Department of Labor Publishes New Rule Requiring Federal Contractors and Subcontractors to Notify Employees of Rights under Federal Labor Laws

5.26.2010 - Posted in E&B Alerts - Government Contracts

On Wednesday, May 19, 2010, the U.S. Department of Labor published a final rule requiring all Federal contractors and subcontractors to notify their employees about their rights under the National Labor Relations Act (NLRA). The rule, found at 29 C.F.R. Part 471, also states that all Federal contracts and subcontracts must include a provision requiring Federal contractors and subcontractors to post the notice. The rule, which implements Executive Order 13496, signed by President Obama on January 30, 2009, states that notices to employees must be physically posted in and around plants and offices where other notices to employees are posted. The rule applies to prime contractors as well as all tiers of subcontractors, based on the broad definition of "contract" set forth in the rule. Moreover, the term "subcontract" is to be construed broadly to encompass contracts for commercial items as defined in the Federal Acquisition Regulations, 48 CFR § 2.101.

The required notice (i) lists the right of employees under the NLRA to form, join, and support a union and to bargain collectively with their employer; (ii) provides examples of unlawful employer and union conduct that interferes with those rights; and (iii) indicates how employees can contact the National Labor Relations Board with questions or to file a complaint. Possible sanctions for noncompliance with the notice requirement include the suspension or cancellation of an existing contract and debarment from future Federal contracts and subcontracts. Exceptions to the posting requirement exist for prime contracts under the Simplified Acquisition Threshold, currently at $100,000, and subcontracts below $10,000.

Under the new rule, Federal government contractors must be sure to include the notice requirement in all subcontracts. Additionally, all Federal contractors and subcontractors should post the required notice immediately in physical form as well as electronic form if notices to employees are currently posted electronically. Copies of the required notice can be acquired from (1) the Federal contracting departments and agencies; (2) OLMS at (202) 693-0123 or www.olms.dol.gov; or (3) field offices of the Department of Labor's OLMS or Office of Federal Contract Compliance Programs.

The full text of the Department of Labor's new rule is available at:http://www.dol.gov/olms/regs/compliance/EO13496.htm. For more information, please contact Mark Blando at (612) 236-0160 or [email protected] .