June 2, 2010

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New NLRA Notice Posting Requirement Takes Effect June 21, 2010

Shortly after President Barack Obama took office last January, he signed Executive Order 13496 (the "Order"). The Order requires certain federal contractors and subcontractors to post notices informing employees of their rights under federal labor law. On May 20, 2010, the U.S. Department of Labor ("DOL") Office of Labor-Management Standards ("OLMS") issued a final rule implementing the Order. The rule, which takes effect on June 21, 2010, identifies which federal contractors and subcontractors are required to post the notice, establishes the content of the notice, provides guidance on the manner and location of the posting, and sets forth penalties for noncompliance.

Coverage
The notice must be posted by federal contractors who have at least one covered federal contract of at least $100,000, and by the subcontractors (whether at the first-tier level or below) performing work necessary to the primary covered contract as long as their subcontract is greater than $10,000.

The reach of the Order is not limited to employers whose employees are unionized. There is, however, an exception to the posting requirement. Contractors and subcontractors that do not meet the definition of "employer" under the National Labor Relations Act ("NLRA") have no obligation to post the notice.

Content of the Required Notice
The required notice provides employees with information concerning their rights under the NLRA to join a union and to bargain collectively with their employer. The notice goes on to provide seven examples of illegal conduct by employers, and five examples of illegal union conduct. Importantly, the notice informs employees that they should contact the National Labor Relations Board ("NLRB") if they believe their rights or the rights of others have been violated, and it provides the NLRB's website address and toll-free number for that purpose. Notices and additional information are available on the DOL website at http://www.dol.gov/olms/regs/compliance/EO13496.htm.

Manner and Location of Posting
The notice must be conspicuously displayed in all places where notices to employees are customarily posted, as well as where employees perform activities related to the federal contract or subcontract. If an employer customarily posts notices to employees electronically, it must post the notice about NLRA rights electronically in addition to posting it physically. When posted electronically, the notice must be prominent, include a link to the DOL's website containing the full text of the notice, and must be labeled "Important Notice About Employee Rights to Organize and Bargain Collectively with Their Employers." Additionally, notice must be provided in languages used by "a significant portion" of the contractor or subcontractor's employees.

Enforcement
The regulations provide for compliance evaluations, complaints, complaint investigations, and enforcement procedures by the DOL's Office of Federal Contract Compliance Programs ("OFCCP"). Contractors and subcontractors that violate this notification rule may be subject to sanctions for noncompliance, including suspension or cancellation of an existing contract; debarment from future contracts; and inclusion on a list published and distributed by the Director of OLMS to all executive agencies listing the names of contractors and subcontractors declared ineligible for future contracts as a result of noncompliance with these requirements.

More Change to Come?
The new posting requirement marks the first time that employers have been required to proactively post a notice summarizing employee rights under the NLRA, and may lead to increased organizing activity and an increase in the number of unfair labor practice charges filed by employees with the NLRB.

Notably, with the new composition of the NLRB (See Labor Law Alert: Obama Delivers Change to the NLRB (April 5, 2010) http://bit.ly/bKjcbv) there has been speculation about the possibility that the NLRB will use its substantive rulemaking authority under Section 6 of the Act to issue a workplace rights notice not limited to government contractors, but applicable to all employers covered by the NLRA. A petition for such rulemaking has been pending before the NLRB since 1993. The petition states in part:

Employees . . . are generally unaware of their rights under the Act; indeed, it appears that most are even unaware of the existence of the Board and have no knowledge of what it is supposed to do. This is especially true of unorganized employees, notwithstanding that they are granted important and extensive rights under Section 7 of the Act: to form, join, or assist labor organizations, to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any such activities. In view of the vast numbers of unorganized employees and the general misperception among unorganized employees that they possess few if any rights of the kind protected by this Act, there is a greater need for a general notice and posting requirement regarding Section 7 and related unfair labor practices . . . .

In 2007, then Board Member Wilma Liebman issued a statement before the Senate's Health, Education, Labor and Pensions ("HELP") Committee expressing her interest in administrative rulemaking. She said, "[r]emarkably, more than 70 years after the [NLRA] was passed, the Board does not require employers to post any notice informing employees of their rights under federal labor law, except three days before a scheduled election and as a remedy in cases where the employer has committed an unfair labor practice. The Board has never acted on long-pending petitions for rulemaking requiring such a notice. It is high time we did." Recently, Liebman, now Chairperson of the Board, has reiterated before the American Bar Association and the U.S. Chamber of Commerce that the NLRB intends to make greater use of rulemaking and remains particularly interested in the 1993 petition asking the Board to adopt a rule requiring employers to post workplace notices informing employers of their rights under the NLRA. The recently revamped NLRB has not yet done so, but that change may be on the near horizon.

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