President Obama signed three Executive Orders on January 30, 2009 that will affect the way federal contractors do business. Failure to comply with these E.O.’s can lead to a government investigation, hearing and debarment.

The E.O. entitled “Nondisplacement of Qualified Workers Under Service Contracts” (available for download here) requires successor contractors and subcontractors performing the same or similar services at the same location to offer the predecessor’s employees, who may otherwise have been terminated, “a right of first refusal of employment” under the new contract. The requirement does not include supervisory or management employees, and it does not cover certain specified contracts.

The E.O. entitled “Notification of Employee Rights Under Federal Labor Laws” (available for download) requires contractors to post notices to be specified by the Secretary of Labor and reverses the Bush Administration’s requirement (E.O. 13201, pursuant to “Beck”) to post a notice advising employees that they can limit financial support for the unions representing employees in that workplace.

The E.O. entitled “Economy in Government Contracting” (available for download) requires activities undertaken to persuade employees in the manner of exercising (including to exercise or not to exercise) the right to organize and bargain collectively to be treated as “unallowable” costs. Activities such as labor-management committees and employee publications unrelated to such persuasive activities will be treated as allowable costs.