Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

The U.S. Department of Agriculture has withdrawn a controversial rule that would have required contactors to certify that they and their subcontractors and suppliers are in compliance with all applicable labor laws. The contracting clause, reminiscent of the Clinton Administration “blacklisting” regulation, was issued in December 2011 as both a direct final rule and a notice of proposed rulemaking. Bypassing the normal notice and comment period, the direct final rule would have taken effect on February 29 of this year. The Department simultaneously issued the proposed rule that allowed for a normal notice and comment process.

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Updated: January 5, 2012

Both the House and Senate have approved a conference report (pdf) to the National Defense Authorization Act for Fiscal Year 2012 (H.R. 1540), a bill that authorizes appropriations for the Department of Defense (DoD). The final measure includes a provision stipulating that in determining whether TRICARE network providers are to be considered subcontractors subject to affirmative action and other requirements governed by the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), TRICARE managed care support contracts that include the requirement to establish, manage, or maintain a network of providers will not be considered to be a contract for the performance of health care services or supplies on the basis of that requirement. The conference report also contains provisions extending certain reemployment rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA) to members of the National Guard called to respond to domestic emergencies.

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The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued its long-awaited proposed rule (pdf) amending the nondiscrimination and affirmative action requirements regarding individuals with disabilities for federal contractors and subcontractors. Specifically, the rule revises the regulations that implement Section 503 of the Rehabilitation Act of 1973, as amended. Section 503 requires most federal contractors and subcontractors to take affirmative action to employ and advance in employment qualified individuals with disabilities, and prohibits discrimination against them. According to the notice to be published in the December 9 edition of the Federal Register, the proposed regulations would strengthen these affirmative action requirements, describe the specific actions a contractor must take to satisfy its obligations, increase the contractor’s data collection obligations, and establish specific utilization benchmarks to help measure the effectiveness of the contractor’s affirmative action efforts. In addition, the proposal revises the nondiscrimination provisions to conform to changes made by the ADA Amendments Act (ADAAA) of 2008.

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On December 1, 2011 the Senate passed 93-7 the National Defense Authorization bill that extends reemployment rights to members of the National Guard mobilized for domestic emergencies, and stipulates that certain health care providers under the TRICARE network are not to be considered subcontractors subject to Office of Federal Contract Compliance Programs (OFCCP) requirements.

USERRA Rights

Introduced by Sen. Roy Blunt (R-MO), Amendment 1133 to the National Defense Authorization Act for Fiscal Year 2012 (S. 1867) would amend sections of the Uniformed Services Employment and Reemployment Rights Act (USERRA), which provides certain employment and reemployment rights to returning service members, and prohibits employers from taking adverse actions against them. Specifically, the amendment would extend these rights to members of the National Guard who have been called up to carry out homeland security missions in the United States. Current law does not afford National Guard members serving domestically the same USERRA protections it does for those serving overseas. The amendment revises section 4312 of USERRA to include full time National Guardsmen called up for federal homeland security missions for possible exemption from the Act’s 5-year limit on service. This amendment had been introduced as a standalone bill – the National Guard Employment Protection Act (H.R. 1811, S. 1823) – in both the House and Senate this year, but had failed to advance.

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The Department of Agriculture’s Office of Procurement and Property Management has issued a direct final rule that would require its contractors to attest that they and their subcontractors, to the best of their knowledge, are in compliance with all applicable labor laws, and report any violations to their contracting officer. Specifically, the rule would add a subpart and clause entitled “Labor Law Violations” to the Agriculture Acquisition Regulation (AGAR) providing the language that must be included in all UDSA solicitations and contracts exceeding the simplified acquisition threshold (currently $150,000). If adopted, the provision would read as follows:

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Updated:  November 21, 2011

The first portion of President Obama’s jobs package is likely to become law this week after the House unanimously approved a bill the Senate amended (H.R. 674) that contains employer tax incentives for hiring unemployed veterans. The veterans provisions are set forth in the VOW to Hire Heroes Act, added as an amendment to a previously-approved tax bill the House cleared in October. Among other job training and assistance benefits offered to veterans, the measure would provide employers with a tax credit of up to $5,600 for hiring veterans who have been unemployed for at least six months, a $2,400 credit for hiring veterans who have been unemployed for more than four weeks, but less than six months, and a credit of up to $9,600 that would increase the existing Wounded Warriors Tax Credit for employers that hire veterans with service-connected disabilities who have been unemployed for at least six months. These hiring incentives were included in the broader American Jobs Act (S. 1660) that failed to advance in the Senate last month.

