Labor Pressing Obama for Action on Contractor Workers' Union Rights

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By Sam Skolnik and Ben Penn

Sept. 27 — Labor groups and lawmakers are pressuring the Obama administration to issue perhaps its furthest-reaching executive order aimed at federal contractors — this time to strengthen workers’ union rights.

Labor and progressive leaders told Bloomberg BNA that the administration is discussing a possible post-election action: a model employer executive order (EO), including a labor peace clause that would mandate that contractors affirm workers’ right to unionize in return for a no-strike pledge.

However, an administration official downplayed the possibility that the White House currently has plans for a new contractor-focused EO.

President Barack Obama has already signed 13 EOs and presidential memoranda ordering government contractors to establish a higher minimum wage, provide paid sick leave and comply with a host of additional regulations.

Asked to confirm whether the White House and Labor Secretary Thomas Perez are considering a model employer-type policy as the president is close to leaving office, Rep. Keith Ellison (D-Minn.) told Bloomberg BNA it remains on the table.

“I’ve been familiar with the discussion, and it’s ongoing. But as far as I know, it’s speculative at this point,” Ellison said in a recent interview. “Is the conversation happening? You bet it is.”

A model employer EO also could require that agencies give preference to businesses that pay workers a minimum wage of $15 per hour and provide benefits such as health insurance, full-time hours and stable work schedules, the labor leaders said.

Such an EO would infuriate federal contractor groups, which have repeatedly expressed concerns about the effects of Obama’s existing EOs.

The unions advocating for this EO see it as the only remaining way Obama could substantially boost union membership, reversing decades of declines. If their wish isn't granted and Democrat Hillary Clinton is elected president, the labor federation Change to Win said it would repeat its request to her transition team.

Supporters of Sen. Bernie Sanders (I-Vt.) succeeded in July at including a plank in the final version of the 2016 Democratic National Convention (DNC) platform that explicitly supports a model employer EO. To build on that momentum, Democratic lawmakers from the Senate and the House engaged with the White House about taking action in Obama’s final months, according to a source familiar with the conversations.

The administration’s response was, “‘We’re taking a look at it,’” said the source, who spoke on condition of anonymity.

Quality of Life

Bill Samuel, government affairs director for the AFL-CIO, told Bloomberg BNA that now that regulations are finalized for the Fair Pay and Safe Workplaces EO, which requires contractors to disclose certain labor law violations, the labor movement believes a model employer EO may be the next logical step.

“We’re all looking at that,” Samuel said. “It’s certainly our goal that the government should be an employer that raises living standards, and improves quality of life for working families.”

Yet there are still political and legal obstacles that could prevent such an executive order from being issued at this stage.

Not for Now

The administration declined to confirm or deny whether meetings have been taking place. But an administration official said they aren’t interested in pursuing a model employer EO — for now, anyway.

Obama continues to support collective bargaining rights, but a model employer EO “is not something the Administration is considering at this time,” an administration official told Bloomberg BNA in a written statement.

Obama’s contractor-focused EOs, including the order to institute a $10.10 minimum wage for contractor workers and the Fair Pay and Safe Workplaces EO, reflect his support of unions and workers, the official wrote.

Contractors Ready to Fight

Federal contractor representatives and their political allies said they believe it's probable — not just possible — that Obama will issue one or more new EOs that target contractors before his term is over.

Rep. Cresent Hardy (R-Nev.), who serves on the House Small Business Committee, which recently held a hearing that mostly focused on the negative consequences of Obama’s EOs on smaller government contractors, said the president’s track record is clear.

“My gut feeling is that there’s no doubt that he’s going to push through as much as he can,” Hardy, chairman of the Subcommittee on Investigations, Oversight and Regulations, told Bloomberg BNA. “He’s been on a record pace to continue to regulate, and he has a short time to do his agenda. He’s proven over and over again he doesn’t care to go through Congress.”

If Obama issues something akin to a model employer EO, including a labor peace agreement, “you'd see a lot of companies walk away from the federal market,” Trey Hodgkins, senior vice president, Public Sector, at the Information Technology Alliance for Public Sector (ITAPS), told Bloomberg BNA. For smaller businesses in the federal contracting space, “it could have existential ramifications,” he said.

Obama’s plans to sign additional contractor-focused EOs already have likely been set in motion, Alan Chvotkin, executive vice president and counsel for the Professional Services Council (PSC), told Bloomberg BNA. “My sense is that these have already been written and vetted” by executive branch attorneys, he said, adding that he not heard specifically that a model employer EO was in the mix.

If such an EO is issued, contractor groups would, at a minimum, be ready to work the regulatory process to try to lessen its sting, through extensive comments made during the rulemaking process, Chvotkin said. The PSC and other groups did this in response to the paid sick leave and Fair Pay and Safe Workplaces EOs, among others.

