Notification of Employee Rights Under Federal Labor Laws, 28368-28402 [2010-11639]
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Federal Register / Vol. 75, No. 97 / Thursday, May 20, 2010 / Rules and Regulations
DEPARTMENT OF LABOR
Office of Labor-Management
Standards
29 CFR Part 471
RIN 1215–AB70; RIN 1245–AA00
Notification of Employee Rights Under
Federal Labor Laws
AGENCY: Office of Labor-Management
Standards, Department of Labor.
ACTION: Final rule.
On August 3, 2009, the Office
of Labor-Management Standards
(‘‘OLMS’’) in the Department of Labor
(‘‘the Department’’) issued a proposed
rule implementing Executive Order
13496. This final rule sets forth the
Department’s review of and response to
comments on the proposal and any
changes made to the rule in response to
those comments.
President Barack Obama signed
Executive Order 13496 (‘‘Executive
Order’’ or ‘‘E.O. 13496’’) on January 30,
2009. The Executive Order requires
nonexempt Federal departments and
agencies to include within their
Government contracts specific
provisions requiring contractors and
subcontractors with whom they do
business to post notices informing their
employees of their rights as employees
under Federal labor laws. The Executive
Order requires the Secretary of Labor
(‘‘Secretary’’) to prescribe the size, form,
and content of the notice that must be
posted by a contractor under paragraph
1 of the contract clause described in
section 2 of the Order. Under the
Executive Order, unless a specified
exception or exemption applies, Federal
Government contracting departments
and agencies must include the required
contract provisions in every
Government contract. As required by
the Executive Order, this final rule
establishes the content of the notice
required by the Executive Order’s
contract clause, and implements other
provisions of the Executive Order,
including provisions regarding
sanctions, penalties, and remedies that
may be imposed if the contractor or
subcontractor fails to comply with its
obligations under the Order and the
implementing regulations.
DATES: Effective Date: This rule will be
effective on June 21, 2010.
FOR FURTHER INFORMATION CONTACT:
Denise M. Boucher, Director, Office of
Policy, Reports and Disclosure, Office of
Labor-Management Standards, U.S.
Department of Labor, 200 Constitution
Avenue, NW., Room N–5609,
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SUMMARY:
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Washington, DC 20210, (202) 693–0123
(this is not a toll-free number), (800)
877–8339 (TTY/TDD).
SUPPLEMENTARY INFORMATION: The
Regulatory Information Number (RIN)
identified for this rulemaking changed
with publication of the Spring
Regulatory Agenda due to an
organizational restructuring. The old
RIN was assigned to the Employment
Standards Administration, which no
longer exists; a new RIN has been
assigned to the Office of LaborManagement Standards.
I. Background on the Rulemaking
On August 3, 2009, the Department
issued a Notice of Proposed Rulemaking
(‘‘NPRM’’ or ‘‘proposed rule’’), 74 FR
38488, to implement Executive Order
13496, ‘‘Notification of Employee Rights
Under Federal Labor Laws,’’ 74 FR 6107,
Feb. 4, 2009. The Department invited
written comments on the proposed
regulations from interested parties,
including current and potential
Government contractors, subcontractors,
and vendors, and current and potential
employees of such entities; labor
organizations; public interest groups;
Federal contracting agencies; and the
public. In addition, when proposing
certain provisions of the rule, the
Department invited public comment
regarding issues addressed in those
specific provisions. The public
comment period closed on September 2,
2009, and the Department has
considered all timely comments
received in response to the proposed
rule.1
The Department received 86 unique
and timely comments from a wide
variety of sources. Commenters
included individuals, labor
organizations, and other organizations
and associations representing the
interests of employees, employers and
government contractors and
subcontractors. The Department
recognizes and appreciates the value of
comments, ideas, and suggestions from
members of the public, labor
1 The Department received a single request to
extend the comment period for an additional 30
days. The commenter, a law firm, asserted that the
30-day comment period was too brief and that, as
a result, many interested parties were unaware of
the proposed rule. After due consideration, the
Department has determined that the 30-day
comment period was sufficient, and additional time
in which to respond is not warranted. The
commenter requesting the extension was able to
submit a lengthy, substantive comment within the
30-day period and attached additional comments
from many of its clients. In addition, the
Department received within the 30-day period a
notable number of substantive comments
representing a broad spectrum of interests
associated with the proposed rule. Finally, no other
commenter requested such an extension.
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organizations, employers, industry
associations and other interested
parties.
II. The Executive Order
On January 30, 2009, President Barack
Obama signed Executive Order 13496,
entitled ‘‘Notification of Employee
Rights Under Federal Labor Laws.’’ 74
FR 6107, Feb. 4, 2009. The purpose of
the Executive Order is ‘‘to promote
economy and efficiency in Government
procurement’’ by ensuring that
employees of certain Government
contractors are informed of their rights
under Federal labor laws. Id., Sec. 1. As
the Order states, ‘‘When the Federal
Government contracts for goods or
services, it has a proprietary interest in
ensuring that those contracts will be
performed by contractors whose work
will not be interrupted by labor unrest.
The attainment of industrial peace is
most easily achieved and workers’
productivity is enhanced when workers
are well informed of their rights under
Federal labor laws, including the
National Labor Relations Act (Act), 29
U.S.C. 151 et seq.’’ Id. The Order
reiterates the declaration of national
labor policy contained in the National
Labor Relations Act (‘‘NLRA’’), 29 U.S.C.
151, that ‘‘encouraging the practice and
procedure of collective bargaining and
* * * protecting the exercise by
workers of full freedom of association,
self-organization, and designation of
representatives of their own choosing,
for the purpose of negotiating the terms
and conditions of their employment or
other mutual aid or protection’’ will
‘‘eliminate the causes of certain
substantial obstructions to the free flow
of commerce’’ and ‘‘mitigate and
eliminate these obstructions when they
have occurred.’’ Id., Sec. 1, quoting 29
U.S.C. 151. As the Order concludes,
‘‘[r]elying on contractors whose
employees are informed of such rights
under Federal labor laws facilitates the
efficient and economical completion of
the Federal Government’s contracts.’’ Id.
The Executive Order achieves the goal
of notification to employees of federal
contractors of their legal rights through
two related mechanisms. First, Section
2 of the Order provides the complete
text of a contract clause that
Government contracting departments
and agencies must include in all
covered Government contracts. Sec. 2,
74 FR at 6107–08. Second, through
incorporation of the specified clause in
its contracts with the Federal
government, contractors thereby agree to
post a notice in conspicuous places in
their plants and offices informing
employees of their rights under Federal
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labor laws. Sec. 2, para. 1, 74 FR at
6107–08.
The Executive Order states that the
Secretary ‘‘shall be responsible for [its]
administration and enforcement.’’ Sec.
3, 74 FR at 6108. To that end, the
Executive Order delegates to the
Secretary the authority to ‘‘adopt such
rules and regulations and issue such
orders as are necessary and appropriate
to achieve the purposes of this order.’’
Id., Sec. 3(a). In particular, the
Executive Order requires the Secretary
to prescribe the content, size, and form
of the employee notice. Id., Sec. 3(b). In
addition, the Executive Order permits
the Secretary, among other things, to
make modifications to the contractual
provisions required to be included in
Government contracts (Sec. 3(c)); to
provide exemptions for contracting
departments or agencies with respect to
particular contracts or subcontracts or
classes of contracts or subcontracts for
certain specified reasons (Sec. 4); to
establish procedures for investigations
of Government contractors and
subcontractors to determine whether the
required contract provisions have been
violated (Sec. 5); to conduct hearings
regarding compliance (Sec. 6); and to
provide for certain remedies in the
event that violations are found (Sec. 7).
74 FR at 6108–09.
III. Statutory Authority for the
Executive Order and the Department’s
Regulation
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A. Legal Authority
The President issued Executive Order
13496 pursuant to his authority under
‘‘the Constitution and laws of the United
States,’’ expressly including the Federal
Property and Administrative Services
Act (‘‘Procurement Act’’), 40 U.S.C. 101
et seq. The Procurement Act authorizes
the President to ‘‘prescribe policies and
directives that [he] considers necessary
to carry out’’ the statutory purposes of
ensuring ‘‘economical and efficient’’
government procurement and supply.
40 U.S.C. 101, 121(a). Executive Order
13496 delegates to the Secretary of
Labor the authority to ‘‘adopt such rules
and regulations and issue such orders as
are necessary and appropriate to achieve
the purposes of this order.’’ Sec. 3, 74 FR
at 6108. The Secretary has delegated her
authority to promulgate these
regulations to the Office of Federal
Contract Compliance Programs
(‘‘OFCCP’’) and the Office of LaborManagement Standards (‘‘OLMS’’).
Secretary’s Order 7–2009, 74 FR 58834,
Nov. 13, 2009; Secretary’s Order 8–
2009, 74 FR 58835, Nov. 13, 2009.
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B. Interagency Coordination
Section 12 of the Executive Order
requires the Federal Acquisition
Regulatory Council (‘‘FAR Council’’) to
take action to implement provisions of
the Order in the Federal Acquisition
Regulation (FAR). 74 FR at 6110.
Accordingly, the Department has
coordinated with the FAR Council for
the insertion of language into the FAR
that implements the Executive Order.
IV. Summary of the Final Rule and
Discussion of the Comments
This final rule establishes standards
and procedures for the implementation
and enforcement of Executive Order
13496. Subpart A of the rule sets out
definitions, the prescribed requirements
for the size, form and content of the
employee notice, exceptions for certain
types of contracts, and exemptions that
may be applicable to contracting
departments and agencies with respect
to a particular contract or subcontract or
class of contracts or subcontracts.
Subpart B of the rule sets out standards
and procedures related to complaint
procedures, compliance evaluations,
and enforcement of the rule. Subpart C
sets out other standards and procedures
related to certain ancillary matters. This
preamble follows the same
organizational outline, and within each
section of the preamble the Department
has noted and responded to the
comments addressed to that particular
section of the rule.
During the interagency review process
that preceded the publication of the
NPRM, the Department received
requests to improve the readability and
understandability of the regulatory text
by employing ‘‘plain language,’’ which
includes, among other things, the use of
common, everyday words, except for
necessary technical terms, the use of the
active rather than the passive voice, and
the use of short sentences. The
Department has made revisions to the
regulatory text of the final rule in
accordance with these guidelines.
As part of a Departmental
restructuring, effective November 8,
2009, the Department abolished the
Employment Standards Administration
(‘‘ESA’’), which was the administrative
umbrella for several agencies within the
Department, including OLMS and
OFCCP. As the administrator overseeing
both OLMS and OFCCP, the Assistant
Secretary for Employment Standards
had designated administrative and
enforcement functions under the
proposed rule. Due to the elimination of
ESA and the position of Assistant
Secretary for Employment Standards,
the final rule has been revised so that
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the roles and functions assigned to the
Assistant Secretary in the proposed rule
are reassigned. See §§ 471.2, 471.13,
471.14, 471.15, 471.16, 471.21, 471.22,
and 471.23. Generally speaking, the
Assistant Secretary’s enforcement
review functions have been reassigned
to the Department’s Administrative
Review Board, and the administrative
functions in the rule have been
reassigned to the Directors, formerly
called the Deputy Assistant Secretaries,
of OFCCP or OLMS, or both.2 In
addition, the definition of ‘‘Assistant
Secretary’’ has been deleted from
§ 471.1, and definitions have been
added for easy reference to the ‘‘Director
of OFCCP’’ and the ‘‘Director of OLMS’’
in the body of the rule.
A. The Purpose of Executive Order,
Statutory Authority and Preemption
The Department received a number of
comments about the Executive Order
and its purpose, the President’s
authority to issue it, and the asserted
preemption of the Order or the
Department’s regulation by the National
Labor Relations Act (‘‘NLRA’’), 29 U.S.C.
151, et seq. First, the Department
received several comments opposing the
Executive Order generally, each of
which suggests, for various reasons, that
the Executive Order constitutes
unnecessary interference with private
enterprise. Several commenters also
commented on the purpose of the
Executive Order. Some commenters
were doubtful that the Executive Order
would fulfill its stated goals of
promoting economy and efficiency in
government procurement through
notifying employees of their rights, and
suggested instead the Executive Order
would have the opposite effect and
actually increase costs to taxpayers and
amplify labor-management conflict,
among other negative effects cited.
Other commenters stated that the
Executive Order would undoubtedly
achieve its stated goals. In particular,
these commenters indicated that
informing employees of their rights will
enhance industrial peace and worker
productivity, promote a stable
workforce and improve employee
morale, reduce intimidation,
misinformation, harassment, and fear in
the workplace, eliminate injustice, and
contribute to positive labor-management
relations—all of which will foster labor
peace and reduce costs to the
government.
2 For ease of reference and to avoid confusion, the
Directors of OLMS and of OFCCP are referred to in
this preamble by their current title, ‘‘Director,’’ even
when this preamble is discussing passages of the
NPRM that refer to their former title, ‘‘Deputy
Assistant Secretary.’’
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One commenter suggested that the
Procurement Act provides an
insufficient basis of authority for the
President to issue Executive Order
13496. Although the comment
acknowledges that the courts have
rejected a similar challenge alleging
insufficient authority under the
Procurement Act for the issuance of an
executive order requiring federal
contractors to post notices to their
employees, the commenter suggests that
the scope of the notice required by
Executive Order 13496 is broader than
the Procurement Act permits.
The Department disagrees with the
assertion that Executive Order 13496 is
not within the President’s authority
under the Procurement Act. The
Procurement Act authorizes the
President to ‘‘prescribe policies and
directives that the President considers
necessary to’’ ‘‘provide the Federal
Government with an economical and
efficient system’’ of government
procurement. 40 U.S.C. 101, 121. The
Procurement Act grants the President
flexibility and ‘‘broad-ranging
authority,’’ and executive orders issued
under the authority of the Procurement
Act need only meet a ‘‘lenient standard’’
that requires that the order have a
‘‘sufficiently close nexus’’ to the values
of providing the government an
economical and efficient system for
procurement and supply. UAW-Labor
Employment Training Corp. v. Chao,
325 F.3d 360, 367–68 (DC Cir. 2003).
Various executive orders have passed
this ‘‘lenient standard,’’ even in cases in
which the link between the order and
efficient procurement may seem
attenuated, where an argument can be
made that the order will have the
opposite effect of its stated goal, or
when the order increases costs to the
government in the short term. Id. at
367–68.3 Executive Order 13496, which
3 Since the passage of the Procurement Act in
1949, successive administrations have issued
executive orders governing labor and employment
practices of federal contractors, and such orders
have been sustained in the federal courts of appeals
against attacks asserting that the President exceeded
his authority under the Procurement Act. See, e.g.,
Executive Order 11246, 3 CFR 339 (1964–65
Compilation) (1965) (applying equal opportunity
principles to federal contractors), upheld by
Contractors Ass’n of Eastern Pennsylvania v.
Secretary of Labor, 442 F.2d 159 (3d Cir.), cert.
denied, 404 U.S. 854, (1971); Executive Order
12092, 43 FR 51,375 (1978) (imposing wage controls
on federal contractors), upheld by AFL–CIO v.
Kahn, 618 F.2d 784 (DCCir.) (en banc), cert. denied,
443 U.S. 915 (1979); Executive Order 13202, 66 FR
11225 (2001) (agencies and entities receiving
federal assistance for construction projects may
neither require nor prohibit bidders or contractors
from entering into project labor agreements), upheld
by Bldg. and Constr.. Trades Dept, AFL–CIO v.
Allbaugh, 295 F.3d 28 (DC Cir. 2002); E.O. 13201,
66 FR 11221 (2001) (requiring federal contractors to
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is intended to reduce government
procurement costs through better
informing employees of their rights so
that obstructions to commerce stemming
from labor unrest will be mitigated or
eliminated, certainly meets this
standard.
Five commenters contend that the
Executive Order or the Department’s
regulations implementing it are
preempted by the National Labor
Relations Act. The comments invoke
both theories of NLRA preemption
fashioned by the Supreme Court, socalled Garmon preemption (San Diego
Bldg. Trades Council v. Garmon, 359
U.S. 236, 244 (1959)), which prohibits
regulation of activities that are protected
by Section 7 or prohibited by Section 8
of the NRLA, and so-called Machinists
preemption (Int’l Ass’n of Machinists &
Aerospace Workers v. Wisconsin
Employment Relations Comm’n, 427
U.S. 132, 144 (1976)), which prohibits
regulation of areas that Congress
intended to be left ‘‘unregulated and to
be controlled by the free play of
economic forces.’’ 427 U.S. at 144. The
Court has described Machinists preemption as creating a ‘‘free zone from
which all regulation, ‘whether federal or
State,’ is excluded.’’ Golden State
Transit Corp. v. Los Angeles, 493 U.S.
103, 111 (1989), quoting Machinists, 427
U.S. at 153.
The Department disagrees with the
contention that the Executive Order or
this implementing regulation is
preempted by the NLRA. Garmon
preemption is inapplicable because the
activity regulated by the Executive
Order—the posting of an accurate,
noncoercive notice of employee rights—
is not conduct that is either protected by
Section 7 or prohibited by Section 8 of
the NLRA. Similarly, Machinists
preemption is inapplicable because the
provision of accurate, noncoercive
information to employees about their
NLRA rights is not within the zone of
conduct intended by Congress to be
reserved for market freedom. Further,
Chamber of Commerce v. Brown, 128
include in their contracts a provision agreeing to
post notices informing employees of Beck rights),
upheld by UAW-Labor and Employment Training
Corp. v. Chao, 325 F.3d 360 (DCCir. 2003). See also
City of Albuquerque v. U.S. Dept. of Interior, 379
F.3d 901 (10th Cir. 2004) (Procurement Act
provided a sufficient statutory foundation for
executive order directing that in meeting federal
space needs in urban areas, first consideration be
given to centralized community business areas;
order’s directions were sufficiently related to the
Act to be a valid exercise of the Act’s delegated
authority); AFL–CIO v. Carmen, 669 F.2d 815 (DC
Cir. 1981) (executive action to phase out free
parking for federal employees was authorized since
the institution of parking charges for federal
employees would assist government in utilizing its
property efficiently and economically).
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S.Ct. 2408 (2008), in which the Court
held that Machinists preemption
invalidated a State statute that
prohibited employers that receive State
funds from assisting, promoting, or
deterring union organizing, is
distinguishable because the State law in
that case attempted regulation of speech
about unionization that was within the
zone of conduct intended to be left to
market forces. In this case, federal
contractors remain free to advocate
about unionization, and there is no
interference with speech rights
protected by Section 8(c) of the NLRA.
Further, the regulation does not
interfere with the primary jurisdiction
of the National Labor Relations Board
(‘‘NLRB’’ or ‘‘Board’’) to draw the lines
defining coercive speech that violates
Section 8 of the NLRA, 29 U.S.C. 158,
or that is prejudicial to a fair
representation election under Section 9,
29 U.S.C. 159.
B. The Definitions
Section 471.1 of the final rule
contains definitions of terms used in the
rule. The Department received six
comments from the public about the
proposed definitions and, as noted
below, has made some modifications to
the definitions after reviewing the
comments.
The Department received three related
to the definitions of ‘‘contractor’’ and
‘‘contract.’’ The NPRM defined a
‘‘contractor’’ to include both a prime
contractor and a subcontractor, and
defined ‘‘contract’’ to include both a
Government contract and a subcontract.
The effect of these definitions, taken
together with the substantive obligations
of the Executive Order and the rule,
creates no differentiation between the
obligations of the prime contractor—the
contractor that directly does business
with the Federal government—and the
subcontractors of the prime contractor.
The three comments noted that the
broad definitions of ‘‘contractor’’ and
‘‘contract’’ improperly and without
limitation impose the substantive
obligations of the rule on all
subcontractors. The three comments all
suggest that the definitions should be
modified to reflect some limitation on
the application of the rule to
subcontractors, such as the application
of the simplified acquisition threshold,
41 U.S.C. 403, to subcontractors or a
limitation on the application of the rule
to subcontractors below the first tier.
One of the three comments notes that
although the proposed rule stated that
the simplified acquisition threshold did
not apply to subcontracts, because the
definition of ‘‘contract’’ and
‘‘contractors’’ included ‘‘subcontract’’
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and ‘‘subcontractor,’’ the rule arguably
applies the simplified acquisition
threshold to subcontracts. 74 FR at
38491.
The remaining comments about the
definitional section of the rule were all
submitted by one commenter. This
commenter noted that the limited
definition of ‘‘collective bargaining
agreement’’ in the proposed rule is
inconsistent with the definition of
‘‘collective bargaining agreement’’ in the
NLRA, and may lead to confusion. The
same commenter requests an
explanation for the inclusion of
‘‘weatherization’’ in the definition of
‘‘construction,’’ noting that the
definition of ‘‘construction’’ in similar
Departmental regulations does not
include the term. Finally, this
commenter recommends that the
definition of ‘‘government contract’’
should expressly exclude contracts for
the purchase of ‘‘commercial items,’’ as
defined in the Federal Acquisition
Regulation, 48 CFR 2.101, so that the
terms and conditions of sales of
commercial items to the government
will be as similar as possible to sales in
the private sector where a contract with
the government is not involved.
After full consideration of these
comments about the definitions in the
proposed rule, the Department has made
the following decisions. The
Department endorses the definitions of
‘‘contract’’ and ‘‘contractor’’ as set out in
the proposal, and has made no change
to these definitions in the final rule. As
discussed in greater detail below, the
obligations of the final rule apply to
both the government contractor and its
subcontractors at any tier. In addition,
the exception in the Executive Order,
and in this implementing rule, for
government contracts below the
simplified acquisition threshold applies
only to the prime contract and not to
subcontracts of the prime contract.
Finally, as further explained below, the
Department has decided to except from
application of the final rule subcontracts
that are de minimis in value, which the
Department has defined as those
subcontracts that do not exceed $10,000.
This exception has been incorporated
into the rule in § 471.3(a), and no
modification to the definitions is
required in order to implement this new
exception for de minimis value
subcontracts.
The Department declines to exclude
from the definition of ‘‘government
contract’’ contracts for commercial items
as defined in the Federal Acquisition
Regulations, 48 CFR 2.101. The
Department acknowledges, as the
comment suggests, that the application
of this rule to contracts for commercial
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items means that such contracts will
differ from the purchase of the same
items when the Federal government is
not the purchaser. However, the
judgment underlying the Executive
Order, and the Department’s judgment
in this implementing rule, is that cost
savings in Federal contracting can be
made when employees are well
informed of their NLRA rights, and this
principle holds true whether the
contract is for commercial items or for
some other product or service.
The Department agrees that the
definition of ‘‘collective bargaining
agreement’’ in the rule, which is
intended only to identify a class of
collective bargaining agreements under
the Federal Service Labor Management
Relations Statute (‘‘FSLMRS’’), 5 U.S.C.
7101 et seq., that are excepted from
coverage under the Executive Order,
may be confusing to readers accustomed
to the usage of the same term in the
NLRA. Therefore, the definition of this
term has been removed from § 471.1,
and the exception for collective
bargaining agreements entered into
under the FSLMRS is set out more fully
in § 471.3 without cross-reference to the
definitional section. In order to treat the
other coverage exception similarly, the
definition of ‘‘simplified acquisition
threshold’’ has been removed from
§ 471.1, and the exception for
government contracts below the
simplified acquisition threshold has
been made more explicit in § 471.3
without cross-reference to the
definitional section. In addition, in
response to a comment, the Department
notes that because of the Federal
government’s increased emphasis on
energy efficiency, the inclusion of
weatherization activities within the
definition of ‘‘construction’’ was
important to ensure that Federal
contracts involving weatherization are
subject to the rule. For consistency, a
similar revision has been made to the
definition of ‘‘construction work site.’’
Finally, in response to a comment
received during interagency review of
the final rule, the Department has
modified the definition of ‘‘labor
organization’’ to more precisely
duplicate the definition of ‘‘labor
organization’’ in the NLRA, 29 U.S.C.
152(5).
C. The Content of the Employee Notice
1. Statutory Rights Included in the
Notice
Executive Order 13496 requires the
Secretary to ‘‘prescribe the size, form
and content of the notice’’ that
contractors must post to notify
employees of their rights. Sec. 3(b), EO
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13496, 74 FR at 6108. Appendix A to
Subpart A of the proposed regulatory
text presented the content of the
Secretary’s proposed notice, which sets
forth employee rights under the NLRA.
74 FR at 38498–99. As a threshold
matter, the Department concluded in the
NPRM that providing notice of
employee rights under the NLRA best
effectuates the purpose of the Executive
Order. 74 FR at 38489–90. Section 1 of
the Executive Order clearly states that
the Order’s policy is to attain industrial
peace and enhance worker productivity
through the notification of workers of
‘‘their rights under Federal labor laws,
including the National Labor Relations
Act.’’ Sec. 1, 74 FR at 6107. The policy
of the Executive Order goes on to
emphasize the foundation underlying
the NLRA, which is to encourage
collective bargaining and to protect
workers’ rights to freedom of association
and self-organization, and notes that
efficiency and economy in government
contracting is promoted when
contractors inform their employees of
‘‘such rights.’’ Further, the contract
clause prescribed by the Executive
Order requires Federal contractors to
post the notice ‘‘in conspicuous places
in and about plants and offices where
employees covered by the National
Labor Relations Act engage in activities
related to performance of the contract.
* * *’’ Sec. 2, para. 1, 74 FR at 6107
(emphasis added). Because of these
specific references to the NLRA, the
NPRM proposed including in the notice
only employee rights contained in the
NLRA.
The Department received one
comment noting a textual ambiguity in
the Executive Order relating to the
content of the notice. The commenter
pointed out that the Executive Order
refers to the provision of notice about
‘‘rights under Federal labor laws,
including the National Labor Relations
Act,’’ which, the commenter submits,
suggests that the Department should
include rights under other ‘‘Federal
labor laws’’ in the notice as well. In
particular, this commenter suggested
that the notice should include statutory
rights under the Railway Labor Act
(‘‘RLA’’), 45 U.S.C. 151–188, the Federal
law governing labor-management
relations in the airline and rail
industries. Two other commenters
suggested the inclusion in the notice of
rights under the Labor-Management
Reporting and Disclosure Act
(‘‘LMRDA’’) 29 U.S.C. 401 et seq., which
guarantees certain rights to union
members. A final commenter on this
subject agreed with the Department that
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the notice should be limited to rights
under the NLRA.
The Department has considered the
inclusion of other statutory rights in the
notice, but has concluded that there is
overwhelming textual support in the
Executive Order, as noted above, for its
original conclusion that rights under the
NLRA should be the sole focal point of
the required notice. Taken together,
these provisions of the Executive Order
offer strong evidence that its intent is to
provide notice to employees of rights
under the NLRA. Furthermore, no other
Federal labor or employment laws are
mentioned expressly in the Executive
Order.4 Therefore, there is no textual
support—other than the plural reference
to ‘‘Federal labor laws’’—that would
support the inclusion of rights under
either the LMRDA or the RLA, as
suggested by the comments. Inclusion of
rights under the RLA is precluded for
another reason as well. Because
Executive Order 13496 requires that the
notice be posted ‘‘where employees
covered by the National Labor Relations
Act’’ work, 74 FR 6107, and the NLRA
expressly excludes from its coverage
employers covered under the RLA and
their employees, 29 U.S.C. 152(2) and
(3), when the Executive Order and the
NLRA are read together, federal
contractors that are covered by the RLA
are excluded from the requirements of
the Executive Order.
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2. Overview of the Comments on the
Content of the Proposed Notice
As noted in the NPRM, the
Department considered the level of
detail the notice should contain
regarding NLRA rights. The Department
considered requiring a verbatim
replication of the NLRA’s enumeration
of employee rights in Section 7, 29
U.S.C. 157, or a simplified list of rights
based upon that statutory provision.5 In
the end, however, the Department
concluded in the NPRM that inclusion
of the statutory language itself or a
simplified list of rights in a notice
would be unlikely to convey the
information necessary to best inform
4 The Postal Reorganization Act, 39 U.S.C. 101 et
seq., extended the jurisdiction of the NLRB to
employees of the United States Postal Service. See
39 U.S.C. 1201–1209.
5 Section 7 of the NLRA, 29 U.S.C. 157, states
that: ‘‘[e]mployees shall have the right to selforganization, to form, join, or assist labor
organizations, to bargain collectively through
representatives of their own choosing, 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 except to the extent
that such right may be affected by an agreement
requiring membership in a labor organization as a
condition of employment as authorized in section
8(a)(3) [section 158(a)(3) of this title].’’
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employees of their rights under the Act.
Instead, the Department proposed a
statement of employee rights, contained
in Appendix A to Subpart A of Part 471
(‘‘NPRM notice’’ or ‘‘proposed notice’’),
74 FR at 38498–99, that provided greater
detail of NLRA rights derived from
Board or court decisions and that would
more effectively convey such rights to
employees. The proposed notice also
contained examples of general
circumstances that constitute violations
of employee rights under the Act. Thus,
the Department proposed a notice that
provided employees with more than a
rudimentary overview of their rights
under the NLRA, in a user-friendly
format, while simultaneously not
overwhelming employees with
information that is unnecessary and
distracting in the limited format of a
notice. The Department specifically
invited comment on the statement of
employee rights proposed for inclusion
in the required notice to employees. In
particular, the Department requested
comment on whether the notice
contains sufficient information of
employee rights under the Act; whether
the notice effectively conveys the
information necessary to best inform
employees of their rights under the Act;
and whether the notice achieves the
desired balance between providing an
overview of employee rights under the
Act and limiting unnecessary and
distracting information.
The content of the proposed notice
received more comments than any other
single topic addressed in the proposed
rule. Many comments from both
individuals and organizations offered
general support for the content of the
proposed notice, stating that employee
awareness of basic legal rights will
promote a fair and just workplace,
improve employee morale, and foster
workforce stability, among other
benefits. Several employee and civil
rights organizations registered support
for the rule, and maintained that
because employers are required to post
notices informing employees of other
federal workplace rights, this notice
represents little or no additional burden
and, in fact, is long overdue given the
other required notices.6 Labor
6 The Department of Labor implements employee
notification requirements pertaining to employers
covered by the Fair Labor Standards Act, 29 U.S.C.
211 (implementing regulation 29 CFR 516.4); the
Occupational Safety and Health Act, 29 U.S.C.
657(c) (implementing regulation 29 CFR 1903.2);
the Family Medical Leave Act, 29 U.S.C. 2601 et
seq., (implementing regulation 29 CFR 825.300,
.402); the Uniformed Service Employment and
Reemployment Rights Act, 38 U.S.C. 4334
(implementing regulation 20 CFR 1002); Employee
Polygraph Protection Act, 29 U.S.C. 2003
(implementing regulation 29 CFR 801.6); and the
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organizations were also supportive of
the proposed notice generally, noting
that employees’ awareness of their basic
workplace rights in a clear and effective
manner will promote the free exercise of
those rights and prevent employer
interference and intimidation of
employees regarding self-organization
and collective bargaining.
Other commenters were less
enthusiastic about the content of the
proposed notice. A significant number
of commenters—approximately onethird—including many employer,
industry and interest groups, argued
that the content of the notice is not
balanced, and appears to promote
unionization instead of employee
freedom of association. In particular,
many commenters stated that among the
rights contained in Section 7 of the
NLRA is the right to refrain from union
activity, but this right is given little
attention in comparison to other rights
in the proposed notice. In addition,
many of these commenters also noted
that the examples of employer and
union unfair labor practices are
unbalanced—the list of employer
misconduct in the proposed notice was
seven items long, while the example of
union misconduct contained only one
item. Several commenters also noted
that the proposed notice excludes rights
associated with an anti-union position,
including the right to seek
decertification of a bargaining
representative, the right to abstain from
union membership in so-called right-towork states, and rights associated with
the Supreme Court’s decision in
Communication Workers v. Beck, 487
U.S. 735 (1988), permitting employees
to seek reimbursement of that portion of
dues or fees collected under a union
security clause in a collective bargaining
agreement that is not used for collective
bargaining, contract administration, or
grievance adjustments. Many of these
comments noted that a neutral and
even-handed government position on
unionization would be more inclusive
of these rights.
Many comments addressed the issue
of complexity, as it pertains both to the
Migrant and Seasonal Agricultural Worker
Protection Act, 29 U.S.C. 1821(b), 1831(b)
(implementing regulation 29 CFR 500.75, .76).
Federal contractors specifically have additional
notification requirements, including equal
employment opportunity rights under Executive
Order 11246, the Rehabilitation Act of 1973, 29
U.S.C. 793, and the Vietnam Era Veterans’
Readjustment Assistance Act of 1974,
(implementing regulations at 41 CFR Chapter 60–
l .42; 41 CFR 60–250.4(k); and 41 CFR 60–74
1.5(a)(4)), and rights under the Davis-Bacon Act, 40
U.S.C. 3142(c)(2) (implementing regulation 29 CFR
5.5(a)(l)) and the Service Contract Act, 29 U.S.C.
