The new executive orders are intended to foster the unionization of government contractors.

All U.S. federal government contractors should be aware of four executive orders signed into law by President Obama in late January and early February 2009. These executive orders are clearly meant to foster the unionization of government contractors. In summary form these executive orders are as follows:

Non-Displacement of Qualified Workers Under Service Contracts Executive Order

Based upon the supposed premise that a carryover workforce reduces the disruption of the delivery of services and provides the federal government with the benefits of an experienced and trained workforce, the “Non-Displacement of Qualified Workers Under Service Contracts Executive Order” requires successor federal government contractors and subcontractors which provide services subject to the Service Contract Act of 1965, 41 U.S.C. § 351 et seq., to offer a right of first refusal of employment to the predecessor contractor’s/subcontractor’s qualified employees under the successor contract (subcontract) for the same or similar services at the same location. This helps unions because if the predecessor’s employees are unionized and the successor is forced to hire the unionized workers, the successor will also inherit an obligation to recognize the union and bargain with it as a matter of law under the National Labor Relations Act. This executive order also will require the successor to hire a predecessor’s non-union employees as well, thus limiting the successors ability to choose its own workforce.

Economy in Government Contracting Executive Order

Based upon the supposed premise that activities undertaken to persuade employees to exercise or not exercise the right to organize and bargain collectively are not directly related to a contractor’s provision of goods and services to the federal government, the “Economy in Government Contracting Executive Order” makes any costs incurred by federal government contractors for such activities unallowable costs. Reduced to its essence, the purpose of this executive order has made it more difficult for federal contractors to campaign against unionization since any costs associated with that will not be reimbursable.

Notification of Employees Rights Under Federal Labor Law Executive Order

Based upon the supposed premise that the government has a proprietary interest in ensuring that its contracts for goods and services not be interrupted by labor unrest, the “Notification of Employees Rights Under Federal Labor Law Executive Order” requires federal government contractors, where statutorily covered employees engage in activities relating to the performance of the contractor’s government contracts that exceed the simplified acquisition threshold, to post notices informing employees of their right to unionize. The purpose of this executive order is to put the notion of unionization before all non-union employees of federal contractors.

Use of Project Labor Agreement for Federal Construction Projects Executive Order

Based upon the supposed premise that large, complex construction projects involve multiple contractors with workforces that fluctuate to meet immediate construction requirements, the “Use of Project Labor Agreement for Federal Construction Projects Executive Order” encourages federal agencies to consider requiring the use of “union-only” project labor agreements by contractors and subcontractors on “large scale construction projects” (defined as costing over $25 million) to facilitate timely completion of such projects. This executive order is meant to encourage the use of unionized companies only on all large construction projects.