On February 17, 2022, the United States Department of Agriculture (USDA) published a Notice of Proposed Rulemaking updating USDA’s Agriculture Acquisition Regulation (AGAR), the agency’s counterpart to the Federal Acquisition Regulation (FAR).  In the proposed rulemaking, USDA included a requirement to add two new clauses that would revive and expand the Obama-era “blacklist rule” requiring contractors to disclose violations of certain labor and employment laws, and certify compliance with labor laws during the term of the contract. USDA’s new AGAR regulation requires the agency to include two clauses in every supply and service (including construction) acquisition above the simplified acquisition threshold.  The first clause, entitled “Labor Law Violations,” requires the contractor to certify compliance with 15 specified labor laws, and equivalent state-law enactments, and promptly report to the contracting officer any future adjudications of noncompliance. Contractors must also certify, to the best of their knowledge, that their subcontractors and suppliers are in compliance with the specified laws.  Under the clause, these certifications may give rise to False Claims Act liability if untrue. The second clause, entitled “Past Performance Labor Law Violations,” requires contractors submitting offers to certify that they and any subcontractors are in compliance with all previously required corrective actions for adjudicated labor law violations, and to provide a list of any such violations prior to award. The labor laws that are subject to the certification requirement include: Fair Labor Standards Act (FLSA), Occupational Safety and Health Act (OSHA), National Labor Relations Act (NLRA), Service Contract Act (SCA), Davis-Bacon Act (DBA), Title VII of the Civil Rights Act, Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), and Family and Medical Leave Act (FMLA), among others. USDA’s move brings to mind the saying that “everything old is new again,” and in that vein, it is worth reviewing the prior history of the Obama-era efforts to impose a similar certification requirement across federal contracting.  On July 31, 2014, then President Obama issued Executive Order 13673 requiring contractors to disclose alleged labor law violations in connection with contracting proposals, ostensibly for the purpose of assisting agencies in their “responsible source” determination.  However, the Executive Order’s implementation was enjoined by a federal judge in October 2016.  Congress then repealed the implementing regulations on March 27, 2017, using a procedure that barred the FAR Council from issuing a similar rule without Congress’s affirmative approval. USDA’s proposed rulemaking could be the start of individual agency-level efforts to impose Executive Order 13673’s requirements on an agency-by-agency basis.  Given the history of the Obama Administration’s similar blacklisting rule, one can expect legal challenges if the rule is eventually finalized.

In a rare showing of bipartisanship, the Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which allows employees or others to escape mandatory arbitration clauses in connection with any case raising issues of sexual harassment or assault. President Biden previously expressed support for the bill and is expected to quickly sign it into law. Specifically, the bill gives employees and others alleging a “sexual assault dispute” or “sexual harassment dispute” the ability to elect to render a mandatory arbitration clause invalid or unenforceable.  Because this ability is phrased as an “election,” it appears that the person resisting arbitration must affirmatively challenge the arbitration agreement, rather than the arbitration agreement being entirely unenforceable. The bill defines a “sexual assault dispute” as a “dispute involving a nonconsensual sexual act or sexual contact”. A “sexual harassment dispute” is defined as a dispute relating to any of the following conduct directed at an individual or group of individuals: Unwelcomed sexual advances. Unwanted physical contact that is sexual in nature, including assault. Unwanted sexual attention, including unwanted sexual comments and propositions for sexual activity. Conditioning professional, educational, consumer, health care, or long-term care benefits on sexual activity. Retaliation for rejecting unwanted sexual attention.” The bill applies not only to federal claims under Title VII of the Civil Rights Act of 1964, but also to state and tribal law claims as well.  Employees can also avoid class, collective, or multi-plaintiff action waivers in connection with sexual harassment or sexual assault disputes.  In addition, the bill provides that the validity and enforceability of an agreement is to be decided by the court, rather than an arbitrator, which will likely increase the probability that disputes will be resolved in favor of court litigation rather than arbitration. Employees frequently bring a sexual harassment, also referred to as hostile work environment, claim as part of a broader action with other employment-based claims.  Although the bill does not explicitly address how mandatory arbitration would apply to such a mixed action, it provides that it reaches actions that “relate to” sexual harassment or assault claims.  This broad language raises the prospect that employees alleging sexual harassment along with other, potentially unrelated claims will be able to litigate the entire dispute in court. The new bill, once signed, will undoubtedly have far-reaching implications given the millions of individuals subject to arbitration clauses.  Numerous recent Supreme Court decisions giving broad construction of the scope and applicability of the Federal Arbitration Act (“FAA”) may be called into question. Polsinelli attorneys will continue to monitor for related developments. Arbitration has long been a key tool in employers’ playbooks to manage their risk and potential liability under the plethora of federal, state, and local laws governing their personnel practices.  This bill deals a blow to employers’ ability to mandate arbitration in the context of sexual harassment claims.  Employers who rely on mandatory arbitration as part of their risk management programs should consult with counsel to adjust their practices in response to this bill and other recent developments.

Beginning on May 15, 2022, employers in New York City must begin listing salary ranges in any advertisements for jobs, promotions, or transfer opportunities. The new measure is the latest in a nationwide trend of state and local laws designed to promote pay equity by increasing employee bargaining power in pay negotiations. Under the new law, any employer with more than four employees in New York City commits an “unlawful discriminatory practice” if it advertises a job, promotion, or transfer opportunity without stating the minimum and maximum salary for that position in the advertisement. Notably, independent contractors are included in the calculation of whether an employer meets the four-employee threshold. The employer must list a salary range extending from the “lowest to the highest salary the employer in good faith believes at the time of the posting it would pay” for the advertised job. The disclosure requirement does not apply to temporary staffing firms. Under the New York City Human Rights Act, the penalties for violations are hefty, as the city can impose a civil monetary penalty of up to $125,000 per violation, or $250,000 for violations that result from an employer’s willful, wanton, or malicious action. The law does not define or specify what types of communications regarding open positions qualify as advertisements. Based on the inclusion of advertisements for promotion or transfer opportunities, it appears that the disclosure requirement applies to internal listings as well as advertisements to the public. In addition, the law requires disclosure of a “salary” range, but does not specify what if any additional disclosure must be made of non-salary compensation like commissions, bonuses, and stock or other equity awards. With the new requirement, New York City joins Colorado in requiring pay disclosures in job advertisements. Several other states, including Connecticut, Nevada, California, Maryland, and Washington have similar laws requiring employers to provide certain disclosures in response to an employee’s request. Other states are currently considering similar bills. This growing nationwide trend underscores the need for employers to review their recruiting and onboarding processes. In addition, the disclosure of salary ranges could lead to pay discrimination claims from employees who discover they fall at the bottom end of an employer’s range. Accordingly, when employers assess the salary range they will include in any public or internal advertisement, they should also consider auditing the compensation of existing employees in the position to ensure that any disparities in pay are justified by legitimate and objectively-identifiable differences in the employees’ positions or backgrounds.

