[Federal Register Volume 66, Number 190 (Monday, October 1, 2001)]
[Proposed Rules]
[Pages 50010-50021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24320]
[[Page 50009]]
-----------------------------------------------------------------------
Part III
Department of Labor
-----------------------------------------------------------------------
Office of Labor-Management Standards
-----------------------------------------------------------------------
29 CFR Part 470
Obligations of Federal Contractors and Subcontractors; Notice of
Employee Rights Concerning Payment of Union Dues or Fees; Proposed Rule
Federal Register / Vol. 66, No. 190 / Monday, October 1, 2001 /
Proposed Rules
[[Page 50010]]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Office of Labor-Management Standards
29 CFR Part 470
RIN 1215-AB33
Obligations of Federal Contractors and Subcontractors; Notice of
Employee Rights Concerning Payment of Union Dues or Fees
AGENCY: Office of Labor-Management Standards, Employment Standards
Administration, Labor.
ACTION: Notice of proposed rule-making; request for comments.
-----------------------------------------------------------------------
SUMMARY: This Notice of Proposed Rule-Making (NPRM) proposes a
regulation to implement Executive Order 13201, which was signed by
President George W. Bush on February 17, 2001. Executive Order 13201
(``the Executive Order,'' ``the Order,'' or ``EO 13201'') requires non-
exempt Government contractors and subcontractors to post notices
informing their employees that under Federal law, those employees have
certain rights related to union membership and use of union dues and
fees. The Order also provides the text of contractual provisions that
Federal Government contracting departments and agencies must include in
every Government contract, except for collective bargaining agreements
and contracts for purchases under the Simplified Acquisition Threshold.
These provisions include the language of the required notices, and
explain the sanctions, penalties, and remedies that may be imposed if
the contractor or subcontractor fails to comply with its obligations
under the Order. Covered Government contractors and subcontractors must
include these same provisions in their nonexempt subcontracts and
purchase orders, so that the provisions will be binding upon each
subcontractor or vendor.
The Proposed Rule would provide the text of the required
contractual provisions, explain exemptions, and set forth procedures
for ensuring compliance with the Order; it also would contain other
related requirements. This NPRM invites comments on the Proposed Rule.
DATES: Comment Period: Comments must be received on or before November
30, 2001.
ADDRESSES: Comments should be sent to Don Todd, Deputy Assistant
Secretary for Labor-Management Programs, Office of Labor-Management-
Standards, Employment Standards Administration, U.S. Department of
Labor, 200 Constitution Avenue, NW, Room N-5605, Washington, DC 20210.
As a convenience to commenters, comments transmitted by facsimile
(FAX) machine will be accepted. The telephone number of the FAX
receiver is (202) 693-1340. To assure access to the FAX equipment, only
comments of five or fewer pages will be accepted via FAX transmittal.
Receipt of submissions, whether by U.S. mail or FAX transmittal, will
not be acknowledged.
Comments will be available for public inspection during normal
business hours at the above address.
FOR FURTHER INFORMATION CONTACT: Don Todd, Deputy Assistant Secretary
for Labor-Management Programs, Office of Labor-Management Standards,
Employment Standards Administration, U.S. Department of Labor, 200
Constitution Avenue, NW., Room S-2321, Washington, DC 20210, (202) 693-
0200 (this is not a toll-free number). Individuals with hearing
impairments may call 1-800-877-8339 (TTY/TDD).
SUPPLEMENTARY INFORMATION: The preamble to 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 redelegation authority, and interagency
coordination authority.
III. Overview of the Rule--summarizes pertinent aspects of the
regulatory text, and describes the purposes and application of that
text.
IV. Regulatory Procedure--sets forth the applicable regulatory
requirements and requests comments on specific issues.
I. Background
Executive Order 13201 (66 FR 11221, February 22, 2001) is designed
to promote economy and efficiency in Government procurement by
requiring Government contractors to inform their workers that Federal
labor laws give those workers certain rights related to union
membership and use of union dues and fees. The Order provides the text
of a contract clause that Government contracting departments and
agencies must include in all nonexempt Government contracts and
subcontracts. That clause requires contractors to post a notice, the
exact language of which is included in the clause. The clause also
requires contractors to include the same clause in their nonexempt
subcontracts and purchase orders, and describes generally the
sanctions, penalties, and remedies that may be imposed if the
contractor fails to satisfy its obligations under the Order and the
clause.
The text of the notice informs employees that they cannot be
required to join, or maintain membership in, a union in order to keep
their jobs; that under certain conditions, the law permits a union and
an employer to enter into a union-security agreement requiring
employees to pay dues and fees to the union; and that, even where such
union-security agreements exist, employees who are not union members
can only be required to pay their share of union costs relating to
certain specific activities. The notice also provides a general
description of the remedies to which employees may be entitled if these
rights have been violated, and provides contact information for further
information about those rights and remedies.
The Order contains requirements similar, but not identical, to
those included in Executive Order 12800, issued on April 13, 1992, by
former President George H. W. Bush. See 57 FR 12985 (April 14, 1992);
57 FR 13413 (April 16, 1992). That earlier Order, in turn, was intended
to inform employees of their rights under the decisions of the United
States Supreme Court in Communications Workers of America v. Beck, 487
U.S. 735 (1988), and related cases. In Beck, the Court held that a
union may not use fees and dues that it collects from bargaining unit
employees who have not joined the union to finance activities that are
not ``germane'' to the union's representational purposes. Examples of
activities the Court considered ``germane'' include collective
bargaining, contract administration, and grievance adjustment. Beck,
487 U.S. at 745, 760.
During 1992, the Department of Labor (``the Department'') issued a
Notice of Proposed Rule-Making (NPRM) and Final Rule implementing
Executive Order 12800. See 57 FR 33403 et seq. (July 24, 1992) (NPRM);
57 FR 49588 et seq. (November 2, 1992) (Final Rule). However, Executive
Order 12800 was revoked on February 1, 1993, by Executive Order 12836.
58 FR 7045 (published February 3, 1993). The Final Rule was therefore
withdrawn. See 58 FR 15402 (March 22, 1993).
This Proposed Rule, authorized by Section 1 of Executive Order
13201, is based largely upon the November 2, 1992, Final Rule
implementing the earlier Order. Most substantive differences between
the Proposed Rule and the 1992 Final Rule are necessitated by the
differences between the two Executive Orders. The Department has made a
few changes to the language of the earlier Final Rule in order to make
[[Page 50011]]
the Proposed Rule more consistent with the regulations and procedures
of the Office of Federal Contract Compliance Programs (OFCCP). This
NPRM provides that OFCCP, under the supervision of the Deputy Assistant
Secretary for Federal Contract Compliance, would conduct compliance
evaluations and complaint investigations under the Order and the Rule.
See Section II(B) of this preamble, ``Departmental Authorization.''
Each substantive difference between the earlier Final Rule and this
Proposed Rule is discussed below in section III, ``Overview of the
Rule.''
