Pursuant to President Obama’s Executive Order (EO): Notification of Employee Rights Under Federal Labor Laws issued on January 30, 2009, the Department of Labor (DOL) has published in today’s Federal Register a proposed rule requiring government contractors and subcontractors to post notices outlining employees’ rights under the National Labor Relations Act (NLRA). The proposed rule describes what these notices should include, which entities are covered, and explains the sanctions, penalties, and other remedies that may be imposed in the event of noncompliance.

The EO required that most federal departments and agencies include in their contracts a provision requiring contractors and subcontractors to post “in conspicuous places in and about [their] plants and offices where employees covered by the [NLRA] engage in activities relating to the performance of the contract,” notice of an employee’s rights under federal labor law. The EO specifically exempts two types of federal contracts from triggering the new posting: collective bargaining agreements and purchases under the simplified acquisition threshold, currently $100,000. The proposed rule establishes standards and procedures for implementing this EO, to be codified in subchapter D, Part 471 of Volume 29 of the Code of Federal Regulations.

The first part of the proposed rule includes definitions, prescribes requirements for the size, form and content of the notice, exceptions for certain types of contracts, and exemptions. Notably, the DOL explains that instead of including a simplified list of employee protections under federal labor law or copying the language used in Section 7 of the NLRA outlining an employee’s rights, the proposed notice contains “greater detail of NLRA rights, derived from Board or court decisions, implementing such rights – which will more effectively convey such rights to employees.” In addition, the proposed notice provides National Labor Relations Board (NLRB) contact information, instructions on how to file a charge with that agency, and points out the 6-month statute of limitations for lodging a complaint. The DOL invites comment on this detailed statement of employee rights, and requests input on whether any provisions should be added or deleted. The DOL also seeks comment on whether the employee notice clause in the contract, subcontract, or purchase order should be set out verbatim, rather than incorporated by reference to ensure that contractors are aware of their obligations to post the required notice.

With respect to subcontractors, the proposed rule explains that the DOL has broadly interpreted the language in the EO, and therefore proposes that the obligation to post notices of employee rights extends beyond first tier subcontractors. In addition, the DOL notes that while the EO exempts from the notice obligations contracts involving purchases below the simplified acquisition threshold ($100,000), it does not exempt subcontracts involving purchases below this threshold. In the definitions section of the proposed rule, however, the DOL defines “subcontract” as only those subcontracts that are necessary to the performance of the government contract. Thus, the proposed rule notes, “[a]lthough this rule may result in coverage of subcontractors with relatively de minimis value in the overall scheme of government contracts, covered subcontractors include only those who are performing subcontracts that are necessary to the performance of the prime contract.” The DOL seeks comment on whether and in what form further limitations for subcontractor coverage are needed.

As for the physical posting of the notice, the DOL states that if a contractor customarily posts notices to employees electronically, it must do the same for the new employee rights notice. The DOL has proposed that a contractor may satisfy this obligation by posting the notice to its internal or external website, which must also prominently display a link to the DOL’s website containing the full text of the employee notice. The content of the notice must also link to the DOL’s web page. The DOL invites comment on whether it should prescribe standards regarding the size, clarity, location, and brightness of this link.

The second part of the proposed rule outlines the standards and procedures related to complaints, compliance evaluations and enforcement. Penalties for violations include contract cancellation, termination or suspension. In addition, the Labor Secretary may issue an order debarring the contractor “until such contractor has satisfied the Secretary that such contractor has complied with and will carry out the provisions of the order.” Written complaints can be sent to either the Office of Federal Contract Compliance (OFCCP) or the Office of Labor Management Standards (OLMS). The OFCCP would have investigative authority.

All comments on this proposed rule must contain the identification number: 1215-AB70, and be received by September 2, 2009. Written comments may be sent to Denise M. Boucher, Director of the Office of Policy, Reports and Disclosure, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution Avenue, N.W., Room N–5609, Washington, DC 20210. Comments may also be sent electronically through the Federal eRulemaking Portal at http://www.regulations.gov.