351(a)(4) (implementing regulation 29 CFR 4.6(e),
.184).
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law and to the content of the proposed
notice. Approximately ten comments
stated that the Department’s attempt to
summarize NLRA decisional law was
flawed because the law is far too
complex to condense into a single
workplace notice. Many of these
comments noted that NLRA law has
been developed over 75 years, and
involves interpretations by both the
NLRB and the federal courts, sometimes
with conflicting results. Some
commenters noted that because of Board
member turnover, which alters the
political composition of the Board, legal
precedent changes frequently, thus
requiring frequent updates to the
content of the notice. Several
commenters cited the NLRB’s Basic
Guide to the National Labor Relations
Act: General Principles of Law Under
the Statute and Procedures of the
National Labor Relations Board (Basic
Guide to the NLRA) (1997), available at
https://www.nlrb.gov/nlrb/shared_files/
brochures/basicguide.pdf, to make their
point about legal complexity. In the
Foreword to the Basic Guide to the
NLRA, the Board’s General Counsel
states that ‘‘[a]ny effort to state basic
principles of law in a simple way is a
challenging and unenviable task. This is
especially true about labor law, a
relatively complex field of law.’’ The
thrust of these comments about legal
complexity was that NLRA decisional
law is too complex, dynamic, and
nuanced, and any attempt to summarize
it in a workplace notice will result in an
oversimplification of the law and lead to
confusion, misunderstanding,
inconsistencies, and some say,
heightened labor-management
antagonism.
Similarly, six comments stated that
the proposed notice itself was too
complex to be helpful or informative to
employees. Some said the notice was
too long and wordy, and therefore likely
to confuse or mislead employees,
which, as one commenter noted, is
contrary to the purpose of the Executive
Order. Another said the notice is too
long and contains examples of employer
misconduct that are arbitrary and too
specific.
Comments asserting that the content
of the proposed notice was too detailed
dovetailed with the many comments
suggesting that the required notice
should specify only those rights
contained in Section 7 of the NLRA or,
alternatively, those rights and
obligations as stated in employee
advisories on the NLRB’s Web site.7
Approximately sixteen comments
7 See https://www.nlrb.gov/Workplace_Rights/
employee_rights.aspx.
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suggested this simplified approach,
while only three advocated in favor of
the level of complexity in the notice,
noting particularly that the detail in the
notice comports with the Executive
Order’s requirement that employees
should be ‘‘well informed of their
rights.’’ Those comments favoring a
more streamlined notice suggested that
a simplified version of the notice based
on Section 7 or the NLRB’s Web site
advisory would be clear,
straightforward, and easily understood;
would not be stated in ‘‘legalese’’; would
be unlikely to confuse or inflame
tensions; would defer to the statute’s
drafters or to the NLRB’s expertise to
provide a statement of rights; would be
unbiased; and would decrease the
likelihood of misleading employees; and
would improve readability.
In addition to these general comments
about the proposed notice, many
comments offered suggestions for
specific revisions to individual
provisions within the four sections of
the proposed notice: the preamble, the
statement of affirmative rights, the
examples of unlawful conduct, and the
enforcement and contact information.
The following discussion presents in
succession the comments related to
individual provisions of the notice,
followed by the Department’s decisions
regarding the content of the final notice
made in response to all comments on
the content of the notice.
3. Comments Addressing the Preamble
of the Proposed Notice
The preamble of the proposed notice
stated that ‘‘[i]t is the policy of the
United States to encourage collective
bargaining and protect the exercise by
workers of full freedom of association,
self-organization, and designation of
representatives of their own choosing,
for the purpose of negotiating the terms
and conditions of their employment or
other mutual aid and protection.’’ 74 FR
at 38498. The proposed preamble was
based on Section 1 of the NLRA, 29
U.S.C. 151, and Executive Order 13496,
Section 1. The Department specifically
sought comment on this description of
policy in the proposed notice.
Five commenters support the
statement in the preamble that U.S.
policy encourages collective bargaining
and the full exercise of worker selfdetermination rights. Many supportive
comments noted that the preamble is
appropriate given that Section 1 of the
Executive Order also reiterates the
policy of encouraging collective
bargaining. Fourteen commenters
opposed the preamble on various
grounds. Many negative commenters
noted that the preamble resembles text
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28373
from Section 1 of the NLRA, ‘‘Findings
and Policies,’’ 29 U.S.C. 151, but
substantially misstates it.8 These
commenters note that U.S. policy as
stated in Section 1 of the NLRA is ‘‘to
eliminate the causes of certain
substantial obstructions to the free flow
of commerce and to mitigate and
eliminate these obstructions when they
have occurred,’’ and that one means to
achieve that policy goal is through the
encouragement of collective bargaining
and free exercise of rights. By
overlooking the statute’s true stated
purpose to eliminate obstructions to
commerce, these commenters say, the
notice’s preamble improperly elevates
the ‘‘encouragement of collective
bargaining’’ to a guiding principle rather
than simply a means to achieve the free
flow of commerce. Other commenters
noted that the policy of the U.S. is, or
should be, to remain neutral regarding
labor-management relations, and the
preamble should reflect neutrality by
emphasizing employee choice, which
includes the right to refrain from
collective bargaining or other union
activities. One commenter noted that
Section 1 of the NLRA must be read
together with Section 9 of the NLRA, 29
U.S.C. 159, which establishes
procedures for the election of a
collective bargaining representative by a
vote of a majority, thus underscoring
that U.S. policy encourages collective
bargaining only when a majority of
employees have freely chosen
workplace representation. Observing
some differences between the text of the
notice’s preamble and the statement of
purpose in the Executive Order, two
commenters noted that the preamble
does not accurately track the Executive
Order’s precatory language.9 Finally,
8 Section 1 of the NLRA states that ‘‘[i]t is
declared to be the policy of the United States to
eliminate the causes of certain substantial
obstructions to the free flow of commerce and to
mitigate and eliminate these obstructions when
they have occurred by encouraging the practice and
procedure of collective bargaining and by protecting
the exercise by workers of full freedom of
association, self-organization, and designation of
representatives of their own choosing, for the
purpose of negotiating the terms and conditions of
their employment or other mutual aid or
protection.’’ 29 U.S.C. 151.
9 Section 1 of the Executive Order, 74 FR 6107,
states:
As the [NLRA] recognizes, ‘‘encouraging the
practice and procedure of collective bargaining and
* * * protecting the exercise by workers of full
freedom of association, self organization, and
designation of representatives of their own
choosing, for the purpose of negotiating the terms
and conditions of their employment or other mutual
aid or protection’’ will ‘‘eliminate the causes of
certain substantial obstructions to the free flow of
commerce’’ and ‘‘mitigate and eliminate these
obstructions when they have occurred.’’ 29 U.S.C.
151.
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several commenters suggested that the
preamble be eliminated altogether so
that these drafting issues need not be
addressed.
4. Comments Addressing the Statement
of Affirmative Rights in the Proposed
Notice
The proposed notice contains the
following statement of affirmative rights:
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Under federal law, you have the right to:
Organize a union to negotiate with your
employer concerning your wages, hours, and
other terms and conditions of employment.
Form, join or assist a union.
Bargain collectively through a duly
selected union for a contract with your
employer setting your wages, benefits, hours,
and other working conditions.
Discuss your terms and conditions of
employment with your co-workers or a
union; join other workers in raising work
related complaints with your employer,
government agencies, or members of the
public; and seek and receive help from a
union subject to certain limitations.
Take action with one or more co-workers
to improve your working conditions,
including attending rallies on non-work time,
and leafleting on non-work time in non-work
areas.
Strike and picket, unless your union has
agreed to a no-strike clause and subject to
certain other limitations. In some
circumstances, your employer may
permanently replace strikers.
Choose not to do any of these activities,
including joining or remaining a member of
a union.
Comments on the statement of
affirmative rights offered both general
guidance on the provisions overall, as
well as specific recommendations for
revising each provision individually.
Generally, two labor organizations
suggested that the statement of
affirmative rights should present only
the basic rights without any attempt to
present the limitations to those basic
rights that have developed over the
decades of decisional law. The first
labor organization argues that such
limitations are themselves subject to
further exceptions, which cannot be
included in the notice without
overwhelming and confusing
employees. This comment notes that the
limitations to the basic rights included
on the notice involve fact-dependent
scenarios that do not assist employees
in understanding their basic rights.
None of the basic rights, the comment
asserts, have ever been understood as
absolutes without any exceptions or
limitations, so the attempt to include
those in the notice is unnecessary and
confusing. One commenter from the
retail industry noted generally that the
statement of affirmative rights should
contain a disclaimer that ‘‘certain types
of speech and expression in the
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workplace are not protected.’’ As an
example, the commenter indicated that
some employers may permissibly
prohibit third-party solicitations or
leafleting, or wearing of any insignia, in
a retail setting. The final general
comment regarding the statement of
affirmative rights suggested that the use
of the second-person pronouns ‘‘you’’
and ‘‘your’’ is overly inclusive because
not all casual readers of the poster are
covered by the statement of rights. This
comment suggests that the notice must
make it clear that the enumerated rights
apply only to covered employees, as the
Department has done with the notice
required by the Family and Medical
Leave Act, 29 CFR part 825 Appendix
C. This comment notes that a statement
regarding eligibility would eliminate
confusion for employees who are not
covered by the NLRA but may read the
notice.
Many comments about the notice’s
statement of affirmative rights were
directed at whether each individual
provision, e.g., the right to bargain
collectively or the right to discuss union
issues with coworkers, constitutes an
informative, accurate, and/or complete
statement of the law. Some general
conclusions emerge from a review of the
comments on each provision, which is
set out in more detail below. First, labor
organizations tended to favor statements
of rights that were short and without
qualifications or exceptions, and
disfavored the ‘‘subject to certain
exceptions’’ limitations added to some
of the provisions. Groups representing
employers, on the other hand, argued in
favor of adding exceptions and
limitations to the notice, sometimes to
the extent that the notice would lose the
quality of a poster and would become
instead a more comprehensive manual.
a. The Right To Organize and the Right
To Form, Join and Assist a Union
There were no comments, positive or
negative, specifically about the text of
the notice referencing employees’ rights
to organize a union or form, join or
assist a union.
b. The Right To Bargain Collectively
Two comments suggested that the
statement that employees have the right
to bargain collectively with their
employers through a duly selected
union over wages and other terms and
conditions of employment is misleading
and vague. The first comment argues
that the statement is misleading because
it fails to acknowledge that an employer
does not have an obligation under the
NLRA to consent to the establishment of
a collective bargaining agreement, but
instead only has the statutory duty to
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‘‘meet at reasonable times and confer in
good faith with respect to wages, hours,
and other terms and conditions of
employment.’’ 29 U.S.C. 158(d).
Moreover, the failure to reach an
agreement is not per se unlawful, and
the finding of an unfair labor practice
instead depends on whether the parties
engaged in good faith bargaining. This
commenter suggests that the notice
should instead note that the NLRA
requires the parties to bargain in good
faith but does not compel agreement or
the making of concessions, and that, in
some instances, a bargaining impasse
will result, permitting the parties to
exercise their economic weapons, such
as strikes or lockouts. A few other
commenters similarly suggested that the
notice should include a statement that
both employers and unions have an
obligation to bargain in good faith.
The second comment submitted about
this particular provision argues that the
term ‘‘duly selected’’ union is so vague
that it permits misunderstanding. For
instance, the comment suggests, the
phrase permits the reader to erroneously
conclude that an employer is obligated
to bargain with a union supported by
the majority of employees signing union
authorization cards but not certified by
the NLRB following a governmentsupervised secret ballot election.
Alternatively, the comment submits that
the phrase permits readers to
erroneously believe that an employer
must bargain with a minority union. To
remedy the misstatements in this and
other sections of the notice, the
comment suggests that the Department
rely on the text of the NLRB’s very brief
brochure entitled, Protecting Workplace
Democracy.10
c. Discuss With Coworkers, Join With
Other Coworkers
Both labor organizations and
management groups suggested changes
to the third provision in this section of
the notice. One labor organization
suggested significant streamlining of
this provision so that it references only
employees’ ‘‘communication’’ rights, and
recommends the inclusion of the other
‘‘action’’ rights (‘‘join other workers,’’
etc.) in the following provision. This
comment advised that separation of
communication from action would
clarify each provision. Thus, the
comment suggests that this provision
should read simply: ‘‘Discuss your terms
and conditions of employment or union
organizing with your coworkers or with
a union.’’ A second labor organization
10 The brochure can be accessed at https://
www.nlrb.gov/nlrb/shared_files/brochures/
OutreachBrochure_Rev_10-30-07.pdf.
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agreed that communication and action
rights should be separated, but adds that
this provision should emphasize
employees’ rights to communicate with
their coworkers at their place of work
about union issues. While this comment
suggests that this provision reference
‘‘employee’s rights of workplace access/
communication,’’ it makes no specific
proposal for revision of the text.
Comments from the groups
representing employer interests
generally suggest one of two
approaches—either that the provisions
should be stricken entirely because the
law in this area is too complex to
summarize or that the general statement
in the provision is inaccurate because it
fails to include limitations and
qualifications on an employee’s right to
discuss union issues with coworkers.
One law firm representing employers
suggests that the provision be stricken
entirely, because the notice cannot
possibly accurately summarize Board
law on this point, which is constantly
evolving. Four other commenters assert
that the following complexities or
subtleties are missed in the overly
succinct statement about
communication rights: The statement
fails to notify employees that employers
can lawfully prohibit certain
communication, such as a no-talk rule
about a drug investigation or
disparagement of employer’s product or
service; the statement fails to include
the Board’s recently articulated rules
governing employee use of and access to
employer e-mail for union talk,11 omits
references to the fact that an employee
does not have an absolute right to speak
to a union organizer on an employers’
property, does not discuss the meaning
of ‘‘mutual aid,’’ fails to discuss an
employees’ duty not to disparage
employers’ products or services, and
does not reference the limitations on socalled Weingarten rights involving an
employee’s right to have a union
representative present in a disciplinary
meeting; and the provision does not
clarify that concerted activity must be
both ‘‘concerted’’ and ‘‘for the mutual aid
and protection’’ of employees, nor does
it reflect that not all action taken
together with coworkers is protected, for
example, a sit down strike; and the
provision does not explain that certain
expressions or conduct, for instance,
profanity directed at the employer, may
not be protected (Jackson Lewis). As
proposed revisions to this provision,
one comment suggests that provisions
should include the general ‘‘subject to
certain limitations’’ language; another
suggests sole reliance on the NLRB’s
11 See
The Register Guard, 351NLRB 1110 (2007).
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brochure, Protecting Workplace
Democracy, See supra n. 12; and the
remaining comments suggest the
inclusion of the level of detail that
would effectively turn the notice into a
multi-page legal reference.
d. Attending Rallies
All four comments about the right to
attend rallies suggest that this provision
should be eliminated. One comment
suggests that the term ‘‘rally’’ has no
legal history or meaning under the
NLRA, and that the reference is
misleading because it erroneously
indicates that there might be some legal
protection for a rally on company
property on non-work time. Other
comments similarly suggest that the
provision is flawed because it does not
distinguish between types of protected
and unprotected rallies and is
confusing. In addition to deleting the
reference to rallies, one labor
organization’s proposed revision
suggests deleting the reference to
leafleting, discussed further below, and
establishing this provision as the
‘‘action’’ provision in counterpoint to the
‘‘communication’’ provision above.
Thus, this comment suggests the
following revision: ‘‘Take action with
one or more of your co-workers to
improve your working conditions by,
among other means, raising workrelated complaints directly with your
employer or with a government agency,
and seeking help from a union.’’
e. Leafleting
Four of the five comments about the
inclusion of the right to leaflet on nonwork time in non-work areas level
criticisms similar to criticisms of other
provisions—that the provision is too
general and does not distinguish
between types of leafleting conduct that
are protected and those that are
unprotected. For instance, the
comments indicate that the provision
fails to note limitations related to the
rights of off-duty employees to handbill,
that leafleting can be prohibited in
patient care areas, and that some types
of communications, such as the
disparagement or vilification of an
employer’s reputation, are unprotected.
The fifth comment on this topic suggests
elimination of the provision because the
right to engage in literature distribution
is adequately addressed in the examples
of violations and need not be addressed
in the statement of affirmative rights.
f. Striking and Picketing
The notice’s reference to the right to
strike and picket received eight
comments, and the comments are
aligned generally as they have been with
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28375
other provisions: Labor organizations
suggest the removal of the ‘‘subject to
certain other limitations’’ language and
the suggestion that ‘‘[i]n some
circumstances, your employer may
permanently replace strikers,’’ while
comments representing employer
interests suggest the provision is flawed
because of the absence of further
limitations, exceptions, and
distinctions.
One labor organization suggests that
the right to strike and picket be
presented as are the other rights in the
notice, with a plain affirmative
statement of the right and without
describing possible limitation on the
exercise of the right in question. The
reference to the limitation on the right
in the presence of a contractual nostrike clause both overstates and
understates the possible limitations on
the right, this commenter submits,
depending, for example, on the nature
of the no-strike clause in question. A
second labor organization echoes the
criticism, and further suggests that the
introduction of the complex law
regarding an employer’s right to
permanently replace certain striking
employees adds an unnecessary and
ultimately confusing limitation, which
will lead employees to fear exercising
the right. Other labor organizations
specifically endorse this criticism.
Among the permutations missed in
the proposed formulation, other
commenters argue, are the distinctions
that may lead to a determination that
certain strike activity is unprotected,
such as whether the strike is for
recognition or bargaining, whether the
strike has a secondary purpose, whether
picketing involves a reserved-gate,
whether the strike is a sit-down or
minority strike, whether the conduct is
a slow down and not a full withholding
of work, whether the strike is partial or
intermittent, whether the strike involves
violence, and whether the strike is an
unfair labor practice strike or an
economic strike. One law firm suggests
this area of law is so complex that it
cannot be reduced to a single provision
in the notice, and thus should be
eliminated altogether.
g. Choosing To Refrain From Union
Activity
All nine comments about the right to
refrain from engaging in union activity
universally criticized its lack of
prominence, two of these comments
asserting that the provision’s
prominence was so diminished that
they did not notice the statement at all.
Some comments accused the
Department of ‘‘burying’’ the provision
in the text far below the other rights to
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engage in union activity, further
exemplifying, some say, that the
Department favors union activity.
Suggested revisions to amplify the
prominence of the provision include
stating that employees have the right to
refrain from protected, concerted
activities and/or union activities; stating
that employees’ right to refrain includes
the right to actively oppose
unionization, to not sign union
authorization cards, to request a secret
ballot election, to decertify a union
representative, to not be a member of a
union or pay dues or fees (addressed
further below); and stating that
employees have the right to be fairly
represented even if not a member of the
union. One employer suggested that if
the notice retains its current emphasis
favoring union activity and disfavoring
the freedom to refrain from such
activity, employers will be compelled to
post their own notices, which the
commenter states is not unlawful, that
emphasize and elaborate on the right to
refrain. Rather than subject employees
to two posters, the commenter suggests,
the Department should better balance
this notice.
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h. Rights Related to Union Membership
Eight commenters want the notice to
include a statement about an employee’s
rights under Communication Workers v.
Beck, 487 U.S. 735 (1988) (‘‘Beck
rights’’). Typical of these comments is a
submission suggesting that the notice
should include the right to not be a
member of a union, to not pay union
dues or fees as condition of employment
if the employee is in a so-called rightto-work state, and not to pay full union
dues as condition of employment in
non-right-to-work state. This commenter
suggests that the failure to include these
rights would make clear the Secretary’s
purpose to assist unions and union
officials that themselves enjoy no rights
under the NLRA. Another commenter
made a somewhat different point about
Beck rights, suggesting that the notice
must include the right to refrain from
being a full dues-paying member
although an employee may have to pay
representational fees; the right to refuse
to pay any dues in a right-to-work state;
and the right to withhold dues
earmarked for political, lobbying or
other non-representational activities. A
third commenter suggests that if Beck
rights are included, the Department may
find it difficult to explain ‘‘compulsory
unionism.’’
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5. The Examples of Unlawful Conduct
in the Notice
The proposed Notice contained the
following examples of unlawful
conduct:
It is illegal for your employer to:
Prohibit you from soliciting for the union
during non-work time or distributing union
literature during non-work time, in non-work
areas.
Question you about your union support or
activities.
Fire, demote, or transfer you, or reduce
your hours or change your shift, or otherwise
take adverse action against you, or threaten
to take any of these actions, because you join
or support a union, or because you engage in
other activity for mutual aid and protection,
or because you choose not to engage in any
such activity.
Threaten to close your workplace if
workers choose a union to represent them.
Promise or grant promotions, pay raises, or
other benefits to discourage or encourage
union support.
Prohibit you from wearing union hats,
buttons, t-shirts, and pins in the workplace
except under special circumstances, for
example, as where doing so might interfere
with patient care.
Spy on or videotape peaceful union
activities and gatherings or pretend to do so.
It is illegal for a union or for the 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 support the union.
As a general matter and as noted earlier,
there were many comments about the
disproportionate number of examples of
employer misconduct as compared to
the single example of union
misconduct. Thirteen comments made
this point, many relying on the number
of paragraphs devoted to illegal
employer conduct (7) and the number of
paragraphs devoted to illegal union
conduct (1). Several comments
indicated that when one compares the
employer misconduct listed in Section
8(a) of the NLRA with union
misconduct listed in Section 8(b), no
such imbalance appears in the text of
the statute. In order to comply with the
Executive Order’s directive to accurately
inform workers of their rights, several
comments indicated, additional
examples of illegal union conduct must
be included. Many suggested reliance
on the statutory text of Section 8 to
achieve the proper balance. Several
commenters provided additional
examples of union misconduct that may
be listed, including the refusal to
process a grievance because the
employee is not a union member,
requiring nonmembers to pay a fee to
receive contract benefits, videotaping
non-striking employees, disciplining
members for engaging in activity
adverse to a union-represented grievant,
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disciplining members for refusing to
engage in unprotected activity, engaging
in perfunctory or careless grievance
handling, failing to notify employees of
their Beck rights, causing or attempting
to cause an employer to discriminate
against an employee regarding union
security, requiring employees to agree to
dues checkoff instead of direct payment,
discriminatorily applying hiring hall
rules, and conditioning continued
employment on the payment of a fine.
Four commenters offered general
comments about the examples of
unlawful employer conduct. Of those,
two suggested relatively minor
revisions—one asked for more specific
examples of violations and one
suggested the inclusion of the concept
that low-level supervisors must not
engage in misconduct. A third suggested
the inclusion of examples of employer
misconduct that interferes with or
restrains an employee’s right to oppose
unionization. The fourth, from a labor
organization, suggests that the
Department should delete the specific
references to solicitation, distribution
and insignia, and instead categorically
state that ‘‘it is unlawful for employers
to interfere with any and all employee
rights, including all examples of rights
listed above.’’ This comment contends
that this would be clearer and more
accurate than the current provision,
which lists only some but not all
violations.
As with the notice’s statement of
affirmative rights, the individual
provisions in this section of the notice
each received numerous comments and
suggestions for improvement. The vast
majority of the comments about the
specific provisions are from
representatives of employers, and most
suggest that the examples are too broad
and fail to reflect the various
permutations that would convert some
conduct from prohibited to permitted.
a. No Solicitation and No Distribution
Rules
Seven commenters were critical of the
provision stating that an employer
cannot lawfully prohibit employees
from ‘‘soliciting for the union during
non-work time or distributing union
literature during non-work time, in nonwork areas.’’ Of those, two labor
organizations suggest that the references
to ‘‘non-work time’’ and ‘‘non-work
areas’’ are too abstract, ambiguous and
confusing, and suggest additions to the
text to explain the references. Thus, one
labor organization proposes that the
notice state that employers may not
‘‘prohibit you from soliciting for a union
during non-work time, such as before or
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after work or during break times; or
from distributing union literature during
such non-work time, in non-work areas,
such as parking lots or break rooms.’’ 12
The second labor organization offered
the same clarification of the reference to
non-work time, but goes further. This
comment suggested that ‘‘solicitation’’
has a narrow meaning and involves
asking someone to join the union by
signing an authorization card, which is
subject to the restrictions suggested in
the notice. The comment submits,
however, that this should be
distinguished from more general ‘‘union
talk’’—discussing the advantages and
disadvantages of unionization—which,
the comment asserts, cannot be lawfully
restricted by employers.
The remaining comments criticize the
provision for failing to note any
limitations on employees’ rights to
solicit and distribute, such as the
limited rights of off-duty employees,
and limitations in the retail and health
care establishments. One comment, in
particular, wants the notice to advise
hospital employees that they do not
enjoy a protected right to solicit in
immediate patient care areas or where
their activity might disturb patients, and
proposes including the qualification,
‘‘except that a hospital or other health
care employer may prohibit all
solicitation in immediate patient care
areas or outside those areas when
necessary to avoid disrupting health
care operations or disturbing patients.’’
Another comment suggested that the
law in this area is so complex that no
meaningful but succinct provision can
be constructed, and therefore
recommends deleting it entirely.
b. Interrogating Employees About Union
Activity
Four commenters, all representing
employer interests, suggested that the
notice’s provision indicating that it is
unlawful for an employer to question an
employee about his or her union
support or activities is too broadly
stated. Three of the four suggested that
the provision should include the
Board’s standard for analysis of
interrogation charges, i.e., whether the
questioning interferes with an
employee’s rights given the totality of
the circumstances. Two of those three
suggested the inclusion of the
circumstances that might be considered
to determine whether questioning is
unlawful, including the presence of
employer hostility to unions, the
12 This comment also suggested changing the
reference in the proposed provision from ‘‘the
union’’ to ‘‘a union’’ to avoid the suggestion that
there is a preferred union, such as an incumbent
union. This suggestion has been adopted.
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identity of the questioner, the place and
method used, and the employee’s
response. The fourth comment asserted
that the provision should be stricken
because the law in this area is too
complex to summarize.
c. Taking Adverse Action Against
Employees for Engaging in UnionRelated Activity
Four comments, all from employer
groups, disapprove of the provision
describing unlawful employer
discrimination against employees for
engaging in union activity. Two of the
four suggest that the provision is
inadequate because it does not
recognize the application of the Board’s
burden-shifting analysis in Wright Line,
Inc., 251 NLRB 1083 (1980) to
determine whether unlawful
discrimination has occurred. Another
comment suggests that the provision is
inaccurate because it does not reflect
that in states without right-to-work laws
and where a collective bargaining
agreement contains a union security
clause, some employers may be required
to terminate employees who choose not
to join the union or pay union dues or
fees. The final comment complains that
this provision is inaccurate because it
does not include or explain protection
for ‘‘concerted activity.’’
d. Threats To Close
Five comments, all from employer
groups, criticize the overgeneralization
of the provision stating that it is
unlawful to threaten to close if a union
is chosen to represent employees. Most
comments note that, as with unlawful
interrogation, a threat to close is
evaluated under a totality of
circumstances, and that an employer is
permitted to state the effects of
unionization on the company so long as
the statement is based on demonstrably
probable consequences of unionization.
Also, as with other provisions, one
commenter suggested that the provision
should be eliminated because the law in
this area is too complex to capture. A
final comment suggests that the
provision implies that a union can
guarantee job security.
e. Promising Benefits
One comment from a group
representing employer interests states
that this provision is ‘‘the only
substantive statement that the
Department has proposed in the notice
that we do not find fault with.’’ The only
two other comments state that the
provision fails to recognize that an
employer may promise or grant benefits
that are not coercive in nature.
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f. Prohibitions on Union Insignia
Two labor organizations and six
employer groups are critical of this
provision. One labor organization
criticizes both the inclusion of the
‘‘special circumstances’’ exception as
well as the reference to ‘‘patient care
areas’’ as an example of a special
circumstance. In addition to asserting
that it inaccurately states the law
because it fails to include ‘‘immediate’’
as a characterization of ‘‘patient care
areas,’’ this comment suggests that the
provision would be better stated as an
affirmative right rather than an
employer unfair labor practice. The
second labor organization suggests the
elimination of ‘‘patient care area’’ as an
example of the ‘‘special circumstances’’
exception.
The six remaining comments suggest
that the provision fails to illuminate the
conditions under which ‘‘special
circumstances’’ may exist, including in
hotels or retail establishments where the
insignia may interfere with the
employer’s public image, or when the
insignia is profane or vulgar. Another
comment indicates that the provision is
overly broad because it does not reflect
that a violation depends on the work
environment and the content of the
insignia. All either suggest that more
detail should be added to the provision
to narrow its meaning, or it should be
stricken.
g. Spying or Videotaping
Five commenters challenged the
accuracy of this provision, asserting
primarily that observation of union
activity that occurs out in the open and
videotaping for security purposes is
lawful. Aside from the common
suggestion that the provision be
stricken, no specific revisions were
suggested in the comments.
h. Union Discrimination or Adverse
Action
There were no comments specifically
addressing the one example of unlawful
union conduct.
6. The Enforcement and Contact
Information in the Notice
The proposed notice included NLRB
contact information and basic
enforcement procedures to enable
employees to find out more about their
rights under the Act and to proceed
with enforcement if necessary.
Accordingly, the required notice stated
that illegal conduct will not be
permitted, provided information
regarding the NLRB and filing a charge
with that agency, and indicated that the
Board will prosecute violators of the
Act. Furthermore, the notice indicated
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that there is a 6-month statute of
limitations applicable to making
allegations of violations and provides
NLRB contact information for use by
employees. The Department invited
suggested additions or deletions to these
procedural provisions that would
improve the content of the notice.
Three commenters offered suggestions
for this section of the notice. One
commenter provided the following text
to substitute for the paragraph in the
proposed notice that begins, ‘‘If you
believe your rights * * *’’:
If you believe your rights or the rights of
others have been violated, you should
contact the NLRB immediately. You may
inquire concerning possible violations
without your employer or anyone else being
informed of the inquiry. If the NLRB
representative with whom you speak believes
that a violation might have occurred he or
she will inform you how you may file a
charge seeking redress of the violation.
Charges may be filed by any person and need
not be filed by the employee directly affected
by the violation.
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The same commenter also suggested
that the NLRB’s telephone number
appear before its Web site information
because, the comment asserts, more
people are likely to use the telephone to
make the contact. A second commenter
suggested that the contact information
provide the important assurance that
employees may raise employment
questions or concerns with the NLRB in
confidence, which is a revision that the
first commenter’s proposed paragraph
incorporates. Finally, a third commenter
suggested that the admonition in the
notice that an employee ‘‘must contact
the NLRB within six months of the
unlawful treatment’’ if the employee
believes a violation has occurred
suggests that contacting the NLRB is
mandatory and ignores those employees
who may not want to contact the NLRB.
The commenter suggests that the
provision include the phrase, ‘‘if you
desire relief from the NLRB.’’
7. Suggestions To Incorporate Three
Additional Provisions
One comment suggested that the use
in the proposed notice of the secondperson pronouns ‘‘you’’ and ‘‘your’’ is
overly inclusive because not all casual
readers of the poster will be covered by
the NLRA. This comment suggested that
the notice should clarify that the
specified rights apply only to covered
employees in order to eliminate
confusion for employees who are not
covered by the NLRA but may read the
Notice.
Four commenters suggested that the
Notice include a provision referencing
the NLRA’s obligation on employers and
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labor organizations to bargain in good
faith. One of these comments requested
the inclusion as an express limitation on
the provision that employees have the
right to bargain collectively, in order to
clarify that the employer’s obligation
was only to bargain in good faith and
not necessarily to reach an agreement.
One commenter from the retail
industry noted generally that the
statement of affirmative rights should
contain a qualification that ‘‘certain
types of speech and expression in the
workplace are not protected.’’ As an
example, the commenter indicated that
some employers may permissibly
prohibit third-party solicitations or
leafleting, or wearing of any insignia, in
a retail setting. Although this comment
suggests a statement indicating
limitations on certain employee speech
rights, the Department has considered
whether such a statement may be
appropriate more broadly for
application to all the rights and
obligations listed in the notice,
particularly in light of the many
comments criticizing the proposed
notice because its provisions do not
indicate that the rights and obligations
are subject to exceptions and
limitations.
8. Revisions to the Notice Based on the
Comments
After fully considering these
comments, the Department has decided
to revise the employee notice that will
be included in the final rule (‘‘final
notice’’) as follows.
a. The Introduction to the Final Notice
The Department has substantially
revised the preamble, or introduction, to
the final notice to achieve several goals.
First, the Department agrees with those
comments suggesting that the preamble
included in the NPRM notice contained
content that did not promote employees’
awareness of their specific rights under
the NLRA, and that such a prominent
place on the notice merited text that
better served that goal. Second, the
Department has included in this
premier paragraph the concept that the
NLRA prohibits both employer and
union misconduct. Third, the
Department agrees with comments
suggesting that the final notice should
contain a provision indicating which
employers and employees are covered
by the NLRA, and that coverage
provision has been added with an
asterisk in the new introduction. Fourth,
in response to the many comments
indicating that the NPRM notice
included only broad generalities and
did not include exceptions or
limitations to the general rights listed in
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the notice based on particular facts or
circumstances, which, if heeded, would
convert a simple employee notice into a
lengthy legal guide, the Department has
included a cautionary note at the outset
that the stated rights are general in
nature, and the notice is not intended to
provide specific advice about their
application in all circumstances.
