Worker Protection:

Federal Contractors and Violations of Labor Law

HEHS-96-8: Published: Oct 24, 1995. Publicly Released: Oct 24, 1995.

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Pursuant to a congressional request, GAO provided information on the extent to which federal contractors violate the National Labor Relations Act (NLRA), focusing on: (1) the characteristics associated with these NLRA violators; and (2) ways to improve federal contractors' compliance with NLRA.

GAO found that: (1) in 1993, six firms held 90 percent of the federal contracts awarded to NLRA violators; (2) the cases brought to the National Labor Relations Board (NLRB) mainly involved workers' rights, collective bargaining, and discrimination violations; (3) NLRB remedies mainly included the reinstatement of unlawfully fired workers, restoration of workers' job status, payment of back wages or benefits, collective bargaining orders, and orders to cease threatening workers with job loss; (4) the NLRB remedies affected nearly 1,000 individual workers and thousands of additional workers represented by 12 bargaining units; (5) most of the NLRA violators were Departments of Defense and Energy contractors; (6) 15 of the 80 violators had to reinstate or restore more than 20 individuals each, NLRB cease and desist orders issued against them, or a history of NLRA violations; and (7) NLRB could enhance its enforcement of NLRA by collecting judgments against violators from their federal contract awards and increasing coordination with the General Services Administration (GSA) to identify such violators.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: NLRB issued regulations enabling it to use administrative and tax refund offsets to collect money from labor law violators, including those who receive federal contracts, who failed to comply with an NLRB order to restore wages. Through administrative offset, NLRB may request other federal agencies to withhold money owed to it from violators' contract payments, and through tax refund offset, it may request IRS to withhold debts owed to NLRB from violators' income tax refunds. NLRB is making full use of offsets. Although the action taken by NLRB is different than what GAO recommended, it is consistent with the spirit of the recommendation and could enhance NLRB's enforcement of the act more than GAO anticipated. Using offsets to collect debts owed by all violators, rather than only federal contractors, could result in NLRB settling cases more quickly, avoiding lengthy contempt proceedings, gaining cost savings to NLRB and the government from less litigation, and collecting more overdue judgments.

    Recommendation: The Chairman and General Counsel, NLRB, and the Administrator, GSA, should develop an information arrangement approach to facilitate the identification of violators who receive federal contracts.

    Agency Affected: National Labor Relations Board

  2. Status: Closed - Not Implemented

    Comments: No action is intended by GSA because NLRB decided to pursue enforcement of the offset provision with the Treasury Department and IRS. GSA, in turn, provides the quarterly data to IRS on federal contractors that NLRB needs to enforce this provision.

    Recommendation: The Chairman and General Counsel, NLRB, and the Administrator, GSA, should develop an information arrangement approach to facilitate the identification of violators who receive federal contracts.

    Agency Affected: General Services Administration

 

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