Obama pulls a two-fer with his pen and phone. WSJ:
August is a month of political vacations, so naturally the Obama Administration is using the free time to push through more policies that do an end run around Congress. The latest dash is an executive order from President Obama that would unilaterally reshape federal employment policy, create negotiating leverage for labor unions and open new platforms for the plaintiffs bar. How’s your summer going?
Under the order signed last week, contractors and subcontractors who receive more than $500,000 in federal money will be obliged to report to government agencies any labor-law violations going back three years. The order covers violations of everything from family and medical leave to federal wage and hour laws in the three years before applying for a contract.
That’s not all. There will now be a labor contract adviser at every federal agency handling contracts. They’ll be busy. The Executive Order fact sheet notes that the new reporting rules will sweep in some 24,000 businesses with federal contracts, employing about 28 million workers, according to Labor Department estimates.
For organized labor, this is political leverage from heaven. When unions are in a collective bargaining fight with a company, they typically file complaints with the likes of OSHA, the National Labor Relations Board and the Equal Employment Opportunity Commission. Under the new executive order, the government will have the ability to revoke the contracts of those with violations. That’s punishment above and beyond any remedies meted out by the NLRB.
That would be another finger on the scales to force settlements on terms favorable to the President’s political allies. If you’re a government contractor, any time a union files an unfair labor practices charge, the pressure to settle becomes overwhelming. Choose to fight and you face not only the civil penalties of violating a law but the risk of having your federal contracts revoked or suspended.
For the trial lawyers, the executive order includes a transparency provision that requires contractors to provide their employees with information about pay, overtime pay and deductions
as a condition of receiving a federal contract. The plaintiffs bar has complained that inadequate record-keeping is a stumbling block to their litigation. Now, via the Obama pen, they’ll have more data to feed lawsuits over the Fair Labor Standards Act.
Another trial-lawyer gift bars pre-dispute arbitration from certain types of employment litigation, funneling them to the plaintiffs bar instead. Gentlemen, start your cash registers.
The new regime in effect rewrites U.S. labor laws, from the Fair Labor Standards Act to the Americans with Disabilities Act, all of which have existing remedies for violations specified by Congress. The President is empowered to make changes that “promote efficiency in federal contracts,” but we’d like to know how that gives him the legal authority to add remedies for violations of labor laws that already have free-standing penalties.
Former President Bill Clinton tried a similar gambit with an executive order barring the government from giving federal contracts to companies that hired permanent replacements for striking workers. The D.C. Circuit Court of Appeals rejected that effort in 1996’s Chamber of Commerce v. Reich. The court struck down the order on grounds that it violated the National Labor Relations Act.
Judge Laurence Silberman wrote that the Clinton order should fail because it “seeks to set a broad policy governing the behavior of thousands of American companies and affecting thousands of American workers. . . . No state or federal official or government entity can alter the delicate balance of bargaining and economic power that the NLRA establishes, whatever his or its purpose may be.”
With the array of labor law already in place, it’s easy for large companies to get tripped up on technical violations. The real point of the order is to establish mechanisms for interest groups to roll over employers who don’t accede to their demands. Sounds a lot like the way Mr. Obama is handling Congress.