In addition to such substantive changes, the Department has revised
certain sections of the 1992 Final Rule to comply with Executive Order
12988 (February 5, 1996). That Order requires Federal agencies to draft
their regulations to be simple and easy to understand. Accordingly, the
Department has drafted the Proposed Rule to make it easier to read. For
example, the Department has reworded the headings of regulatory
sections into the form of questions. Also, the Department has replaced
ambiguous or confusing words with plainer language; for example, the
word ``shall'' has been replaced in the Proposed Rule by the terms
``must,'' ``will,'' ``is/are,'' or similar words, as appropriate. Other
specific provisions that would differ from the 1992 Final Rule are
discussed below in section III.
While this NPRM was being prepared, the Department issued an
Interim Procedural Notice (IPN) to provide guidance to contractors and
subcontractors about how to comply with Executive Order 13201 pending
the publication of a Final Rule implementing the Order. 66 FR 19988
(April 18, 2001). The IPN authorizes covered contractors to fulfill
their posting obligations under the Order by replicating the text of
the notice set forth in the Order and posting it in conspicuous places
in and about their plants and offices, including all places where
notices to employees are customarily posted. As noted below in section
470.2(e) of the Proposed Rule, the Department is printing an employee
notice poster that will be provided by the contracting agency or may be
obtained directly from the Department at the addresses listed in that
section. The Rule proposes that once the Department's official employee
notice poster is available, contractors may only fulfill their posting
obligations by using that official poster or by making and using exact
duplicate copies of that poster.
II. Authority
A. Legal Authority
The legal authority for the Notice of Proposed Rule-Making is
Executive Order 13201, issued pursuant to the Constitution and laws of
the United States, including the Federal Property and Administrative
Services Act, 40 U.S.C. 471 et seq.
B. Departmental Authorization
Section 1(b) of Executive Order 13201 delegates responsibility for
the administration and enforcement of the Order to the Secretary of
Labor, and directs the Secretary to adopt rules and regulations and
issue such orders as are deemed necessary and appropriate to achieve
the purposes of the Order. Section 9 of the Order authorizes the
Secretary to delegate any function or duty 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.
Using that delegation authority, Secretary's Order 3-2001, issued
March 26, 2001, and published in the Federal Register on April 3, 2001
(66 FR 17762), delegates and assigns responsibility for the
administration and enforcement of EO 13201 to the Assistant Secretary
for Employment Standards. The Assistant Secretary, in turn, has
delegated general responsibility for the administration and enforcement
of the Executive Order to the Deputy Assistant Secretary for Labor-
Management Programs. Under this delegation, the Deputy Assistant
Secretary for Labor-Management Programs has specific responsibility for
granting and withdrawing exemptions and waivers under this part, and
for referring for administrative enforcement cases against contractors
that have been found to have violated the provisions of the Order or
this part.
The Assistant Secretary has conveyed responsibility for conducting
compliance evaluations and complaint investigations under the Order and
this part to the Deputy Assistant Secretary for Federal Contract
Compliance.
C. Interagency Coordination
The Civilian Agency Acquisition Council has been requested to
insert language implementing the Executive Order into the Federal
Acquisition Regulation (FAR).
III. Overview of the Rule
This Proposed Rule would add a new subchapter C and part 470 to
Volume 29 of the Code of Federal Regulations (CFR).
Preamble, Subpart A
Subpart A would contain definitions, the employee notice clause,
and exemptions.
Sec. 470.1 What definitions apply to this part?
The proposed definitions contained in this section would be
derived, for the most part, from the definitions of the same terms,
either in OFCCP's regulations at 41 CFR 60-1.3 (which deals with
certain obligations of Federal contractors regarding equal employment
opportunity, and the procedures used to enforce those obligations), or
in the November 2, 1992, Final Rule that implemented Executive Order
12800 (``the earlier Final Rule''). See 57 FR 49588, 49595. With
certain exceptions explained below, any substantive differences between
the text of a definition in this Proposed Rule and the text of the
definition on which it is based are necessitated by differences between
Executive Order 13201, which authorizes this NPRM, and Executive Order
12800, which authorized the earlier Final Rule. In addition, pursuant
to Executive Order 12988, stylistic or phrasing changes have been made
to particular proposed definitions to clarify their meaning or make
their wording consistent with the wording of similar definitions in
other regulations; such proposed changes are also explained below.
Assistant Secretary: The substance of this definition would be
based on the definition of the same term in the corresponding section
of the earlier Final Rule, and would be consistent with the delegation
in Secretary's Order 3-2001. The structure of the Department has been
changed since 1992, when the earlier Rule was promulgated; because of
those changes, the authority under EO 13201 is now delegated to the
Assistant Secretary for Employment Standards, as discussed in section
I(B) of this preamble.
Collective bargaining agreement: Section 2(a) of EO 13201 exempts
from the requirements of the Order those agreements that meet this
definition. As required by section 2(a) of the Order, this definition
would be based on the definition of the same term in the Civil Service
Reform Act, 5 U.S.C. 7103(a)(8). Because that statutory definition, in
turn, references the definition of the term ``collective bargaining''
in 5 U.S.C. 7103(a)(12), the proposed definition would incorporate the
relevant portions of the latter statutory definition as well. The
Department has revised and reorganized the language of these two
statutory definitions in order to make
[[Page 50012]]
the proposed definition more understandable.
Construction: The definition of this term would be identical to the
definition of the same term in the earlier Final Rule, except that, to
make the definition easier to understand, the phrase ``as used in
paragraphs (d) and (j) of this section'' would be omitted. The
definition also would be substantively consistent with the definition
of the term ``construction work'' in 41 CFR 60-1.3.
Construction work site: This definition would be identical to the
definition of the same term in the earlier Final Rule.
Contract, contracting agency, and contractor: These definitions
would be identical to the definitions of the same terms in the earlier
Final Rule.
Department: This definition would be identical to the definition of
the same term in the earlier Final Rule, and would be consistent with
the delegation of authority in section 1(b) of EO 13201.
Employee notice clause: This term was used, but not defined, in the
earlier Final Rule. The Proposed Rule would use the term as a shorthand
method of referring to the clause that EO 13201 requires Government
contracting departments and agencies, contractors, and subcontractors
to include in their non-exempt contracts.
Government: This definition would be identical to the definition of
the same term in the earlier Final Rule.
Government contract: This definition would be identical to the
definition of the same term in 41 CFR 60-1.3, with one exception.
OFCCP's definition of the term excludes ``Federally assisted
construction contracts'; the Proposed Rule would delete the word
``construction'' to signify that all Federally assisted contracts (not
just construction contracts) would be exempt from the requirements of
the Executive Order.
Labor organization: This definition would be identical to the
definition of the same term in the earlier Final Rule.
Modification: This definition would be substantively similar to the
definition of the same term in the earlier Final Rule. The proposed
definition has been rewritten slightly to make it easier to understand.
This revision is not intended to change the meaning of the definition;
the Department intends that the definition would be interpreted in the
same way as the corresponding definition in the earlier Final Rule.