Finally, the Department has made
prominent the NLRB investigation and
enforcement role, and has suggested that
that agency can assist employees with
specific questions or concerns should
they arise. As a result, the final notice
contains a new introduction that better
serves these goals, as follows
The NLRA guarantees the right of
employees to organize and bargain
collectively with their employers, and to
engage in other protected concerted activity.
Employees covered by the NLRA* are
protected from certain types of employer and
union misconduct. This Notice gives you
general information about your rights, and
about the obligations of employers and
unions under the NLRA. Contact the National
Labor Relations Board, the federal agency
that investigates and resolves complaints
under the NLRA, using the contact
information supplied below if you have any
questions about specific rights that may
apply in your particular workplace.
The coverage provision, associated
with the asterisk in the introduction,
states:
The National Labor Relations Act covers
most private-sector employers. Excluded
from coverage under the NLRA are publicsector employees, agricultural and domestic
workers, independent contractors, workers
employed by a parent or spouse, employees
of air and rail carriers covered by the Railway
Labor Act, and supervisors (although
supervisors that have been discriminated
against for refusing to violate the NLRA may
be covered).
b. The Statement of Affirmative Rights
in the Final Notice
The Department concluded that no
change was necessary to three of the
seven affirmative rights listed in the
proposed notice. As previously noted,
the first two rights listed—the right to
organize a union to bargain collectively
and the right to form, join and assist a
union—attracted no specific comments,
either positive or negative, and therefore
these provisions are unmodified in the
final notice. The third right that the
Department has left unchanged—the
right to refrain from union activity,
including joining or remaining a
member of a union—received several
comments suggesting that this right was
given diminished prominence in favor
of rights that promote activity in
support of unions. This contention is
misguided. The list of rights included in
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the notice is patterned after the list of
rights in the NLRA, 29 U.S.C. 157,
which includes the right to refrain last,
after stating several other rights before
it. See, supra, n. 5. Similarly, the
NLRB’s Web site page follows the same
pattern, listing the right to refrain fifth
on a list of five specified rights. See
https://www.nlrb.gov/Workplace_Rights/
employee_rights.aspx
In addition, the notice’s examples of
unlawful employer conduct include the
concept that it is illegal for an employer
taking adverse action against an
employee ‘‘ because [the employee]
choose[s] not to engage in any such
[union-related] activity[,]’’ further
underscoring an employee’s right to
refrain. Accordingly, the Department
concludes that the notice sufficiently
addresses this right among the list of
statutory rights.
The Department has amended the
statement in the notice regarding the
right to bargain collectively. Based on
comments discussed above, this
provision was modified to substitute the
statutory phrase ‘‘representatives of
[employees’] own choosing’’ for the
phrase ‘‘duly selected union’’ to
eliminate the ambiguity of the latter.
The substituted phrase retains the intent
of the original phrase, which was to
reflect that bargaining representatives
can be elected or can be voluntarily
recognized by an employer based on a
verifiable showing that the labor
organization enjoys majority support
among employees in the bargaining
unit, but employs the words of the
statute instead. Thus, the final notice
states that employees have the right to
‘‘bargain collectively through
representatives of employees’ own
choosing for a contract with your
employer setting your wages, benefits,
hours, and other working conditions.’’
Based on comments, the next two
provisions—discuss terms and
conditions of employment and take
action—have been substantially
modified to achieve several goals. First,
the Department agrees that these two
provisions as presented in the proposed
notice could be simplified and clarified
by separating employees’
communication rights from their
conduct rights. In addition, the
Department agrees that inclusion of the
right to leaflet was duplicative of the
provision regarding employer
interference with distribution of union
literature, and so this reference has been
deleted from the final notice. Next, the
Department decided to delete the
reference to the right to attend rallies on
non-work time so as not to complicate
a list of essential and fundamental rights
under the NLRA. Finally, because the
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reference in the proposed notice to
‘‘seeking and receiving help from a
union’’ was moved to the following
provision and in an effort to retain the
concept that employees can discuss
union-related activity among
themselves, the Department added to
the employee discussion provision the
right to talk about unions and union
organizing. As a result, the two
provisions in the final notice state that
employees have the right to, ‘‘discuss
your terms and conditions of
employment or union organizing with
your co-workers or a union’’ and ‘‘take
action with one or more co-workers to
improve your working conditions by,
among other means, raising workrelated complaints directly with your
employer or with a government agency,
and seeking help from a union.’’
As noted earlier, the provision in the
proposed notice related to the rights to
strike and picket received several
comments. Labor organizations
suggested the removal of the references
to a contractual no-strike provision,
permanent replacements, and the phrase
‘‘subject to certain other limitations.’’ By
contrast, comments from employers
suggested the provision is flawed
because of the absence of the many
limitations, exceptions, and distinctions
related to these rights. By necessity, the
notice cannot contain an exhaustive list
of limitations on and exceptions to the
rights to strike and picket, as suggested
by employers. Indeed, the various
permutations of these rights
comprehensively documented by such
comments reflect that in highlighting
just a few limitations, or referring to
them ambiguously as ‘‘other
limitations,’’ the proposed notice fell
short of the goal to clearly inform
employees about their rights. However,
because exercising the right to strike, in
particular, can significantly affect the
livelihood of employees, the
Department considers it vital to reflect
in one general phrase that there are
caveats associated with it. The
Department is satisfied that the addition
of a general caveat, coupled with the
admonition in the new introduction to
contact the NLRB with specific
questions about the application of rights
in certain situations, provides sufficient
guidance to employees about the
exercise of these rights while still
staying within the constraints set by a
necessarily brief employee notice. Thus,
this provision in the final notice states
that employees have the right to ‘‘Strike
and picket, depending on the purpose or
means of the strike or the picketing.’’
As noted, the Department received
several comments suggesting that the
notice contain provisions related to
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Beck rights. The final notice will retain,
as part of the right to refrain, the
provision stating that an employee has
the right to not join or remain a member
of a union that represents the
employee’s bargaining unit. However,
further explication of Beck rights will
not be included because of space
limitations and because of the policy
choice, as expressed in Executive Order
13496, to revoke a more explicit notice
to employees of Beck rights. See Sec. 13,
E.O. 13496, 74 FR at 6110.
c. The Examples of Unlawful Conduct
in the Final Notice
The Department has decided that
three examples of unlawful employer
conduct—regarding unlawful threats to
close, promises or grants of benefits, and
spying or videotaping—need no revision
for the final notice. The comments
related to these three provisions all
shared a common theme, as discussed
above, that the provisions are
overgeneralizations that neither capture
the legal standard associated with
evaluating allegations of unlawful
conduct nor indicate factual scenarios
in which the highlighted conduct may
be lawful. After review of these
comments and the case law cited
therein, the Department concludes that
the provisions as proposed are accurate
and informative, and, as with the notice
as a whole, strike an appropriate
balance between being simultaneously
instructive and succinct.
The Department has decided to
modify the remaining four examples of
illegal employer conduct in order to
clarify them. First, the Department has
modified the provision related to
employers’ no-solicitation and nodistribution rules for the final notice.
The Department agrees with those
comments suggesting that the terms
‘‘non-work time’’ and ‘‘non-work areas,’’
while used commonly in Board law, are
not readily ascertainable, and the
addition of common examples of each
would assist employees in
understanding their rights. Therefore,
the provision was modified to clarify
the meaning of ‘‘non-work time’’ and
‘‘non-work areas.’’ The remaining
comments suggesting the inclusion of
the various circumstances in which nosolicitation and no-distribution rules
may be lawful were rejected due to
limitations imposed by a notice format.
More specifically, the Department
recognizes that under the NLRB’s
precedent, a hospital’s prohibition of
solicitation or distribution of literature
in immediate patient care areas, even
during employees’ nonworking time, is
presumptively lawful. Brockton
Hospital, 333 NLRB 1367, 1368 (2001).
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Once again, however, the limitations on
the format preclude the inclusion of
factual permutations in which a general
right may not apply or may only apply
with qualifications, and hospital
employees, as well as other employees,
can contact the NLRB with specific
questions about the lawfulness of their
employers’ rules governing solicitation
and literature distribution. Finally, the
Department acknowledges, as one
comment noted, that the NLRB
distinguishes between ‘‘solicitation’’ for
a union, which generally means
encouraging a coworker to participate in
supporting a union, and so-called
‘‘union talk,’’ which generally refers to
discussions about the advantages and
disadvantages of unionization. W.W.
Grainger, 229 NLRB 161, 166 (1977),
enforced, 582 F.2d 1118, (7th Cir.1978);
Jensen Enterprises, Inc., 339 NLRB 877,
878 (2003). However, this provision is
intended to expressly address the
former; the right to engage in ‘‘union
talk’’ is now encompassed more
specifically by the revision, as noted
above, to the ‘‘discussion’’ provision in
the affirmative rights section of the final
notice. Accordingly, this provision in
the final notice indicates that it is illegal
for employers to ‘‘prohibit you from
soliciting for a union during non-work
time, such as before or after work or
during break times; or from distributing
union literature during non-work time,
in non-work areas, such as parking lots
or break rooms.’’
The comments about the next
provision regarding employers’
questions about union support or
activity correctly note that the Board’s
test for determining the legality of such
questions is whether under all the
circumstances the interrogation
reasonably tends to restrain, coerce, or
interfere with rights guaranteed
employees by the Act. Rossmore House,
269 NLRB 1176, 1177 (1984), enforced,
760 F.2d 1006 (9th Cir. 1985). Under
this totality of circumstances approach,
consideration is given to whether the
interrogated employee is an open or
active supporter of the union, the
background surrounding the
interrogation, the nature and purpose of
the information sought, the identity of
the questioner, the place and/or method
of the interrogation, and the truthfulness
of any reply by the questioned
employee. Id. The Board has said that
these factors are not to be mechanically
applied but rather are useful indicia that
serve as a starting point for assessing the
totality of the circumstances. Id. The
comments suggesting revisions of this
provision, as with many of the prior
suggestions, request inclusion of
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substantial detail, much of which is
beyond the purview of this notice.
However, the Department has
concluded that the provision would be
clarified by reference to the concepts
that unlawful questioning interferes
with employees’ Section 7 rights and
that the interference is judged under the
circumstances of the questioning. Thus,
this provision in the final notice states
that it is unlawful for employers to
‘‘question you about your union support
or activities in a manner that
discourages you from engaging in that
activity.’’
Comments about employers’ taking, or
threatening to take, adverse action
against employees because of their
union-related or other protected activity
request the inclusion of complicated
references to legal complexities, such as
the application of a burden-shifting
analysis to determine whether unlawful
discrimination has occurred, Wright
Line, Inc., 251 NLRB 1083 (1980), or the
consideration of the impact of right-towork laws. This provision is intended to
supply employees with notice of their
fundamental right to be free from
discrimination based on union activity,
and its accuracy and instructiveness
will be diminished by such complicated
references. However, the Department
agrees with one comment suggesting
that the provision can be improved with
the substitution of one word to
underscore that the protections of the
NLRA attach to activity that is concerted
in nature. Thus, this provision in the
final notice instructs employees that it
is unlawful for employers to ‘‘fire,
demote, or transfer you, or reduce your
hours or change your shift, or otherwise
take adverse action against you, or
threaten to take any of these actions,
because you join or support a union, or
because you engage in concerted
activity for mutual aid and protection,
or because you choose not to engage in
any such activity.’’
The final provision regarding
unlawful employer conduct that the
Department decided to revise is related
to union insignia in the workplace.
Generally, an employer may not
prohibit the wearing of union insignia,
absent special circumstances. Airport
2000 Concessions, LLC, 346 NLRB 958,
960 (2006). For reasons of format, the
notice cannot accommodate those
comments suggesting that this provision
specify those cases in which the Board
has found ‘‘special circumstances’’ to
exist, such as where insignia might
interfere with production or safety;
where it conveys a message that is
obscene or disparages a company’s
product or service; where it interferes
with an employer’s attempts to have its
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employees project a specific image to
customers; where it hinders production;
where it causes disciplinary problems in
the plant; or where it would have any
other consequences that would
constitute special circumstances under
settled precedent. Escanaba Paper Co.,
314 NLRB 732 (1994), enforced, 73 F.3d
74 (6th Cir. 1996). In addition, as noted
earlier, an employer’s prohibition on
wearing union insignia in immediate
patient care areas is presumptively
valid. London Memorial Hospital, 238
NLRB 704, 708 (1978). This lengthy list
supplied by some comments highlights
that the addition of only one example of
‘‘special circumstances’’—the patient
care example—may mislead or confuse
employees. Thus, the general caveat that
special circumstances may defeat the
application of the general rule, coupled
with the advice to employees to contact
the NLRB with specific questions about
particular issues, achieves the balance
required for an employee notice of
rights about union insignia in the
workplace.
The proposed notice had only one
very broad description of union conduct
that is unlawful under the NLRA.
Although this provision generally
encompassed a wide range of illegal
union activity, it was criticized in
comments for lacking specificity, and
thus resulting in imbalance as compared
to the examples of unlawful employer
activity.13 After reviewing the
comments, the Department has revised
the notice in order to more thoroughly
reflect the range of unlawful union
conduct.
Thus, the final notice contains the
following five examples of unlawful
union conduct:
• Threaten you that you will lose
your job unless you support the union.
• Refuse to process a grievance
because you have criticized union
officials or because you are not a
member of the union.
• Use or maintain discriminatory
standards or procedures in making job
referrals from a hiring hall.
• Cause or attempt to cause an
employer to discriminate against you
because of your union-related activity.
13 The Department notes that the NLRB reported
that in fiscal year 2008, 22,497 unfair labor practice
charges were filed. Seventy-Third Annual Report of
the National Labor Relations Board for the Fiscal
Year Ended September 30, 2008, at 5, available at
https://www.nlrb.gov/nlrb/shared_files/brochures/
annual%20reports/NLRB2008.pdf. Of these, 16,179
charges were against employers, and 6,210 charges
were filed against unions. Id. Thirty-nine percent of
all charges were found to have merit, and 1108
complaints were issued. Id. at 7. Of complaints
issued, 86 percent were against employers and 14
percent were against unions. Id. at 8.
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• Take other adverse action against
you based on whether you have joined
or support the union.
d. The Inclusion of the Duty to Bargain
in Good Faith
The Department agrees with those
comments that suggested that
employees should be aware that their
employer and their bargaining
representative have a statutory duty to
bargain in good faith. Thus, the final
notice states that ‘‘if you and your
coworkers select a union to act as your
collective bargaining representative,
your employer and the union are
required to bargain in good faith in a
genuine effort to reach a written,
binding agreement setting your terms
and conditions of employment. The
union is required to fairly represent you
in bargaining and enforcing the
agreement.’’ The latter sentence
regarding the union’s duty of fair
representation is somewhat duplicative
of provisions above exemplifying union
misconduct, but the Department
concluded that it was important to note
a union’s duty to fairly represent all
bargaining unit members specifically in
connection with its obligation to bargain
in good faith.
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e. The Contact Information
The proposed notice contained two
paragraphs about the NLRB, its
enforcement procedures, and its contact
information, which have been
streamlined into one paragraph for the
final notice. In doing so, and after
reviewing the comments, the
Department has substituted the word
‘‘should’’ for the word ‘‘must’’ to indicate
that it is not mandatory that the NLRB
be notified of unlawful conduct;
retained the admonition to employees to
act promptly and within the six month
statute of limitations; added a sentence
that underscores the confidentiality
associated with contacting the NLRB;
added a sentence that indicates that
anyone can file a charge with the NLRB;
and retained the sentence relating to
possible reinstatement, back pay and
cease-and-desist remedies. The final
notice, as modified on the basis of
comments discussed above, is set forth
in Appendix A to Subpart A of this rule.
D. Incorporation of the Contract Clause
in Government Contracts and
Subcontracts
As proposed in § 471.2(a), all
nonexempt prime contractors and
subcontractors are required to include
the employee notice contract clause in
each of their nonexempt contracts and
subcontracts. In order to ensure that
contractors are made aware of their
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contractual obligation to post the
required notice, proposed § 471.2(b)
provided that the employee notice
contract clause must be set out verbatim
in a contract, subcontract or purchase
order, rather than being incorporated by
reference in those documents. In the
NPRM, the Department requested
comment regarding the utility of setting
out the employee notice clause
verbatim, as opposed to incorporation of
the clause by reference.
The Department received ten
comments about this requirement, only
one of which agreed with the
Department that full inclusion of the
employee notice clause in every
contract and subcontract will ensure
that contractors and subcontractors fully
understand their obligations under the
rule. The other nine comments
suggested that the rule should permit
the inclusion of the employee notice
clause by reference for various reasons,
including that full inclusion provides
little utility, and is burdensome and
unreasonable because many contractors
would have to substantially revise their
procurement and contract documents,
many of which are purposefully brief,
standard-form documents, in order to
comply. One commenter noted that
because the content of the notice itself
may be subject to updating, the contract
clause will also require modification,
and contractors who are unaware of the
necessary update may inadvertently rely
on outdated contract documents or
provisions. Another commenter
suggested that the notice in the contract
clause is very long and contains
language that will confuse readers of
contracts and purchase orders. Finally,
several commenters also noted that the
prohibition on incorporation by
reference is inconsistent with various
laws—some of which are implemented
by the Department—that permit contract
clause incorporation by reference,
including Executive Order 11246,
Vietnam Era Veterans Readjustment
Assistance Act, and Section 503 of the
Rehabilitation Act of 1973, among
others.
Following full consideration of these
comments, and in order to ease
contractor compliance with the
requirements of this rule, the
Department has decided to permit
inclusion of the employee notice clause
by reference. Therefore, in place of
proposed § 471.2(b) that disallowed
incorporation by reference, the final rule
contains a new § 471.2(b), that permits
incorporation by reference. The
Department has coordinated with the
FAR Council to implement this
provision.
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28381
E. Application of the Rule to Contractors
and Subcontractors; Exceptions and
Exemptions; Other Limitations
As proposed in § 471.2(a), all
nonexempt prime contractors and
subcontractors are required to include
the employee notice contract clause in
each of their nonexempt subcontracts so
that the obligation to notify employees
of their rights flows to subcontractors of
a government contract as well. The
Executive Order expressly excepts from
its application two types of Government
contracts: Collective bargaining
agreements as defined in 5 U.S.C.
7103(a)(8) and contracts involving
purchases below the simplified
acquisition threshold as defined in the
Office of Federal Procurement Policy
Act, 41 U.S.C. 403. Sec. 2, 74 FR at
6107. The simplified acquisition
threshold is currently set at $100,000.
41 U.S.C. 403. Section 471.3(a)(1) and
(2) of the proposed rule implemented
these exceptions. 74 FR at 38498. In
addition, the Executive Order’s
provision regarding its effective date
excepts contracts resulting from
solicitations issued prior to the effective
date of the final rule promulgated
pursuant to this rulemaking. Sec. 16, 74
FR 6111. Proposed § 471.3(a)(3)
implemented this provision of the
Executive Order. 74 FR at 38498.
The NPRM concluded that the
obligations of the rule apply to
government contractors and all
subcontractors of the government
contract, regardless of whether the
subcontractor is a first-tier subcontractor
or a more remote subcontractor. This
conclusion was based on the
Department’s construction of the
interrelated terms of the Executive
Order. The NPRM noted that paragraph
4 of the contract clause in the Executive
Order requires the contractor to
incorporate only paragraphs 1 through 3
of the clause in its subcontracts. 74 FR
at 38490. A narrow reading of the
operation of this provision outside the
full context of the Executive Order, the
NPRM noted, might suggest that the
obligation to include the contract clause
is limited to contracts between the
government agency and the prime
contractor. Id. Under this reading,
subcontractors would be required only
to post the notice of employee rights,
and their subcontractors (sometimes
called second-tier contractors) would
have no responsibilities under the
Executive Order. However, the NPRM
reasoned that provisions of the
Executive Order establishing
exemptions and exceptions for the
application of the Executive Order’s
obligations do not expressly specify that
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its obligations do not flow past the firsttier subcontractor, a significant
limitation that would normally be made
explicit in the text of the Executive
Order rather than by operation of the
contract clause’s incorporation
provision. In addition, the NPRM noted
that in the Department’s past regulatory
treatment of a similar issue, it had
adapted through regulation the
application of an executive order’s
contract inclusion provisions so that the
obligation to abide by the mandates of
the orders flows to subcontractors below
the first tier. See, e.g., 69 FR 16378, Mar.
29, 2004 (final rule implementing E.O.
13201) (based on identical contract
incorporation provision, ‘‘the intent of
the Order was clearly that the clause be
passed to subcontractors below the first
tier’’); 57 FR 49591, Nov. 2, 1992 (final
rule implementing E.O. 12800) (‘‘It is
clear, however, that the intent of
Executive Order 12800 was that the
clause flow down below the first-tier
level’’). The NPRM concluded that the
Department’s experience with
regulatory implementation of prior
executive orders establishing that the
obligations of those orders flow past the
first-tier subcontractor supported the
application of this rule to subcontractors
below the first tier, and best achieves
the purposes of this Executive Order. 74
FR at 38491. Accordingly, the
Department concluded that in order to
fully implement the intent of Executive
Order 13496, proposed § 471.2(a) was
adapted to require the inclusion of
paragraphs 1 through 4, rather than 1
through 3, of the contract clause. The
Department specifically sought
comments on this proposal.
The NPRM also concluded that
although the Executive Order clearly
did not apply to government contracts
for purchases below the simplified
acquisition threshold, the Executive
Order did not provide for the same
exception for subcontracts involving
purchases below the simplified
acquisition threshold. However, the
Department noted that inclusion of the
express limitation in the definition of
‘‘subcontract’’ that ‘‘subcontracts’’ consist
only of those instruments that are
‘‘necessary to the performance of the
government contract,’’ NPRM § 471.1(r),
was intended as a control on the
otherwise universal application of the
rule to subcontracts. 74 FR at 38491,
citing OFCCP v. Monongahela R.R., 85–
OFC–2, 1986 WL 802025
(Recommended Decision and Order,
April 2, 1986), aff’d, (Deputy Under
Secretary’s Final Decision and Order,
Mar. 11, 1987) (railroad transporting
coal to power generation plant of energy
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company contracting with GSA was
subcontractor because delivery of coal is
necessary for the power company to
perform under its contract with GSA).
Thus, the NPRM noted that although the
rule may result in coverage of
subcontracts 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 Department invited
comment on whether a further
limitation on the application of the rule
to subcontracts is necessary, and if it is,
whether such a limitation is best
accomplished through the application of
this or another standard, for instance, a
threshold related to the monetary value
of the subcontract.
The Department received numerous
comments about the application of the
rule to subcontractors below the first
tier, the non-application of the
simplified acquisition threshold to
subcontractors, and the proposed
‘‘necessary to the performance’’
limitation on the application of the rule
to subcontractors. Four comments
supported the application of the rule to
subcontractors below the first tier.
These commenters noted various
reasons for their support, including that
application of the rule to more remote
subcontractors would prevent
circumvention of the rule through
subcontracting, would further the
Executive Order’s goal of preventing
labor unrest, and was similar to the
Department’s implementation of prior
executive orders. One commenter noted
that it is not unusual for a vast majority
of laborers on a jobsite to be employed
by subcontractors of the prime
contractor or its subcontractors, and that
the rule should apply equally to such
jobsites regardless of the remoteness of
the subcontract to the prime contract.
Three commenters argued that the
Department should not apply the rule to
subcontractors below the first tier, and
one commenter requested clarification
on the application of the rule below the
first tier. Those comments opposing
lower-tier application suggested that the
rule has gone too far in its application,
and that coverage of the rule should be
limited to first-tier subcontractors. One
commenter in particular disagreed with
the Department’s modification of the
contract inclusion provision discussed
above, contending that the Department’s
reliance on its prior regulatory
implementation of Executive Orders
13201 and 12800 was inapt. The
commenter noted that each of those
executive orders contained a provision,
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not present in Executive Order 13496,
stating that the Secretary may exempt
‘‘subcontracts below an appropriate tier
set by the Secretary,’’ thus indicating
that the application of the rule to any
tier of subcontractors was contemplated
by the executive order but subject to
administrative limitation. See Sec.
3(b)(v), E.O. 13201, 66 FR 11221, Feb.
22, 2001 (revoked by Executive Order
13496); Sec. 3(b)(v), E.O. 12800, 57 FR
12985, April 13, 1992 (revoked by
Executive Order 12836). By contrast, the
commenter notes, Executive Order
13496 contains no such language
permitting the Secretary to limit the
application of the rule, thus indicating
that flow-down below the first tier is not
contemplated by the plain language of
the Executive Order.
The Department received eleven
comments regarding the proposal in the
NPRM to apply the simplified
acquisition threshold only to
government contracts and not to
subcontracts, and all universally stated
that the simplified acquisition threshold
should apply to subcontracts as well.
Most comments noted the incongruity
associated with the application of the
threshold to prime contracts but not to
subcontracts, asserting that it makes
little sense to except prime contracts
below a set monetary limit but then
apply the rule to reach subcontracts
below that same limit. Most negative
comments similarly noted that the
failure to apply the simplified
acquisition threshold to subcontracts
will result in coverage of very small
contracts and contractors, which, they
argue, the Executive Order clearly
intended to avoid by requiring the
application of the dollar limit to prime
contracts. Coverage of small
subcontractors is burdensome to those
contractors, many commenters asserted,
and will result in the application of the
rule to very small procurement contracts
and will discourage some contractors
from bidding for work associated with a
government contract. Some commenters
said they failed to see the policy reason
supporting the non-application of the
threshold to subcontracts. One
commenter contended that the
application of the rule to small
subcontractors violates a Congressional
mandate in the Small Business Act, 15
U.S.C. 637(d), that requires Federal
agencies to give preference to small and
disadvantaged businesses. Another
comment noted the apparent
inconsistency in proposed
§ 471.3(a)(2)(ii), which applies the
simplified acquisition threshold to
‘‘contracts and subcontracts’’ for an
indefinite quantity, but not to contracts
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for a defined quantity. As noted above
in the discussion of comments about the
rule’s definition section, because the
definitions of ‘‘contract’’ and
‘‘contractor’’ include ‘‘subcontract’’ and
‘‘subcontractor,’’ commenters argued
that the rule by its terms does in fact
apply the simplified acquisition
threshold to limit its application to
subcontracts. Finally, one commenter
suggested that if the Department is
concerned that application of the
simplified acquisition threshold to
subcontractors will unnecessarily limit
the reach of the rule to small
contractors, it should nevertheless
include some other limitation on the
application of the rule to prevent its
application to very small contractors.
The Department’s proposed limitation
on the application of the rule to only
those subcontracts that are ‘‘necessary to
the performance of the prime contract’’
received little support from
commenters. By contrast, five
commenters submitted that the term
was so general and vague as to be
completely ineffective as a significant
limitation on the rule’s application. Two
commenters suggested that all
subcontracts in some manner, no matter
how attenuated, are necessary to the
performance of the prime contract, or
the subcontract would not have been
executed in the first place. In this vein,
one commenter noted that the
Department’s use of the phrase suggests
pejoratively that some subcontracts are
unnecessary to the performance of the
government contract. Other commenters
queried how a subcontractor at the time
of the execution of the subcontract is to
know whether the subcontract is
necessary to the performance of the
government contract, particularly when
such a determination by the Department
will only be made during subsequent
enforcement proceedings that may have
adverse consequences for the
subcontractor. One commenter noted
that when a subcontractor or vendor
receives a purchase order from a firm,
the subcontractor or vendor may have
no way of knowing of the purchase
order’s connection to a government
contract without conducting an
investigation into the purchaser’s
connections, which may be considered
intrusive. One commenter stated that
the Department’s reliance on OFCCP v.
Monongahela R.R., 85–OFC–2, 1986 WL
802025 (Recommended Decision and
Order, April 2, 1986), aff’d, (Deputy
Under Secretary’s Final Decision and
Order, Mar. 11, 1987) to support
explication of the phrase raised
concerns because the rule should not
apply to subcontractors that only supply
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material to a job site but do not install
it.
Four commenters suggested
alternative standards that would serve
to limit the application of the rule to
subcontractors. Suggested limitations
included establishing a value for de
minimis subcontracts to which the rule
would not apply, which was phrased by
another commenter as establishing an
exemption for small contractors based
on the monetary value of the
subcontract; creating an exception for
application of the rule to firms with a
small, defined number of employees;
and application of the rule to only those
contractors and subcontractors that
provide services, as opposed to
supplies, to the government. One
commenter noted that the rule should
include a ‘‘minimum size threshold
[below] which a contractor is exempt,’’
but the commenter did not indicate
whether the limit should be connected
to the size of the subcontract’s value, the
size of the subcontractor’s workforce, or
the size of the subcontractor’s revenue.
This same commenter submitted that
the rule must also provide some means
by which a subcontractor will be
notified that the subcontract is covered
by the rule and some clarification on
compliance in those situations in which
a subcontractor does not have control
over the site where the prime contract
is being performed.
After carefully considering all the
comments related to the application of
the rule to subcontractors, the
Department has made the following
decisions. The Department will retain
the provision, as proposed in
enumerated paragraph 4 of the contract
clause set out in Appendix A
(‘‘paragraph 4’’), requiring government
contractors to incorporate paragraphs (1)
through (4) in every subcontract. As
noted in the proposal, the contract
inclusion provision in paragraph 4
cannot be read in isolation, but rather it
must be read in conjunction with other
operative words and phrases of
paragraph 4 and in the Executive Order
as a whole in order to fully implement
its purpose. Many aspects of the
Executive Order demonstrate the
President’s intent to apply the
obligations of the Order not just to
government contracts, but also to
subcontracts of the government contract
at all levels. As the proposal noted, no
other provision in the Executive Order,
save for the mechanical operation of
paragraph 4, suggests that the intent of
the Executive Order was to except
subcontracts below the first tier. The
Department concludes that silence in
failing to include lower tier
subcontractors in the Executive Order’s
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28383
exemptions and exceptions provisions
indicates that they were meant to be
covered. In addition, the Department
broadly interprets paragraph 4’s
directive that the contractor ‘‘will
include the provisions of paragraphs 1
through 3 above in every subcontract
entered into in connection with this
contract * * * so that such provisions
will be binding upon each
subcontractor[.]’’ The Department reads
the terms ‘‘will include’’ in ‘‘every
subcontract’’ to mean that the initial
contractor will ensure, to the extent
possible, that the posting obligation will
be included in all subcontracts in
connection with the prime contract,
whether at the first tier level or below.
Read in this fashion, this directive can
be implemented only by requiring, as
does the final rule, that every
subcontract pass through such an
obligation to any lower tier
subcontractors. In addition, the
Department interprets broadly the
reference to ‘‘contractor’’ in paragraph 4
(‘‘The contractor will include
paragraphs (1) through (3) above * * *’’)
to encompass a ‘‘subcontractor,’’ so that
the provision is read to require each
subcontractor on a government contract,
regardless of tier, to include posting
requirements in any of its subcontracts.
Other provisions in the Executive
Order outside paragraph 4 evince an
intent to apply the rule to subcontracts
below the first tier. References to
‘‘contractors’’ (Sec. 1), ‘‘any Government
contractor, subcontractor, or vendor’’
(Sec. 5), and ‘‘a Government contractor
or subcontractor’’ (Sec. 5) are
unqualified or modified, and the
Department interprets the references to
mean subcontractors at all tiers. This
broad interpretation is most fitting in
application to the statement of policy in
Section 1 of the Executive Order, which
provides that ‘‘[w]hen the Federal
government contracts for goods or
services, it has a proprietary interest in
ensuring that those contracts will be
performed by contractors whose work
will not be interrupted by labor unrest’’
and ‘‘relying on contractors whose
employees are informed of such rights
under Federal labor laws facilitates the
efficient and economical completion of
the Federal Government’s contracts.’’ 74
FR 6107. Given the frequency with
which the performance of government
contracts are subcontracted, the policy
of the Executive Order is best
understood as reaching contracts below
the first tier. This is particularly true
when the government contract is, for
instance, a large, multi-million dollar
transaction, and its performance is
subcontracted in multiple tiers. The
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economy and efficiency that is sought to
be promoted by the Executive Order
would not be realized if subcontractors
below the first tier of a large government
contract were not subject to this rule,
and a labor dispute at a lower tier
subcontractor interfered with the
delivery of the large prime contract. In
such a case, ‘‘the efficient and
economical completion of the Federal
Government’s contracts’’ would not be
realized. 74 FR 6107. As a result, the
Department interprets the Executive
Order as a whole as seeking to avoid just
such a scenario.