Another tactic would be legislation, he said, which could be akin to the provisions in the House and Senate versions of the National Defense Authorization Act for fiscal 2017, currently in conference committee. The bills in both chambers would exempt defense contractors from the Fair Pay and Safe Workplaces EO.

Finally, the business groups could go the legal route. “Litigation is difficult but not impossible,” Chvotkin said.

Union Density

The Change to Win labor federation, which has pushed for responsible contracting standards since Obama’s transition to office, is convinced the president may have a parting gift for unions through a labor peace order.

“This noncommittal statement is very similar to other responses the administration has given right before the president took executive action,” Joseph Geevarghese, Change to Win’s deputy director, told Bloomberg BNA when presented with the administration’s statement.

The labor federation holds out hope, Geevarghese said, because it sees the post-election environment as a good opportunity for Obama to boost union density — something he has not yet been able to accomplish despite making other important worker-friendly strides.

“The most important way that the president can secure his legacy is to make sure that low-wage workers, especially the federal contract workers who have been going out on strike, have a seat at the table,” Geevarghese said.

Change to Win’s campaign arm, Good Jobs Nation, has organized 18 single-day walkouts since 2013 by contractor workers at many of Washington’s landmark federal buildings.

Creating a Win

A model employer EO wouldn’t only be a boon to organized labor, it could be of great benefit to about 8 million low-wage federal contract workers affected by it, according to the liberal think tank Demos.

The likelihood of a model employer executive order — or any presidential action that incorporates its principles—hinges on the presidential election, said Ellison, co-chairman of the Congressional Progressive Caucus. A Clinton victory over Republican Donald Trump on Nov. 8 “would create a win,” he said, by allowing Obama to take action in his final weeks in office, knowing that the implementation tasks could be handed off to a like-minded Clinton administration.

But if Trump wins, Ellison said, “Obama would know, ‘Hell, anything I do is going to be reversed.’”

A Trump victory wouldn’t necessarily preclude Obama from signing a model employer EO, but it would make it less likely, several sources said.

A Clinton win would also provide the possibility that if Obama fails to act on a model employer EO, she might. Sen. Elizabeth Warren (D-Mass.), a supporter of Change to Win, told Bloomberg BNA in a written statement that the next president should build on Obama’s accomplishments.

“One of the most effective tools the President has for improving the economic security of working Americans is to pursue ambitious executive actions,” Warren wrote. “President Obama has raised the minimum wage for federal contractors and guaranteed paid sick leave, giving millions of Americans a little more financial security. The next administration should build on this work, including banning the use of non-competes in federal contracts, requiring federal contractors enroll their employees in retirement plans, and requiring that all federal contractors have some certainty and predictability around their work schedules.”

Shifted Priorities

An EO that includes a labor peace provision would likely not build union membership as robustly as several Democratic-sponsored labor bills, such as “card check” legislation, which would have required employers to bargain with a union if a majority of workers simply signed on in favor of representation.

But it’s considered Obama’s final shot to give unions more leverage in their quest to boost membership. “In this moment where it’s unlikely that Congress is going to flip, probably the only way that unions will be able to grow in the next four to eight years is through executive action,” Geevarghese said.

The advocacy for a model employer EO began before Obama became president.

Change to Win and its largest affiliate, the Service Employees International Union, proposed a high-road contracting EO, which included union neutrality, during then-Senator Obama’s transition to office in 2008. After initial consideration, the White House shifted priorities, Geevarghese said.

Costly and Burdensome

But the idea of a model employer EO picked up steam over the summer. New York City issued an EO requiring that some contractors enter a labor peace with unions. The Democratic convention adopted its model employer EO plank. The following week, a New York Times editorial called for the president to issue such an EO.

Groups that represent federal contractors sense this, and are bracing for the possibility of a last-minute EO from Obama.

Over the years, contractors have cried foul over the current administration's EOs they say reflect an inherently anti-business agenda — or, which have shifted “power and decisions away from the employer and to the employee,” as one government contracts attorney told Bloomberg BNA in March.

Contractors concede that some of Obama’s EOs haven’t been too difficult to implement, and that many companies that do business with the government had adopted the underlying policies long before the feds ordered them to. They include the EOs to institute a $10.10 minimum wage, and another that barred contractors from discriminating against lesbian, gay, bisexual and transgender employees.

Other EOs, such as the Fair Pay and Safe Workplaces EO, have been tougher to implement, with few practical public policy benefits, contractors said, and in some cases have convinced companies not to do business with the federal government.

Leaders from four contracting trade associations — the PSC, the National Defense Industrial Association, the Aerospace Industries Association and ITAPS — expressed concern to the White House last year about the volume of EOs.

“[T]he net effect has been to significantly increase the costs of doing business with the government,” they wrote. “This rapid growth in compliance requirements is becoming untenable.”

To contact the reporters on this story: Sam Skolnik in Washington at sskolnik@bna.com; Ben Penn in Washington at bpenn@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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