On November 18, 2021, President Biden issued Executive Order 14055 that requires successor contractors under federal government service contracts to offer employment to certain employees of the predecessor contractor whose employment would otherwise be terminated as a result of the predecessor’s loss of the contract.  Executive Order 14055 reinstates provisions of Executive Order 13495, which was issued under the Obama administration but revoked by President Trump in 2019. The Executive Order applies to contracts covered by the Service Contract Act (SCA).  A successor contractor who obtains an SCA-covered contract must provide the predecessor’s employees the option to continue working on the successor contract, before staffing the contract with other employees (commonly referred to as a “right of first refusal”).  Successor contractors must give predecessor employees a minimum of 10 business days to accept the offer of employment.  To ensure predecessor employees receive a right of first refusal, the predecessor contractor is required to provide a list of all SCA employees, working under the contract within the last month of the contract term, at least 10 business days prior to the end of the contract.  The list must also include the anniversary dates of the covered employees. The non-displacement requirement applies only to SCA-defined “service employees,” and therefore will generally encompass only employees who are non-exempt under the Fair Labor Standards Act.  In an interesting departure from the Obama-era executive order, however, Executive Order 14055 does not exclude managerial and supervisory employees from the right of first refusal.  The order does retain the Obama-era order’s exceptions for employees who perform work on both federal and commercial contracts and employees for whom the successor contractor reasonably believes, based on evidence of the employee’s past performance, there would be just cause for the employee’s termination. The Executive Order instructs the Department of Labor to issue regulations implementing the non-displacement requirement.  We expect that the forthcoming regulations will mirror the Department of Labor’s prior regulations implementing Executive Order 13495, which were the subject of some controversy upon their issuance.

On December 7, 2021, Judge R. Stan Baker of the U.S. District Court for the Southern District of Georgia enjoined the federal government from enforcing Executive Order 14042’s COVID-19 vaccination mandate for federal government contractors and subcontractors on a nationwide basis pending a further order from that court.  This ruling follows a November 30, 2021 order that similarly enjoined the contractor vaccine mandate in the states of Tennessee, Ohio, and Kentucky.  This is the latest in a growing number of  court decisions enjoining President Biden’s vaccine mandates, as the federal government has been barred, at least for now, from enforcing each of the three federal vaccination mandates applicable to private sector employers – the federal contractor mandate, the Center for Medicare & Medicaid Services (CMS) mandate, and the OSHA Emergency Temporary Standard. The Georgia litigation challenging the federal contractor vaccination mandate was brought by the States of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia, with the Associated Builders and Contractors (ABC) trade organization also intervening as a plaintiff.  In comparison to the earlier Kentucky ruling, the court based its award of injunctive relief on relatively narrow grounds, finding that the Federal Property and Administrative Services Act’s delegation of authority to the President to set federal procurement policy to achieve the objectives of “economy and efficiency” did not reach so far as to authorize the issuance of public health regulations.  Unlike the Kentucky ruling, the court did not address additional arguments asserting procedural and constitutional deficiencies in Executive Order 14042.  However, the court granted a broader scope of injunctive relief than the Kentucky injunction, finding that the nationwide scope of ABC’s membership required that enforcement of the mandate be enjoined nationwide in order to grant complete relief. We expect that the government will appeal the preliminary injunction to the U.S. Court of Appeals for the Eleventh Circuit.  Notably, on December 6, 2021, the Eleventh Circuit rejected the State of Florida’s challenge to the CMS vaccine mandate, finding that mandate to be within the government’s authority, though the predictive weight of that ruling could be limited because the two mandates were based on independent statutory grants of authority. Pending a contrary ruling from the Eleventh Circuit or the U.S. Supreme Court, the federal government is barred from enforcing Executive Order 14042’s vaccine mandate in any state or territory.  Given the potential that the injunction could be reversed, and the lack of clarity regarding what if any adjustments the federal government would make to the vaccine mandate in that event,  contractors may wish to continue their preparations in order to avoid being caught off-guard.  In addition, the court’s ruling does not prohibit federal contractors who wish to voluntarily implement their own vaccine requirement for their workforces from doing so, though the lack of an enforceable federal mandate means that such employers will need to carefully consider the effect of state laws which limit or prevent employers from requiring vaccination.

On December 7, 2021, Judge R. Stan Baker of the U.S. District Court for the Southern District of Georgia enjoined the federal government from enforcing Executive Order 14042’s COVID-19 vaccination mandate for federal government contractors and subcontractors on a nationwide basis pending a further order from that court.  This ruling follows a November 30, 2021 order that similarly enjoined the contractor vaccine mandate in the states of Tennessee, Ohio, and Kentucky.  This is the latest in a growing number of  court decisions enjoining President Biden’s vaccine mandates, as the federal government has been barred, at least for now, from enforcing each of the three federal vaccination mandates applicable to private sector employers – the federal contractor mandate, the Center for Medicare & Medicaid Services (CMS) mandate, and the OSHA Emergency Temporary Standard. The Georgia litigation challenging the federal contractor vaccination mandate was brought by the States of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia, with the Associated Builders and Contractors (ABC) trade organization also intervening as a plaintiff.  In comparison to the earlier Kentucky ruling, the court based its award of injunctive relief on relatively narrow grounds, finding that the Federal Property and Administrative Services Act’s delegation of authority to the President to set federal procurement policy to achieve the objectives of “economy and efficiency” did not reach so far as to authorize the issuance of public health regulations.  Unlike the Kentucky ruling, the court did not address additional arguments asserting procedural and constitutional deficiencies in Executive Order 14042.  However, the court granted a broader scope of injunctive relief than the Kentucky injunction, finding that the nationwide scope of ABC’s membership required that enforcement of the mandate be enjoined nationwide in order to grant complete relief. We expect that the government will appeal the preliminary injunction to the U.S. Court of Appeals for the Eleventh Circuit.  Notably, on December 6, 2021, the Eleventh Circuit rejected the State of Florida’s challenge to the CMS vaccine mandate, finding that mandate to be within the government’s authority, though the predictive weight of that ruling could be limited because the two mandates were based on independent statutory grants of authority. Pending a contrary ruling from the Eleventh Circuit or the U.S. Supreme Court, the federal government is barred from enforcing Executive Order 14042’s vaccine mandate in any state or territory.  Given the potential that the injunction could be reversed, and the lack of clarity regarding what if any adjustments the federal government would make to the vaccine mandate in that event,  contractors may wish to continue their preparations in order to avoid being caught off-guard.  In addition, the court’s ruling does not prohibit federal contractors who wish to voluntarily implement their own vaccine requirement for their workforces from doing so, though the lack of an enforceable federal mandate means that such employers will need to carefully consider the effect of state laws which limit or prevent employers from requiring vaccination.

On December 2, 2021, OFCCP announced that its Affirmative Action Program Verification Interface (also referred to as the Contractor Portal) is now operative. Through the Contractor Portal, federal government supply and service contractors and subcontractors will be required to certify on an annual basis that they have developed and maintained affirmative action plans (AAP) for each of their establishments or functional units. Construction contractors are not required to certify compliance or register for the Contractor Portal. Beginning February 1, 2022, contractors will be able to register their companies through the Portal. The AAP certification period will then begin on March 31, 2022, and contractors and subcontractors must complete the certification by June 30, 2022.  OFCCP has issued FAQs on the Portal and will also be issuing a user guide in the upcoming months to provide contractors with additional information regarding registration and the certification process. The certification requirement applies to both establishment-based and functional affirmative action plans (FAAPs). Although it is not clear whether a contractor’s failure to make the required certification will flag the contractor to undergo an OFCCP compliance evaluation, the certification requirement appears to raise the stakes for contractors and subcontractors to ensure their compliance with the affirmative action plan requirement.  Some companies doing business with the federal government or with a government contractor may not realize that they have a federal government contract or subcontract that is subject to OFCCP’s equal opportunity clause and the AAP requirement.  Notably, OFCCP’s regulations provide that the equal opportunity clause is deemed to be included in all covered contracts or subcontracts, regardless of whether the clause is explicitly incorporated in the actual contract document.  Accordingly, contractors potentially subject to the AAP requirement (generally, those with federal contracts or subcontracts exceeding $50,000 in value and 50 or more employees) should carefully consider whether they are required to implement an AAP, and do so, ahead of the upcoming certification requirement.