In addition, as noted in the proposal,
the interpretation of Executive Order
13496 has been informed by the
interpretation of Executive Orders
12800 and 13201. In both those cases,
the Department similarly interpreted the
text of the orders, which had contract
incorporation provisions that were
virtually identical to paragraph 4 of
Executive Order 13496, to provide for
application of the obligations to
subcontractors below the first tier. See
69 FR 16378, Mar. 29, 2004; 57 FR
49591, Nov. 2, 1992. The Department
has concluded that Executive Order
13496 was drafted with awareness of
these earlier Executive Orders, and that
it was intended to be implemented in
the same manner as its predecessors.
One commenter emphasized that the
regulatory implementation of Executive
Orders 12800 and 13201 was
supportable because those orders
granted authority to the Secretary to
exempt subcontracts below an
appropriate tier, suggesting application
of the obligations of those orders to
lower contract tiers. See Section 3(b)(v)
of Executive Orders 12800 and 13201,
57 FR 12986, Apr. 13, 1991; 66 FR
11222, Jan. 17, 2001 (‘‘subcontracts
below an appropriate tier set by the
Secretary’’ may be exempted). In this
case, the comment notes, Executive
Order 13496 does not grant the
Secretary similar regulatory authority to
exempt contracts below an appropriate
tier, thus suggesting that the Executive
Order does not contemplate reaching
contracts other than first tier
subcontracts. However, the Department
views the absence of such regulatory
authority to exempt contracts below a
certain tier as supporting its
interpretation that the Executive Order
intends that its obligations are to apply
to all subcontracts of the prime contract
regardless of tier. The President omitted
from Executive Order 13496 any
administrative authority to exempt
lower tier subcontractors because he did
not intend to permit any tier-based
exemption, and not because it was
contemplated that lower tier
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subcontractors would, at some point, be
outside the reach of the purposes of the
Executive Order. Thus, the Department
interprets silence as to tier coverage
within the text of the Executive Order
as reflecting an intent for all tiers to be
covered.
The Department’s grant of authority to
promulgate regulations under the
Executive Order is broad, and permits
the Department to implement the Order
in a manner that is ‘‘necessary and
appropriate to achieve the purposes’’ of
the Order. Sec. 3(a), 74 FR at 6108. In
addition, the Secretary has the express
authority under the Executive Order to
‘‘make modification of the contractual
provisions * * * necessary to achieve
purposes of this order[.]’’ Sec. 3(c), 74
FR at 6108. Accordingly, in order to
implement the purpose, intent, and
express provisions of the Executive
Order, which the Department concludes
applies to nonexempt government
contracts and all subcontracts of the
government contract, the Department
will retain paragraph 4 of the contract
clause as proposed.
The Department will also retain the
interpretation set out in the proposal
that the exception for contracts below
the simplified acquisition threshold
applies only to the prime contract. The
Department views as plain and
unambiguous the text of the Executive
Order on this point. Section 2 of the
Order states that ‘‘all Government
contracting departments and agencies
shall, to the extent consistent with law,
include the [contract clause] in every
Government contract, other than * * *
purchases under the simplified
acquisition threshold. * * *’’ 74 FR
6107 (emphasis added). Based on this
provision, the exception for contracts
below the simplified acquisition
threshold applies only to the original
government contract, and has no
application to subsequent subcontracts.
In response to comments, the
Department does not consider the
result—excepting prime contracts below
the simplified acquisition threshold and
covering subcontracts below that
threshold—to be incongruous. The
Department concludes that the
Executive Order embodies a sound
policy choice that when the Federal
government enters into a large prime
contract (defined as exceeding the
simplified acquisition threshold), all
employees working under the umbrella
of that prime contract will be notified of
their rights under federal labor law,
including employees of lower tier
subcontractors. Indeed, it would be
incongruous to seek economical and
efficiency improvements in government
procurement through a well-informed
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contractor workforce and yet not apply
those standards to all subcontracts
flowing from the covered prime contract
regardless of their size. The Department
notes that the application of the rule to
subcontracts below the simplified
acquisition threshold presents no
greater notice-posting obligation than
many of those employers already have
with other notice-posting obligations
under various labor and employment
laws. For instance, the notice-posting
obligation of USERRA, the Uniformed
Services Employment and
Reemployment Rights Act, requires all
employers regardless of size to post
notices to their employees about their
USERRA rights. 38 U.S.C. 4334; 20 CFR
1002 (implementing regulations). The
reach of this rule is not incompatible or
inconsistent with the reach of other
labor and employment notice-posting
obligations.
After full consideration of comments
about the application of the rule to de
minimis value subcontracts, the
Department has concluded that it is
‘‘necessary and appropriate,’’ Sec. 3 of
the Executive Order, to establish a de
minimis value standard for subcontracts
below which the rule will not apply.
Such a standard expressly employs the
principle that certain activity is of such
modest concern to the application of the
legal standard that it can be set apart
from its application. Wisconsin Dept. of
Revenue v. William Wrigley, Jr., Co., 505
U.S. 214 (1992) (the maxim—‘‘the law
cares not for trifles’’—is part of the
established background of legal
principles against which all enactments
are adopted, and which all enactments
(absent contrary indication) are deemed
to accept). A de minimis standard based
on the dollar value of the subcontract
also has the advantage of permitting
subcontractors to ascertain at the time of
entry into the subcontract that this rule
will or will not apply to them. In
implementing the equal opportunity
contract clause requirements of
Executive Order 11246, the Department
has established a $10,000 threshold for
contracts and subcontracts below which
that rule will not apply. See 41 CFR 60–
1.5(a). The Department considers
suitable the application of a similar
$10,000 threshold for subcontracts
below which this rule will not apply,
and this de minimis standard has been
added to § 471.3(a)(4). In addition, as
with the admonition in § 471.3(a)(2)(i)
that agencies and contractors may not
enter into contracts so as to avoid the
application of the rule, contractors and
subcontractors similarly may not enter
into contracts so as to avoid application
of the rule, and that constraint has also
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been added to § 471.3(a)(4). In addition
to the exception for de minimis
contracts, the definition of subcontract,
as proposed in the NPRM, will continue
to be limited to those that are ‘‘necessary
to the performance of’’ the government
contract.
In addition to the exceptions for
certain contracts, the Executive Order
establishes two exemptions that the
Secretary, in her discretion, may
provide to contracting department or
agencies that the Secretary finds
appropriate for exemption. Sec. 4, 74 FR
6108. These provisions permit the
Secretary to exempt a contracting
department or agency or group of
departments or agencies from the
requirements of any or all of the
provisions of the Order with respect to
a particular contract or subcontract or
any class of contracts or subcontracts if
she finds either that the application of
any of the requirements of the Order
would not serve its purposes or would
impair the ability of the government to
procure goods or services on an
economical and efficient basis, or that
special circumstances require an
exemption in order to serve the national
interest. Id. Proposed § 471.3(b)
implemented these exemptions, and
provided for the submission of written
requests for exemptions to the Director
of OLMS. It also provided that the
Director may withdraw an exemption if
a determination is made that such
action is necessary or appropriate to
achieve the purposes of the rule. The
Department invited comments on the
standards and procedures for requesting
an exemption and the Department’s
withdrawal of a granted exemption, but
received no comments applicable to
these proposed revisions. Therefore, the
proposed provisions implementing the
exemptions stated in the Executive
Order have been carried over to the final
rule unchanged. See §§ 471.3(b) and (c).
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F. Physical and Electronic Posting
Requirements
1. Physical Posting Requirements
The contract clause in the Executive
Order requires a contractor to post the
employee notice ‘‘in conspicuous places
in and about its plants and offices where
employees covered by the National
Labor Relations Act engage in activities
relating to the performance of the
contract, including in all places where
notices to employees are customarily
posted both physically and
electronically.’’ Sec. 2, 74 FR 6107. This
provision from the Executive Order
establishes a number of criteria for
posting, including ‘‘conspicuous’’
posting, posting in locations where
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NRLA-covered employees work, posting
in locations where contract-related
activity is performed, and posting where
employee notices are customarily
placed. The NPRM summarized the
physical posting criteria by stating that
the provision establishes that a
contractor is required to post the notice
physically at its place of operation
where employees are likely to see it. 74
FR at 38491. In addition, proposed
§ 471.2(d) provided that the Department
will print the required employee notice
poster and supply it to Federal
contractors through the Federal
contracting agency. The NPRM also
noted the poster may be obtained from
OLMS, whose contact information was
provided in this subsection of the
proposed rule, or can be downloaded
from OLMS’s Web site, https://
www.olms.dol.gov. The NPRM observed
that the Department’s printing of the
poster and provision of it to Federal
contractors will reduce the burden on
those contractors to comply with the
Executive Order and this regulation, and
will ensure conformity and consistency
with the Secretary’s specifications for
the notice. Proposed § 471.2(d) also
permitted contractors to reproduce in
exact duplicate the poster supplied by
the Department to satisfy their
obligations under the Executive Order
and this rule. The Department invited
comment on its proposal to make
available print and electronic format
posters containing the employee notice.
The Department received nine
comments on issues related to the
physical posting requirements. As a
general matter, a few comments stated
support for the requirements for
physical posting, and a few complained
that the posting would create workplace
clutter. However, most comments
requested clarification of the criteria for
posting and the meaning of specific
terms, including ‘‘customary’’ placement
and ‘‘activities related to the
performance of the contract.’’
The contract clause in the Executive
Order requires covered contractors to
post notices in ‘‘places where notices to
employees are customarily posted.’’ 74
FR 6107. One comment sought guidance
on this provision, asking whether
‘‘customary’’ postings means placement
where the employer posts routine
notices to employees such as general
personnel information, or whether it
instead means placement where the
employer posts other legally mandated
notices, which may be different.
One comment suggests that the
contract clause establishes two
independent requirements for posting:
First, a contractor must post the notice
where NLRA-covered employees
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28385
perform work related to the contract,
and second, they must post it in all
places where notices to employees are
customarily posted. This comment
suggests that the first requirement is
separate from the second, so the notice
must be posted where contract work is
being performed, even if not where
customary employee notices are posted,
and a notice must also be posted where
employee notices are customarily
posted. Under this interpretation, a
contractor must post, for example, on
the work floor and where other notices
are posted. In a similar vein, a second
commenter suggests that DOL ‘‘mandate
effective physical posting’’ because
‘‘employees working at diverse or
remote locations may not always pay
attention to electronic notices but do
take note of physical postings in their
work areas’’ (emphasis added).
Several commenters raised concerns
about the application of the phrase
‘‘activities relating to the performance of
the contract.’’ One commenter submitted
that the meaning of where employees
‘‘engage in activities relating to the
performance of the contract’’ is vague
and unclear. Must a contractor post the
notice, the commenter asks, in a
location in which employees indirectly
engage in contract activities, such as
where employees provide some but not
all products and/or services related to
the contract; where employees spent
only 20% of their work time on
products and/or services that would
‘‘eventually’’ be used at a second facility
in performance of the contract; where
the product or service was altered prior
to fulfillment of the contract; or where
human resources personnel work at a
separate location by providing support
to employees working on the contract?
In short, the commenter posits, what
‘‘nexus’’ must exist between an
employee and work related to the
performance of the contract?
A second commenter suggests that
posting should be required only where
employees work directly on the
contract. The comment argues that
requiring employers to post where
employees are not working directly on
the government contract may cause
compliance challenges and would give
contractors ‘‘significant pause’’ before
entering into future government
contracts. This commenter requests
guidance from the Department regarding
employees that do not directly perform
contract work but perform supportive
work, such human resources and
accounting employees. Similarly, a third
comment requests clarification on
posting where the contractor’s
employees perform ‘‘remote tasks,’’ such
as payroll employees at a separate
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facility, or employees at a distribution
center that sends parts to the assembly
facility where the contract work is
performed. This comment also proposes
that the Department interpret the
provision to mean work performed
directly on the contract, thus
eliminating ‘‘upstream’’ and
‘‘downstream’’ employees. To the extent
the rule covers administrative functions,
the comment requests more specific
guidance on how such work is ‘‘related
to the performance of the contract.’’
Finally, two commenters contended
that the rule’s posting requirements
conflict with the Executive Order.
Specifically, they observe that
§ 471.10(b)(1) requires that the notice be
posted at ‘‘each of the contractor’s
establishments and/or construction
work sites* * *[,]’’ which appears to be
broader than the contract clause
requirement to post where employees
engage in activities related to contract
performance. The comment
recommends revision to regulatory text
to state that posting is only required
where employees engage in contract’s
performance.
The Department received several
comments about the physical poster
itself. Two comments suggested that the
poster be printed in other languages,
particularly Spanish. Two agree with
the Department that in order to ensure
that the notice is not reduced or
otherwise modified, the poster as
supplied by the Department cannot be
altered in size or substance and that
only exact duplicates of the Departmentsupplied poster can be utilized. By
contrast, two commenters noted that
this no-alteration requirement prevents
contractors from purchasing the poster
through a commercial source that
consolidates Federally mandated
posters into a single poster, provides
updates to posters when the content is
revised by the implementing agency, or
both.
After carefully reviewing the
comments related to the physical
posting requirements, the Department
has concluded the following. The
Executive Order requires a contractor to
post the employee notice ‘‘in
conspicuous places in and about its
plants and offices[,] including all places
where notices to employees are
customarily posted * * * physically.’’
Sec. 2, para. 1, 74 FR 6107. Because the
Department received no comments
raising issues regarding the meaning of
posting ‘‘in conspicuous places[,]’’ the
Department concludes that contractors
are accustomed to such a requirement
and it has a well-accepted meaning. A
notice is conspicuously posted if it is
placed in a central location where
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employees are likely to see it. Dunham
v. McLaughlin Body Co., 812 F. Supp
867, 872 (DC Ill. 1992) (notice required
under Age Discrimination in
Employment Act). See also 29 CFR
825.300, which requires covered
employers to ‘‘post and keep posted’’ the
notice required by the Family and
Medical Leave Act (‘‘FMLA’’), 29 U.S.C.
2601 et seq., ‘‘on its premises, in
conspicuous places where employees
are employed,’’ which means
‘‘prominently where it can be readily
seen by employees and applicants for
employment.’’ Accordingly, for the
purposes of this rule, a contractor meets
the requirement to post the employee
notice conspicuously if the notice is
prominent and can be readily seen by
employees. This standard has been
incorporated into a new subsection of
§ 471.2(d), which establishes the
regulatory standards for a contractor’s
physical posting of the employee
notice.14
The requirement to post ‘‘in and about
[a contractor’s] plants and offices * * *,
including in all places where notices to
employees are customarily posted[,]’’
when read together with the
‘‘conspicuous’’ requirement, requires
widespread posting that is prominent
and readily observable throughout the
contractor’s plants and offices, and
emphasizes that among these locations
is placement where other employee
notices are posted. ‘‘Other notices to
employees’’ is not limited to Federally
mandated legal notices, but includes
notices to employees regarding the
terms and conditions of their
employment. See § 471.2(d)(1).
In response to comments, the
Department has determined that it is
necessary and appropriate to require a
contractor that employs a significant
number of employees who are not
proficient in English to post the
employee notice in languages other than
English to achieve the purposes of the
Order, and this requirement has been
incorporated into § 471.2(d). In
implementing a similar requirement
under the FMLA, 29 CFR 825.300(a)(4),
the Department stated that ‘‘when the
employer employs a significant portion
of employees who are not literate in
English, the employer [must] provide
the poster and general notice to
employees in a language in which they
are literate.’’ 73 FR 67991, Nov. 17,
2008. The Department similarly adopts
this standard for application in this rule,
and will require a contractor to post the
employee notice in a language or
14 Subsequent subsections of § 471.2 have been
re-lettered following the insertion of new
subsection (d).
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languages spoken by a significant
portion of the contractor’s workforce.
See § 471.2(d). Employers with multiple
locations may post notices in different
languages at different locations, if the
posted notices are provided in
languages in which the employees are
literate at each location. The
Department will provide necessary
translations of the poster. See § 471.2(e).
With regard to the requirement in
§ 471.2(e) that the poster not be altered
by the contractor, the Department
clarifies that this prohibition is not
intended to, and should not, impair the
ability of contractors to utilize a
commercial poster service that might
provide the instant employee notice
consolidated onto one poster with other
Federally mandated labor and
employment notices, so long as such
consolidation does not alter the size,
color, or content of the poster provided
by the Department.
Finally, the Department agrees with
the comments that additional guidance
is needed to advise contractors and
employees regarding the meaning of the
requirement to post where employees
‘‘engage in activities relating to the
performance of the contract.’’ 74 FR
6107. The starting point for
interpretation and implementation of
this phrase is two prior executive orders
that similarly obligated notice-posting
through contract clause incorporation.
Although neither Executive Order 11246
nor 13201 included the operative phrase
as a provision setting the outside
bounds of the posting requirement, they
each employed the operative phrase
inversely to establish the basis of a
coverage exemption.15 As a result, both
Executive Orders 11246 and 13201
provided that the Department may grant
exemptions to facilities of a contractor
that are ‘‘in all respects separate and
distinct from activities of the contractor
related to the performance of the
contract.’’ See E.O. 11246, Sec. 204(d),
as amended (available at https://
www.dol.gov/ofccp/regs/statutes/
eo11246.htm); E.O. 13201, Sec. 3(c), 66
FR 11222–23 (emphasis added).
In implementing the ‘‘separate and
distinct facilities’’ exemption for
15 The contract clause prescribed by Executive
Order 13201 specified that ‘‘[d]uring the term of this
contract, the contractor agrees to post a notice, of
such size and in such form as the Secretary of Labor
shall prescribe, in conspicuous places in and about
its plants and offices, including all places where
notices to employees are customarily posted.’’ Sec.
2(a)(1), 66 FR 11221. Section 202 of Executive
Order 11246 requires that ‘‘[t]he contractor agrees to
post in conspicuous places, available to employees
and applicants for employment, notices to be
provided by the contracting officer setting forth the
provisions of this nondiscrimination clause.’’ Sec.
202(1), E.O. 11246 (available at https://www.dol.gov/
ofccp/regs/statutes/eo11246.htm).
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Executive Order 11246, the Department
has adopted a multi-factor analysis to
determine whether activity at a certain
facility is separate and distinct from
activity related to the performance of
the contract.16 Although these
exemption factors are facility-based, and
are inherently intended to analyze
whether entire facilities are contractrelated, they are nevertheless instructive
because they suggest that indirect
support of or benefit from the
government contract may cause the
denial of an exemption or waiver
request.
In addition to analyzing the
implementation of the phrase as it
operated in the two predecessor
executive orders, the Department has
also looked to the implementation of a
similar phrase that affirmatively
established the bounds of a contractor’s
obligations without regard to the
possibility of waivers or exemptions.
The Department’s previous experience
implementing Section 503 of the
Rehabilitation Act, 29 U.S.C. 793,
provides such an analog. Prior to a
statutory amendment in 1992, the
affirmative action requirements of
Section 503 required government
contracts in excess of $10,000 to
‘‘contain a provision requiring that, in
employing persons to carry out such
contract, the party contracting with the
United States shall take affirmative
action to employ and advance in
employment qualified individuals with
disabilities.’’ 29 U.S.C. 793 (1991
compilation) (emphasis added).
Accordingly, the affirmative action
provision of Section 503 applied only
insofar as the contractor was employing
persons to ‘‘carry out’’ or, as with
Executive Order 13496, ‘‘engage in
activities related to the performance of,’’
the government contract. The similar
focus of these provisions is thus
directed to the specific nature of the
employees’ work, and is not based on
the conduct of the work at a facility.
To determine whether contractors
were ‘‘employing persons to carry out’’ a
government contract for the purposes of
Section 503, the Department established
a disjunctive test. 29 CFR 60–
16 These factors are found in Office of Federal
Contractor Compliance Programs Directive,
Separate Facility Waivers/Exemptions (Sept. 13,
2002) (available at https://www.dol.gov/ofccp/regs/
compliance/directives/dir260.pdf). Other factors
that may be considered include the number of
facilities connected to the contractor’s Government
contracts and the nature of the contractor’s
contractual relationship with the Government. Id. at
4. The Department’s implementation of now
revoked Executive Order 13201 concluded that the
identical factors would be used to consider requests
for waivers for separate and distinct facilities under
that rule. See 69 FR 16384.
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741.4(a)(2). Under that test, the
Department considered a position to
have been engaged in carrying out a
contract if:
(A) The duties of the position included
work that fulfilled a contractual obligation, or
work that was necessary to, or that
facilitated, performance of the contract or a
provision of the contract; or
(B) The cost or a portion of the cost of the
position was allowable as a cost of the
contract under the principles set forth in the
Federal Acquisition Regulation at 48 CFR Ch.
1, part 31: Provided, That a position shall not
be considered to have been covered by this
part by virtue of this provision if the cost of
the position was not allocable in whole or in
part as a direct cost to any Government
contract, and only a de minimis (less than
2%) portion of the cost of the position was
allocable as an indirect cost to Government
contracts, considered as a group.
29 CFR 60–741.4(a)(2)(A)-(B). In
proposing this regulatory test, the
Department explained that subsection A
includes ‘‘work that is necessary to or
that facilitates contract performance,
even if not directly required by an
express contract term, [which] is
intended to reflect the practical reality
that performance of a contract generally
requires the cooperation of a variety of
individuals engaged in auxiliary and
related functions beyond direct
production of the goods or provision of
the services that are the object of the
contract.’’ 57 FR 48092, Oct. 21, 1992.
The Department has uniformly
concluded in each of these prototypes—
Executive Orders 11246 and 13201, and
Section 503—that contract-related work
includes more than direct work that
effectuates that product or service that
is the subject of the contract. Under the
Department’s interpretations, included
in contract-related activity is indirect or
auxiliary work without which the
contract could not be effectuated, such
as maintenance, repair, personnel and
payroll work.
Accordingly, the Department will
adopt the disjunctive test previously
used for implementing the affirmative
action requirements of Section 503 of
the Rehabilitation Act to determine
whether, under Executive Order 13496,
particular employees are ‘‘engage[d] in
activities relating to the performance of
the contract.’’ See § 471.2(d)(2).17 In
determining whether employees are
engaging in activities relating to the
performance of the contract under
17 In addition, Proposed § 471.10(b)(1), which
stated that compliance evaluations will determine
whether the notice is posted ‘‘in an about each of
the contractor’s establishments and/or construction
worksites,’’ has been modified to reflect that
compliance evaluations will assess conformity with
the applicable physical and electronic posting
standards contained in § 471.2(d) and (f).
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§ 471.2(d)(2)(i), the Department notes
that a contract for production and sale
of goods to the Government commonly
requires the work not only of the
production employees assembling the
goods, but also of those engaged in
functions such as repairing the
machinery used in producing the goods;
maintaining the plant; assuring quality
control and security; storing the goods
after production; delivering them to the
Government; hiring, paying, and
providing personnel services for the
employees engaged in contract-related
work; keeping financial and accounting
records; performing related office and
clerical tasks; and supervising or
managing the employees engaged in
such tasks. This list is not intended to
be exhaustive, but only to illustrate that
a variety of functions may commonly be
involved in activities related to the
performance of the contract. Whether a
particular employee is engaged in
activities related to the performance of
the contract depends on the facts. In
each case, the question is whether the
duties of the employee’s position
include work that contributes to or
furthers the performance of the contract,
or work whose omission would impede
the contract’s performance.
2. Electronic Posting Requirements
The NPRM stated that those
contractors that customarily post notices
to employees electronically must also
post the required notice electronically.
In proposed § 471.2(e), the Department
indicated that such contractors may
satisfy the electronic posting
requirement on any Web site that is
maintained by the contractor or
subcontractor and customarily used for
employee notices, whether external or
internal. The NPRM noted that a
contractor must display prominently on
its Web page or electronic site where
other employee notices are customarily
placed a link to the DOL’s Web page
that contains the full text of the
employee notice. The contractor must
also place the link in the prescribed text
contained in § 471.2(e). The prescribed
text is the introductory language of the
notice. The Department sought
comments on this proposal for
electronic compliance, and particularly
requested feedback regarding whether it
should prescribe standards regarding
the size, clarity, location, and brightness
with regard to the link, including how
to prescribe electronic postings that are
at least as large, clear and conspicuous
as the contractor’s other posters.
The Department received numerous
comments about the electronic posting
requirements of the rule. About half of
those comments sought additional
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guidance on the meaning of particular
terms used in the rule that establish the
electronic posting requirement, and the
other half commented on the text
prescribed to accompany the electronic
link to the notice. In addition, the
Department received one comment
responding particularly to whether the
Department should adopt standards
regarding display of the link. Finally,
one comment challenged the
requirement to post electronically as
unnecessary, redundant and ultimately
burdensome because, the commenter
submitted, most employees are
accustomed to finding notices on
employee bulletin boards. This
comment also suggested that posting
this notice electronically, when other
Federally mandated notices are required
to be posted only physically, heightens
the impact of this notice and suggests
that it may have priority over other
required notices. The comment suggests
that this outcome is not supported by
the requirements of the Executive Order.
Two comments suggested additional
limitations on the meaning of
‘‘customarily post[ing] notices to
employees electronically,’’ which is the
threshold standard that triggers the
obligation to post this notice
electronically as well. The first
comment applauds the use of electronic
notification to employees, but suggests
that the requirement to post
electronically be limited to those cases
in which the employer posts only other
Federally mandated notices
electronically. The comment suggests
that employers may post a variety of
notices to employees electronically, and
the mere use of electronic
communications would trigger the eposting requirement for this notice. The
second comment suggests that in those
cases in which an employer posts
notices to employees both physically
and electronically, the rule should be
modified to give employers the option
to post only physically. The comment
supports the optional requirement with
the example of firms that engage in
manufacturing that may post some
notices electronically. The most
effective way to reach the employees
engaged in the manufacturing process,
the comment contends, is to physically
post notices on the shop floor. This
comment suggests the electronic posting
in such instances would be needless
and burdensome, and defeat the intent
of the Executive Order. The comment
suggests that the requirement to post
electronically be limited to those cases
in which employees engaged in
activities related to the contract have
regular access to electronic postings and
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access to electronic postings may be
limited to employees engaged in
activities related to the contract.
Three comments sought clarification
of the requirement to ‘‘display
prominently’’ the link to the
Department’s Web site containing the
full text of the notice. The first comment
suggests that many employers have
intranet sites that are devoted entirely to
communication with employees, and
absent further guidance on prominent
display, such employers will be
uncertain where on those sites to
include the link to the required notice.
One labor organization suggested that
placement of the link be required
‘‘immediately’’ on any page referencing
employee notices so that successive
clicks are avoided. A second labor
organization suggested that the rule
require the link to be no less prominent
than the employer’s display of other
comparable notices. Finally, in response
to the Department’s specific query
regarding whether it should prescribe
standards regarding the size, clarity,
location and brightness of the link, one
commenter responded negatively,
arguing that such regulation would be
‘‘intrusive, overreaching and overregulating.’’ Instead of assuming that
contractors may try to minimize the
link, the comment suggested that the
Department simply require that the link
be displayed in the same size and clarity
as other information on the employer’s
Web site.
The Department received six
comments on the text required to be
included with the link to the notice, and
because the prescribed text is identical
to the preamble of the notice, the
comments were analogous to comments
discussed earlier about the text of the
preamble—some favored the statement
regarding encouraging collective
bargaining and some opposed it. In
addition to comments about the content
of the text, two commenters objected to
the length of the prescribed text, one
suggesting that it is cumbersome and
impractical and the other suggesting
that the prescribed text simply state,
‘‘Your Rights Under the National Labor
Relations Act.’’ Two labor organizations
favored the inclusion of the prescribed
text, and suggested that it include the
heading, ‘‘Important notice of Your
Federal Rights with Regard to Collective
Bargaining.’’
After full consideration of the
comments about the rule’s electronic
posting requirements, the Department
has made the following decisions. The
Executive Order requires posting in ‘‘all
places where notices to employees are
customarily posted both physically and
electronically.’’ Sec. 2, para. 1, 74 FR
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6107 (emphasis added). Thus, the Order
indicates that the physical and
electronic posting requirements are
simultaneous, and one cannot be used
in lieu of, or as a substitute for, the
other. Accordingly, if an employer
customarily posts employee notices
both physically and electronically, it
must post this notice both physically
and electronically. As with the physical
posting requirements, the Department
concludes that a contractor ‘‘customarily
posts employee notices electronically’’
within the meaning of the rule when the
contractor posts messages to employees
electronically about the terms and
conditions of their employment, and
such messages are not limited to
Federally mandated communications
and employee rights. Thus, a contractor
must post this notice electronically in
those places that it customarily posts
electronically other messages to
employees about the terms and
conditions of their employment.
Further, inherent in the concept of a
contractor’s ‘‘customary’’ electronic
posting is employee access to those
communications. Presumably, a
contractor would not electronically post
notices to employees about the terms
and conditions of their employment if
its employees did not have regular
access to those notices. Therefore, the
Department need not at this time
provide guidance or set standards
regarding employee access to electronic
postings.
The Executive Order’s requirement to
post ‘‘conspicuously’’ was interpreted in
proposed § 471.2(e) of the NPRM as
requiring the ‘‘prominent display’’ of the
link to the Department’s Web site, and
comments reflected uncertainty
regarding the meaning of this provision.
In particular, as noted in the comments,
large contractors may have entire
intranets that are available for
communication to employees. Other
contractors may maintain a Web site on
which notices to employees are not
consolidated into one location. Until
compliance experience is further
developed, the Department will not
adopt a standard for ‘‘prominent
display’’ that precisely regulates the
location of electronic notice by a set
number of successive ‘‘clicks’’ away
from a starting page, as suggested in
some comments. Instead, the
Department will consider that the
electronic notice is displayed
prominently if the link to the
Department’s Web site containing the
notice is no less prominent than the
contractor’s other notices to employees.
In addition, at this time the Department
will not set regulatory standards
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regarding the clarity or brightness of the
link to the Department’s Web site.
Further, in response to comments and
for a variety of reasons, including
limitations on space available for
electronic notices, the Department has
eliminated the requirement to include
text specified in proposed Appendix B
with the link to the Department’s Web
site containing the employee notice.
Instead, the link to the Department’s
Web site must read, ‘‘Important Notice
about Employee Rights to Organize and
Bargain Collectively with Their
Employers,’’ and this requirement has
been included with the other
requirements for electronic posting in
§ 471.2(f).
Finally, as with the requirement to
post translations of the physical
employee notice, where a significant
portion of a contractor’s workforce is
not proficient in English, the contractor
must provide the required electronic
notice in the language the employees
speak. This requirement will be satisfied
by prominent display, as required in
§ 471.2(f), of a link to the Department of
Labor’s Web site that contains the full
text of the poster in the language or
languages the employees speak. In such
cases, the Office of Labor-Management
Standards will provide translations of
the link to the Department’s Web site
that must be displayed on the
contractor’s or subcontractor’s Web site.
G. Application of the Rule to Employers
of ‘‘Employees Covered by the NLRA’’
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Proposed § 471.4 implemented the
policy noted above that the Executive
Order requires notice-posting in those
workplaces in which employees covered
by the NLRA perform work related to
the Federal contract. Thus, § 471.4 of
the proposed regulatory text established
coverage of the rule that is coterminous
with NLRA coverage, and stated that the
rule did not apply to employers
excluded from the definition of
‘‘employer’’ in the NLRA, 29 U.S.C.
152(2), and employers of employees
excluded from the definition of
‘‘employee’’ under the NLRA, 29 U.S.C.
152(3).18
18 Under the NLRA, the term ‘‘employer’’ excludes
the United States, any wholly owned Government
corporation, any Federal Reserve Bank, any State or
political subdivision thereof, any person subject to
the Railway Labor Act [45 U.S.C. 151 et seq.], any
labor organization (other than when acting as an
employer), or anyone acting in the capacity of
officer or agent of such labor organization. 29 U.S.C.
152(2). Section 471.4(a)(3) of the NPRM contained
an inadvertent drafting error, which combined two
employer exclusions into one subparagraph. The
two exclusions—any State or political subdivision
of a State and any person subject to the Railway
Labor Act—have been listed in separate
subparagraphs in the final rule, thus increasing by
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One commenter agreed with proposed
§ 471.4 as a starting point, but suggested
that the rule must clarify several points
with respect to NLRA coverage. First,
the comment suggests that the rule
should state that it does not apply to
contractors without employees. Second,
the comment suggests that the rule
should exempt employers that do not
fall within the NLRB’s discretionary
jurisdictional standards related to the
volume and character of the business
done by the employer. Third, the
comment states that the rule should
indicate that the Board’s jurisdiction
does not extend to some employers,
such as religious school and tribal
enterprises. A second comment agrees
that the Department should state that
employers who are not covered by the
Board’s discretionary jurisdictional
standards, or are exempted from
coverage for other reasons, such as
certain religious educational institutions
or the horse-racing industry, should be
expressly excluded from the rule’s
application. Two comments raised the
issue of application of the rule to foreign
operations. The first comment urges the
exemption of posting requirements for
[presumably U.S. firms with]
‘‘employees performing work outside of
the United States’’ because ‘‘the nations
in which our companies operate
overseas have labor management
requirements of their own.’’ The second
comment raises the concern that
requiring notice-posting ‘‘in foreign
contracts and subcontracts would be
confusing to employees working abroad
who would not be subject to the
statute.’’ This comment notes that
OFCCP has incorporated a similar
exclusion in its regulations at 41 CFR
60–1.5(a)(3), and suggests a similar
exemption for work performed on
contracts and subcontracts outside the
U.S.
