[Federal Register Volume 74, Number 147 (Monday, August 3, 2009)]
[Proposed Rules]
[Pages 38488-38501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17577]
[[Page 38487]]
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Part II
Department of Labor
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Office of Labor-Management Standards
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29 CFR Part 471
Notification of Employee Rights Under Federal Labor Laws; Proposed Rule
Federal Register / Vol. 74, No. 147 / Monday, August 3, 2009 /
Proposed Rules
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DEPARTMENT OF LABOR
Office of Labor-Management Standards
29 CFR Part 471
RIN 1215-AB70
Notification of Employee Rights Under Federal Labor Laws
AGENCY: Office of Labor-Management Standards, Employment Standards
Administration, Department of Labor.
ACTION: Notice of proposed rulemaking; request for comments.
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SUMMARY: This Notice of Proposed Rulemaking (NPRM) proposes a
regulation to implement Executive Order 13496, which was signed by
President Barack Obama on January 30, 2009. Executive Order 13496
(``the Executive Order,'' ``the Order,'' or ``EO 13496'') requires
nonexempt Federal departments and agencies to include within their
Government contracts specific provisions requiring that contractors and
subcontractors with whom they do business post notices informing their
employees of their rights as employees under Federal labor laws. The
Executive Order requires the Secretary (``Secretary'') of the
Department of Labor (``Department'') to initiate a rulemaking to
prescribe the size, form, and content of the notice that must be posted
by a contractor under paragraph 1 of the contract clause described in
section 2 of the Order. Under the Executive Order, Federal Government
contracting departments and agencies must include the required contract
provisions in every Government contract, except for collective
bargaining agreements and contracts for purchases under the Simplified
Acquisition Threshold, and except in those cases in which the Secretary
exempts a contracting department or agency with respect to particular
contracts or subcontracts or class of contracts or subcontracts
pursuant to section 4 of the Order. As required by the Executive Order,
this proposed rule establishes the content of the notice required by
the Executive Order's contract clause, and implements other provisions
of the Executive Order, including provisions regarding sanctions,
penalties, and remedies that may be imposed if the contractor or
subcontractor fails to comply with its obligations under the Order and
the implementing regulations.
DATES: Comments regarding this proposed rule must be received by the
Department of Labor on or before September 2, 2009.
ADDRESSES: You may submit comments, identified by 1215-AB70, only by
the following methods:
Internet--Federal eRulemaking Portal. Electronic comments may be
submitted through http://www.regulations.gov. To locate the proposed
rule, use key words such as ``Department of Labor'' or ``Notification
of Employee Rights Under Federal Labor Laws'' to search documents
accepting comments. Follow the instructions for submitting comments.
Delivery: Comments should be sent to: Denise M. Boucher, Director
of the Office of Policy, Reports and Disclosure, Office of Labor-
Management Standards, U.S. Department of Labor, 200 Constitution
Avenue, NW., Room N-5609, Washington, DC 20210. Because of security
precautions the Department continues to experience delays in U.S. mail
delivery. You should take this into consideration when preparing to
meet the deadline for submitting comments.
The Office of Labor-Management Standards (OLMS) recommends that you
confirm receipt of your delivered comments by contacting (202) 693-0123
(this is not a toll-free number). Individuals with hearing impairments
may call (800) 877-8339 (TTY/TDD). Only those comments submitted
through http://www.regulations.gov, hand-delivered, or mailed will be
accepted. Comments will be available for public inspection at http://www.regulations.gov and during normal business hours at the above
address.
The Department will post all comments received on http://www.regulations.gov without making any change to the comments,
including any personal information provided. The http://www.regulations.gov Web site is the Federal e-rulemaking portal and all
comments posted there are available and accessible to the public. The
Department cautions commenters not to include their personal
information such as Social Security numbers, personal addresses,
telephone numbers, and e-mail addresses in their comments as such
submitted information will become viewable by the public via the http://www.regulations.gov Web site. It is the responsibility of the
commenter to safeguard his or her information. Comments submitted
through http://www.regulations.gov will not include the commenter's e-
mail address unless the commenter chooses to include that information
as part of his or her comment.
FOR FURTHER INFORMATION CONTACT: Denise M. Boucher, Director, Office of
Policy, Reports and Disclosure, Office of Labor-Management Standards,
Employment Standards Administration, U.S. Department of Labor, 200
Constitution Avenue, NW., Room N-5609, Washington, DC 20210, (202) 693-
1185 (this is not a toll-free number), (800) 877-8339 (TTY/TDD).
SUPPLEMENTARY INFORMATION: The Proposed Rule is organized as follows:
I. Background--provides a brief description of the development of
the Proposed Rule
II. Authority--cites the legal authority supporting the Proposed
Rule, Departmental re-delegation authority, and interagency
coordination authority
III. Overview of the Rule--outlines the proposed regulatory text
IV. Regulatory Procedures--sets forth the applicable regulatory
requirements and requests comments on specific issues
I. Background
On January 30, 2009, President Barack Obama signed Executive Order
13496, entitled ``Notification of Employee Rights Under Federal Labor
Laws.'' 74 FR 6107 (February 4, 2009). The purpose of the Order is ``to
promote economy and efficiency in Government procurement'' by ensuring
that employees of certain Government contractors are informed of their
rights under Federal labor laws. Id., Sec. 1. As the Order states,
``When the Federal Government contracts for goods or services, it has a
proprietary interest in ensuring that those contracts will be performed
by contractors whose work will not be interrupted by labor unrest. The
attainment of industrial peace is most easily achieved and workers'
productivity is enhanced when workers are well informed of their rights
under Federal labor laws, including the National Labor Relations Act
(Act), 29 U.S.C. 151 et seq.'' The Order reiterates the declaration of
national labor policy contained in the National Labor Relations Act
(``NLRA''), 29 U.S.C. 151, that ``encouraging the practice and
procedure of collective bargaining and * * * protecting the exercise by
workers of full freedom of association, self-organization, and
designation of representatives of their own choosing, for the purpose
of negotiating the terms and conditions of their employment or other
mutual aid or protection'' will ``eliminate the causes of certain
substantial obstructions to the free flow of commerce'' and ``mitigate
and eliminate these obstructions when they have occurred.'' Id.,
Section 1, quoting 29 U.S.C. 151. As the Order concludes, ``[r]elying
on contractors whose employees are informed of such rights under
Federal labor laws facilitates the efficient and economical completion
of the Federal Government's contracts.'' Id.
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The Order achieves the goal of notification to employees of federal
contractors of their legal rights through two related mechanisms.
First, Section 2 of the Order provides the complete text of a contract
clause that Government contracting departments and agencies must
include in all covered Government contracts and subcontracts. 74 FR at
6107-6108, Sec. 2. Second, through incorporation of the specified
clause in its contracts with the Federal government, contractors
thereby agree to post a notice in conspicuous places in their plants
and offices informing employees of their rights under Federal labor
laws. Id., Sec. 2, Para. 1.
The Order states that the Secretary of Labor (``Secretary'')
``shall be responsible for [its] administration and enforcement.'' 74
FR at 6108, Sec. 3. To that end, the Order delegates to the Secretary
the authority to ``adopt such rules and regulations and issue such
orders as are necessary and appropriate to achieve the purposes of this
order.'' Id., Sec. 3(a). In particular, the Order requires the
Secretary to prescribe the content, size, and form of the employee
notice. Id., Sec. 3(b). In addition, the Order permits the Secretary,
among other things, to make modifications to the contractual provisions
required to be included in Government contracts (Sec. 3(c)); to provide
exemptions for contracting departments or agencies with respect to
particular contracts or subcontracts or class of contracts or
subcontracts for certain specified reasons (Sec. 4); to establish
procedures for investigations of Government contractors and
subcontractors to determine whether the required contract provisions
have been violated (Sec. 5); to conduct hearings regarding compliance
(Sec. 6); and to provide for certain remedies in the event that
violations are found (Sec. 7). Id., 74 FR at 6108-6109. Accordingly,
the Secretary proposes the following regulations to implement the
policies and procedures set forth in the Executive Order. The specific
standards and procedures proposed to implement the Executive Order will
be discussed in detail in Section III., Overview of the Rule, below.
II. Authority
A. Legal Authority
The President issued Executive Order 13496 pursuant to his
authority under ``the Constitution and laws of the United States,''
expressly including the Federal Property and Administrative Services
Act ``Procurement Act,'' 40 U.S.C. 101 et seq. The Procurement Act
authorizes the President to ``prescribe policies and directives that
[he] considers necessary to carry out'' the statutory purposes of
ensuring ``economical and efficient'' government procurement and
supply. 40 U.S.C. 101, 121(a). Executive Order 13496 delegates to the
Secretary of Labor the authority to ``adopt such rules and regulations
and issue such orders as are necessary and appropriate to achieve the
purposes of this order.'' 74 FR at 6108, Sec. 3. The Secretary has
delegated her authority to promulgate these regulations to the
Assistant Secretary for Employment Standards. Secretary's Order 01-2008
(May 30, 2008), 73 FR 32424 (published June 6, 2008).
B. Interagency Coordination
Section 12 of the Executive Order requires the Federal Acquisition
Regulatory Council (FAR Council) to take action to implement provisions
of the Order in the Federal Acquisition Regulation (FAR). 74 FR at
6110. Accordingly, the Department has coordinated with the FAR Council
in inserting language implementing the Executive Order into the FAR.
III. Overview of the Rule
The Department's proposed rule, which establishes standards and
procedures for implementing and enforcing Executive Order 13496, is set
forth in subchapter D, Part 471 of Volume 29 of the Code of Federal
Regulations (CFR). Subpart A of the proposed rule sets out definitions,
the prescribed requirements for the size, form and content of the
employee notice, exceptions for certain types of contracts, and
exemptions that may be applicable to contracting departments and
agencies with respect to a particular contract or subcontract or class
of contracts or subcontracts. Subpart B of the proposed rule sets out
standards and procedures related to complaint procedures, compliance
evaluations, and enforcement of the rule. Subpart C sets out other
standards and procedures related to certain ancillary matters. The
discussion below is organized in the same manner, and explains the
Department's adoption of the standards and procedures set out in the
regulatory text, which follows. The Department invites comments on any
issues addressed by the proposals in this rulemaking.
