On the last day of July 2014, President Obama signed an executive order that binds prospective government contractors to stronger labor laws, called the Fair Pay and Safe Workplaces order. One part of the order requires transparency about a company’s history of labor violations, requiring companies seeking contracts of $500,000 or more to make any of its previous labor law violations public. This is designed to push companies to resolve back wage claims and other labor disputes.
But that’s not even the exciting part. The order also prohibits companies pursing federal contracts of more than $1 million from requiring their workers to sign mandatory arbitration agreements, usually as a condition of employment. Forced arbitration strips workers of their right to sue their employer for labor violations, steering complaints to an intermediary (in most every case chosen by the company) that hears both sides of the dispute and decides the case.
Paul Bland, executive director of Public Justice, calls the order “one of the most important positive steps for civil rights in the last 20 years.” President Obama did something that was long overdue when he signed this monumental executive order that will protect millions of American citizens.
The following is a statement from Lisa Blue Baron, American Association for Justice President, on the announcement of the Fair Pay and Safe Workplaces executive order. Lisa explains the significance of this highly important action by the president.
We are pleased and strongly encouraged by the announcement of the Fair Pay and Safe Workplaces executive order, which will restore access to justice for millions of Americans whose rights have been eliminated by the abusive practice of forced arbitration. For far too long, corporations have used forced arbitration to deny Americans their Constitutional and statutory rights by kicking employees and consumers out of court and sending them to a dispute mill that is rigged, secretive, contains virtually no right to appeal, and consistently favors corporate America.
This executive order is a tremendous victory for all employees of big corporations that do business with the government. Now workers will be able to enforce their rights to be employed in a workplace free from discrimination. “Still, there are other fundamental federal and state laws that workers will not be able to enforce in court because of forced arbitration. Forced arbitration also prevents credit card users, nursing home residents, service members, and students from holding corporate wrongdoers accountable. We must continue the fight to ban forced arbitration in all contexts, otherwise there is nothing to prevent corporations from eviscerating Americans’ rights with the fine print.”
The Fair Pay and Safe Workplaces executive order prohibits corporations with federal contracts of $1 million or more from subjecting their employees to forced arbitration for accusations of employment discrimination or civil suits related to sexual assault or harassment. This prohibition extends to all employees – not just those performing work related to the federal contract.
The Department of Labor estimates that there are roughly 24,000 businesses with federal contracts, employing about 28 million workers. In addition to the ban on forced arbitration for disputes under Title VII, and sexual assault and harassment, the executive order will:
Require prospective contractors and their subcontractors to disclose labor law violations from the past three years before they are awarded a federal government contract; ensure that corporations that repeatedly violate the rights of their employees and disregard workplace safety don’t receive federal government contracts; require corporations to provide employees with information concerning their hours worked, overtime hours, pay, and any additions to or deductions made from their pay so employees can be sure they’re getting paid what they’re owed.
Because corporations with workplace violations are more likely to encounter performance problems, the president’s action will also improve the efficiency of federal contracting and result in savings to American taxpayers.
President Obama is to be commended for taking this action. No longer can the overwhelming majority of companies doing business with the federal government hide behind forced arbitration and use it as a shield when their employees are victims of wrongful conduct.
Source: Sarah Jones; American Association for Justice; 202-684-9582; email@example.com
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