DATE: February 22, 2001

FROM: Barry McVay, CPCM

SUBJECT: Executive Order 13201, Notification of Employee Rights Concerning Payment of Union Dues or Fees

SOURCE: Federal Register; February 22, 2001, Vol. 66, No. 36, page 11219

AGENCIES: The President

ACTION: Issuance of Executive Order

SYNOPSIS: "To promote economy and efficiency in government procurement," President George W. Bush ordered on February 17, 2001, that contractors and subcontractors post notices alerting nonunion employees that they cannot be forced to pay fees to unions to support not related to collective bargaining, contract administration, and grievance adjustment.

EDITOR'S NOTE: President Bush also issued two other executive orders that pertain to labor on federal contracts. See today's FEDERAL CONTRACT DISPATCHES "Executive Order 13202, Preservation of Open Competition and Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally Funded Construction Projects," and "Executive Order 13204, Revocation of Executive Order on Nondisplacement of Qualified Workers Under Certain Contracts."

EFFECTIVE DATE: April 18, 2001.

SUPPLEMENTAL INFORMATION: In the 1988 case Communications Workers of America v. Beck, the Supreme Court ruled that nonunion employees cannot be forced to support activities not related to collective bargaining, such as contributions to support political candidates. On April 13, 1992, President George H. W. Bush issued Executive Order 12800 requiring contractors and subcontractors to post notices in their facilities alerting nonunion employees of their rights under Beck. On May 12, 1992, Federal Acquisition Circular (FAC) 90-11 implemented the executive order by adding Federal Acquisition Regulation (FAR) Subpart 22.15, Notification of Employee Rights Concerning Payment of Union Dues or Fees, and a clause at FAR 52.222-18.

On February 1, 1993, President Clinton issued Executive Order 12836 revoking Executive Order 12800 because he found it "distinctly anti-union." On March 2, 1993, FAC 90-17 removed FAR Subpart 22.15 and FAR 52.222-18.

Executive Order 13201 revokes the part of Executive Order 12836 that revoked Executive Order 12800 (in other words, President George W. Bush is reinstating his father's Executive Order 12800). "When workers are better informed of their rights, including their rights under the federal labor laws, their productivity is enhanced," says President George W. Bush. "The availability of such a workforce from which the United States may draw facilitates the efficient and economical completion of its procurement contracts."

Executive Order 13201 requires every contractor with a contract over the $100,000 simplified acquisition threshold to post a notice that is practically-identical to the one required by Executive Order 12800. The notice explains that unions are entitled to require nonunion employees to pay dues under certain circumstances. "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 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." The notice provides the address of the National Labor Relations Board headquarters and its website at http://www.nlrb.gov.

If the contractor does not comply with the executive order, the contractor's contracts "may be cancelled, terminated, or suspended in whole or in part, and the contractor may be declared ineligible for further government contracts..."

The contractor will be required to include the provisions of the required notice in all subcontracts and purchase orders under covered contracts unless exempt by regulations issued by the Secretary of Labor. The executive order permits the Secretary of Labor to exempt contracts that involve "(i) work outside the United States and do not involve the recruitment or employment of workers within the United States; (ii) work in jurisdictions where State law forbids enforcement of union-security agreements; (iii) work at sites where the notice to employees...would be unnecessary because the employees are not represented by a union; (iv) numbers of workers below appropriate thresholds set by the Secretary; or (v) subcontracts below an appropriate tier set by the Secretary." The Secretary may also exempt "facilities of a contractor, subcontractor, or vendor that are in all respects separate and distinct from activities related to the performance of the contract..."

The Secretary of Labor may investigate any contractor, subcontractor, or vendor to determine whether the required contractual provisions have been violated, and the Secretary may investigate complaints by employees of a federal contractor, subcontractor, or vendor. After investigating the contractor, subcontractor, or vendor, and after consulting with the contracting agency, the Secretary can direct the agency to "cancel, terminate, suspend, or cause to be cancelled, terminated, or suspended, any contract, or any portion or portions thereof, for failure of the contractor to comply with the contractual provisions...[and] refrain from entering into further contracts, or extensions or other modifications of existing contracts, with any noncomplying contractor, until such contractor has satisfied the Secretary that such contractor has complied with and will carry out the provisions..."

The executive order directs the FAR Council to "take whatever action is required to implement in the FAR the provisions of this order and of any related rules, regulations, or orders of the Secretary that were issued to implement this executive order...The provisions of this order shall apply to contracts resulting from solicitations issued on or after the effective date of this order." Also, it directs all agencies to "revoke expeditiously any orders, rules, regulations, guidelines, or policies implementing or enforcing Executive Order 12836 of February 1, 1993, as it relates to notification of employee rights concerning payment of union dues or fees, to the extent consistent with law."

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2001 by Panoptic Enterprises. All Rights Reserved.

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