On August 3, 2009, the U.S. Department of Labor (DOL) issued a proposed rule to implement President Barack Obama’s recent Executive Order 13496 requiring federal contractors to inform employees of their rights under federal labor laws, including the National Labor Relations Act (NLRA). Executive Order 13496 requires covered contractors to include certain language in their contracts and to conspicuously post notices of employee rights under federal labor laws. The proposed rule describes the content of the required notice, which contractors and subcontractors must post, and the penalties that can be imposed for noncompliance.

The first part of the proposed rule includes definitions, prescribes requirements for the size, form and content of the notice, lists exceptions for certain types of contracts, and details available exemptions. Declining to require the inclusion of language used in the NLRA outlining an employee’s rights (or even a simplified list of employee protections under the NLRA), the DOL instead proposes a notice which contains “greater detail of NLRA rights, derived from Board or court decisions, implementing such rights – which will more effectively convey such rights to employees . . . and apply the rights to actual workplace situations.” The notice’s proposed language informs employees that they have the “right to [d]iscuss your terms and conditions of employment with your co-workers or a union, join other workers in raising work-related complaints with your employer . . ., [and] take action with one or more co-workers to improve your working conditions.” The proposed notice provides examples of prohibited employer conduct and a brief description of prohibited union conduct. It directs employees to the National Labor Relations Board’s (NLRB) website and toll-free number, warning that employees have only six months to file a complaint.

The notice would be required to be posted by federal contractors, first-tier subcontractors, and all other subcontractors below the first-tier – without regard to contract dollar amounts – as long as they are “necessary to the performance of the prime contract.”.

The notice described in the proposed rule includes language setting forth the right to collectively bargain and other pro-union type statements and would be required to be included verbatim – rather than incorporated by reference – in contracts, subcontracts, and purchase orders. The notice, which can be obtained from contracting agencies and the Office of Labor Management Standards (OLMS), must be physically posted by contractors and subcontractors where employees are likely to see it. Contractors who customarily post notices to employees electronically must also post this notice electronically on its intranet or extranet, and must prominently include a link to the DOL’s website containing the full text of the notice.

Penalties for noncompliance with the proposed regulations include cancellation, termination, or suspension of federal contracts. In addition, the Secretary of Labor may issue an order debarring the contractor “until such contractor has satisfied the Secretary that such contractor has complied with and will carry out the provisions of the order.” Written complaints can be filed with either the Office of Federal Contract Compliance (OFCCP) or the OLMS, although OFCCP will have investigative authority.

The DOL has invited comments on all parts of the proposed regulations, but parties wishing to comment must do so by September 2.