Executive Orders Broaden Secretary of Labor's Powers

In what has gone relatively unnoticed, President Obama has endowed the incoming Secretary of Labor with sweeping enforcement powers via the executive orders signed this past Friday.

The first order: Notification of Employee Rights Under Federal Labor Laws, requires government contractors and subcontractors to display notices of an employee’s rights to unionize and bargain collectively under the National Labor Relations Act, yet revokes the executive order signed by former President Bush that required that federal contractors be informed of their rights to refrain from joining or maintaining membership in a labor union, and to object to how their union dues/fees – if paid pursuant to a union security agreement – are used. More insidiously, this order gives the Secretary of Labor the responsibility to administer and enforce the order. Within 120 days, the Secretary is required to initiate a rulemaking to prescribe the size, form and content of the notice employers must post.

In addition, the Secretary of Labor is given broad investigation and quasi-judicial powers to determine whether an employer is in violation of this order. The Secretary may hold hearings, public or private, regarding compliance with the order, and has the power to impose sanctions against the employer, including not only the cancellation of the contract at issue, but also debarment from future government contracts.

The second order: Nondisplacement of Qualified Workers Under Service Contracts, which requires government contractors who take over a service contract from an existing provider to retain qualified employees of the previous provider, also endows the Secretary with investigation and enforcement powers. According to Section 6 of this order:

the Secretary shall have the authority to issue final orders prescribing appropriate sanctions and remedies, including, but not limited to, orders requiring employment and payment of wages lost. The Secretary also may provide that where a contractor or subcontractor has failed to comply with any order of the Secretary or has committed willful violations of this order or the regulations issued pursuant thereto, the contractor or subcontractor, and its responsible officers, and any firm in which the contractor or subcontractor has a substantial interest, shall be ineligible to be awarded any contract of the United States for a period of up to 3 years.

The third order, which prohibits government contractors from assigning costs associated with dissuading employees from joining a union or engaging in collective bargaining to the government contract, does not similarly imbue the Secretary with broad enforcement powers.

Taken together, these orders do not merely reverse Bush-era labor policy. They indicate President Obama’s intent to empower the Secretary of Labor with the ability to investigate and penalize employers for potential violations. This is a clear departure from even past “labor-friendly” administrations.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.