Insights

On June 21, 2010, the Department of Labor's final regulations implementing President Obama's Executive Order No. 13496 will take effect.  This Executive Order, and the associated regulations, require federal contractors and subcontractors to post a notice in conspicuous places at their worksites notifying employees of their rights under the National Labor Relations Act.  With very limited exceptions, the Executive Order also requires employers to include the notice in all federal contracts and subcontracts.

The Secretary of the Department of Labor is responsible for the administration and enforcement of this Order. The penalties for non-compliance are steep, including contract termination and a ban from future government contracts.

President Obama's Executive Order is part of a series of initiatives to bolster the power of unions.  Not only did the Executive Order rescind a 2001 Executive Order of President Bush that required federal contractors to post a notice informing their employees of their right not to join a union ("Beck Poster"), but the Department of Labor's regulations implementing the Executive Order make clear that the Obama Administration encourages workers to exercise their right to organize and bargain collectively.

Employers who contract or subcontract with the federal government should pay careful attention to Executive Order No. 13496 and the associated regulations.  Since they will be forced to notify employees of their right to organize, among other rights, federal contractors and subcontractors will need to re-evaluate their management strategies.  Day Pitney can provide assistance with issues relating to this Executive Order.