On Friday, January 30, President Obama signed three executive orders which have a significant impact on the rights of employees of federal contractors. The President said that these orders would “reverse many of the policies towards organized labor that we’ve seen these last eight years, policies with which I’ve sharply disagreed.” In effect, these Executive Orders favor the interests of organized labor concerning representation of employees of federal contractors.

One order requires that a company taking over a federal contract from a predecessor company offer jobs to nonsupervisory employees already on the job when the new contractor takes over. This requirement is a revival of a Clinton administration order that was rescinded by President Bush. This Executive Order essentially gives the incumbent employees a right of first refusal for jobs with the new contractor. The effect is that if the employees were represented by a union with the predecessor company, the incoming company will have to recognize the union as the representative of the employees and bargain with the union over the initial terms and conditions of employment that will apply on the job.

A second order reverses a Bush administration executive order requiring federal contractors to post a “Beck notice.” Based on the United States Supreme Court decision in Communication Workers of America v. Beck (1988), the Bush order required federal contractors to post notices alerting workers to the fact that the union representing them could not use their dues money for things other than collective bargaining and related matters. President Obama’s order lifts the Bush requirement but also imposes a new obligation on federal contractors. Now federal contractors will be required to post a notice informing employees of their right to join or to choose not to join unions. 

The third order prohibits federal contractors from being reimbursed by the government under their contracts for expenses incurred trying to influence employee attitudes about union organizing. This could include costs incurred for hiring legal counsel, holding meetings with employees or distributing information to employees, if those activities are intended to persuade employees to exercise or not to exercise the right to join unions. The practical implication is that federal contractors who choose to exercise their rights under the law to have non-coercive communications with employees about union organizing will have to be careful to account for how those activities are paid for and will have to assure that no portion of funds received under the federal contracts are used in support of those activities.

Overall, these orders undo certain Bush administration policies, and signal a clear shift in favor of organized labor.