November 15, 2019

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President Trump EO Revokes Workers’ Right of First Refusal with Successor Service Contract Employers

President Donald Trump signed an executive order on October 31 revoking the obligation of successor government service contract employers to offer their predecessor employers’ employees the right of first refusal in positions for which they are qualified.

Executive Order on Improving Federal Contractor Operations by Revoking Executive Order 13495” provides no explanation for the revocation, but the move likely was influenced by the new Secretary of Labor, Eugene Scalia.

Federal contractors are no longer required to post or provide any Executive Order 13495 (EO 13495) notices. The October 31 revocation, however, does not affect federal contractors’ other posting or notice obligations, including those under Executive Order 13496, which requires certain federal contractors to post a “Notification of Employee Rights under Federal Labor Laws.”

Executive Order 13495

Beginning in 2013, EO 13495, “Nondisplacement of Qualified Workers under Service Contracts,” provided some protection (a right of first refusal for continued employment) to qualified service workers when a government contract was replaced with a new contract and successor contractor at the same location.

EO 13495 and its implementing regulations applied to any contract or subcontract for services entered into by the federal government or its contractors covered by the McNamara-O’Hara Service Contract Act (SCA). It required that qualified workers (non-exempt workers covered by the SCA’s requirements) on a covered contract who stood to lose their jobs because of the completion or expiration of a contract be given a right of first refusal for employment with the successor contractor.

Generally, the successor contractor was prohibited from hiring any new employees under the successor contract until qualified workers performing the prior contract were provided the opportunity to accept a job with the successor. EO 13495 applied only to successor contracts for the performance of the same or similar services at the same location.

EO 13495 required the predecessor contractor to provide written notice to eligible employees by a conspicuous workplace posting or with notices delivered to the employees individually.

Revocation

The new executive order requires the Labor Secretary and others to “promptly move to rescind any orders, rules, regulations, guidelines, programs, or policies implementing or enforcing Executive Order 13495.” Significantly, it immediately terminates any existing investigations or compliance actions based on EO 13495.

Previously, the President had revoked other Executive Orders signed by President Barack Obama, including the “Blacklisting” Order.

Jackson Lewis P.C. © 2019

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About this Author

Laura Mitchell, Jackson Lewis, Management Representation lawyer, Contractual Drafting Attorney
Principal

Laura A. Mitchell is a Principal in the Denver, Colorado, office of Jackson Lewis P.C. She represents management exclusively in all areas of employment law, focusing on affirmative action and government contractor compliance.

Ms. Mitchell is a Principal in the firm’s Affirmative Action and OFCCP Defense practice group, representing government and non-government contractors in Office of Federal Contract Compliance Programs (OFCCP) matters, preparing for and defending OFCCP audits, and counseling employers on issues stemming...

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Leslie Stout-Tabackman, Labor Employment Attorney, Shareholder, Jackson Lewis Law Firm
Shareholder

Leslie Stout-Tabackman is a Principal in the Washington, D.C. Region office of Jackson Lewis P.C. She has a broad-based practice counseling and representing employers on compliance with federal and state workplace laws and regulations, and designing and implementing sound practices and policies.

Ms. Stout-Tabackman regularly counsels and represents clients with matters before the U.S. Department of Labor’s (DOL) Wage and Hour Division, including Fair Labor Standards Act (FLSA) issues and prevailing wage and benefits issues arising under the Service Contract Act (SCA) and the Davis-Bacon Act (DBA). Her prevailing wage practice includes counseling federal contractors and providing comprehensive training on SCA and DBA prevailing wages and benefits requirements, coverage, exemption and worker classification issues, and related contracting procedures from the solicitation and bid stage through completion of the contract. Her wage and hour practice includes advising clients on compliance with the minimum wage and overtime obligations of the FLSA and state wage and hour laws, including classification of positions as exempt or nonexempt, overtime requirements for nonexempt employees, compensation policies for exempt employees, conducting voluntary FLSA compliance audits,and providing education and training sessions for clients on these topics. She regularly represents clients facing DOL FLSA, SCA and DBA audits and has advised and represented clients on these matters before the DOL’s Administrative Review Board.

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