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President Barack Obama signs an executive order titled “Fair Pay and Safe Workplace” Thursday, July 31, 2014, at the Eisenhower Executive Office Building on the White House grounds in Washington. The executive order requires prospective federal contractors to disclose labor law violations, informing federal agencies before they award federal contracts. At left is Labor Secretary Tom Perez. (AP Photo/Charles Dharapak)
Obama order presses contractors to obey labor laws

President hopes to pressure the most egregious violators to clean up their act or else lose out on lucrative federal contracts.

First Published Jul 31 2014 06:46 pm • Last Updated Jul 31 2014 07:26 pm

Washington • President Barack Obama moved Thursday to require federal contractors to give their workers more rights in labor disputes, putting his pen to an executive order the day after the House voted to sue him for allegedly exceeding his presidential powers. In an election-year dare to Republicans, Obama said congressional obstinacy would only embolden him to take even more aggressive actions on his own.

By forcing companies to disclose recent labor law violations, Obama hopes to pressure the most egregious violators to clean up their act or else lose out on lucrative federal contracts, White House officials said. The order also requires that contractors give their workers information to determine whether their paychecks are accurate, and allow workers to have a judge, not an arbitrator, hear sexual assault and civil rights grievances.

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Numerous congressional studies show that the same U.S. companies that rack up the highest fines for labor violations continue to win billions of dollars in government contracts year after year. Obama said the vast majority of companies that contract with the government play by the rules — but some don’t.

"I don’t want those who don’t to be getting a competitive advantage over the folks who are doing the right thing. That’s not fair," Obama said.

Obama signed the order in front of a supportive audience of workers and labor advocates at the White House, where he goaded Republicans by offering to "wash their car, walk their dog" if they would agree to work with him to move his policies forward. Deriding the House GOP’s lawsuit against him as a waste of America’s time, he vowed not to let intimidation from Congress get in his way.

"We’re not going to stop," Obama said. "And if they’re not going to lift a finger to help working Americans, then I’m going to work twice as hard to help working Americans."

Facing opposition that’s only hardened as the midterm elections approach, Obama has searched for ways to use what he does control — the federal bureaucracy — to demonstrate the merits of his own proposals, albeit on a smaller scale. Thursday’s executive order adds to others Obama has signed this year, including requiring federal contractors to pay their workers at least $10.10 an hour and barring contractors from discriminating against gay or transgender workers.

Labor unions and civil rights groups cheered the executive order, calling it a boon for both taxpayer and workers.

"It’s going to send a very loud and clear message to all employers that do contracted work that it’s time to play by the rules," Mary Kay Henry, president of the Service Employees International Union, said in an interview.

But business groups derided Obama’s move as overreach by a politically motivated president. They argued there are plenty of laws and enforcement mechanisms to deal with companies that flagrantly violate labor laws.


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"The president seems to be using the federal procurement process as his own little ‘laboratory’ for bad ideas in labor policy, and this one is bound to have some unintended consequences," said Joe Trauger, vice president of the National Association of Manufacturers.

One provision of Obama’s order prohibits companies seeking contracts that exceed $1 million from requiring their workers to agree upfront to submit certain sexual assault, harassment and discrimination disputes to arbitration rather than seeking redress through the courts. The requirement that contractors divulge labor violations within the past three years applies to those bidding on contracts of more than $500,000.



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