As noted, Section 2 of the Executive
Order requires contractors to post the
required notice ‘‘where employees
covered by the National Labor Relations
Act’’ perform contract-related activities.
The NLRA applies to employers and
employees that are not excluded from
coverage under the definitions of those
one the number of employer exclusions listed in
§ 471.4(a).
The NLRA’s definition of ‘‘employee’’ also
excludes those employed as agricultural laborers, in
the domestic service of any person or family in a
home, by a parent or spouse, as an independent
contractor, as a supervisor, or by an employer
subject to the Railway Labor Act, such as railroads
and airlines. 29 U.S.C. 152(3). Section 471.4(b) has
been modified to include the NLRA’s catchall
definition of excluded employees, i.e., someone
who is employed ‘‘by any other person who is not
an employer as defined’’ in the NLRA. 29 USC
152(3).
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28389
terms in the Act. 29 U.S.C. 152(2)–(3).
Section 10(a) of the Act empowers the
Board ‘‘to prevent any person from
engaging in any unfair labor practice
affecting commerce,’’ and § 9 of the Act
extends the jurisdiction to
representation cases where commerce
would be affected. 29 U.S.C. 160(a), 159.
Sections 2(6) and 2(7) provide statutory
definitions of ‘‘commerce’’ and ‘‘affecting
commerce.’’ 29 U.S.C. 152(6), (7).
The Supreme Court has determined
that Congress granted the Board with
‘‘the fullest jurisdictional breadth
constitutionally permissible under the
Commerce Clause.’’ NLRB v. Reliance
Fuel Corp., 371 U.S. 224, 226 (1963).
Although the NLRA’s statutory
jurisdiction is coextensive with
congressional power to legislate under
the Commerce Clause, the Board has
established discretionary standards that
limit the assertion of its broad statutory
authority to those cases which, in its
opinion, have a substantial effect on
commerce. These discretionary
standards are based on the volume and
character of the business done by the
employer. See ‘‘An Outline of Law and
Procedure in Representation Cases,’’
Chapter 1, Jurisdiction (August 2008)
(available at https://www.nlrb.gov/nlrb/
legal/manuals/outline_chap1.html).
However, even where an employer fails
to meet the appropriate discretionary
monetary standard, the Board will assert
its jurisdiction to the extent necessary to
address alleged violations of Section
8(a)(4), which prohibits retaliation
against employees who give testimony
or file charges under the Act, if it can
be established that the Board has
statutory jurisdiction, i.e., a greater than
de minimis flow of goods or services
across State lines. Pickle Bill’s, Inc., 224
NLRB 413 (1976).
After due consideration, the
Department declines to limit the
application of the notice-posting
requirements based on the Board’s
discretionary jurisdictional standards
for the following reasons. First, had the
President wanted the application of the
rule to be limited in such a fashion, the
words of the Executive Order would
create such a limitation, but no such
text appears in the Order. Second, the
Board’s discretionary jurisdictional
standards were established to better
effectuate the purposes of the Act to
‘‘promote the prompt handling of major
cases’’ by limiting the exercise of its
jurisdiction ‘‘to enterprises whose
operations have, or at which labor
disputes would have, a pronounced
impact upon the flow of interstate
commerce.’’ Hollow Tree Lumber
Company, 91 NLRB 635, 636 (1950).
The application of the notice-posting
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rule to employers outside the Board’s
discretionary jurisdictional limits raise
no similar concerns related to the
prompt handling of major unfair labor
practice or representation cases, and
thus no similar rationale demands the
inclusion of such a limitation. Third,
the Board’s discretionary jurisdictional
standards are numerous and unwieldy
for the purposes of this rule. The
jurisdictional standards that have the
broadest application are those for retail
and non-retail operations, but the Board
has established numerous separate
individual standards to address certain
industries and types of enterprises,
including health care organizations,
newspapers, and educational
institutions, among others. See ‘‘An
Outline of Law and Procedure in
Representation Cases,’’ supra, Chapter 1,
Jurisdiction (discussing jurisdictional
standards applicable by industry).
Finally, as illustrated in Pickle Bill’s,
Inc., supra, 224 NLRB at 413, certain
public policies, such as remedying an
employer’s unlawful interference with
the statutory right of all employees
freely to resort to and participate in the
Board’s processes, demand that the
Board’s discretionary jurisdictional
standards not apply. The Department
likewise concludes that the public
policy underlying this rule favoring
notification to employees of their rights
similarly demands that the Board’s
discretionary jurisdictional standards
not apply. Therefore, the Department
has determined that the rule applies to
employers of ‘‘employees covered by the
National Labor Relations Act,’’ Sec. 2, 74
FR at 6107, without regard to the
Board’s discretionary jurisdictional
limitations.19
These comments also raise the issue
of the application of the rule to certain
contractors that might implicate the
First Amendment, such as religiously
affiliated employers. See NLRB v.
Catholic Bishop of Chicago, 440 U.S.
490 (1979) (reading the NLRA in light of
the Religion Clauses of the First
Amendment, NLRB lacks jurisdiction
over church-operated schools). Because
such limits to the NLRA’s jurisdiction
are constitutional in nature and
19 As one comment notes, the Board has declined
completely to exercise jurisdiction over the
horseracing and dogracing industries because they
are peculiarly related to, and regulated by, local
governments, and because further regulation of
them would not contribute to stability in labor
relations in those industries. See 29 CFR 103.3.
Because the Board has expressly found that its
jurisdiction would not enhance labor-management
stability in those industries, and because the
purpose of this rule is to promote labor peace and
reduce labor unrest, the Department will follow this
jurisdictional standard and not apply the rule to the
horseracing or dogracing industries.
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similarly implicate the Department’s
action under the Executive Order with
respect to such contractors, the rule will
not apply to contractors that hold
themselves out to the public as a
religious institution, that are nonprofit,
and are religiously affiliated. See
University of Great Falls v. NLRB, 278
F.3d 1335 (DC Cir. 2002) (employing
three-part test for implementing
Catholic Bishop); Universidad Central
de Bayamon v. NLRB, 793 F.2d 383 (1st
Cir. 1985) (en banc) (Breyer, Circuit
Judge) (same).
As noted, the comments also raise the
issue of the application of the rule to
U.S. firms doing business abroad. The
Supreme Court has stated that the
statutory jurisdiction of the NLRA
extends only to employees ‘‘of our own
country and its possessions.’’ Benz v.
Compania Naviera Hidalgo, S.A., 353
U.S. 138, 144 (1957). More precisely, the
Act only applies to employees in the
territorial United States, and not to
American employees located abroad.
See, e.g., RCA Oms, 202 NLRB 228
(1973); Range Sys’s. Eng’g Support, 326
NLRB 1047 (1998); Computer Sci.’s
Raytheon, 318 NLRB 966 (1995); GTE
Automatic Elec. Inc., 226 NLRB 1222
(1976). Similarly, the regulations
implementing Executive Order 11246
exempt from coverage ‘‘work performed
outside the United States by employees
who were not recruited within the
United States.’’ 41 CFR. 60–1.5(a)(3). For
these reasons, the Department has
determined that this rule will not apply
to government contracts for work
performed exclusively by employees of
U.S. firms operating outside the
territorial United States, and
§ 471.3(a)(5) has been added to reflect
this determination.
Finally, the comments raise the issue
regarding the application of the rule to
tribal governments. The NLRA is a
statute of general applicability, and
therefore may be applicable to the
activities of Indian tribes. NLRB v.
Chapa-De Indian Health Program Inc.,
316 F.3d 995 (9th Cir. 2003). The
Board’s standard for determining the
circumstances under which it will
exercise jurisdiction over Indian-owned
and -operated enterprises is based on
the nature of the enterprise and not its
location. San Manuel Indian Bingo &
Casino, 341 NLRB 1055 (2004). In San
Manuel, the Board overruled prior
precedent and applied the statute to the
conduct of Indian tribes, unless the law
touches the exclusive rights of selfgovernment in purely intramural
matters, the application of the law
would abrogate treaty rights, or there is
evidence in the statute or legislative
history that Congress did not intend the
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law to apply to Indian tribes. Id. The
Department will utilize the same
standard, and apply this rule to Federal
contractors that are Indian-owned or
-operated enterprises, unless one of the
exceptions articulated by the Board in
San Manuel applies.
Subpart B—General Enforcement;
Compliance Review and Complaint
Procedures
Subpart B of the proposed rule
established standards and procedures
the Department will use to determine
compliance with obligations of the rule,
take complaints regarding
noncompliance, address findings of
violations, provide hearings for certain
matters, impose sanctions, including
debarment, and provide for
reinstatement in the case of debarment.
The standards and procedures proposed
in the NPRM were taken largely from
the Department’s prior rule
administering and enforcing Executive
Order 13201, 66 FR 11221. See 29 CFR
Part 470 (2008), rescinded under
authority of E.O. 13496, 74 FR 14045,
March 30, 2009. The Department invited
comment on the administrative and
enforcement procedures proposed in
Subpart B.
The NPRM noted that OFCCP
administers and enforces several laws
that ban discrimination and require
Federal contractors and subcontractors
to take affirmative action to ensure that
all individuals have an equal
opportunity for employment. Therefore,
OFCCP already has responsibility for
monitoring, evaluating and ensuring
that contractors doing business with the
Federal government conduct themselves
in a manner that complies with certain
Federal laws. Proposed § 471.10 built on
this practice and expertise, and
established authority in the Director of
OFCCP to conduct evaluations to
determine whether a contractor is in
compliance with the requirements of
this rule. Under proposed § 471.10(a),
such evaluations may be done solely for
the purpose of assessing compliance
with this rule, or may be undertaken in
conjunction with an assessment of a
Federal contractors’ compliance with
other laws under OFCCP’s jurisdiction.
This proposed section also established
standards regarding location of the
posted notice that will be used by
OFCCP to assess compliance and
indicates that an evaluation record will
reflect efforts made toward conciliation,
corrective action and/or
recommendations regarding
enforcement actions.
The Department received three
comments that each raised concerns
about OFCCP evaluations to determine
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whether a contractor is in compliance
with the contract clause-inclusion and
notice-posting requirements of the rule.
The thrust of these comments is that
OFFCP compliance evaluators do not
have substantive expertise about the
rights and obligations contained in the
NLRA, and therefore should not be
permitted to dispense advice to
employees regarding those rights and
obligations during compliance reviews.
One comment noted that employees are
likely to be confused by OFCCP’s role in
implementing the rule, because the
NLRB has enforcement authority
regarding the rights stated in the notice.
A second commenter noted that the
Department should delegate authority
for compliance to the NLRB, since it has
the proper enforcement authority. Two
commenters noted that the Department
must ensure that OFCCP compliance
evaluators refer any questions regarding
substantive rights and obligations under
the NLRA to the NLRB. In response to
these concerns, the Department notes
that the purpose of an OFCCP
compliance evaluation is to determine
whether a contractor is in compliance
with the requirements of this rule, in
particular, whether the contractor has
satisfied the notice-posting and contract
clause-inclusion requirements
applicable to that contractor. To the
extent that questions are raised
regarding the substantive provisions of
the notice during a compliance
evaluation, the OFCCP reviewer will
refer such questions to the NLRB.
Therefore, no change to the proposed
§ 471.10 is required.
Proposed § 471.11 provided for the
Department’s acceptance of written
complaints alleging that a contractor
doing business with the Federal
government has failed to post the notice
required by this rule. The proposed
section established that no special
complaint form is required, but that
complaints must be in writing. In
addition, as proposed in § 471.11,
written complaints must contain certain
information, including the name,
address and telephone number of the
person submitting the complaint, and
the name and address of the Federal
contractor alleged to have violated this
rule. This proposed section established
that written complaints may be
submitted either to OFCCP or OLMS,
and the contact information for each
agency was contained in this
subsection. Finally, proposed § 471.11
established that OFCCP will conduct
investigations of complaints submitted
under this section, make compliance
findings based on such investigations,
and include in the investigation record
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any efforts made toward conciliation,
corrective action, and recommended
enforcement action.
The Department received one
comment regarding the ‘‘informality’’ of
the complaint submission process. The
comment suggests that because the
complaint is not required to be
submitted under penalty of perjury or
similar standard, the process permits
the filing of false complaints for
harassment or other wrongful purposes.
Unlike most other complaints alleging
an employer’s violation of a legal
obligation, however, a complaint filed
under § 471.11 requires only a
straightforward allegation that an
employer has not posted the required
notice physically and/or electronically,
or has not included the contract clause
in its covered contracts or subcontracts.
Once notified that such a complaint has
been received, the alleged violation is
either easily remedied or easily
disproved, providing virtually no
opportunity for harassment or other
misuse of the complaint process. In
addition, because the factual basis
underlying a complaint is easily
corrected, an employee who files a true
complaint may be vulnerable to
retaliation by an employer who quickly
corrects the violation and then subjects
the complaining employee to
repercussions that may result from a
penalty-of-perjury standard. Finally, the
complaint process for the Department’s
former and now-revoked employee
notice rule, 29 CFR 470.11 (2008) was
identical to this process. For these
reasons, the Department has decided to
retain the complaint process as
proposed in the NPRM. See § 471.11.
Proposed § 471.12 set out the initial
steps that the Department will take in
the event that a contractor is found to
be in violation of this rule, including
making reasonable efforts to secure
compliance through conciliation. Under
this proposed section, a noncompliant
contractor must take action to correct
the violation and commit in writing to
maintain compliance in the future. If the
contractor fails to come into
compliance, OLMS may proceed with
enforcement efforts proposed in
§ 471.13.
One comment regarding the
conciliation process requested that the
Department clarify the extent of a
contractor’s liability for penalties if the
contractor has fully cooperated with
reasonable conciliation effort and
complies with the requirements of the
rule. The same comment suggests that a
contractor be given notice of the
conciliation process and an opportunity
to appear at that stage before the
Director for Federal Contract
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Compliance, and that if compliance
results, a written decision be issued to
that effect.
The comment misconstrues the
conciliation and enforcement processes
of the rule. Enforcement proceedings
against a contractor, discussed further
below, will result when a violation has
not been corrected through conciliation.
§ 471.13(a)(2). If, during the conciliation
process, a contractor comes into full
compliance with the requirements of the
rule and commits in writing not to
repeat the violation, § 471.12(b), there is
no need to refer the matter for
enforcement, and no attendant penalties
can result. Similarly, because of the
informality of the conciliation process
and the absence of any penalties
associated with it, there is no basis to
provide a contractor with formal notice,
an opportunity to be heard, or a
decision on the record at that stage of
the process.
Proposed § 471.13 implemented
Section 6 of the Executive Order, 74 FR
6108–09, and established steps that the
Department will take in the event that
conciliation efforts fail to bring a
contractor into compliance with this
rule. Under this proposed section,
enforcement proceedings may be
initiated if violations are found as a
result of either a compliance evaluation
or a complaint investigation, or in those
cases in which a contractor refuses to
allow a compliance evaluation or
complaint investigation or refuses to
cooperate with the compliance
evaluation or complaint investigation,
including failing to provide information
sought during those procedures. The
enforcement procedures proposed in
§ 471.13 relied primarily on the
Department’s regulations at 29 CFR part
18, which govern administrative
hearings before an Administrative Law
Judge (‘‘ALJ’’), and on the provisions for
expedited hearings at 29 CFR 18.42. The
procedures in this proposed section
established that an ALJ will make
recommended findings and conclusions
regarding any alleged violation to the
Assistant Secretary for Employment
Standards (‘‘Assistant Secretary’’), who
would issue a final administrative order.
The final administrative order may
include a cease-and-desist order or other
appropriate remedies in the event that a
violation is found. The procedures in
this proposed section also established
timetables for submitting exceptions to
the ALJ’s recommended order to the
Assistant Secretary, and also provided
for the use of expedited proceedings.
Other than the substitution of the
Administrative Review Board for the
Assistant Secretary, as noted earlier, no
changes were made to proposed
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§ 471.13, and it is unchanged in the
final rule.
Proposed § 471.14 addressed the
imposition of sanctions and penalties in
cases in which violations are found, and
established post-hearing procedures
related to such sanctions or penalties.
Section 7 of the Executive Order
provides the framework for the scope
and nature of remedies the Department
may order in the event of a violation. 74
FR 6109.
Section 7(a) of the Executive Order
provides that the Secretary may issue a
directive that the contracting
department or agency cancel, terminate,
suspend, or cause to be cancelled,
terminated or suspended any contract or
portion of a contract for noncompliance.
Id. In addition, the Executive Order
indicates that contracts may be
cancelled, terminated or suspended
absolutely, or their continuance may be
conditioned on a requirement for future
compliance. Id. Prior to issuing such a
directive, the Secretary must offer the
head of the contracting department or
agency an opportunity to object in
writing to the remedy contemplated,
and the objections must contain reasons
why the contract is essential to the
agency’s mission. Id. Finally, Section 7
of the Executive Order prevents the
imposition of such a remedy if the head
of the contracting department or agency,
or his or her designee, continues to
object to the issuance of the directive.
Id. Proposed § 471.14(a), (b), (c), and
(d)(1) fully implemented the standards
and procedures established in Section
7(a) of the Executive Order.
Section 7(b) of the Executive Order
provides that the Secretary may issue an
order debarring noncompliant
contractors ‘‘until such contractor has
satisfied the Secretary that such
contractor has complied with and will
carry out the provisions of the order.’’ 74
FR 6109. As with the remedies
discussed above, prior to the imposition
of debarment, the Secretary must offer
the head of the contracting department
or agency an opportunity to object in
writing to debarment, and the objections
must contain reasons why the contract
is essential to the agency’s mission. Id.
Finally, Section 7(b) of the Executive
Order prevents the imposition of
debarment if the head of the contracting
department or agency, or his or her
designee, continues to object to it. Id.
Proposed § 471.14(d)(3) of the rule
established the availability of the
debarment remedy. Section 471.14(f) of
the proposed rule indicated that the
Assistant Secretary will periodically
publish and distribute the names of
contractors or subcontractors that have
been debarred for noncompliance. Other
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than the substitution of the Director of
OLMS for the Assistant Secretary, as
noted earlier, no changes were made to
proposed § 471.14, and it is unchanged
in the final rule.
Proposed § 471.15 permitted a
contractor or subcontractor to seek a
hearing before the Assistant Secretary
before the imposition of any of the
remedies outlined above. Other than the
substitution of the Director of OLMS for
the Assistant Secretary, as noted earlier,
no changes were made to proposed
§ 471.15, and it is unchanged in the
final rule. Proposed § 471.16 provides
contractors or subcontractors that have
been debarred under this rule an
opportunity to seek reinstatement by
requesting such in a letter to the
Assistant Secretary. Under this
proposed provision, the Assistant
Secretary may reinstate the debarred
contractor or subcontractor if he or she
finds that the contractor or
subcontractor has come into compliance
with this rule and has shown that it will
fully comply in the future.
As noted above, § 471.2(a) required all
nonexempt prime contractors and
subcontractors to include the employee
notice contract clause in each of its
nonexempt subcontracts so that the
obligation to notify employees of their
rights is binding upon each successive
subcontractor. Regarding enforcement of
the requirements of the rule as to
subcontractors, the Executive Order
requires the contractor to ‘‘take such
action with respect to any such
subcontract as may be directed by the
Secretary of Labor as a means of
enforcing such provisions, including
sanctions for noncompliance.’’ Sec. 2,
para. 4, 74 FR 6108. Accordingly, in the
event that the Department determines
that a subcontractor is out of
compliance with the requirements of
this rule regarding employee notice or
inclusion of the contract clause in the
subcontractor’s own subcontracts, the
Secretary may direct the contractor to
require the noncompliant subcontractor
to come into compliance. As indicated
in the Executive Order, if such a
directive causes the contractor to
become involved in litigation with the
subcontractor, the contractor may
request the United States to enter the
litigation in order to protect the interests
of the United States. Sec. 2, para. 4, 74
FR 6108. If the contractor is unable to
compel subcontractor compliance on its
own accord, the compliance review,
complaint, investigation, conciliation,
hearing and decision procedures
established in §§ 471.10 through 471.16
to assess and resolve contractor
compliance with the requirements of
this rule are also applicable to
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subcontractors. In those instances in
which a contractor fails to take the
action directed by the Secretary
regarding a subcontractor’s
noncompliance, the contractor may be
subject to the same enforcement and
remedial procedures that apply to
noncompliance with requirements to
provide employee notice or include the
contract clause in its contracts. See
§ 471.13(a)(1).
The Department received a number of
comments regarding the enforcement
procedures of the rule, the vast majority
of which raised concerns regarding the
Department’s purported enforcement of
the substantive provisions of the notice.
Eight comments raised the issue with
respect to the second paragraph of the
contract clause, which states that the
‘‘contractor will comply with all
provisions of the Secretary’s notice, and
related rules, regulations, and orders of
the Secretary of Labor.’’ 74 FR 6107.
These comments note that this
provision, when taken together with the
rule’s enforcement procedures, suggest
that the Department will be adjudicating
violations of the substantive provisions
of the notice, which they correctly
indicate is solely within the purview of
the National Labor Relations Board.
Other commenters raise the same issue
more generically, and suggest that the
Department’s enforcement against
contractors that violate the Department’s
rule interferes with the NLRB’s
exclusive jurisdiction. Overall, the
comments indicate that the
Department’s interference with the
NLRB’s adjudicatory role would violate
principles of preemption and primary
jurisdiction, and incorrectly impose
sanctions precluded by the NLRA.
In response to these comments, the
Department assures the contractor
community that it cannot, nor will it,
attempt to enforce the substantive
provisions of the notice against
contractors or subcontractors. As the
comments correctly note, such
enforcement authority is within the
exclusive jurisdiction of the National
Labor Relations Board. The primary
purpose of the Executive Order is to
reduce the government’s contracting
costs by ensuring that employees are
well-informed of their rights under the
NLRA. 74 FR 6107. The mechanism by
which the Executive Order achieves this
goal is through requiring that a
contractor agree in the government
contract to post a notice, developed by
the Department, to its employees about
those rights. The grant of enforcement
authority to the Department in Sections
6 and 7 of the Executive Order is
limited, and the Order sanctions the
Department’s enforcement activity only
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as to a contractor’s compliance with the
contract clause-inclusion requirements
and the notice-posting requirements of
this final rule. The Department does not
construe the second paragraph of the
contract clause as establishing an
independent basis of authority for the
enforcement of the substantive
provisions of the notice. Of course, the
substantive provisions of the notice are
an accurate reflection of NLRA law. As
a result, if a contractor is failing or
refusing to comply with those
provisions, the contractor may be in
violation of the NLRA, and in that case
charges may be lodged solely with and
adjudicated solely by the NLRB.
Beyond questions related to alleged
overlapping jurisdiction, comments
regarding enforcement of the rule made
general observations and consisted of
some requests for clarification. Two
commenters submitted general support
for the administrative and enforcement
procedures of the rule. One comment
indicated that these same enforcement
procedures worked well in
implementing the now-revoked
Executive Order 13201, and urged the
Department to similarly emphasize
compliance assistance rather than
‘‘heavy-handed enforcement.’’ One
commenter described the available
sanctions, particularly debarment, as
‘‘unduly extreme,’’ and is concerned that
a contractor might face such sanctions
in the event of an unintentional or
inadvertent violation, such as when a
notice has fallen off the wall. Another
comment requested more guidance on
reinstatement from debarment under
§ 471.16, including the steps a
contractor must take to seek
reinstatement and the requirement of a
written decision on the request. This
comment offers as an example the
reinstatement procedures established in
41 CFR 60–1.31. Another comment
requests that the Department clarify that
a contractor has no affirmative
obligation to compel a subcontractor’s
compliance with the rule, and that a
contractor can only be compelled to
itself comply. This comment suggests
that it is unrealistic of the Department
to require that contractors police their
subcontractors for compliance, and that
the Department should take
enforcement action directly against a
subcontractor in the event of the
subcontractor’s noncompliance. The
final comment regarding enforcement
suggests that the rule must be revised to
reflect the Department’s elimination of
the Employment Standards
Administration and the abolition of the
position of Assistant Secretary for
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Employment Standards, which, as
previously noted, has been done.
In response to these comments, the
Department notes that contractors will
not receive harsh sanctions for
inadvertent or unintentional violations
of the rule. Indeed, the primary purpose
of the conciliation procedures is to seek
a contractor’s cooperation and
compliance with the rule, so inadvertent
and unintentional noncompliance will
be addressed long before any sanctions
may be imposed. Further, the
Department has decided to clarify the
standards for reinstatement of a
debarred contractor, and, as suggested,
those standards are modeled on the
regulation governing reinstatement of
contractors debarred under Executive
Order 11246, 41 CFR 60–1.31. Thus,
under amended § 471.16, in connection
with a reinstatement request to the
Director of OLMS, debarred contractors
are required to show that they have
established and will carry out policies
and practices in compliance with the
Executive Order and implementing
regulations. Before reaching a decision,
the Director of OLMS may request that
a compliance evaluation of the
contractor be conducted, and may
require the contractor to supply
additional information regarding the
request for reinstatement. If the Director
of OLMS finds that the contractor or
subcontractor has come into compliance
with and will carry out the Executive
Order and the regulation, the contractor
or subcontractor may be reinstated. In
addition, under the revised provision,
the Director of OLMS shall issue a
written decision on the request. See
§ 471.16.
Finally, in response to the comment
suggesting that contractors not be
compelled to police their subcontractors
to determine compliance, the
Department concludes that the operative
provision in paragraph 4 of the contract
clause of the Executive Order does not
support the position suggested in the
comment. This provision requires a
contractor to ‘‘take such action with
respect to any such subcontract as may
be directed by the Secretary of Labor as
a means of enforcing such provisions,
including the imposition of sanctions
for non-compliance.’’ 74 FR 6108. The
provision thus indicates that a prime
contractor cannot turn a blind eye
toward noncompliance of its
subcontractors, and should the
Department become aware that a prime
contractor has a significant number of
subcontractors that are out of
compliance with this rule, the
Department may order that prime
contractor to require its subcontractors
to come into compliance. In the event
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28393
that the contractor disregards such an
order to seek compliance among its
subcontractors, such disregard may
make the prime contractor liable for
penalties and sanctions in the same
manner as if the contractor had failed to
incorporate the contract clause or post
the employee notice. In this regard,
however, the prime contractor is liable
for penalties and sanctions only insofar
as it fails or refuses to seek compliance
among subcontractors following an
order by the Department to do so. If a
prime contractor diligently seeks
subcontractor compliance following
such an order, but a subcontractor’s
compliance is not forthcoming, the
prime contractor will not be liable for
the subcontractor’s noncompliance. As
noted above, only § 471.16 of this
subpart was modified in response to
comments.
Subpart C—Ancillary Matters
A number of discrete issues unrelated
to the issues addressed in the two
previous subparts merit attention in this
rule, and they are set out in this subpart.
Consequently, this subpart addresses
delegations of authority within and
outside the Department to administer
and enforce this rule, rulings under or
interpretations of the Executive Order,
standards prohibiting intimidation,
threats, coercion or other interference
with rights protected under this rule,
and other provisions of the Executive
Order that are included in this rule. The
Department invited comment on these
provisions and received none, save the
suggestion discussed earlier in the
context of enforcement that the
Department delegate its enforcement
role to the NLRB. Therefore, the
provisions as proposed in this subpart
will be retained, except that, as noted
earlier, the roles and responsibilities
given to the Assistant Secretary for ESA
have been reassigned.
Section 471.20 implements Section 11
of the Executive Order, 74 FR 6110,
which permits the delegation of the
Secretary’s authority under the Order to
Federal agencies within or outside the
Department. Revised § 471.21 of the rule
indicates that the Directors of OLMS
and OFCCP will share the authority to
make rulings under or interpretations of
this rule, as appropriate and in
accordance with their respective
responsibilities under the rule. In this
connection, requests for such rulings or
interpretations must be submitted to the
Director of OLMS, who will consult
with the Director of OFCCP to the extent
necessary and appropriate to issue the
requested ruling or interpretation.
Section 471.22 seeks to prevent
intimidation or interference with rights
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protected under this rule, so it indicates
that the sanctions and penalties
available for noncompliance set out in
§ 471.14 will be available should a
contractor or subcontractor fail to take
all steps necessary to prevent such
intimidation or interference. Activities
protected by this section include filing
a complaint, furnishing information, or
assisting or participating in any manner
in a compliance evaluation, a complaint
investigation, hearing or any other
activity related to the administration
and enforcement of this rule. Finally,
§ 471.23 implements Section 9 of the
Executive Order, 74 FR 6109, which
requires that contracting departments
and agencies cooperate with the
Secretary in carrying out her functions
under the Order, and implements
Section 15 of the Executive Order, 74 FR
6110, which establishes general
guidelines for the Order’s
implementation.
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IV. Regulatory Procedures
Executive Order 12866
This final rule has been drafted and
reviewed in accordance with Executive
Order 12866, Section 1(b), Principles of
Regulation. 58 FR 51735–36, Oct. 4,
1993. The Department has determined
that this rule is not an ‘‘economically
significant’’ regulatory action under
Section 3(f)(1) of Executive Order
12866. 58 FR 51738. Based on the
Department’s analysis, including a cost
impact analysis set forth more fully
below with regard to the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., this
rule is not likely to: (1) Have an annual
effect on the economy of $100 million
or more or adversely affect in a material
way the economy, a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or state, local, or tribal
governments or communities; (2) create
a serious inconsistency or otherwise
interfere with an action taken or
planned by another agency; (3)
materially alter the budgetary impact of
entitlements, grants, user fees, or loan
programs or the rights and obligations of
recipients thereof, or (4) raise novel
legal or policy issues. 58 FR 51738. As
a result, the Department has concluded
that a full economic impact and cost/
benefit analysis is not required for the
rule under section 6(a)(3)(B) of the
Executive Order. 58 FR 51741. However,
because of its importance to the public,
the rule was reviewed by the Office of
Management and Budget.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980
(‘‘RFA’’) requires agencies promulgating
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final rules to prepare a final regulatory
flexibility analysis and to develop
alternatives wherever possible, when
drafting regulations that will have a
significant impact on a substantial
number of small entities. 5 U.S.C. 601
et seq. The focus of the RFA is to ensure
that agencies ‘‘review rules to assess and
take appropriate account of the potential
impact on small businesses, small
governmental jurisdictions, and small
organizations, as provided by the
[RFA].’’ E.O. 13272, Sec. 1, 67 FR 53461
(‘‘Proper Consideration of Small Entities
in Agency Rulemaking’’). However, an
agency is relieved of the obligation to
prepare a final regulatory flexibility for
a final rule if the Agency head certifies
that the rule will not, if promulgated,
have a significant economic impact on
a substantial number of small entities. 5
U.S.C. 605(b). Based on the analysis
below, in which the Department has
estimated the financial burdens to
covered small contractors and
subcontractors associated with
complying with the requirements
contained in this final rule, the
Department has certified to the Chief
Counsel for Advocacy of the Small
Business Administration (‘‘SBA’’) that
this rule will not have a significant
economic impact on a substantial
number of small entities.
The primary goal of Executive Order
13496 and these implementing
regulations is the notification to
employees of their rights with respect to
collective bargaining and other
protected, concerted activity. This goal
is achieved through the incorporation of
a contract clause in all covered
Government contracts. The Executive
Order and this rule impose the
obligation to ensure that the contract
clause is included in all Government
contracts not on private contractors, but
on Government contracting departments
and agencies, which are not ‘‘small
entities’’ that come within the focus of
the RFA. Therefore, the costs attendant
to learning of the obligation to include
the contract clause in Government
contracts and modifying those contracts
in order to comply with that obligation
is a cost borne by the Federal
government, and is not incorporated
into this analysis.
Once the required contract clause is
included in the Government contract,
contractors then begin to assume the
burdens associated with compliance.
Those obligations include posting the
required notice and incorporating the
contract clause into all covered
subcontracts, thus making the same
obligations binding on covered
subcontractors. For the purposes of the
RFA analysis, the Department estimates
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that, on average, each prime contractor
will subcontract some portion of its
prime contract three times, and the
prime contractor therefore will expend
time ensuring that the contract clause is
included in its subcontracts and
notifying those subcontractors of their
attendant obligations. To the extent that
subcontractors subcontract any part of
their contract with the prime contractor,
they, in turn, will be required to expend
time ensuring that the contract clause is
included in the next tier of subcontracts
and notifying the next-tier
subcontractors of their attendant
obligations. Therefore, for the purpose
of determining time spent on
compliance, the Department will not
differentiate between the obligations of
prime contractors and subsequent tiers
of subcontractors in assessing time
spent on compliance; the Department
assumes that all contractors, whether
prime contractor or subcontractor, will
spend equivalent amounts of time
engaging in compliance activity.
