Department of Energy June 16, 2015 Executive Order (EO) 13673: Fair Pay and Safe Workplaces Jean Seibert Stucky Assistant General Counsel for Labor and Pension Law

2 Executive Order (7/31/14) and Proposed FAR Rule Background EO was designed to improve contractor compliance with labor laws & increase efficiency/ cost savings in government contracting. The Federal Acquisition Regulation (FAR) Council issued a Proposed Rule to amend the FAR and implement the EO -  Published in the Federal Register on 5/28/15 for a 60-day comment period (

3 Executive Order 13673: WHAT DOES IT DO? The EO is designed to improve contractor compliance with labor laws and increase efficiency/cost savings in government contracting through requirements to:  Disclose labor violations: For contracts > $500,000, offerors and contractors report civil judgments, arbitral awards/decisions, and administrative merits determinations for 14 named laws or equivalent State laws. Please see procedures in place in DOE Order Chapter 1, available at: order-3503http://energy.gov/gc/downloads/doe- order-3503  Assess disclosures: Provides direction to Contracting Officers in making responsibility determinations (go – no go contract placement) with the advice of Labor Compliance Advisors (LCAs), including mitigating factors. For assistance contact your site leads at: assistant-general-counsel-labor-and-pension-lawhttp://energy.gov/gc/leadership/contact-us/contacts- assistant-general-counsel-labor-and-pension-law  Implementation assistance: The EO is intended to be remedial, not punitive. Implementation assistance will be provided through labor compliance agreements and other support.  Training and policy development: For acquisition and other agency personnel regarding compliance with labor laws. See “Labor Law Compliance” page on LCA website

4 Executive Order 13673: Labor Compliance Advisor (LCA) Designation EO requires each agency to designate a senior agency official to serve as LCA  The Secretary of Energy has designated the Assistant General Counsel for Labor and Pension Law, currently Jean Stucky, as LCA for DOE. Under the EO, the LCA will be primarily responsible for implementing the order within the agency.

5 Executive Order 13673: Labor Compliance Advisor (LCA) Designation In implementing the EO, the LCA will work closely with -  The Secretary’s Senior Advisors David Foster and Natasha Campbell  NNSA Office of General Counsel on issues concerning NNSA; and  Representative(s) of the cognizant DOE/NNSA health and safety organization on such matters.

6 Executive Order 13673: Labor Compliance Advisor (LCA) Designation Key LCA functions include, among other things:  Working with DOE acquisition personnel & contractors to improve understanding of and compliance with labor laws;  Assisting Contracting Officers in making responsibility determinations based on the nature of the violations, mitigating factors, and remedial measures agreed upon; and  Issuing an annual public report on agency actions to promote labor law compliance.

7 Executive Order 13673: WHAT DOES IT NOT DO?  Does not apply to contracts and subcontracts less than $500, which may exclude many contracts, e.g., contracts involving small businesses.  Is not intended to blacklist contractors --- EO’s goal is to correct the violations and foster compliance.  Is not intended to disrupt procurement process – contractors are encouraged to engage w/DOL & contracting/enforcement agencies early after learning of violations to assist in responsibility determinations.

8 Executive Order 13673: Proposed FAR Implementing Rule (5/28/15) Proposed rule clarifies disclosure requirements of the EO –  To a central government system;  Sets forth initial and then more detailed violation disclosures (for potential awardees) during the procurement process; and  Contractor has discretion how to collect from subcontractor – refers contractors to DOL guidance or DOL contact.

9 Executive Order and Proposed Rule The EO and proposed rule differs from rule proposed by President Clinton in that this rule: – Only covers labor laws; – Has clearer standards; and – Sets forth an implementation assistance regime so there is less burden on contracting community and more consistent application of the EO includes opportunity for coordination w/ DOL, enforcement agencies, and agency LCAs to provide guidance on labor violation disclosures, mitigating measures and how to assess them.

10 DOL Proposed Guidance Overview Proposed Guidance published in Federal Register for 60-day comment period and is available at Defines:  “administrative merits determination”  “civil judgment”  “arbitral award or decision” Provides guidance on:  types of information that should be reported  how reported violations should be assessed and what mitigating factors should be considered  paycheck transparency provisions DOL will issue later guidance addressing which state laws are equivalent to the federal labor laws

11 DOL Proposed Guidance (Published in FR on 5/28/15) Some Specifics Guidance defines and provides exhaustive list of what is considered to be an “administrative merits determination” and examples of labor law violations that are “serious,” “willful,” “repeated,” “pervasive.” Guidance specifically seeks comments on—  The category of “serious” violation where 25% of the workforce is affected;  whether the thresholds for fines and penalties and for back wages are set at the appropriate levels;  The proposed definition of “substantially similar” for determining if a violation is repeated under the Order;  how best to assess the number of a contractor’s or subcontractor’s violations in light of its size; and  how to determine whether State or local requirements are substantially similar to those required by the Order.

12 DOL Proposed Guidance (Published in FR on 5/28/15) Mitigating Factors “all the facts and circumstances of the violations, as well as any mitigating factors, should be considered.” Factors considered in evaluating violations at issue--  Only a single violation;  Low number of violations relative to the size of the contractor/subcontractor;  Involved recent legal or regulatory change;  Findings suggest that the contractor/subcontractor acted in good faith or had reasonable grounds for believing that it was not violating the law;  Remediation and prevention of recurrence – Implementation of a safety and health management program, collectively-bargained grievance procedure, or other compliance program; and  Long period of compliance following the violations.

13 Executive Order DOE/NNSA has already done a lot of this. We recognize that labor relations and labor standards were probably on the back burner for years, and that union membership declined substantially during the same period of time outside the DOE/NNSA complex. And, we will take that into account in administering the EO. Most fee determinations do take into account competent business management  And, that in our view certainly includes management of labor and benefits  And, it should be understood that contractors will be held accountable in their annual performance evaluations for their performance in this regard.

14 Executive Order 13673: Proposed Rule (5/28/15) We will be reasonable, and We will work with you, and Labor compliance agreements can help in many cases where any concerns do emerge.