Subpart A--Definitions, Requirements for Employee Notice, and
Exceptions and Exemptions
Subpart A contains definitions of terms used in the rule,
requirements for the content, size and form of the notice that a
contractor must post to its employees, the types of contracts that are
excepted from the rule and applicable exemptions available to a
contracting department or agency with respect to a particular contract
or subcontract or class of contracts or subcontracts.
Definitions
The definitions proposed in this rule are derived largely from the
definitions of the same terms in the Department's Office of Federal
Contract Compliance Programs (OFCCP) regulations at 41 CFR part 60-1.3
and the former regulations implementing Executive Order 13201, 29 CFR
Part 470 (2008), rescinded under authority of E.O. 13496, 74 FR 14045
(March 30, 2009). Slight variations between the definitions proposed
here and those upon which they were modeled were made in order to
accommodate the terms to Executive Order 13946. The Department invites
comments regarding the definitions proposed in Section 471.1 below.
Requirements for Employee Notice
As noted above, Executive Order 13496 requires the Secretary to
``prescribe the size, form and content of the notice'' that contractors
must post to notify employees of their rights. Sec. 3(b), E.O. 13496,
74 FR at 6108. The proposed rule fulfills the Secretary's obligation to
establish standards and procedures regarding each of these issues,
which are discussed in turn below.
Section 471.2(a) of the proposed rule sets out in full the four
paragraphs that the Executive Order requires to be included in all non-
excepted Government contracts. The first paragraph of the proposed
contract clause specifies the content of the notice that must be
provided to employees of Federal contractors. The proposed notice
contains those employee rights established under the National Labor
Relations Act (``NLRA''), 29 U.S.C. 151, et seq. The Secretary believes
providing notice of the rights under the NLRA bests effectuates the
purpose of the Executive Order. Section 1 of the Executive Order
clearly states that the Order's policy is to attain industrial peace
and enhance worker productivity through the notification of workers of
``their rights under Federal labor laws, including the National Labor
Relations Act.'' 74 FR at 6107, Sec. 1. The policy of the Executive
Order goes on to emphasize the foundation underlying the NLRA, which is
to encourage collective bargaining and to protect workers' rights to
freedom of association and self-organization, and notes that
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efficiency and economy in government contracting is promoted when
contractors inform their employees of ``such rights.'' Further, the
contract clause prescribed by the Order requires Federal contractors to
post the notice ``in conspicuous places in and about plants and offices
where employees covered by the National Labor Relations Act engage in
activities related to performance of the contract * * *.'' 74 FR at
6107, Sec. 2, Para. 1 (emphasis added). As a result, the Executive
Order's terms provide that the employee notice it requires must be
posted only by employers in the private sector, with some statutory
exceptions, and need not be posted by employers in the public
sector.\1\
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\1\ Under the NLRA, the term ``employer'' excludes the United
States government, any wholly owned government corporation, or any
State or political subdivision. 29 U.S.C. 152(2). As a result,
employees of these public-sector employers are not ``employees''
covered by the NLRA. The NLRA's definition of ``employee'' also
excludes those employed as agricultural laborers, in the domestic
service of any person or family in a home, by a parent or spouse, as
an independent contractor, as a supervisor, or by an employer
subject to the Railway Labor Act, such as railroads and airlines. 29
U.S.C. 152(3).
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In establishing a description of rights under the NLRA in the
proposed notice, the Department believes that such rights are best
presented to employees following a concise preamble that provides
context to such rights. Therefore, section 471.2 of the proposed rule
sets out the following text for inclusion in the notice to employees
prior to the description of employee rights under the NLRA:
It is the policy of the United States to encourage collective
bargaining and protect the exercise by workers of full freedom of
association, self-organization, and designation of representatives
of their own choosing, for the purpose of negotiating the terms and
conditions of their employment or other mutual aid and protection.
The content of the above notice derives from section 1 of the NLRA,
29 U.S.C. 151, and E.O. 13496, Section 1. The Department seeks comments
on this description of policy in the proposed section 471.2.
In proposing to include the statutory rights under the NLRA in the
required notice, the Secretary considered the level of detail the
notice should contain regarding those statutory rights. A broad
statement of employee rights under the NLRA appears in section 7 of the
Act, which states:
Employees shall have the right to self-organization, to form,
join, or assist labor organizations, to bargain collectively through
representatives of their own choosing, and to engage in other
concerted activities for the purpose of collective bargaining or
other mutual aid or protection, and shall also have the right to
refrain from any or all such activities * * *.
29 U.S.C. 157. The Department considered requiring a verbatim
replication of the statute's enumeration of employee rights in Section
7 of the NLRA. Alternatively, the Department considered including a
simplified list of rights based upon the statutory provision, which
would include the right of employees to: Organize; form, join, or
assist any union; bargain collectively through representatives of their
own choice; act together for other mutual aid or protection; or choose
not to engage in any of these protected concerted activities.
However, the Department does not believe that posting the statutory
language itself or a simplified list of rights in a notice will be
likely to convey the information necessary to best inform employees of
their rights under the Act. Instead, the Department proposes that the
statement of employee rights contained in Appendix A to Subpart A of
Part 471 be required for inclusion in the notice. This statement
contains greater detail of NLRA rights, derived from Board or court
decisions implementing such rights--which will more effectively convey
such rights to employees. A more complete and readable text will also
better enable employees to apply the rights to actual workplace
situations. Additionally, employees will be better apprised of their
rights under the NLRA if the notice also contains examples of general
circumstances, also derived from Board or court decisions further
implementing section 7 and other provisions of the NLRA, that
constitute violations of their rights under the Act. With the above
principles in mind, the Department devised a notice that provides
employees with a more than rudimentary overview of their rights under
the NLRA, in a user-friendly format, while simultaneously not
overwhelming employees with information that is unnecessary and
distracting in the limited format of a notice.
The Department invites comment on this statement of employee rights
proposed for inclusion on the required notice to employees. In
particular, the Department requests comment on whether the notice
contains sufficient information of employee rights under the Act;
whether the notice effectively conveys the information necessary to
best inform employees of their rights under the Act; and whether the
notice achieves the desired balance between providing an overview of
employee rights under the Act and limiting unnecessary and distracting
information.
Moreover, proposed Sec. 471.2 also requires that the notice of
employee rights contain NLRB contact information and basic enforcement
procedures to enable employees to find out more about their rights
under the Act and to proceed with enforcement if necessary.
Accordingly, the required notice confirms that illegal conduct will not
be permitted, provides information regarding the NLRB and filing a
charge with that agency, and indicates that the Board will prosecute
violators of the Act. Furthermore, the notice indicates that there is a
6-month statute of limitations applicable to making allegations of
violations and provides NLRB contact information for use by employees.
The Department invites suggested additions or deletions to these
procedural provisions that would improve the content of the notice of
employee rights.
Paragraph 4 of the contract clause in the Executive Order requires
the contractor to incorporate only paragraphs 1 through 3 of the clause
in its subcontracts. See 74 FR at 6108, Sec. 2, para. 4. A narrow
reading of the operation of this provision outside the full context of
the Executive Order might suggest that the obligation to include the
contract clause is limited to contracts between the government agency
and the prime contractor. Under this reading, subcontractors would be
required only to post the notice of employee rights, and their
subcontractors (sometimes called second tier contractors) would have no
responsibilities under the Executive Order. However, the provisions of
the Executive Order establishing exemptions and exceptions for the
application of the Executive Order's obligations do not expressly
specify that its obligations do not flow past the first tier
subcontractor, a significant limitation that one would expect to be
made explicitly in the text of the Executive Order rather than by
operation of the contract clause's incorporation provision. In
addition, in the Department's past regulatory treatment of a similar
issue, it has adapted through regulation the application of an
Executive Order's contract inclusion provisions so that the obligation
to abide by the mandates of the orders flows to subcontractors below
the first tier. See, e.g., 69 FR 16376, 16378 (Mar. 29, 2004) (final
rule implementing E.O. 13201) (based on identical contract
incorporation provision, ``the intent of the Order was clearly that the
clause be passed to
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subcontractors below the first tier''); 57 FR 49588, 49591 (Nov. 2,
1992) (final rule implementing E.O. 12800) (``It is clear, however,
that the intent of Executive Order 12800 was that the clause flow down
below the first tier level''). The Department's experience with
regulatory implementation of all these Executive Orders is that
requiring the obligations of the Executive Order to flow past the first
tier subcontractor best achieves the purposes of the Executive Orders.
For these reasons, the Department has concluded that in order to fully
implement the intent of E.O. 13496, Sec. 471.2(a) has been adapted to
require the inclusion of paragraphs 1 through 4 of the contract clause.
The Department seeks comments on this proposal.
Proposed Sec. 471.2(b) provides that the employee notice clause is
to be set out verbatim in a contract, subcontract or purchase order,
rather than being incorporated by reference in those documents.
Proposed Sec. 471.2(c) implements Section 3(c) of the Executive Order,
74 FR 6108, permitting the Secretary to modify the contract clause
under certain specified circumstances as needed from time to time. The
Department requests comment regarding the utility of setting out the
employee notice clause verbatim, as opposed to incorporation by
reference, to ensure that contractors will be aware of their
contractual obligation to post the required notice.
The contract clause in the Executive Order requires a contractor to
post the employee notice conspicuously ``in and about its plants and
offices * * * including in all places where notices to employees are
customarily posted both physically and electronically.'' 74 FR 6107,
Sec. 2, para. 2. As a result, a contractor is required to post the
notice physically at its place of operation where employees are likely
to see it. Proposed Sec. 471.2(d) provides that the Department will
print the required employee notice poster and supply it to Federal
contractors through the Federal contracting agency. In addition, the
poster may be obtained from OLMS, whose contact information is provided
in this subsection of the proposed rule, or can be downloaded from
OLMS's Web site, http://www.olms.dol.gov. The Secretary has concluded
that the Department's printing of the poster and provision of it to
Federal contractors will reduce the burden on those contractors to
comply with the Executive Order and this regulation, and will ensure
conformity and consistency with the Secretary's specifications for the
notice. Proposed Sec. 471.2(d) also permits contractors to reproduce
in exact duplicate the poster supplied by the Department to satisfy
their obligations under the Executive Order and this rule. The
Department invites comment on its proposal to make available print and
electronic format posters containing the employee notice.