The Department estimates that each
contractor will spend a total of 3.5 hours
per year in order to comply with this
rule, which includes 90 minutes for the
contractor to learn about the contract
and notice requirements, train staff, and
maintain records; 30 minutes for
contractors to incorporate the contract
clause into each subcontract and
explain its contents to subcontractors;
30 minutes acquiring the notice from a
government agency or Web site; and 60
minutes posting them physically and
electronically, depending on where and
how the contractor customarily posts
notices to employees. The Department
assumes that these activities will be
performed by a professional or business
worker, who, according to Bureau of
Labor statistics data, earned a total
hourly wage of $31.02 in January 2009,
including accounting for fringe benefits.
The Department then multiplied this
figure by 3.5 hours to estimate the
average annual costs for contractors and
subcontractors to comply with this rule.
Accordingly, this rule is estimated to
impose average annual costs of $108.57
per contractor (3.5 hours × $31.02).
These costs will decrease in subsequent
years based on a contractor’s increasing
familiarity with the rule’s requirements
and having already satisfied its posting
requirements in earlier years.20 Based
20 The Department received two comments
suggesting that the annual compliance costs were
underestimated in the proposed rule. The first
comment indicated that contractors will spend time
each year reviewing the notice to assess whether it
is consistent with legislation, or Board or court
decisions. This comment also suggested that
contractors would be ‘‘working under contract terms
which would not only be out-of-sync which [sic]
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upon figures obtained from
USASpending.gov, which compiles
information on federal spending and
contractors across government agencies,
the Department concludes that there
were 186,536 unique Federal
contractors holding Federal contracts in
FY 2008.21 Although this rule does not
apply to Federal contracts below the
simplified acquisition threshold, the
Department does not have a means by
which to calculate what portion of all
Federal contractors hold only contracts
with the government below the
simplified acquisition threshold.
Therefore, in order to determine the
number of entities affected by this rule,
the Department counted all Federal
contractors, regardless of the size of the
government contract held. Based on
data analyzed in the Federal
Procurement Data System (fpds.gov),
which compiles data about types of
contractors, of all 186,536 unique
Federal prime contractors,
approximately 35% are ‘‘small entities’’
as defined by the Small Business
Administration (SBA) size standards.22
the updated law, but also potentially in conflict
with the updated law, thereby needlessly exposing
them to potential liabilities or penalties.’’ The
second comment indicated that the time allocated
for incorporation in full of the contract clause was
too low, but the comment did not suggest an
alternate figure for that allocation.
The Department concludes that neither of these
comments provides an adequate basis to reassess
the annual compliance cost estimates in the
proposed rule. First, a contractor will not need to
review legislation and Board or court decisions to
ensure that the notice in the contract clause is
accurate; this is the job of the Department. Second,
the time allotment for the incorporation of the
contract clause, whether by reference or in full, is
essentially the same—the contractor must ensure
that its subcontracts are revised to include a
standard-form provision that establishes the duty to
post the notice. After the first time the contractor
ensures the accuracy of the provision that must be
incorporated, the time a contractor devotes to
ensuring the proper inclusion of the provision on
an ongoing basis should not increase as a result of
the length of the provision. In any event, as noted
above, the Department has revised the prohibition
against incorporation of the contract clause by
reference proposed in the NPRM, and the final rule
now permits incorporation of the contract clause by
reference. Finally, the Department rejects the
premise that the notice or the contract clause
containing it will be ‘‘out-of-sync’’ with the state of
the law, thereby exposing a contractor to liabilities
or penalties.
21 The Federal Funding Accountability and
Transparency Act of 2006, Pub. L. 109–282 (Sept.
26, 2006), requires that the Office of Management
and Budget establish a single searchable Web site,
accessible by the public for free, that includes for
each Federal award: (1) The name of the entity
receiving the award; (2) the amount of the award;
(3) information on the award including transaction
type, funding agency, etc.; (4) the location of the
entity receiving the award; and (5) a unique
identifier of the entity receiving the award. See 31
U.S.C.A. § 6101 note. In compliance with this
requirement, USASpending.gov was established.
22 The Federal Procurement Data System (‘‘FPDS’’)
compiles data regarding small business ‘‘actions’’
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Therefore, for the purposes of the RFA
analysis, the Department estimates that
this rule will affect 65,288 small Federal
prime contractors.
As noted above, for the purposes of
this analysis, the Department estimates
that each prime contractor subcontracts
a portion of the prime contract three
times, on average. However, the
community of prime contractors does
not utilize a unique subcontractor for
each subcontract; the Department
assumes that subcontractors may be
working under several prime contracts
for either a single prime contractor or
multiple prime contractors, or both. In
addition, some subcontractors may also
be holding prime contracts with the
government, so they may already be
counted as affected entities. Therefore,
in order to determine the unique
number of subcontractors affected by
this rule, the Department estimates there
are the same number of unique
subcontractors as prime contractors,
resulting in the estimate that 186,536
subcontractors are affected by this rule.
Further, for the purposes of this
analysis, the Department assumes that
all subcontractors are ‘‘small entities’’ as
defined by SBA size standards.
and small business ‘‘dollars’’ using the criteria
employed by SBA to define ‘‘small entities.’’ In FY
2008, small business actions accounted for 50% of
all Federal procurement action. However, deriving
a percentage of contractors that are small using the
‘‘action’’ data would overstate the number of small
contractors because contract actions reflect more
than just contracts; they include modifications,
blanket purchase agreement calls, task orders, and
federal supply schedule orders. As a result, there
are many more contract actions than there are
contracts or contractors. Accordingly, a single small
contractor might have hundreds of actions, e.g.,
delivery or task orders, placed against its contract.
These contract actions would be counted
individually in the FPDS, but in fact represent only
one small business.
Also reflected in FPDS, in FY 2008, small
business ‘‘dollars’’ accounted for 19% of all Federal
dollars spent. However, deriving a percentage of
contractors that are small using the ‘‘dollars’’ data
would understate the number of small contractors.
Major acquisitions account for a disproportionate
share of the dollar amounts and are almost
exclusively awarded to large businesses. For
instance, Lockheed Martin was awarded $34 billion
in contracts in FY 2008, which accounted for 6%
of all Federal spending in that year. The top five
federal contractors, all large businesses, accounted
for over 20% of contract dollars in FY 2008. As a
result, because the largest Federal contractors
disproportionately represent ‘‘dollars’’ spent by the
Federal government, the FPDB’s data on small
‘‘dollars’’ spent understates the number of small
entities with which the Federal government does
business.
The Department concludes that the percentage of
all Federal contractors that are ‘‘small’’ is probably
somewhere between 19% and 50%, the two
percentages derived from the FPDS figures on small
‘‘actions’’ and small ‘‘dollars.’’ The mean of these
two percentages is approximately 35%, and the
Department will use this figure above to estimate
how many of all Federal contractors are ‘‘small
entities’’ in SBA’s terms.
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Therefore, in order to estimate the total
number of ‘‘small’’ contractors affected
by this rule, the Department has added
together the estimates for the number of
small prime contractors calculated
above (65,288) with the estimate of all
subcontractors (186,536), all of which
we assume are small. Accordingly, the
Department estimates that 251,824 small
prime and subcontractors are affected by
this rule.
Based on this analysis, the
Department concludes that this final
rule will not have a significant
economic impact on a substantial
number of small entities. The
Regulatory Flexibility Act does not
define either ‘‘significant economic
impact’’ or ‘‘substantial’’ as it relates to
the number of regulated entities. 5
U.S.C. 601. In the absence of specific
definitions, ‘‘what is ‘significant’ or
‘substantial’ will vary depending on the
problem that needs to be addressed, the
rule’s requirements, and the preliminary
assessment of the rule’s impact.’’ See A
Guide for Government Agencies: How to
Comply with the Regulatory Flexibility
Act, Office of Advocacy, U.S. Small
Business Administration at 17 (available
at https://www.sba.gov) (‘‘SBA Guide’’).
As to economic impact, one important
indicator is the cost of compliance in
relation to revenue of the entity or the
percentage of profits affected. Id. In this
case, the Department has determined
that the average cost of compliance with
this rule in the first year for all Federal
contractors and subcontractors will be
$108.57. The Department concludes that
this economic impact is not significant.
Furthermore, the Department has
determined that of the entire regulated
community of all 186,536 prime
contractors and all 186,536
subcontractors, 67% percent of that
regulated community constitute small
entities (251,824 small contractors
divided by all 373,072 contractors).
Although this figure represents a
substantial number of federal
contractors and subcontractors, because
Federal contractors are derived from
virtually all segments of the economy
and across industries, this figure is a
small portion of the national economy
overall. Id. at 20 (‘‘the substantiality of
the number of businesses affected
should be determined on an industryspecific basis and/or the number of
small businesses overall’’).23
23 The Department received one comment
asserting that the Department erroneously
concluded in the proposed rule that an effect on an
estimated 67% of the federal contractor community
was insubstantial. To the contrary, the Department
noted in the proposed rule, as here, that the rule
was likely to affect a ‘‘substantial number of federal
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Accordingly, the Department concludes
that the rule does not impact a
substantial number of small entities in
a particular industry or segment of the
economy. Therefore, under 5 U.S.C. 605,
the Department concludes that the final
rule will not have a significant
economic impact on a substantial
number of small entities.
Unfunded Mandates Reform
For purposes of the Unfunded
Mandates Reform Act of 1995, this rule
would not include any Federal mandate
that might result in increased
expenditures by State, local, and tribal
governments, or increased expenditures
by the private sector of more than $100
million in any one year.
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Paperwork Reduction Act
As part of its continuing effort to
reduce paperwork and respondent
burden, the Department of Labor
conducts a public consultation program
to provide the general public and
Federal agencies with an opportunity to
comment on proposed and continuing
collections of information in accordance
with the Paperwork Reduction Act of
1995 (‘‘PRA’’) (44 U.S.C. 3506(c)(2)(A)).
This helps to ensure that the public
understands the Department’s collection
instructions; respondents can provide
the requested data in the desired format,
reporting burden (time and financial
resources) is minimized, collection
instruments are clearly understood, and
the Department can properly assess the
impact of collection requirements on
respondents.
Certain sections of this rule, including
§ 471.11(a) and (b), contain information
collection requirements for purposes of
the PRA. In accordance with the PRA,
the August 3, 2009 NPRM solicited
comments on the information
collections as they were proposed.
Additionally, the Department separately
contractors and subcontractors.’’ 74 FR at 38495.
However, the purpose of the RFA, and it focus, is
to minimize the impact of agency regulations on
particular industries or sectors of the economy. See
SBA Guide at 15–20. As stated in the proposed rule
and above, federal contractors and subcontractors
represent all industries and sectors of the economy,
thus the effect of the rule is dissipated across the
economy. As an alternative approach, the comment
urged the Department to recognize federal
contractors and subcontractors as a discrete
‘‘industry,’’ which the Department declines to do
because the adoption of such a standard would
defeat the focus of the analysis. Finally, in
assuming both here and in the proposed rule that
100% of subcontractors were small within SBA’s
terms, the Department employed an expansive
estimate that undoubtedly inflated of the overall
number of affected entities. The use of the broad
assumption serves to illustrate the point that even
if a substantial number of federal contractors and
subcontractors are affected by the final rule, the
effect of the rule on the economy as a whole is not
substantial.
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requested comments on the information
collections in a 60 day notice published
in the Federal Register on September 8,
2009 (74 FR 46236), and submitted a
contemporaneous request for OMB
review of the proposed collection of
information. The Department did not
receive any comments in response to
either the NPRM PRA analysis or the
September 8, 2009 notice. OMB did not
approve the collections of information
contained in the NPRM stage of this
rulemaking, and directed the
Department to resubmit the relevant
PRA documentation to OMB at the final
rulemaking stage.
The rule requires contractors to post
notices and cooperate with any
investigation in response to a complaint
or as part of a compliance evaluation. It
also permits employees to file
complaints with the Department
alleging that a contractor has failed to
comply with those requirements. The
application of the PRA to those
requirements is discussed below.
The final rule imposes certain
minimal burdens associated with the
posting of the employee notice poster
required by the Executive Order and
§ 471.2(a). As noted in § 471.2(e), the
Department will supply the notice, and
contractors will be permitted to post
exact duplicate copies of the notice.
Under the regulations implementing the
PRA, ‘‘[t]he public disclosure of
information originally supplied by the
Federal government to [a] recipient for
the purpose of disclosure to the public’’
is not considered a ‘‘collection of
information’’ under the Act. See 5 CFR
1320.3(c)(2). Therefore, the posting
requirement is not subject to the PRA.
The final rule will also impose certain
burdens on the contractor associated
with cooperating with an investigation
into failure to comply with Part 471.
The regulations implementing the PRA
exempt any information collection
requirements imposed by an
administrative agency during the
conduct of an administrative action
against specific individuals or entities.
See 5 CFR 1320.4. Once the agency
opens a case file or equivalent about a
particular party, this exception applies
during the entire course of the
investigation, before or after formal
charges or complaints are filed or formal
administrative action is initiated. Id.
Therefore, this exemption would apply
to the Department’s investigation of
complaints alleging violations of the
Order or this rule as well as compliance
evaluations.
As for the burden hour estimate for
employees filing complaints, the
Department estimates, based on the
experience of OFCCP administering
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other laws applicable to Federal
contractors, that it will take an average
of 1.28 hours for such a complainant to
compose a complaint containing the
necessary information and to send that
complaint to the Department. This
number is also consistent with the
burden estimate for filing a complaint
under E.O. 13201 and the now-revoked
Part 470 regulations.
The Department has estimated it
would receive a total of 50 employee
complaints in any given year, which is
significantly larger than the estimate
contained its most recent PRA
submission for Executive Order 13201.
In that submission, the Department
estimated it would receive 20 employee
complaints. This number itself had been
revised downwards because the
Department never received any
employee complaints pursuant to the
now-revoked Part 470 regulations.
Because the applicability of the final
rule and Executive Order 13496 is
greater in scope than the now-revoked
Part 470 and Executive Order 13201 in
terms of geography (the now-revoked
Part 470 regulations only applied to
states without right-to-work laws,
whereas this rule applies nationwide),
the Department has revised upwards its
estimate of employee complaints under
this rule from 20 to 50.
Section 471.3(b) permits contracting
departments to submit written requests
for an exemption from the obligations of
the Executive Order (waiver request) as
to particular contracts or classes of
contracts under specified circumstance.
The PRA does not cover the costs to the
Federal government for the submission
of waiver requests by contracting
agencies or departments or for the
processing of waiver requests by the
Department of Labor. The regulations
implementing the PRA define the term
‘‘burden,’’ in pertinent part, as ‘‘the total
time, effort, or financial resources
expended by persons to generate,
maintain, retain, or disclose or provide
information to or for a Federal agency.’’
5 CFR 1320.3(b)(1). The definition of the
term ‘‘person’’ in the same regulations
includes ‘‘an individual, partnership,
association, corporation (including
operations of government-owned
contractor-operated facilities), business
trust, or legal representative, an
organized group of individuals, a State,
territorial, tribal, or local government or
branch thereof, or a political
subdivision of a State, territory, tribal,
or local government or a branch of a
political subdivision.’’ 5 CFR 1320.3(k).
It does not include the Federal
government or any branch, political
subdivision, or employee thereof.
Therefore, the cost to the Federal
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government for the submission of
waiver requests by contracting agencies
and departments need not be taken into
consideration.
The Department invited the public to
comment on whether each of the
proposed collections of information: (1)
Ensures that the collection of
information is necessary to the proper
performance of the agency, including
whether the information will have
practical utility; (2) estimates the
projected burden, including the validity
of the methodology and assumptions
used, accurately; (3) enhances the
quality, utility, and clarity of the
information to be collected; and (4)
minimizes the burden of the collection
of information on those who are to
respond, including through the use of
appropriate automated, electronic,
mechanical, or other technological
collection techniques or other forms of
information technology (e.g., permitting
electronic submission of responses). As
noted above, the Department received
no comments on the PRA analysis.
The Department notes that a federal
agency cannot conduct or sponsor a
collection of information unless it is
approved by OMB under the PRA, and
displays a currently valid OMB control
number, and the public is not required
to respond to a collection of information
unless it displays a currently valid OMB
control number. Also, notwithstanding
any other provisions of law, no person
shall be subject to penalty for failing to
comply with a collection of information
if the collection of information does not
display a currently valid OMB control
number.
As instructed by OMB and in
accordance with the PRA (5 CFR
1320.11 (h)), in connection with this
final rule, the Department submitted an
ICR to OMB for its request of the new
information collection requirements
contained in this rule. OMB approved
the ICR on May 5, 2010, under OMB
Control Number 1215–0209, which will
expire on May 31, 2013.
Executive Order 13132 (Federalism)
The Department has reviewed this
rule in accordance with Executive Order
13132 regarding federalism, and has
determined that the rule does not have
‘‘federalism implications.’’ The
employee notice required by the
Executive Order and part 471 must be
posted only by employers covered
under the NLRA. Therefore, the rule
does not ‘‘have substantial direct effects
on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government.’’
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Executive Order 13084 (Consultation
and Coordination With Indian Tribal
Governments)
The Department certifies that this
final rule does not impose substantial
direct compliance costs on Indian tribal
governments.
Small Business Regulatory Enforcement
Fairness Act of 1996
This rule is not a major rule as
defined by Section 804 of the Small
Business Regulatory Enforcement
Fairness Act of 1996. This rule will not
result in an annual effect on the
economy of $100 million or more; a
major increase in costs or prices; or
significant adverse effects on
competition, employment, investment,
productivity, innovation, or on the
ability of the United States-based
companies to compete with foreignbased companies in domestic and
export markets.
List of Subjects in 29 CFR Part 471
Administrative practice and
procedure, Government contracts,
Employee rights, Labor unions.
Text of Final Rule
Accordingly, a new Subchapter D,
consisting of Part 471, is added to 29
CFR Chapter IV to read as follows:
■
Subchapter D—Notification of
Employee Rights Under Federal Labor
Laws
PART 471—OBLIGATIONS OF
FEDERAL CONTRACTORS AND
SUBCONTRACTORS; NOTIFICATION
OF EMPLOYEE RIGHTS UNDER
FEDERAL LABOR LAWS
Subpart A—Definitions, Requirements
for Employee Notice, and Exceptions
and Exemptions
Sec.
471.1 What definitions apply to this part?
471.2 What employee notice clause must
be included in Government contracts?
471.3 What exceptions apply and what
exemptions are available?
471.4 What employers are not covered
under the rule?
Appendix A to Subpart A of Part 471—
Text of Employee Notice Clause
Sec.
Subpart B—General Enforcement;
Compliance Review and Complaint
Procedures
471.10 How will the Department determine
whether a contractor is in compliance
with Executive Order 13496 and this
part?
471.11 What are the procedures for filing
and processing a complaint?
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471.12 What are the procedures to be
followed when a violation is found
during a complaint investigation or
compliance evaluation?
471.13 Under what circumstances, and
how, will enforcement proceedings
under Executive Order 13496 be
conducted?
471.14 What sanctions and penalties may
be imposed for noncompliance, and
what procedures will the Department
follow in imposing such sanctions and
penalties?
471.15 Under what circumstances must a
contractor be provided the opportunity
for a hearing?
471.16 Under what circumstances may a
contractor be reinstated?
Subpart C—Ancillary Matters
471.20 What authority under this part or
Executive Order 13496 may the Secretary
delegate, and under what circumstances?
471.21 Who will make rulings and
interpretations under Executive Order
13496 and this part?
471.22 What actions may the Director of
OLMS take in the case of intimidation
and interference?
471.23 What other provisions apply to this
part?
Authority: 40 U.S.C. 101 et seq.; Executive
Order 13496, 74 FR 6107, February 4, 2009;
Secretary’s Order 7–2009, 74 FR 58834, Nov.
13, 2009; Secretary’s Order 8–2009, 74 FR
58835, Nov. 13, 2009.
Subpart A—Definitions, Requirements
for Employee Notice, and Exceptions
and Exemptions
§ 471.1
What definitions apply to this part?
Construction means the construction,
rehabilitation, alteration, conversion,
extension, demolition, weatherization,
or repair of buildings, highways, or
other changes or improvements to real
property, including facilities providing
utility services. The term construction
also includes the supervision,
inspection, and other on-site functions
incidental to the actual construction.
Construction work site means the
general physical location of any
building, highway, or other change or
improvement to real property which is
undergoing construction, rehabilitation,
alteration, conversion, extension,
demolition, weatherization or repair,
and any temporary location or facility at
which a contractor or subcontractor
meets a demand or performs a function
relating to the contract or subcontract.
Contract means, unless otherwise
indicated, any Government contract or
subcontract.
Contracting agency means any
department, agency, establishment, or
instrumentality in the executive branch
of the Government, including any
wholly owned Government corporation,
that enters into contracts.
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Contractor means, unless otherwise
indicated, a prime contractor or
subcontractor.
Department means the U.S.
Department of Labor.
Director of OFCCP means the Director
of the Office of Federal Contract
Compliance Programs in the Department
of Labor.
Director of OLMS means the Director
of the Office of Labor-Management
Standards in the Department of Labor.
Employee notice clause means the
contract clause set forth in Appendix A
that Government contracting
departments and agencies must include
in all Government contracts and
subcontracts pursuant to Executive
Order 13496 and this part.
Government means the Government of
the United States of America.
Government contract means any
agreement or modification thereof
between any contracting agency and any
person for the purchase, sale, or use of
personal property or non-personal
services. The term ‘‘personal property,’’
as used in this section, includes
supplies, and contracts for the use of
real property (such as lease
arrangements), unless the contract for
the use of real property itself constitutes
real property (such as easements). The
term ‘‘non-personal services’’ as used in
this section includes, but is not limited
to, the following services: utilities,
construction, transportation, research,
insurance, and fund depository. The
term Government contract does not
include:
(1) Agreements in which the parties
stand in the relationship of employer
and employee; and
(2) Federal financial assistance, as
defined in 29 CFR 31.2.
Labor organization means any
organization of any kind, or any agency
or employee representation committee
or plan, in which employees participate
and which exists for the purpose, in
whole or in part, of dealing with
employers concerning grievances, labor
disputes, wages, rates of pay, hours of
employment, or conditions of work.
Modification of a contract means any
alteration in the terms and conditions of
that contract, including amendments,
renegotiations, and renewals.
Order or Executive Order means
Executive Order 13496 (74 FR 6107,
Feb. 4, 2009).
Person means any natural person,
corporation, partnership,
unincorporated association, State or
local government, and any agency,
instrumentality, or subdivision of such
a government.
Prime contractor means any person
holding a contract with a contracting
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agency, and, for the purposes of
subparts B and C of this part, includes
any person who has held a contract
subject to the Executive Order and this
part.
Related rules, regulations, and orders
of the Secretary of Labor, as used in
§ 471.2 of this part, means rules,
regulations, and relevant orders issued
pursuant to the Executive Order or this
part.
Secretary means the Secretary of
Labor, U.S. Department of Labor, or his
or her designee.
Subcontract means any agreement or
arrangement between a contractor and
any person (in which the parties do not
stand in the relationship of an employer
and an employee):
(1) For the purchase, sale or use of
personal property or non-personal
services that, in whole or in part, is
necessary to the performance of any one
or more contracts; or
(2) Under which any portion of the
contractor’s obligation under any one or
more contracts is performed, undertaken
or assumed.
Subcontractor means any person
holding a subcontract and, for the
purposes of subparts B and C of this
part, any person who has held a
subcontract subject to the Executive
Order and this part.
Union means a labor organization as
defined above.
United States means the several
States, the District of Columbia, the
Virgin Islands, the Commonwealth of
Puerto Rico, Guam, American Samoa,
the Commonwealth of the Northern
Mariana Islands, and Wake Island.
§ 471.2 What employee notice clause must
be included in Government contracts?
(a) Government contracts. With
respect to all contracts covered by this
part, Government contracting
departments and agencies must, to the
extent consistent with law, include the
language set forth in Appendix A to
Subpart A of Part 471 in every
Government contract, other than those
contracts to which exceptions are
applicable as stated in § 471.3.
(b) Inclusion by reference. The
employee notice clause need not be
quoted verbatim in a contract,
subcontract, or purchase order. The
clause may be made part of the contract,
subcontract, or purchase order by
citation to 29 CFR Part 471, Appendix
A to Subpart A.
(c) Adaptation of language. The
Director of OLMS may find that an Act
of Congress, clarification of existing law
by the courts or the National Labor
Relations Board, or other circumstances
make modification of the contractual
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provisions necessary to achieve the
purposes of the Executive Order and
this part. In such circumstances, the
Director of OLMS will promptly issue
rules, regulations, or orders as are
needed to ensure that all future
government contracts contain
appropriate provisions to achieve the
purposes of the Executive Order and
this part.
(d) Physical Posting of Employee
Notice. A contractor or subcontractor
that posts notices to employees
physically must also post the required
notice physically. Where a significant
portion of a contractor’s workforce is
not proficient in English, the contractor
must provide the notice in the language
employees speak. The employee notice
must be placed:
(1) In conspicuous places in and
about the contractor’s plants and offices
so that the notice is prominent and
readily Seen by employees. Such
conspicuous placement includes, but is
not limited to, areas in which the
contractor posts notices to employees
about the employees’ terms and
conditions of employment; and
(2) Where employees covered by the
National Labor Relations Act engage in
activities relating to the performance of
the contract. An employee shall be
considered to be so engaged if:
(i) The duties of the employee’s
position include work that fulfills a
contractual obligation, or work that is
necessary to, or that facilitates,
performance of the contract or a
provision of the contract; or
(ii) The cost or a portion of the cost
of the employee’s position is allowable
as a cost of the contract under the
principles set forth in the Federal
Acquisition Regulation at 48 CFR Ch. 1,
part 31: Provided, That a position shall
not be considered covered by this part
by virtue of this provision if the cost of
the position was not allocable in whole
or in part as a direct cost to any
Government contract, and only a de
minimis (less than 2%) portion of the
cost of the position was allocable as an
indirect cost to Government contracts,
considered as a group.
(e) Obtaining a poster with the
employee notice. A poster with the
required employee notice, including a
poster with the employee notice
translated into languages other than
English, will be printed by the
Department, and will be provided by the
Federal contracting agency or may be
obtained from the 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, or from any
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field office of the Department’s Office of
Labor-Management Standards or Office
of Federal Contract Compliance
Programs. A copy of the poster in
English and in languages other than
English may also be downloaded from
the Office of Labor-Management
Standards Web site at https://
www.olms.dol.gov. Additionally,
contractors may reproduce and use
exact duplicate copies of the
Department’s official poster.
(f) Electronic postings of employee
notice. A contractor or subcontractor
that customarily posts notices to
employees electronically must also post
the required notice electronically. Such
contractors or subcontractors satisfy the
electronic posting requirement by
displaying prominently on any Web site
that is maintained by the contractor or
subcontractor, whether external or
internal, and customarily used for
notices to employees about terms and
conditions of employment, a link to the
Department of Labor’s Web site that
contains the full text of the poster. The
link to the Department’s Web site must
read, ‘‘Important Notice about Employee
Rights to Organize and Bargain
Collectively with Their Employers.’’
Where a significant portion of a
contractor’s workforce is not proficient
in English, the contractor must provide
the notice required in this subsection in
the language the employees speak. This
requirement will be satisfied by
displaying prominently on any Web site
that is maintained by the contractor or
subcontractor, whether external or
internal, and customarily used for
notices to employees about terms and
conditions of employment, a link to the
Department of Labor’s Web site that
contains the full text of the poster in the
language the employees speak. In such
cases, the Office of Labor-Management
Standards will provide translations of
the link to the Department’s Web site
that must be displayed on the
contractor’s or subcontractor’s Web site.
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§ 471.3 What exceptions apply and what
exemptions are available?
(a) Exceptions for specific types of
contracts. The requirements of this part
do not apply to any of the following:
(1) Collective bargaining agreements
as defined in the Federal Service LaborManagement Relations Statute, entered
into by an agency and the exclusive
representative of employees in an
appropriate unit to set terms and
conditions of employment of those
employees.
(2) Government contracts that involve
purchases below the simplified
acquisition threshold set by Congress
under the Office of Federal Procurement
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Policy Act. Therefore, the employee
notice clause need not be included in
government contracts for purchases
below that threshold, provided that
(i) No agency or contractor is
permitted to procure supplies or
services in a manner designed to avoid
the applicability of the Order and this
part; and
(ii) The employee notice clause must
be included in government contracts for
indefinite quantities, unless the
contracting agency or contractor has
reason to believe that the amount to be
ordered in any year under such a
contract will be less than the simplified
acquisition threshold set in the Office of
Federal Procurement Policy Act.
(3) Government contracts resulting
from solicitations issued before the
effective date of this rule.
(4) Subcontracts of $10,000 or less in
value, except that contractors and
subcontractors are not permitted to
procure supplies or services in a manner
designed to avoid the applicability of
the Order and this part.
(5) Contracts and subcontracts for
work performed exclusively outside the
territorial United States.
(b) Exemptions for certain contracts.
The Director of OLMS may exempt a
contracting department or agency or
groups of departments or agencies from
the requirements of this part with
respect to a particular contract or
subcontract or any class of contracts or
subcontracts when the Director finds
that either:
(1) The application of any of the
requirements of this part would not
serve its purposes or would impair the
ability of the Government to procure
goods or services on an economical and
efficient basis; or
(2) Special circumstances require an
exemption in order to serve the national
interest.
(c) Procedures for requesting an
exemption and withdrawals of
exemptions. Requests for exemptions
under this subsection from a contracting
department or agency must be in
writing, and must be directed to the
Director of OLMS, U.S. Department of
Labor, 200 Constitution Avenue, NW.,
Room N–5603, Washington, DC, 20210.
The Director of OLMS may withdraw an
exemption granted when, in the
Director’s judgment, such action is
necessary or appropriate to achieve the
purposes of this part.
§ 471.4 What employers are not covered
under this part?
(a) The following employers are
excluded from the definition of
‘‘employer’’ in the National Labor
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28399
Relations Act (NLRA), and are not
covered by the requirements of this part:
(1) The United States or any wholly
owned Government corporation;
(2) Any Federal Reserve Bank;
(3) Any State or political subdivision
thereof;
(4) Any person subject to the Railway
Labor Act;
(5) Any labor organization (other than
when acting as an employer); or
(6) Anyone acting in the capacity of
officer or agent of such labor
organization.
(b) Additionally, employers
exclusively employing workers who are
excluded from the definition of
‘‘employee’’ under the NLRA are not
covered by the requirements of this part.
Those excluded employees are
employed:
(1) As agricultural laborers;
(2) In the domestic service of any
family or person at his home;
(3) By his or her parent or spouse;
(4) As an independent contractor;
(5) As a supervisor as defined under
the NLRA;
(6) By an employer subject to the
Railway Labor Act; or
(7) By any other person who is not an
employer as defined in the NLRA
Appendix A to Subpart A of Part 471—
Text of Employee Notice Clause
‘‘1. During the term of this contract, the
contractor agrees to post a notice, of such size
and in such form, and containing such
content as the Secretary of Labor shall
prescribe, in conspicuous places in and about
its plants and offices where employees
covered by the National Labor Relations Act
engage in activities relating to the
performance of the contract, including all
places where notices to employees are
customarily posted both physically and
electronically. The ‘‘Secretary’s notice’’ shall
consist of the following:
‘‘Employee Rights Under The National Labor
Relations Act’’
‘‘The NLRA guarantees the right of
employees to organize and bargain
collectively with their employers, and to
engage in other protected concerted activity.
Employees covered by the NLRA* are
protected from certain types of employer and
union misconduct. This Notice gives you
general information about your rights, and
about the obligations of employers and
unions under the NLRA. Contact the National
Labor Relations Board, the Federal agency
that investigates and resolves complaints
under the NLRA, using the contact
information supplied below, if you have any
questions about specific rights that may
apply in your particular workplace.
‘‘Under the NLRA, you have the right to:
• Organize a union to negotiate with your
employer concerning your wages, hours, and
other terms and conditions of employment.
• Form, join or assist a union.
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• Bargain collectively through
representatives of employees’ own choosing
for a contract with your employer setting
your wages, benefits, hours, and other
working conditions.
• Discuss your terms and conditions of
employment or union organizing with your
co-workers or a union.
• Take action with one or more co-workers
to improve your working conditions by,
among other means, raising work-related
complaints directly with your employer or
with a government agency, and seeking help
from a union.
• Strike and picket, depending on the
purpose or means of the strike or the
picketing.
• Choose not to do any of these activities,
including joining or remaining a member of
a union.
