New Executive Order seeks to ban contracts from violators

Frank S. Clowney III

A new executive order signed by President Barack Obama may have a significant impact on federal contractors in California and other locations throughout the United States. The order will require contractors to disclose violations of labor laws when they submit bids for federal contracts.

The ‘Fair Pay and Safe Workplaces” Executive Order was signed on July 31. It requires contractors to disclose those violations that occurred within the last three years as part of their application for new federal contracts. These disclosures must be made when a contractor submits a bid, during the award process and every six months after the contract is awarded. It requires contracting agencies to consider labor law violations as a disqualifying factor when they award federal contracts. The Executive Order also requires employers to disclose certain compensation information and other information related to whether workers are employees or independent contractors and whether employees are exempt or non-exempt under the Fair Labor Standards Act. These requirements apply to federal contracts in excess of $500,000.

For federal contracts in excess of $1 million, pre-dispute arbitration agreements will not be allowed if a potential claim may arise under Title VII of the Civil Rights Act or for tort claims that arise from sexual harassment or assault claims. However, contractors can arbitrate these claims through post-dispute agreements with workers. The Federal Acquisition Regulation Council and the Department of Labor plan to hold sessions in which stakeholders and employers can discuss issues and create processes to implement the executive order. The order’s requirements will begin to be implemented in 2016.

Employees who believe that their employers have violated labor laws may discuss this issue with an employment law attorney. An employment law attorney may be able to explain how employers may have a new incentive to effectively handle a claim in order to prevent the potential loss of future lucrative contracts.

Source: The National Law Review , “President Obama Signs Executive Order on Federal Contractor Blacklisting“, August 01, 2014