Employment Issues in Government Contracting
In recent years, employment and labor-related laws affecting government contractors (and oversight and enforcement of these laws) have expanded and changed the regulatory and enforcement landscape. Wiley Rein’s Government Contracts Practice regularly counsels and represents clients regarding non-discrimination and affirmative action requirements of the Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP), as well as contractor requirements and investigations that arise under the Service Contract Act (SCA), the Davis Bacon Act (DBA), and Davis Bacon and Related Act (DBRA). In addition, we routinely advise federal contractors regarding traditional employment issues, such as compliance with DOL wage and hour laws under the Fair Labor Standards Act (FLSA), covenants not to compete relating to current and prospective employees, the differences between an “employee” and an “independent contractor,” and discrimination and sexual harassment allegations and investigations.
Department of Labor's Office of Federal Contract Compliance Program
Our attorneys regularly counsel clients on the non-discrimination and affirmative action requirements of the DOL OFCCP, including Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, as amended, involving individuals with disabilities, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended. We advise clients on the creation and review of affirmative action plans and compliance policies, as well as preparation for OFCCP compliance reviews and preventive audits.
In addition, we often represent clients during investigations by other DOL agencies, such as the Wage and Hour Division and the Occupational Safety and Health Administration (OSHA). Recent DOL OFCCP engagements include:
- Successfully represented contractors in connection with OFCCP compliance reviews, responded to OFCCP inquiries, and negotiated conciliation agreements.
- Responded on behalf of contractor to OFCCP complaint of disability discrimination and retaliation under Section 503 of the Rehabilitation Act.
- Presented analysis and summaries to clients on OFCCP’s recent final rules amending Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974.
Service Contract Act
Compliance with the wage and fringe benefit payment and related obligations under the SCA is a key concern for service contractors. Non-compliance with the SCA can lead to substantial back wage or fringe benefit liabilities, contract termination, or debarment from federal contracting. Wiley Rein attorneys regularly provide guidance and representation on a wide range of SCA issues, as well as wage and hour requirements, pension contribution issues, and the employment matters that arise when a contract is transitioned from one federal contractor to another. Wiley Rein attorneys also counsel clients on their obligations under the DOL and Federal Acquisition Regulation Nondisplacement rules, which require contractors to offer jobs to many SCA-covered employees of their predecessor contractors.
Recent representative SCA experience includes:
- Prepared successful petitions on behalf of six different large service contractors seeking approval of use of a self-funded insurance plan as a bona fide fringe benefit under the SCA.
- Conducted a comprehensive SCA compliance audit of a business unit with more than $1 billion in service contracts and prepared report summarizing findings and recommendations to mitigate SCA compliance risk.
- Assisted a prime contractor with investigation and remediation of subcontractor failure to provide the required minimum level of fringe benefits under the SCA.
- Represented division of large federal service contractor in responding to DOL Wage & Hour Division SCA audit of multi-billion dollar service contract.
- Assessed DOL audit findings and assisted with negotiation of settlement of labor category misclassification allegations under multi-million dollar service contract.
Davis Bacon Act
The DBA and DBRA apply to a wide range of federally-funded construction projects, and the DOL aggressively monitors and enforces compliance with these laws. Our attorneys have performed internal reviews to determine contractor and subcontractor compliance with DBA/DBRA requirements and regularly assist contractors on DOL DBA/DBRA audit matters, including DOL audits arising under the American Recovery and Reinvestment Act of 2009 (ARRA), which incorporates DBA requirements.
Recent DBA engagements include:
- Performed an internal compliance review to assess subcontractor compliance with the DBA on a multi-million dollar ARRA-funded project.
- Successfully resolved DOL DBA audit of subcontractor labor category classification arising under multi-million dollar ARRA-funded grant.
- Assisted client in facilitating retroactive DBA back wage payments to subcontractor employees.
- Counseled client on application of public utility exception to DBA coverage to non-ARRA funded project.
Covenants Not to Compete
Our practice often provides contractors counsel and representation regarding covenants not to compete, including non-competition and non-solicitation provisions. We advise clients in analyzing the interplay between covenants not to compete and the Nondisplacement Rule and on how to narrowly draft scope and duration provisions to address unique requirements for government contractors. In addition, we provide representation in enforcement of these provisions to ensure that former employees and prospective employers understand the requirements of the covenants not to compete. For example, we recently secured a temporary restraining order in federal district court in Virginia against a former employee of our client that violated his non-compete obligations and helped to secure a contract award for a competitor.
Fair Labor Standards Act and Employment Investigations
The FLSA governs wage and hour requirements for employers and establishes standards to define who is exempt from the minimum wage and overtime requirements of the law. The FLSA also raises unique issues for service contractors given SCA prevailing wage requirements. Our practice is adept at counseling clients on FLSA compliance issues and creating company policies and procedures to minimize the risk of potential litigation. We assist employers in conducting wage and hour self-audits and have successfully resolved several national collective action wage and hour disputes.
In addition, we have conducted hundreds of time-charging, discrimination, and sexual harassment investigations for both large and small government contractors. Wiley Rein attorneys also have significant experience defending employers before federal and state courts and agencies, such as the Equal Employment Opportunity Commission (EEOC) with respect to claims involving employment discrimination, harassment, wrongful termination, and breach of express or implied employment contracts.
*Not admitted to the District of Columbia Bar. Supervised by principals of the firm who are members of the District of Columbia Bar.
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