‘‘Under the NLRA, it is illegal for your
employer to:
• Prohibit you from soliciting for a union
during non-work time, such as before or after
work or during break times; or from
distributing union literature during non-work
time, in non-work areas, such as parking lots
or break rooms.
• Question you about your union support
or activities in a manner that discourages you
from engaging in that activity.
• Fire, demote, or transfer you, or reduce
your hours or change your shift, or otherwise
take adverse action against you, or threaten
to take any of these actions, because you join
or support a union, or because you engage in
concerted activity for mutual aid and
protection, or because you choose not to
engage in any such activity.
• Threaten to close your workplace if
workers choose a union to represent them.
• Promise or grant promotions, pay raises,
or other benefits to discourage or encourage
union support.
• Prohibit you from wearing union hats,
buttons, t-shirts, and pins in the workplace
except under special circumstances.
• Spy on or videotape peaceful union
activities and gatherings or pretend to do so.
‘‘Under the NLRA, it is illegal for a union
or for the union that represents you in
bargaining with your employer to:
• Threaten you that you will lose your job
unless you support the union.
• Refuse to process a grievance because
you have criticized union officials or because
you are not a member of the union.
• Use or maintain discriminatory
standards or procedures in making job
referrals from a hiring hall.
• Cause or attempt to cause an employer
to discriminate against you because of your
union-related activity.
• Take other adverse action against you
based on whether you have joined or support
the union.
‘‘If you and your coworkers select a union
to act as your collective bargaining
representative, your employer and the union
are required to bargain in good faith in a
genuine effort to reach a written, binding
agreement setting your terms and conditions
of employment. The union is required to
fairly represent you in bargaining and
enforcing the agreement.
‘‘Illegal conduct will not be permitted. If
you believe your rights or the rights of others
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have been violated, you should contact the
NLRB promptly to protect your rights,
generally within six months of the unlawful
activity. You may inquire about possible
violations without your employer or anyone
else being informed of the inquiry. Charges
may be filed by any person and need not be
filed by the employee directly affected by the
violation. The NLRB may order an employer
to rehire a worker fired in violation of the
law and to pay lost wages and benefits, and
may order an employer or union to cease
violating the law. Employees should seek
assistance from the nearest regional NLRB
office, which can be found on the Agency’s
Web site: https://www.nlrb.gov. ‘‘Click on the
NLRB’s page titled ‘‘About Us,’’ which
contains a link, ‘‘Locating Our Offices.’’ You
can also contact the NLRB by calling toll-free:
1–866–667–NLRB (6572) or (TTY) 1–866–
315–NLRB (6572) for hearing impaired.
‘‘* The National Labor Relations Act covers
most private-sector employers. Excluded
from coverage under the NLRA are publicsector employees, agricultural and domestic
workers, independent contractors, workers
employed by a parent or spouse, employees
of air and rail carriers covered by the Railway
Labor Act, and supervisors (although
supervisors that have been discriminated
against for refusing to violate the NLRA may
be covered).
‘‘This is an official Government Notice and
must not be defaced by anyone.
‘‘2. The contractor will comply with all
provisions of the Secretary’s notice, and
related rules, regulations, and orders of the
Secretary of Labor.
‘‘3. In the event that the contractor does not
comply with any of the requirements set
forth in paragraphs (1) or (2) above, this
contract may be cancelled, terminated, or
suspended in whole or in part, and the
contractor may be declared ineligible for
further Government contracts in accordance
with procedures authorized in or adopted
pursuant to Executive Order 13496 of January
30, 2009. Such other sanctions or remedies
may be imposed as are provided in Executive
Order 13496 of January 30, 2009, or by rule,
regulation, or order of the Secretary of Labor,
or as are otherwise provided by law.
‘‘4. The contractor will include the
provisions of paragraphs (1) through (4)
herein in every subcontract or purchase order
entered into in connection with this contract
(unless exempted by rules, regulations, or
orders of the Secretary of Labor issued
pursuant to Section 3 of Executive Order
13496 of January 30, 2009), so that such
provisions will be binding upon each
subcontractor. The contractor will take such
action with respect to any such subcontract
or purchase order as may be directed by the
Secretary of Labor as a means of enforcing
such provisions, including the imposition of
sanctions for non-compliance: Provided,
however, if the contractor becomes involved
in litigation with a subcontractor, or is
threatened with such involvement, as a result
of such direction, the contractor may request
the United States to enter into such litigation
to protect the interests of the United States.’’
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Subpart B—General Enforcement;
Compliance Review and Complaint
Procedures
§ 471.10 How will the Department
determine whether a contractor is in
compliance with Executive Order 13496 and
this part?
(a) The Director of OFCCP may
conduct a compliance evaluation to
determine whether a contractor holding
a covered contract is in compliance with
the requirements of this part. Such an
evaluation may be limited to
compliance with this part or may be
included in a compliance evaluation
conducted under other laws, Executive
Orders, and/or regulations enforced by
the Department.
(b) During such an evaluation, a
determination will be made whether:
(1) The employee notice required by
§ 471.2(a) is posted in conformity with
the applicable physical and electronic
posting requirements contained in
§ 471.2(d) and (f); and
(2) The provisions of the employee
notice clause are included in
government contracts, subcontracts or
purchase orders entered into on or after
June 21, 2010, or that the government
contracts, subcontracts or purchase
orders have been exempted under
§ 471.3(b).
(c) The results of the evaluation will
be documented in the evaluation record,
which will include findings regarding
the contractor’s compliance with the
requirements of the Executive Order and
this part and, as applicable, conciliation
efforts made, corrective action taken
and/or enforcement recommended
under § 471.13.
§ 471.11 What are the procedures for filing
and processing a complaint?
(a) Filing complaints. An employee of
a covered contractor may file a
complaint alleging that the contractor
has failed to post the employee notice
as required by the Executive Order and
this part; and/or has failed to include
the employee notice clause in
subcontracts or purchase orders.
Complaints may be filed with the Office
of Labor-Management Standards
(OLMS) or the Office of Federal Contract
Compliance Programs (OFCCP) at 200
Constitution Avenue, NW., Washington,
DC 20210, or with any OLMS or OFCCP
field office.
(b) Contents of complaints. The
complaint must be in writing and must
include:
(1) The employee’s name, address,
and telephone number;
(2) The name and address of the
contractor alleged to have violated the
Executive Order and this part;
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(3) An identification of the alleged
violation and the establishment or
construction work site where it is
alleged to have occurred;
(4) Any other pertinent information
that will assist in the investigation and
resolution of the complaint; and
(5) The signature of the employee
filing the complaint.
(c) Complaint investigations. In
investigating complaints filed with the
Department under this section, the
Director of OFCCP will evaluate the
allegations of the complaint and
develop a case record. The record will
include findings regarding the
contractor’s compliance with the
requirements of the Executive Order and
this part, and, as applicable, a
description of conciliation efforts made,
corrective action taken, and/or
enforcement recommended.
§ 471.12 What are the procedures to be
followed when a violation is found during a
complaint investigation or compliance
evaluation?
(a) If any complaint investigation or
compliance evaluation indicates a
violation of the Executive Order or this
part, the Director of OFCCP will make
reasonable efforts to secure compliance
through conciliation.
(b) Before the contractor may be found
to be in compliance with the Executive
Order or this part, the contractor must
correct the violation found by the
Department (for example, by posting the
required employee notice, and/or by
amending its subcontracts or purchase
orders with subcontractors to include
the employee notice clause), and must
commit, in writing, not to repeat the
violation.
(c) If a violation cannot be resolved
through conciliation efforts, the Director
of OFCCP will refer the matter to the
Director of OLMS, who may take action
under § 471.13.
(d) For reasonable cause shown, the
Director of OLMS may reconsider, or
cause to be reconsidered, any matter on
his or her own motion or in response to
a request.
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§ 471.13 Under what circumstances, and
how, will enforcement proceedings under
Executive Order 13496 be conducted?
(a) General. (1) Violations of the
Executive Order or this part may result
in administrative enforcement
proceedings. The bases for a finding of
a violation may include, but are not
limited to:
(i) The results of a compliance
evaluation;
(ii) The results of a complaint
investigation;
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(iii) A contractor’s refusal to allow a
compliance evaluation or complaint
investigation to be conducted; or
(iv) A contractor’s refusal to cooperate
with the compliance evaluation or
complaint investigation, including
failure to provide information sought
during those procedures.
(v) A contractor’s refusal to take such
action with respect to a subcontract as
directed by the Director of OFCCP or the
Director of OLMS as a means of
enforcing compliance with the
provisions of this part.
(vi) A subcontractor’s refusal to
adhere to requirements of this part
regarding employee notice or inclusion
of the contract clause in its
subcontracts.
(2) If a determination is made by the
Director of OFCCP that the Executive
Order or the regulations in this part
have been violated, and the violation
has not been corrected through
conciliation, he or she will refer the
matter to the Director of OLMS for
enforcement consideration. The Director
of OLMS may refer the matter to the
Solicitor of Labor to begin
administrative enforcement
proceedings.
(b) Administrative enforcement
proceedings. (1) Administrative
enforcement proceedings will be
conducted under the control and
supervision of the Solicitor of Labor,
under the hearing procedures in 29 CFR
part 18, Rules of Practice and Procedure
for Administrative Hearings Before the
Office of Administrative Law Judges.
(2) The administrative law judge will
certify his or her recommended decision
issued under 29 CFR 18.57 to the
Administrative Review Board. The
decision will be served on all parties
and amicus curiae.
(3) Within 25 days (10 days if the
proceeding is expedited) after receipt of
the administrative law judge’s
recommended decision, either party
may file exceptions to the decision.
Exceptions may be responded to by the
other parties within 25 days (7 days if
the proceeding is expedited) after
receipt. All exceptions and responses
must be filed with the Administrative
Review Board.
(4) After the expiration of time for
filing exceptions, the Administrative
Review Board may issue a final
administrative order, or may otherwise
appropriately dispose of the matter. In
an expedited proceeding, unless the
Administrative Review Board issues a
final administrative order within 30
days after the expiration of time for
filing exceptions, the administrative law
judge’s recommended decision will
become the final administrative order. If
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28401
the Administrative Review Board
determines that the contractor has
violated the Executive Order or the
regulations in this part, the final
administrative order will order the
contractor to cease and desist from the
violations, require the contractor to
provide appropriate remedies, or,
subject to the procedures in § 471.14,
impose appropriate sanctions and
penalties, or any combination thereof.
§ 471.14 What sanctions and penalties
may be imposed for noncompliance, and
what procedures will the Department follow
in imposing such sanctions and penalties?
(a) After a final decision on the merits
has issued and before imposing the
sanctions and penalties described in
paragraph (d) of this section, the
Director of OLMS will consult with the
affected contracting agencies, and
provide the heads of those agencies the
opportunity to respond and provide
written objections.
(b) If the contracting agency provides
written objections, those objections
must include a complete statement of
reasons for the objections, which must
include a finding that, as applicable, the
completion of the contract, or further
contracts or extensions or modifications
of existing contracts, is essential to the
agency’s mission.
(c) The sanctions and penalties
described in this section will not be
imposed if:
(1) The head of the contracting
agency, or his or her designee, continues
to object to the imposition of such
sanctions and penalties, or
(2) The contractor has not been given
an opportunity for a hearing.
(d) In enforcing the Executive Order
and this part, the Director of OLMS may
take any of the following actions:
(1) Direct a contracting agency to
cancel, terminate, suspend, or cause to
be canceled, terminated or suspended,
any contract or any portions thereof, for
failure to comply with its contractual
provisions required by Section 7(a) of
the Executive Order and the regulations
in this part. Contracts may be canceled,
terminated, or suspended absolutely, or
continuance of contracts may be
conditioned upon compliance.
(2) Issue an order of debarment under
Section 7(b) of the Executive Order
providing that one or more contracting
agencies must refrain from entering into
further contracts, or extensions or other
modification of existing contracts, with
any non-complying contractor.
(3) Issue an order of debarment under
Section 7(b) of the Executive Order
providing that no contracting agency
may enter into a contract with any noncomplying subcontractor.
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(e) Whenever the Director of OLMS
exercises the authority in this section,
the contracting agency must report the
actions it has taken to the Director of
OLMS within such time as the Director
of OLMS will specify.
(f) Periodically, the Director of OLMS
will publish and distribute to all
executive agencies a list of the names of
contractors and subcontractors that
have, in the judgment of the Director of
OLMS, failed to comply with the
provisions of the Executive Order and
this part, or of related rules, regulations,
and orders of the Secretary of Labor, and
as a result have been declared ineligible
for future contracts under the Executive
Order and the regulations in this part.
§ 471.15 Under what circumstances must a
contractor be provided the opportunity for
a hearing?
Before the Director of OLMS takes
either of the following actions, a
contractor or subcontractor must be
given the opportunity for a hearing:
(a) Issues an order for cancellation,
termination, or suspension of any
contract or debarment of any contractor
from further Government contracts
under Sections 7(a) or (b) of the
Executive Order and § 471.14(d)(1) or
(2) of this part; or
(b) Includes the contractor on a
published list of non-complying
contractors under Section 7(c) of the
Executive Order and § 471.14(f) of this
part.
§ 471.16 Under what circumstances may a
contractor be reinstated?
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Any contractor or subcontractor
debarred from or declared ineligible for
further contracts under the Executive
Order and this part may request
reinstatement in a letter to the Director
of OLMS. In connection with a request
for reinstatement, debarred contractors
and subcontractors shall be required to
show that they have established and
will carry out policies and practices in
compliance with the Executive Order
and implementing regulations. Before
reaching a decision, the Director of
OLMS may request that a compliance
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evaluation of the contractor or
subcontractor be conducted, and may
require the contractor or subcontractor
to supply additional information
regarding the request for reinstatement.
If the Director of OLMS finds that the
contractor or subcontractor has come
into compliance with the Executive
Order and this part and has shown that
it will carry out the Executive Order and
this part, the contractor or subcontractor
may be reinstated. The Director of
OLMS shall issue a written decision on
the request.
Subpart C—Ancillary Matters
§ 471.20 What authority under this part or
Executive Order 13496 may the Secretary
delegate, and under what circumstances?
Section 11 of the Executive Order
grants the Secretary the right to delegate
any functions or duties under the Order
to any officer in the Department of
Labor or to any other officer in the
executive branch of the Government,
with the consent of the head of the
department or agency in which that
officer serves.
§ 471.21 Who will make rulings and
interpretations under Executive Order
13496 and this part?
The Director of OLMS and the
Director of OFCCP will make rulings
under or interpretations of the Executive
Order or the regulations contained in
this part in accordance with their
respective responsibilities under the
regulations. Requests for a ruling or
interpretation must be submitted to the
Director of OLMS, who will consult
with the Director of OFCCP to the extent
necessary and appropriate to issue such
ruling or interpretation.
§ 471.22 What actions may the Director of
OLMS take in the case of intimidation and
interference?
The Director of OLMS may impose
the sanctions and penalties contained in
§ 471.14 of this part against any
contractor or subcontractor who does
not take all necessary steps to ensure
that no person intimidates, threatens, or
coerces any individual for the purpose
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of interfering with the filing of a
complaint, furnishing information, or
assisting or participating in any manner
in a compliance evaluation, complaint
investigation, hearing, or any other
activity related to the administration or
enforcement of the Executive Order or
this part.
§ 471.23 What other provisions apply to
this part?
(a) The regulations in this part
implement only the Executive Order,
and do not modify or affect the
interpretation of any other Department
of Labor regulations or policy.
(b) Each contracting department and
agency must cooperate with the Director
of OLMS and the Director of the OFCCP,
and must provide any information and
assistance that they may require, in the
performance of their functions under
the Executive Order and the regulations
in this part.
(c)(1) This subpart does not impair or
otherwise affect:
(i) Authority granted by law to a
department, agency, or the head thereof;
or
(ii) Functions of the Director of the
Office of Management and Budget
relating to budgetary, administrative, or
legislative proposals.
(2) This subpart must be implemented
consistent with applicable law and
subject to the availability of
appropriations.
(d) Neither the Executive Order nor
this part creates any right or benefit,
substantive or procedural, enforceable at
law or in equity by any party against the
United States, its departments, agencies,
or entities, its officers, employees, or
agents, or any other person.
Signed in Washington, DC, May 7, 2010.
John Lund,
Director, Office of Labor-Management
Standards.
Patricia A. Shiu,
Director, Office of Federal Contract
Compliance Programs.
[FR Doc. 2010–11639 Filed 5–19–10; 8:45 am]
BILLING CODE 4510–CP–P
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[Federal Register Volume 75, Number 97 (Thursday, May 20, 2010)]
[Rules and Regulations]
[Pages 28368-28402]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-11639]
[[Page 28367]]
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Part III
Department of Labor
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Office of Labor-Management Standards
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29 CFR Part 471
Notification of Employee Rights Under Federal Labor Laws; Final Rule
Federal Register / Vol. 75, No. 97 / Thursday, May 20, 2010 / Rules
and Regulations
[[Page 28368]]
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DEPARTMENT OF LABOR
Office of Labor-Management Standards
29 CFR Part 471
RIN 1215-AB70; RIN 1245-AA00
Notification of Employee Rights Under Federal Labor Laws
AGENCY: Office of Labor-Management Standards, Department of Labor.
ACTION: Final rule.
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SUMMARY: On August 3, 2009, the Office of Labor-Management Standards
(``OLMS'') in the Department of Labor (``the Department'') issued a
proposed rule implementing Executive Order 13496. This final rule sets
forth the Department's review of and response to comments on the
proposal and any changes made to the rule in response to those
comments.
President Barack Obama signed Executive Order 13496 (``Executive
Order'' or ``E.O. 13496'') on January 30, 2009. The Executive Order
requires nonexempt Federal departments and agencies to include within
their Government contracts specific provisions requiring contractors
and subcontractors with whom they do business to post notices informing
their employees of their rights as employees under Federal labor laws.
The Executive Order requires the Secretary of Labor (``Secretary'') to
prescribe the size, form, and content of the notice that must be posted
by a contractor under paragraph 1 of the contract clause described in
section 2 of the Order. Under the Executive Order, unless a specified
exception or exemption applies, Federal Government contracting
departments and agencies must include the required contract provisions
in every Government contract. As required by the Executive Order, this
final rule establishes the content of the notice required by the
Executive Order's contract clause, and implements other provisions of
the Executive Order, including provisions regarding sanctions,
penalties, and remedies that may be imposed if the contractor or
subcontractor fails to comply with its obligations under the Order and
the implementing regulations.
DATES: Effective Date: This rule will be effective on June 21, 2010.
FOR FURTHER INFORMATION CONTACT: Denise M. Boucher, Director, Office of
Policy, Reports and Disclosure, Office of Labor-Management Standards,
U.S. Department of Labor, 200 Constitution Avenue, NW., Room N-5609,
Washington, DC 20210, (202) 693-0123 (this is not a toll-free number),
(800) 877-8339 (TTY/TDD).
SUPPLEMENTARY INFORMATION: The Regulatory Information Number (RIN)
identified for this rulemaking changed with publication of the Spring
Regulatory Agenda due to an organizational restructuring. The old RIN
was assigned to the Employment Standards Administration, which no
longer exists; a new RIN has been assigned to the Office of Labor-
Management Standards.
I. Background on the Rulemaking
On August 3, 2009, the Department issued a Notice of Proposed
Rulemaking (``NPRM'' or ``proposed rule''), 74 FR 38488, to implement
Executive Order 13496, ``Notification of Employee Rights Under Federal
Labor Laws,'' 74 FR 6107, Feb. 4, 2009. The Department invited written
comments on the proposed regulations from interested parties, including
current and potential Government contractors, subcontractors, and
vendors, and current and potential employees of such entities; labor
organizations; public interest groups; Federal contracting agencies;
and the public. In addition, when proposing certain provisions of the
rule, the Department invited public comment regarding issues addressed
in those specific provisions. The public comment period closed on
September 2, 2009, and the Department has considered all timely
comments received in response to the proposed rule.\1\
---------------------------------------------------------------------------
\1\ The Department received a single request to extend the
comment period for an additional 30 days. The commenter, a law firm,
asserted that the 30-day comment period was too brief and that, as a
result, many interested parties were unaware of the proposed rule.
After due consideration, the Department has determined that the 30-
day comment period was sufficient, and additional time in which to
respond is not warranted. The commenter requesting the extension was
able to submit a lengthy, substantive comment within the 30-day
period and attached additional comments from many of its clients. In
addition, the Department received within the 30-day period a notable
number of substantive comments representing a broad spectrum of
interests associated with the proposed rule. Finally, no other
commenter requested such an extension.
---------------------------------------------------------------------------
The Department received 86 unique and timely comments from a wide
variety of sources. Commenters included individuals, labor
organizations, and other organizations and associations representing
the interests of employees, employers and government contractors and
subcontractors. The Department recognizes and appreciates the value of
comments, ideas, and suggestions from members of the public, labor
organizations, employers, industry associations and other interested
parties.
II. The Executive Order
On January 30, 2009, President Barack Obama signed Executive Order
13496, entitled ``Notification of Employee Rights Under Federal Labor
Laws.'' 74 FR 6107, Feb. 4, 2009. The purpose of the Executive Order is
``to promote economy and efficiency in Government procurement'' by
ensuring that employees of certain Government contractors are informed
of their rights under Federal labor laws. Id., Sec. 1. As the Order
states, ``When the Federal Government contracts for goods or services,
it has a proprietary interest in ensuring that those contracts will be
performed by contractors whose work will not be interrupted by labor
unrest. The attainment of industrial peace is most easily achieved and
workers' productivity is enhanced when workers are well informed of
their rights under Federal labor laws, including the National Labor
Relations Act (Act), 29 U.S.C. 151 et seq.'' Id. The Order reiterates
the declaration of national labor policy contained in the National
Labor Relations Act (``NLRA''), 29 U.S.C. 151, that ``encouraging the
practice and procedure of collective bargaining and * * * protecting
the exercise by workers of full freedom of association, self-
organization, and designation of representatives of their own choosing,
for the purpose of negotiating the terms and conditions of their
employment or other mutual aid or protection'' will ``eliminate the
causes of certain substantial obstructions to the free flow of
commerce'' and ``mitigate and eliminate these obstructions when they
have occurred.'' Id., Sec. 1, quoting 29 U.S.C. 151. As the Order
concludes, ``[r]elying on contractors whose employees are informed of
such rights under Federal labor laws facilitates the efficient and
economical completion of the Federal Government's contracts.'' Id.
The Executive Order achieves the goal of notification to employees
of federal contractors of their legal rights through two related
mechanisms. First, Section 2 of the Order provides the complete text of
a contract clause that Government contracting departments and agencies
must include in all covered Government contracts. Sec. 2, 74 FR at
6107-08. Second, through incorporation of the specified clause in its
contracts with the Federal government, contractors thereby agree to
post a notice in conspicuous places in their plants and offices
informing employees of their rights under Federal
[[Page 28369]]
labor laws. Sec. 2, para. 1, 74 FR at 6107-08.
The Executive Order states that the Secretary ``shall be
responsible for [its] administration and enforcement.'' Sec. 3, 74 FR
at 6108. To that end, the Executive Order delegates to the Secretary
the authority to ``adopt such rules and regulations and issue such
orders as are necessary and appropriate to achieve the purposes of this
order.'' Id., Sec. 3(a). In particular, the Executive Order requires
the Secretary to prescribe the content, size, and form of the employee
notice. Id., Sec. 3(b). In addition, the Executive Order permits the
Secretary, among other things, to make modifications to the contractual
provisions required to be included in Government contracts (Sec. 3(c));
to provide exemptions for contracting departments or agencies with
respect to particular contracts or subcontracts or classes of contracts
or subcontracts for certain specified reasons (Sec. 4); to establish
procedures for investigations of Government contractors and
subcontractors to determine whether the required contract provisions
have been violated (Sec. 5); to conduct hearings regarding compliance
(Sec. 6); and to provide for certain remedies in the event that
violations are found (Sec. 7). 74 FR at 6108-09.
III. Statutory Authority for the Executive Order and the Department's
Regulation
A. Legal Authority
The President issued Executive Order 13496 pursuant to his
authority under ``the Constitution and laws of the United States,''
expressly including the Federal Property and Administrative Services
Act (``Procurement Act''), 40 U.S.C. 101 et seq. The Procurement Act
authorizes the President to ``prescribe policies and directives that
[he] considers necessary to carry out'' the statutory purposes of
ensuring ``economical and efficient'' government procurement and
supply. 40 U.S.C. 101, 121(a). Executive Order 13496 delegates to the
Secretary of Labor the authority to ``adopt such rules and regulations
and issue such orders as are necessary and appropriate to achieve the
purposes of this order.'' Sec. 3, 74 FR at 6108. The Secretary has
delegated her authority to promulgate these regulations to the Office
of Federal Contract Compliance Programs (``OFCCP'') and the Office of
Labor-Management Standards (``OLMS''). Secretary's Order 7-2009, 74 FR
58834, Nov. 13, 2009; Secretary's Order 8-2009, 74 FR 58835, Nov. 13,
2009.
B. Interagency Coordination
Section 12 of the Executive Order requires the Federal Acquisition
Regulatory Council (``FAR Council'') to take action to implement
provisions of the Order in the Federal Acquisition Regulation (FAR). 74
FR at 6110. Accordingly, the Department has coordinated with the FAR
Council for the insertion of language into the FAR that implements the
Executive Order.
IV. Summary of the Final Rule and Discussion of the Comments
This final rule establishes standards and procedures for the
implementation and enforcement of Executive Order 13496. Subpart A of
the rule sets out definitions, the prescribed requirements for the
size, form and content of the employee notice, exceptions for certain
types of contracts, and exemptions that may be applicable to
contracting departments and agencies with respect to a particular
contract or subcontract or class of contracts or subcontracts. Subpart
B of the rule sets out standards and procedures related to complaint
procedures, compliance evaluations, and enforcement of the rule.
Subpart C sets out other standards and procedures related to certain
ancillary matters. This preamble follows the same organizational
outline, and within each section of the preamble the Department has
noted and responded to the comments addressed to that particular
section of the rule.
During the interagency review process that preceded the publication
of the NPRM, the Department received requests to improve the
readability and understandability of the regulatory text by employing
``plain language,'' which includes, among other things, the use of
common, everyday words, except for necessary technical terms, the use
of the active rather than the passive voice, and the use of short
sentences. The Department has made revisions to the regulatory text of
the final rule in accordance with these guidelines.
As part of a Departmental restructuring, effective November 8,
2009, the Department abolished the Employment Standards Administration
(``ESA''), which was the administrative umbrella for several agencies
within the Department, including OLMS and OFCCP. As the administrator
overseeing both OLMS and OFCCP, the Assistant Secretary for Employment
Standards had designated administrative and enforcement functions under
the proposed rule. Due to the elimination of ESA and the position of
Assistant Secretary for Employment Standards, the final rule has been
revised so that the roles and functions assigned to the Assistant
Secretary in the proposed rule are reassigned. See Sec. Sec. 471.2,
471.13, 471.14, 471.15, 471.16, 471.21, 471.22, and 471.23. Generally
speaking, the Assistant Secretary's enforcement review functions have
been reassigned to the Department's Administrative Review Board, and
the administrative functions in the rule have been reassigned to the
Directors, formerly called the Deputy Assistant Secretaries, of OFCCP
or OLMS, or both.\2\ In addition, the definition of ``Assistant
Secretary'' has been deleted from Sec. 471.1, and definitions have
been added for easy reference to the ``Director of OFCCP'' and the
``Director of OLMS'' in the body of the rule.
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\2\ For ease of reference and to avoid confusion, the Directors
of OLMS and of OFCCP are referred to in this preamble by their
current title, ``Director,'' even when this preamble is discussing
passages of the NPRM that refer to their former title, ``Deputy
Assistant Secretary.''
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A. The Purpose of Executive Order, Statutory Authority and Preemption
The Department received a number of comments about the Executive
Order and its purpose, the President's authority to issue it, and the
asserted preemption of the Order or the Department's regulation by the
National Labor Relations Act (``NLRA''), 29 U.S.C. 151, et seq. First,
the Department received several comments opposing the Executive Order
generally, each of which suggests, for various reasons, that the
Executive Order constitutes unnecessary interference with private
enterprise. Several commenters also commented on the purpose of the
Executive Order. Some commenters were doubtful that the Executive Order
would fulfill its stated goals of promoting economy and efficiency in
government procurement through notifying employees of their rights, and
suggested instead the Executive Order would have the opposite effect
and actually increase costs to taxpayers and amplify labor-management
conflict, among other negative effects cited. Other commenters stated
that the Executive Order would undoubtedly achieve its stated goals. In
particular, these commenters indicated that informing employees of
their rights will enhance industrial peace and worker productivity,
promote a stable workforce and improve employee morale, reduce
intimidation, misinformation, harassment, and fear in the workplace,
eliminate injustice, and contribute to positive labor-management
relations--all of which will foster labor peace and reduce costs to the
government.
[[Page 28370]]
One commenter suggested that the Procurement Act provides an
insufficient basis of authority for the President to issue Executive
Order 13496. Although the comment acknowledges that the courts have
rejected a similar challenge alleging insufficient authority under the
Procurement Act for the issuance of an executive order requiring
federal contractors to post notices to their employees, the commenter
suggests that the scope of the notice required by Executive Order 13496
is broader than the Procurement Act permits.
The Department disagrees with the assertion that Executive Order
13496 is not within the President's authority under the Procurement
Act. The Procurement Act authorizes the President to ``prescribe
policies and directives that the President considers necessary to''
``provide the Federal Government with an economical and efficient
system'' of government procurement. 40 U.S.C. 101, 121. The Procurement
Act grants the President flexibility and ``broad-ranging authority,''
and executive orders issued under the authority of the Procurement Act
need only meet a ``lenient standard'' that requires that the order have
a ``sufficiently close nexus'' to the values of providing the
government an economical and efficient system for procurement and
supply. UAW-Labor Employment Training Corp. v. Chao, 325 F.3d 360, 367-
68 (DC Cir. 2003). Various executive orders have passed this ``lenient
standard,'' even in cases in which the link between the order and
efficient procurement may seem attenuated, where an argument can be
made that the order will have the opposite effect of its stated goal,
or when the order increases costs to the government in the short term.
Id. at 367-68.\3\ Executive Order 13496, which is intended to reduce
government procurement costs through better informing employees of
their rights so that obstructions to commerce stemming from labor
unrest will be mitigated or eliminated, certainly meets this standard.
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\3\ Since the passage of the Procurement Act in 1949, successive
administrations have issued executive orders governing labor and
employment practices of federal contractors, and such orders have
been sustained in the federal courts of appeals against attacks
asserting that the President exceeded his authority under the
Procurement Act. See, e.g., Executive Order 11246, 3 CFR 339 (1964-
65 Compilation) (1965) (applying equal opportunity principles to
federal contractors), upheld by Contractors Ass'n of Eastern
Pennsylvania v. Secretary of Labor, 442 F.2d 159 (3d Cir.), cert.
denied, 404 U.S. 854, (1971); Executive Order 12092, 43 FR 51,375
(1978) (imposing wage controls on federal contractors), upheld by
AFL-CIO v. Kahn, 618 F.2d 784 (DCCir.) (en banc), cert. denied, 443
U.S. 915 (1979); Executive Order 13202, 66 FR 11225 (2001) (agencies
and entities receiving federal assistance for construction projects
may neither require nor prohibit bidders or contractors from
entering into project labor agreements), upheld by Bldg. and
Constr.. Trades Dept, AFL-CIO v. Allbaugh, 295 F.3d 28 (DC Cir.
2002); E.O. 13201, 66 FR 11221 (2001) (requiring federal contractors
to include in their contracts a provision agreeing to post notices
informing employees of Beck rights), upheld by UAW-Labor and
Employment Training Corp. v. Chao, 325 F.3d 360 (DCCir. 2003). See
also City of Albuquerque v. U.S. Dept. of Interior, 379 F.3d 901
(10th Cir. 2004) (Procurement Act provided a sufficient statutory
foundation for executive order directing that in meeting federal
space needs in urban areas, first consideration be given to
centralized community business areas; order's directions were
sufficiently related to the Act to be a valid exercise of the Act's
delegated authority); AFL-CIO v. Carmen, 669 F.2d 815 (DC Cir. 1981)
(executive action to phase out free parking for federal employees
was authorized since the institution of parking charges for federal
employees would assist government in utilizing its property
efficiently and economically).
---------------------------------------------------------------------------
Five commenters contend that the Executive Order or the
Department's regulations implementing it are preempted by the National
Labor Relations Act. The comments invoke both theories of NLRA
preemption fashioned by the Supreme Court, so-called Garmon preemption
(San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244 (1959)),
which prohibits regulation of activities that are protected by Section
7 or prohibited by Section 8 of the NRLA, and so-called Machinists
preemption (Int'l Ass'n of Machinists & Aerospace Workers v. Wisconsin
Employment Relations Comm'n, 427 U.S. 132, 144 (1976)), which prohibits
regulation of areas that Congress intended to be left ``unregulated and
to be controlled by the free play of economic forces.'' 427 U.S. at
144. The Court has described Machinists pre-emption as creating a
``free zone from which all regulation, `whether federal or State,' is
excluded.'' Golden State Transit Corp. v. Los Angeles, 493 U.S. 103,
111 (1989), quoting Machinists, 427 U.S. at 153.
