Labor & Employment Law Daily Trump scraps Obama EO giving hiring preference to displaced employees of past federal contractors
Tuesday, November 5, 2019

Trump scraps Obama EO giving hiring preference to displaced employees of past federal contractors

Executive Order 13495, issued by President Obama as one of his earliest official actions, was revoked on October 31. Displaced employees of predecessor government contractors won’t get first crack at successors’ jobs.

President Donald J. Trump on Thursday, October 31, issued an “Executive Order on Improving Federal Contractor Operations by Revoking Executive Order 13495.” The EO revokes an executive order issued by President Obama on January 30, 2009, freeing up federal government contractors to make hiring decisions independent of any obligation to offer employment to their predecessors’ workers when they take over a federal contract.

Trump said his EO aims “to promote economy and efficiency in Federal Government procurement.” Accordingly, he directed the Secretary of Labor, Federal Acquisition Regulatory Council, and heads of other executive departments and agencies to rescind any regulations or policies implementing the Obama administration’s past directive.

The Obama EO, “Nondisplacement of Qualified Workers Under Service Contracts,” required successor federal contractors to offer a right of first refusal in jobs to the displaced employees of the predecessor contractor in certain circumstances.

The DOL and FARC issued final rules implementing EO 13495 in December 2012. The DOL rule applied to all federal service contracts and solicitations made on or after January 18, 2013, and required that federal service contracts covered by the Service Contract Act above the current simplified acquisition threshold of $150,000 and solicitations for such contracts require contractors and their subcontractors to offer existing current employees the right of first refusal to take positions for which they are qualified under the new contract. (Managerial or supervisory employees would not have the right of first refusal.).

Trump also ordered the Secretary of Labor immediately to terminate any investigations or compliance actions arising from EO 13495. (Under the DOL rule implementing the Obama EO, contractors who were found to have violated the requirements could be barred from future federal contracts for up to three years.).

As noted by Littler, “If the predecessor contractor’s workforce was unionized, the revocation of EO 13495 could also affect whether the new contractor inherits its predecessor’s union.”

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