Person: This definition would be identical to the definition of the
same term in the earlier Final Rule, except that, to make the
definition easier to understand, the phrase ``as used in paragraphs
(j), (o), (r), and (s) of this section'' would be omitted.
Prime contractor: This definition would be similar to the
definition of the same term in the earlier Final Rule. The second part
of the definition would state that ``for purposes of subparts B and
C,'' the term would apply to any person who has held a contract subject
to the Order. In the earlier Final Rule, this second part of the
definition, which would have the effect of authorizing the Department
to take appropriate action against a prime contractor who may not hold
a Government contract at the time the action is being taken, applied
only for purposes of subpart B of this part. In this Proposed Rule, the
Department would apply the second part of the definition to subpart C
in order to ensure that the provisions of section 470.22, which
authorize sanctions and penalties for intimidation and interference,
would apply to former as well as current prime contractors.
Related rules, regulations, and orders of the Secretary of Labor:
This definition would be based on the definition of the same term in
the earlier Final Rule. The difference between the old and new
definitions would reflect two facts addressed above in the discussion
of the definition of the term Assistant Secretary: first, that the
structure of the Department has been changed since 1992, when the
earlier Rule was promulgated; and second, that because of those
changes, the authority under EO 13201 is now delegated to the Assistant
Secretary for Employment Standards, who has re-delegated that authority
to the Deputy Assistant Secretaries for Labor-Management Programs and
for Federal Contract Compliance, as discussed in section I(B) of this
preamble.
Subcontract: This definition would be identical to the definition
of the same term in 41 CFR 60-1.3.
Subcontractor: This definition would be identical to the definition
of the same term in the earlier Final Rule, except that the second
clause of the definition would apply to subparts B and C of this part,
for the same reasons explained above in the discussion of the
definition of ``prime contractor.''
Union: This definition would state that the term ``union'' is
defined in the same way as the term ``labor organization.'' The earlier
Final Rule equated these two terms as well.
Union-security agreement: This definition would be identical to the
definition of the same term in the earlier Final Rule.
United States: This definition would be identical to the definition
of the same term in 41 CFR 60-1.3, except that the phrase ``shall
include'' would be replaced by ``includes.''
Sec. 470.2 Under the Executive Order, what employee notice clause must
be included in Government contracts?
Subsection 470.2(a): This subsection would implement the
requirements of section 2(a) of EO 13201. The text of the employee
notice clause provided in the subsection would be identical to the text
provided in the Executive Order, with three exceptions.
First, paragraph 1 of the clause set forth in section 2(a) of the
Order states that, in notices posted in the plants or offices of
carriers subject to the Railway Labor Act (``RLA''), ``the last
sentence'' of the notice should not be included. It appears that the
Order adopted the quoted phrase because it was included in the 1992
Executive Order. In that earlier Order, ``the last sentence'' of the
notice provided contact information for the National Labor Relations
Board (``NLRB''), which does not have jurisdiction over carriers
subject to the RLA. However, EO 13201 added a sentence to the end of
the notice; that sentence provides the URL for the NLRB's website. The
reference in section 2(a) of the Order to ``the last sentence'' of the
notice apparently fails to take into account that additional sentence.
In the interest of clarity, and to implement the implicit intent of the
Executive Order to exclude the posting of NLRB related information in
Railway Labor Act related work sites, the Proposed Rule would replace
the phrase ``the last sentence'' with the phrase ``the last two
sentences'' in the text of the notice.
Second, paragraph 4 of the clause in the Executive Order requires a
contractor to pass down only the provisions of paragraphs 1 through 3
of the clause to its subcontractors and vendors. The same requirement
was included in the July 1992 NPRM implementing the earlier Executive
Order. See 57 FR 33403, 33405. In response, the Associated General
Contractors of America (AGC) observed that, since paragraphs 1 through
3 of the clause do not themselves require pass-down, first-tier
subcontractors and vendors would not be required to pass down the
clause further. 57 FR 49588, 49591 (discussion of section 470.2(a)(4)).
As the AGC noted, this result contradicted the NPRM's requirement that
the clause be included in the contract document of each tier. Id. The
Department noted in its response that the intent of Executive Order
12800 was clearly that the clause ``flow down beyond the first tier
level''; otherwise there would have been no
[[Page 50013]]
reason for the provision, in section 3(b)(v) of that Order, that
authorized the Secretary to exempt ``subcontractors below an
appropriate tier.'' Id. As a result, the Department revised the clause
in the earlier Final Rule to require pass-down of paragraphs 1 through
4, rather than only paragraphs 1 through 3. Id.
Similarly, Executive Order 13201 contains a provision at section
3(b)(v) that authorizes the Secretary to exempt subcontractors below an
appropriate tier. Therefore, for the same reasons discussed in the
previous paragraph, the Proposed Rule would revise paragraph 4 of the
employee notice clause to require contractors to pass down paragraphs 1
through 4 of the clause to their subcontractors and vendors, rather
than only paragraphs 1 through 3.
Third, the words ``Provided'' and ``that'' would be deleted from
the final sentence in section 4 of the clause, and the word ``shall''
would be changed to ``must'' throughout the clause, in order to make
the clause easier to understand. This revision is not intended to
change the meaning of the clause; the clause would be interpreted in
the same way as the corresponding material in the Executive Order.
Paragraph 470.2(b): This paragraph is subject to the relevant
provisions of the Paperwork Reduction Act of 1995 (PRA) at 44 U.S.C.
3507(d), and will be reviewed by the Office of Management and Budget
(OMB) under those provisions. The paragraph would be identical to the
corresponding paragraph in the earlier Final Rule, except that the
heading of the paragraph would be revised to more accurately describe
the contents of the paragraph.
Paragraph 470.2 (c): This paragraph would be identical to the
corresponding paragraph in the earlier Final Rule.
Paragraph 470.2 (d): This paragraph would be identical to the
corresponding paragraph in the earlier Final Rule, except that the
title of the office to which requests for copies of the poster should
be directed would be updated.
Sec. 470.3 What contracts are exempt from the employee notice clause
requirement?
The exemptions in this section are either required or authorized by
the Executive Order.
Paragraph 470.3(a): This paragraph would exempt, from the
requirements of part 470, contracts for purchases below the Simplified
Acquisition Threshold, as that threshold is defined in the Office of
Federal Procurement Policy Act, 41 U.S.C. 403. This exemption is
required by section 2(a) of the Executive Order. Subparagraphs (1) and
(2) would be modeled on the parallel section in the earlier Final Rule.
See 57 FR 49588, 49596. Consistent with plain-language guidelines, the
relevant language from the earlier Final Rule has been slightly
rewritten for the Proposed Rule, to improve the subparagraphs' clarity.
This revision is not intended to change the meaning of these
subparagraphs; they would be interpreted in the same way as the
corresponding provisions of the earlier Final Rule.
