Executive Order 13496 (EO): Notice of Employee's Right to Unionize
Timothy D. Norton II
On January 30, 2009, President Obama signed EO 13496 which requires federal contractors and subcontractors to post a notice to employees of their rights under the National Labor Relations Act (NLRA). The EO also requires federal contractors to incorporate certain clauses in to their contracts with subcontractors. These clauses are recited in the language of EO.
The EO does not apply to all federal contractors. A covered federal contractor is one who has a federal contract of $100,000 or more. However, there is no dollar threshold for federal subcontractors. A federal subcontractor is defined as a subcontractor who is performing work “necessary to” the performance of the covered federal contractor. This definition is extremely broad and most likely covers every subcontractor who has contracted with a covered federal contractor.
The required EO notice specifically states that employees have the right under the NLRA to form or join a union. Additionally, the notice provides that if an employer discriminates or takes any adverse action against an employee for joining a union or supporting a union, the employee may contact the National Labor Relations Board. The notice provides detailed instructions on how the employee should contact the NLRB.
One body that has the power to oversee the implementation is the Office of Federal Contract Compliance Programs (OFCCP). There are three ways the OFCCP may enforce the EO. The OFCCP can investigate through an EO compliance audit, a general compliance audit under EO 11246, Section 503 of the Rehabilitation Act or VEVRAA or through the investigation of a complaint by an employee. An employee may file a written complaint to the OFCCP if the contractor discriminates against the employee because the employee has exercised its rights under the NLRA or EO.
If a contractor is determined to be non-compliant with the EO, the penalties are severe. They include cancellation or suspension of current contracts and debarment from future contracts including extension of existing contracts. One of the more controversial provisions of the EO requires contractor enforcement of the EO. Under the EO, if a subcontractor is determined to be non-complaint, the contractor may have the responsibility to direct that subcontractor to comply with the EO. If a contractor refuses to direct its subcontractors to become compliant, the penalties may be assessed against the contractor as if the contractor was non-compliant. This could potentially lead to expensive litigation between the contractor and the subcontractor.
One interesting twist in the EO is that it does not prohibit contractors from posting a notice informing employees of its thoughts on unionization. This notice, however, should be drafted by counsel to prevent the possibility of violating the law.
Contact CGA’s Labor and Employment Law Department with questions concerning compliance with the EO 13496.
