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 publicly
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 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.