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The Equal Employment Opportunity Commission (EEOC) and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) have updated the Memorandum of Understanding (MOU) (pdf) between the two agencies “to promote greater efficiency and coordination, and to eliminate conflict and duplication of effort.” The substantive revisions to the MOU – last edited in 1999 – clarify how discrimination complaints or charges filed with one agency are to be processed if they involve issues subject to the jurisdiction of the other.

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The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) have issued a final rule implementing Executive Order (EO) 13494, Economy in Government Contracting, which precludes government contractors from being reimbursed for expenses incurred to influence employees regarding their decisions to form unions or engage in collective bargaining. Issued on January 30, 2009, EO 13494 considers as un-reimbursable any activities that are undertaken to persuade employees to exercise or not exercise such rights, such as preparing and distributing materials, hiring or consulting legal counsel or consultants, holding meetings (including paying the salaries of the attendees at meetings held for this purpose) and planning or conducting activities by managers, supervisors or union representatives during working hours. Such expenditures are deemed “unallowable” under any federal government contract by the order. Although federal contractors cannot use federal funds for these purposes, they may use federal dollars to “maintain satisfactory relations” between the contractor and its employees. As stated in the order, such expenditures could include the cost of labor-management committees, employee publications (provided they do not attempt to persuade employees regarding unionization), and other related activities. Continue reading this entry at Littler's Labor Relations Counsel.

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The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) have issued a final rule (pdf) adopting regulations that implement Executive Order (EO) 13496: Notification of Employee Rights Under Federal Labor Laws. (pdf)  Among other requirements, this E.O. mandates that all government contracting departments and agencies include a provision in most government contracts stipulating that the contractor post a notice "in all places where notices to employees are customarily posted both physically and electronically," informing them of their rights under the National Labor Relations Act (NLRA). Covered contractors are also required to include a similar provision in subcontracts that are necessary to the performance of the government contract and in an amount in excess of $10,000. This notification rule should not be confused with the National Labor Relations Board’s final rule – Notification of Employee Rights under the National Labor Relations Act – that requires private sector employers subject to the NLRA to post a notice informing employees of their rights under the NLRA.

The final rule to be published in the November 2, 2011 edition of the Federal Register adopts without change interim regulations amending the Federal Acquisition Regulation (FAR) to apply the Department of Labor’s rule on this topic. The DOL’s rule, which was released in May 2010, prescribed the requirements for the size, form, and content of the notice, outlined the exceptions for certain types of contracts, and discussed the standards and procedures related to complaints, penalties, compliance evaluations and enforcement of the notice requirement. In June 2010, the Office of Federal Contract Compliance Programs (OFCCP) issued a directive on its procedures for conducting audits to verify that contractors are complying with the E.O.

For more information on the contractor notification requirements mandated by E.O. 13496, see Littler's ASAP: DOL Issues Final Rule on Notification by Federal Contractors of Employee Labor Law Rights.

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Federal contractors will have an additional month to submit their VETS-100/VETS-100A reporting forms required under the Vietnam Era Veterans' Readjustment and Assistance Act of 1974 (VEVRAA), as amended. The Department of Labor’s Veterans' Employment & Training Service (VETS) has announced that due to continuing technical problems with the agency’s electronic filing system, contractors required to file Forms 100 and 100A will have until December 30, 2011 to report the number of their current employees and new hires who are qualified covered veterans. The normal annual reporting cycle begins August 1 and ends September 30. The agency had already extended the filing deadline by one month, but the technical problems have not been resolved as anticipated. The DOL now expects the electronic system to be operational as of November 1, 2011.

According to the announcement on the VETS website, because of these technical difficulties, “the Department will not initiate enforcement actions against contractors who submit the VETS-100/VETS-100A from November 1, 2011 through December 30, 2011. Unless a further update is given or other recognized exceptions apply, the Department may initiate enforcement actions against contractors who do not submit VETS-100/VETS-100A forms by December 30, 2011.”

