President Barack Obama on July 31, 2014 signed the Fair Pay and Safe Workplaces Executive Order, continuing with the "year of action" to move forward with authorized and necessary reforms to labor and employment laws despite Congressional gridlock. Since his State of the Union pledge, the President has signed several executive orders impacting federal contractors that will raise the minimum wage, ban discrimination against LGBT workers, and prohibit retaliation for discussing compensation. The Fair Pay Executive Order requires prospective federal contractors to disclose labor law violations and will give federal agencies more guidance on how to consider such breaches when awarding federal contracts. Significantly, the Executive Order extends the Franken Amendment to companies with federal contracts (not just defense contractors) over $1 million, prohibiting them from requiring their employees to enter into pre-dispute arbitration "agreements" for disputes arising out of Title VII of the Civil Rights Act of 1964 or from torts related to sexual assault or harassment (except when valid contracts already exist).
The Franken Amendment, first enacted in 2009, bans defense contractors receiving federal contracts over $1 million from forcing their employees to arbitrate the same types of claims. The Executive Order builds on a policy already passed by Congress and successfully implemented by the Department of Defense, the largest federal contracting agency, and will help improve contractors' compliance with labor laws. The White House fact sheet on the Executive Order can be found at www.whitehouse.gov.
The National Employment Lawyers Association and its Fair Arbitration Now coalition partners issued a statement praising the President’s action, urging Congress to ban forced arbitration for all employment disputes by enacting the Arbitration Fairness Act (AFA, H.R. 1844/S. 878).