[Federal Register Volume 60, Number 137 (Tuesday, July 18, 1995)]
[Proposed Rules]
[Pages 36756-36767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17611]
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DEPARTMENT OF LABOR
Employment Standards Administration; Wage and Hour Division
29 CFR Part 9
RIN 1215-AA95
Executive Order 12933 of October 20, 1994; ``Nondisplacement of
Qualified Workers Under Certain Contracts''
AGENCY: Wage and Hour Division, Employment Standards Administration,
Labor.
ACTION: Notice of proposed rulemaking, request for comments.
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SUMMARY: This document proposes regulations to implement Executive
Order 12933, ``Nondisplacement of Qualified Workers Under Certain
Contracts,'' signed by the President on October 20, 1994 (59 FR 53560,
October 24, 1994). The Executive Order requires that workers on a
building service contract for a public building be given the right of
first refusal for employment with the successor contractor, if they
would otherwise lose their jobs as a result of the termination of the
contract. The proposed rules contain a contract clause that must be
incorporated into each covered contract, implementing regulations, and
enforcement procedures.
DATES: Comments on the proposed rule are due on or before September 1,
1995.
ADDRESSES: Submit written comments to Maria Echaveste, Administrator,
Wage and Hour Division, Employment Standards Administration U.S.
Department of Labor, Room S-3502, 200 Constitution Avenue, NW.,
Washington, DC 20210. Commenters who wish to receive notification of
receipt of comments are requested to include a self-addressed, stamped
post card or to submit them by certified mail, return receipt
requested. As a convenience to commenters, comments may be transmitted
by facsimile (``FAX'') machine to (202) 219-5122. This is not a toll-
free number. If transmitted by FAX and a hard copy is also submitted by
mail, please indicate on the hard copy that it is a duplicate copy of
the FAX transmission.
[[Page 36757]]
FOR FURTHER INFORMATION CONTACT:
William W. Gross, Office of Program Operations, Wage and Hour Division,
Employment Standards Administration, U.S. Department of Labor, Room S-
3502, 200 Constitution Avenue, NW., Washington, DC 20210; telephone
(202) 219-8353. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Paperwork Reduction Act
Reporting and recordkeeping requirements contained in the
regulations (Sec. 9.9(b) and Sec. 9.11) have been submitted to the
Office of Management and Budget under the provisions of the Paperwork
Reduction Act of 1990 (Pub. L. 96-511) for review.
The public reporting burden for information collection requirements
contained in these regulations is estimated to average as follows:
15 minutes per response, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
The reporting requirements of Sec. 9.11 are already required by the
Service Contract Act regulations, 29 CFR 4.6(1)(2), OMB Number 1215-
0150, and therefore impose no new burden. The only new requirement is
the recordkeeping requirement in Sec. 9.9.
Send comments regarding this burden to the Office of Information
Management, U.S. Department of Labor, Room N-1301, 200 Constitution
Avenue, NW., Washington, DC 20210; and the Office of Information and
Regulatory Affairs, Office of Management and Budget, Washington, DC
20503.
II. Background
Executive Order 12933 was signed October 20, 1994, by President
Clinton, and published in the Federal Register on October 24, 1994 (59
FR 53560). The purpose and need for the Executive Order are clearly
stated in the Executive Order itself:
When a service contract for the maintenance of a public building
expires and a follow-on contract is awarded for the same service,
the successor contractor typically hires the majority of the
predecessor's employees. On occasion, however, a follow-on
contractor will hire a new work force, and the predecessor's
employees are displaced.
As a buyer and participant in the marketplace, the Government is
concerned about hardships to individuals that may result from the
operation of our procurement system.
Furthermore, the Government's procurement interests in economy
and efficiency benefit from the fact that a carryover work force
will minimize disruption to the delivery of services during any
period of transition and provide the Government the benefits of an
experienced and trained work force rather than one that may not be
familiar with the Government facility.
In order to address these concerns, Section 1 of the Executive Order
makes the following statement of policy:
It is the policy of the Federal Government that solicitations
and building service contracts for public buildings shall include a
clause that requires the contractor under a contract that succeeds a
contract for performance of similar services at the same public
building to offer those employees (other than managerial or
supervisory employees) under the predecessor contract whose
employment will be terminated as a result of the award of the
successor contract, a right of first refusal to employment under the
contract in positions for which they are qualified. There shall be
no employment openings under the contract until such right of first
refusal has been provided. Nothing in this order shall be construed
to permit a contractor to fail to comply with any provision of any
other Executive order or laws of the United States.
The Executive Order requires that the Secretary of Labor issue
implementing regulations by April 20, 1995, and that the Federal
Acquisition Regulatory Council issue regulations by that date which
require inclusion of the contract clause in Federal solicitations and
contracts. The Executive Order further provides that the order does not
confer any right or benefit enforceable against the United States, but
that it is not intended to preclude judicial review of final decisions
by the Secretary of Labor in accordance with the Administrative
Procedure Act, 5 U.S.C. 701 et seq.
Key issues addressed in the regulations on which public comment is
particularly solicited are summarized and explained in this preamble.
As required by the Executive Order, the Department of Labor (DOL) has
consulted with the Federal Acquisition Regulatory (FAR) Council with
respect to the implementation of the Executive Order.
III. Summary and Discussion
Scope of Coverage
General Coverage (9.2)
The Executive Order applies only to ``building service contracts''
for ``public buildings'' where the contract is entered into by the
United States. These terms are defined elsewhere in the regulations.
The Order applies only to contracts of an amount equal to or greater
than the simplified acquisition threshold, set by the Office of Federal
Procurement Policy Act (41 U.S.C. 403(11)) at $100,000. Because the
language of the Executive Order does not specifically reference
subcontracts, the regulations contain no ``flow-down'' requirements for
subcontractors.
Where a contract is for both recurring building services and some
other purpose, such as construction, the building services are subject
to the Order, but only with respect to the building services portion of
the contract. However, where the building services are only incidental,
such as incidental maintenance performed under a contract to operate a
day-care center, the Order would not apply to such services. The
standards used for determining when construction work performed under a
mixed contract is covered by the Davis-Bacon Act are utilized in
determining when building services are more than incidental. See 29 CFR
4.116(c)(2); 48 CFR 22.402(b)(ii).
It is also important to point out that the coverage principles of
the Executive Order are different than those of the McNamara-O'Hara
Service Contract Act (SCA), 41 U.S.C. 351 et seq., although there is
significant overlap between the two programs.
Building Services Contract (9.3)
Section 2(b) of the Executive Order defines the term ``building
services contract'' to include contracts ``for recurring services
related to the maintenance of a public building, e.g., janitorial,
window washing, food service. * * *'' The regulations define
``recurring services'' to include services performed regularly or
periodically throughout a contract (and its follow-on contract) at the
same building. Contracts which are for non-recurring maintenance
services, such as servicing of fixed equipment which is performed only
one time each year, and contracts for services which are not
maintenance services, such as operation of a day care center, are not
subject to the Order.
Public Building (9.4)
Section 2 of the Executive Order defines the term ``public
building.'' The definition is patterned after the definition of a
public building in Section 13 of the Public Buildings Act of 1959, 40
U.S.C. 612, and the definition in the Executive Order is largely
repeated in section 9.4 of the regulations. Generally, buildings
suitable for office or storage space and administered by the General
Services Administration (GSA) or by another Federal agency under a
delegation from GSA are considered to be ``public buildings.''
Many buildings are specifically excluded from the term ``public
building,'' including buildings on
[[Page 36758]]
properties of the United States Postal Service, on military
installations, and on Department of Veterans Affairs installations used
for hospital or domiciliary purposes. In addition, buildings ``on the
public domain'' are not ``public buildings''. ``Public domain'' is
commonly considered to be public lands in the West. Accordingly,
``public domain'' in these regulations is defined to include lands
administered by the Department of the Interior, Bureau of Land
Management, and the Department of Agriculture, U.S. Forest Service.
