16354 Federal Register / Vol. 60, No. 60 / Wednesday, March 29, 1995 / Proposed Rules

DEPARTMENT OF LABOR

29 CFR Part 270

RIN 1294–AA13

Office of the American Workplace;

Permanent Replacement of Lawfully

Striking Employees by Federal

Contractors

AGENCY: Office of the American

Workplace, Labor.

ACTION: Notice of proposed rulemaking.

SUMMARY: This notice of proposed

rulemaking sets forth proposed

regulations for implementing Executive

Order 12954, which was signed by

President Clinton on March 8, 1995 and

became effective on that date, and was

published in the Federal Register on

March 10, 1995. Executive Order 12954

provides that in procuring goods and

services, in order to ensure the

economical and efficient administration

and completion of contracts, federal

contracting agencies shall not contract

with employers that permanently

replace lawfully striking employees.

DATES: Interested parties may submit

written comments on this proposal by

April 28, 1995.

ADDRESSES: Written comments should

be submitted to the Office of the

American Workplace, U.S. Department

of Labor, 200 Constitution Avenue NW.,

Room S–2203, Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT:

Charles L. Smith, Special Assistant to

the Deputy Secretary, Office of the

American Workplace, U.S. Department

of Labor, 200 Constitution Avenue NW.,

Room S–2203, Washington, DC 20210,

(202) 219–6045. This is not a toll-free

number.

SUPPLEMENTARY INFORMATION: On March

8, 1995, President Clinton signed

Executive Order 12954, ‘‘Ensuring the

Economical and Efficient

Administration and Completion of

Federal Government Contracts.’’ In the

Order, the President makes the finding

that economy and efficiency in

procurement are generally advanced by

contracting with employers that do not

permanently replace lawfully striking

employees. That is, the permanent

replacement of strikers can adversely

affect a contractor’s ability to reliably

provide high quality goods and services,

thereby adversely affecting the Federal

Government’s economy, efficiency, and

cost of operations. The Order then states

that ‘‘[i]t is the policy of the executive

branch in procuring goods and services

that, to ensure the economical and

efficient administration and completion

of Federal Government contracts,

contracting agencies shall not contract

with employers that permanently

replace lawfully striking employees.’’

The Order further states that all

discretion under the Order is to be

exercised in accordance with this

policy.

The Order then establishes a flexible

mechanism, based on case-by-case

determinations, designed to ensure

economy and efficiency in government

procurement involving contractors that

have permanently replaced lawfully

striking employees. Under the Order,

the Secretary of Labor is authorized to

conduct investigations, either on the

basis of a complaint or on his or her

own initiative, and to hold hearings as

he or she deems advisable in order to

determine whether an organizational

unit of a federal contractor has

permanently replaced lawfully striking

employees.

If the Secretary finds that an

organizational unit of a federal

contractor has permanently replaced

lawfully striking employees, he or she

may exercise either or both of two

options. First, he or she may find that

existing contracts should be terminated

for convenience; the head of the

contracting agency may object to that

finding in writing and the termination

for convenience shall not be issued.

Second, the Secretary may find that it

is appropriate to debar the employer

from future contracts and renewal of

existing contracts until the labor dispute

is resolved. However, a contracting

agency may enter into a contract with

the employer if there is a compelling

reason to do so.

The Secretary has delegated his

authority under the Order to the

Assistant Secretary for the American

Workplace in Secretary’s Order No. 2–

95, signed on March 8, 1995, and

published in the Federal Register on

March 13, 1995, 60 FR 13602.

Administrative Notices

A. Executive Order 12866

The Department of Labor has

determined that this rule is a significant

regulatory action as defined in section

3(f) of Executive Order 12866. The

Department is issuing this rule in

conformance with that Executive Order.

The Department has determined that the

potential benefits of this regulatory

action outweigh the potential costs, and

that the rule promotes the President’s

priorities. This rule does not meet the

criteria of section 3(f)(1) of Executive

Order 12866 and, therefore, the

information in section 6(a)(3)(C) of that

Executive Order is not required. This

rule has been reviewed by the Office of

Management and Budget.

B. Regulatory Flexibility Act

The Agency Head has certified that

this rule is not expected to have a

significant impact on a substantial

number of small entities as defined in

the Regulatory Flexibility Act.

C. Paperwork Reduction Act

This rule contains no information

collection requirements for purposes of

the Paperwork Reduction Act of 1980

(44 U.S.C. 3501 et seq.).

