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Obama issues Executive Orders as assault on “employment-at-will” doctrine continues

You hear us talk about the assault on the “employment-at-will” doctrine all the time. And you may wonder what the fuss is all about. Well, after the activities at the federal level, the picture will be a little clearer.

We have previously told you about efforts at the state level to pass a state law that would allow employers to be sued for taking employment action against employees who were gay, lesbian, transgendered, or claimed the action taken against them was because of their sexual orientation or gender identity. Associated Industries of Missouri was successful in working with other pro-employer organizations to stop this effort which has gained momentum over the last couple of sessions, even passing the Missouri Senate in 2013.

AIM’s position is that a new class of lawsuits against employers should not be created. Employers should not discriminate against anyone, and we encourage businesses to follow the lead of other businesses that have taken steps to enact policies that prohibit discrimination. But establishing new protected classes in state law comes at a price because it allows disgruntled employees a new avenue to sue employers. And with Missouri’s very low standard of proof for discrimination cases, employers are left nearly defenseless against such claims – whether they are true or not.

AIM is also concerned that recent anti-employer court decisions regarding whistle-blower and discrimination claims continue to erode the employment-at-will doctrine: the ability of an employer to employ or dismiss an employee with or without cause. As a result of these decisions and the low standard of proof that has evolved, we have seen employers settle such cases much too often, and plaintiffs’ attorneys are well aware of this fact.

So we have faced this assault at the state level over the last couple of legislative sessions and successfully defeated the legislation. But lobbyists will be pushing the issue again next session, according to statements attributed to one such lobbyist (who also happens to lobby for the Missouri AFL-CIO) in an article this week in The Missouri Times.

But now we are facing activity that is very concerning from the federal government, and of special concern to you if you have a federal contract.

President Obama hit select employers with new federal requirements by amending or enacting three Executive Orders in just 10 days.

On July 21, 2014, President Obama amended two Executive Orders to prohibit the federal government (as an employer) and certain federal contractors from discriminating on the basis of sexual orientation or gender identity.

Executive Order 11246, originally issued by President Lyndon B. Johnson, prohibited federal contractors from discriminating “against any employee or applicant for employment because of race, color, religion, sex, or national origin.” President Obama’s Executive Order adds sexual orientation and gender identity to the list of protected categories, according to a statement on the White House website.

Executive Order 11478, issued by President Nixon, applies to the federal government and prohibits discrimination against federal employees on the basis of race, color, religion, sex, national origin, disability, and age. It was later amended by President Clinton to include “sexual orientation.” President Obama’s Executive Order will add “gender identity” to the list of protected categories.

The terms, “sexual orientation” and “gender identity” are not defined in the Executive Order, but the Secretary of Labor is ordered to “prepare regulations to implement the requirements” of the order. While other protected classes such as “race”, “age”, and “sex” are easier to identify and define, these new classes may not be as easy to define and their definition will be important to employers that are directly affected by this new federal mandate.

Wikipedia defines “gender identity” as “a person’s private sense, and subjective experience, of their own gender. This is generally described as one’s private sense of being a man or a woman, consisting primarily of the acceptance of membership into a category of people: male or female.Dictionary.com defines the term as “a person’s inner sense of being male or female…”.

If a person’s “private” or “inner sense” is now a protected class, how is an employer to know that a person is a member of that protected class in the first place? Is it possible that an employer could take action against an employee, not knowing of this very private situation, and then find themselves the victim of a lawsuit claiming discrimination?

Again, the new Executive Order affects only certain federal contractors and the federal government.

BUT THAT’S NOT ALL…

Just yesterday, July 31, 2014, President Obama issued a third Executive Order – this one also affecting federal contractors. The Fair Pay and Safe Workplaces Executive Order will govern new federal procurement contracts valued at more than $500,000 and is expected to be implemented in stages during 2016. The new Executive Order would essentially bar federal contractors from securing new federal contracts if they have violated any labor laws in the last three years.

Joe Trauger, Vice President of Human Resources Policy at the National Association of Manufacturers, sent an email with more details regarding the Executive Order yesterday noting key components as follows:

  1. Directs contractors to disclose any labor law violations from the past three years before they can be awarded a contract. This will also apply to subcontractors. There are 14 covered Federal statutes and equivalent state laws, which wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections.

  2. Contracting officers will take into account only the most egregious violations, and each agency will designate a senior official as a Labor Compliance Advisor to provide consistent guidance on whether contractors’ actions rise to the level of a lack of integrity or business ethics.

  3. Requires contractors to give their employees information concerning their hours worked, overtime hours, pay, and any additions to, or deductions made from their pay, so workers can be sure they’re getting paid what they’re owed.

  4. Directs companies with federal contracts of $1 million or more not to require their employees to enter into pre-dispute arbitration agreements for disputes arising out of Title VII of the Civil Rights Act or from torts related to sexual assault or harassment (except when valid contracts already exist).

  5. Directs the General Services Administration to develop a single website for contractors to meet their reporting requirements—for this order and for other requirements.

  6. Federal contractors and other stakeholders will be invited to participate in listening sessions with Office of Management and Budget, the Department of Labor, and senior White House officials to share views on how to implement the Executive Order.

Mr. Trauger also notes the Executive Order was prompted by a letter sent last week from Representatives Keith Ellison (D-MN) and Raul Grijalva (D-AZ), Co-Chairs of the Congressional Progressive Caucus, requesting an Executive Order. “This Executive Order and the amendments previously offered on the House floor over the past several weeks, completely circumvent the current process, well-established by the Federal Acquisition Regulation (FAR) in which contracting officers and agency suspension and debarment officials already consider a contractor’s integrity and business ethics before bringing an action to bar a contractor from new work.”

We will continue to monitor this situation and report developments to you.

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