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President Obama Signs Three Labor-Friendly Executive Orders

February 4, 2009

On January 30, 2009 President Obama signed three labor-friendly executive orders, ushering in what is expected to be a new era for organized labor following its heavy financial and other support to President Obama during his election campaign. Both prior to and since his election to office, President Obama has been nothing less than clear about his endorsement of organized labor and its role in our society and economy. President Obama has publicly stated: "[W]e have to reverse many of the policies toward labor that we've seen these last eight years." "I do not view the labor movement as part of the problem; to me it's part of the solution." "We need to level the playing field for workers and the unions that represent their interests, because we know that you cannot have a strong middle class without a strong labor movement." A summary of each of the three executive orders follows.

Executive Order 13494, Economy in Government Contracting

This executive order applies to all providers of goods and services to the executive branch of the federal government. The executive order prohibits reimbursement by the federal government for any wages or other expenses incurred by the employer for activities undertaken to persuade employees concerning whether or not to organize and bargain collectively. Covered persuasion activities that would not qualify for reimbursement include preparing and distributing persuasion materials, engaging legal counsel and consultants regarding persuasion, holding employee meetings consisting of persuasion on paid company time, and planning or conducting such persuasive activities during company paid time.

Executive Order 13495, Non-Displacement of Qualified Workers Under Service Contracts

This executive order reinstates Executive Order 12933 signed by President Clinton on October 20, 1994, and which was revoked by President George W. Bush on February 17, 2001. This executive order requires successor employers who have won new service contracts with the executive branch of the federal government to give the predecessor employer's employees the right of first refusal for any jobs being offered by the successor employer in the same facility previously serviced by the predecessor's employees.

The stated purpose of the executive order is to ensure continuity of the services being provided. The benefit to unions is that if the predecessor's workforce was unionized, continued union support is all but ensured. The executive order mandates the inclusion of new language in the service contracts to require such preferential hiring and the procedures for such preferential hiring. The executive order authorizes the head of the contracting department or agency to exempt successor contractors and subcontractors from this requirement if it is determined that inclusion of these provisions would not serve the purposes of this order or if it would impair the ability of the department or agency to procure such services on an economical and efficient basis.

Executive Order 13496, Notification of Employee Rights Under Federal Labor Laws

This executive order revokes Executive Order 13201, signed by President George W. Bush on February 17, 2001 and which required providers of goods or services to the executive branch to post a Beck Notice stating that employees have a right to not join unions and the right to not pay agency fees associated with political and other non-representational activities of the union. Beck Notices will no longer be required to be posted. However, in place of the Beck Notice, this executive order requires contractors and subcontractors to the executive branch to post a notice of employee rights, the content of which will be determined at a later date by the Secretary of Labor. Most assuredly, the notice will inform employees about the right to organize and bargain collectively.

Physical and electronic notices must be posted in conspicuous places in and about the facilities where employees who are covered by the National Labor Relations Act work. Language to require these notice postings will be included in future federal contracts. The purported purpose of the executive order is to promote economy and efficiency in government procurement and to avoid disruptions in the provision of goods and services due to labor unrest. The Secretary of Labor is empowered by the executive order to exempt employers from this posting obligation if the Secretary determines that posting would not serve the purposes of this executive order or would impair the ability of the government to procure goods or services on an economical and efficient basis.

If you have any questions about any of these executive orders, or if you would like a copy of the executive orders, please do not hesitate to contact Varnum's Labor and Employment Relations Practice Team.

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