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The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has submitted to the Office of Management and Budget (OMB) for review revised forms it uses to collect information in connection with non-construction supply and service contractor compliance reviews. Specifically, the agency intends to amend its “Scheduling Letter” (pdf) that the OFCCP sends to federal contractors selected for compliance review. This letter notifies the contractor that it will be audited and informs the contractor that it will need to provide certain information in connection with the evaluation. The changes to the actual scheduling letter, for the most part, are cosmetic. OFCCP ceased reviewing I-9 forms as part of its routine audits, and the new scheduling letter reflects that change. The scheduling letter is issued along with the standard form known as the “Itemized Listing,” (pdf) which sets forth the specific information and documentation that the contractor is required to produce, in addition to the actual affirmative action plans themselves. The OFCCP intends to make substantial changes to the Itemized Listing, however.

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When the House of Representatives returns from its August recess it plans to take up a number of bills designed to repeal various labor- and employment-related regulations and agency actions. According to a memorandum issued by House Majority Leader Eric Cantor (R-VA), their regulatory relief agenda will include repeal of specific regulations, as well as fundamental and structural reform of the rule-making system. One of the first bills the House will consider the week of September 12 is the Protecting Jobs From Government Interference Act (H.R. 2587), legislation that would prohibit the National Labor Relations Board from ordering any employer to close, relocate, or transfer its operations under any circumstance. The House Committee on Education and the Workforce narrowly approved this bill on July 21, 2011.

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The Department of Labor’s Wage and Hour Division (WHD) has issued its final rule (pdf) implementing Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts, signed by President Obama on January 30, 2009. This Order requires that any federal service contracts covered by the Service Contract Act (SCA) above the simplified acquisition threshold (currently $150,000) and solicitations for such contracts include a clause requiring contractors and their subcontractors to offer existing employees the right of first refusal to take positions for which they are qualified under the new contract. The right of first refusal clause does not apply to managerial or supervisory employees. Any new contractor cannot advertise employment openings until the right of first refusal has been exercised by the existing employees. Unlike a similar Executive Order issued by former President Clinton, there are no exemptions for the U.S. Postal Service, NASA, military, and Veterans Administration. Contractors found in violation of the Order and its implementing regulations could be barred from future federal contracts for up to three years. The effective date of this rule will be published in the Federal Register once the Federal Acquisition Regulatory Council (FARC) issues its own regulations on this Executive Order.

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The Department of Labor’s Veterans' Employment & Training Service (VETS) has announced that federal contractors have until November 30, 2011 to submit their VETS-100/VETS-100A reporting forms. The Vietnam Era Veterans' Readjustment and Assistance Act of 1974 (VEVRAA), as amended, requires that certain contractors and subcontractors report annually the number of their current employees and new hires who are qualified covered veterans. More information on VEVRAA’s federal contracting requirements can be found here.

According to the notice on the VETS’s website, technical problems have delayed the electronic submission of these forms, which was slated to begin August 1, 2011. The agency believes the problems will be fixed within the next two months, enabling the online filing system to begin accepting the forms by October 1, 2011. Because of these technical problems, the agency states that it “will not initiate enforcement actions against contractors who submit the VETS-100/VETS-100A from October 1, 2011 through November 30, 2011.” Unless otherwise notified, contractors can expect the VETS to resume enforcement actions against those who fail to submit the VETS-100/VETS-100A forms by November 30, 2011.

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The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued an advance notice of proposed rulemaking (ANPRM) (pdf) to solicit public input on the agency’s development and implementation of a new compensation data collection tool. According to the agency’s summary of this ANPRM, to be published in the August 10, 2011 edition of the Federal Register, “[p]ossible uses for the collected data include generating insight into potential problems of compensation discrimination at the establishment level that warrant further review or evaluation by OFCCP or contractor self-audit.” The agency further states that the data provided could be used “to conduct analyses at the establishment level, as well as to identify and analyze industry trends, Federal contractors’ compensation practices and potential equal employment-related issues.” The agency claims that the tool would likely be used “primarily as a screening tool” that would enable the agency to “effectively and efficiently identify supply and service contractors whose compensation data indicates that further investigation is necessary” as well as be used to “identify contractors for compensation focused reviews as well as full compliance reviews.”

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During a web chat to discuss the Office of Federal Compliance Programs’ (OFCCP) regulatory agenda, OFCCP Director Patricia Shiu touted the agency’s recent accomplishments and fielded a number of questions about various OFCCP regulations and other initiatives. The agency has been considerably more active on the enforcement and regulatory front this year. In fact, Shiu claimed that in comparison to the same time period last year, the agency completed 44 financial conciliation agreements that include $5.66 million in awards and 657 job offers for 8,090 individuals in the first 6 months of Fiscal Year 2011, representing a 25 percent increase in agreements and more than double the amount in monetary awards.