Those contractors that customarily post notices to employees
electronically must also post the required notice electronically. In
Sec. 471.2(e), the Department proposes that such contractors may
satisfy the electronic posting requirement on any web site that is
maintained by the contractor or subcontractor and customarily used for
employee notices, whether external or internal. A contractor must
display prominently on its Web page or electronic site where other
employee notices are customarily placed a link to the DOL's web page
that contains the full text of the employee notice. The contractor must
also place the link in the prescribed text contained in Sec. 471.2(e).
The prescribed text is the introductory language of the notice. The
Department seeks comments on this proposal for electronic compliance.
In addition, the Department seeks comment on whether it should
prescribe standards regarding the size, clarity, location, and
brightness with regard to the link, including how to prescribe
electronic postings that are at least as large, clear and conspicuous
as the contractor's other posters.
Exceptions for Specific Types of Contracts and Exemptions Available to
Contracting Departments or Agencies With Respect to Particular
Contractors or Subcontracts
The Executive Order expressly excepts from its application two
types of Government contracts: Collective bargaining agreements as
defined in 5 U.S.C. 7103(a)(8) and contracts involving purchases below
the simplified acquisition threshold as defined in the Office of
Federal Procurement Policy Act, 41 U.S.C. 403; 74 FR at 6107, Sec. 2.
The simplified acquisition threshold is currently set at $100,000. 41
U.S.C. 403. Section 471.3(a)(1) and (2) of the proposed rule implement
these exceptions. In addition, the Executive Order's provision
regarding its effective date excepts contracts resulting from
solicitations issued prior to the effective date of the final rule
promulgated pursuant to this rulemaking. 74 FR 6111, Sec. 16. Proposed
Sec. 471.3(a)(3) implements this provision of the Executive Order.
As proposed in Sec. 471.2(a), all nonexempt prime contractors and
subcontractors are required to include the employee notice contract
clause in each of their nonexempt subcontracts so that the obligation
to notify employees of their rights flows to subcontractors of a
government contract as well. The Executive Order does not except from
its coverage subcontracts involving purchases below the simplified
acquisition threshold. The Department has defined ``subcontract'' in
the definitional section of the rule to include only those subcontracts
that are necessary to the performance of the government contract. See
Sec. 471.1(r); see also OFCCP v. Monongahela R.R., 85-OFC-2, 1986 WL
802025 (Recommended Decision and Order, April 2, 1986), aff'd, (Deputy
Under Secretary's Final Decision and Order, Mar. 11, 1987) (railroad
transporting coal to power generation plant of energy company
contracting with GSA was subcontractor because delivery of coal is
necessary to for the power company to perform under its contract with
GSA). Although this rule may result in coverage of subcontracts with
relatively de minimis value in the overall scheme of government
contracts, covered subcontractors include only those who are performing
subcontracts that are necessary to the performance of the prime
contract. The Department invites comment on whether a further
limitation on the application of the rule to subcontracts is necessary,
and if it is, whether such a limitation is best accomplished through
the application of this or another standard, for instance, a threshold
related to the monetary value of the subcontract.
In addition to the exceptions for certain contracts, the Executive
Order establishes two exemptions that the Secretary, in her discretion,
may provide to contracting departments or agencies that the Secretary
finds appropriate for exemption. 74 FR 6108, Sec. 4. These provisions
permit the Secretary to exempt a contracting department or agency or
group of departments or agencies from the requirements of any or all of
the provisions of the Order with respect to a particular contract or
subcontract or any class of contracts or subcontracts if she finds
either that the application of any of the requirements of the Order
would not serve its purposes or would impair the ability of the
government to procure goods or services on an economical and efficient
basis, or that special circumstances require an exemption in order to
serve the national interest. Id. Proposed Sec. 471.3(b) implements
these exemptions. Proposed Sec. 471.3(b) provides for the submission
of written requests for exemptions to the
[[Page 38492]]
Deputy Assistant Secretary for Labor-Management Programs, and further
provides that the Deputy Assistant Secretary may withdraw an exemption
if a determination is made that such action is necessary or appropriate
to achieve the purposes of the rule. The Department invites comments on
the standards and procedures for requesting an exemption and the
Department's withdrawal of a granted exemption.
Finally, proposed Sec. 471.4 implements the policy noted above
that the Executive Order requires notice-posting in those workplaces in
which employees covered by the NLRA perform their work under the
Federal contract. Thus, this rule does not apply to employers excluded
from the definition of ``employer'' in the NLRA, 29 U.S.C. 152(2), and
employers of employees excluded from the definition of ``employee''
under the NLRA, 29 U.S.C. 152(3). As a result, Federal, State and local
public-sector employers are not covered by this rule. 29 U.S.C. 152(2).
Also excluded are employers of workers employed: as agricultural
laborers; in the domestic service of any person or family in a home; by
a parent or spouse; as an independent contractor; as a supervisor; or
by an employer subject to the Railway Labor Act, such as railroads and
airlines. 29 U.S.C. 152(3).
Subpart B--General Enforcement; Compliance Review and Complaint
Procedures
Subpart B of the proposed rule establishes standards and procedures
the Department will use to determine compliance with obligations of the
rule, take complaints regarding noncompliance, address findings of
violations, provide hearings for certain matters, impose sanctions,
including debarment, and provide for reinstatement in the case of
debarment. The standards and procedures proposed in this subpart are
taken largely from the Department's prior rule administering and
enforcing Executive Order 13201, 66 FR 11221 (February 22, 2001). See
29 CFR Part 470 (2008), rescinded under authority of E.O. 13496, 74 FR
14045 (March 30, 2009). The Department invites comment on the
administrative and enforcement procedures proposed in Subpart B.
The Department's Office of Federal Contract Compliance Programs
(``OFCCP'') administers and enforces several laws that ban
discrimination and require Federal contractors and subcontractors to
take affirmative action to ensure that all individuals have an equal
opportunity for employment. Therefore, OFCCP already has responsibility
for monitoring, evaluating and ensuring that contractors doing business
with the Federal government conduct themselves in a manner that
complies with certain Federal laws. Proposed Sec. 471.10 builds on
this practice and expertise, and establishes authority in the Deputy
Assistant Secretary for Federal Contract Compliance to conduct
evaluations to determine whether a contractor is in compliance with the
requirements of this rule. Under proposed Sec. 471.10(a), such
evaluations may be done solely for the purpose of assessing compliance
with this rule, or may be undertaken in conjunction with an assessment
of a Federal contractors' compliance with other laws under OFCCP's
jurisdiction. This proposed section also establishes standards
regarding location of the posted notice that will be used by OFCCP to
assess compliance and indicates that an evaluation record will reflect
efforts made toward conciliation, corrective action and/or
recommendations regarding enforcement actions.
Proposed Sec. 471.11 provides for the Department's acceptance of
written complaints alleging that a contractor doing business with the
Federal government has failed to post the notice required by this rule.
The proposed section establishes that no special complaint form is
required, but that complaints must be in writing. In addition, as
proposed in Sec. 471.11, written complaints must contain certain
information, including the name, address and telephone number of the
person submitting the complaint, and the name and address of the
Federal contractor alleged to have violated this rule. This proposed
section establishes that written complaints may be submitted either to
OFCCP or OLMS, and the contact information for each agency is contained
in this subsection. Finally, proposed Sec. 471.11 establishes that
OFCCP will conduct investigations of complaints submitted under this
section, make compliance findings based on such investigations, and
include in the investigation record any efforts made toward
conciliation, corrective action, and recommended enforcement action,
Proposed Sec. 471.12 sets out the initial steps that the
Department will take in the event that a contractor is found to be in
violation of this rule, including making reasonable efforts to secure
compliance through conciliation. Under this proposed section, a
noncompliant contractor must take action to correct the violation and
commit in writing to maintain compliance in the future. If the
contractor fails to come into compliance, OLMS may proceed with
enforcement efforts proposed in Sec. 471.13.
Proposed Sec. 471.13 implements Section 6 of the Executive Order,
74 FR 6108-6109, and establishes steps that the Department will take in
the event that conciliation efforts fail to bring a contractor into
compliance with this rule. Under this proposed section, enforcement
proceedings may be initiated if violations are found as a result of
either a compliance evaluation or a complaint investigation, or in
those cases in which a contractor refuses to allow a compliance
evaluation or complaint investigation or refuses to cooperate with the
compliance evaluation or complaint investigation, including failing to
provide information sought during those procedures. The enforcement
procedures proposed in Sec. 471.13 rely primarily on the Department's
regulations at 29 CFR part 18, which govern administrative hearings
before Administrative Law Judges (ALJ), and, in particular, on the
provisions for expedited hearings at 29 CFR 18.42. The procedures in
this proposed section establish that an ALJ will make recommended
findings and conclusions regarding any alleged violation to the
Assistant Secretary for Employment Standards (``Assistant Secretary''),
who will issue a final administrative order. The final administrative
order may include a cease-and-desist order or other appropriate
remedies in the event that a violation is found. The procedures in this
proposed section also establish timetables for submitting exceptions to
the ALJ's recommended order to the Assistant Secretary, and also
provide for the use of expedited proceedings.
Proposed Sec. 471.14 addresses the imposition of sanctions and
penalties in cases in which violations are found, and establishes post-
hearing procedures related to such sanctions or penalties. Section 7 of
the Executive Order provides the framework for the scope and nature of
remedies the Department may order in the event of a violation. 74 FR
6109. Section 7(a) of the Executive Order provides that the Secretary
may issue a directive that the contracting department or agency cancel,
terminate, suspend, or cause to be cancelled, terminated or suspended
any contract or portion of a contract for noncompliance. Id. In
addition, the Executive Order indicates that contracts may be
cancelled, terminated or suspended absolutely, or their continuance may
be conditioned on a requirement for future compliance. Id. Prior to
issuing such a directive, the Secretary must offer the head of the
contracting department or
[[Page 38493]]
agency an opportunity to object in writing to the remedy contemplated,
and the objections must contain reasons why the contract is essential
to the agency's mission. Id. Finally, Section 7 of the Executive Order
prevents the imposition of such a remedy if the head of the contracting
department or agency, or his or her designee, continues to object to
the issuance of the directive. Id. Proposed Sec. 471.14(a), (b), (c),
and (d)(1) fully implement the standards and procedures established in
Section 7(a) of the Executive Order.