On December 2, 2021, OFCCP announced that its Affirmative Action Program Verification Interface (also referred to as the Contractor Portal) is now operative. Through the Contractor Portal, federal government supply and service contractors and subcontractors will be required to certify on an annual basis that they have developed and maintained affirmative action plans (AAP) for each of their establishments or functional units. Construction contractors are not required to certify compliance or register for the Contractor Portal. Beginning February 1, 2022, contractors will be able to register their companies through the Portal. The AAP certification period will then begin on March 31, 2022, and contractors and subcontractors must complete the certification by June 30, 2022.  OFCCP has issued FAQs on the Portal and will also be issuing a user guide in the upcoming months to provide contractors with additional information regarding registration and the certification process. The certification requirement applies to both establishment-based and functional affirmative action plans (FAApPs). Although it is not clear whether a contractor’s failure to make the required certification will flag the contractor to undergo an OFCCP compliance evaluation, the certification requirement appears to raise the stakes for contractors and subcontractors to ensure their compliance with the affirmative action plan requirement.  Some companies doing business with the federal government or with a government contractor may not realize that they have a federal government contract or subcontract that is subject to OFCCP’s equal opportunity clause and the AAP requirement.  Notably, OFCCP’s regulations provide that the equal opportunity clause is deemed to be included in all covered contracts or subcontracts, regardless of whether the clause is explicitly incorporated in the actual contract document.  Accordingly, contractors potentially subject to the AAP requirement (generally, those with federal contracts or subcontracts exceeding $50,000 in value and 50 or more employees) should carefully consider whether they are required to implement an AAP, and do so, ahead of the upcoming certification requirement.

On November 30, 2021, the U.S. District Court for the Eastern District of Kentucky threw a wrench into the federal government’s efforts to enforce Executive Order 14042’s COVID-19 vaccination mandate against federal government contractors by issuing a preliminary injunction barring the government from enforcing the mandate in Tennessee, Ohio, and Kentucky.  The court’s order is the latest development that government contractors must address in attempting to comply with Executive Order 14042 while minimizing litigation risks from employees who are unable or unwilling to become fully vaccinated. The Eastern District of Kentucky litigation challenging the federal contractor vaccination mandate was brought by the States of Tennessee, Ohio, and Kentucky, as well as two individual plaintiffs.  In granting the preliminary injunction requested by the States, the court relied upon three grounds to find that the Biden Administration exceeded its authority in issuing Executive Order 14042.  First, the court determined that Congress’s grant of authority under the Federal Property and Administrative Services Act for the President to promote “economy and efficiency in federal contracting” did not authorize the imposition of a vaccination mandate on federal government contractors, because the mandate is not closely tied to the statute’s objectives.  The court noted that if FPASA did provide the President the authority to mandate vaccination, such a grant of authority would violate the constitutional nondelegation principle.  Second, the court ruled that the vaccination mandate violated the Competition in Contracting Act, as contractors who “represent the best value to the government,” but do not follow the vaccine mandate, would be barred from competing for government contracts.  Finally, the court found the vaccine mandate to be a federal intrusion on powers reserved to the States, violating the Tenth Amendment of the Constitution. The court’s ruling applies only to prohibit enforcement of the vaccination mandate against contractors and subcontractors on covered contracts in Tennessee, Ohio, and Kentucky, rather than nationwide.  We expect that the government will appeal the preliminary injunction.  The appeal will be heard by the U.S. Court of Appeals for the Sixth Circuit, which is also hearing the challenges to OSHA’s Emergency Temporary Standard requiring COVID-19 vaccination or testing for employers with more than 100 employees. The Safer Federal Workforce Task Force guidance implementing Executive Order 14042’s mandate did not require that covered employees become fully vaccinated until January 18, 2022, which means that the employee receive the final shot in the applicable vaccination series by January 4, 2022.  Unless and until the mandate is enjoined in other jurisdictions, federal contractors outside of Tennessee, Ohio, and Kentucky should move forward in ensuring that their relevant employees are fully vaccinated by the deadline, as an employee receiving the Moderna or Pfizer vaccine will need to receive the first shot in early December to stay on track to become fully vaccinated by January 18, 2022.  Contractors in the three states covered by the injunction should also continue preparations in order to avoid being caught off-guard if the Eastern District of Kentucky’s injunction is stayed or reversed.

On November 16, 2021, the Department of Labor published a Final Rule implementing Executive Order 14026 and raising the federal contractor minimum wage to $15 per hour under most federal government contracts entered into after January 30, 2022.  The Final Rule also increases the minimum wage for employees who regularly receive tips to $10.50 per hour and will eliminate the ability of contractors to take a tip credit effective January 30, 2024. Beginning January 30, 2022, federal agencies will be required to include a contract clause imposing the increased minimum wage in the following types of government contracts: Procurement contracts for construction covered by the Davis-Bacon Act; Contracts for services covered by the Service Contract Act; Concessions contracts; Contracts with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public. Contractors subject to the clause must flow the minimum wage requirement down to subcontractors who work on the covered contract.  The clause will not be included in federal grants, certain contracts with Indian Tribes, contracts excluded from the Davis-Bacon Act or Service Contract Act, contracts performed outside the United States, and contracts for manufacturing or furnishing materials, supplies, articles, or equipment. As in the Notice of Proposed Rulemaking preceding the Final Rule, employees are entitled to receive the increased minimum wage if they perform services “on or in connection with” a federal contract.  Employees perform services “on” a federal contract when they directly perform the services called for by the contract. Employees perform services “in connection with” a federal contract when they perform services that are not required by the contract, but are necessary to the performance of the contract’s services, such as security, maintenance, or janitorial work at facilities that perform federal contract work. Workers who only perform “in connection with” a federal contract are not subject to the minimum wage requirement if they perform less than 20% of their work time on performing services “in connection with” the contract. As in the Notice of Proposed Rulemaking, the final rule does not create a private right of action for employees to sue contractors for unpaid wages.  However, employees can submit complaints to the Department of Labor, which may result in sanctions for failing to pay the increased minimum wage. These sanctions can include withholding of contract payments from the prime contractor, the termination of contracts, and debarment from federal contracting.

