Proposed Rule Will Encourage Employees of Federal Contractors to Unionize

On January 30, President Barack Obama issued Executive Order 13496. In short, the executive order stated that the government would require federal contractors to post notices in the workplace notifying employees of their "rights" under the National Labor Relations Act (the Act).

The executive order did not prescribe the content of the notice, nor any of the posting rules. However, many observers expected the notices would reiterate Section 7 of the Act, which sets forth employee "rights" under the Act. (Section 7 states that "Employees shall have the right to self-organization, to form, join or assist labor organizations, to bargain collectively, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities….)

Mandated Notice to Employees

On August 3, the proposed rule was published in the Federal Register. The proposed rule includes the proposed content of the mandatory notice to employees. The DOL states it decided the mandated postings should do much more than just reiterate Section 7 rights:

"[T]he Department does not believe that posting the statutory language itself or a simplified list of rights in a notice will be likely to convey the information necessary to best inform employees of their rights under the Act… A more complete and readable text will also better enable employees to apply the rights to actual workplace situations." (Emphasis added.)

Proposed Text of Mandated Notice

The Department states that the "more complete and readable text" in the mandated notice shall begin with "a concise preamble that provides context to such rights:"

The "employee-enabling, readable text" in the proposed notice then lists the following.

• Nine separate employee "rights" related to supporting a union or engaging in concerted activity that are protected under the Act, including the right to "strike or picket" or "take action with one or more co-workers to improve your working conditions."
  
  BUT, only an isolated statement that employees also have the "right" to: "Choose not to do any of these activities, including joining or remaining a member of a union."

• Eight separate examples of unlawful employer conduct that would restrain or coerce employees who are seeking union representation.
  
  BUT, not even one example of unlawful union conduct that would restrain or coerce employees who oppose being represented by a union. Instead, the proposed notice lists an isolated example of unlawful conduct by a union that already represents the employees. (It is illegal for a union that represents you in bargaining with your employer to: discriminate or take other adverse action against you based on whether you have joined or supported the union.)

While the examples listed in the proposed notice do "more completely" inform employees who are inclined to support a union of their rights, the DOL's examples most clearly do not "more completely" inform employees who oppose unionization of their rights.

• The proposed notice states that an employee may "solicit[] for the union during non-work time or distribute union literature during non-work time, in non-work areas."
  
  BUT, the proposed notice says nothing about the rights of employees to solicit against the union during non-work time or distribute anti-union literature during non-work time in non-work areas.

• The proposed notice states that, "Under federal law, you have the right to… organize a union to negotiate your wages, hours and other terms and conditions of employment."
  
  BUT,  the proposed notice says nothing about the rights of employees who are already represented by a union to seek to decertify the union.

Nor does the proposed notice inform employees of the "rights" they could lose through unionization and the collective bargaining process.

For example, if the notice were really designed "to convey the information necessary to best inform employees of their rights …derived from Board and court decisions," one might reasonably expect that the proposed notice would inform employees of the bedrock corollary to a union's role as the employees' "exclusive bargaining representative": An individual employee may lose wages or benefits as the result of union representation and collective bargaining.

The United States Supreme Court 65 years ago stated: "some [better or more skilled] employees may lose by the collective [bargaining] agreement…better terms than those obtainable by the group…." J.I. Case Company. v. NLRB, 321 U.S. 332 (1944).

Undoubtedly, many commentators will see the proposed notice as one sided and crossing the line between "informing" employees of their rights and "encouraging" unionization.

A link to the full text of the mandated notice is available by clicking here.

Scope of the Proposed Rule

With few exceptions, the rule would govern:

(1) Any new contract with any agency of the United States government that has a value of $100,000 (covered contracts)

(2) All subcontracts and even purchase orders that are necessary to the performance of the covered contracts

Notably, the executive order did not specify that it would apply to subcontractors and suppliers of contractors with covered contracts.

What the Proposed Rule Requires

A federal contractor on a covered contract would be required to agree in the contract that:

(1) During the term of the contract, the contractor will post the mandated notice.

(2) The contractor will comply with all provisions of the mandated notice and all related rules, regulations and orders of the DOL.

(3) If the contractor does not comply with either of two preceding paragraphs, the contract itself may be cancelled, terminated or suspended, and the contractor may be declared ineligible for further government contracts.

(4) The contractor will include these same four requirements in every subcontract and purchase order entered into in connection with the contract.

Paragraph 2, above, seems in contradiction to the primary and exclusive jurisdiction of the NLRB to administer and enforce the Act. See 29 U.S.C. § 160 (The Board's power to prevent unfair labor practices "shall not be affected by any other means of adjustment or prevention that has been or may be established by agreement, law, or otherwise…). The plain language of this paragraph indicates that, if the Department finds that an employer has violated the Act in a manner prohibited by the mandated notice, the Department could terminate the employer's federal contract and bar the employer from entering into other federal contracts.

Enforcement

The proposed rule states that compliance will be administered by the Office of Federal Contract Compliance (OFCCP), which currently audits certain other federal contractors' compliance with federally-mandated affirmative action programs and other laws that bar discrimination.

The proposed rule provides for "compliance evaluations," for the OFCCP to receive complaints of non-compliance, and for enforcement proceedings conducted under the control of the solicitor of the DOL in accordance with 29 C.F.R. Part 18. If a contractor is found in non-compliance, the contract may be terminated, suspended or canceled, and the contractor may be debarred from contracting with the federal government.

Form and Manner of Posting

The proposed rule states that in order to reduce the burden on contractors and to ensure conformity and consistency with the specifications for the mandated notice, the Department of Labor will print copies of the mandated notice and supply the copies to contractors through the contracting agency. The proposed rule states that the posters will also be available from any field office of the Office of Labor-Management Standards (OLMS) or the OFCCP, or downloaded from the OLMS Web site at http://www.olms.dol.gov. The proposed rule would also permit contractors to reproduce the poster in exact duplicate.

The proposed rule requires contractors to post the mandated notice physically at their places of operation where employees covered by the Act are likely to see it. Contractors that customarily post notices to employees electronically must also post the mandated notice electronically. This requirement may be satisfied on any web site maintained by the contractor that is customarily used for employee notices, whether this website is internal or external. The proposed rule requires not only that contractors link to the DOL Web page containing the full text of the mandated notice, but also prescribes the language for the link. The text accompany the link must be the complete first sentence of the mandated notice.

What This Means to Federal Contractors

The proposed rule has yet to be finalized and may undergo significant change as a result of comments submitted by interested employers and other parties. If the proposed rule is adopted after the comment period without substantial change, posting the mandated notice in paper and electronic form will obviously encourage some employees to unionize or engage in other concerted activity that is protected under the National Labor Relations Act. How much of a difference this will make will depend largely on how carefully employees read government postings and how large and conspicuous these postings are in comparison to other government postings.

If the posted mandated notices are truly conspicuous and will inevitably be read by the contractor's employees, contractors will likely consider posting (or otherwise communicating to employees) further information about the disadvantages of union representation. The proposed rule does not address the permissibility of such postings, but presumably truthful statements of fact and non-coercive expressions of opinion would be protected under Section 8(c) of the Act, 29 U.S.C. § 158(c).

Comments Regarding Proposed Rule

The public may submit comments objecting to requirements of the proposed rule until September 2. The Department will post all comments it receives.

Electronic comments may be submitted through the Federal eRulemaking Portal at www.regulations.gov, or mailed 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 Ave., NW., Room N-5609, Washington, DC 20210.