On August 3, 2009, the Office of Labor–Management Standards of the US Department of Labor (DOL) issued a notice of proposed rulemaking to implement Executive Order 13496 (EO 13496 or the Order), signed by President Obama on January 30, 2009, which requires nonexempt federal departments and agencies to include within their government contracts specific provisions mandating that contractors and subcontractors with whom they do business post notices informing their employees of their rights under federal labor laws. Federal Register (74 Fed. Reg. 38488).

The proposed rule prescribes an “employee notice clause” that must be included in every government contract, other than collective bargaining agreements between a federal agency and a union and purchase orders under the simplified acquisition threshold.  The employee notice clause must be quoted verbatim in a contract, subcontract or purchase order.  It may not be made part of the contract, subcontract or purchase order “by words of incorporation or inclusion.”

The required employee notice poster, printed by DOL, will be furnished by the federal agency involved.  Copies may also be downloaded from the Office of Labor-Management Standards Web site at http://www.olms.dol.gov.  Contractors may reproduce and use exact duplicate copies of the official poster.  The poster must be posted in conspicuous places where employees performing the contract are located, “including all places where notices to employees are customarily posted both physically and electronically.” 

The regulations also provide proposed enforcement, compliance review and complaint procedures.  They permit the Deputy Assistant Secretary for Federal Contract Compliance to conduct a compliance evaluation, either limited to this rule or included in a compliance evaluation under other laws or Executive Orders, such as Executive Order 11246.  An employee of a covered contractor would also be able to file a complaint alleging that the contractor failed to post the notice or to include the notice clause in its subcontracts or purchase orders.  If a violation is found to have occurred, DOL will “make reasonable efforts to secure compliance through conciliation.”  If that is unsuccessful, the proposed rule provides for administrative enforcement proceedings under the control and supervision of the US Solicitor of Labor. Among the sanctions and penalties available are cancellation, termination or suspension of the contract and/or debarment.

The proposed rule, including the notice clause and poster language, can be accessed by clicking here. Comments regarding the proposed rule must be submitted to DOL on or before September 2, 2009.

The Arent Fox Labor & Employment Law Group regularly advises government contract clients on compliance with federal labor and employment laws and executive orders.  If you are interested in submitting comments or learning more about the proposed rule, please feel free to contact us.

Michael L. Stevens
stevens.michael@arentfox.com
202.857.6382