DOL issues final rule on contractor duties

By G. Phillip Shuler

The U.S. Department of Labor published its final regulations detailing the obligations of federal contractors and subcontractors with regard to informing employees of their rights under the Supreme Court's decision in Communication Workers v. Beck, 487 U.S. 735 (1988).

Beck held that union represented workers who are not union members but pay dues (agency fees) to unions pursuant to union security clauses in collective bargaining agreements cannot be required to pay the portion of dues that cover union expenditures not related to collective bargaining, contract administration or adjustment of grievances.

In 2001, President Bush issued Executive Order 13201 requiring federal contractors and subcontractors to post notices in their workplaces informing employees of their rights relating to union membership and the use of union dues under Beck.

Organized labor challenged Executive Order 13201 but ultimately failed. UAW - Labor Employment Training Corp., et al v. Chao, 325 F.3d 360 (D.C. Cir. 2003) reh'g den. No. 02-5080.

Under the final regulations, federal contractors are required to post at their worksites and in conspicuous places in their plants and offices a poster printed and distributed by DOL or a contracting agency detailing their rights. The Executive Order also requires the posting of the following notice:

"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 or grievance adjustment."

The notice states that workers may be entitled to a refund if they believe their dues or fees have been used for other purposes (such as political activities) and suggests employees contact the NLRB for more information.

The Office of Federal Contract Compliance Programs (OFCCP) is designated as the enforcement agency responsible for ensuring contractor compliance with Executive Order 13201. Sanctions available include suspension or termination of existing contracts and debarment from future contracts.

The rule applies to contracts resulting from solicitations issued before April 18, 2001.

However, nonunion contractors, prime contractors, and those with less than 15 employees are exempt even if subcontractor employees on the same worksite are represented by a union.

Construction union membership. Despite near record employment in the construction industry, the Bureau of Labor Statistics reports that only 16 percent of all construction workers are members of building trades unions in 2003. The membership rate for 2003 is down from 17.2 percent in 2002 and 18.1 percent in 2001. In hard numbers, the roles of building trades unions declined by 40,000 or 3.5 percent in 2003.

The construction numbers are consistent with overall workforce figures where union membership among wage and salary workers dropped to 12.9 percent in 2003 from 13.3 percent the year previous. The decline in the private sector was to 8.2 percent from 8.6 percent the year before. Union leaders blamed the decline on the Bush Administration and on U.S. labor law.

ExxonMobil not guilty. A temporary contract employee employed by a staffing firm failed in her attempt to declare ExxonMobil Chemical Co. liable for fraud and conspiracy to commit fraud by denying her benefits under ExxonMobil benefit plans. The Fifth Circuit declared that Anita McGowan's claims were preempted by ERISA and that she could not pursue her claims without first exhausting her administrative remedies. McGowan v. ManPower Int'l, Inc., 5th Cir., No. 03-41201 (04/05/04).

This is the third case discussed recently in this column where employees of plant contractors have attempted to be covered by their host employers benefit plans.

NLRB must pay employer's attorneys' fees. The Court of Appeals for the District of Columbia has ruled that the NLRB must pay an employer's attorney's fees under the Equal Access to Justice Act finding that the NLRB based its complaint on an incident which was never made the subject of an unfair labor practice charge and, since the only disputed incident was outside the Board's jurisdiction, it was baseless. Precision Concrete v. NLRB, D.C. Cir., No. 02-1164.

Editor's Note: G. Phillip Shuler is a partner in the New Orleans office of Chaffe, McCall, Phillips, Toler & Sarpy.