Companies seeking lucrative federal government contracts will have a hard time getting them if they have a history of labor violations or require workers to give up their right to sue as a condition of employment, thanks to an executive order President Obama signed Thursday.
“Some companies that earn billions of dollars as government contractors are among the worst violators of U.S. labor laws, yet year after year they keep winning new contracts,” the Associated Press reported. “So President Barack Obama is aiming to end impunity for labor violators by pushing companies to clean up their act if they want to keep taking federal money.”
The president’s order will bind any companies that want a new contract with the government to better pro-labor provisions. In an effort to push companies to resolve back wage claims and other labor disputes, the order will require companies seeking contracts of $500,000 or more to make any of its previous labor law violations public.
According to the AP, federal agencies will be given more guidance on how labor violations should factor into the decision to award contracts. This way, companies that habitually violate labor laws and worker rights won’t have easy access to coveted government contracts.
The order also prohibits companies pursing federal contracts of more than $1 million from requiring their workers to sign mandatory arbitration agreements, usually as a condition of employment. Forced arbitration strips workers of their right to sue their employer for labor violations, steering complaints to an intermediary (usually chosen by the company) that hears both sides of the dispute and decides the case.
The order’s mandatory arbitration proscription will apply to workers alleging Civil Rights Act violations and accusations of sexual harassment or assault.
Currently, about 24,000 companies contract with the federal government, employing about 28 million Americans, or 1 in 5 U.S. workers, the AP reported.
Before these new worker protections, President Obama has signed executive orders mandating a $10.10-per-hour minimum wage for federal contractors, and barring contractors who discriminate against LGBT workers.
Legislators critical of the pro-worker measures accuse Obama of overstepping his bounds and are pushing forward with a lawsuit against him. The president and his supporters say executive orders are necessary in order to move past a “do-nothing” Congress.