Buildings on other Federal property are not considered to be ``on the
public domain'' for purposes of the Executive Order.
A unique situation arises with respect to the Pentagon. Originally,
the Pentagon was considered a ``public building'' within the scope of
the Public Buildings Act. Subsequently, Section 2804 of the National
Defense Authorization for FY 1991 (10 U.S.C. 2674) removed the Pentagon
from GSA's authority under the Public Buildings Act; however, that
legislation did not change the Public Buildings Act's definition of a
public building. This, while not specifically addressed in the
regulations, DOL considers the Pentagon to be a ``public building''
within the meaning of the Executive Order. Furthermore, this
interpretation is consistent with the purpose of the Executive Order,
to cover Government office buildings. Commenters are invited to address
this issue in their comments.
Leased buildings are not public buildings covered by the Executive
Order unless they are being leased pursuant to lease-purchase
contracts. It should be noted, however, that building services
performed on a building being leased pursuant to a lease-purchase
contract would be covered only if the services are being performed
under a contract directly with the Government; building services
performed by the lessor would be considered incidental to the lease
(see Sec. 9.2) and would not be covered.
Coverage Limitations (9.5)
The Order does not apply to contracts under the simplified
acquisition threshold, which is currently $100,000. In addition,
contracts for commodities or services by the blind or severely
handicapped awarded pursuant to the Javits-Wagner-O'Day Act, 41 U.S.C.
46-48a; contracts for certain services provided by sheltered workshops
for the severely handicapped, awarded pursuant to the Edgar Amendment
of the Treasury, Postal Services and General Government Appropriations
Act, Public Law 103-329; and vending service contracts operated by the
blind, awarded pursuant to the Randolph-Sheppard Act, 20 U.S.C. 107,
are excluded from coverage pursuant to section 3(b)-(d) of the
Executive Order.
The Executive Order also excludes ``services where the contractor's
employees perform work at the public building and at other locations
under contracts not subject to this Order (e.g., pest control or trash
removal where the contractor's employees visit the site periodically
and where the employees under the contract respond to service calls),''
provided that employees are not deployed in a manner designed to avoid
the purposes of the Order. Thus, the manner in which the services will
be performed by the successor contractor as well as the nature of the
services must both be considered in determining whether a building
services contract is subject to the Executive Order.
Contract Clause (9.6)
Section 4 of the Executive Order specifies the contract clause that
must be included in solicitations and contracts for building services
that succeed contracts for the performance of similar work at the same
public building. The regulations set forth additional provisions which
are necessary to implementation of the Order. In accordance with
Section 5 of the Order, a provision of the clause makes it clear that
disputes under the Order are to be resolved in accordance with DOL
procedures rather than pursuant to the general disputes clause of the
Contract Disputes Act, 41 U.S.C. 601 et seq. Provisions also provide
for withholding of contract funds in the event the contractor is
determined to have violated the provisions of the Executive Order and
is found liable for lost wages or other monetary relief; and to require
contractors to cooperate in investigations by DOL or the contracting
agency.
Contractor Obligations
Employee Coverage/Staffing (9.7/9.8)
With certain exclusions, all employees performing recurring
building services on the predecessor contract whose employment would
otherwise be terminated as the result of the award of the contract to a
new contractor, must in good faith be offered the right of first
refusal to employment under the successor contract before any other
employees may be hired. Because the successor contractor will not know
whether an individual employee of the predecessor contractor will
continue to be employed or will be terminated because of the change in
contracts, the regulations state a presumption that all employees will
be terminated when the predecessor's contract expires. This presumption
can be defeated by specific evidence to the contrary, which the
successor contractor could obtain through inquiries of, or contact
with, the contracting officer, the employees, or the predecessor
contractor after award of the contract to the successor.
The Executive Order does not require that a successor contractor
perform a contract with the same number of employees as the
predecessor. For example, if the predecessor employed twenty (20)
custodial workers, the successor may determine it can perform the
contract work with only eighteen (18) custodial workers. Thus if the
contractor continues to employ five (5) of its existing workers, the
offer of the right of first refusal would initially be limited to
thirteen (13) employees of the predecessor. The successor contractor
has complete discretion, within the constraints of these regulations,
to determine which employees will first be offered a right of first
refusal. If any of the predecessor's employees to whom the right of
first refusal was offered decline that offer, then the successor must
offer the right of first refusal to any remaining employees of the
predecessor who were not originally offered the right of first refusal.
The question arises, however, whether the successor contractor's
obligations continue throughout the performance of the contract.
Although the language of the Executive Order could arguably suggest
such a result, it would be impractical and unduly burdensome. Therefore
the regulations provide that once the contract is fully staffed and
contract performance has commenced, the obligation to offer the right
of first refusal ceases, and any subsequent vacant positions may be
filled in accordance with the successor's normal business practices.
The only exception to this provision would be if the evidence shows
that the successor contractor increased the initial staffing level
within the first three months after commencement of the contract. Three
months was selected as a reasonable period for continuing to impose an
obligation to offer a right of first refusal in order to ensure that
necessary staffing adjustments during the start-up period will be
covered, and at the same time to discourage attempts to manipulate the
work force. During this three month period the right of first refusal
must be offered to any eligible employees until the final staffing
level is reached.
Services at buildings not covered by the Order. The contractor is
not
[[Page 36759]]
obligated to offer a right of first refusal to employment in any
position which will perform services both at buildings covered by the
Executive Order and buildings not covered by the Order.
Managerial and supervisory employees. The successor contractor is
not required to offer a right of first refusal to employees who
performed as managers or supervisors under the predecessor contract or
to employees who are not service employees within the meaning of the
SCA. Thus the regulations provide that those employees who are employed
as bona fide executive, administrative, or professional employees
within the meaning of the regulations issued under the Fair Labor
Standards Act (FLSA) at 29 CFR Part 541 (and therefore are exempt from
the provisions of the FLSA and SCA), need not be offered a right of
first refusal.
The successor contractor has complete discretion to decide who will
be employed as managers and supervisors on the contract. However, if a
service employee of the predecessor is qualified for a management/
supervisory position, an offer of employment in that exempt
classification would satisfy the successor's obligation to offer the
employee a right of first refusal.
Existing employees of the successor contractor. The Executive Order
provides that employees who worked for the successor contractor for at
least three months immediately preceding the commencement of the
successor contract and who would otherwise face lay-off or discharge,
may be employed on the successor contract without regard to the
successor's obligation to offer the right of first refusal. The key
elements are that the employee (1) must have been employed by the
successor for at least three months prior to the commencement of the
successor contract and (2) would otherwise face lay-off or discharge.
Employees who had been laid-off by the successor prior to the
commencement of the successor contract or existing employees of the
successor who are not facing lay-off or termination because, for
example, they would continue to be employed on another contract, may
not be employed on the successor contract until all eligible employees
of the predecessor have been offered the right of first refusal.
Unsuitable employees. The successor contractor is not required to
offer the right of first refusal to any employee who the successor
reasonably believes, based on the particular employee's past
performance, has failed to perform suitably on the job. The regulation
implementing this provision does not define what constitutes a
``reasonable belief'' or ``suitable performance''. However, the
successor contractor must base the conclusion that an employee failed
to perform suitably on information from a credible source relative to a
particular employee's past performance on the job, such as the
predecessor contractor, the employee's supervisor or foreman, or the
contracting agency. Information that does not directly relate to an
employee's performance on the job may not be used as a basis for
failing to offer a right of first refusal.