On November 18, 2021, District of Columbia Mayor Muriel Bowser signed the “COVID Vaccination Leave Emergency Amendment Act of 2021” (the “Act”). The Act applies to nearly all private employers with employees in the District. The Act (1) establishes new paid COVID-19 vaccine leave requirements and (2) extends the public health emergency leave available under the DC Family Medical Leave Act (“DCFMLA”), which expired November 5, 2021. The Act will remain in effect until February 16, 2022. New Paid COVID-19 Vaccine Leave The Act requires employers provide up to two (2) hours of paid leave for employees to obtain each dose of a COVID-19 vaccine, including boosters. This leave is also available for employees to obtain a COVID-19 vaccine for their child. Additionally, the Act requires employers provide up to eight (8) hours of paid vaccine recovery leave, per dose and during the 24 hour period following the vaccine dose, for employees to recover from the vaccine or to care for their child recovering from the vaccine. This leave is in addition to the two (2) hours of paid leave for employees to obtain vaccinations. Extension of Public Health Emergency Leave The Act also extends D.C.’s declared public health emergency for COVID-19. Under the previously-enacted Coronavirus Support Temporary Amendment Act of 2021, employees were entitled to an additional 16 weeks of unpaid public health emergency leave for COVID-19 related-reasons. However, the public health emergency declaration expired on November 5, 2021. The Act extends the expanded DCFMLA COVID-19 leave until February 16, 2022. Reasons an employee may use the unpaid public health emergency leave include: (1) to care for themselves or a family member after testing positive for COVID-19, (2) the employee is required to quarantine/isolate or care for a family member who is required to quarantine/isolate, or (3) the employee must care for a child whose school/place of care is closed due to COVID-19. Compliance Assistance Below are answers to questions employers may have regarding compliance with the new paid vaccine leave requirements of the Act: 1. May employers require employees to provide documentation supporting their need for paid vaccine leave? Answer: Yes. Employers can require employees, after they return from their leave, to provide their vaccine record or documentation showing the date and time of their (or their child’s) vaccination. 2. Is there a limit to how much paid COVID-19 vaccine leave an employee can use? Answer: Yes. Employees are only entitled to up to 48 hours of paid vaccine leave (including vaccine recovery leave) in a year. 3. Can employers require employees to provide notice prior to taking leave? Answer: Yes. An employer can require employees provide up to 48 hours’ notice prior to taking any vaccine leave. However, in the case of an emergency, employees need only to provide reasonable notice. 4. If employees are subject to a collective bargaining agreement, can they waive the paid vaccine leave requirements of the Act? Answer: No. The Act explicitly prohibits waiver of the paid vaccine leave requirements through collective bargaining agreements. 5. Are employers required to give new employees paid vaccine leave immediately after hire? Answer: No. Employees are not entitled to paid vaccine leave until they have been employed for 15 days. 6. Do these new leave laws expand the amount of leave available to employees under DC and federal law? Answer: Yes. DC’s new vaccine leave, public health emergency leave, and expanded DC FMLA COVID-19 leave are in addition to leave available under DC FMLA, DC Safe and Sick Leave law, and the federal FMLA. For example, under the DC FMLA, employees are now entitled to up to 16 weeks of family leave, 16 weeks of medical leave, and 16 weeks of COVID-19 leave, in addition to the 12 weeks available under federal FMLA. If you have any additional questions about how the Act, or any other related DC COVID-19 leave laws, affect your business, contact your Polsinelli attorney.

Effective January 26, 2022, New York will greatly expand whistleblower protections provided to employees and independent contractors, creating new compliance challenges and avenues of liability for employers. Senate Bill S4394A (the “Amendment”), recently signed into law by Governor Hochul on October 28, 2021, amends New York’s whistleblower protection law (codified at Section 740 of New York’s Labor Law) in four principal ways: ·       Expanding the definition of protected activity under the law; ·       Expanding the scope of individuals entitled to whistleblower protection; ·       Expanding the definition of adverse actions under the law; and ·       Watering down the requirement that whistleblowers notify their employer of the challenged conduct prior to reporting it to law enforcement or other government bodies. Most importantly, the amendment expands the scope of protected activity under the whistleblower law.  Previously, a whistleblower was protected only when disclosing employer conduct that violated a law, rule, or regulation and created a substantial and specific danger to public health or safety or constituted health care fraud.  Now, whistleblowers will also have protection when reporting employer conduct that the whistleblower reasonably believes violates a law, rule, or regulation or is a substantial and specific damage to public health or safety.  What constitutes “reasonable belief” will likely be determined by future case law, but will likely include both objective and subjective analyses as is the case under other whistleblower protection laws (similar to Section 806 of the Sarbanes-Oxley Act). The law also expands the universe of individuals who may be entitled to whistleblower protection.  Previously, New York’s whistleblower law protected only employees.  The new amendment clarifies that the whistleblower law also protects former employees and expands protection to independent contractors.  Further, the amendment  broadens the definition of  “retaliatory action” under the law to include (1) actions or threats to a former employee’s current or future employment; and (2) threats to contact U.S. immigration authorities on an employee or an employee’s family member. Finally, the new amendment allows employees or independent contractors to, in some cases, obtain protection without reporting the alleged illegality or threat to health and safety to the employer.  Whereas previously employees were required to report violations of law to the employer to obtain protection, now they merely need to make “a good faith effort” to do so.  In addition, employer notification is excused entirely if: (1) there is an imminent and serious danger to public health and safety, (2) the employee reasonably believes that reporting would result in the destruction of evidence or concealment of the conduct, (3) the conduct could reasonably be expected to endanger the health of a minor, (4) the employee reasonably believes that reporting would result in physical harm to the employee or another person, or (5) the employee reasonably believes their supervisor is aware of the conduct and will not correct it. Employers should be aware that the amendment imposes a posting requirement for employers. Employers must post a notice of employee rights in a well-lit place that is “customarily frequented by employees and applicants.”  The New York Department of Labor will likely publish a model notice prior to the effective date of January 26, 2022. The new whistleblower protection under New York state law joins the ever-proliferating layers of employee whistleblower protections under state and federal law.  Employers who receive complaints about illegality or health and safety issues will need to carefully document both the receipt of the complaint itself and the employer’s response.  Employers would be well-advised to consult counsel before taking an adverse employment action following a whistleblower’s report. If you have questions regarding these upcoming changes to New York law, contact your Polsinelli attorney.

On November 9, 2021, the Office of Federal Contract Compliance Programs (OFCCP) published a proposed rule rescinding its December 2020 Final Rule broadening the religious exemption from Executive Order 11246’s nondiscrimination requirements for federal contractors, which went into effect on January 8, 2021.  The rescission of the Trump-era religious exemption regulation was not unexpected, as OFCCP previously announced its intention to rescind the rule in February 2021.  The proposed rule will reinstate the pre-2020 language of OFCCP’s religious exemption regulation. The current OFCCP religious exemption regulations, enacted in the waning days of the Trump administration, widen the availability of the religious exemption to federal contractors, especially those who operate on a for-profit basis, and also broadly construe the protection offered to religious contractors. The current regulations also include a rule of construction requiring OFCCP to enforce contractor non-discrimination obligations in a manner that provides the broadest protection of religious activity.  In the new proposed rule, OFCCP proposes eliminating the Trump-era regulations in their entirety and instead aligning OFCCP’s religious exemption with the existing body of case law construing Title VII’s religious exemption. The return to OFCCP’s pre-Trump religious exemption based on Title VII precedents will certainly reduce the availability of the religious exemption to federal contractors as a defense against discrimination claims asserted by OFCCP.  That said, the practical impact of the change will likely be minimal, as federal contractor employers who might have been protected by the broader religious exemption would nonetheless be subject to the Title VII standard in any related private litigation brought by the employees alleged to have been discriminated against.  The DOL will accept public comments on the proposed rule for 30 days, until December 9, 2021.

On November 10, 2021, the Biden Administration announced another change to the deadline for federal contractors to become fully vaccinated against COVID-19 as required by Executive Order 14042.  The deadline is now January 18, 2022, meaning that employees must receive their final vaccine dose by January 4, 2022. This is now the third deadline for vaccination set by the Safer Federal Workforce Task Force.  In its initial Guidance, the Task Force established a December 8, 2021 deadline.  However, when the Biden Administration issued the Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard and Center for Medicare and Medicaid Services (CMS) vaccination mandate on November 4, 2021, it also pushed back the deadline for federal contractor employees to become fully vaccinated until January 4, 2021 in order to conform Executive Order 14042’s deadline to OSHA’s and CMS’s deadlines. The Task Force did not provide any explanation for the disparity between the January 4 and January 18 dates.

