are necessary to avoid sanctions for noncompliance in the event of a DOL investigation.

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