Section 7(b) of the Executive Order provides that the Secretary may
issue an order debarring noncompliant contractors ``until such
contractor has satisfied the Secretary that such contractor has
complied with and will carry out the provisions of the order.'' 74 FR
6109. As with the remedies discussed above, prior to the imposition of
debarment, the Secretary must offer the head of the contracting
department or agency an opportunity to object in writing to debarment,
and the objections must contain reasons why the contract is essential
to the agency's mission. Id. Finally, Section 7(b) of the Executive
Order prevents the imposition of debarment if the head of the
contracting department or agency, or his or her designee, continues to
object to it. Id. Proposed Sec. 471.14(d)(3) of the rule establishes
the availability of the debarment remedy. Section 471.14(f) of the
proposed rule indicates that the Assistant Secretary will periodically
publish and distribute the names of contractors or subcontractors that
have been debarred for noncompliance.
Proposed Sec. 471.15 permits a contractor or subcontractor to seek
a hearing before the Assistant Secretary before the imposition of any
of the remedies outlined above. Finally, proposed Sec. 471.16 provides
contractors or subcontractors that have been debarred under this rule
an opportunity to seek reinstatement by requesting such in a letter to
the Assistant Secretary. Under this proposed provision, the Assistant
Secretary may reinstate the debarred contractor or subcontractor if he
or she finds that the contractor or subcontractor has come into
compliance with this rule and has shown that it will fully comply in
the future.
As noted above, Sec. 471.2(a) requires all nonexempt prime
contractors and subcontractors to include the employee notice contract
clause in each of its nonexempt subcontracts so that the obligation to
notify employees of their rights is binding upon each successive
subcontractor. Regarding enforcement of the requirements of the rule as
to subcontractors, the Executive Order requires the contractor to
``take such action with respect to any such subcontract as may be
directed by the Secretary of Labor as a means of enforcing such
provisions, including sanctions for noncompliance.'' 74 FR 6108, Sec.
2, para. 4. Accordingly, in the event that the Department determines
that a subcontractor is out of compliance with the requirements of this
rule regarding employee notice or inclusion of the contract clause in
the subcontractor's own subcontracts, the Secretary may direct the
contractor to require the noncompliant subcontractor to come into
compliance. As indicated in the Executive Order, if such a directive
causes the contractor to become involved in litigation with the
subcontractor, the contractor may request the United States to enter
the litigation in order to protect the interests of the United States.
74 FR 6108, Sec. 2, para. 4. If the contractor is unable to compel
subcontractor compliance on its own accord, the compliance review,
complaint, investigation, conciliation, hearing and decision procedures
established in Sections 471.10 through 471.16 to assess and resolve
contractor compliance with the requirements of this rule are also
applicable to subcontractors. In those instances in which a contractor
fails to take the action directed by the Secretary regarding a
subcontractor's noncompliance, the contractor may be subject to the
same enforcement and remedial procedures that apply when it is
determined to be out of compliance regarding the requirements to
provide employee notice or include the contract clause in its
contracts. See Sec. 471.13(a)(1).
Subpart C--Ancillary Matters
A number of discrete issues unconnected to the issues addressed in
the two previous subparts merit attention in this proposed rule, and
they are set out in this subpart. Consequently, this Subpart addresses
delegations of authority within and outside the Department to
administer and enforce this proposed rule, rulings under or
interpretations of the Executive Order, standards prohibiting
intimidation, threats, coercion or other interference with rights
protected under this rule, and other provisions of the Executive Order
that are included in this proposed rule. The Department invites comment
on any issues addressed in this subpart.
Proposed Sec. 471.20 implements Section 11 of the Executive Order,
74 FR 6110, which permits the delegation of the Secretary's authority
under the Order to Federal agencies within or outside the Department.
Section 471.21 of the proposed rule indicates that the Assistant
Secretary has authority to make rulings under or interpretations of
this rule. Proposed Sec. 471.22 seeks to prevent intimidation or
interference with rights protected under this rule, so it proposes that
the sanctions and penalties available for noncompliance set out in
Sec. 471.14 be available should a contractor or subcontractor fail to
take all steps necessary to prevent such intimidation or interference.
Activities protected by this proposed section include filing a
complaint, furnishing information, or assisting or participating in any
manner in a compliance evaluation, a complaint investigation, hearing
or any other activity related to the administration and enforcement of
this rule. Finally, proposed Sec. 471.23 implements Section 9 of the
Executive Order, 74 FR 6109, which requires that contracting
departments and agencies cooperate with the Secretary in carrying out
her functions under the Order, and implements Section 15 of the
Executive Order, 74 FR 6110, which establishes general guidelines for
the Order's implementation.
IV. Regulatory Procedures
Executive Order 12866
This proposed rule has been drafted and reviewed in accordance with
Executive Order 12866, section 1(b), Principles of Regulation. 58 FR
51735, 51735-51736. The Department has determined that this rule is not
an ``economically significant'' regulatory action under section 3(f)(1)
of Executive Order 12866. 58 FR 51738. Based on the Department's
analysis, including a cost impact analysis set forth more fully below
with regard to the Regulatory Flexibility Act, 5 U.S.C. 601 et seq.,
this rule is not likely to: (1) Have an annual effect on the economy of
$100 million or more or adversely affect in a material way the economy,
a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or state, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof, or (4) raise novel legal or policy issues. 58 FR 51738. As a
result, the Department has concluded that a full economic impact and
cost/benefit analysis is not required for the rule under section
6(a)(3)(B) of the Executive Order. 58 FR 51741. However, because of its
importance to the public,
[[Page 38494]]
the rule was reviewed by the Office of Management and Budget.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et seq.,
requires agencies promulgating proposed rules to prepare an initial
regulatory flexibility analysis and to develop alternatives wherever
possible, when drafting regulations that will have a significant impact
on a substantial number of small entities. The focus of the RFA is to
ensure that agencies ``review rules to assess and take appropriate
account of the potential impact on small businesses, small governmental
jurisdictions, and small organizations, as provided by the [RFA].''
Executive Order 13272, Sec. 1, 67 FR 53461 (``Proper Consideration of
Small Entities in Agency Rulemaking''). However, an agency is relieved
of the obligation to prepare an initial regulatory flexibility for a
proposed rule if the Agency head certifies that the rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities. 5 U.S.C 605. Based on the analysis below, in which
the Department has estimated the financial burdens to covered small
contractors and subcontractors associated with complying with the
requirements contained in this proposed rule, the Department has
certified to the Chief Counsel for Advocacy of the Small Business
Administration (SBA) that this rule will not have a significant
economic impact on a substantial number of small entities.
The primary goal of the Executive Order and these implementing
regulations is the notification to employees of their rights with
respect to collective bargaining and other protected, concerted
activity. This goal is achieved through the incorporation of a contract
clause in all covered Government contracts. The Executive Order and
this rule impose the obligation to ensure that the contract clause is
included in all Government contracts not on private contractors, but on
Government contracting departments and agencies, which are not ``small
entities'' that come within the focus of the RFA. Therefore, the costs
attendant to learning of the obligation to include the contract clause
in Government contracts and modifying those contracts in order to
comply with that obligation is a cost borne by the Federal government,
and is not incorporated into this analysis.
Once the required contract clause is included in the Government
contract, contractors then begin to assume the burdens associated with
compliance. Those obligations include posting the required notice and
incorporating the contract clause into all covered subcontracts, thus
making the same obligations binding on covered subcontractors. For the
purposes of this analysis, the Department estimates that, on average,
each prime contractor will subcontract some portion of its prime
contract three times, and the prime contractor therefore will expend
time ensuring that the contract clause is included in its subcontracts
and notifying those subcontractors of their attendant obligations. To
the extent that subcontractors subcontract any part of their contract
with the prime contractor, they, in turn, will be required to expend
time ensuring that the contract clause is included in the next tier of
subcontracts and notifying the next-tier subcontractors of their
attendant obligations. Therefore, for the purpose of determining time
spent on compliance, the Department will not differentiate between the
obligations of prime contractors and subsequent tiers of subcontractors
in assessing time spent on compliance; the Department assumes that all
contractors, whether prime contractor or subcontractor, will spend
equivalent amounts of time engaging in compliance activity.
The Department estimates that each contractor will spend a total of
3.5 hours per year in order to comply with this rule, which includes 90
minutes for the contractor to learn about the contract and notice
requirements, train staff, and maintain records; 30 minutes for
contractors to incorporate the contract clause into each subcontract
and explain its contents to subcontractors; 30 minutes acquiring the
notice from a government agency or Web site; and 60 minutes posting
them physically and electronically, depending on where and how the
contractor customarily posts notices to employees. The Department
assumes that these activities will be performed by a professional or
business worker, who, according to Bureau of Labor statistics data,
earned a total hourly wage of $31.02 in January, 2009, including
accounting for fringe benefits. The Department then multiplied this
figure by 3.5 hours to estimate the average annual costs for
contractors and subcontractors to comply with this rule. Accordingly,
this proposed rule is estimated to impose average annual costs of
$108.57 per contractor (3.5 hours x $31.02). These costs will decrease
in subsequent years based on a contractor's increasing familiarity with
the rule's requirements and having already satisfied its posting
requirements in earlier years.
Based upon figures obtained from USASpending.gov, which compiles
information on federal spending and contractors across government
agencies, the Department concludes that there were 186,536 unique
Federal contractors holding Federal contracts in FY 2008.\2\ Although
this rule does not apply to Federal contracts below the simplified
acquisition threshold, the Department does not have a means by which to
calculate what portion of all Federal contractors hold only contracts
with the government below the simplified acquisition threshold to which
the rule would not apply in any respect. Therefore, in order to
determine the number of entities affected by this rule, the Department
used all Federal contractors as a basis, regardless of the size of the
government contract held. Based on data analyzed in the Federal
Procurement Data System (fpds.gov), which compiles data about types of
contractors, of all 186,536 unique Federal prime contractors,
approximately 35% are ``small entities'' as defined by the Small
Business Administration (SBA) size standards.\3\
[[Page 38495]]
Therefore, for the purposes of the RFA analysis, the Department
estimates that this rule will affect 65,288 small Federal prime
contractors.
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\2\ The Federal Funding Accountability and Transparency Act of
2006, Pub.L. 109-282, (Sept. 26, 2006), requires that the Office of
Management and Budget establish a single searchable Web site,
accessible by the public for free, that includes for each Federal
award, among other things: (1) The name of the entity receiving the
award; (2) the amount of the award; (3) information on the award
including transaction type, funding agency, etc.; (4) the location
of the entity receiving the award; and (5) a unique identifier of
the entity receiving the award. See 31 U.S.C.A. Sec. 6101 note. In
compliance with this requirement, USASpending.gov was established.