At the time this Rule is being proposed, Congress has set the
Simplified Acquisition Threshold at $100,000. Therefore, except as
provided in subparagraphs (1) and (2), contracts for purchases of less
than that amount would not need to include the employee notice clause.
If Congress were to amend the threshold after the Proposed Rule is
published, this paragraph would be read to exempt contracts for
purchases below the amended amount.
Paragraph 470.3(b): This paragraph would exempt, from the
requirements of part 470, Government contracts that result from
solicitations issued before April 18, 2001, the effective date of the
Order. This exemption would be based on section 14 of the Executive
Order, which provides that the Order applies to contracts resulting
from solicitations issued on or after that date.
Paragraph 470.3(c): This paragraph would permit the Deputy
Assistant Secretary for Labor-Management Programs, upon written
request, to exempt contracting agencies or persons from including the
employee notice clause in particular contracts, subcontracts, or
purchase orders, where special circumstances in the national interest
require such exemption. Such exemptions are authorized by section 3(a)
of the Executive Order.
Paragraph 470.3(d): This paragraph would permit the Deputy
Assistant Secretary for Labor-Management Programs to withdraw the
exemption for a specific contract or subcontract, or group of contracts
or subcontracts, when, in his or her judgment, such a withdrawal is
necessary or appropriate to achieve the purposes of the Executive
Order. This subparagraph would be similar to the parallel subparagraph,
470.3(c), in the earlier Final Rule; the title of the Departmental
officer authorized to withdraw exemptions would be updated to reflect
changes in the structure of the Department.
Sec. 470.4 What contractors or facilities are exempt from the posting
requirements?
Paragraph 470.4(a): This paragraph is authorized by section
3(b)(iv) of EO 13201, and would be identical to the parallel paragraph
in the earlier Final Rule.
Paragraph 470.4(b): This paragraph is authorized by section
3(b)(iii) of EO 13201, and would be identical to the parallel paragraph
in the earlier Final Rule.
Paragraph 470.4(c): This paragraph is authorized by section
3(b)(ii) of EO 13201, and would be identical to the parallel paragraph
in the earlier Final Rule, except that the phrase ``in jurisdictions''
would be inserted before the word ``where'' to conform the language of
the regulation to that of the Executive Order.
Paragraph 470.4(d): As with paragraph 470.2(b), discussed above,
this paragraph is subject to the provisions of the PRA, and will be
reviewed by OMB. The contents of the paragraph are authorized by
section 3(c) of EO 13201, and would be modeled on 41 CFR 60-1.5(b)(2).
The Proposed Rule revises the language of that subparagraph to conform
to the requirements of EO 13201 and the current structure of the
Department of Labor, and to clarify the meaning of the paragraph.
Paragraph 470.4(e): This paragraph is authorized by section 3(b)(i)
of EO 13201, and would be identical to the parallel paragraph in the
earlier Final Rule.
Subpart B--Compliance Evaluations, Complaint Investigations, and
Enforcement Procedures
Sec. 470.10 How will the Department determine whether a contractor is
in compliance with the Executive Order and this part?
This section would be substantively similar to the parallel section
in the earlier Final Rule. See 57 FR 49588, 49597. The differences
between the two sections would be necessitated by the requirements of
EO 13201 or result from changes in OFCCP's general practice and
procedures, including changes in the terminology used by OFCCP to refer
to those practices and procedures. For example, the process of
determining whether a contractor is in compliance with its obligations
is now called a ``compliance evaluation.'' The term encompasses
compliance reviews, as well as off-site record reviews and compliance
checks. See 41 CFR 60-1.20(a). Therefore, the term ``compliance
evaluation'' would replace ``compliance review'' throughout the section
in the Proposed Rule. Additionally, references to ``the Department''
would be modified to clarify that the Deputy Assistant Secretary for
Federal Contract Compliance has responsibility for
[[Page 50014]]
conducting compliance evaluations, and subparagraph 470.10(b)(2) would
be modified to include the requirements of section 14 of EO 13201.
Sec. 470.11 What are the procedures for filing and processing a
complaint?
Paragraph 470.11(a) and (b): As with paragraphs 470.2(b) and
470.4(d), discussed above, these paragraphs are subject to the
provisions of the PRA, and will be reviewed by OMB. The paragraphs
would contain the same substantive requirements as the parallel
sections in the earlier Final Rule. See 57 FR 49588, 49597. The
Proposed Rule would revise the language of those previous sections to
improve their clarity, correct punctuation errors, and make them more
consistent with OFCCP's regulations at 41 CFR 60-1.22 and 1.23.
Paragraphs 470.11(c)-(d): These paragraphs would be substantively
similar to the corresponding paragraphs in the earlier Final Rule. See
57 FR 49588, 49597. They would also be consistent with OFCCP's
regulations at 41 CFR 60-1.24(a) and (b). The Proposed Rule would
revise the paragraphs slightly to make them easier to understand, and
to clarify that the Deputy Assistant Secretary for Federal Contract
Compliance has responsibility for conducting complaint investigations.
None of the revisions to the paragraphs is intended to change the
meaning of the paragraphs; the paragraphs would be interpreted in the
same way as the corresponding provisions of the earlier Final Rule.
Sec. 470.12 What are the procedures to be followed when a violation is
found during a complaint investigation or compliance evaluation?
Paragraph 470.12(a): This paragraph would contain the same
substantive requirements as the corresponding paragraph in the earlier
Final Rule, and would be consistent with OFCCP's regulation at 41 CFR
60-1.24(c)(2). For the reasons explained in the discussion of section
470.10 above, the Proposed Rule would replace the term ``compliance
review'' with ``compliance evaluation.'' See 57 FR 49588, 49597. The
Proposed Rule would also revise the paragraph slightly to make it
easier to understand. This revision is not intended to change the
meaning of the paragraph; the paragraph would be interpreted in the
same way as the corresponding provision of the earlier Final Rule.
Paragraph 470.12(b): This paragraph would contain the same
substantive requirements as the corresponding paragraph in the earlier
Final Rule. The Proposed Rule would add examples of ways in which a
contractor that has violated the Order or the Rule might correct such a
violation. The corrective action that the Deputy Assistant Secretary
would require in a given case would depend on the type of violation.
The addition of the examples would be made to clarify the Rule, and is
not intended to change the meaning of the paragraph; the paragraph
would be interpreted in the same way as the corresponding paragraph in
the earlier Final Rule.
Paragraphs 470.12(c) and (d): These paragraphs would be identical
to the corresponding paragraphs in the earlier Final Rule, except that
the title of the official responsible for processing a violation would
be updated. These paragraphs also would be consistent with OFCCP's
regulations at 41 CFR 60-1.24(c)(3) and (5), respectively.
Sec. 470.13 Under what circumstances, and how, will enforcement
proceedings under the Executive Order be conducted?
This section would be identical to the corresponding section in the
earlier Final Rule, with two exceptions. First, for the reasons
explained above in the discussion of section 470.10, the terms
``compliance review'' and ``on-site review'' would be replaced with
``compliance evaluation.'' Second, the title of the official
responsible for referring cases for enforcement would be updated.
