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

[r]equire the use of a project labor agreement by a contractor where use of such agreement will (i) advance the Federal Government’s interest in achieving economy and efficiency in Federal procurement, producing labor-management stability, and ensuring compliance with laws and regulations governing safety and health, equal employment opportunity, labor and employment standards, and other matters, and (ii) be consistent with law.

This order does not mandate or limit the use of PLAs, defined in the order as “pre-hire collective bargaining agreement[s] with one or more labor organizations that establish[] the terms and conditions of employment for a specific construction project . . .” Nor does the order require any contractor or subcontractor to enter into a PLA with any particular union. However, the order requires the Director of the Office of Management and Budget (OMB), in consultation with the Secretary of Labor, to formulate recommendations as to whether broader use of PLAs “would help to promote the economical, efficient, and timely completion of such projects.” Thus, it is possible that the scope of this order could be broadened.

If a PLA is used, this agreement must “(a) bind all contractors and subcontractors on the construction project through the inclusion of appropriate specifications in all relevant solicitation provisions and contract documents; (b) allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements; (c) contain guarantees against strikes, lockouts, and similar job disruptions; (d) set forth effective, prompt, and mutually binding procedures for resolving labor disputes arising during the project labor agreement; (e) provide other mechanisms for labor-management cooperation on matters of mutual interest and concern, including productivity, quality of work, safety, and health; and (f) fully conform to all statutes, regulations, and Executive Orders.”

This order also revokes the orders issued by former President Bush that prohibited federal agencies from making the use of a PLA a bid specification on a federal construction project.

It is no surprise that organized labor, which has been lobbying in favor of revoking Bush’s policies, is pleased with Obama’s latest order. The construction industry, on the other hand, is critical of this move, claiming that it will penalize those contractors and their employees who have chosen not to join unions. The practical impact of this order cannot be predicted until the OMB and the Secretary of Labor have finalized their recommendations.
 

The first order: Notification of Employee Rights Under Federal Labor Laws, requires government contractors and subcontractors to display notices of an employee’s rights to unionize and bargain collectively under the National Labor Relations Act, yet revokes the executive order signed by former President Bush that required that federal contractors be informed of their rights to refrain from joining or maintaining membership in a labor union, and to object to how their union dues/fees – if paid pursuant to a union security agreement – are used. More insidiously, this order gives the Secretary of Labor the responsibility to administer and enforce the order. Within 120 days, the Secretary is required to initiate a rulemaking to prescribe the size, form and content of the notice employers must post.

In addition, the Secretary of Labor is given broad investigation and quasi-judicial powers to determine whether an employer is in violation of this order. The Secretary may hold hearings, public or private, regarding compliance with the order, and has the power to impose sanctions against the employer, including not only the cancellation of the contract at issue, but also debarment from future government contracts.

The second order: Nondisplacement of Qualified Workers Under Service Contracts, which requires government contractors who take over a service contract from an existing provider to retain qualified employees of the previous provider, also endows the Secretary with investigation and enforcement powers. According to Section 6 of this order:

the Secretary shall have the authority to issue final orders prescribing appropriate sanctions and remedies, including, but not limited to, orders requiring employment and payment of wages lost. The Secretary also may provide that where a contractor or subcontractor has failed to comply with any order of the Secretary or has committed willful violations of this order or the regulations issued pursuant thereto, the contractor or subcontractor, and its responsible officers, and any firm in which the contractor or subcontractor has a substantial interest, shall be ineligible to be awarded any contract of the United States for a period of up to 3 years.

The third order, which prohibits government contractors from assigning costs associated with dissuading employees from joining a union or engaging in collective bargaining to the government contract, does not similarly imbue the Secretary with broad enforcement powers.

Taken together, these orders do not merely reverse Bush-era labor policy. They indicate President Obama’s intent to empower the Secretary of Labor with the ability to investigate and penalize employers for potential violations. This is a clear departure from even past “labor-friendly” administrations.
 

• Executive Order on Preservation of Open Competition and Government Neutrality Towards Government Contractors’ Labor Relations on Federal and Federally Funded Construction Projects. This order prohibited any government construction contract from requiring or prohibiting bidders, offerers, contractors or subcontractors from entering into or adhering to agreements with one or more labor organizations. In essence, this executive order made it impermissible to favor bidders who promised to employ unionized workers.
• Executive Order on Notification of Employee Rights Concerning Payment of Union Dues or Fees. This order required federal contractors to post a notice to its employees informing them that (1) they are not required to join or maintain membership in a labor union, and (2) that those who are not union members—but are nonetheless required to pay dues or fees pursuant to a union security agreement—can 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.
• Executive Order on Nondisplacement of Qualified Workers Under Certain Contracts. This order revoked Clinton-era Executive Order 12933, which required that solicitations and building service contracts for public buildings include a clause outlining existing employees’ right of first refusal to take positions under the new contract. The right of first refusal clause did not apply to managerial or supervisory employees. The new contract could not advertise employment openings until the right of first refusal had been exercised by the existing employees.
• Executive Order on Revocation of Executive Order and Presidential Memorandum Concerning Labor-Management Partnerships. This order revoked another Clinton executive order that established the National Partnership Council and required federal agencies to form labor-management partnerships for management purposes. The National Partnership Council was comprised of, among other members, the Director of the Office of Personnel Management, the Deputy Secretary of Labor, the Chair of the Federal Labor Relations Authority, the President of the American Federation of Government Employees, a representative from the AFL-CIO and officials from a number of other federal sector unions. The labor-management partnerships mandated the involvement of employees and their union representatives as full partners with management representatives in performing certain managerial functions.

Not only is reversing these executive orders a quicker and somewhat less-conspicuous way to appease organized labor versus promoting pro-labor legislation such as EFCA, but it also would continue what is becoming a tradition when the administration changes party hands. Therefore, it is likely that one or all of the above measures will be rescinded within the first 100 days of the new administration.