List of Subjects in 29 CFR Part 270

Administrative practice and

procedure; Government contracts;

Federal contractors and subcontractors.

Signed at Washington, D.C., this 24th day

of March, 1995.

Charles L. Smith,

Special Assistant to the Deputy Secretary.

Accordingly, it is proposed to amend

29 CFR Chapter II by adding a new Part

270 as set forth below.

PART 270—OBLIGATIONS OF

FEDERAL CONTRACTING AGENCIES:

PERMANENT REPLACEMENT OF

LAWFULLY STRIKING EMPLOYEES

Subpart A—Preliminary Matters

Sec.

270.1 Definitions.

270.2 Statement of policy.

Subpart B—Enforcement

270.10 Complaints.

270.11 Investigations.

270.12 Findings by the Assistant Secretary.

270.13 Hearings.

270.14 Termination of contract for

convenience.

270.15 Debarment.

270.16 Determination of resolution of labor

dispute.

Subpart C—Ancillary Matters

270.20 Cooperation with the Assistant

Secretary.

270.21 Rulings and interpretations.

270.22 Delegation of authority by the

Secretary.

270.23 General.

Authority: Executive Order No. 12954, 60

FR 13023, March 10, 1995; Secretary’s Order

No. 2–95, 60 FR 13602, March 13, 1995.

Subpart A—Preliminary Matters

§ 270.1 Definitions.

(a) Affiliates means business

concerns, organizations, or individuals

among which, directly or indirectly,

either one controls or has the power to

control the other, or a third party

controls or has the power to control

both. Indicia of control include, but are

not limited to, interlocking management
Federal Register / Vol. 60, No. 60 / Wednesday, March 29, 1995 / Proposed Rules 16355

or ownership, identity of interest among

family members, shared facilities and

equipment, common use of employees,

or a business entity organized following

the debarment, suspension, or proposed

debarment of a contractor which has the

same or similar management,

ownership, or principal employees as

the contractor that was debarred,

suspended, or proposed for debarment.

(b) Assistant Secretary means the

Assistant Secretary of Labor for the

American Workplace.

(c) Contract means a mutually binding

agreement between the Government as a

buyer, represented by a contracting

agency, and a seller, where the seller

agrees to furnish supplies or services

(including construction) and the

Government agrees to pay for them. It

includes job orders or task orders issued

under basic ordering agreements; letter

contracts; orders, such as purchase

orders under which the contract

becomes effective by written acceptance

or performance; and bilateral

modifications to a contract, which

increase the supplies or services to be

delivered under the contract. For

purposes of this part a contract is

limited to agreements in which the

Government agrees to pay an amount in

excess of the Simplified Acquisition

Threshold of $100,000 specified in

section 4(11) of the Office of Federal

Procurement Policy Act, 41 U.S.C.

403(11). The term ‘‘contract’’ does not

include agreements in which the parties

stand in the relationship of employer

and employee.

(d) Contracting agency means any

executive department or independent

establishment in the executive branch of

the Government, including any wholly

owned Government corporation.

(e) Contractor means a prime

contractor.

(f) Department means the U.S.

Department of Labor.

(g) Deputy Assistant Secretary means

the Deputy Assistant Secretary for

Labor-Management Programs, Office of

the American Workplace, U.S.

Department of Labor.

(h) Employee includes any employee

of an employer, and includes any

individual whose work has ceased as a

consequence of, or in connection with,

any current labor dispute or because of

any unfair labor practice, but does not

include any individual having the status

of an independent contractor or any

individual employed as a supervisor.

(i) Government means the government

of the United States of America.

(j) Labor dispute includes any

controversy concerning terms, tenure, or

conditions of employment, or

concerning the association or

representation of persons in negotiating,

fixing, maintaining, changing, or

seeking to arrange terms or conditions of

employment, regardless of whether the

disputants stand in the proximate

relation of employer and employee.

(k) Lawfully striking employee means

an employee who is engaged in a strike

that has not been finally adjudicated to

be unlawful under any applicable

federal, state, or local law.

(l) Order means Executive Order

12954, dated March 8, 1995 (60 FR

13023, March 10, 1995).

(m) Organizational unit of a federal

contractor includes:

(1) A division or other organizational

element of a person that is responsible

as the prime contractor for performing a

contract, and (2) Any other affiliate of

the person that could provide the goods

or services required to be provided

under the contract.

