AGC Submits Comments on Proposed Rule Requiring Federal Contractors to Post NLRA Notices

On September 3, AGC submitted comments on a proposed rule issued by the U.S. Department of Labor ("the Department") Office of Labor-Management Standards titled "Notification of Employee Rights Under Federal Labor Laws."  The proposed rule implements Executive Order 13496, which requires federal agencies to include a new clause in nonexempt contracts requiring contractors and subcontractors to post notices informing their employees about their rights under the National Labor Relations Act ("NLRA").  The proposed rule establishes the content of the notice and sets forth sanctions, penalties, and administrative procedures related to findings of noncompliance. AGC commented that the content of the proposed notice should be shortened, simplified, and contain more balanced information.  AGC recommended removing the lengthy list of specific examples of illegal employer conduct or at least including a similar list of illegal union conduct as well as additional information about employees' so-called "Beck rights" concerning union nonmembership and dues payment.  AGC also recommended that the Department abandon its proposal to include the entire text of the notice in the new contract clause, suggesting instead that the Department allow contracting agencies to incorporate the notice by reference. AGC also expressed strong concern about the provisions in the proposed rule that appear to give the Department authority to enforce compliance with the content of the notice - i.e., substantive mandates of the NLRA - rather than merely with the posting requirement.  AGC pointed out that the Department lacks authority and expertise to administer and enforce the NLRA, a complex and fluctuating body of law over which the National Labor Relations Board has primary jurisdiction. In addition, AGC asserted that the proposed rule makes available overly severe sanctions - including contract cancellation, termination, and debarment - for even minor violations.  AGC advised the Department to make such sanctions available only in cases of willful and repeated offenses, as determined after an opportunity for a full and fair hearing. Finally, AGC challenged the Department's interpretation of the executive order's application to subcontracts involving purchases below the simplified acquisition threshold.  Because the executive order explicitly exempts contracts for purchases below the simplified acquisition threshold but does not explicitly exempt such subcontracts, the Department included in coverage of the rule subcontracts below the threshold provided that they are necessary to the performance of the prime contract.  AGC recommended that the Department limit the rule to subcontracts that are both for purchases above the simplified acquisition threshold and necessary to the performance of the prime contract. For more information, contact Denise Gold, Associate General Counsel, at goldd@agc.org or (703) 837-5326.