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Obama Acts to Deny Federal Contracts to Labor Law Violators

President Barack Obama today signed an executive order that will make it harder for companies with a history of labor law violations such as wage and hour and workplace safety to win federal contracts. Said Obama:

We expect our tax dollars to be spent wisely on these contracts. Our tax dollars shouldn't go to companies that violate workplace laws, they shouldn't go to companies that violate workers' rights.

From raising wages to workplace protections, said AFL-CIO President Richard Trumka, "President Obama is showing strong leadership where it’s needed most."

Today’s executive order is a commonsense measure that will make our contracting system fairer. Preventing tax dollars from being funneled to chronic violators of workers’ rights is good for workers, our economy and companies who play by the rules. When Congress shows the same leadership, all workers will be better off.

The order requires bidding companies to disclose a three-year history of labor law violations. Politico noted that a 2010 U.S. Government Accountability Office report found that many of the companies incurring the largest fines for wage-and-hour or workplace safety violations went on to win new federal contracts. Obama said most companies “do the right thing,” while he added:

But some don't, and I don't want those who don't to be getting a competitive advantage over the folks who are doing the right thing.

The order also forbids firms with more than $1 million in contracts to force employees to arbitration instead of the courts for violation of federal laws banning race, sex, national origin or religious discrimination.

Communications Workers of America (CWA) President Larry Cohen said the order,

Not only will establish a mechanism that ensures workers are treated fairly and lawfully, but is a good step toward providing incentives for employers who practice collective bargaining and follow other labor standards. 

Find out more about the Fair Pay and Safe Workplaces Executive Order here.

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