The post-hearing procedures that would be set forth in this section
for imposing sanctions or penalties would be consistent with section 6
of the Executive Order.
Sec. 470.14 What sanctions and penalties may be imposed for
noncompliance, and what procedures will the Department follow in
imposing such sanctions and penalties?
This section would be similar to the corresponding section of the
earlier Final Rule. See 57 FR 49588, 49597-98. Substantive differences
between the two sections are explained below.
Paragraph 470.14(a): In this paragraph, references to the
``affected contracting agency'' would be changed to the plural
``affected contracting agencies,'' to indicate that a particular
contractor may hold contracts with more than one Federal agency, and
that all affected agencies should be notified when the Department
intends to impose sanctions and penalties against such a contractor.
Paragraph 470.14(b): Except for the replacement of the word
``shall'' by ``will,'' this paragraph would contain language identical
to that of the second sentence of paragraph 470.14(a) of the earlier
Final Rule. The sentence would be placed in a separate paragraph in
order to make the section easier to understand. This change is not
intended to alter the meaning of the sentence; the sentence would be
interpreted in the same way as the corresponding sentence in the
earlier Final Rule.
Paragraph 470.14(c): Except for the replacement of the word
``shall'' by ``will,'' this paragraph would contain language identical
to that of the corresponding paragraph in the earlier Final Rule,
paragraph 470.14(b).
Paragraph 470.14(d): Except for the replacement of the word
``shall'' by ``must,'' this paragraph would contain language identical
to that of the corresponding paragraph in the earlier Final Rule,
paragraph 470.14(c).
Paragraph 470.14(e): Except for the replacement of the word
``shall'' by ``must'' and an update to a citation, this paragraph would
contain language identical to that of the final sentence of paragraph
470.14(e) in the earlier Final Rule. The Proposed Rule would move the
sentence, which explains what contracting agencies must do when the
Assistant Secretary exercises his or her authority under paragraph
470.14(d), to make this section easier to understand.
Paragraph 470.14(f): Except for the replacement of the word
``shall'' by ``will,'' this paragraph would contain language identical
to that of the first sentence of paragraph 470.14(d) in the earlier
Final Rule. To make the Rule easier to understand, the material
discussed in the second sentence of that earlier paragraph would be
moved to section 470.15 of the Rule.
Sec. 470.15 Under what circumstances must a contractor be provided the
opportunity for a hearing?
This section is authorized by section 5(b) of the Executive Order.
Paragraph 470.15(b) would contain material similar to that in the
second sentence of paragraph 470.14(d) of the earlier Final Rule. The
Proposed Rule would revise the relevant language of the Order and the
earlier Final Rule to make it easier to understand. These changes are
not intended to alter the meaning of this section; the section would be
interpreted in the same way as section 5(b) of the Executive Order.
Sec. 470.16 Under what circumstances may a contractor be reinstated?
This section would contain language similar to that found in the
corresponding section of the earlier Final Rule. The Proposed Rule
would revise the section to make it easier to
[[Page 50015]]
understand. These changes are not intended to alter the meaning of this
section; the section would be interpreted in the same way as the
corresponding section of the earlier Final Rule.
Subpart C--Ancillary Matters
This subpart would address miscellaneous matters as discussed
below.
Sec. 470.20 What authority under this Rule or the Executive Order may
the Secretary delegate, and under what circumstances?
This section would contain language similar to that found in the
corresponding section, section 470.21, of the earlier Final Rule. The
Proposed Rule would place this section at the beginning of subpart C so
that the subpart would follow a more logical order. The section would
explain what functions and duties the Secretary of Labor is authorized
to delegate to another government officer under section 9 of the
Executive Order. The section that was numbered 470.20 in the earlier
Final Rule, and that would follow this section under the Proposed Rule,
would discuss one of the functions the Secretary has chosen to delegate
under the Order.
The Proposed Rule would revise the section slightly to correct an
apparent grammatical error in the corresponding section of the earlier
Final Rule, and to make the section easier to understand. These changes
are not intended to alter the meaning of this section; the section
would be interpreted in the same way as section 9 of the Executive
Order and the corresponding section of the earlier Final Rule.
Sec. 470.21 Who will make rulings and interpretations under the
Executive Order and this part?
This section would be identical to the corresponding section,
section 470.20, of the earlier Final Rule.
Sec. 470.22 What actions may the Assistant Secretary take in the case
of intimidation and interference?
This section would contain material and language similar to that of
the corresponding section of the earlier Final Rule. The Proposed Rule
would revise the language of that earlier section slightly, in order to
replace the term ``compliance review'' with ``compliance evaluation''
(for the reasons discussed above in section 470.10 of this preamble),
and to make the section easier to understand. These changes are not
intended to alter the meaning of this section; the section would be
interpreted in the same way as the corresponding section of the earlier
Final Rule.
Sec. 470.23 What other provisions apply to this part?
Paragraph 470.23(a): This paragraph would be identical to the
corresponding paragraph in the earlier Final Rule, except that the
Executive Order number would be updated.
Paragraph 470.23(b): This paragraph, which would require
contracting agencies to cooperate with and assist the Assistant
Secretary and Deputy Assistant Secretaries in carrying out their duties
under the Executive Order and this part, would contain the same
substantive requirements as the first sentence of paragraph 470.14(e)
of the earlier Final Rule. Because section 470.14 of this Proposed Rule
would deal with sanctions and penalties, the material in that sentence
would be moved to this general section to indicate that contracting
agencies must cooperate with and assist the Assistant Secretary and
Deputy Assistant Secretaries in carrying out all of their duties under
the Order and this part, not just those duties relating to sanctions
and penalties.
Paragraph 470.23(c): The language of this paragraph would be
identical to the language of the corresponding paragraph, paragraph
470.23(b), of the earlier Final Rule, with two exceptions. First, the
reference to section 11 of the Executive Order would be updated to
section 13, to correspond with the text of the current Order, EO 13201.
Second, the final clause of the earlier paragraph would be deleted,
because section 13 of the current Order does not include or authorize
that language.
IV. Regulatory Procedures
Executive Order 12866
This Notice of Proposed Rule-Making constitutes an ``other
significant regulatory action'' within the meaning of Executive Order
12866, and therefore the Department has provided a cost-benefit
analysis below. However, the implementation of the Proposed Rule would
not have an annual effect of $100 million or more on the economy, nor
would it adversely affect in a material way the economy, a sector of
the economy, productivity, jobs, the environment, public health or
safety, or State, local, or tribal governments or communities.
Therefore, the Department has concluded that this NPRM is not
``economically significant'' as defined in section 3(f)(1) of EO 12866.
With regard to the benefits that would result from the Proposed
Rule: Section 1(a) of Executive Order 13201 states that ``[w]hen
workers are better informed of their rights, including their rights
under the Federal labor laws, their productivity is enhanced.'' On that
basis, the Order and the Proposed Rule, which are intended to ensure
that employees of Government contractors are informed of certain rights
regarding union dues and fees, are designed to promote economy and
efficiency in Government procurement.
