WASHINGTON — 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. 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.
Obama on Thursday will sign an executive order that requires contractors to give their workers more rights to address disputes. Companies seeking large contracts won’t be allowed to require their workers to sign agreements saying that an arbitrator, rather than a judge, gets to hear sexual assault or civil rights grievances and make binding decisions. The order also requires that workers be given information each pay period to help them to determine whether their paychecks are accurate, White House officials said.
Hoping to nudge companies into fixing their problems, Obama will also require companies to make public any violations in the past three years when they’re seeking contracts exceeding $500,000. Officials said federal agencies that award contracts will be given better guidance about factoring violations into their decision-making, a move aimed at persuading the most egregious violators to resolve back wage claims and enter remediation agreements out of fear they’ll start losing contracts.
Obama’s order, which doesn’t require approval from Congress, serves as an election-year rebuttal to what the White House sees as an incessant attempt by Republicans to dissuade Obama from taking action on his own. On Wednesday, minutes after Republicans pushed a plan through the House to sue Obama for allegedly overstepping his authority, his senior adviser, Dan Pfeiffer, announced in a letter to the White House’s email list that Obama would sign the labor order.
“The president is not going to back away from his efforts to use his authority to solve problems and help American families,” Pfeiffer said.
Facing opposition from Congress that has only grown more unrelenting as the midterm elections approach, Obama has been scanning the federal government for ways to show the merits of his own proposals, albeit on a smaller scale. Already, Obama has signed executive orders requiring federal contractors to pay their workers at least $10.10 an hour, the rate Obama wants Congress to adopt as the national minimum wage, and barring contractors from discriminating against gay or transgender workers.
But unlike the minimum wage or gay rights, labor laws have not been a major item on Obama’s wish list for Congress. Randy Johnson, the U.S. Chamber of Commerce’s senior vice president, said there are lots of labor laws already and lots of agencies responsible for enforcing them.
“If the president wants to add the penalty of debarment from federal contracts to be determined by procurement officials without expertise in those laws, he needs to go to Congress and get the proper authority,” Johnson said.
Many of the companies the order seeks to target have already faced penalties for violating wage, health and safety laws, but those penalties don’t necessarily preclude a company from winning future contracts. Several congressional studies have shown that the U.S. companies that rack up the highest fines for violations are contractors that continue to win lucrative federal bids.
The provision barring mandatory arbitration agreements will apply only to new contracts exceeding $1 million, officials said, and will affect disputes brought under the anti-discrimination section of the Civil Rights Act or accusations of sexual assault or harassment. It mirrors protections Congress already has enacted that apply to Defense Department contracts.