Can contractors use federal funds to persuade workers to join or not join a union?

President Barack Obama, on January 30, 2009, issued Executive Order 63069 prohibiting the use of federal contracting dollars for any activities aimed at persuading workers to join, or not to join, a union. The Order instructs federal contracting departments and agencies to treat, as disallowable for disbursement of federal funds, any activities undertaken to persuade employees-whether employees of the recipient of the Federal disbursements or of any other entity-to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively through representatives of the employees' own choosing.

The Order also provides that contractors will not be reimbursed for costs of activities that seek to persuade as to the manner of exercising organizing rights.

Unallowable expenses. Examples of unallowable expenses-when incurred to persuade employees to exercise or not to exercise, or concern the manner of exercising, their rights to organize and bargain collectively-include costs related to the following activities:

• preparing and distributing materials;

• hiring or consulting legal counsel or consultants;

• holding meetings, including paying the salaries of the attendees at meetings held for this purpose (i.e.,captive audience meetings) and

• planning or conducting meetings by managers, supervisors, or union representatives during work hours.

Allowable costs. Contracting departments and agencies shall, however, treat as allowable the costs incurred in maintaining satisfactory relations between the contractor and its employees, including costs of labor management committees, employee publications (other than those undertaken to persuade employees to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively), and other related activities.