In the Department's view, the only costs that contractors would
incur under the Proposed Rule would result from the notice posting
requirement in section 470.2(a) of the Rule, and the requirement in
section 470.4(d) of the Rule that contractors apply in writing for
waivers from the posting requirement for facilities that do not perform
work on Government contracts. For the posting requirement, the
Department has concluded, based on both OFCCP's historical experience
and the fact that the Department will supply the required employee
notice poster at no cost, that the annualized costs would be
negligible.
OFCCP receives few requests from contractors for waivers of
regulatory requirements for facilities not connected with Government
contracts (see 41 CFR 60-741(b)(3)). For those few contractors that do
request waivers, the cost consists of drafting a letter and sending the
letter to DOL to request the waiver. Based on that experience, the
Department estimates that under the Proposed Rule, one-tenth of one
percent (.1%) of Federal contractors annually would be likely to submit
requests for waivers. Given a total of 200,000 supply, services, and
construction contractors who would be subject to the Proposed Rule, the
Department estimates that 200 contractors per year (.1% of 200,000)
would be likely to request a waiver under the Rule.
The Department estimates that it would take an average of one hour
to prepare and mail each waiver request under the Proposed Rule. Of
that hour, 20 percent of the burden would be assumed by executive,
administrative, or managerial staff, and 80 percent would be assumed by
administrative support staff. In the publication ``Employer Costs for
Employee Compensation'' (USDL 99-173), the Bureau of Labor Statistics
(BLS) lists average compensation for executive, administrative, and
managerial positions as $35.18 per hour, and for administrative support
as $16.63 per hour. Based on this information and on current postage
rates, the Department has calculated the total estimated annualized
cost to contractors that
[[Page 50016]]
would request waivers under the Proposed Rule as follows:
Executive, Administrative, and Managerial--200 x .20 x $35.18 =
$1,407.20
Administrative Support--200 x .80 x $16.63 = $2,660.80
Postage--200 x .34 = $68.00
Total annualized cost estimate--$4,136.00
Dividing the total annualized cost estimate of $4,136.00 by the
estimated total number of Government supply, service, and construction
contractors (200,000), the Department calculates that the estimated
average cost per Federal contractor establishment under the Proposed
Rule would be $.02.
The Office of Management and Budget (OMB) has reviewed the NPRM for
consistency with the President's priorities and the principles set
forth in EO 12866.
Regulatory Flexibility Act
The Proposed Rule presented in this NPRM would not substantially
change existing obligations for Federal contractors; it would merely
require certain contractors to post notices informing their employees
of certain rights those employees already hold under Federal law, and
to include clauses in contracts with subcontractors and vendors,
requiring those subcontractors and vendors to post the same notices.
Accordingly, the Proposed Rule would not have a significant economic
impact on a substantial number of small business entities. The
Secretary has certified to the Chief Counsel for Advocacy of the Small
Business Administration to that effect. Therefore, under the Regulatory
Flexibility Act, 5 U.S.C. 605(b), a regulatory flexibility analysis is
not required.
Unfunded Mandates Reform
For purposes of the Unfunded Mandates Reform Act of 1995, as well
as EO 12875, Enhancing the Intergovernmental Partnership, the Rule
proposed in this NPRM 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 sections
470.2(b), 470.4(d), and 470.11(a) and (b), contain information
collection requirements. As required by the Paperwork Reduction Act
(PRA), the Department has submitted a copy of these sections to OMB for
its review.
The Proposed Rule would also require contractors to post notices,
investigate complaints, and, where appropriate, file requests for
waivers. The application of the PRA to those requirements is discussed
below.
The Proposed Rule would impose certain minimal burdens associated
with the posting of the employee notice poster required by the
Executive Order and section 470.2(a) of the Rule. As noted in section
470.2(d), the Department will supply the poster, and contractors will
be permitted to make and post exact duplicate copies thereof. 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. 5 CFR
1320.3(c)(2). Therefore, the posting requirement is not subject to the
PRA.
The Proposed Rule would also impose certain burdens associated with
the filing and processing of a complaint on both the complainant and
the contractor. The burdens for the complainant are described in the
PRA package the Department will submit to OMB. With regard to the
burdens for the contractor, the regulations implementing the PRA exempt
from the requirements of the Act 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 Rule.
Finally, section 470.4(d) of this Rule would permit a contractor to
apply in writing for a waiver from the requirement to post the employee
notice contained in section 470.2(a). For the Department's analysis of
the burdens that would be imposed on contractors as a result of this
requirement, see the discussion of Executive Order 12866 above.
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 November 30,
2001 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
Rule does not have ``federalism implications.'' Some States do hold
Federal contracts that do not involve the provision of Federal
assistance to those States. However, as described above in the
discussion of other regulatory procedures, the Department has concluded
that the impact of requirements of posting notices, and requesting
waivers that would be imposed by the Rule on those States would be
negligible. Therefore, the 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.
Request for Comments
This Proposed Rule would implement Executive Order 13201. 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.
Clarity of This Regulation
Executive Order 12988 and the President's Memorandum of June 1,
1998, require each Federal agency to write all rules in plain language.
The
[[Page 50017]]
Department invites comments on how to make this Proposed Rule easier to
understand. For example:
--Have we organized the material to suit your needs?
--Are the requirements in the Rule clearly stated?
--Does the Rule contain technical language or jargon that is not clear?
--Would a different format (grouping and order of sections, use of
headings, paragraphing) make the Rule easier to understand?
--Would more (but shorter) sections be better?
--Could we improve clarity by adding tables, lists, or diagrams?
--What else could we do to make the Rule easier to understand?
List of Subjects in 29 CFR Part 470
Administrative practice and procedure, Government contracts,
Unions.
Accordingly, OLMS proposes to amend 29 CFR chapter IV by adding a
new subchapter C, consisting of part 470, as set forth below.
Signed at Washington, DC, this 6 day of September, 2001.
Joe N. Kennedy,
Acting Assistant Secretary for Employment Standards.
Don Todd,
Deputy Assistant Secretary for Labor-Management Programs.
A new subchapter C, consisting of part 470, is added to 29 CFR
chapter IV to read as follows:
Subchapter C--Employee Rights Concerning Payment of Union Dues or Fees
PART 470--OBLIGATIONS OF FEDERAL CONTRACTORS AND SUBCONTRACTORS;
NOTICE OF EMPLOYEE RIGHTS CONCERNING PAYMENT OF UNION DUES OR FEES
Subpart A--Preliminary Matters
Sec.
470.1 What definitions apply to this part?
470.2 Under the Executive Order, what employee notice clause must
be included in Government contracts?
470.3 What contracts are exempt from the employee notice clause
requirement?
470.4 What contractors or facilities are exempt from the posting
requirements?
Subpart B--Compliance Evaluations, Complaint Investigations, and
Enforcement Procedures
470.10 How will the Department determine whether a contractor is
in compliance with the Executive Order and this part?