\3\ The Federal Procurement Data System compiles data regarding
small business ``actions'' and small business ``dollars'' using the
criteria employed by SBA to define ``small entities.'' In FY 2008,
small business actions accounted for 50% of all Federal procurement
action. However, deriving a percentage of contractors that are small
using the ``action'' data would overstate the number of small
contractors because contract actions reflect more than just
contracts; they include modifications, blanket purchase agreement
calls, task orders, and federal supply schedule orders. As a result,
there are many more contract actions than there are contracts or
contractors. Accordingly, a single small contractor might have
hundreds of actions, e.g., delivery or task orders, placed against
its contract. These contract actions would be counted individually
in the FPDS, but represent only one small business.
Also reflected in FPDS, in FY 2008, small business ``dollars''
accounted for 19% of all Federal dollars spent. However, deriving a
percentage of contractors that are small using the ``dollars'' data
would understate the number of small contractors. Major acquisitions
account for a disproportionate share of the dollar amounts and are
almost exclusively awarded to large businesses. For instance,
Lockheed Martin was awarded $34 billion in contracts in FY 2008,
which accounted for 6% of all Federal spending in that year. The top
five federal contractors, all large businesses, accounted for over
20% of contract dollars in FY 2008. As a result, because the largest
Federal contractors disproportionately represent ``dollars'' spent
by the Federal government, the FPDB's data on small ``dollars''
spent understates the number of small entities with which the
Federal government does business.
The Department concludes that the percentage of all Federal
contractors that are ``small'' is probably somewhere between 19% and
50%, the two percentages derived from the FPDS figures on small
``actions'' and small ``dollars.'' The mean of these two percentages
is approximately 35%, and the Department will use this figure above
to estimate how many of all Federal contractors are ``small
entities'' in SBA's terms.
---------------------------------------------------------------------------
As noted above, for the purposes of this analysis, the Department
estimates that each prime contractor subcontracts a portion of the
prime contract three times, on average. However, the community of prime
contractors does not utilize a unique subcontractor for each
subcontract; the Department assumes that subcontractors may be working
under several prime contracts for either a single prime contractor or
multiple prime contractors, or both. In addition, some subcontractors
may also be holding prime contracts with the government, so they may
already be counted as affected entities. Therefore, in order to
determine the unique number of subcontractors affected by this rule,
the Department estimates there are the same number of unique
subcontractors as prime contractors, resulting in the estimate that
186,536 subcontractors are affected by this rule. Further, for the
purposes of this analysis, the Department assumes that all
subcontractors are ``small entities'' as defined by SBA size standards.
Therefore, in order to estimate the total number of ``small''
contractors affected by this rule, the Department has added together
the estimates for the number of small prime contractors calculated
above (65,288) with the estimate of all subcontractors (186,536), all
of which we assume are small. Accordingly, the Department estimates
that 251,824 small prime and subcontractors are affected by this rule.
Based on this analysis, the Department concludes that this proposed
rule will not have a significant economic impact on a substantial
number of small entities. The Regulatory Flexibility Act does not
define either ``significant economic impact'' or ``substantial'' as it
relates to the number of regulated entities. 5 U.S.C. 601. In the
absence of specific definitions, ``what is `significant' or
`substantial' will vary depending on the problem that needs to be
addressed, the rule's requirements, and the preliminary assessment of
the rule's impact.'' See A Guide for Government Agencies: How to Comply
with the Regulatory Flexibility Act, Office of Advocacy, U.S. Small
Business Administration at 17, available at http://www.sba.gov. As to
economic impact, one important indicator is the cost of compliance in
relation to revenue of the entity or the percentage of profits
affected. Id. In this case, the Department has determined that the
average cost of compliance with this rule in the first year for all
Federal contractors and subcontractors will be $108.57. The Department
concludes that this economic impact is not significant. Furthermore,
the Department has determined that of the entire regulated community of
all 186,536 prime contractors and all 186,536 subcontractors, 67%
percent of that regulated community constitute small entities (251,824
small contractors divided by all 373,072 contractors). Although this
figure represents a substantial number of federal contractors and
subcontractors, because Federal contractors are derived from virtually
all segments of the economy and across industries, this figure is a
small portion of the national economy overall. Id. at 20 (``the
substantiality of the number of businesses affected should be
determined on an industry-specific basis and/or the number of small
businesses overall''). Accordingly, the Department concludes that the
rule does not impact a substantial number of small entities in a
particular industry or segment of the economy. Therefore, under 5
U.S.C. 605, the Department concludes that the proposed rule will not
have a significant economic impact on a substantial number of small
entities.
Unfunded Mandates Reform
For purposes of the Unfunded Mandates Reform Act of 1995, this
proposed rule would not include any Federal mandate that might result
in increased expenditures by State, local, and tribal governments, or
increased expenditures by the private sector of more than $100 million
in any one year.
Paperwork Reduction Act
Certain sections of this proposed rule, including Sec. 471.11(a)
and (b), contain information collection requirements for purposes of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA). As
required by the PRA, the Department has submitted a copy of these
sections to OMB for its review.
The proposed rule requires contractors to post notices and
cooperate with any investigation into a failure to comply with the
requirements of part 471 as the result of a complaint or a compliance
evaluation. It also permits employees to file complaints with the
Department alleging that a contractor has failed to comply with those
requirements. The application of the PRA to those requirements is
discussed below.
The proposed rule imposes certain minimal burdens associated with
the posting of the employee notice poster required by the Executive
Order and Sec. 471.2(a). As noted in Sec. 471.2(e), the Department
will supply the notice, and contractors will be permitted to post exact
duplicate copies of the notice. Under the regulations implementing the
PRA, ``[t]he public disclosure of information originally supplied by
the Federal government to [a] recipient for the purpose of disclosure
to the public'' is not considered a ``collection of information'' under
the Act. See 5 CFR 1320.3(c)(2). Therefore, the posting requirement is
not subject to the PRA.
The proposed rule would also impose certain burdens on the
contractor associated with cooperating with an investigation into
failure to comply with the requirements of part 471 as the result of a
complaint or in connection with a compliance evaluation. The
regulations implementing the PRA exempt any information collection
requirements imposed by an administrative agency during the conduct of
an administrative action against specific individuals or entities. See
5 CFR 1320.4. Once the agency opens a case file or equivalent about a
particular party, this exception applies during the entire course of
the investigation, before or after formal charges or complaints are
filed or formal administrative action is initiated. Id. Therefore, this
exemption would apply to the Department's investigation of complaints
alleging violations of the Order or this proposed rule as well as
compliance evaluations.
As for the burden hour estimate for employees filing complaints, we
estimate, based on the experience of the Office of Federal Contract
Compliance Programs (OFCCP) administering other laws applicable to
Federal contractors, that it will take an average of 1.28 hours for
such a complainant to compose a complaint containing the necessary
information and to send that complaint to the Department. This number
is also consistent with the burden estimate for filing a complaint
under E.O. 13201 and the now-revoked part 470 regulations.
The Department has estimated it would receive a total of 50
employee complaints in any given year, which is significantly larger
than the estimate contained its most recent PRA submission for E.O.
13201. In that
[[Page 38496]]
submission, the Department estimated it would receive 20 employee
complaints. This number itself had been revised downwards because the
Department never received any employee complaints pursuant to the now-
revoked 29 CFR part 470 regulations. Because the applicability of the
proposed rule and E.O. 13496 is greater in scope than the now-revoked
part 470 and E.O. 13201 in terms of geography (the now-revoked part 470
regulations only applied to states without right-to-work laws, whereas
the proposed rule applies nationwide), the Department has revised
upwards its estimate of employee complaints under the proposed rule
from 20 to 50. In addition, E.O. 13201 required the posting of a notice
containing information of interest to only a few--employees who may
have objected to paying union dues or fees for non-representational
activities--while the information in the poster required by this
regulation should be of interest to all employees.
The Department calculated the estimates of annualized cost to
respondents for the hour burdens associated with this collection of
information. Specifically, it used the data from the Bureau of Labor
Statistics (BLS) National Compensation Survey: Occupation Wages in the
United States (NCS), 2007 (Bulletin 2704), to calculate the cost of the
burden hours associated with employee complaints. The NCS Bulletin
indicates that the average hourly wage for all workers during 2007, the
most recent year available, was $19.88 per hour. Therefore, we estimate
that the cost to a complainant of filing a complaint under E.O. 13496
will be $25.92, or $25.45 ($19.88 x 1.28) + $0.47 for postage and
envelope ($0.44 postage and $0.03 for the envelope). We further
estimate, as stated above, that 50 individual complaints will be filed
each year. Therefore, we project that this collection of information
will impose on employees who file complaints a total annual cost burden
of $1,296.00 ($25.92 per complaint x 50 complaints).
Proposed Sec. 471.3(b) permits contracting departments to submit
written requests for an exemption from the obligations of the Executive
Order (waiver request) as to particular contracts or classes of
contracts under specified circumstance. The PRA does not cover the
costs to the Federal government for the submission of waiver requests
by contracting agencies or departments or for the processing of waiver
requests by the Department of Labor. The regulations implementing the
PRA define the term ``burden,'' in pertinent part, as ``the total time,
effort, or financial resources expended by persons to generate,
maintain, retain, or disclose or provide information to or for a
Federal agency.'' 5 CFR 1320.3(b)(1). The definition of the term
``person'' in the same regulations includes ``an individual,
partnership, association, corporation (including operations of
government-owned contractor-operated facilities), business trust, or
legal representative, an organized group of individuals, a State,
territorial, tribal, or local government or branch thereof, or a
political subdivision of a State, territory, tribal, or local
government or a branch of a political subdivision.'' 5 CFR 1320.3(k).
It does not include the Federal government or any branch, political
subdivision, or employee thereof. Therefore, the cost to the Federal
government for the submission of waiver requests by contracting
agencies and departments need not be taken into consideration.