On November 4, 2021, the Biden Administration issued a Fact Sheet announcing the release of its long-awaited Occupational Safety and Health Administration (OSHA) and Center for Medicare and Medicaid Services (CMS) COVID-19 vaccination mandates.  The Fact Sheet delivered significant news for federal government contractors by announcing that the December 8, 2021 deadline for compliance with Executive Order 14042’s COVID-19 vaccination mandate for contractors will be extended to January 4, 2022, the same deadline set forth in the OSHA Emergency Temporary Standard and CMS mandate. The Fact Sheet also announced that the new OSHA mandate is inapplicable to workplaces that are subject to Executive Order 14042’s vaccination mandate in order to streamline compliance and avoid the need to track multiple vaccination requirements for the same employees.  This will allow some federal contractors to avoid the substantial documentation and recordkeeping requirements imposed by the new OSHA standard.  However, it also means that federal contractors cannot offer employees who work on or in connection with a federal contract the testing option that is available under OSHA’s Emergency Temporary Standard.  Some contractors that have purely commercial workplace locations not subject to Executive Order 14042 may be subject to both the Executive Order’s and OSHA’s mandates. The announcement follows closely on a November 1, 2021 update to the Safer Federal Workforce Task Force’s Frequently Asked Questions on the contractor mandate that provided additional flexibility to federal contractors in implementing the requirement.  Specifically, the new FAQ guidance clarified that employees with pending religious or disability-based accommodation requests may continue to work – subject to the masking and social distancing protocols applicable to unvaccinated employees – while their requests are adjudicated.  The new FAQs also provide contractors with some additional flexibility in addressing covered employees who refuse to become fully vaccinated by the deadline.  It is unclear whether the Task Force will eliminate this flexibility in light of the delay in the Executive Order’s deadline. As of 2:00 PM EST on November 4, 2021, the Safer Federal Workforce Task Force had not updated its Guidance or FAQs to incorporate the new deadline announced in the Fact Sheet.  We expect that additional guidance from the Task Force will follow in the near future.

On September 24, 2021, the Safer Federal Workforce Task Force (Task Force) published its expected guidance regarding the COVID-19 vaccination mandate for federal government contractors.  This Guidance defines the specific parameters of the vaccine mandate, as well as other safety protocols that contractors must follow. The Guidance clarifies that all “covered employees” must be fully-vaccinated by December 8, 2021.  An employee is fully vaccinated two weeks after he or she receives all doses of an approved vaccine.  Employees are not required to receive any vaccine booster to qualify as fully vaccinated.  Contractors are required to obtain documentation of each employee’s vaccination status – an employee’s attestation is not sufficient.  In addition, the Guidance provides that prior COVID-19 infection or antibody test results may not be substituted for vaccination.  After December 8, 2021, contractors must ensure that employees are fully vaccinated by the first day of performance on a federal contract. The Guidance provides for accommodations from its mandate for employees who communicate that they are not vaccinated due to a sincerely-held religious belief or disability.  Contractors are responsible for determining accommodations, even when the employee performs his or her services at a federal worksite. As suggested by the Executive Order announcing the mandate, the vaccination requirement will apply to some employees of federal contractors who do not work on or in connection with a federal contract, and instead perform only commercial work.  A “covered employee,” for purposes of the mandate, includes any full-time or part-time employee who works at a location at which an employee working on or in connection with a contract “is likely to be present.”  So, an employee performing solely commercial work in a facility, building, or campus where contract work is also being performed would likely be subject to the mandate.  The Guidance has a limited exception for situations where commercial and contract workers perform services in distinct areas of the same facility, but the contractor must “affirmatively determine” that there will be “no interactions,” including in common areas like lobbies, elevators, and parking garages, between contract and commercial employees at the facility in order to avoid extending the vaccine requirement to all employees at the facility.  Fully remote workers who perform work on federal contracts from home are also subject to the vaccination mandate. In addition to the vaccine mandate, federal contractors are also subject to new masking and social distancing protocols.  Unvaccinated employees (i.e., those who obtain accommodations from the mandate) are required to wear masks in indoor and crowded outdoor areas and maintain a distance of six feet from others at all times to the extent practicable.  Vaccinated employees are required to wear masks indoors in areas of high or substantial community transmission, as determined by the CDC.  In areas of low or moderate transmission, fully vaccinated employees do not need to wear a mask.  Regardless of the transmission level, fully vaccinated employees are not required to socially distance. Contractors are required to check the CDC’s transmission level for any covered work locations on a weekly basis to determine the proper safety protocols. Contractors are also required to ensure that visitors comply with applicable masking and social distancing requirements. Contractors must also designate a specific employee to coordinate COVID-19 workplace safety efforts at covered workplaces.  Fully remote employees who work from home are not required to follow masking or social distancing protocols. Contractors with federal contracts or subcontracts pre-dating October 15, 2021 will be required to comply with the Guidance when an extension or option is exercised with respect to the contract.  After November 14, 2021, most new federal contracts will contain the clause requiring compliance.  For contracts issued between October 15, 2021 and November 14, 2021, agencies appear to have some leeway with respect to inclusion of the contract clause, though the Guidance and prior Executive Order strongly encourage the clause’s inclusion. COVID-19 vaccine mandates present complex issues for employers, especially when employees request religious or disability-based accommodations.  The proliferating COVID-19 vaccine mandates – from the Guidance, OSHA’s forthcoming emergency temporary standard, and, in some jurisdictions, state and local authorities – only add additional complexity to this rapidly-developing issue.  Given the short timeframe between the October 15, 2021 date on which the clause will start being included in contracts and the December 8, 2021 vaccination date, contractors who expect to receive covered contracts in the near future should begin preparing now to ensure their workforce’s compliance with the vaccination mandate.

On September 24, 2021, the Safer Federal Workforce Task Force (Task Force) published its expected guidance regarding the COVID-19 vaccination mandate for federal government contractors.  This Guidance defines the specific parameters of the vaccine mandate, as well as other safety protocols that contractors must follow. The Guidance clarifies that all “covered employees” must be fully-vaccinated by December 8, 2021.  An employee is fully vaccinated two weeks after he or she receives all doses of an approved vaccine.  Employees are not required to receive any vaccine booster to qualify as fully vaccinated.  Contractors are required to obtain documentation of each employee’s vaccination status – an employee’s attestation is not sufficient.  In addition, the Guidance provides that prior COVID-19 infection or antibody test results may not be substituted for vaccination. After December 8, 2021, contractors must ensure that employees are fully vaccinated by the first day of performance on a federal contract. The Guidance provides for accommodations from its mandate for employees who communicate that they are not vaccinated due to a sincerely-held religious belief or disability. Contractors are responsible for determining accommodations, even when the employee performs his or her services at a federal worksite. As suggested by the Executive Order announcing the mandate, the vaccination requirement will apply to some employees of federal contractors who do not work on or in connection with a federal contract, and instead perform only commercial work.  A “covered employee,” for purposes of the mandate, includes any full-time or part-time employee who works at a location at which an employee working on or in connection with a contract “is likely to be present.”  So, an employee performing solely commercial work in a facility, building, or campus where contract work is also being performed would likely be subject to the mandate.  The Guidance has a limited exception for situations where commercial and contract workers perform services in distinct areas of the same facility, but the contractor must “affirmatively determine” that there will be “no interactions,” including in common areas like lobbies, elevators, and parking garages, between contract and commercial employees at the facility in order to avoid extending the vaccine requirement to all employees at the facility.  Fully remote workers who perform work on federal contracts from home are also subject to the vaccination mandate. In addition to the vaccine mandate, federal contractors are also subject to new masking and social distancing protocols. Unvaccinated employees (i.e., those who obtain accommodations from the mandate) are required to wear masks in indoor and crowded outdoor areas and maintain a distance of six feet from others at all times to the extent practicable. Vaccinated employees are required to wear masks indoors in areas of high or substantial community transmission, as determined by the CDC. In areas of low or moderate transmission, fully vaccinated employees do not need to wear a mask. Regardless of the transmission level, fully vaccinated employees are not required to socially distance. Contractors are required to check the CDC’s transmission level for any covered work locations on a weekly basis to determine the proper safety protocols. Contractors are also required to ensure that visitors comply with applicable masking and social distancing requirements. Contractors must also designate a specific employee to coordinate COVID-19