Offer of Employment/Recordkeeping (9.9, 9.10)
The Executive Order requires the successor to make an express offer
of employment to each employee and state the time within which the
employee must accept such offer, which must be at least ten (10) days.
The regulation at section 9.9 states that the offer may be made either
in writing or orally at a meeting of the predecessor contractor's
employees, and requires that the contractor keeps either a copy of the
offer or minimum documentation regarding the meeting at which the offer
was made, which may consist of notations on the attendance roster and a
copy of any written notice distributed.
The regulations require the predecessor contractor to give the
contracting officer a list of current employees at least 60 days before
the end of the contract. However, the successor's obligation to extend
a right of first refusal applies to all employees employed at the end
of the contract, including any who may begin work after the list of
employees is provided. It is not envisioned that the omission of such
employees' name from the list will be unduly burdensome since successor
contractors commonly hire the predecessor's work force without the
convenience of such a list.
The regulations at section 9.10 discuss what is a bona fide offer
of employment. In general, an offer of employment will be presumed to
be bona fide. Employees need not be offered employment in the same job
that they were employed in under the predecessor contract, provided the
employee is qualified for the position offered. Thus an employee may be
equipped by education, training or experience to perform the duties of
a position to be filled by the successor contractor, even though he or
she encumbered a position under the predecessor contractor that did not
require or utilize such education, training or experience. However, an
offer of employment at a lower level or to a different position may be
a basis for closely examining whether the offer is bona fide, based on
valid business reasons.
Predecessor's Obligation to Provide a List of Employees (9.11)
The Executive Order requires that, no less than 60 days before the
completion of the contract, the predecessor contractor provide the
contracting officer with a certified list of all service employees
working at the Federal facility during the last month of the contract.
The list is also required to contain anniversary dates of employment,
either with the current or predecessor contractor, of each service
employee. The contracting officer in turn will provide the list to the
successor contractor, and it will be provided on request to employees
or their representatives.
Except for the timing of submission of the list, this requirement
is the same as the requirement under the SCA at 29 CFR 4.6(1)(2) that
the predecessor furnish the names and anniversary dates at least ten
days before contract termination. Thus the Executive Order does not
create any new obligation on the predecessor, but simply moves forward
the date the list must be submitted.
Because the predecessor contractor cannot know with certainty, 60
days in advance of termination, who will be performing on the contract
in the final month, the regulations provide that the predecessor will
provide the names of all service employees working on the contract. The
successor in turn must assume the employees listed will be working
during the final month of the contract unless the evidence demonstrates
otherwise.
Notice to Employees (9.12)
Service employees need to be advised of their right of first
refusal in the event of contract transition. Various options were
considered regarding how the employees should be so advised. Notice
could easily be accomplished by the predecessor contractor, but it has
no substantive obligations under the Order. The Department also
considered placing the obligation on the successor contractor, but
concluded that it would be more efficient to require notification by
the contracting agency since the predecessor's employees are working
regularly at the Federal building. Therefore the regulations require
that the agency either post a notice or give individual notice to the
predecessor contractor's employees. An optional, prototype notice is
included in an Appendix to the regulations.
[[Page 36760]]
Enforcement (Subpart B)
Section 5 of the Executive Order provides that the Secretary of
Labor is responsible for investigating and obtaining compliance with
the Executive Order. It further provides that the Secretary has the
authority to issue final orders prescribing appropriate sanctions and
remedies, including but not limited to, orders requiring employment and
payment of wages lost.
The executive Order also requires that alternative dispute
mechanisms be utilized to the maximum extent possible in resolving
enforcement issues. Thus, the thrust of the Executive Order is to keep
the enforcement processes as simple and timely as possible, given the
immediacy of both the employee's and the contractor's need for a
response.
Role of the Contracting Officer (9.100)
In developing the enforcement provisions of the regulations, we
have attempted to provide a process that encourages resolution at the
earliest possible stage with fairness and efficiency. For this reason,
the regulations provide that complaints alleging violations shall be
filed with the contracting officer, who will provide the employee and
the successor contractor with information about the requirements of the
Executive Order. If this is not sufficient to resolve the matter, the
regulations provide that the contracting officer will obtain statements
from the parties of their respective positions and submit a report to
the Department of Labor.
Role of the Department of Labor (9.101, 9.102)
If the contracting officer cannot resolve the dispute, section
9.100(b) provides that the contracting officer will submit his or her
report. Based on the contracting officer's report, Wage and Hour may
attempt to resolve the dispute through informal negotiations; however,
if that is not successful, Wage and Hour will conduct a full
investigation of the facts and issue a determination as to whether a
violation has occurred. The Administration also has the authority to
conduct an investigation on his or her own initiative.
Hearing Procedures (9.103-9.107)
The Administrator's determination shall become a final order of the
Secretary unless a request for a hearing is filed within 20 days or,
where the Administrator determines that relevant facts are not in
dispute, a petition for review is filed with the Board of Service
Contract Appeals (BSCA), which shall have the authority to hear all
appeals under the Executive Order. Section 9.103 provides the
procedures and time frames for appeal to the Board. The BSCA is
delegated the authority to hear and decide appeals on behalf of the
Secretary under the Executive Order because it currently hears appeals
under the Service Contract Act and his expertise in service contract
labor standards disputes.
Consistent with the Executive Order's directive to favor the
resolution of disputes by efficient and informal alternative dispute
methods, section 9.104 encourages parties to utilize settlement judges
to mediate settlement negotiations prior to an Administrative Law Judge
(ALJ) hearing. The general ALJ regulations, 29 CFR Part 18, Sec. 18.9,
already provide settlement judge procedures, and these procedures have
been expressly adopted for use under the Executive Order.
If a complaint cannot be resolved informally through the
conciliation or the settlement judge process, then section 9.105
provides procedures for a hearing before an ALJ. In most cases it is
envisioned that the parties to the proceeding will be the contractor
and the complainant (if any). However, the Wage-Hour Administrator may
appear in any proceeding as a party or as amicus curiae, and will
appear as a party in all cases in which inegligibility sanctions are
imposed. The contracting agency may also appear as amicus curiae.
As provided in section 9.106, the ALJ shall issue a decision within
60 days after the proceeding at which evidence was submitted. If the
ALJ determines that a violation has occurred, the ALJ may order
appropriate relief, and may assess against the successor contractor an
amount equal to the employees' costs and expenses (Sec. 9.106(c)).
Section 9.107 provides the procedures for appealing an ALJ decision to
the BSCA.
Since the Department does not anticipate participating in most
proceedings under the Executive Order where debarment is not an issue,
the Department is considering providing for payment of attorney fees or
costs where the complainant prevails. The Department seeks the views of
commenters regarding the permissibility of such a provision in the
absence of express statutory authority. In the alternative, because it
is anticipated that many complainants may lack the ability to hire
counsel if fees are not available,. the Department is considering
providing that parties may obtain the Administrator's investigation
record and submit it into evidence in proceedings where the Department
is not a party.
Remedies/Ineligibility Sanction (9.108-9.109)
Section 5 of the Executive Order provides that the Secretary has
the authority to prescribe appropriate remedies, including orders
requiring employment and payment of wages lost. Section 9.108 also sets
forth withholding procedures to obtain wages due, and a provision for
suspension of payments if the predecessor fails to provide the
contracting officer with a list of employees on the contract.
Furthermore, where a contractor has failed to comply with any order of
the Secretary or has committed willful violations of the Executive
Order or its regulations, the contractor and its responsible officers,
and any firm in which the contractor has a substantial interest, shall
be ineligible to be awarded any contract or subcontract of the United
States for a period of up to three years. Since debarment is only
imposed for the most serious of violations--i.e., violations that are
willful or failure to comply with an order of the Secretary, which in
itself is a willful violation--the regulations at section 9.109
prescribe a three-year period for debarment in all cases.