The Department invites the public to comment on whether each of the
proposed collections of information: (1) Ensures that the collection of
information is necessary to the proper performance of the agency,
including whether the information will have practical utility; (2)
estimates the projected burden, including the validity of the
methodology and assumptions used, accurately; (3) enhances the quality,
utility, and clarity of the information to be collected; and (4)
minimizes the burden of the collection of information on those who are
to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology (e.g., permitting electronic
submission of responses). Comments must be submitted by September 2,
2009 to: Desk Officer for the Department of Labor, Office of Management
and Budget, 725 17th Street, NW., Washington, DC 20503.
Executive Order 13132 (Federalism)
The Department has reviewed this proposed rule in accordance with
Executive Order 13132 regarding federalism, and has determined that the
proposed rule does not have ``federalism implications.'' The employee
notice required by the Executive Order and part 471 must be posted only
by employers covered under the NLRA. Therefore, the proposed rule does
not ``have substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.''
Executive Order 13084 (Consultation and Coordination With Indian Tribal
Governments)
The Department certifies that this Proposed Rule does not impose
substantial direct compliance costs on Indian tribal governments.
Small Business Regulatory Enforcement Fairness Act of 1996
This proposed rule is not a major rule as defined by section 804 of
the Small Business Regulatory Enforcement Fairness Act of 1996. This
rule will not result in an annual effect on the economy of $100,000,000
or more; a major increase in costs or prices; or significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of the United States-based companies to
compete with foreign-based companies in domestic and export markets.
Request for Comments
This proposed rule would implement Executive Order 13496. The
Department invites comments about the NPRM from interested parties,
including current and potential Government contractors, subcontractors,
and vendors, and current and potential employees of such entities;
labor organizations; public interest groups; Federal contracting
agencies; and the public.
List of Subjects in 29 CFR Part 471
Administrative practice and procedure, Government contracts,
employee rights, Labor unions.
Text of Proposed Rule
Accordingly, a new Subchapter D, consisting of Part 471, is
proposed to be added to 29 CFR Chapter IV to read as follows:
Subchapter D. Notification of Employee Rights Under Federal Labor Laws
PART 471--OBLIGATIONS OF FEDERAL CONTRACTORS AND SUBCONTRACTORS;
NOTIFICATION OF EMPLOYEE RIGHTS UNDER FEDERAL LABOR LAWS
Subpart A--Definitions, Requirements for Employee Notice, and
Exceptions and Exemptions
Sec.
471.1 What definitions apply to this part?
471.2 What employee notice clause must be included in Government
contracts?
471.3 What exceptions apply and what exemptions are available?
471.4 What employers are not covered under the rule?
Appendix A to Subpart A of Part 471--Text of Employee Notice Clause
[[Page 38497]]
Appendix B to Subpart A of Part 471--Electronic Link Language
Subpart B--General Enforcement; Compliance Review and Complaint
Procedures
471.10 How will the Department determine whether a contractor is in
compliance with Executive Order 13496 and this part?
471.11 What are the procedures for filing and processing a
complaint?
471.12 What are the procedures to be followed when a violation is
found during a complaint investigation or compliance evaluation?
471.13 Under what circumstances, and how, will enforcement
proceedings under Executive Order 13496 be conducted?
471.14 What sanctions and penalties may be imposed for
noncompliance, and what procedures will the Department follow in
imposing such sanctions and penalties?
471.15 Under what circumstances must a contractor be provided the
opportunity for a hearing?
471.16 Under what circumstances may a contractor be reinstated?
Subpart C--Ancillary Matters
471.20 What authority under this part or Executive Order 13496 may
the Secretary delegate, and under what circumstances?
471.21 Who will make rulings and interpretations under Executive
Order 13496 and this part?
471.22 What actions may the Assistant Secretary take in the case of
intimidation and interference?
471.23 What other provisions apply to this part?
Authority: 40 U.S.C. 101 et seq.; Executive Order 13496, 74 FR
6107 (February 4, 2009); Secretary's Order 01-2008, 73 FR 32424
(June 6, 2008).
Subpart A--Definitions, Requirements for Employee Notice, and
Exceptions and Exemptions
Sec. 471.1 What definitions apply to this part?
Assistant Secretary means the Assistant Secretary for Employment
Standards, United States Department of Labor, or his or her designee.
Collective bargaining agreement means an agreement, as defined in
the Federal Service Labor-Management Relations Statute, entered into by
an agency and the exclusive representative of employees in an
appropriate unit to set terms and conditions of employment of those
employees.
Construction means the construction, rehabilitation, alteration,
conversion, extension, demolition, weatherization, or repair of
buildings, highways, or other changes or improvements to real property,
including facilities providing utility services. The term construction
also includes the supervision, inspection, and other on-site functions
incidental to the actual construction.
Construction work site means the general physical location of any
building, highway, or other change or improvement to real property
which is undergoing construction, rehabilitation, alteration,
conversion, extension, demolition, or repair, and any temporary
location or facility at which a contractor or subcontractor meets a
demand or performs a function relating to the contract or subcontract.
Contract means, unless otherwise indicated, any Government contract
or subcontract.
Contracting agency means any department, agency, establishment, or
instrumentality in the executive branch of the Government, including
any wholly owned Government corporation, that enters into contracts.
Contractor means, unless otherwise indicated, a prime contractor or
subcontractor.
Department means the U.S. Department of Labor.
Employee notice clause means the contract clause that Government
contracting departments and agencies must include in all Government
contracts and subcontracts pursuant to Executive Order 13496 and this
part.
Government means the Government of the United States of America.
Government contract means any agreement or modification thereof
between any contracting agency and any person for the purchase, sale,
or use of personal property or non-personal services. The term
``personal property,'' as used in this section, includes supplies, and
contracts for the use of real property (such as lease arrangements),
unless the contract for the use of real property itself constitutes
real property (such as easements). The term ``non-personal services''
as used in this section includes, but is not limited to, the following
services: Utilities, construction, transportation, research, insurance,
and fund depository. The term Government contract does not include:
(1) Agreements in which the parties stand in the relationship of
employer and employee; and
(2) Federal financial assistance, as defined in 29 CFR 31.2.
Labor organization means any organization of any kind in which
employees participate and which exists for the purpose, in whole or in
part, of dealing with employers concerning grievances, labor disputes,
wages, rates of pay, hours, or other terms or conditions of employment.
Modification of a contract means any alteration in the terms and
conditions of that contract, including amendments, renegotiations, and
renewals.
Order or Executive Order means Executive Order 13496 (74 FR 6107,
January 30, 2009).
Person means any natural person, corporation, partnership,
unincorporated association, State or local government, and any agency,
instrumentality, or subdivision of such a government.
Prime contractor means any person holding a contract with a
contracting agency, and, for the purposes of subparts B and C of this
part, includes any person who has held a contract subject to the
Executive Order and this part.
Related rules, regulations, and orders of the Secretary of Labor,
as used in Sec. 471.2 of this part, means rules, regulations, and
relevant orders of the Assistant Secretary for Employment Standards, or
his or her designee, issued pursuant to the Executive Order or this
part.
Secretary means the Secretary of Labor, U.S. Department of Labor,
or his or her designee.
Simplified acquisition threshold means the dollar amount set by
Congress under the Office of Federal Policy Procurement Act. As
indicated in this Part, government contracts valued below the dollar
amount set in the Simplified Acquisition Threshold are not subject to
this Part.
Subcontract means any agreement or arrangement between a contractor
and any person (in which the parties do not stand in the relationship
of an employer and an employee):
(1) For the purchase, sale or use of personal property or non-
personal services that, in whole or in part, is necessary to the
performance of any one or more contracts; or
(2) Under which any portion of the contractor's obligation under
any one or more contracts is performed, undertaken or assumed.
Subcontractor means any person holding a subcontract and, for the
purposes of subparts B and C of this part, any person who has held a
subcontract subject to the Executive Order and this part.
Union means a labor organization as defined in paragraph (k) of
this section.
United States, as used herein, shall include the several States,
the District of Columbia, the Virgin Islands, the Commonwealth of
Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern
Mariana Islands, and Wake Island.
[[Page 38498]]
Sec. 471.2 What employee notice clause must be included in
Government contracts?
(a) Government contracts. With respect to all contracts covered by
this part, Government contracting departments and agencies shall, to
the extent consistent with law, include the language set forth in
Appendix A to Subpart A of Part 471 in every Government contract, other
than collective bargaining agreements as defined in Sec. 471.1 and
purchase orders under the simplified acquisition threshold as defined
in Sec. 471.1.
(b) Inclusion by reference not permitted. The employee notice
clause must be quoted verbatim in a contract, subcontract, or purchase
order. The clause may not be made part of the contract, subcontract, or
purchase order by words of incorporation or inclusion.
(c) Adaptation of language. Whenever the Assistant Secretary finds
that an Act of Congress, clarification of existing law by the courts or
the National Labor Relations Board, or other circumstances make
modification of the contractual provisions necessary to achieve the
purposes of Executive Order 13496 and this part, the Assistant
Secretary promptly shall issue such rules, regulations, or orders as
are needed to cause the substitution or addition of appropriate
contractual provisions in Government contracts thereafter entered into.
(d) Obtaining employee notice poster. The required employee notice
poster, printed by the Department, will be provided by the Federal
contracting agency or may be obtained from the Division of
Interpretations and Standards, Office of Labor-Management Standards,
U.S. Department of Labor, 200 Constitution Avenue, NW., Room N-5609,
Washington, DC 20210, or from any field office of the Department's
Office of Labor-Management Standards or Office of Federal Contract
Compliance Programs. A copy of the poster may also be downloaded from
the Office of Labor-Management Standards Web site at http://www.olms.dol.gov. Additionally, contractors may reproduce and use exact
duplicate copies of the Department's official poster.
(e) Electronic postings of employee notice poster. A contractor or
subcontractor that customarily posts notices to employees
electronically must also post the required notice electronically. Such
contractors or subcontractors satisfy the electronic posting
requirement by displaying prominently on any Web site that is
maintained by the contractor or subcontractor and customarily used for
employee notices, whether external or internal, a link to the
Department of Labor's Web site that contains the full text of the
poster. The language that must constitute the link is contained in
Appendix B to Subpart A to Part 471.
Sec. 471.3 What exceptions apply and what exemptions are available?
(a) Exceptions for specific types of contracts. The requirements of
this part do not apply to
(1) Collective bargaining agreements as defined in Sec. 471.1.
