Enter to open, tab to navigate, enter to select
Rule Bars Reimbursement of Federal Contractors for Persuading Employees on Unionizing and Collective Bargaining
Practical Law Legal Update 3-510-8876 (Approx. 3 pages)
Rule Bars Reimbursement of Federal Contractors for Persuading Employees on Unionizing and Collective Bargaining
by PLC Labor & Employment
| Published on 04 Nov 2011 • USA (National/Federal) |
The Department of Defense, the General Services Administration and NASA issued a final rule barring reimbursement of government contractors for the cost of activities to persuade employees to exercise, or refrain from exercising, their rights to unionize or engage in collective bargaining.
On November 2, 2011, the Department of Defense, the General Services Administration and NASA issued a final rule that bars government contractors from being reimbursed for costs related to influencing employees to exercise, or refrain from exercising, their rights to unionize or engage in collective bargaining through representatives of their own choosing.
The new rule, which implements Executive Order 13494 on Economy in Government Contracting, amends the Federal Acquisition Regulations to disallow costs for so-called persuader activity including:
- Preparing and distributing materials.
- Hiring or consulting legal counsel or consultants.
- Holding meetings, including paying the wages of the attendees.
- Planning or conducting activities by managers, supervisors or union representatives during work hours.
However, the rule permits reimbursement for costs incurred to maintain satisfactory relations between a contractor and its employees, including the cost of:
- Paying union shop stewards.
- Labor management committees.
- Employee publications.
- Other related activities.
The agencies made no changes to the language in the rule proposed in April of 2010, in response to comments that the rule:
- Favors unions.
- Contains unclear language.
- Imposes significant compliance burdens.
- Conflicts with reporting duties in other statutes.
- Interferes with a contractor's right to free speech, not otherwise prohibited by the National Labor Relations Act (NLRA).
- Is pre-empted by the NLRA, like similar state laws have been (see Legal Update, New York Cannot Prohibit Employers From Using State Funds to Oppose Unionization: NDNY).
Under the new rule, which is effective December 2, 2011, federal contractors must track their expenses more carefully to ensure requests for reimbursement include only allowable expenses.
For additional information on employee rights under the NLRA, see Practice Note, Employee Rights and Unfair Labor Practices Under the National Labor Relations Act.
For an outline of federal contractor and subcontractor obligations under affirmative action laws, see Practice Note, Affirmative Action: Overview.