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The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued a new Directive updating the application and approval procedures for Functional Affirmative Action Program (FAAP) Agreements. OFCCP regulations allow federal supply and service contractors to develop affirmative action programs (AAPs) that are based on their business function or unit instead of establishments based on physical location. In order to do so, contractors must get prior OFCCP approval. In essence, the OFCCP Director must determine that “the contractor’s overall operational structure, compliance history, and proposed functional AAPs meet the criteria” set forth in the new Directive, effective June 14, 2011.

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The Department of Defense (DoD) will issue a final rule (pdf) that extends the existing restrictions on a contractor’s use of mandatory arbitration agreements in certain instances. Currently, a provision in the DoD and Full-Year Continuing Appropriations Act bans contractors or subcontractors at any tier that receive funds appropriated by the Act for a contract in excess of $1 million from enforcing mandatory, pre-dispute agreements to arbitrate “any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.” This restriction does not apply to a contractor’s or subcontractor’s agreement with employees or independent contractors that cannot be enforced in the U.S., nor does it apply to the acquisition of commercial items, including commercially available off-the-shelf items. The Secretary of Defense is permitted to waive the applicability of this prohibition to a particular contract or subcontract in the interest of national security.

The final rule extends the arbitration restrictions to large contracts awarded with funds provided under the DoD appropriations act for the year 2011 and subsequent DoD appropriations acts. A final rule implementing these restrictions for funds awarded by the 2010 DoD Appropriations Act was issued in December 2010. The final rule states that: “Since DoD anticipates that this will be an ongoing requirement, this rule applies to use of all subsequent fiscal year funds appropriated or otherwise made available under subsequent DoD appropriations acts.” If the restriction is removed at a future date, DoD notes that it will amend the Defense Federal Acquisition Regulations accordingly.

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On June 21, 2011, the Senate Armed Services Committee approved (pdf) a draft of the National Defense Authorization Act for Fiscal Year 2012 (pdf) that would end efforts by the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) to extend federal affirmative action obligations to hospitals that participate in or accept reimbursement through the TRICARE program.

TRICARE is the Department of Defense’s health care program for active duty and retired military and their families. OFCCP has been taking the position that providers participating in TRICARE are government subcontractors subject to various affirmative action and equal employment opportunity compliance requirements enforced by OFCCP. The Senate Bill would reject OFCCP’s position by explicitly excluding TRICARE institutional, professional, and pharmacy network providers from being considered subcontractors for the purposes of Federal Acquisition Regulation (FAR) or any other law, in order to maintain adequate TRICARE provider networks.  Continue reading this entry at Littler's Healthcare Employment Counsel.

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By David Goldstein

In an obscure notice published in the May 12, 2011 Federal Register, the Office of Federal Contract Compliance Programs (OFCCP) announced an intention to alter the forms it uses to collect information in connection with compliance reviews. These changes, if implemented, will substantially impact federal contractors in their record retention practices and in their responses to audit scheduling letters.

OFCCP commences its audits by first sending a “Scheduling Letter” to the selected government contractor advising it of the audit and requiring the contractor to provide certain information. The Scheduling Letter is always accompanied by a standard form known as the “Itemized Listing,” which sets forth the information and documentation that the contractor is required to produce.

The May 12 Federal Register Notice indicates that OFCCP intends to change the text of the Scheduling Letter and alter the Itemized Listing. In a supporting statement prepared by OFCCP in connection with these proposed changes – but not published in the Federal Register – OFCCP states that its revisions to the body of the Scheduling Letter are simply made for clarity. However, the agency acknowledges that its proposed changes to the itemized listing are substantive and that some of the proposed changes would be very significant. 

Continue reading at Littler's ASAP: OFCCP Looks to Overhaul Audit Procedures Through Revisions to Scheduling Letter and Itemized Listing.

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The Office of Federal Contract Compliance Programs (OFCCP) has announced that it will hold an online information session to discuss its new Active Case Enforcement (ACE) protocol, the process by which the agency conducts supply and service (S&S) compliance evaluations. In December 2010, the OFCCP issued a directive discontinuing the former Active Case Management (ACM) process that had been in place since 2003. Two months later, the agency issued a second directive outlining the new ACE procedures for conducting S&S compliance evaluations, which includes full desk audits, increased onsite evaluations, focused evaluations, and full reviews.

