PRESIDENT ISSUES 3 PRO-LABOR ORDERS COVERING GOVERNMENT CONTRACTORS

On January 30, 2009, President Obama issued three pro-labor Executive Orders concerning government contractors.

The Order entitled, “Economy in Government Contracting,” prohibits federal contracting departments and agencies from treating as allowable costs the expenses involved in opposing union organizing, such as preparing materials, retaining legal counsel or consultants, holding meetings, or planning or conducting activities during working hours. The Order gives the Federal Acquisition Regulatory Council (FAR) 150 days to develop implementing regulations and will be applicable to contracts resulting from solicitations after that date. This Order makes no mention of subcontractors. The Order states that it does not limit the ability of contractors to engage in advocacy for which they do not claim reimbursement; however, it will require contractors to maintain accounting records showing that they were not reimbursed for the funds used to oppose union organizing.

The Order entitled, “Nondisplacement of Qualified Workers Under Service Contracts,” requires government contractors and subcontractors covered by the Service Contract Act to agree that if they replace an existing contractor, they will give right of first refusal to the existing contractor’s employees. A similar executive order was issued by President Clinton in 1994 and revoked by President Bush in 2001. The Order gives the Secretary of Labor 180 days to issue regulations, and will apply to contracts resulting from solicitations after that date.

The Order entitled, “Notification of Employee Rights Under Federal Labor Laws,” requires government contractors and subcontractors to post a notice informing employees of their right to organize. The form of the notice will be prescribed by the Secretary of Labor. This Order gives the Secretary of Labor 120 days to issue regulations, and will apply to contracts resulting from solicitations after that date. The Order also repeals an executive order issued by President Bush in 2001 which requires federal contractors and subcontractors to post notices of employees’ “Beck” rights, i.e., their right to refrain from paying a portion of their union dues.

February 3, 2009

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