Q&A for Federal Contractors and Subcontractors Subject to Posting Requirements of Executive Order 13496

As discussed in Baker & Daniels' May 25, 2010, alert, the U. S. Department of Labor recently issued a rule requiring certain federal contractors and subcontractors to notify employees of their rights under the National Labor Relations Act (NLRA). The posting requirement implements Executive Order 13496 (Executive Order), signed by President Obama on January 30, 2009. This alert will answer commonly asked questions about the new posting requirement.

What does the Executive Order require?

It requires certain federal contractors and subcontractors to post a notice informing employees of their right under the NLRA to join unions. The required posting also identifies specific acts by employers and unions that are prohibited under the NLRA. 29 C.F.R. §§ 471.1 – 471.2.

To whom does this Executive Order apply?

It applies to certain employers who have federal government contracts or subcontracts. 29 C.F.R. §§ 471.1 – 471.2. However, the Executive Order does not apply to employers who are excluded from the definition of "employer" under the NLRA (i.e., the United States or any wholly-owned government corporation, any state or political subdivision, any person subject to the Railway Labor Act) or employers who employ workers that are excluded from the definition of "employee" under the NLRA (i.e., agricultural workers, domestic employees, independent contractors, employers subject to the Railway Labor Act). 29 C.F.R. § 471.4.

What is the definition of a "government contract or subcontract" and are there any dollar thresholds?

A government contract or subcontract is an agreement with any department, agency or establishment of the federal government for the purchase, sale or use of personal property, including supplies and real property, or non-personal services, such as utilities, construction, transportation, research and insurance. 29 C.F.R. § 471.1. Contracts falling below the simplified acquisition threshold of $100,000 and subcontracts of $10,000 or less do not fall within the scope of the posting requirements. 29 C.F.R. §§ 471.3(a)(2) and 471.3(a)(4). Government contracts do not include grants and loans of federal funds. 29 C.F.R. § 471.1.

When did the notice posting requirement take effect?

June 21, 2010.

Does the Executive Order apply to employers who entered into government contracts or subcontracts prior to June 2010?

No. The posting is applicable only to contracts that are the result of solicitations issued on and after June 21, 2010. Thus, contractors with existing multiyear contracts may not be required to post the notice. 29 C.F.R. § 471.3(a)(3).

If my company is covered by this Executive Order, are we required to post the notice at all of our locations or only at those locations that perform work on the government contract or subcontract?

The Executive Order requires posting only at facilities where employees are engaging in activity or work related to the performance of the government contract or subcontract (including at facilities where "indirect," "partial" or "preparatory" work is performed). 29 C.F.R. § 471.2(d)(2).

Where in a covered facility must the notice be posted?

Postings must be in conspicuous places in your plants and offices where employees covered by the NLRA engage in activities relating to the performance of the contract, including all places where notices to employees are customarily posted both physically and electronically. 29 C.F.R. §§ 471.2(d)(1) and 471.2(f). Electronic postings must provide a link to the Department of Labor's website (http://www.dol.gov/olms/regs/compliance/EmployeeRightsPoster11x17_Final.pdf) that states "Important Notice about Employee Rights to Organize and Bargain Collectively with Their Employers." 29 C.F.R. § 471.2(f).

What is the penalty for failure to post?

Employers who fail to comply may have their contract or subcontract canceled, terminated or suspended and/or be precluded from entering into future contracts with the federal government. 29 C.F.R. § 471.14.

Where can we obtain a copy of the notice?

Copies of the postings can be obtained via download through either of the following links: http://www.dol.gov/olms/regs/compliance/EmployeeRightsPoster2page_Final.pdf. http://www.dol.gov/olms/regs/compliance/EmployeeRightsPoster11x17_Final.pdf.

You also can obtain a copy of the Notice by calling (202) 693-0123 or by sending a request to the following address: Division of Interpretations and Standards, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution Avenue, NW, Room N-5609, Washington, DC 20210.

Are we allowed to also post a notice about the company's philosophy on union free environments?

Yes, and you should consider doing so.