According to the webinar invitation, OFCCP representatives will explain what contractors can expect when scheduled for a S&S compliance evaluation using ACE procedures, including a discussion of key terms and how ACE procedures differ from the discontinued ACM process.

Attorneys in Littler’s OFCCP Practice Group have observed that under the new ACE procedures, contractors are receiving lengthy information requests much earlier in the audit process, in some cases even before the initial desk audit submission has been received. These requests seek documentation and evidence of the contractors’ compliance with all of the regulations that OFCCP enforces, including in particular the regulations dealing with outreach to individuals with disabilities and veterans, and a few questions pertaining to compliance with OFCCP’s regulations addressing sex discrimination (Part 60-20), and religion/national origin discrimination (Part 60-50).

The webinar will be conducted on Tuesday, May 17, 2011 from 2:00 - 3:30 PM EDT. Registration for this information session is required, and can be made here.

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The Office of Federal Contract Compliance Programs (OFCCP) is proposing to amend its regulations regarding a contractor’s and subcontractor’s affirmative action and nondiscrimination obligations towards protected veterans under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). This law prohibits employment discrimination against specified categories of veterans by federal government contractors and subcontractors, and mandates that each covered contractor and subcontractor take affirmative action to hire and promote veterans. According to a summary included in the notice of proposed rulemaking, (pdf) the intended regulatory changes would strengthen these affirmative action provisions, describe specific actions a contractor must take to satisfy its obligations, increase the contractor’s data collection obligations, and require the contractor to establish hiring benchmarks to assist in measuring the effectiveness of its affirmative action efforts.

The proposal addresses two sets of VEVRAA regulations. Those found at 41 CFR part 60-250 generally apply to government contracts of $25,000 or more entered into before December 1, 2003. The regulations found at 41 CFR part 60-300 apply to government contracts entered into on or after December 1, 2003. The threshold amount to trigger coverage by the affirmative action plan (AAP) requirements for this group is a single contract of $100,000 or more, entered into on or after December 1, 2003. Because of the extensive changes to these regulations, the OFCCP is proposing to rescind part 60-250 in its entirety, as the agency assumes that few, if any, unmodified contracts entered into before December 1, 2003 for $25,000 or more currently exist. The agency seeks comment, however, to determine if any such contracts are still, in fact, in effect.

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A new proposed rule would impose additional reporting requirements on federal service contractors. Issued by the Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA), the proposal (pdf) would amend the Federal Acquisition Regulation (FAR) to require service contractors for federal agencies other than the DoD that are covered by the Federal Activities Inventory Reform (FAIR) Act of 1998 to report the following information for each covered contract by October 31 of each year:

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The DOL’s Office of Federal Contract Compliance Programs (OFCCP) has issued a directive outlining Active Case Enforcement (ACE) procedures for conducting Supply & Service (S&S) compliance evaluations. In December 2010, the agency issued a directive to discontinue the former ACE process that had been in place since 2003. According to the agency, the former system was “primarily an abbreviated desk audit process” to expedite the closing of S&S contract compliance evaluations where there existed no evidence of systemic discrimination. The agency claimed that the former process “eroded” its enforcement authority and was of “limited utility.” According to the new directive, the updated ACE process “will more effectively utilize [the OFCCP’s] resources and strengthen its enforcement efforts.”

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Earlier this week, the United States Supreme Court in NASA v. Nelson (pdf) upheld the National Aeronautics and Space Administration’s (NASA) right to conduct reasonable background checks on the employees of government contractors. While the case focused on the scope of background checks conducted by the federal government, the Court’s ruling provides some useful guidance for private employers as well.  Continue reading this entry at Littler's Workplace Privacy Counsel.

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On December 16, 2010, OFCCP Director Patricia Shiu signed Directive 293 (pdf) to provide “comprehensive guidance for assessing when health care providers and insurers are federal contractors and subcontractors based on their relationship with a Federal health care program or with participants in a Federal health care program.” This new directive was aimed at clarifying the confusion left by two prior OFCCP directives (Nos. 189 and 262) as to the types of arrangements that would subject medical providers and hospitals to OFCCP’s jurisdiction.  Continue reading this entry at Littler's Healthcare Employment Counsel.

