It looks like announcements are steadily coming from the Administration setting forth additional requirements on federal contractors. On July 21, 2014, President Obama signed an executive order banning job discrimination against gay and lesbian American workers of federal contractors. In making the announcement, the President stated that Congress has debated such legislation for decades without agreeing to it, and so he indicated he was going to exercise executive authority to take the step for federal contractors. The executive order also protects workers based not just on sexual orientation, but also gender identity, meaning transgender employees. There are no exemptions for religious groups in the executive order. However, the Obama executive order leaves in place exemptions that religious contractors enjoy regarding ministerial positions. It appears that the sexual orientation and gender identity discrimination bans, like the general prohibitions on race, sex, religion and national origin bias, will apply to all contractors with ten (10) or more employees. Affected employers will get a chance to comment on regulations implementing this new order before they become final.
The President noted that 18 states and more than 200 cities have already banned discrimination based on sexual orientation. Currently, Title VII bars employers from discriminating against workers based on sex, but does not expressly prohibit sexual orientation or gender identity bias in the workplace.
In addition, on July 31, 2014, the President signed an executive order requiring prospective contractors to disclose to agencies violations of 14 federal wage and hour, discrimination, health and safety, family and medical leave, labor and other workplace laws. Known as the "Fair Pay and Safe Workplaces Executive Order," it applies to new federal contracts of more than $500,000.00 starting in 2016. It will require companies to reveal all such workplace violations in the past three years before becoming eligible for a contract. The Administration intends to deny contracts to firms with the most egregious track records. Each agency will appoint a labor compliance advisor who, under Department of Labor guidance, will review disclosures and consult with contracting officers to disqualify the worst violators from contract consideration.
The executive order also requires contractors to provide their employees with accurate pay documents showing hours worked, overtime hours, pay and any additions or deductions made from pay. If the contractor is treating an individual performing work under a contract as an independent contractor, rather than an employee, the contractor must provide a document informing the individual of that status.
Further, employers with contracts of $1 million may not require workers who are not covered by a collective bargaining agreement with the union to arbitrate claims under Title VII or any tort related to or arising out of sexual assault or harassment.
The current executive orders follow a February executive order, which currently is in rule-making process, to raise the minimum wage of federal contractors' employees to $10.10 per hour.
National employer organizations immediately announced concern about this form of "black listing" companies from federal contracts possibly due to minor infractions of complex labor laws. However, government officials said that minor offenses would not disqualify a company, and that the agencies would provide guidance to companies that have been identified as having a history of labor law violations. Such firms would have an opportunity to remedy their legal practices, which the contracting officer would take into account in awarding contracts. President Clinton tried a similar approach with an executive order barring the government from giving federal contracts to companies that hired permanent replacements of striking workers. However, the D.C. Circuit Court of Appeals rejected that effort in Chamber of Commerce v. Reich, (C.A.D.C. 1996), when the court struck the order down on grounds that it violated the National Labor Relations Act.
There is good news to contractors in that a number of items were left out of the new executive order, items pertaining to the adoption of a fair compensation preference to employers that pay a "living wage" and/or creation of a contracting preference for employers that "respect collective bargaining rights."