President Trump has loosened the federal government's grip on businesses looking to secure federal contracts. On March 27, 2017, the President signed Executive Order 13782 revoking executive orders by President Obama that had regulated the conduct of federal contractors. President Trump's EO 13782 expressly revokes Obama's EO 13673, also known as the Fair Pay and Safe Workplaces Order, as well as subsequent amendments set forth in Section 3 of EO 13683 and EO 13738.
President Obama issued EO 13673 on July 31, 2014, with the stated purpose of ensuring that federal contractors comply with applicable labor laws. EO 13673 contained three major provisions that separately addressed disclosure of compliance with labor laws, paycheck transparency, and arbitration clauses for sexual harassment, sexual assault and discrimination claims.
More specifically, EO 13673 required federal agencies to include provisions in their solicitations to potential service providers directing the providers to disclose "whether there has been any administrative merits determination, arbitral award or decision, or civil judgment" issued against the service providers within the preceding three years for violations of certain labor laws. The list of applicable labor laws includes, but is not limited to, the Fair Labor Standards Act, the National Labor Relations Act, the Occupational Safety and Health Act of 1970, Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act and the Americans with Disabilities Act of 1990. President Obama's EO 13673 also required all agency solicitations and contracts to include that service providers must issue to individuals performing work under the contract a document containing information on that individual's hours worked, overtime hours, pay and any additions made to or deductions made from pay. EO 13673 further required agencies in their solicitations and contracts to prohibit service providers from including forced arbitration clauses in their contracts with employees which require the arbitration of claims arising under Title VII of the Civil Rights Act of 1964, or any tort related to or arising out of sexual assault or harassment.
President Trump's executive order effectively revokes these requirements and directs all executive departments and agencies to "consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing the revoked" executive orders. Although President Trump's executive order does not provide many details as to how it will affect service providers looking to secure federal contracts, service providers can reasonably expect fewer disclosure obligations in securing such contracts and fewer requirements governing employee contracts and compensation. For example, service providers bidding on federal contracts may no longer be required to disclose recent labor law violations. Service providers may not be required to make detailed disclosures in their employees' paychecks and may be free to include and enforce mandatory arbitration clauses for sexual harassment, sexual assault and discrimination claims, in their employee contracts. Although it remains to be seen exactly how individual agencies will implement President Trump's executive order in their solicitation and contracting practices, service providers looking to secure federal contracts can reasonably expect to face fewer hurdles throughout the contracting process.