In an attempt to contain the continuing COVID-19 pandemic, President Biden issued two Executive Orders on September 9, 2021 that mandate COVID-19 vaccines for federal government employees and employees of federal government contractors. Although key details of these vaccine mandates have yet to be defined, the new measures appear to build on the administration’s recent mandate for vaccination or testing of contractor employees who work on-site at federal locations.  As a result of these new mandates, federal government contractors will soon be presented with complex and risk-laden decisions as employees seek exemptions, to the extent available, from the vaccine mandate. The Basics of the Executive Orders The first executive order is applicable to federal government employees, and requires the Safer Federal Workforce Task Force (Task Force) to issue guidance requiring a vaccine mandate for federal agency employees.  Federal agencies are then required to implement the Task Force’s guidance “with exceptions only as required by applicable law.”  The second executive order is applicable to federal government contractors, and provides that new government contracts and contract-like instruments must include a clause requiring the contractor and “any subcontractors (at any tier)” to comply with “all guidance” issued by the Task Force.  Pursuant to the terms of the contractor Executive Order, the clause’s requirements are applicable to “any workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a Federal Government contract or contract-like instrument.”  The Executive Order applicable to federal contractors provides that the Task Force will issue its guidance by September 24, 2021, and outline “definitions of relevant terms,” “explanations of protocols required of contractors and subcontractors,” and “any exceptions” to the vaccination mandate. What Types of Federal Contracts Trigger the Vaccine Mandate? The vaccine mandate is applicable to any contract or contract-like instrument that is entered into, extended, renewed, or has an option exercised on or after October 15, 2021. However, the Executive Order is effective immediately and agencies are “strongly encouraged, to the extent permitted by law” to extend the vaccine mandate to existing contracts not otherwise subject to the Executive Order.  The Executive Order adopts the definition of “contract or contract-like instrument” from the Department of Labor’s minimum wage regulations, and thus presumably excludes procurement contracts excluded from the Davis-Bacon Act and service contracts excluded from the Service Contract Act.  The Executive Order explicitly excludes federal grants, contracts with Indian Tribes, employees who perform work outside of the United States, contracts equal or less than the simplified acquisition threshold (generally $250,000), and subcontracts solely for the provision of products. Which Employees are Covered By the Mandate? The new contract clause will “apply to any workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a Federal Government contract or contract-like instrument.”  The “on or in connection with” standard is borrowed from the federal contractor minimum wage requirement.  Employees perform services “on” a contract when they perform the work required by the contract, and perform “in connection with” a federal contract when they perform services that are not required by the contract, but are necessary to the performance of the contract’s services, such as custodial, security, or maintenance services at facilities that perform both commercial and government work.  The executive order applies to “any workplace locations . . . in which an individual is working on or in connection” with a contract.  On its face, this would apply the vaccine mandate to full-time remote workers who do not interact in-person with any other co-workers. The Executive Order is ambiguous about several important issues, which will need to be fleshed out by the Task Force’s guidance.  First, in the context of the federal contractor minimum wage requirement, employees who work only “in connection with” a contact are not covered unless more than 20% of their work time is spent performing contract-related services.  Will the same 20% threshold apply to the vaccine mandate?  Second, the Executive Order is phrased to apply to “any workplace locations” where contract work is performed, rather than to employees performing the work.  Arguably, the mandate may cover workers performing only commercial work if there is also government contract work performed at the employee’s “workplace location,” which is itself a potentially ambiguous term pending further guidance from the Task Force. What Exemptions are Applicable? The Executive Order provides that the Task Force should permit only exceptions “required by applicable law.”  Presumably, this would include disability, religious, and pregnancy accommodations that are required by federal statutes. To date, many employers implementing vaccine mandates have struggled with these accommodation requirements, which present complex and nuanced legal issues.  To the extent the Task Force’s guidance regarding exemptions is different than generally-applicable federal law, it will only add to the complexity. Moreover, state law may impose different or additional requirements, including laws in some states protecting workers against mandatory vaccine mandates, which may conflict with the mandate required by the Executive Order.  To the extent there is ambiguity as to which employees are actually covered by the Executive Order, the potentially conflicting obligations under the Executive Order and state laws may pose challenging dilemmas for employers. COVID-19 vaccine mandates present complex legal issues for employers, especially when employees claim a right to religious, disability, pregnancy, or other accommodations. Federal contractors should begin working with counsel now to prepare for the new mandate required by the executive orders, including implementing procedures to communicate with employees regarding the mandate, ascertain employees’ vaccination statuses, and process and address requests for accommodations.

