?On July 15, the U.S. Department of Labor published in the Federal Register a notice of proposed rulemaking (NPRM) to implement the nondisplacement protections under Executive Order 14055 for employees of large federal service contracts. We’ve gathered articles on the NPRM from SHRM Online and other outlets.
Reinstated Executive Order
When a service contract expires and a follow-on contract is awarded for similar service, the successor contractor often hires the majority of the predecessor’s employees. Sometimes, a successor contractor hires a new workforce, displacing the predecessor’s employees. In 2021, President Joe Biden reinstated by executive order a requirement that successor service contracts and subcontracts include a clause that requires the contractor, and its subcontractors, to offer those individuals employed under the predecessor’s contract a right of first refusal of employment under the new contract in positions for which they are qualified.
Benefits of a Carryover Workforce
“Using a carryover workforce reduces disruption in the delivery of services during the period of transition between contractors, maintains physical and information security, and provides the federal government with the benefits of an experienced and well-trained workforce that is familiar with the federal government’s personnel, facilities and requirements,” the executive order stated. “These same benefits are also often realized when a successor contractor or subcontractor performs the same or similar contract work at the same location where the predecessor contract was performed.”
NPRM’s Goals
The NPRM would establish standards and procedures for implementing and enforcing Executive Order 14055. Executive Order 14055’s requirement applies to contractors and subcontractors performing work on covered federal service contracts—that is, most Service Contract Act contracts over $250,000.
Only Qualified Employees Protected
Employers don’t have to offer a right of first refusal to any employee of the predecessor contractor when the contractor reasonably believes, based on reliable evidence of the particular employee’s past performance, that there would be just cause to discharge the worker if employed by the contractor.
Déjà Vu
If this all seems familiar, it’s because the concept of nondisplacement goes back to at least the Clinton administration, and subsequent administrations have both rescinded and revived the policy. Comments on the NPRM are due by Aug. 15.