By: Alexander J. Passantino, Paul H. Kehoe, and Lawrence Z. Lorber

On March 6, 2015, the Department of Labor submitted its final guidance pursuant to Executive Order 13673, titled Fair Pay and Safe Workplaces, to the White House’s Office of Management and Budget’s Office of Information and Regulatory Affairs (“OIRA”) for review. Review by OIRA is the final step in the process prior to the publication of this guidance.

As you may recall, on July 31, 2014, President Obama signed the Executive Order requiring prospective federal contractors to disclose “any administrative merits decision, arbitral award or decision, or civil judgment” to the contracting agency under fourteen federal statutes, Executive Orders and all equivalent state labor laws addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. In addition, the Executive Order directed (i) the Federal Acquisition Regulatory (FAR) Council to amend the Federal Acquisition Regulation to “identify considerations for determining whether serious, repeated, willful, or pervasive violations of labor laws… demonstrate a lack of integrity or business ethics” and (ii) the Secretary of Labor to develop guidance to assist agencies in determining whether labor law violations were issued for “serious, repeated, willful, or pervasive” violations. Finally, the Executive Order extended the Franken Amendment prohibiting companies with federal contracts over $1 million from maintaining mandatory arbitration agreements, despite the manifest legality of such agreements as determined by the Supreme Court.

As we have written previously, this Executive Order and related regulatory actions place significant additional labor, employment, and social requirements on the federal procurement system. This guidance from the Department of Labor will purportedly define what “serious, repeated, willful, or pervasive” violations are, and add an additional layer of complexity and additional remedial responses for federal contractors during the procurement process. In addition to the Department of Labor Guidance, the FAR Council must issue new regulations incorporating the Executive Order’s requirements into the procurement system and the procurement agencies must appoint Labor Compliance Advisors to interact with the procurement personnel in each agency to interpret the Labor Department guidance and the FAR regulations. We will, of course, keep you updated on the status of the guidance and provide analysis once published.