On July 31, 2014, President Obama signed an executive order focusing on labor violations and other employment practices of companies contracting with the federal government. The order requires contractors bidding for contracts of more than $500,000 to disclose violations of federal labor laws rendered against the company within the past three years, including the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act. Under the order, an official will keep track of employment law violations by contractors and will be responsible for determining if violations warrant denial of a government contract. The order takes a strong stance against companies who are “repeat offenders,” making it clear the government will not award contracts to companies who consistently violate the rights of American workers.

Notably, the order also prohibits companies with contracts exceeding $1 million from having “forced arbitration” clauses that require employees to secretly arbitrate claims of discrimination under Title VII, sexual harassment, and sexual assault. Under the order, arbitration may only occur when the employee or independent contractor voluntarily consents to arbitration after the dispute arises. Approximately 28 million workers are currently employed by businesses contracting with the federal government.

As noted in the order, “Contractors that consistently adhere to labor laws are more likely to have workplace practices that enhance productivity and increase the likelihood of timely, predictable, and satisfactory delivery of goods and services.” At Barrett & Farahany, LLP, we could not agree more, and strive every day to enforce all federal labor laws that promote an efficient American economy.

Full order available here: Executive Order