Definitions (9.200)
The regulations include definitions of several of the important
terms. The definition of ``service employee'' is based on the Service
Contract Act, as the Executive Order provides, but references back to
the coverage requirements of the Order (employees performing recurring
building services), rather than to employees on contracts subject to
the SCA.
Dates of Applicability
The regulations will apply to all contracts awarded after the
effective date, and the clauses contained in section 9.6 must be
included in all such contracts. In addition, in order to provide
successor contractors with the convenience of a list of names from the
predecessor contractor earlier than the SCA requirement of 10 days
before completion of the contract, it is suggested that existing
contracts be amended to include the clause in section 9.6(c).
Executive Order 12866
Because this rule provides the initial implementing regulations for
an executive order issued by the President, it will be treated as a
``significant regulatory action'' within the meaning of Executive Order
12866. However, no economic analysis is required since the rule will
not have a significant economic impact. The Executive Order
[[Page 36761]]
simply requires contractors to follow the practice which is currently
followed in most cases in any event as a good business practice, and
will improve Government efficiency and economy in those few cases where
the practice would not otherwise have been followed by decreasing or
eliminating the loss of productivity that may occur when experienced
employees are terminated.
Furthermore, the total value of Federal contracts covered by
Executive Order 12933 is less than $100 million, and only a small
fraction of that total may involve terminations of predecessor
employees. General Services Administration data for Fiscal Year 1994
indicate that no more than 88 new building service contract actions
were taken, with a value of $39.2 million. Since only a very small
percentage of that dollar value involves terminations, the economic
impact of the Executive Order is minimal.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act of 1980 (RFA) requires agencies to
prepare regulatory flexibility analyses, and to develop alternatives,
whenever possible, in drafting regulations that will have a
``significant economic impact on a substantial number of small
entities.'' The Department has determined that such an analysis is not
required for this rulemaking. This conclusion is based on the fact that
the Executive Order mandates a practice which is already followed in
almost all cases. Accordingly, this regulation will not have a
significant economic impact on a substantial number of small entities
within the meaning of the RFA. The Secretary has certified to the Chief
Counsel for Advocacy of the Small Business Administration to this
effect. Therefore, no regulatory flexibility analysis is required.
Document Preparation
This document was prepared under the direction and control of Maria
Echaveste, Administrator, Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor.
List of Subjects in 29 CFR Part 9
Employment, Federal buildings and facilities, Government contracts,
Law enforcement, Labor.
Signed at Washington, D.C. on this 12th day of July, 1995.
Maria Echaveste,
Administrator, Wage and Hour Division.
For the reasons set out in the preamble, 29 CFR Part 9 is proposed
to be added to read as follows:
PART 9--NONDISPLACEMENT OF QUALIFIED WORKERS UNDER CERTAIN
CONTRACTS
Subpart A--How is Executive Order 12933 Applied?
Covered Contracts Generally
Sec.
9.1 What is the purpose of Executive Order 12933?
9.2 Which contracts are covered by Executive Order 12933?
9.3 What is a ``building service contract?''
9.4 What is ``public building?''
9.5 Which contracts are not covered by Executive Order 12933?
Contract Clauses
9.6 What contract clauses must be included in covered contracts?
Contractor Obligations
9.7 May a contractor employ persons other than the predecessor
contractor's employees?
9.8 Must the successor contractor offer a right of first refusal to
all employees of the predecessor contractor?
9.9 In what manner must the successor contractor offer employment?
9.10 What constitutes a bona fide offer of employment?
9.11 What are the obligations of the predecessor contractor?
Notice to Employees
9.12 How ill employees learn of their rights?
Subpart B--What Enforcement Mechanisms Does Executive Order 12933
Provide?
Complaint Procedures
9.100 What may employees do if they believe that their rights under
the Executive Order have been violated?
9.101 What action will the Wage and Hour Division take to try to
resolve the complaint?
9.102 How are complaints resolved if conciliation is unsuccessful?
9.103 How are decisions of the Administrator appealed?
Administrative Law Judge Procedures
9.104 How may cases be settled without formal hearing?
9.105 What procedures are followed if a complaint cannot be
resolved through conciliation or settlement agreement?
9.106 What rules apply to the decision of the administrative law
judge?
Appeal Procedures
9.107 How may an administrative law judge's decision be appealed?
Enforcement Remedies
9.108 What are the consequences to a contractor of not complying
with the Executive Order?
9.109 Under what circumstances will ineligibility sanctions be
imposed?
Subpart C--Definitions
9.200 Definitions
Appendix A to Part 9--Notice to Building Service Contract Employees
Authority: Secs. 4-6, Executive Order 12933; 5 U.S.C. 301.
Subpart A--How is Executive Order 12933 Applied?
Covered Contracts Generally
Sec. 9.1 What is the purpose of Executive Order 12933?
The Government's procurement interests in both economy and
efficiency are furthered when a successor contractor carries over an
existing work force. A carryover work force minimizes disruption in the
delivery of services during a period of transition and provides the
Government the benefit of an experienced and trained work force.
Executive Order 12933 therefore generally requires that successor
contractors performing building service contracts for public buildings
offer a right of first refusal to employment under the contract to
those employees under the predecessor contract whose employment will be
terminated as a result of the award of the successor contract.
Sec. 9.2 Which contracts are covered by Executive Order 12933?
(a) The Executive Order and these rules apply to ``building service
contracts'' for ``public buildings'' where the contract is entered into
by the United States in an amount equal to or greater than the
simplified acquisition threshold of $100,000, as set forth in section
4(11) of the Office of Federal Procurement Policy Act (41 U.S.C.
403(11)).
(b)(1) Except as provided in paragraph (b)(2) of this section,
contracts which include a requirement for recurring building services
are subject to the Executive Order and these regulations even if the
contract also contains non-service requirements, such as construction
or supplies, or requirements for other types of services, and even if
the contract is not subject to the McNamara-O'Hara Service Contract
Act, 41 U.S.C. 351 et seq. However, the requirements of the Executive
Order apply only to the building services portion of the contract.
(2) The requirements of the Executive Order do not apply to
building services
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which are only incidental to a contract for another purpose, such as
incidental maintenance under a contract to operate a day-care center.
Building services performed on a building being leased pursuant to a
lease-purpose contract would be considered incidental and would not be
covered unless the services are being performed under a contract
directly with the Government. Building service requirements will not be
considered incidental, and therefore will be subject to the Executive
Order, where:
(i) The contract contains specific requirements for a substantial
amount of building services or it is ascertainable that a substantial
amount of building services will be necessary to the performance of the
contract (the word ``substantial'' relates to the type and quantity of
building services to be performed and not merely to the total value of
such work (whether in absolute dollars or cost percentages) as compared
to the total value of the contract); and
(ii) The building services work is physically or functionally
separate from, and as a practical matter is capable of being performed
on a segregated basis from the other work called for by the contract.
Sec. 9.3 What is a ``building service contract?''
(a) A ``building service contract'' is a contract for ``recurring
services'' related to the maintenance of a public building. ``Recurring
services'' are services which are required to be performed regularly or
periodically throughout the course of a contract, and throughout the
course of the succeeding or follow-on contract at the same building.
Examples of building services contracts include, but are not limited
to, contracts for the recurring provision of custodial or janitorial
services; window washing; laundry; food services; guard or other
protective services; landscaping and groundskeeping services; and
inspection, maintenance, and repair of fixed equipment such as
elevators, air conditioning, and heating systems. However, as provided
in section 9.5(b)(5) of this part, excluded from the Executive Order
are those services where the employees work at both the public building
and at other locations not subject to the Executive Order.
