News + Events
New “Union-Friendly” Executive Orders Affect Government Contractors
February 12, 2009
Tashwanda C. Pinchback
In just a few weeks, President Obama has already signed four Executive Orders that are being described as “pro-union” and affect the way government contractors and subcontractors interact with labor unions.
The first Executive Order, “Economy in Government Contracting,” prevents government contractors from obtaining federal reimbursement for the costs and expenses incurred in their efforts to influence its employees’ decision to join a union or engage in collective bargaining. The costs that are disallowed include:
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preparing and distributing materials;
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hiring or consulting legal counsel or consultants;
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holding meetings (including paying the salaries of the attendees at meetings held for this purpose); and
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planning or conducting activities by managers, supervisors, or union representatives during work hours.
The order directs the Federal Acquisition Regulatory Council (FAR Council) to adopt rules and regulations necessary to carry out the order within 150 days.
The second Executive Order, “Nondisplacement of Qualified Workers Under Service Contractors,” requires successor federal contractors and subcontractors to give the employees of the successor contractor the “right of first refusal” for open positions. While the new contractor need not employ all employees under the predecessor contract, it may not make offers of employment to other individuals until it has extended offers of employment to the predecessor’s employees. Thus, if a union is present, the new contractor may have to recognize and consult with the incumbent union over initial terms and conditions of employment. The penalties for failing to comply are severe and include disqualification for federal contracts for up to three years. This Executive Order is effective immediately.
The third Executive Order, “Notification of Employee Rights Under Federal Labor Laws,” requires government contractors to post notices informing employees of their affirmative right to organize under the National Labor Relations Act. The Executive Order also rescinds Executive Order 12301, issued by President George W. Bush, which required contractors and subcontractors to post notices informing their employees of their rights under Communication Workers of America v. Beck, 487 U.S. 735 (1988), such as the ability to refuse to join a union and the ability to object to the use of non-union member dues for certain purposes. The Department of Labor is responsible for the administration and enforcement of this Executive Order, and the Secretary of Labor has 120 days to promulgate the text of the notice.
The fourth and most recent Executive Order promotes the use of union labor for large-scale federal construction projects valued at $25 million or more. The Executive Order encourages federal agencies to have construction contractors and subcontractors enter project labor agreements. Those agreements require contractors to negotiate with union officials, recognize union wages and benefits, and generally abide by collective-bargaining agreements. This Executive Order is effective immediately.