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Despite the initial focus on health care repeal, several lawmakers have introduced labor and employment-related legislation during the first two weeks of the new 112th Congress. Some aim to tweak existing laws, while others call for more massive overhauls. Rep. Michele Bachmann (R-MN), for instance, introduced a bill (H.R. 87) the first day of the new legislative term to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act which was signed into law on July 21, 2010. This bill contains several employment related provisions dealing with executive compensation, arbitration, and whistleblower protections. Although the chances of repealing the Dodd-Frank Act are slim, greater scrutiny of and challenges to its implementation are expected.

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During Friday’s online chat to discuss the Office of Federal Contract Compliance Programs’ (OFCCP) regulatory agenda, Director Patricia Shiu spent a significant amount of time fielding questions about possible changes to the agency’s compensation data analysis methods. Recently, the agency issued a proposed rescission of its interpretive standards and voluntary guidelines regarding the analysis of compensation data. Shiu acknowledged that the agency is “taking a much stronger approach to enforcement on compensation discrimination, as part of our effort to, once and for all, end the wage gap between men and women.” To that end, the agency plans to publish next month an advance notice of proposed rulemaking (ANPRM) to solicit public comments about developing a new compensation tool to help the OFCCP better collect data about wages. In addition, the OFCCP will hold a series of stakeholder meetings to gather information regarding ways to analyze compensation.

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The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) is proposing to rescind guidance materials addressing compensation discrimination that would ultimately give the agency more leeway in finding federal contractors and subcontractors liable for pay disparities. According to the agency, the first guidance document at issue – Interpreting Nondiscrimination Requirements of Executive Order 11246 with respect to Systemic Compensation Discrimination (Standards) (pdf) – has limited the OFCCP’s ability to “effectively investigate, analyze and identify compensation discrimination.” As for the second document up for rescission – Voluntary Guidelines for Self-Evaluation of Compensation Practices for Compliance with Executive Order 11246 with respect to Systemic Compensation Discrimination (Voluntary Guidelines) (pdf) – the OFCCP claims that it has been “largely unused” by federal contractors and is not an effective enforcement strategy.

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The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) will issue an interim rule (pdf) that adopts the Department of Labor’s final rule implementing Executive Order (EO) 13496: Notification of Employee Rights Under Federal Labor Laws. (pdf) The DOL issued its final rule on this EO last May. The EO at issue mandates that all government contracting departments and agencies include a provision in most government contracts stipulating that the contractor post a notice “in all places where notices to employees are customarily posted both physically and electronically,” informing them of their rights under the National Labor Relations Act (NLRA), and revokes a Bush-era EO that had required federal contractors to post a notice (commonly known as “Beck” notices) to their employees informing them that they were not required to join or maintain membership in a labor union, and that those who were not union members – but were nonetheless required to pay dues or fees pursuant to a union security agreement – could object to paying a portion of those dues or fees to support activities that are not related to collective bargaining, contract administration or grievance adjustment.  Continue reading this entry at Littler’s Labor Relations Counsel.

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The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued a directive discontinuing the agency’s Active Case Management (ACM) procedures. Instituted in July 2003, the ACM process was “primarily an abbreviated desk audit process” to expedite the closing of supply and service (S&S) contract compliance evaluations where there existed no evidence of systemic discrimination. The agency considered cases with fewer than 10 potential victims to fall under this category. According to the directive, absent such evidence of widespread discrimination, full desk audits were to be performed only once out of every 25 such cases, and onsite evaluations only once out of every 50th review. The OFCCP claims in the directive that the ACM has caused the agency to “narrow the focus of its enforcement efforts” and has “eroded” its enforcement authority, thereby prompting its revocation.

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The U.S. Department of Defense (DoD) will issue a final rule (pdf) implementing section 8116 of the DoD Appropriations Act for Fiscal Year 2010, which restricts a contractor’s use of mandatory arbitration agreements in certain instances. Specifically, section 8116 bans contractors or subcontractors at any tier that receive funds appropriated by the Act for a contract in excess of $1 million from enforcing mandatory, pre-dispute agreements to arbitrate “any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.” After June 17, 2010, contractors are required to certify compliance by their subcontractors. The Secretary of Defense is permitted to waive the applicability of this prohibition to a particular contract or subcontract in the interest of national security. Additionally, the arbitration limitations do not apply to a contractor’s or subcontractor’s agreement with employees or independent contractors that cannot be enforced in the U.S., nor do they apply to the acquisition of commercial items, including commercially available off-the-shelf items.