(b)(1) Contracts which provide maintenance services only on a non-
recurring basis are not ``building service contracts'' within the
meaning of the Executive Order and are not subject to its provisions.
For example, a contract to perform servicing of fixed equipment once a
year, or to mulch a garden on a one-time or annual basis, is a non-
recurring maintenance contract that is not covered by the Executive
Order.
(2) Contracts for the provision of services which may be performed
in a public building but are not related to the maintenance of that
public building are not ``building service contracts'' and are not
covered by the Executive Order and these rules. For example, a contract
for day care services in a Federal office building would not be subject
to the Executive Order.
Sec. 9.4 What is a ``public building?''
(a) A ``public building'' is any building owned by the United
States which is generally suitable for office or storage space or both
for the use of one or more Federal agencies or mixed ownership
corporations, together with its grounds, approaches, and appurtenances.
Public buildings shall include:
(1) Federal office buildings;
(2) Customhouses;
(3) Courthouses;
(4) Border inspection facilities;
(5) Warehouses;
(6) Records centers;
(7) Appraiser stores;
(8) Relocation facilities; and
(9) Similar Federal facilities.
(b)(1) Public buildings do not include any building on the public
domain, including that reserved for national forests and other
purposes. The public domain includes only those lands administered by
the Department of the Interior, Bureau of Land Management, and the
Department of Agriculture, U.S. Forest Service.
(2) Also not covered are any buildings:
(i) On properties of the United States in foreign countries;
(ii) On Native American and Native Eskimo properties held in trust
by the United States;
(iii) On lands used in connection with Federal programs for
agricultural, recreational, and conservation purposes, including
research in connection therewith;
(iv) On or used in connection with river, harbor, flood control,
reclamation, or power objects; or for chemical manufacturing or
development projects; or for nuclear production, research, or
development projects;
(v) On or used in connection with housing and residential projects;
(vi) On properties of the United States Postal Service;
(vii) On military installations (including any fort, camp, post,
naval training station, airfield, proving ground, military supply
depot, military school, or any similar facility of the Department of
Defense);
(viii) On installations of the National Aeronautic and Space
Administration, except regular office buildings; and
(ix) On Department of Veterans Affairs installations used for
hospital or domiciliary purposes.
(3) Buildings leased by the Government are not public buildings
unless the building is leased pursuant to a lease-purchase contract.
Sec. 9.5 Which contracts are not covered by Executive Order 12933?
(a) A contract is not covered by the Executive Order unless it
requires the provision of recurring building services, and unless the
contract succeeds a contract for similar work at the same public
building.
(b) The Executive Order expressly excludes:
(1) Contracts for services under the simplified acquisition
threshold ($100,000);
(2) Contracts for commodities or services produced or provided by
the blind or severely handicapped, awarded pursuant to the Javits-
Wagner O'Day Act, 41 U.S.C. 46-48a; and any future enacted law creating
an employment preference for some group of workers under building
service contracts;
(3) Guard, elevator operator, messenger, or custodial services
provided to the Government under contracts with sheltered workshops
employing the severely handicapped as outlined in the Edgar Amendment,
section 505 of the Treasury, Postal Services and General Government
Appropriations Act, 1995, P.L. 103-329;
(4) Agreements for vending facilities operated by the blind,
entered into under the preference provisions of the Randolph-Sheppard
Act, 20 U.S.C. 107; and
(5) Services where the contractor's employees perform work at the
public building and at other locations under contracts not subject to
the Executive Order and these regulations, provided that the employees
are not deployed in a manner that is designed to avoid the purposes of
the Order. Examples include, but are not limited to, pest control or
trash removal services where the employees periodically visit various
Government and non-Government sites, and service calls to repair
equipment at various Government and non-Government buildings.
Contract Clauses
Sec. 9.6 What contract clauses must be included in covered contracts?
The clauses set forth in the following paragraphs shall be included
in full by the contracting agency in every solicitation and contract
entered into by
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the United States equal to or in excess of $100,000, where the contract
requires the provision of building services and succeeds a contract for
the performance of similar services at the same public building:
(a) Consistent with the efficient performance of this contract, the
contractor shall, except as otherwise provided herein, in good faith
offer those employees (other than managerial and supervisory employees)
under the predecessor contract whose employment will be terminated as a
result of award of this contract or the expiration of the contract
under which the employees were hired, a right of first refusal to
employment under the contract in positions for which the employees are
qualified. The contractor shall determine the number of employees
necessary for efficient performance of this contract and may elect to
employ fewer employees than the predecessor contractor employed in
connection with performance of the work. Except as provided in
paragraph (b) of this section, there shall be no employment opening
under the contract, and the contractor shall not offer employment under
the contract, to any person prior to having complied fully with this
obligation. The contractor shall make an express offer of employment to
each employee as provided herein and shall state the time within which
the employee must accept such offer, but in no case shall the period
within which the employee must accept such offer be less than 10 days.
(b) Notwithstanding the contractor's obligation under paragraph (a)
of this section, the contractor:
(1) May employ on the contract any employee who has worked for the
contractor for at least 3 months immediately preceding the commencement
of this contract and who would otherwise face lay-off or discharge, and
(2) Is not required to offer a right of first refusal to any
employee(s) of the predecessor contractor who are not service employees
within the meaning of the McNamara-O'Hara Service Contract Act, 41
U.S.C. 257(b), and
(3) Is not required to offer a right of first refusal to any
employee(s) of the predecessor contractor who the contractor reasonably
believes, based on the particular employee's past performance, has
failed to perform suitably on the job.
(c) In accordance with Federal Acquisition Regulation 52.222-4(n)
and 29 CFR 4.6(1)(2), the contractor shall, no less than 60 days before
completion of this contract, furnish the Contracting Officer with a
certified list of the names of all service employees working at the
Federal facility during the last month of contract performance. The
list shall also contain anniversary dates of employment on the contract
either with the current or predecessor contractors of each service
employee. The Contracting Officer will provide the list to the
successor contractor and the list shall be provided on request to
employees or their representatives.
(d) If it is determined, pursuant to regulations issued by the
Secretary of Labor, that the contractor is not in compliance with the
requirements of this clause or any regulation or order of the
Secretary, appropriate sanctions may be imposed and remedies invoked
against the contractor, as provided in Executive Order No. 12933, the
regulations of the Secretary of Labor at 29 CFR Part 9, and relevant
orders of the Secretary of Labor, or as otherwise provided by law.
(e) The Contracting Officer shall withhold or cause to be withheld
from the prime contractor under this or any other Government contract
with the same prime contractor such sums as an authorized official of
the Department of Labor requests, upon a determination by the
Administrator that the prime contractor failed to comply with the terms
of this clause, and that wages lost as a result of the violations are
due to employees or that other monetary relief is appropriate.
(f) The contractor shall cooperate in any investigation by the
contracting agency or the Department of Labor into possible violations
of the provisions of this cause and shall make records requested by
such official(s) available for inspection, copying, or transcription
upon request.
(g) Disputes arising out of this clause shall not be subject to the
general disputes of this contract. Such disputes shall be resolved in
accordance with the procedures of the Department of Labor set forth in
29 CFR Part 9. Disputes within the meaning of this clause include
disputes between the contractor and the contracting agency, the U.S.
Department of Labor, or the employees under the contract or its
predecessor contractor or their representatives.
Contractor Obligations
Sec. 9.7 May a contractor employ persons other than the predecessor
contractor's employees?
(a) There shall be no employment openings under a contract subject
to the Executive Order and the successor contractor shall not offer
employment under the contract until it fully complies with its
obligation to offer a right of first refusal, except as provided under
paragraph (b) of this section.