(2) Government contracts that involve purchases below the
simplified acquisition threshold as defined in Sec. 471.1. Therefore,
the employee notice clause need not be included in contracts for
purchases below that threshold, provided that:
(i) No agency or contractor is permitted to procure supplies or
services in a way designed to avoid the applicability of the Order and
this part; and
(ii) The employee notice clause must be included in contracts and
subcontracts for indefinite quantities, unless the contracting agency
or contractor has reason to believe that the amount to be ordered in
any year under such a contract or subcontract will be less than the
simplified acquisition threshold.
(3) Government contracts resulting from solicitations issued prior
to the date of the effective date of this rule.
(b) Exemptions for certain contracts. The Deputy Assistant
Secretary for Labor-Management Programs may exempt a contracting agency
department or agency or groups of departments or agencies from the
requirements of this part with respect to a particular contract or
subcontract or any class of contracts or subcontracts when the Deputy
Assistant Secretary finds that:
(1) The application of any of the requirements of this part would
not serve its purposes or would impair the ability of the Government to
procure goods or services on an economical and efficient basis; or
(2) Special circumstances require an exemption in order to serve
the national interest.
(c) Procedures for requesting an exemption and withdrawals of
exemptions. Requests for exemptions under this subsection from an
agency or department must be in writing, and must be directed to the
Deputy Assistant Secretary for Labor-Management Programs, U.S.
Department of Labor, 200 Constitution Avenue, NW., Room N-5603,
Washington, DC 20210. The Deputy Assistant Secretary for Labor-
Management Programs may withdraw an exemption granted under this
section when, in the Deputy Assistant Secretary's judgment, such action
is necessary or appropriate to achieve the purposes of this part.
Sec. 471.4 What employers are not covered under this part?
(a) The following employers are excluded from the definition of
``employer'' in the National Labor Relations Act (NLRA), and are not
covered by the requirements of this part:
(1) The United States or any wholly owned Government corporation;
(2) Or any Federal Reserve Bank;
(3) Or any State or political subdivision thereof, or any person
subject to the Railway Labor Act;
(4) Or any labor organization (other than when acting as an
employer);
(5) Or anyone acting in the capacity of officer or agent of such
labor organization.
(b) Additionally, employers exclusively employing workers who are
excluded from the definition of ``employee'' under the NLRA are not
covered by the requirements of this part. Those excluded employees are
employed:
(1) As agricultural laborers;
(2) In the domestic service of any family or person at his home;
(3) By his parent or spouse;
(4) As an independent contractor;
(5) As a supervisor as defined under the NLRA; or
(6) By an employer subject to the Railway Labor Act.
Appendix A to Subpart A of Part 471--Text of Employee Notice Clause
``1. During the term of this contract, the contractor agrees to
post a notice, of such size and in such form, and containing such
content as the Secretary of Labor shall prescribe, in conspicuous
places in and about its plants and offices where employees covered
by the National Labor Relations Act engage in activities relating to
the performance of the contract, including all places where notices
to employees are customarily posted both physically and
electronically. The ``Secretary's Notice'' shall include the
following information:
``NOTICE TO EMPLOYEES
RIGHTS OF EMPLOYEES UNDER THE NATIONAL LABOR RELATIONS ACT
``It is the policy of the United States to encourage collective
bargaining and protect the exercise by workers of full freedom of
association, self-organization, and designation of representatives
of their own choosing, for the purpose of negotiating the terms and
conditions of their employment or other mutual aid and protection.
``Under federal law, you have the right to:
Organize a union to negotiate with your employer concerning your
wages, hours, and other terms and conditions of employment.
[[Page 38499]]
Form, join or assist a union.
Bargain collectively through a duly selected union for a
contract with your employer setting your wages, benefits, hours, and
other working conditions.
Discuss your terms and conditions of employment with your co-
workers or a union; join other workers in raising work-related
complaints with your employer, government agencies, or members of
the public; and seek and receive help from a union subject to
certain limitations.
Take action with one or more co-workers to improve your working
conditions, including attending rallies on non-work time, and
leafleting on non-work time in non-work areas.
Strike and picket, unless your union has agreed to a no-strike
clause and subject to certain other limitations. In some
circumstances, your employer may permanently replace strikers.
Choose not to do any of these activities, including joining or
remaining a member of a union.
``It is illegal for your employer to:
Prohibit you from soliciting for the union during non-work time
or distributing union literature during non-work time, in non-work
areas.
Question you about your union support or activities.
Fire, demote, or transfer you, or reduce your hours or change
your shift, or otherwise take adverse action against you, or
threaten to take any of these actions, because you join or support a
union, or because you engage in other activity for mutual aid and
protection, or because you choose not to engage in any such
activity.
Threaten to close your workplace if workers choose a union to
represent them.
Promise or grant promotions, pay raises, or other benefits to
discourage or encourage union support.
Prohibit you from wearing union hats, buttons, t-shirts, and
pins in the workplace except under special circumstances, for
example, as where doing so might interfere with patient care.
Spy on or videotape peaceful union activities and gatherings or
pretend to do so.
It is illegal for a union or for the union that represents you
in bargaining with your employer to: discriminate or take other
adverse action against you based on whether you have joined or
support the union.
``If your rights are violated:
Illegal conduct will not be permitted. The National Labor
Relations Board (NLRB), an agency of the United States government,
will protect your right to a free choice concerning union
representation and collective bargaining and will prosecute
violators of the National Labor Relations Act. The NLRB may order an
employer to rehire a worker fired in violation of the law and to pay
lost wages and benefits and may order an employer or union to cease
violating the law. The NLRB can only act, however, if it receives
information of unlawful behavior within six months.
``If you believe your rights or the rights of others have been
violated, you must contact the NLRB within six months of the
unlawful treatment. Employees should seek assistance from the
nearest regional NLRB office, which can be found on the Agency's Web
site: http://www.nlrb.gov.
``Click on the NLRB's page titled About Us, which contains a
link, Locating Our Offices. You can also contact the NLRB by calling
toll-free: 1-866-667-NLRB (6572) or (TTY) 1-866-315-NLRB (1-866-315-
6572) for hearing impaired.
``This is an official Government Notice and must not be defaced
by anyone.
``2. The contractor will comply with all provisions of the
Secretary's Notice, and related rules, regulations, and orders of
the Secretary of Labor.
``3. In the event that the contractor does not comply with any
of the requirements set forth in paragraphs (1) or (2) above, this
contract may be cancelled, terminated, or suspended in whole or in
part, and the contractor may be declared ineligible for further
Government contracts in accordance with procedures authorized in or
adopted pursuant to Executive Order 13496 of January 30, 2009. Such
other sanctions or remedies may be imposed as are provided in
Executive Order 13496 of January 30, 2009, or by rule, regulation,
or order of the Secretary of Labor, or as are otherwise provided by
law.
``4. The contractor will include the provisions of paragraphs
(1) through (4) herein in every subcontract or purchase order
entered into in connection with this contract (unless exempted by
rules, regulations, or orders of the Secretary of Labor issued
pursuant to section 3 of Executive Order 13496 of January 30, 2009,
so that such provisions will be binding upon each subcontractor. The
contractor will take such action with respect to any such
subcontract or purchase order as may be directed by the Secretary of
Labor as a means of enforcing such provisions, including the
imposition of sanctions for non-compliance: Provided, however, if
the contractor becomes involved in litigation with a subcontractor,
or is threatened with such involvement, as a result of such
direction, the contractor may request the United States to enter
into such litigation to protect the interests of the United
States.''
Appendix B to Subpart A of Part 471--Electronic Link Language
RIGHTS OF EMPLOYEES UNDER THE NATIONAL LABOR RELATIONS ACT
``It is the policy of the United States to encourage collective
bargaining and protect the exercise by workers of full freedom of
association, self-organization, and designation of representatives
of their own choosing, for the purpose of negotiating the terms and
conditions of their employment or other mutual aid and protection.''
Subpart B--General Enforcement; Compliance Review and Complaint
Procedures
Sec. 471.10 How will the Department determine whether a contractor is
in compliance with Executive Order 13496 and this part?
(a) The Deputy Assistant Secretary for Federal Contract Compliance
may conduct a compliance evaluation to determine whether a contractor
holding a covered contract is in compliance with the requirements of
this part. Such an evaluation may be limited to compliance with this
part or may be included in a compliance evaluation conducted under
other laws, Executive Orders, and/or regulations enforced by the
Department.
(b) During such an evaluation, a determination will be made
whether:
(1) The employee notice required by Sec. 471.2(a) is posted in
conspicuous places in and about each of the contractor's establishments
and/or construction work sites, including all places where notices to
employees are customarily posted both physically and electronically;
and
(2) The provisions of the employee notice clause are included in
government contracts, subcontracts or purchase orders entered into on
or after [THE EFFECTIVE DATE OF FINAL RULE], or that the government
contracts, subcontracts or purchase orders have been exempted under
Sec. 471.3(b).
(c) The results of the evaluation will be documented in the
evaluation record, which will include findings regarding the
contractor's compliance with the requirements of Executive Order 13496
and this part and, as applicable, conciliation efforts made, corrective
action taken and/or enforcement recommended under Sec. 471.13.
Sec. 471.11 What are the procedures for filing and processing a
complaint?
(a) Filing complaints. An employee of a covered contractor may file
a complaint alleging that the contractor has failed to post the
employee notice as required by Executive Order 13496 and this part;
and/or has failed to include the employee notice clause in subcontracts
or purchase orders. Complaints may be filed with the Office of Labor-
Management Standards (OLMS) or the Office of Federal Contract
Compliance Programs (OFCCP) at 200 Constitution Avenue, NW.,
Washington, DC 20210, or with any OLMS or OFCCP field office.
(b) Contents of complaints. The complaint must be in writing and
must include the name, address, and telephone number of the employee
who filed the complaint (the complainant), the name and address of the
contractor alleged to have violated Executive Order 13496 and this
part, an identification of the alleged violation and the establishment
or construction work site where it is alleged to have occurred, and any
other pertinent information that will assist in the investigation and
[[Page 38500]]
resolution of the complaint. The complainant must sign the complaint.
(c) Complaint investigations. In investigating complaints filed
with the Department under paragraph (a) of this section, the Deputy
Assistant Secretary for Federal Contract Compliance will evaluate the
allegations of the complaint and develop a case record. The record will
include findings regarding the contractor's compliance with the
requirements of Executive Order 13496 and this part, and, as
applicable, a description of conciliation efforts made, corrective
action taken, and/or enforcement recommended.