The final rule adopts the interim rule issued in May 2010 with certain minor changes. Specifically, the final rule further explains the DoD waiver process and the conditions under which the DoD’s waiver authority will be exercised. The DoD’s waiver determination will “set forth the grounds for the waiver with specificity, state any alternatives considered, and explain why each of the alternatives would not avoid harm to national security interests.” The final rule is effective as of the date of publication in the Federal Register, which is scheduled for December 8, 2010.

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The newly-enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203) contains a provision that will impose diversity requirements on businesses in the financial industry. Section 342 of the bill mandates that within six months various federal agencies that deal with financial firms, such as the Treasury Department and the Securities and Exchange Commission, establish an Office of Minority and Women Inclusion (OMWI). The director of each such office will be charged with, among other things, developing and implementing standards for ensuring “to the maximum extent possible, the fair inclusion and utilization of minorities, women, and minority-owned and women-owned businesses in all business and activities of the agency at all levels, including in procurement, insurance, and all types of contracts.”

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The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) will issue an Advance Notice of Proposed Rulemaking (ANPRM) (pdf) to invite public comments as to how the agency can strengthen the affirmative action requirements relating to Section 503 of the Rehabilitation Act. As discussed in the ANPRM, Section 503 requires covered federal contractors to:

• employ nondiscriminatory employment practices;
• provide reasonable accommodations to qualified job applicants and employees with disabilities;
• after a job offer is extended but before employment begins, invite job applicants to voluntarily and confidentially self-identify as to whether or not they have a disability in order to benefit from any affirmative action programs covered contractors may have;
• maintain personnel and employment records; and
• for those contractors and subcontractors with 50 or more employees and a contract of $50,000 or more, develop and maintain a written affirmative action program (AAP).

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A number of federal agencies plan to issue an interim rule (pdf) that will require federal contractors and subcontractors to disclose executive compensation details and first-tier subcontractor awards on contracts expected to be $25,000 or more. This rule amends the Federal Acquisition Regulation (FAR) to implement the section of the Federal Funding Accountability and Transparency Act that requires the Office of Management and Budget (OMB) to create a free, public website that provides information about all federal contract awards. To that end, the rule requires that by the end of the month following the month the contract is awarded, and annually thereafter, the contractor or first-tier subcontractor must report the names and total compensation of each of the five most highly compensated executives for the contractor’s or first-tier subcontractor’s preceding completed fiscal year. Contractors and subcontractors whose gross income in the previous tax year was less than $300,000 are exempt from these disclosure requirements. The rule also requires contractors to report subcontracts of $25,000 or more, and any changes made to those contracts which impact data previously submitted. According to the interim rule, these reporting requirements “are sweeping in their breadth, and are intended to empower the American taxpayer with information that may be used to demand greater fiscal discipline from both executive and legislative branches of Government.”

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The Office of Federal Contract Compliance Programs (OFCCP) has issued a directive on its verification procedures under Executive Order (E.O.) 13496, Notification of Employee Rights under Federal Labor Laws. (pdf) This E.O. mandates that all government contracting departments and agencies include a provision in government contracts covered by the order stipulating that contractors and subcontractors post a notice “in all places where notices to employees are customarily posted both physically and electronically,” informing them of their rights under the National Labor Relations Act (NLRA). The Department of Labor’s Office of Labor Management Standards (OLMS) published a final rule (pdf) implementing this E.O. last month. The OFCCP is responsible for investigating complaints, performing compliance evaluations, conciliating compliance issues, and referring violations to the OLMS for enforcement. The directive published online this week outlines the processes and procedures it will use to perform these tasks.

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The Department of Labor’s Office of Labor Management Standards (OLMS) will publish in tomorrow’s Federal Register a final rule (pdf) implementing Executive Order (EO) 13496: Notification of Employee Rights Under Federal Labor Laws. (pdf)  This EO mandates that all government contracting departments and agencies include a provision in most government contracts stipulating that the contractor post a notice “in all places where notices to employees are customarily posted both physically and electronically,” informing them of their rights under the National Labor Relations Act (NLRA).

