Employment United States
September 2014 Authors: Celina Joachim +1 713 427 5051 firstname.lastname@example.org Shaun Cassin +1 713 427 5032 email@example.com Recent Webinar: To view our recent webinar, The Changing Landscape for Federal Government Contractors, please click here. For further information please contact any of our Employment Counseling and Litigation partners: Chicago Andrew Boling +1 312 861 8076 firstname.lastname@example.org Douglas Darch +1 312 861 8933 email@example.com Robert Mignin +1 312 861 2520 firstname.lastname@example.org Houston J. Richard Hammett +1 713 427 5016 email@example.com Celina Joachim +1 713 427 5051 firstname.lastname@example.org Scott Nelson +1 713 427 5027 email@example.com
Executive Order Requires Federal Contractors to Disclose Labor Violations and Prohibits Pre-Dispute Arbitration Agreements On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order, which imposes additional requirements on certain federal contractors, including disclosure of labor violations and prohibiting the use of pre-dispute arbitration agreements. What Is the Fair Pay and Safe Workplaces Executive Order? The Order will require federal contractors and subcontractors with procurement contracts valued at more than $500,000 to disclose violations of various labor laws from the past three years. The Executive Order specifies that covered federal contractors must disclose violations by an administrative merits determination, an arbitral award or decision, or a civil judgment. When a contractor submits an offer to a government agency for a procurement contract, these disclosures must be made to that agency. Contractors must report violations of the following laws: • the Fair Labor Standards Act; • the Occupational Safety and Health Act; • the Family and Medical Leave Act; • Title VII of the Civil Rights Act of 1964; • the Americans with Disabilities Act; • the Age Discrimination in Employment Act; • the National Labor Relations Act; • the Davis-Bacon Act; • the Service Contract Act; • Executive Order 11246 (which prohibits federal contractors from discriminating based on protected classes); • Section 503 of the Rehabilitation Act; • the Migrant and Seasonal Agricultural Worker Protection Act; • the Vietnam Era Veterans’ Readjustment Assistance Act • Executive Order 13658 (which establishes a higher minimum wage for employees of federal contractors); • All equivalent state laws In addition, the Order prevents federal contractors or subcontractors with contracts valued at more than $1 million from requiring their employees to sign pre-dispute arbitration agreements for disputes arising out of Title VII or torts related to sexual assault or harassment. Federal contractors can still resolve these disputes in arbitration if employees consent to arbitration after the dispute arises. However, because an employee would be unlikely to consent post-dispute, this Order has the practical effect of eliminating arbitration as an option for federal contractors.
New York Rob Lewis +1 212 891 3532 firstname.lastname@example.org Palo Alto Jenni Field +1 650 856 5501 email@example.com Cynthia Jackson +1 650 856 5572 firstname.lastname@example.org Actions to Consider According to a White House Fact Sheet, the Order is expected to be implemented on new contracts in stages, on a prioritized basis, during 2016. Furthermore, the Order requires the Federal Acquisition Regulation to propose rules and regulations to carry out the Order. Thus, as a practical matter, the Order will not be enforced immediately. However, federal contractors and subcontractors should begin to analyze the Order (click here to view the Executive Order) and anticipate what violations, if any, they will be required to disclose when submitting bids for new contracts. Additionally, federal contractors that have had repeated problems complying with Title VII or that have been sued for harassment or sexual assault torts must recognize that any standard arbitration clauses signed by employees will not be valid if there is a future violation of those laws. Contractors should take steps to minimize the chance of these violations through preventative measures (i.e., employee training, reporting guideline, etc.), especially if the prospect of resolving these disputes in court (as opposed to in arbitration) presents a great financial risk.