470.11 What are the procedures for filing and processing a
complaint?
470.12 What are the procedures to be followed when a violation is
found during a complaint investigation or compliance evaluation?
470.13 Under what circumstances, and how, will enforcement
proceedings under the Executive Order be conducted?
470.14 What sanctions and penalties may be imposed for
noncompliance, and what procedures will the Department follow in
imposing such sanctions and penalties?
470.15 Under what circumstances must a contractor be provided the
opportunity for a hearing?
470.16 Under what circumstances may a contractor be reinstated?
Subpart C--Ancillary Matters
470.20 What authority under this part or the Executive Order may
the Secretary delegate, and under what circumstances?
470.21 Who will make rulings and interpretations under the
Executive Order and this part?
470.22 What actions may the Assistant Secretary take in the case
of intimidation and interference?
470.23 What other provisions apply to this part?
Authority: 40 U.S.C. 471 et seq.; E.O. 13201 (66 FR 11221,
February 22, 2001).
Subpart A--Preliminary Matters
Sec. 470.1 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, for purposes of Sec. 470.2, means
an agreement entered into by the representative of a Federal agency and
the exclusive representative of employees in an appropriate unit in the
agency, as a result of those representatives performing their mutual
obligation to:
(1) Meet at reasonable times; and
(2) Consult and bargain in a good-faith effort to reach agreement,
with respect to the conditions of employment affecting the employees in
the unit; and
(3) Execute, if requested by either party, a written document
incorporating any collective bargaining agreement reached through such
meetings, consultation, and bargaining.
Construction means the construction, rehabilitation, alteration,
conversion, extension, demolition, 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, which enters into contracts.
Contractor means, unless otherwise indicated, a prime contractor or
subcontractor, at any tier.
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 nonexempt
Government contracts and subcontracts pursuant to Executive Order
13201.
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 nonpersonal services. The term
``personal property,'' as used in this part, 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 ``nonpersonal services'' as
used in this part 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) Federally assisted contracts.
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 13201 (66 FR 11221,
February 22, 2001).
Person means any natural person, corporation, partnership,
unincorporated association, State or local government, and any agency,
[[Page 50018]]
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.
Related rules, regulations, and orders of the Secretary of Labor,
as used in Sec. 470.2, 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.
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
nonpersonal services which, 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.
Union means a labor organization as defined in section.
Union-security agreement means an agreement entered into between a
contractor and a labor organization which requires certain employees of
the contractor to pay uniform periodic dues, initiation fees, or other
payments to that labor organization as a condition of employment.
United States as used in this part includes 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.
Sec. 470.2 Under the Executive Order, what employee notice clause must
be included in Government contracts?
(a) Government contracts. Except in contracts exempted in
accordance with Sec. 470.3 and collective bargaining agreements as
defined in Sec. 470.1, all Government contracting agencies must, to the
extent consistent with law, include the following provisions in
Government contracts, including contracts resulting from solicitations
issued on or after April 18, 2001:
``1. During the term of this contract, the contractor agrees to
post a notice, of such size and in such form as the Secretary of
Labor will prescribe, in conspicuous places in and about its plants
and offices, including all places where notices to employees are
customarily posted. The notice must include the following
information (except that the last two sentences must not be included
in notices posted in the plants or offices of carriers subject to
the Railway Labor Act, as amended (45 U.S.C. 151-188)).
``Notice to Employees
``Under Federal law, employees cannot be required to join a
union or maintain membership in a union in order to retain their
jobs. Under certain conditions, the law permits a union and an
employer to enter into a union-security agreement requiring
employees to pay uniform periodic dues and initiation fees. However,
employees who are not union members can object to the use of their
payments for certain purposes and can only be required to pay their
share of union costs relating to collective bargaining, contract
administration, and grievance adjustment.
``If you do not want to pay that portion of dues or fees used to
support activities not related to collective bargaining, contract
administration, or grievance adjustment, you are entitled to an
appropriate reduction in your payment. If you believe that you have
been required to pay dues or fees used in part to support activities
not related to collective bargaining, contract administration, or
grievance adjustment, you may be entitled to a refund and to an
appropriate reduction in future payments.
``For further information concerning your rights, you may wish
to contact the National Labor Relations Board (NLRB) either at one
of its Regional offices or at the following address: National Labor
Relations Board, Division of Information, 1099 14th Street, NW,
Washington, D.C. 20570.
``To locate the nearest NLRB office, see NLRB's website at
www.nlrb.gov.''
``2. The contractor will comply with all provisions of Executive
Order 13201 of February 17, 2001, 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 13201 of February 17, 2001. Such
other sanctions or remedies may be imposed as are provided in
Executive Order 13201 of February 17, 2001, 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 13201 of February 17, 2001,
so that such provisions will be binding upon each subcontractor or
vendor. 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 noncompliance: However, if
the contractor becomes involved in litigation with a subcontractor
or vendor, 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.''
(b) Inclusion by reference. The employee notice clause need not be
quoted verbatim in a contract, subcontract, or purchase order. The
clause may be made part of the contract, subcontract, or purchase order
by citation to 29 CFR part 470.
(c) Adaptation of language. The Assistant Secretary may make such
changes in the contractual provisions of the Executive Order as may be
necessary to reflect Acts of Congress, clarifications in the law by the
courts, or otherwise to fully and accurately inform employees of their
rights under the Executive Order.
(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-5605,
Washington, DC 20210, or from any field office of the Department's
Office of Labor-Management Standards or Office of Federal Contract
Compliance Programs. Additionally, contractors may reproduce and use
exact duplicate copies of the Department's official poster.
Sec. 470.3 What contracts are exempt from the employee notice clause
requirement?
(a) Transactions below the Simplified Acquisition Threshold. The
requirements of this part do not apply to Government contracts for
purchases that fall below the Simplified Acquisition Threshold, as that
threshold is defined in the Office of Federal Procurement Policy Act,
41 U.S.C. 403. Therefore, the employee notice clause need not be
included in contracts for purchases below that threshold, provided
that--
(1) No agency, contractor, or subcontractor is permitted to procure
supplies or services in a way designed to avoid the applicability of
the Order and this part; and
(2) The employee notice clause must be included in contracts and
[[Page 50019]]
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.
(b) Government contracts resulting from solicitations issued before
April 18, 2001. Pursuant to section 14 of the Order, the requirements
of this part do not apply to Government contracts that result from
solicitations issued before April 18, 2001, the effective date of the
Order.
(c) Specific contracts. The Deputy Assistant Secretary for Labor-
Management Programs may exempt a contracting agency or any person from
requiring the inclusion of any or all of the employee notice clause in
any specific contract, subcontract, or purchase order when the Deputy
Assistant Secretary deems that special circumstances in the national
interest so require. Requests for such exemptions 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 S-2321, Washington, D.C. 20210.
