President Obama is preparing to sign an executive order that would strengthen regulations on companies that receive federal contracts. The order is aims to reduce labor violations within government contractors by requiring any company seeking a federal contracts of over $500k to disclose publically any labor violations it has received over the previous three years.
Federal agencies who award such contracts will be given new guidance on how to factor in past labor violations when determining which applicant should receive a federal contract. The most egregious violators could be forced into remediation agreements before new contracts are granted. The executive order would also require companies with government contracts to present its workers with detailed patrol information each pay period so they can verify if their paychecks are accurate.
Perhaps most importantly, the order would prohibit companies seeking government contracts from requiring its employees to agree to mandatory arbitration to resolve any work-related dispute. Mandatory arbitration clauses are the preferred dispute resolution method for the company because it keeps injured or disgruntled employees from being able to file a lawsuit against the employer.
The regulations that are a part of this executive order are a positive step towards strengthening worker protections, but they only apply to those companies that are pursuing new federal contracts. Federal contractors employ roughly 28 million workers, which is about 20% of the U.S. workforce.