In an attempt to contain the continuing COVID-19 pandemic, President Biden issued two Executive Orders on September 9, 2021 that mandate COVID-19 vaccines for federal government employees and employees of federal government contractors. Although key details of these vaccine mandates have yet to be defined, the new measures appear to build on the administration’s recent mandate for vaccination or testing of contractor employees who work on-site at federal locations.  As a result of these new mandates, federal government contractors will soon be presented with complex and risk-laden decisions as employees seek exemptions, to the extent available, from the vaccine mandate. The Basics of the Executive Orders The first executive order is applicable to federal government employees, and requires the Safer Federal Workforce Task Force (Task Force) to issue guidance requiring a vaccine mandate for federal agency employees.  Federal agencies are then required to implement the Task Force’s guidance “with exceptions only as required by applicable law.”  The second executive order is applicable to federal government contractors, and provides that new government contracts and contract-like instruments must include a clause requiring the contractor and “any subcontractors (at any tier)” to comply with “all guidance” issued by the Task Force.  Pursuant to the terms of the contractor Executive Order, the clause’s requirements are applicable to “any workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a Federal Government contract or contract-like instrument.”  The Executive Order applicable to federal contractors provides that the Task Force will issue its guidance by September 24, 2021, and outline “definitions of relevant terms,” “explanations of protocols required of contractors and subcontractors,” and “any exceptions” to the vaccination mandate. What Types of Federal Contracts Trigger the Vaccine Mandate? The vaccine mandate is applicable to any contract or contract-like instrument that is entered into, extended, renewed, or has an option exercised on or after October 15, 2021. However, the Executive Order is effective immediately and agencies are “strongly encouraged, to the extent permitted by law” to extend the vaccine mandate to existing contracts not otherwise subject to the Executive Order.  The Executive Order adopts the definition of “contract or contract-like instrument” from the Department of Labor’s minimum wage regulations, and thus presumably excludes procurement contracts excluded from the Davis-Bacon Act and service contracts excluded from the Service Contract Act.  The Executive Order explicitly excludes federal grants, contracts with Indian Tribes, employees who perform work outside of the United States, contracts equal or less than the simplified acquisition threshold (generally $250,000), and subcontracts solely for the provision of products. Which Employees are Covered By the Mandate? The new contract clause will “apply to any workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a Federal Government contract or contract-like instrument.”  The “on or in connection with” standard is borrowed from the federal contractor minimum wage requirement.  Employees perform services “on” a contract when they perform the work required by the contract, and perform “in connection with” a federal contract when they perform services that are not required by the contract, but are necessary to the performance of the contract’s services, such as custodial, security, or maintenance services at facilities that perform both commercial and government work.  The executive order applies to “any workplace locations . . . in which an individual is working on or in connection” with a contract.  On its face, this would apply the vaccine mandate to full-time remote workers who do not interact in-person with any other co-workers. The Executive Order is ambiguous about several important issues, which will need to be fleshed out by the Task Force’s guidance.  First, in the context of the federal contractor minimum wage requirement, employees who work only “in connection with” a contact are not covered unless more than 20% of their work time is spent performing contract-related services.  Will the same 20% threshold apply to the vaccine mandate?  Second, the Executive Order is phrased to apply to “any workplace locations” where contract work is performed, rather than to employees performing the work.  Arguably, the mandate may cover workers performing only commercial work if there is also government contract work performed at the employee’s “workplace location,” which is itself a potentially ambiguous term pending further guidance from the Task Force. What Exemptions are Applicable? The Executive Order provides that the Task Force should permit only exceptions “required by applicable law.”  Presumably, this would include disability, religious, and pregnancy accommodations that are required by federal statutes. To date, many employers implementing vaccine mandates have struggled with these accommodation requirements, which present complex and nuanced legal issues.  To the extent the Task Force’s guidance regarding exemptions is different than generally-applicable federal law, it will only add to the complexity. Moreover, state law may impose different or additional requirements, including laws in some states protecting workers against mandatory vaccine mandates, which may conflict with the mandate required by the Executive Order.  To the extent there is ambiguity as to which employees are actually covered by the Executive Order, the potentially conflicting obligations under the Executive Order and state laws may pose challenging dilemmas for employers. COVID-19 vaccine mandates present complex legal issues for employers, especially when employees claim a right to religious, disability, pregnancy, or other accommodations. Federal contractors should begin working with counsel now to prepare for the new mandate required by the executive orders, including implementing procedures to communicate with employees regarding the mandate, ascertain employees’ vaccination statuses, and process and address requests for accommodations.

On September 1, 2021, the Office of Federal Contract Compliance Programs (OFCCP) announced that it would “evaluate” using compensation data reported by federal contractors in annual EEO-1 filings to guide its enforcement efforts in the area of pay equity.  This decision reverses a Trump-era decision that OFCCP would not request, accept, or use the data, and is a step towards the agency’s expected heightened enforcement activity in the area of pay equity. OFCCP’s reversal appears to be the next chapter in the protracted history of the Obama-era EEOC’s effort to collect compensation data from federal contractors and other employers through a new “Component 2” of the annual Employer Information Report, more commonly known as the EEO-1, submission. In September 2016, EEOC obtained approval from the Office of Management and Budget (OMB) to collect pay data for calendar years 2017 and 2018, but the Trump administration OMB later attempted to revoke the authorization.  The Trump OMB’s revocation was invalidated by the U.S. District Court for the District of Columbia, which ordered the EEOC to conduct the previously approved pay data collection.  However, in September 2019 the EEOC announced it would not seek renewal of OMB’s authorization for later years.  OFCCP followed with its own announcement on November 25, 2019 that it would not “request, accept, or use Component 2 data, as it does not expect to find significant utility in the data,” because the Component 2 data was not collected at a level of detail sufficient to make comparisons of similarly-situated employees. Now, OFCCP has reversed its position and announced that it will “evaluate the data’s utility because the joint collection and analysis of compensation data could improve OFCCP’s ability to efficiently and effectively investigate potential pay discrimination.”  OFCCP’s announcement also indicates that the agency may consider the Component 2 data “in conjunction with other available information, such as labor market survey data” in selecting contractors for compliance evaluations. OFCCP’s EEO-1 announcement appears to set the table for enhanced enforcement in the area of pay equity and compensation discrimination, as OFCCP is signaling it will use the EEO-1 pay data to select contractors for compliance evaluations.  Given the agency’s discontinuance of disability- and veteran-oriented focused reviews in favor of full compliance evaluations, OFCCP will be collecting employee-level compensation information in all of its compliance evaluations.  The announcement may also signal that OFCCP is coordinating with the EEOC on reinstating the Component 2 requirement, as the 2017 and 2018 data collected by EEOC would appear to have limited utility on a going forward basis.

On July 29, 2021, the Biden Administration announced a COVID-19 vaccination mandate for certain employees of federal government contractors. The announcement, released in a Fact Sheet, imposes new safety protocols on the federal contractor workforce, but does not flesh out key details, including the specific responsibilities of federal contractors to obtain and ensure compliance. The Fact Sheet states that every “onsite” employee of a federal contractor “will be asked to attest to their COVID-19 vaccination status.” If an employee does not attest to being fully vaccinated, then that employee will be required to wear a mask on the job “no matter their geographic location,” physically distance from other employees and visitors, and comply with weekly or twice weekly screening testing requirements. Unvaccinated employees would also be subject to restrictions on official travel. The Fact Sheet also states that the administration is “directing” that “similar standards” be applied “to all federal contractors.” The Fact Sheet leaves many key questions unanswered, including: Who are the “onsite” contractor employees subject to the new mandate? Presumably the mandate applies to contractor employees who work on federal premises, but the Fact Sheet does not explicitly define this category. What obligations do federal contractors have to determine the vaccination status of their employees or conduct the required testing? What specific physical distancing protocols will unvaccinated employees be required to follow and who is responsible for ensuring compliance? Which agency will be issuing further requirements for “all federal contractors,” and under what statutory authority? Federal contractors, especially those whose employees work on federal premises, should begin immediately preparing to ensure their personnel comply with the new requirements. Contractors may wish to begin taking action to determine the vaccination status of their workforces and encourage employees to obtain a COVID-19 vaccination. Because vaccination issues are rapidly developing and involve complex determinations under the Americans with Disabilities Act, Genetic Information Non-Discrimination Act, and other federal and state laws, contractors should consult with counsel about these requirements. Polsinelli will continue to update the contractor community as additional details are announced.

On July 21, 2021, the Department of Labor issued a Notice of Proposed Rulemaking to implement President Biden’s Executive Order 14026 increasing the minimum wage for certain employees of federal government contractors and subcontractors to $15.00 per hour. As expected, the proposed regulations are generally consistent with the regulations previously issued by the Obama administration in 2014 to implement President Obama’s increase in the federal contractor minimum wage. Under the proposed regulations, the minimum wage for workers performing services on or in connection with a federal contract will increase to $15.00 per hour as of January 22, 2022, with inflation-based adjustments on January 1 of 2023 and each successive year. The increased minimum wage applies to contracts that are entered, renewed, or extended (including extensions through the government’s exercise of an option) after January 30, 2022. The regulations provide contractors with a short grace period, however, as contracts entered into between January 30, 2022 and March 30, 2022 that result from pre-January 30, 2022 solicitations are not covered by the regulations until the contract is renewed or extended. The regulations include a minimum wage of $10.50 per hour for tipped employees, but the ability to take a tip credit will phase out on January 1, 2024, after which point tipped employees will be entitled to the same minimum wage as other covered employees. Notable exclusions from the increased minimum wage include federal grants, contracts with Indian Tribes, procurement contracts excluded from the Davis-Bacon Act, service contracts excluded from the Service Contract Act, contracts that are not performed in the United States, and contracts for manufacturing or furnishing materials, supplies, articles, or equipment to the federal government. As in the previous regulations, employees perform services “on” a federal contract when they directly perform the services called for by the contract, which should be a relatively straightforward determination. Employees perform services “in connection with” a federal contract when they perform services that are not required by the contract, but are necessary to the performance of the contract’s services. Common examples of services “in connection with” a contract include custodial, security, or maintenance services at facilities that perform work on federal contracts. Workers who only perform “in connection with” a federal contract are not subject to the minimum wage requirement if they perform less than 20% of their work time on performing services “in connection with” the contract. Both prime contractors and subcontractors of any tier are covered by the higher minimum wage. The regulations do not create a private right of action for employees to sue contractors for unpaid wages, but instead provide for the Department of Labor’s Wage and Hour Division to investigate complaints of violations. Employers are prohibited from retaliating against employees who make such complaints. Possible sanctions for failing to pay the increased minimum wage include withholding of contract payments from the prime contractor, the termination of contracts, and debarment from federal contracting.