(d) Withdrawal of exemption. When any contract or subcontract is of
a class exempted under this section, the Deputy Assistant Secretary for
Labor-Management Programs may withdraw the exemption for a specific
contract or subcontract or group of contracts or subcontracts when, in
the Deputy Assistant Secretary's judgment, such action is necessary or
appropriate to achieve the purposes of the Order.
Sec. 470.4 What contractors or facilities are exempt from the posting
requirements?
(a) Number of employees. The requirement to post the employee
notice given in Sec. 470.2(a) (hereafter in this part referred to as
the posting requirement) does not apply to contractors and
subcontractors that employ fewer than 15 persons.
(b) Union representation. The posting requirement does not apply to
contractor establishments or construction work sites where no union has
been formally recognized by the contractor or certified as the
exclusive bargaining representative.
(c) State law. The posting requirement does not apply to contractor
establishments or construction work sites in jurisdictions where state
law forbids enforcement of union-security agreements.
(d) Work not performed under Government contracts. Upon the written
request of the contractor, the Deputy Assistant Secretary for Labor-
Management Programs may waive the posting requirements with respect to
any of a contractor's facilities if the Deputy Assistant Secretary
finds that the contractor has demonstrated that:
(1) The facility is in all respects separate and distinct from
activities of the contractor related to the performance of a contract;
and
(2) Such a waiver will not interfere with or impede the
effectuation of the Executive Order.
(e) Work outside the United States. The posting requirement does
not apply to work performed outside the United States that does not
involve the recruitment or employment of workers within the United
States.
Subpart B--Compliance Evaluations, Complaint Investigations and
Enforcement Procedures
Sec. 470.10 How will the Department determine whether a contractor is
in compliance with the Executive Order and this part?
(a) The Deputy Assistant Secretary for Federal Contract Compliance
may conduct a compliance evaluation to determine whether a contractor
holding a nonexempt 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 is posted in conspicuous places in and
about each of the contractor's establishments and/or construction work
sites not exempted under Sec. 470.4, including all places where notices
to employees are customarily posted; and
(2) The provisions of the employee notice clause are included in
nonexempt Government contracts, including contracts resulting from
solicitations issued on or after April 18, 2001.
(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 the Executive Order
and this part and, as applicable, conciliation efforts made, corrective
action taken and/or enforcement recommended.
Sec. 470.11 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 the Executive Order and this part; and/
or has failed to include the employee notice clause in nonexempt
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
complainant, the name and address of the contractor alleged to have
violated the Executive Order, 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 resolution of the complaint. The
complainant must sign the complaint.
(c) Referrals. The Department will refer complaints alleging use of
union dues or fees for purposes unrelated to a collective bargaining
agreement, and/or seeking a refund or future adjustment of such dues or
fees, to the National Labor Relations Board or other appropriate
agency.
(d) 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 the Executive Order and this part, and, as applicable,
a description of conciliation efforts made, corrective action taken,
and/or enforcement recommended.
Sec. 470.12 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 the Executive Order or this part, the
Department 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 nonexempt
subcontractors and vendors 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
[[Page 50020]]
compliance with the Executive Order or this part.
(c) If a violation cannot be resolved through conciliation efforts,
the Deputy Assistant Secretary for Labor-Management Programs may
proceed in accordance with Sec. 470.13.
(d) For reasonable cause shown, the Deputy Assistant Secretary may
reconsider, or cause to be reconsidered, any matter on his or her own
motion or pursuant to a request.
Sec. 470.13 Under what circumstances, and how, will enforcement
proceedings under the Executive Order be conducted?
(a) General. (1) Violations of the Executive Order may result in
administrative proceedings to enforce the Order. 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 provide information as required by
the Executive Order and the regulations in this part.
(2) If a determination is made that the Executive Order or the
regulations in this part have been violated, and the violation has not
been corrected through conciliation, 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) Unless otherwise provided by the Office of the Solicitor in its
complaint, all hearings will be conducted in accordance with the rules
for expedited proceedings at 29 CFR 18.42.
(3) 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.
(4) Within 10 days (25 days in the event that the proceeding is not
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 7 days (25 days if the
proceeding is not expedited) after receipt. All exceptions and
responses must be filed with the Assistant Secretary.
(5) After the expiration of time for filing exceptions, the
Assistant Secretary will issue a final administrative order. 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 the Executive Order or the
regulations in this part, the final administrative order may enjoin the
violations, require the contractor to provide appropriate remedies and,
subject to the procedures in Sec. 470.14, impose appropriate sanctions
and penalties.
Sec. 470.14 What sanctions and penalties may be imposed for
noncompliance, and what procedures will the Department follow in
imposing such sanctions and penalties?
(a) 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 continues personally 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 the Order 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 2 of the Executive Order
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 6(b) of the Order
providing that one or more contracting agencies must refrain from
entering into further contracts, or extensions or other modification of
existing contracts, with any noncomplying contractor.
(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 that have, in the judgment
of the Assistant Secretary under Sec. 470.13(b)(5), 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. 470.15 Under what circumstances must a contractor be provided the
opportunity for a hearing?
A contractor must be given the opportunity for a hearing before the
Assistant Secretary:
(a) Issues an order debarring the contractor from further
Government contracts under section 6(b) of the Executive Order and
Sec. 470.14(d)(2); or
(b) Includes the contractor on a published list of noncomplying
contractors under section 6(c) of the Executive Order and
Sec. 470.14(f).
Sec. 470.16 Under what circumstances may a contractor be reinstated?
Any contractor or subcontractor debarred from or declared
ineligible for further contracts or subcontracts under the Executive
Order 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 the Order and this part and has shown
that it will carry out the Order and this part, the contractor or
subcontractor may be reinstated.
Subpart C--Ancillary Matters
Sec. 470.20 What authority under this Part or the Executive Order may
the Secretary delegate, and under what circumstances?
Consistent with section 9 of the Executive Order, the Secretary may
delegate any function or duty of the Secretary under the Order to any
officer
[[Page 50021]]
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. 470.21 Who will make rulings and interpretations under the
Executive Order and this part?
Rulings under or interpretations of the Executive Order or the
regulations contained in this part will be made by the Assistant
Secretary or his or her designee.
Sec. 470.22 What actions may the Assistant Secretary take in the case
of intimidation and interference?
The sanctions and penalties contained in Sec. 470.14 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 of the Executive Order or the
regulations in this part.
Sec. 470.23 What other provisions apply to this part?
(a) The regulations in this part implement Executive Order 13201
only, and do not modify or affect the interpretation of any other
Department of Labor regulations or policy.
(b) Consistent with section 8 of the Executive Order, 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) Consistent with section 13 of the Executive Order, nothing
contained in the Executive Order or this part, or promulgated pursuant
to the Executive Order or this part, is intended to confer any
substantive or procedural right, benefit, or privilege enforceable at
law by any party against the United States, its agencies or
instrumentalities, its officers or employees, or any other person.
[FR Doc. 01-24320 Filed 9-28-01; 8:45 am]
BILLING CODE 4510-CP-P