(n) Permanently replaced, when used

in connection with a lawfully striking

employee, means that during a lawful

strike the employer has placed an

individual in the lawfully striking

employee’s position, and the striking

employee does not have an

unconditional right to reinstatement.

(o) Person means any natural person,

corporation, partnership or joint

venture, unincorporated association,

state or local government, and any

agency, instrumentality, or subdivision

of such a government.

(p) Prime contractor means any

person holding a contract with a

contracting agency.

(q) Secretary means the Secretary of

Labor, U.S. Department of Labor, or his

or her designee.

§ 270.2 Statement of Policy.

(a) It is the policy of the Executive

Branch of the Federal Government that

in procuring goods and services, in

order to ensure the economical and

efficient administration and completion

of contracts, contracting agencies shall

not contract with employers that

permanently replace lawfully striking

employees.

(b) All discretion under the Order and

this part shall be exercised consistent

with this policy.

(c) The Order and this part apply only

to contracts in excess of the Simplified

Acquisition Threshold of $100,000

established in section 4(11) of the Office

of Federal Procurement Policy Act, 41

U.S.C. 403(11).

Subpart B—Enforcement

§ 270.10 Complaints.

(a) Complaints may be filed by an

employee of an organizational unit of a

federal contractor, or his or her

representative, alleging that the

organizational unit has permanently

replaced lawfully striking employees.

All complaints should be filed with the

Deputy Assistant Secretary for LaborManagement Programs, Office of the

American Workplace, U.S. Department

of Labor, 200 Constitution Avenue NW.,

Room S–2203, Washington, DC 20210.

(b) The complaint must be in writing

and should include the name, address,

and telephone number of the

complainant, the name and address of

the organizational unit of the federal

contractor alleged to have permanently

replaced lawfully striking employees, an

identification of the lawfully striking

employees who were allegedly

permanently replaced, and any other

pertinent information which will assist

in the investigation and resolution of

the complaint.

§ 270.11 Investigations.

The Deputy Assistant Secretary may

cause an investigation to be conducted

of an organizational unit of a federal

contractor, regarding the permanent

replacement of lawfully striking

employees, on the basis of complaints

filed with the Department, information

submitted by other persons, or other

available information. The Deputy

Assistant Secretary shall notify the

organizational unit of a federal

contractor of the initiation of an

investigation and the potential

consequences under the Order. The

Deputy Assistant Secretary may also

cause a fact finding hearing to be

conducted, either instead of or in

addition to an investigation. The Deputy

Assistant Secretary shall transmit the

record, including a proposed finding of

fact and a recommendation as to

debarment and/or termination of a

contract or contracts, to the Assistant

Secretary.

§ 270.12 Findings by the Assistant

Secretary.

(a) Upon receipt of the record, the

Assistant Secretary shall make a finding

as to whether the organizational unit of

the federal contractor has permanently

replaced lawfully striking employees.

(b) If the Assistant Secretary finds that

the organizational unit of the federal

contractor has permanently replaced

lawfully striking employees, he or she

shall determine whether it is

appropriate to propose debarment.

(c) If the Assistant Secretary finds that

the organizational unit of the federal

contractor has permanently replaced

lawfully striking employees after March

8, 1995, the effective date of the Order,

he or she shall also determine whether
16356 Federal Register / Vol. 60, No. 60 / Wednesday, March 29, 1995 / Proposed Rules

it is appropriate to propose termination

for convenience of the contract or

contracts of the organizational unit.

(d) If the Assistant Secretary proposes

debarment and/or termination, he or she

shall send the organizational unit a

notice of proposed debarment and/or

termination by certified mail, return

receipt requested, advising the

organizational unit of its right, within

15 days after receipt of the notice, to

submit, in person, in writing, or through

a representative, information and

argument in opposition to debarment

and/or termination.

§ 270.13 Hearings.

(a) If the Assistant Secretary finds that

the submission by the organizational

unit of a federal contractor in opposition

to the proposed debarment and/or

termination raises a genuine dispute

over facts material to the proposed

debarment and/or termination, the

Assistant Secretary shall afford the

organizational unit the opportunity to

appear at an informal hearing. The

Assistant Secretary or his or her

designee shall preside over the

proceeding.

(b) The Assistant Secretary shall make

a decision on the proposed debarment

and/or termination of a contract or

contract based on the record.

§ 270.14 Termination of contract for

convenience.

