The FAR Council has proposed a new FAR Subpart 22.12 addressing Executive Order 13495 and the Department of Labor’s final rule [pdf] on nondisplacement of qualified workers. The proposed amendments restate the substance of the Executive Order and the DOL rule, omitting only the procedures for investigation and enforcement that do not pertain directly to contract administration. A new mandatory contract clause will incorporate the nondisplacement policy into all contracts and subcontracts at any tier to furnish services in the United States that succeed contracts for the same or similar work in the same location (unless an exemption or waiver applies).

The new FAR language does not address the apparent conflict between the policy requirement for nondisplacement of qualified workers and the requirement to accept the terms of an existing collective bargaining agreement under the NLRB’s “perfectly clear” doctrine. The “perfectly clear” doctrine states that a successor employer is bound by the terms of a collective bargaining agreement when it is “perfectly clear” that the successor will retain all employees in the bargaining unit without changes to the terms and conditions of employment. This differs from a normal successor employer, which is required to bargain with the union but not to comply with the existing collective bargaining agreement. 

Without appropriate clarification, a successor employer might always be viewed as coming under the “perfectly clear” doctrine, which could have the effect of locking contractors into the terms of collective bargaining agreements. Obviously this would give unions an upper hand in any negotiations with the successor employer. It also has the effect of increasing the cost of labor at the expense of the taxpayers.

DOL avoided this issue in its own final rule, stating that it was beyond its “departmental authority.” DOL also declined a recommendation that information about incumbent collective bargaining agreements be disclosed to bidders. Since the proposed rules have not been finalized and are not yet effective, the FAR Council still has an opportunity to revise the rules and to comment on their conflict with the “perfectly clear” doctrine. Hopefully the final rules will address the issue directly.

Comments on the proposed FAR Rules can be submitted online at until July 2, 2012. Cite FAR Case 2011-028.

Related entries—

DOL’s final rule on nondisplacement of qualified workers (Sept. 14, 2011)