(b) A successor contractor may employ on the contract any employee
who has worked for that contractor for at least 3 months immediately
preceding the commencement of the contract and who would face lay-off
or discharge if not employed on the subject contract.
Sec. 9.8 Must the successor contractor offer a right of first refusal
to all employees of the predecessor contractor?
(a)(1) Except as provided in this section, a successor contractor
shall offer employment under the contract (i.e., a ``right of first
refusal'') to those employees of the predecessor contractor who, in the
final month of the contract, provided recurring building services
similar to the services to be performed under the successor contract,
and whose employment will be terminated as a result of the award of the
successor contract or expiration of the contract under which the
employees were hired.
(2) Unless the predecessor contractor (either directly or through
the contracting agency) or the individual employee in question provides
evidence to the contrary, the successor contractor must presume that
all service employees of the predecessor contractor who are working at
the same public building during the final month of contract performance
will be terminated when the contract ends.
(b)(1) A successor contractor is not required to offer a right of
first refusal to any managerial or supervisory employee or to any
employee of the predecessor contractor who is not a service employee
within the meaning of the McNarmara-O'Hara Service Contract Act, 41
U.S.C. 357(b). ``Managerial and supervisory'' employees and employees
who are not ``service employees'' are those persons engaged in the
performance of services under the contract who are employed in a bona
fide executive, administrative, or professional capacity, as those
terms are defined in the Fair Labor Standards Act regulations, 29 CFR
Part 541.
(2) A successor contractor is not required to offer a right of
first refusal to any employee of the predecessor contractor who the
successor contractor reasonably believes, based on the particular
employee's past performance, has failed to perform suitably on the job.
An assessment of the employee's past performance must be based on
information provided by a credible source such as the predecessor
contractor, the employee's supervisor, or the contracting agency.
(3) The contractor is not required to offer a right of first
refusal for
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employment in a position which will perform building services both at
public buildings covered by the Executive Order and these regulations,
and at other buildings not covered by the Executive Order.
(c) The successor contractor shall determine the number of
employees necessary for the efficient performance of the contract. The
contractor may, for bona fide staffing or work assignment reasons,
employ fewer employees than the predecessor contractor. Thus, the
successor contractor need not extend the right of first refusal to all
employees of the predecessor contractor, but must offer employment only
to the number of eligible employees it believes necessary to meet its
anticipated staffing pattern, except that:
(1) Where a successor contractor offers a right of first refusal to
fewer employees than were employed by the predecessor contractor, its
obligation to offer employment under the contract to the predecessor's
employees continues until the successor contractor reaches full
staffing levels. For example, a contractor with eighteen (18)
employment openings and a list of twenty (20) predecessor contractor's
employees must continue to offer a right of first refusal to
individuals on the list until eighteen (18) of the employees accept the
contractor's employment offer, or until all of the employees have
either accepted or refused the job offer.
(2) If a successor contractor raises its staffing level within
three months of the commencement of contract performance, its
obligation to offer employment under the contract to eligible employees
continues until the higher staffing level is reached. For example, if a
contractor determines two months into the contract period that it must
hire an additional ten (10) employees to sufficiently perform the
contract requirements, the contractor must first offer a right of first
refusal to ten (10) eligible employees of the predecessor contractor
(or to all of the employees of the predecessor contractor who have not
previously been offered a right of first refusal if less than ten
remain), and must continue to offer a right of first refusal to
individuals on the list until ten (10) of the employees accept the
contractor's employment offer, or until all of the employees have
refused the job offer.
Sec. 9.9 In what manner must the successor contractor offer
employment?
(a) Except as provided in sections 9.7 and 9.8 of this part, a
successor contractor must make a bona-fide express offer of employment
to each of the predecessor contractor's employees before offering
employment on the contract to any other person. The employment offer to
each employee may be either in writing on an individual basis, or
orally at a meeting attended by a group of the predecessor contractor's
employees.
(b) For a period of one year, the contractor must maintain copies
of any written offers of employment or a contemporaneous written record
of any oral offers of employment, including the date, location and
attendance roster of any employee meeting(s) at which the offers were
extended, a summary of each meeting and a copy of any written notice
which may have been distributed, and the names of the predecessor
contractor's employees to whom an offer was made. The contractor must
provide copies of such documentation upon request of any authorized
representative of the contracting agency or Department of Labor.
(c) The contractor shall state the time within which an employee
must accept an employment offer, but in no case may the period in which
the employee has to accept the offer be less than 10 days.
(d) The successor contractor's obligation to offer a right of first
refusal exists even if the successor contractor has not been provided a
list of the predecessor contractor's employees, or the list does not
contain the names of all persons employed during the final month of
contract performance.
Sec. 9.10 What constitutes a bona fide offer of employment?
(a) As a general matter, an offer of employment will be presumed to
be a bona fide offer of employment. An offer of employment need not be
to a position similar to that which the employee previously held, but
the employee must be qualified for the position. Information regarding
an employee's qualifications shall ordinarily come directly from the
employee. If a question arises concerning an employee's qualifications,
that question shall be decided based upon the employee's education and
employment history with particular emphasis on the employee's
experience on the predecessor contract.
(b) An offer of employment at a lower level or to different
positions than employees held before may be a basis for closely
examining the offers of employment to ensure they are bona fide, based
on valid business reasons (not related to a desire that the employee
refuse the offer, or that other employees be hired).
Sec. 9.11 What are the obligations of the predecessor contractor?
(a) Not less than 60 days before completion of its contract, the
predecessor contractor must furnish the contracting officer with a
certified list of the names of all service employees working at the
Federal facility, together with their anniversary dates of employment.
The contracting officer in turn shall provide the list to the successor
contractor and, if requested, to employees of the predecessor
contractor or their representatives.
(b) Unless the predecessor contractor (either directly or through
the contracting agency) or the individual employee in question provides
evidence to the contrary, the successor contractor must presume that
all service employees of the predecessor contractor who are working at
the same public building during the final month of contract performance
will be terminated when the contract ends.
Notice to Employees
Sec. 9.12 How will employees learn of their rights?
Where the successor contract is a contract subject to the Executive
Order and these regulations, the contracting officer will provide
notice to service employees of the predecessor contractor who are
engaged in building services of their possible right to an offer of
employment. Such notice may either be posted in a conspicuous place at
the worksite or may be delivered to the employees individually.
Contracting officers may either use the notice set forth in Appendix A
to this part or another form with the same information.
Subpart B--What Enforcement Mechanism Does Executive Order 12933
Provide?
Complaint Procedures
Sec. 9.100 What may employees do if they believe that their rights
under the Executive Order have been violated?
(a) Any employee of the predecessor contractor who believes he or
she was not offered employment by the successor contractor as required
by the Executive Order and these regulations may file a complaint with
the contracting officer of the appropriate Federal agency.
(b) Upon receipt of a complaint, the contracting officer shall
provide information to the employee(s) and the successor contractor
about their rights and responsibilities under the Executive Order. If
the matter is not resolved through such actions, the contracting
officer shall obtain statements of the
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positions of the parties and prepare a report, including the issues and
any relevant facts known to the contracting officer. The report shall
promptly be forwarded to the nearest District Office of the Wage and
Hour Division or to the Administrator of the Wage and Hour Division,
Employment Standards Administration, Room S-3502, U.S. Department of
Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210.
Sec. 9.101 What action will the Wage and Hour Division take to try to
resolve the complaint?
After obtaining the necessary information from the contracting
officer regarding the alleged violations, the Wage and Hour Division
investigator may contact the successor contractor and attempt, through
conciliation procedures, to obtain a resolution to the matter which is
satisfactory to both the complainant(s) and the successor contractor
and consistent with the requirements of the Executive Order and these
regulations.
Sec. 9.102 How are complaints resolved if conciliation is
unsuccessful?
