President Donald J. Trump has loosened the federal government's grip on businesses looking to secure federal contracts. On March 27, 2017, the president signed Executive Order 13782 revoking executive orders by President Barak Obama that had regulated the conduct of federal contractors. President Trump's EO 13782 expressly revokes Obama's EO 13673, also known as the "Fair Pay and Safe Workplaces" order, as well as subsequent amendments, set forth in Section 3 of EOs 13683 and 13738. President Obama issued EO 13673 on July 31, 2014, with the stated purpose of ensuring that federal contractors comply with applicable labor laws. EO 13673 contained three major provisions that separately addressed (i) disclosure of compliance with labor laws, (ii) paycheck transparency and (iii) arbitration clauses for claims of sexual harassment, sexual assault, and discrimination.
More specifically, EO 13673 required federal agencies to include provisions in their solicitations to potential service providers directing them to disclose "whether there has been any administrative merits determination, arbitral award or decision, or civil judgment" for violations of certain labor laws issued against them within the preceding three years. The list of applicable labor laws includes, but is not limited to, the Fair Labor Standards Act, the National Labor Relations Act, the Occupational Safety and Health Act of 1970, Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act and the Americans with Disabilities Act of 1990. EO 13673 also required all agency solicitations and contracts to include that service providers must issue to individuals performing work under the contract a document containing information on "that individual's hours worked, overtime hours, pay and any additions made to or deductions made from pay." EO 13673 further required agencies to include in their solicitations and contracts a provision that service providers are prohibited from including in their contracts with employees clauses requiring the arbitration of claims arising under Title VII of the Civil Rights Act of 1964, or sounding in any tort relating to or arising out of sexual assault or harassment.
President Trump's EO effectively revokes these requirements and directs all executive departments and agencies to "consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing the revoked" EOs. Although it remains to be seen exactly how individual agencies will implement President Trump's EO in their solicitation and contracting practices, service providers looking to secure federal contracts can reasonably expect to face fewer hurdles throughout the contracting process. For example, service providers bidding on federal contracts may no longer be required to disclose recent labor law violations and may be free to include mandatory arbitration clauses with respect to sexual harassment, sexual assault, and discrimination claims in their employee contracts.
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