Under current law, employers confronted with union organizing drives face an important question: whether to take steps to oppose that effort. Under the Obama Administration, employers holding federal contracts also face an additional question: how will they pay for their efforts to prevent employees from organizing a union?
Federal contractors are allowed to claim certain costs of doing business as "allowable." Generally speaking, an allowable cost is one that can be charged to the government. Shortly after his inauguration, Pres. Obama signed an executive order that prevented contractors from treating costs related to opposing union organizing drives as "unallowable." See Executive Order 13494. Thus, a contractor who wants to exercise its right to express its views on the question of unionization must be willing to shoulder the cost of that effort and will not be able to shift those costs (or a even portion of them) to the government.
Yesterday, three federal agencies (the Department of Defense, NASA, and the General Services Administration) announced proposed regulations further implementing Pres. Obama’s 2009 executive order. The proposed regulation provides examples of the types of unallowable costs, such as (1) preparing and distributing materials; (2) hiring or consulting legal counsel; (3) meetings (including the salary costs of those attending the meetings); and (4) planning or conducting activities related to a union organizing campaign by managers or supervisors during working hours.
Those wishing to comment on the proposed regulations should visit http://www.regulations.gov/ and input "FAR Case 2009-006" under the heading "Enter Keyword or ID". The comment period is open until June 14, 2010.