(a) Upon receipt of a contracting officer's report, the
Administrator shall investigate and gather data concerning such case.
Where conciliation efforts have been attempted, the Administrator need
not initiate the investigation unless and until the efforts fail. The
Administrator may also initiate an investigation at any time on his or
her own initiative. As part of the investigation, the Administrator may
inspect the records of the predecessor and successor contractors (and
make copies thereof), may question the predecessor and successor
contractors and any employees of these contractors, and may require the
production of any documentary or other evidence deemed necessary to
determine whether a violation of the Executive Order (including conduct
warranting imposition of ineligibility sanctions pursuant to section
9.109 of this part) has been committed.
(b) The contractor and the predecessor contractor shall cooperate
in any investigation conducted pursuant to this subpart, and shall not
interfere with the investigation or intimidate, blacklist, discharge,
or in any other manner discriminate against any person because such
person has cooperated in an investigation or proceeding under this
subpart or has attempted to exercise any rights afforded under this
part.
(c) Upon completion of the investigation, the Administrator shall
issue a written determination of whether a violation has occurred which
shall contain a statement of reasons for the findings and conclusions.
A determination that a violation occurred shall address appropriate
relief and the issue of ineligibility sanctions where appropriate.
Notice of the determination shall be given by certified mail to the
complainant (if any), the successor contractor and their
representatives (if any).
(d) The Administrator may conduct a new investigation or issue a
new determination if the Administrator concludes circumstances warrant,
such as where the proceedings before an Administrative Law Judge reveal
that there may have been violations with respect to other employees of
the predecessor contractor, or that imposition of ineligibility
sanctions is appropriate, or where the contractor has failed to comply
with an order of the Secretary.
Sec. 9.103 How are decisions of the Administrator appealed?
(a) Except as provided in paragraph (b), the determination of the
Administrator shall advise the parties (ordinarily the complaint (if
any) and the successor contractor) that the notice of determination
shall become the final order of the Secretary and shall not be
appealable in any administrative or judicial proceeding unless, within
20 days of the date of the determination of the Administrator, the
Chief Administrative Law Judge receives a request for a hearing. The
request for a hearing shall be accompanied by a copy of the
Administrator's determination and may be filed by U.S. mail, facsimile
(FAX), telegram, hand delivery, or next-day delivery service. At the
same time, a copy of any request for a hearing shall be sent to the
complainant(s) or successor contractor, as appropriate; the
Administrator of the Wage and Hour Division; and the Associate
Solicitor, Division of Fair Labor Standards, U.S. Department of Labor,
Washington, D.C. 20210. The Administrator's failure or refusal to seek
ineligibility sanctions shall not be appealable.
(b) If the Administrator concludes that no relevant facts are in
dispute, the parties will be so advised and will be further advised
that the determination shall become the final order of the Secretary
and shall not be appealable in any administrative or judicial
proceeding unless, within 20 days of the date of the determination of
the Administrator, a petition for review is filed with the Board of
Service Contract Appeals pursuant to section 9.107 of this part. The
determination will further advise that if an aggrieved party disagrees
with the factual findings or believes there are relevant facts in
dispute, the aggrieved party may advise the Administrator of the
disputed facts and request a hearing by letter, which must be received
within 20 days of the date of the determination. The Administrator will
either refer the request for a hearing to the Chief Administrative Law
Judge, or notify the aggrieved party of the Administrator's
determination that there is no relevant issue of fact and that a
petition for review may be filed with the Board of Service Contract
Appeals within 20 days of the date of the notice, in accordance with
the procedures at section 9.107 of this part.
(c) If any party desires review of the determination of the
Administrator, including judicial review, a request for an
administrative law judge hearing (or petition for review by the Board
of Service Contract Appeals) must first be filed in accordance with
paragraph (a) (or (b)) of this section. If a timely request for hearing
(or petition for review) is filed, the determination of the
Administrator shall be inoperative unless and until the administrative
law judge or the Board of Service Contract Appeals issues an order
affirming the determination.
Administative Law Judge Procedures
Sec. 9.104 How may cases be settled without formal hearing?
(a) In accordance with the Executive Order's directive to favor the
resolution of disputes by efficient and informal alternative dispute
resolution methods, the parties are encouraged to resolve disputes in
accordance with the conciliation procedures set forth in sections 9.100
and 9.101 of this subpart, or, where such efforts have failed, to
utilize settlement judges to mediate settlement negotiations pursuant
to 29 CFR Part 18, Sec. 18.9. At any time after commencement of a
proceeding, the parties jointly may move to defer the hearing for a
reasonable time to permit negotiation of a settlement or an agreement
containing findings and an order disposing of the whole or any part of
the proceeding.
(b) A settlement judge may be appointed by the Chief Administrative
Law Judge upon a request by a party or the presiding administrative law
judge. The Chief Administrative Law Judge has sole discretion to decide
whether to appoint a settlement judge, except that a settlement judge
shall not be appointed when a party objects to referral of the matter
to a settlement judge.
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Sec. 9.105 What procedures are followed if a complaint cannot be
resolved through conciliation or settlement agreement?
(a) If the case is not stayed to attempt settlement, the
administrative law judge to whom the case is assigned shall within
fifteen (15) calendar days following receipt of the request for
hearing, notify the parties of the day, time and place for hearing. The
date of the hearing shall not be more than 60 days from the date of
receipt of the request for hearing.
(b) Formal rules of evidence shall not apply, but rules or
principles designed to assure production of the most probative evidence
available shall be applied. The administrative law judge may exclude
evidence which is immaterial, irrelevant, or unduly repetitious.
(c) The administrative law judge may, at the request of a party, or
on his/her own motion, dismiss a challenge to a determination of the
Administrator upon the failure of the party requesting a hearing or
his/her representative to attend a hearing without good cause; or upon
the failure of said party to comply with a lawful order of the
administrative law judge.
(d) At the Administrator's discretion, the Administrator has the
right to participate as a party or as amicus curiae at any time in the
proceedings, including the right to petition for review of a decision
of an administrative law judge in a case in which the Administrator has
not previously participated. The Administrator shall participate as a
party in any proceeding in which the Administrator's determination has
sought imposition of ineligibility sanctions.
(e) Copies of the request for hearing and documents filed in all
cases, whether or not the Administrator is participating in the
proceeding, shall be sent to the Administrator, Wage and Hour Division,
and to the Associate Solicitor, Division of Fair Labor Standards, U.S.
Department of Labor, Washington, D.C. 20210.
(f) A Federal agency which is interested in a proceeding may
participate as amicus curiae at any time in the proceedings, at the
agency's discretion. At the request of a Federal agency which is
interested in a proceeding, copies of all pleadings in the case shall
be served on the Federal agency, whether or not the agency is
participating in the proceeding.
(g) The rules of practice and procedure for administrative hearings
before the Office of Administrative Law Judges at 29 CFR Part 18 shall
be applicable to the proceedings provided by this section. To the
extent the rules in 29 CFR Part 18 are inconsistent with a rule of
special application provided by these regulations or the Executive
Order, these regulations and the Executive Order are controlling.
Sec. 9.106 What rules apply to the decision of the administrative law
judge?
(a) The administrative law judge shall issue a decision within 60
days after the proceeding at which evidence was submitted. The decision
shall contain appropriate findings, conclusions, and an order and be
served upon all parties to the proceeding.
(b) Upon the conclusion of the hearing and the issuance of a
decision that a violation has occurred, the administrative law judge
shall issue an order that the successor contractor take appropriate
action to abate the violation, which may include hiring the affected
employee(s) in the same or a substantially equivalent position(s) to
that which the employee(s) held under the predecessor contract,
together with compensation (including lost wages), terms, conditions,
and privileges of that employment. Where ineligibility sanctions have
been sought by the Administrator, the order shall also address whether
such sanctions are appropriate.
