Final Rule Prohibiting Reimbursement of Contractors for Costs Related to Influencing Unionization Decisions

On November 2, 2011, the Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”) issued a final rule implementing President Obama’s Executive Order 13494, Economy in Government Contracting (“EO 13494”).  EO 13494 prohibits government contractors from being reimbursed for activities aimed at influencing employees’ decisions to unionize or bargain collectively. 

The final rule includes a listing of examples of costs relating to unionization efforts that are unallowable, including: 

  • Preparing and distributing materials;
  • Hiring or consulting legal counsel or consultants;
  • Meetings (including paying the salaries of the attendees at meetings held for this purpose); and
  • Planning or condcuting activities by managers, supervisors, or union representatives during work hours.

The final rule, however, allows for costs “incurred in maintaining satisfactory relations between the contractor and its employees . . ., including costs of shop stewards, labor management committees, employee publications, and other related activities” not attempting to persuade employees concerning their unionizing activities.

The final rule will apply to contracts resulting from solicitations issued on or after December 2, 2011.

 

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