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The Department of Defense (DoD) will publish in tomorrow’s edition of the Federal Register an interim rule (pdf) implementing section 8116 of the DoD Appropriations Act for Fiscal Year 2010, which restricts a contractor’s use of mandatory arbitration agreements in certain instances. Specifically, section 8116 bans contractors or subcontractors at any tier that receive funds in excess of $1 million from the appropriations bill from enforcing mandatory, pre-dispute agreements to arbitrate “any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.” The Secretary of Defense is permitted to waive the applicability of this prohibition to a particular contract or subcontract in the interest of national security. Additionally, the arbitration limitations do not apply to a contractor’s or subcontractor’s agreement with employees or independent contractors that cannot be enforced in the U.S.

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The Department of Labor (DOL) has launched a website compiling enforcement data produced by the Office of Federal Contract Compliance Programs (OFCCP), Employee Benefits Security Administration (EBSA), Occupational Safety and Health Administration (OSHA), Wage and Hour Division (WHD), and the Mine Safety and Health Administration (MSHA). Searchable compliance data includes OFCCP compliance evaluations and complaint investigations, EBSA cases that resulted penalty assessments, OSHA inspection case details, and concluded WHD compliance actions, among other information. The DOL explains that the purpose of the enforcement website is “to make the enforcement data, collected by these agencies in the exercise of their mission, accessible and searchable, using common search criteria, by the public. It intends, also, to engage the public in new and creative ways of using this data.” The DOL further notes that the site is a work in progress, and that “new features, functionality, and search criteria will be added over time.” For example, the agency is working on making enforcement data searchable by company name and address, as well as other criteria.

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In tomorrow’s edition of the Federal Register, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) will publish a proposed rule (pdf) implementing Executive Order (EO) 13494, Economy in Government Contracting, which precludes government contractors from being reimbursed for expenses incurred to influence employees regarding their decisions to form unions or engage in collective bargaining. Issued on January 30, 2009, EO 13494 considers as un-reimbursable any activities that are undertaken to persuade employees to exercise or not exercise such rights, such as preparing and distributing materials, hiring or consulting legal counsel or consultants, holding meetings (including paying the salaries of the attendees at meetings held for this purpose) and planning or conducting activities by managers, supervisors or union representatives during working hours. Such expenditures are deemed “unallowable” under any federal government contract by the order. Although federal contractors cannot use federal funds for these purposes, they may use federal dollars to “maintain satisfactory relations” between the contractor and its employees. As stated in the order, such expenditures could include the cost of labor-management committees, employee publications (provided they do not attempt to persuade employees regarding unionization), and other related activities.

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In tomorrow’s edition of the Federal Register, the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) will publish a final rule (pdf) implementing President Obama’s Executive Order (EO) encouraging the use of Project Labor Agreements (PLAs). Issued on February 6, 2009, EO 13502: Use of Project Labor Agreements for Federal Construction Projects declares it the policy of the federal government “to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects . . .” Specifically, this EO states:

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On March 19, the Department of Labor’s Wage and Hour Division (WHD) published in the Federal Register a notice of proposed rulemaking (NPRM) (pdf) that seeks to implement Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts, (pdf) signed by President Obama on January 30, 2009. This Order requires that any federal service contracts and solicitations for such contracts include a clause requiring contractors and their subcontractors to offer existing employees the right of first refusal to take positions for which they are qualified under the new contract. The right of first refusal clause does not apply to managerial or supervisory employees. Any new contractor cannot advertise employment openings until the right of first refusal has been exercised by the existing employees.

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The Office of Federal Contract Compliance Programs (OFCCP) has posted on its website a set of frequently asked questions (FAQs) about the U.S. Supreme Court’s decision in Ricci v. DeStefano, the reverse discrimination case involving New Haven firefighters. In Ricci, the Court determined that the City of New Haven – by tossing the results of an exam that would have disqualified African American from receiving promotions – discriminated against non-African Americans whose scores would have qualified them for advancement. The Court held that “before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.” This decision has left many federal contractors – who must implement affirmative action programs – wondering whether Ricci will affect the OFCCP’s compliance reviews, and whether the decision would change the contractor’s obligations regarding the use and validation of job-related tests.

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A recent presidential directive and piece of legislation seek to ban companies that engage in unlawful practices from receiving federal contracts. On Wednesday, President Obama signed a memorandum ordering the IRS to review the accuracy of certifications submitted by aspiring government contractors attesting to their non-delinquent tax status, and provide him with a report within 90 days. In addition, the memorandum directs the heads of federal agencies to provide recommendations on how to bar tax-delinquent companies from being awarded federal contracts. In a statement, Obama said:

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