(c) If an order is issued finding that the contractor violated the
Executive Order and these regulations, the administrative law judge may
assess a sum equal to the aggregate amount of all costs and expenses
reasonably incurred by the aggrieved employee(s) in the proceeding.
(d) The decision of the administrative law judge shall become the
final order of the Secretary unless a petition for review is timely
filed with the Board of Service Contract Appeals.
Appeal Procedures
Sec. 9.107 How may an administrative law judge's decision be appealed?
(a) The Board of Service Contract Appeals has jurisdiction to hear
and decide in its discretion appeals concerning questions of law and
fact from determinations of the Administrator pursuant to Sec. 9.103(b)
of this part and from decisions of administrative law judges pursuant
to Sec. 9.106 of this part.
(b) Any party desiring review of a decision of the administrative
law judge (or of the Administrator, pursuant to Sec. 9.103(b)) shall
file a petition for review, in writing, with the Board of Service
Contract Appeals. No administrative or judicial review shall be
available unless a timely petition for review to the Board of Service
Contract Appeals is first filed. To be effective, such a petition for
review must be received within 20 days of the date of the decision of
the administrative law judge (or Administrator) and shall be served on
all parties and the Chief Administrative Law Judge (except in cases
involving an appeal from a decision of the Administrator). If a timely
petition for review is filed, the decision of the administrative law
judge (or Administrator) shall be inoperative unless and until the
Board of Service Contract Appeals issues an order affirming the
decision. However, if a petition for review concerns only the
imposition of ineligibility sanctions, the remainder of the decision of
the administrative law judge shall be effective immediately.
(c)(1) A petition for review shall refer to the specific findings
of fact, conclusions of law, or order at issue.
(2) Copies of the petition and all briefs shall be served on the
Administrator, Wage and Hour Division, and on the Associate Solicitor,
Division of Fair Labor Standards, U.S. Department of Labor, Washington,
D.C. 20210.
(d) The Board's final decision shall be issued within 90 days of
the receipt of the petition for review and shall be served upon all
parties by mail to the last known address, and on the Chief
Administrative Law Judge (except in cases involving an appeal from the
determination of the Administrator).
(e) If the Board concludes that the contractor has violated the
Executive Order, the final order shall order action to abate the
violation, which may include hiring the affected employee(s) in the
same or a substantially equivalent position(s) to that which the
employee(s) held under the predecessor contract, together with
compensation (including lost wages), terms, conditions, and privileges
of that employment. Where the Administrator has sought imposition of
ineligibility sanctions, the Board shall also determine whether an
order imposing ineligibility sanctions is appropriate.
(f) If a final order finding violations of the Executive Order is
issued, the Board may assess against the successor contractor a sum
equal to the aggregate amount of all costs and expenses reasonably
incurred by the employee(s) in the proceeding.
(g) In considering the matters within the scope of its jurisdiction
the Board shall act as the authorized representative of the Secretary
and shall act fully and finally on behalf of the Secretary concerning
such matters. The Board shall not have jurisdiction to pass on the
validity of any provision of this part. The Board is an appellate body
and shall decide cases properly before it on
[[Page 36767]]
the basis of all relevant matter contained in the entire record before
it. The Board shall not hear cases de novo or receive new evidence into
the record.
Enforcement Remedies
Sec. 9.108 What are the consequences to a contractor of not complying
with the Executive Order?
(a) The Executive Order provides that the Secretary shall have the
authority to issue orders prescribing appropriate remedies, including,
but not limited to, requiring employment of the predecessor
contractor's employees and payment of wages lost.
(b) After an investigation and a determination by the Administrator
that lost wages or other monetary relief is due, the Administrator may
direct that so much of the accrued payments due on either the contract
or any other contract between the contractor and the Government shall
be withheld in a deposit fund as are necessary to pay the moneys due.
Upon the final order of the Secretary that such moneys are due, the
Administrator may direct that such withheld funds be transferred to the
Department of Labor for disbursement.
(c) If the contracting officer or the Secretary finds that the
predecessor contractor has failed to provide a list of the names of
employees working under the contract in accordance with Sec. 9.6(c),
the contracting officer may take such action as may be necessary to
cause the suspension of the payment of funds until such time as the
list is provided to the contracting officer.
Sec. 9.109 Under what circumstances will ineligibility sanctions be
imposed?
(a) Where the Secretary finds that a contractor has failed to
comply with any order of the Secretary or has committed willful
violations of the Executive Order or these regulations, the Secretary
may order that the contractor and its responsible officers, and any
firm in which the contractor has a substantial interest, shall be
ineligible to be awarded any contract or subcontract of the United
States for a period of three years.
(b) Upon order of the Secretary, the names of persons or firms
found to be ineligible for contracts in accordance with this section
shall be added to the ``List of Parties Excluded from Federal
Procurement and Nonprocurement Programs,'' compiled, maintained and
distributed by the General Services Administration in accordance with
48 CFR 9.404. No contract of the United States shall be awarded to the
persons or firms appearing on this list or to any firm, corporation,
partnership, or association in which such persons or firms have a
substantial interest until three years have elapsed from the date the
persons' or firms' name was entered on the electronic version of the
list.
Subpart C--Definitions
Sec. 9.200 Definitions.
For purposes of this part:
Administrator means the Administrator of the Wage and Hour
Division, Employment Standards Administration, U.S. Department of
Labor, and includes any official of the Wage and Hour Division
authorized to perform any of the functions of the Administrator under
this part.
Contract means any prime contract subject wholly or in part to the
provisions of the Executive Order.
Contracting officer means the individual, a duly appointed
successor, or authorized representative who is designated and
authorized to enter into contracts on behalf of the Federal agency.
Executive Order or Order means Executive Order 12933 (59 FR 53559,
October 24, 1994).
Federal Government means an agency or instrumentality of the United
States which enters into a contract pursuant to authority derived from
the Constitution and the laws of the United States.
Secretary means the Secretary of Labor or his/her authorized
representative.
Service employee means any person engaged in the performance of
recurring building services other than a person employed in a bona fide
executive, administrative, or professional capacity, as those terms are
defined in Part 541 of Title 29, Code of Federal Regulations, and shall
include all such persons regardless of any contractual relationship
that may be alleged to exist between a contractor and such person.
United States means the United States and all executive
departments, independent establishments, administrative agencies, and
instrumentalities of the United States, including corporations, all or
substantially all of the stock of which is owned by the United States,
by the foregoing departments, establishments, agencies,
instrumentalities, and including non-appropriated fund
instrumentalities.
Appendix A to Part 9--Notice to Building Service Contract Employees
The contract for (type of service) services currently performed
by (predecessor contractor) has been awarded to a new contractor.
(Successor contractor) will begin performance on (date successor
contract begins).
As a condition of the new contract:
(Successor contractor) may be required to offer
employment to most current contract employees.
If you are offered employment on the new contract,
you will have at least ten (10) days to accept the offer.
The following factors are reasons why some current employees may
not be offered employment on the new contract:
Managerial or supervisory employees on the current
contract are not entitled to an offer of employment.
The new contractor may reduce the size of the
current work force. Therefore, only a portion of the existing work
force may receive employment offers.
The new contractor may have the right to employ
some or all of its current employees on the new contract before
offering employment to the existing contract employees.
Employees whose performance has been unsuitable on
the current contract are not entitled to employment with the new
contractor.
If you have any questions about your right to employment on the
new contract, contact:
(Name, address, and telephone # for the contracting officer or the
contracting officer's representative)
[FR Doc. 95-17611 Filed 7-17-95; 8:45 am]
BILLING CODE 4510-27-M