Sec. 471.12 What are the procedures to be followed when a violation
is found during a complaint investigation or compliance evaluation?
(a) If any complaint investigation or compliance evaluation
indicates a violation of Executive Order 13496 or this part, the Deputy
Assistant Secretary for Federal Contract Compliance will make
reasonable efforts to secure compliance through conciliation.
(b) The contractor must correct the violation found by the
Department (for example, by posting the required employee notice, and/
or by amending its subcontracts or purchase orders with subcontractors
to include the employee notice clause), and must commit, in writing,
not to repeat the violation, before the contractor may be found to be
in compliance with Executive Order 13496 or this part.
(c) If a violation cannot be resolved through conciliation efforts,
the Deputy Assistant Secretary for Federal Contract Compliance will
refer the matter to the Deputy Assistant Secretary for Labor-Management
Programs, who may proceed in accordance with Sec. 471.13.
(d) For reasonable cause shown, the Deputy Assistant Secretary for
Labor-Management Programs may reconsider, or cause to be reconsidered,
any matter on his or her own motion or pursuant to a request.
Sec. 471.13 Under what circumstances, and how, will enforcement
proceedings under Executive Order 13496 be conducted?
(a) General. (1) Violations of Executive Order 13496 and this part
may result in administrative proceedings to enforce the Order and the
part. The bases for a finding of a violation may include, but are not
limited to:
(i) The results of a compliance evaluation;
(ii) The results of a complaint investigation;
(iii) A contractor's refusal to allow a compliance evaluation or
complaint investigation to be conducted; or
(iv) A contractor's refusal to cooperate with the compliance
evaluation or complaint investigation, including failure to provide
information sought during those procedures.
(v) A contractor's refusal to take such action with respect to a
subcontract as is directed by the Deputy Assistant Secretary for
Federal Contract Compliance or the Deputy Assistant Secretary for
Labor-Management as a means of enforcing compliance with the provision
of this part.
(vi) A subcontractor's refusal to adhere to the requirements of
this part regarding employee notice or inclusion of the contract clause
in its subcontracts.
(2) If a determination is made by the Deputy Assistant Secretary
for Federal Contract Compliance that the Executive Order or the
regulations in this part have been violated, and the violation has not
been corrected through conciliation, he will refer the matter to the
Deputy Assistant Secretary for Labor-Management Programs for
enforcement consideration. The Deputy Assistant Secretary for Labor-
Management Programs may refer the matter to the Solicitor of Labor for
institution of administrative enforcement proceedings.
(b) Administrative enforcement proceedings. (1) Administrative
enforcement proceedings will be conducted under the control and
supervision of the Solicitor of Labor, under the hearing procedures set
forth in 29 CFR part 18, Rules of Practice and Procedure for
Administrative Hearings Before the Office of Administrative Law Judges.
(2) The administrative law judge will certify his or her
recommended decision issued pursuant to 29 CFR 18.57 to the Assistant
Secretary. The decision will be served on all parties and amici.
(3) Within 25 days (10 days in the event that the proceeding is
expedited) after receipt of the administrative law judge's recommended
decision, either party may file exceptions to the decision. Exceptions
may be responded to by the other parties within 25 days (7 days if the
proceeding is expedited) after receipt. All exceptions and responses
must be filed with the Assistant Secretary.
(4) After the expiration of time for filing exceptions, the
Assistant Secretary may issue a final administrative order, or may make
such other disposition of the matter as he or she finds appropriate. In
an expedited proceeding, unless the Assistant Secretary issues a final
administrative order within 30 days after the expiration of time for
filing exceptions, the administrative law judge's recommended decision
will become the final administrative order. If the Assistant Secretary
determines that the contractor has violated Executive Order 13496 or
the regulations in this part, the final administrative order will order
the contractor to cease and desist from the violations, require the
contractor to provide appropriate remedies, or, subject to the
procedures in Sec. 471.14, impose appropriate sanctions and penalties,
or any combination thereof.
Sec. 471.14 What sanctions and penalties may be imposed for
noncompliance, and what procedures will the Department follow in
imposing such sanctions and penalties?
(a) After a final decision on the merits has been issued and before
imposing the sanctions and penalties described in paragraph (d) of this
section, the Assistant Secretary will consult with the affected
contracting agencies, and provide the heads of those agencies the
opportunity to respond and provide written objections.
(b) If the contracting agency provides written objections, those
objections must include a complete statement of reasons for the
objections, among which reasons must be a finding that, as applicable,
the completion of the contract, or further contracts or extensions or
modifications of existing contracts, is essential to the agency's
mission.
(c) The sanctions and penalties described in this section, however,
will not be imposed if:
(1) The head of the contracting agency, or his or her designee,
continues to object to the imposition of such sanctions and penalties,
or
(2) The contractor has not been afforded an opportunity for a
hearing.
(d) In enforcing Executive Order 13496 and this part, the Assistant
Secretary may:
(1) Direct a contracting agency to cancel, terminate, suspend, or
cause to be canceled, terminated or suspended, any contract or any
portions thereof, for failure of the contractor to comply with its
contractual provisions as required by section 7(a) of Executive Order
13496 and the regulations in this part. Contracts may be canceled,
terminated, or suspended absolutely, or continuance of contracts may be
conditioned upon compliance.
(2) Issue an order of debarment under section 7(b) of Executive
Order 13496 providing that one or more contracting agencies must
refrain from entering into further contracts, or extensions or other
modification of existing contracts, with any non-complying contractor.
(3) Issue an order of debarment under section 7(b) of Executive
Order 13496
[[Page 38501]]
providing that no contracting agency may enter into a contract with any
non-complying subcontractor.
(e) Whenever the Assistant Secretary has exercised his or her
authority pursuant to paragraph (d) of this section, the contracting
agency must report the actions it has taken to the Assistant Secretary
within such time as the Assistant Secretary will specify.
(f) Periodically, the Assistant Secretary will publish and
distribute, or cause to be published and distributed, to all executive
agencies a list of the names of contractors and subcontractors that
have, in the judgment of the Assistant Secretary under Sec.
471.13(b)(4) of this part, failed to comply with the provisions of the
Executive Order and this part, or of related rules, regulations, and
orders of the Secretary of Labor, and as a result have been declared
ineligible for future contracts or subcontracts under the Executive
Order and the regulations in this part.
Sec. 471.15 Under what circumstances must a contractor be provided
the opportunity for a hearing?
Before the Assistant Secretary takes the following action, a
contractor or subcontractor must be given the opportunity for a hearing
before the Assistant Secretary:
(a) Issues an order for cancellation, termination, or suspension of
any contract or debarment of any contractor from further Government
contracts under sections 7(a) or (b) of Executive Order 13496 and Sec.
471.14(d)(1) or (2) of this part; or
(b) Includes the contractor on a published list of non-complying
contractors under section 7(c) of Executive Order 13496 and Sec.
471.14(f) of this part.
Sec. 471.16 Under what circumstances may a contractor be reinstated?
Any contractor or subcontractor debarred from or declared
ineligible for further contracts or subcontracts under Executive Order
13496 and this part may request reinstatement in a letter to the
Assistant Secretary. If the Assistant Secretary finds that the
contractor or subcontractor has come into compliance with Executive
Order 13496 and this part and has shown that it will carry out
Executive Order 13496 and this part, the contractor or subcontractor
may be reinstated.
Subpart C--Ancillary Matters
Sec. 471.20 What authority under this part or Executive Order 13496
may the Secretary delegate, and under what circumstances?
Section 11 of Executive Order 13496 grants the Secretary the right
to delegate any of his/her functions or duties under the Order to any
officer in the Department of Labor or to any other officer in the
executive branch of the Government, with the consent of the head of the
department or agency in which that officer serves.
Sec. 471.21 Who will make rulings and interpretations under Executive
Order 13496 and this part?
Rulings under or interpretations of Executive Order 13496 or the
regulations contained in this part will be made by the Assistant
Secretary or his or her designee.
Sec. 471.22 What actions may the Assistant Secretary take in the case
of intimidation and interference?
The sanctions and penalties contained in Sec. 471.14 of this part
may be exercised by the Assistant Secretary against any contractor or
subcontractor who fails to take all necessary steps to ensure that no
person intimidates, threatens, or coerces any individual for the
purpose of interfering with the filing of a complaint, furnishing
information, or assisting or participating in any manner in a
compliance evaluation, complaint investigation, hearing, or any other
activity related to the administration or enforcement of Executive
Order 13496 or this part.
Sec. 471.23 What other provisions apply to this part?
(a) The regulations in this part implement Executive Order 13496
only, and do not modify or affect the interpretation of any other
Department of Labor regulations or policy.
(b) Consistent with section 9 of Executive Order 13496, each
contracting department and agency must cooperate with the Assistant
Secretary, the Deputy Assistant Secretary for Labor-Management
Programs, and/or the Deputy Assistant Secretary for Federal Contract
Compliance, and must provide such information and assistance as the
Assistant Secretary or Deputy Assistant Secretary may require, in the
performance of his or her functions under the Executive Order and the
regulations in this part.
(c)(1) Consistent with section 15 of Executive Order 13496, nothing
in this subpart shall be construed to impair or otherwise affect:
(i) Authority granted by law to a department, agency, or the head
thereof; or
(ii) Functions of the Director of the Office of Management and
Budget relating to budgetary, administrative, or legislative proposals.
(2) This subpart shall be implemented consistent with applicable
law and subject to the availability of appropriations.
(d) Consistent with section 15 of Executive Order 13496, nothing
contained in the Executive Order or this part, or promulgated pursuant
to Executive Order 13496 or this part, is intended to create any right
or benefit, substantive or procedural, enforceable at law or in equity
by any party against the United States, its departments, agencies, or
entities, its officers, employees, or agents, or any other person.
Neither Executive Order 13496 nor this part creates any such right or
benefit.
Signed in Washington, DC, July 20, 2009.
Shelby Hallmark,
Acting Assistant Secretary for Employment Standards.
John Lund,
Deputy Assistant Secretary, Office of Labor-Management Standards.
Lorenzo D. Harrison,
Director, Division of Policy, Planning and Program Development, Office
of Federal Contract Compliance Programs.
[FR Doc. E9-17577 Filed 7-31-09; 8:45 am]
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