(a) Upon finding that termination of a

contract or contracts for convenience is

appropriate, the Assistant Secretary

shall notify the organizational unit of a

federal contractor by certified mail,

return receipt requested, and shall

transmit that finding to the head of any

department or agency that contracts

with the organizational unit.

(b) The head of the department or

agency shall notify the Assistant

Secretary in writing of those contracts

that have been terminated for

convenience pursuant to the Assistant

Secretary’s finding.

(c) If the head of the department or

agency objects to the termination for

convenience of a contract, he or she

shall notify the Assistant Secretary in

writing, promptly after receipt of the

Assistant Secretary’s finding, of the

reasons for not terminating the contract

and the termination for convenience

shall not be issued.

§ 270.15 Debarment.

(a) The scope of any debarment

normally will be limited to the

organizational unit of a federal

contractor that the Assistant Secretary

has found to have permanently replaced

lawfully striking employees.

(b) Upon finding that debarment is

appropriate, the Assistant Secretary

shall promptly notify the organizational

unit of the federal contractor by certified

mail, return receipt requested. The

notice shall advise the organizational

unit of the federal contractor:

(1) Of the effective date of the

debarment;

(2) That the debarment will not

extend beyond the date when the labor

dispute precipitating the permanent

replacement of lawfully striking

employees has been resolved, as

determined by the Assistant Secretary in

accordance with § 270.16;

(3) That under the debarment,

contracting agencies throughout the

executive branch of the Government

shall not contract or consent to

subcontracts with the organizational

unit of the federal contractor nor renew

or otherwise extend the duration of

current contracts, unless the head of a

contracting agency or his or her

designee determines that there is a

compelling reason for such action.

(c) The Assistant Secretary shall

notify the Administrator of the General

Services Administration of the

debarment and the Administrator shall

include the contractor on the list of

debarred contractors. The Assistant

Secretary shall publish or cause to be

published in the Federal Register, the

names of contractors that have, in the

judgment of the Assistant Secretary,

permanently replaced lawfully striking

employees and have been the subject of

debarment. Departments and agencies

shall not renew or otherwise extend the

duration of current contracts or solicit

offers from, award contracts to, or

consent to subcontracts with these

contractors unless the head of the

agency or his or her designee

determines, in writing, that there is

compelling reason for such action.

§ 270.16 Determination of Resolution of

Labor Dispute.

(a) The Assistant Secretary may cause

an investigation to be conducted, on his

or her own initiative or upon request by

any person, to determine whether a

labor dispute that resulted in debarment

has been resolved. Among the factors or

conditions that the Assistant Secretary

may consider are:

(1) Whether the parties to the labor

dispute have either reached a formal

settlement or agreed on a procedure for

resolving their differences;

(2) Whether the parties have agreed

informally to end the labor dispute

without the signing of a written

agreement;

(3) Whether striking employees have

returned to work;

(4) Any other relevant factors tending

to lead to the conclusion that the labor

dispute has ended.

(b) If the Assistant Secretary

determines that the labor dispute has

been resolved, he or she shall terminate

the debarment and notify the public,

federal agencies, federal contractors,

and other interested persons, through

publication in the Federal Register or

otherwise, of this action.

Subpart C—Ancillary Matters

§ 270.20 Cooperation with the Assistant

Secretary.

Consistent with section 7 of the

Order, each contracting agency shall

cooperate with the Assistant Secretary

and provide such information and

assistance as the Assistant Secretary

may require in the performance of the

Assistant Secretary’s functions under

the Order and the regulations in this

part.

§ 270.21 Rulings and interpretations.

Rulings under or interpretations of the

Order or the regulations contained in

this part shall be made by the Assistant

Secretary or his or her designee.

§ 270.22 Delegation of Authority by the

Secretary.

Consistent with section 8 of the

Order, the Secretary may delegate any

function or duty of the Secretary under

this Order to any officer in the

Department or to any other officer in the

executive branch of the Government,

with the consent of the head of the

department or agency in which that

officer serves.

§ 270.23 General.

(a) The regulations in this part

implement Executive Order 12954 only

and do not modify or affect the

interpretation of any other Department

of Labor regulations or policy.

(b) Consistent with section 10 of the

Order, nothing contained in the Order

or this part, or promulgated pursuant to

the Order or this part, is intended to

confer any substantive or procedural

right, benefit, or privilege enforceable at

law by a party against the United States,

its agencies or instrumentalities, its

officers, or its employees.

[FR Doc. 95–7732 Filed 3–24–95; 4:09 pm]

BILLING CODE 4510–86–P