The Fair Pay and Safe Workplaces Executive Order Creates Uncertainty for Government Contractors
On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order (FPSW Executive Order). The crux of the FPSW Executive Order is that it requires federal government contractors (including subcontractors) to disclose labor law violations. The disclosure applies to any "administrative merits determination, arbitral award or decision, or civil judgment" related to the Fair Labor Standards Act, the Occupational Safety and Health Act, the Migrant and Seasonal Agricultural Worker Protection Act, the National Labor Relations Act, the Davis-Bacon Act, the Service Contract Act, Equal Employment Opportunity Executive Order 11246 of September 24, 1965, the Rehabilitation Act of 1973, the Vietnam Era Veterans' Readjustment Assistance Act of 1974, the Family and Medical Leave Act, the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors) or equivalent State laws. The FPSW Executive Order allows contracting officers to consider such disclosures in making responsibility determinations pre-award.
The FPSW Executive Order also authorizes federal officials to negotiate remedial programs with contractors under threat of contract termination and imposes substantial administrative burdens on contractors that report their own and subcontractors' violations.
Practical Tip: Civil litigation of the aforementioned labor laws, which include equivalent State laws, often results in settlements (including Rule 68 offers of judgment). If the settlement involves any type of judgment, you may be required to disclose the judgment even if the judgment denies liability. You should consult your attorney for guidance regarding any unintended consequences of settling such cases.
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