The Department disagrees with the contention that the Executive
Order or this implementing regulation is preempted by the NLRA. Garmon
preemption is inapplicable because the activity regulated by the
Executive Order--the posting of an accurate, noncoercive notice of
employee rights--is not conduct that is either protected by Section 7
or prohibited by Section 8 of the NLRA. Similarly, Machinists
preemption is inapplicable because the provision of accurate,
noncoercive information to employees about their NLRA rights is not
within the zone of conduct intended by Congress to be reserved for
market freedom. Further, Chamber of Commerce v. Brown, 128 S.Ct. 2408
(2008), in which the Court held that Machinists preemption invalidated
a State statute that prohibited employers that receive State funds from
assisting, promoting, or deterring union organizing, is distinguishable
because the State law in that case attempted regulation of speech about
unionization that was within the zone of conduct intended to be left to
market forces. In this case, federal contractors remain free to
advocate about unionization, and there is no interference with speech
rights protected by Section 8(c) of the NLRA. Further, the regulation
does not interfere with the primary jurisdiction of the National Labor
Relations Board (``NLRB'' or ``Board'') to draw the lines defining
coercive speech that violates Section 8 of the NLRA, 29 U.S.C. 158, or
that is prejudicial to a fair representation election under Section 9,
29 U.S.C. 159.
B. The Definitions
Section 471.1 of the final rule contains definitions of terms used
in the rule. The Department received six comments from the public about
the proposed definitions and, as noted below, has made some
modifications to the definitions after reviewing the comments.
The Department received three related to the definitions of
``contractor'' and ``contract.'' The NPRM defined a ``contractor'' to
include both a prime contractor and a subcontractor, and defined
``contract'' to include both a Government contract and a subcontract.
The effect of these definitions, taken together with the substantive
obligations of the Executive Order and the rule, creates no
differentiation between the obligations of the prime contractor--the
contractor that directly does business with the Federal government--and
the subcontractors of the prime contractor. The three comments noted
that the broad definitions of ``contractor'' and ``contract''
improperly and without limitation impose the substantive obligations of
the rule on all subcontractors. The three comments all suggest that the
definitions should be modified to reflect some limitation on the
application of the rule to subcontractors, such as the application of
the simplified acquisition threshold, 41 U.S.C. 403, to subcontractors
or a limitation on the application of the rule to subcontractors below
the first tier. One of the three comments notes that although the
proposed rule stated that the simplified acquisition threshold did not
apply to subcontracts, because the definition of ``contract'' and
``contractors'' included ``subcontract''
[[Page 28371]]
and ``subcontractor,'' the rule arguably applies the simplified
acquisition threshold to subcontracts. 74 FR at 38491.
The remaining comments about the definitional section of the rule
were all submitted by one commenter. This commenter noted that the
limited definition of ``collective bargaining agreement'' in the
proposed rule is inconsistent with the definition of ``collective
bargaining agreement'' in the NLRA, and may lead to confusion. The same
commenter requests an explanation for the inclusion of
``weatherization'' in the definition of ``construction,'' noting that
the definition of ``construction'' in similar Departmental regulations
does not include the term. Finally, this commenter recommends that the
definition of ``government contract'' should expressly exclude
contracts for the purchase of ``commercial items,'' as defined in the
Federal Acquisition Regulation, 48 CFR 2.101, so that the terms and
conditions of sales of commercial items to the government will be as
similar as possible to sales in the private sector where a contract
with the government is not involved.
After full consideration of these comments about the definitions in
the proposed rule, the Department has made the following decisions. The
Department endorses the definitions of ``contract'' and ``contractor''
as set out in the proposal, and has made no change to these definitions
in the final rule. As discussed in greater detail below, the
obligations of the final rule apply to both the government contractor
and its subcontractors at any tier. In addition, the exception in the
Executive Order, and in this implementing rule, for government
contracts below the simplified acquisition threshold applies only to
the prime contract and not to subcontracts of the prime contract.
Finally, as further explained below, the Department has decided to
except from application of the final rule subcontracts that are de
minimis in value, which the Department has defined as those
subcontracts that do not exceed $10,000. This exception has been
incorporated into the rule in Sec. 471.3(a), and no modification to
the definitions is required in order to implement this new exception
for de minimis value subcontracts.
The Department declines to exclude from the definition of
``government contract'' contracts for commercial items as defined in
the Federal Acquisition Regulations, 48 CFR 2.101. The Department
acknowledges, as the comment suggests, that the application of this
rule to contracts for commercial items means that such contracts will
differ from the purchase of the same items when the Federal government
is not the purchaser. However, the judgment underlying the Executive
Order, and the Department's judgment in this implementing rule, is that
cost savings in Federal contracting can be made when employees are well
informed of their NLRA rights, and this principle holds true whether
the contract is for commercial items or for some other product or
service.
The Department agrees that the definition of ``collective
bargaining agreement'' in the rule, which is intended only to identify
a class of collective bargaining agreements under the Federal Service
Labor Management Relations Statute (``FSLMRS''), 5 U.S.C. 7101 et seq.,
that are excepted from coverage under the Executive Order, may be
confusing to readers accustomed to the usage of the same term in the
NLRA. Therefore, the definition of this term has been removed from
Sec. 471.1, and the exception for collective bargaining agreements
entered into under the FSLMRS is set out more fully in Sec. 471.3
without cross-reference to the definitional section. In order to treat
the other coverage exception similarly, the definition of ``simplified
acquisition threshold'' has been removed from Sec. 471.1, and the
exception for government contracts below the simplified acquisition
threshold has been made more explicit in Sec. 471.3 without cross-
reference to the definitional section. In addition, in response to a
comment, the Department notes that because of the Federal government's
increased emphasis on energy efficiency, the inclusion of
weatherization activities within the definition of ``construction'' was
important to ensure that Federal contracts involving weatherization are
subject to the rule. For consistency, a similar revision has been made
to the definition of ``construction work site.'' Finally, in response
to a comment received during interagency review of the final rule, the
Department has modified the definition of ``labor organization'' to
more precisely duplicate the definition of ``labor organization'' in
the NLRA, 29 U.S.C. 152(5).
C. The Content of the Employee Notice
1. Statutory Rights Included in the Notice
Executive Order 13496 requires the Secretary to ``prescribe the
size, form and content of the notice'' that contractors must post to
notify employees of their rights. Sec. 3(b), EO 13496, 74 FR at 6108.
Appendix A to Subpart A of the proposed regulatory text presented the
content of the Secretary's proposed notice, which sets forth employee
rights under the NLRA. 74 FR at 38498-99. As a threshold matter, the
Department concluded in the NPRM that providing notice of employee
rights under the NLRA best effectuates the purpose of the Executive
Order. 74 FR at 38489-90. Section 1 of the Executive Order clearly
states that the Order's policy is to attain industrial peace and
enhance worker productivity through the notification of workers of
``their rights under Federal labor laws, including the National Labor
Relations Act.'' Sec. 1, 74 FR at 6107. The policy of the Executive
Order goes on to emphasize the foundation underlying the NLRA, which is
to encourage collective bargaining and to protect workers' rights to
freedom of association and self-organization, and notes that efficiency
and economy in government contracting is promoted when contractors
inform their employees of ``such rights.'' Further, the contract clause
prescribed by the Executive Order requires Federal contractors to post
the notice ``in conspicuous places in and about plants and offices
where employees covered by the National Labor Relations Act engage in
activities related to performance of the contract. * * *'' Sec. 2,
para. 1, 74 FR at 6107 (emphasis added). Because of these specific
references to the NLRA, the NPRM proposed including in the notice only
employee rights contained in the NLRA.
The Department received one comment noting a textual ambiguity in
the Executive Order relating to the content of the notice. The
commenter pointed out that the Executive Order refers to the provision
of notice about ``rights under Federal labor laws, including the
National Labor Relations Act,'' which, the commenter submits, suggests
that the Department should include rights under other ``Federal labor
laws'' in the notice as well. In particular, this commenter suggested
that the notice should include statutory rights under the Railway Labor
Act (``RLA''), 45 U.S.C. 151-188, the Federal law governing labor-
management relations in the airline and rail industries. Two other
commenters suggested the inclusion in the notice of rights under the
Labor-Management Reporting and Disclosure Act (``LMRDA'') 29 U.S.C. 401
et seq., which guarantees certain rights to union members. A final
commenter on this subject agreed with the Department that
[[Page 28372]]
the notice should be limited to rights under the NLRA.
The Department has considered the inclusion of other statutory
rights in the notice, but has concluded that there is overwhelming
textual support in the Executive Order, as noted above, for its
original conclusion that rights under the NLRA should be the sole focal
point of the required notice. Taken together, these provisions of the
Executive Order offer strong evidence that its intent is to provide
notice to employees of rights under the NLRA. Furthermore, no other
Federal labor or employment laws are mentioned expressly in the
Executive Order.\4\ Therefore, there is no textual support--other than
the plural reference to ``Federal labor laws''--that would support the
inclusion of rights under either the LMRDA or the RLA, as suggested by
the comments. Inclusion of rights under the RLA is precluded for
another reason as well. Because Executive Order 13496 requires that the
notice be posted ``where employees covered by the National Labor
Relations Act'' work, 74 FR 6107, and the NLRA expressly excludes from
its coverage employers covered under the RLA and their employees, 29
U.S.C. 152(2) and (3), when the Executive Order and the NLRA are read
together, federal contractors that are covered by the RLA are excluded
from the requirements of the Executive Order.
---------------------------------------------------------------------------
\4\ The Postal Reorganization Act, 39 U.S.C. 101 et seq.,
extended the jurisdiction of the NLRB to employees of the United
States Postal Service. See 39 U.S.C. 1201-1209.
---------------------------------------------------------------------------
2. Overview of the Comments on the Content of the Proposed Notice
As noted in the NPRM, the Department considered the level of detail
the notice should contain regarding NLRA rights. The Department
considered requiring a verbatim replication of the NLRA's enumeration
of employee rights in Section 7, 29 U.S.C. 157, or a simplified list of
rights based upon that statutory provision.\5\ In the end, however, the
Department concluded in the NPRM that inclusion of the statutory
language itself or a simplified list of rights in a notice would be
unlikely to convey the information necessary to best inform employees
of their rights under the Act. Instead, the Department proposed a
statement of employee rights, contained in Appendix A to Subpart A of
Part 471 (``NPRM notice'' or ``proposed notice''), 74 FR at 38498-99,
that provided greater detail of NLRA rights derived from Board or court
decisions and that would more effectively convey such rights to
employees. The proposed notice also contained examples of general
circumstances that constitute violations of employee rights under the
Act. Thus, the Department proposed a notice that provided employees
with more than a rudimentary overview of their rights under the NLRA,
in a user-friendly format, while simultaneously not overwhelming
employees with information that is unnecessary and distracting in the
limited format of a notice. The Department specifically invited comment
on the statement of employee rights proposed for inclusion in the
required notice to employees. In particular, the Department requested
comment on whether the notice contains sufficient information of
employee rights under the Act; whether the notice effectively conveys
the information necessary to best inform employees of their rights
under the Act; and whether the notice achieves the desired balance
between providing an overview of employee rights under the Act and
limiting unnecessary and distracting information.
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\5\ Section 7 of the NLRA, 29 U.S.C. 157, states that:
``[e]mployees shall have the right to self-organization, to form,
join, or assist labor organizations, to bargain collectively through
representatives of their own choosing, 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 except to the extent that
such right may be affected by an agreement requiring membership in a
labor organization as a condition of employment as authorized in
section 8(a)(3) [section 158(a)(3) of this title].''
---------------------------------------------------------------------------
The content of the proposed notice received more comments than any
other single topic addressed in the proposed rule. Many comments from
both individuals and organizations offered general support for the
content of the proposed notice, stating that employee awareness of
basic legal rights will promote a fair and just workplace, improve
employee morale, and foster workforce stability, among other benefits.
Several employee and civil rights organizations registered support for
the rule, and maintained that because employers are required to post
notices informing employees of other federal workplace rights, this
notice represents little or no additional burden and, in fact, is long
overdue given the other required notices.\6\ Labor organizations were
also supportive of the proposed notice generally, noting that
employees' awareness of their basic workplace rights in a clear and
effective manner will promote the free exercise of those rights and
prevent employer interference and intimidation of employees regarding
self-organization and collective bargaining.
---------------------------------------------------------------------------
\6\ The Department of Labor implements employee notification
requirements pertaining to employers covered by the Fair Labor
Standards Act, 29 U.S.C. 211 (implementing regulation 29 CFR 516.4);
the Occupational Safety and Health Act, 29 U.S.C. 657(c)
(implementing regulation 29 CFR 1903.2); the Family Medical Leave
Act, 29 U.S.C. 2601 et seq., (implementing regulation 29 CFR
825.300, .402); the Uniformed Service Employment and Reemployment
Rights Act, 38 U.S.C. 4334 (implementing regulation 20 CFR 1002);
Employee Polygraph Protection Act, 29 U.S.C. 2003 (implementing
regulation 29 CFR 801.6); and the Migrant and Seasonal Agricultural
Worker Protection Act, 29 U.S.C. 1821(b), 1831(b) (implementing
regulation 29 CFR 500.75, .76). Federal contractors specifically
have additional notification requirements, including equal
employment opportunity rights under Executive Order 11246, the
Rehabilitation Act of 1973, 29 U.S.C. 793, and the Vietnam Era
Veterans' Readjustment Assistance Act of 1974, (implementing
regulations at 41 CFR Chapter 60-l .42; 41 CFR 60-250.4(k); and 41
CFR 60-74 1.5(a)(4)), and rights under the Davis-Bacon Act, 40
U.S.C. 3142(c)(2) (implementing regulation 29 CFR 5.5(a)(l)) and the
Service Contract Act, 29 U.S.C. 351(a)(4) (implementing regulation
29 CFR 4.6(e), .184).
---------------------------------------------------------------------------
Other commenters were less enthusiastic about the content of the
proposed notice. A significant number of commenters--approximately one-
third--including many employer, industry and interest groups, argued
that the content of the notice is not balanced, and appears to promote
unionization instead of employee freedom of association. In particular,
many commenters stated that among the rights contained in Section 7 of
the NLRA is the right to refrain from union activity, but this right is
given little attention in comparison to other rights in the proposed
notice. In addition, many of these commenters also noted that the
examples of employer and union unfair labor practices are unbalanced--
the list of employer misconduct in the proposed notice was seven items
long, while the example of union misconduct contained only one item.
Several commenters also noted that the proposed notice excludes rights
associated with an anti-union position, including the right to seek
decertification of a bargaining representative, the right to abstain
from union membership in so-called right-to-work states, and rights
associated with the Supreme Court's decision in Communication Workers
v. Beck, 487 U.S. 735 (1988), permitting employees to seek
reimbursement of that portion of dues or fees collected under a union
security clause in a collective bargaining agreement that is not used
for collective bargaining, contract administration, or grievance
adjustments. Many of these comments noted that a neutral and even-
handed government position on unionization would be more inclusive of
these rights.
Many comments addressed the issue of complexity, as it pertains
both to the
[[Page 28373]]
law and to the content of the proposed notice. Approximately ten
comments stated that the Department's attempt to summarize NLRA
decisional law was flawed because the law is far too complex to
condense into a single workplace notice. Many of these comments noted
that NLRA law has been developed over 75 years, and involves
interpretations by both the NLRB and the federal courts, sometimes with
conflicting results. Some commenters noted that because of Board member
turnover, which alters the political composition of the Board, legal
precedent changes frequently, thus requiring frequent updates to the
content of the notice. Several commenters cited the NLRB's Basic Guide
to the National Labor Relations Act: General Principles of Law Under
the Statute and Procedures of the National Labor Relations Board (Basic
Guide to the NLRA) (1997), available at https://www.nlrb.gov/nlrb/shared_files/brochures/basicguide.pdf, to make their point about legal
complexity. In the Foreword to the Basic Guide to the NLRA, the Board's
General Counsel states that ``[a]ny effort to state basic principles of
law in a simple way is a challenging and unenviable task. This is
especially true about labor law, a relatively complex field of law.''
The thrust of these comments about legal complexity was that NLRA
decisional law is too complex, dynamic, and nuanced, and any attempt to
summarize it in a workplace notice will result in an oversimplification
of the law and lead to confusion, misunderstanding, inconsistencies,
and some say, heightened labor-management antagonism.
Similarly, six comments stated that the proposed notice itself was
too complex to be helpful or informative to employees. Some said the
notice was too long and wordy, and therefore likely to confuse or
mislead employees, which, as one commenter noted, is contrary to the
purpose of the Executive Order. Another said the notice is too long and
contains examples of employer misconduct that are arbitrary and too
specific.
Comments asserting that the content of the proposed notice was too
detailed dovetailed with the many comments suggesting that the required
notice should specify only those rights contained in Section 7 of the
NLRA or, alternatively, those rights and obligations as stated in
employee advisories on the NLRB's Web site.\7\ Approximately sixteen
comments suggested this simplified approach, while only three advocated
in favor of the level of complexity in the notice, noting particularly
that the detail in the notice comports with the Executive Order's
requirement that employees should be ``well informed of their rights.''
Those comments favoring a more streamlined notice suggested that a
simplified version of the notice based on Section 7 or the NLRB's Web
site advisory would be clear, straightforward, and easily understood;
would not be stated in ``legalese''; would be unlikely to confuse or
inflame tensions; would defer to the statute's drafters or to the
NLRB's expertise to provide a statement of rights; would be unbiased;
and would decrease the likelihood of misleading employees; and would
improve readability.
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\7\ See https://www.nlrb.gov/Workplace_Rights/employee_rights.aspx.
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In addition to these general comments about the proposed notice,
many comments offered suggestions for specific revisions to individual
provisions within the four sections of the proposed notice: the
preamble, the statement of affirmative rights, the examples of unlawful
conduct, and the enforcement and contact information. The following
discussion presents in succession the comments related to individual
provisions of the notice, followed by the Department's decisions
regarding the content of the final notice made in response to all
comments on the content of the notice.
3. Comments Addressing the Preamble of the Proposed Notice
The preamble of the proposed notice stated that ``[i]t is the
policy of the United States to encourage collective bargaining and
protect the exercise by workers of full freedom of association, self-
organization, and designation of representatives of their own choosing,
for the purpose of negotiating the terms and conditions of their
employment or other mutual aid and protection.'' 74 FR at 38498. The
proposed preamble was based on Section 1 of the NLRA, 29 U.S.C. 151,
and Executive Order 13496, Section 1. The Department specifically
sought comment on this description of policy in the proposed notice.
Five commenters support the statement in the preamble that U.S.
policy encourages collective bargaining and the full exercise of worker
self-determination rights. Many supportive comments noted that the
preamble is appropriate given that Section 1 of the Executive Order
also reiterates the policy of encouraging collective bargaining.
Fourteen commenters opposed the preamble on various grounds. Many
negative commenters noted that the preamble resembles text from Section
1 of the NLRA, ``Findings and Policies,'' 29 U.S.C. 151, but
substantially misstates it.\8\ These commenters note that U.S. policy
as stated in Section 1 of the NLRA is ``to eliminate the causes of
certain substantial obstructions to the free flow of commerce and to
mitigate and eliminate these obstructions when they have occurred,''
and that one means to achieve that policy goal is through the
encouragement of collective bargaining and free exercise of rights. By
overlooking the statute's true stated purpose to eliminate obstructions
to commerce, these commenters say, the notice's preamble improperly
elevates the ``encouragement of collective bargaining'' to a guiding
principle rather than simply a means to achieve the free flow of
commerce. Other commenters noted that the policy of the U.S. is, or
should be, to remain neutral regarding labor-management relations, and
the preamble should reflect neutrality by emphasizing employee choice,
which includes the right to refrain from collective bargaining or other
union activities. One commenter noted that Section 1 of the NLRA must
be read together with Section 9 of the NLRA, 29 U.S.C. 159, which
establishes procedures for the election of a collective bargaining
representative by a vote of a majority, thus underscoring that U.S.
policy encourages collective bargaining only when a majority of
employees have freely chosen workplace representation. Observing some
differences between the text of the notice's preamble and the statement
of purpose in the Executive Order, two commenters noted that the
preamble does not accurately track the Executive Order's precatory
language.\9\ Finally,
[[Page 28374]]
several commenters suggested that the preamble be eliminated altogether
so that these drafting issues need not be addressed.
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\8\ Section 1 of the NLRA states that ``[i]t is declared to be
the policy of the United States to eliminate the causes of certain
substantial obstructions to the free flow of commerce and to
mitigate and eliminate these obstructions when they have occurred by
encouraging the practice and procedure of collective bargaining and
by protecting the exercise by workers of full freedom of
association, self-organization, and designation of representatives
of their own choosing, for the purpose of negotiating the terms and
conditions of their employment or other mutual aid or protection.''
29 U.S.C. 151.
\9\ Section 1 of the Executive Order, 74 FR 6107, states:
As the [NLRA] recognizes, ``encouraging the practice and
procedure of collective bargaining and * * * protecting the exercise
by workers of full freedom of association, self organization, and
designation of representatives of their own choosing, for the
purpose of negotiating the terms and conditions of their employment
or other mutual aid or protection'' will ``eliminate the causes of
certain substantial obstructions to the free flow of commerce'' and
``mitigate and eliminate these obstructions when they have
occurred.'' 29 U.S.C. 151.
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4. Comments Addressing the Statement of Affirmative Rights in the
Proposed Notice
The proposed notice contains the following statement of affirmative
rights:
Under federal law, you have the right to:
Organize a union to negotiate with your employer concerning your
wages, hours, and other terms and conditions of employment.
Form, join or assist a union.
Bargain collectively through a duly selected union for a
contract with your employer setting your wages, benefits, hours, and
other working conditions.
Discuss your terms and conditions of employment with your co-
workers or a union; join other workers in raising work related
complaints with your employer, government agencies, or members of
the public; and seek and receive help from a union subject to
certain limitations.
Take action with one or more co-workers to improve your working
conditions, including attending rallies on non-work time, and
leafleting on non-work time in non-work areas.
Strike and picket, unless your union has agreed to a no-strike
clause and subject to certain other limitations. In some
circumstances, your employer may permanently replace strikers.
Choose not to do any of these activities, including joining or
remaining a member of a union.
Comments on the statement of affirmative rights offered both general
guidance on the provisions overall, as well as specific recommendations
for revising each provision individually. Generally, two labor
organizations suggested that the statement of affirmative rights should
present only the basic rights without any attempt to present the
limitations to those basic rights that have developed over the decades
of decisional law. The first labor organization argues that such
limitations are themselves subject to further exceptions, which cannot
be included in the notice without overwhelming and confusing employees.
This comment notes that the limitations to the basic rights included on
the notice involve fact-dependent scenarios that do not assist
employees in understanding their basic rights. None of the basic
rights, the comment asserts, have ever been understood as absolutes
without any exceptions or limitations, so the attempt to include those
in the notice is unnecessary and confusing. One commenter from the
retail industry noted generally that the statement of affirmative
rights should contain a disclaimer that ``certain types of speech and
expression in the workplace are not protected.'' As an example, the
commenter indicated that some employers may permissibly prohibit third-
party solicitations or leafleting, or wearing of any insignia, in a
retail setting. The final general comment regarding the statement of
affirmative rights suggested that the use of the second-person pronouns
``you'' and ``your'' is overly inclusive because not all casual readers
of the poster are covered by the statement of rights. This comment
suggests that the notice must make it clear that the enumerated rights
apply only to covered employees, as the Department has done with the
notice required by the Family and Medical Leave Act, 29 CFR part 825
Appendix C. This comment notes that a statement regarding eligibility
would eliminate confusion for employees who are not covered by the NLRA
but may read the notice.
Many comments about the notice's statement of affirmative rights
were directed at whether each individual provision, e.g., the right to
bargain collectively or the right to discuss union issues with
coworkers, constitutes an informative, accurate, and/or complete
statement of the law. Some general conclusions emerge from a review of
the comments on each provision, which is set out in more detail below.
First, labor organizations tended to favor statements of rights that
were short and without qualifications or exceptions, and disfavored the
``subject to certain exceptions'' limitations added to some of the
provisions. Groups representing employers, on the other hand, argued in
favor of adding exceptions and limitations to the notice, sometimes to
the extent that the notice would lose the quality of a poster and would
become instead a more comprehensive manual.
a. The Right To Organize and the Right To Form, Join and Assist a Union
There were no comments, positive or negative, specifically about
the text of the notice referencing employees' rights to organize a
union or form, join or assist a union.
b. The Right To Bargain Collectively
Two comments suggested that the statement that employees have the
right to bargain collectively with their employers through a duly
selected union over wages and other terms and conditions of employment
is misleading and vague. The first comment argues that the statement is
misleading because it fails to acknowledge that an employer does not
have an obligation under the NLRA to consent to the establishment of a
collective bargaining agreement, but instead only has the statutory
duty to ``meet at reasonable times and confer in good faith with
respect to wages, hours, and other terms and conditions of
employment.'' 29 U.S.C. 158(d). Moreover, the failure to reach an
agreement is not per se unlawful, and the finding of an unfair labor
practice instead depends on whether the parties engaged in good faith
bargaining. This commenter suggests that the notice should instead note
that the NLRA requires the parties to bargain in good faith but does
not compel agreement or the making of concessions, and that, in some
instances, a bargaining impasse will result, permitting the parties to
exercise their economic weapons, such as strikes or lockouts. A few
other commenters similarly suggested that the notice should include a
statement that both employers and unions have an obligation to bargain
in good faith.
The second comment submitted about this particular provision argues
that the term ``duly selected'' union is so vague that it permits
misunderstanding. For instance, the comment suggests, the phrase
permits the reader to erroneously conclude that an employer is
obligated to bargain with a union supported by the majority of
employees signing union authorization cards but not certified by the
NLRB following a government-supervised secret ballot election.
Alternatively, the comment submits that the phrase permits readers to
erroneously believe that an employer must bargain with a minority
union. To remedy the misstatements in this and other sections of the
notice, the comment suggests that the Department rely on the text of
the NLRB's very brief brochure entitled, Protecting Workplace
Democracy.\10\
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\10\ The brochure can be accessed at https://www.nlrb.gov/nlrb/shared_files/brochures/OutreachBrochure_Rev_10-30-07.pdf.
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c. Discuss With Coworkers, Join With Other Coworkers
Both labor organizations and management groups suggested changes to
the third provision in this section of the notice. One labor
organization suggested significant streamlining of this provision so
that it references only employees' ``communication'' rights, and
recommends the inclusion of the other ``action'' rights (``join other
workers,'' etc.) in the following provision. This comment advised that
separation of communication from action would clarify each provision.
Thus, the comment suggests that this provision should read simply:
``Discuss your terms and conditions of employment or union organizing
with your coworkers or with a union.'' A second labor organization
[[Page 28375]]
agreed that communication and action rights should be separated, but
adds that this provision should emphasize employees' rights to
communicate with their coworkers at their place of work about union
issues. While this comment suggests that this provision reference
``employee's rights of workplace access/communication,'' it makes no
specific proposal for revision of the text.
Comments from the groups representing employer interests generally
suggest one of two approaches--either that the provisions should be
stricken entirely because the law in this area is too complex to
summarize or that the general statement in the provision is inaccurate
because it fails to include limitations and qualifications on an
employee's right to discuss union issues with coworkers. One law firm
representing employers suggests that the provision be stricken
entirely, because the notice cannot possibly accurately summarize Board
law on this point, which is constantly evolving. Four other commenters
assert that the following complexities or subtleties are missed in the
overly succinct statement about communication rights: The statement
fails to notify employees that employers can lawfully prohibit certain
communication, such as a no-talk rule about a drug investigation or
disparagement of employer's product or service; the statement fails to
include the Board's recently articulated rules governing employee use
of and access to employer e-mail for union talk,\11\ omits references
to the fact that an employee does not have an absolute right to speak
to a union organizer on an employers' property, does not discuss the
meaning of ``mutual aid,'' fails to discuss an employees' duty not to
disparage employers' products or services, and does not reference the
limitations on so-called Weingarten rights involving an employee's
right to have a union representative present in a disciplinary meeting;
and the provision does not clarify that concerted activity must be both
``concerted'' and ``for the mutual aid and protection'' of employees,
nor does it reflect that not all action taken together with coworkers
is protected, for example, a sit down strike; and the provision does
not explain that certain expressions or conduct, for instance,
profanity directed at the employer, may not be protected (Jackson
Lewis). As proposed revisions to this provision, one comment suggests
that provisions should include the general ``subject to certain
limitations'' language; another suggests sole reliance on the NLRB's
brochure, Protecting Workplace Democracy, See supra n. 12; and the
remaining comments suggest the inclusion of the level of detail that
would effectively turn the notice into a multi-page legal reference.
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\11\ See The Register Guard, 351NLRB 1110 (2007).
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d. Attending Rallies
All four comments about the right to attend rallies suggest that
this provision should be eliminated. One comment suggests that the term
``rally'' has no legal history or meaning under the NLRA, and that the
reference is misleading because it erroneously indicates that there
might be some legal protection for a rally on company property on non-
work time. Other comments similarly suggest that the provision is
flawed because it does not distinguish between types of protected and
unprotected rallies and is confusing. In addition to deleting the
reference to rallies, one labor organization's proposed revision
suggests deleting the reference to leafleting, discussed further below,
and establishing this provision as the ``action'' provision in
counterpoint to the ``communication'' provision above. Thus, this
comment suggests the following revision: ``Take action with one or more
of your co-workers to improve your working conditions by, among other
means, raising work-related complaints directly with your employer or
with a government agency, and seeking help from a union.''
e. Leafleting
Four of the five comments about the inclusion of the right to
leaflet on non-work time in non-work areas level criticisms similar to
criticisms of other provisions--that the provision is too general and
does not distinguish between types of leafleting conduct that are
protected and those that are unprotected. For instance, the comments
indicate that the provision fails to note limitations related to the
rights of off-duty employees to handbill, that leafleting can be
prohibited in patient care areas, and that some types of
communications, such as the disparagement or vilification of an
employer's reputation, are unprotected. The fifth comment on this topic
suggests elimination of the provision because the right to engage in
literature distribution is adequately addressed in the examples of
violations and need not be addressed in the statement of affirmative
rights.
f. Striking and Picketing
The notice's reference to the right to strike and picket received
eight comments, and the comments are aligned generally as they have
been with other provisions: Labor organizations suggest the removal of
the ``subject to certain other limitations'' language and the
suggestion that ``[i]n some circumstances, your employer may
permanently replace strikers,'' while comments representing employer
interests suggest the provision is flawed because of the absence of
further limitations, exceptions, and distinctions.
One labor organization suggests that the right to strike and picket
be presented as are the other rights in the notice, with a plain
affirmative statement of the right and without describing possible
limitation on the exercise of the right in question. The reference to
the limitation on the right in the presence of a contractual no-strike
clause both overstates and understates the possible limitations on the
right, this commenter submits, depending, for example, on the nature of
the no-strike clause in question. A second labor organization echoes
the criticism, and further suggests that the introduction of the
complex law regarding an employer's right to permanently replace
certain striking employees adds an unnecessary and ultimately confusing
limitation, which will lead employees to fear exercising the right.
Other labor organizations specifically endorse this criticism.
Among the permutations missed in the proposed formulation, other
commenters argue, are the distinctions that may lead to a determination
that certain strike activity is unprotected, such as whether the strike
is for recognition or bargaining, whether the strike has a secondary
purpose, whether picketing involves a reserved-gate, whether the strike
is a sit-down or minority strike, whether the conduct is a slow down
and not a full withholding of work, whether the strike is partial or
intermittent, whether the strike involves violence, and whether the
strike is an unfair labor practice strike or an economic strike. One
law firm suggests this area of law is so complex that it cannot be
reduced to a single provision in the notice, and thus should be
eliminated altogether.
g. Choosing To Refrain From Union Activity
All nine comments about the right to refrain from engaging in union
activity universally criticized its lack of prominence, two of these
comments asserting that the provision's prominence was so diminished
that they did not notice the statement at all. Some comments accused
the Department of ``burying'' the provision in the text far below the
other rights to
[[Page 28376]]
engage in union activity, further exemplifying, some say, that the
Department favors union activity. Suggested revisions to amplify the
prominence of the provision include stating that employees have the
right to refrain from protected, concerted activities and/or union
activities; stating that employees' right to refrain includes the right
to actively oppose unionization, to not sign union authorization cards,
to request a secret ballot election, to decertify a union
representative, to not be a member of a union or pay dues or fees
(addressed further below); and stating that employees have th