On July 1, 2021, OFCCP issued its Corporate Scheduling Announcement List (CSAL) scheduling 750 federal contractor and subcontractor establishments for compliance evaluations in fiscal year 2021.  The CSAL identifies contractors and subcontractors that will receive a Scheduling Letter formally initiating an OFCCP audit.  Scheduling Letters are typically issued about 45 days after the CSAL’s publication. The FY2021 CSAL is limited to supply and service contractors, and does not include construction contractors, whose audits will presumably be scheduled pursuant to a separate announcement.  With OFCCP’s elimination of focused reviews and compliance checks earlier this year, significantly fewer contractors will be subject to OFCCP audits in fiscal year 2021 than in recent years.  Overall, the FY2021 CSAL schedules 668 contractor establishment for establishment-based reviews, 57 for functional affirmative action plan (FAAP) reviews, 19 for corporate management compliance evaluations (CMCE) focused on the contractor’s headquarters, and six (6) for university reviews.  In prior years, OFCCP has identified over 2,000 contractors for audits. The CSAL’s publication provides contractors with a valuable opportunity to prepare for the upcoming audit.  OFCCP’s Scheduling Letter requests over 22 categories of data and documents, including full employee-level compensation data, with a relatively short timeframe for response.  Contractors named in the CSAL can begin working immediately, in advance of receipt of the Scheduling Letter, to collect and analyze the requested data and documents in order to identify and, if possible, resolve any potential compliance vulnerabilities before they become more significant issues in the audit process. By identifying potential compliance vulnerabilities now prior to the issuance of a Scheduling Letter, contractors can ensure they are not caught flat-footed by OFCCP allegations arising from the contractor’s initial submission of documents and data.  Although contractors should take this opportunity to ensure that all aspects of their OFCCP compliance are in order, we anticipate that pay equity and gender pay gaps as well as potential race or gender based disparities in reductions in force undertaken during the COVID-19 pandemic will be areas of focus for OFCCP.

On April 27, 2021, President Biden signed Executive Order 14026, which increases the minimum wage for workers on or in connection with a federal government contract to $15.00 as of January 30, 2022.  This Executive Order increases the minimum wage level set by President Obama’s 2014 Executive Order 13658, which has been set at $10.95 per hour since January 1, 2021. The new minimum wage applies to most new federal contracts, contract-like instruments, solicitations, extensions or renewals of existing contracts or contract-like instruments, and exercises of options on existing contracts or contract-like instruments that are entered into or exercised on or after January 30, 2022.  However, the Executive Order “strongly encourage[s]” agencies to ensure, to the extent permitted by law, that the wages paid under existing contracts are consistent with the Executive Order’s requirements.  The Executive Order provides that compliance with the increased minimum wage will be a condition of payment on the government contract, raising the potential for False Claims Act liability if a government contractor accepts payment on a federal contract while failing to pay covered workers the required wage.  The Executive Order’s requirements must, in many circumstances, be included in subcontracts. Although the Executive Order does not elaborate on which employees work “on or in connection” with a federal contract, it is likely that the Department of Labor’s forthcoming regulations implementing the Executive Order will follow the lead of its previous regulations implementing Executive Order 13658.  Under those regulations, workers perform services “on” a contract if they directly perform the services called for by the contract’s terms, and they perform services “in connection with” a contract if they perform work activities that, although not specifically called for by the contract, are necessary to the contract’s performance. The Executive Order also addresses the cash portion of the tipped minimum wage for covered workers.  The cash wage for covered workers who qualify as tipped employees will increase to $10.50 as of January 30, 2022.  The wage will then increase as of 85% of the general minimum wage as of January 30, 2023, and 100% of the general minimum wage as of January 30, 2024, at which point the tip credit will be eliminated. The Department of Labor is required to issue regulations implementing the Executive Order by November 24, 2021.  Federal contractors and subcontractors should consider beginning preparations for the increased minimum wage now, in advance of the regulations, by identifying potentially covered workers whose wages may require adjustment.  Polsinelli will continue to update the contractor community when regulations are issued.

On April 27, 2021, President Biden signed Executive Order 14026, which increases the minimum wage for workers on or in connection with a federal government contract to $15.00 as of January 30, 2022.  This Executive Order increases the minimum wage level set by President Obama’s 2014 Executive Order 13658, which has been set at $10.95 per hour since January 1, 2021. The new minimum wage applies to most new federal contracts, contract-like instruments, solicitations, extensions or renewals of existing contracts or contract-like instruments, and exercises of options on existing contracts or contract-like instruments that are entered into or exercised on or after January 30, 2022.  However, the Executive Order “strongly encourage[s]” agencies to ensure, to the extent permitted by law, that the wages paid under existing contracts are consistent with the Executive Order’s requirements.  The Executive Order provides that compliance with the increased minimum wage will be a condition of payment on the government contract, raising the potential for False Claims Act liability if a government contractor accepts payment on a federal contract while failing to pay covered workers the required wage.  The Executive Order’s requirements must, in many circumstances, be included in subcontracts. Although the Executive Order does not elaborate on which employees work “on or in connection” with a federal contract, it is likely that the Department of Labor’s forthcoming regulations implementing the Executive Order will follow the lead of its previous regulations implementing Executive Order 13658.  Under those regulations, workers perform services “on” a contract if they directly perform the services called for by the contract’s terms, and they perform services “in connection with” a contract if they perform work activities that, although not specifically called for by the contract, are necessary to the contract’s performance. The Executive Order also addresses the cash portion of the tipped minimum wage for covered workers.  The cash wage for covered workers who qualify as tipped employees will increase to $10.50 as of January 30, 2022.  The wage will then increase as of 85% of the general minimum wage as of January 30, 2023, and 100% of the general minimum wage as of January 30, 2024, at which point the tip credit will be eliminated. The Department of Labor is required to issue regulations implementing the Executive Order by November 24, 2021.  Federal contractors and subcontractors should consider beginning preparations for the increased minimum wage now, in advance of the regulations, by identifying potentially covered workers whose wages may require adjustment.  Polsinelli will continue to update the contractor community when regulations are issued.

On March 31, 2021, in United States ex rel. Felten v. William Beaumont Hospital, the Sixth Circuit Court of Appeals held that an employer’s allegedly retaliatory conduct directed at an employee after the employee’s termination can give rise to a False Claims Act (FCA) retaliation claim.  In doing so, the Sixth Circuit embraced a minority position among courts nationwide and created a split with the Tenth Circuit, which held in 2018 that only retaliation against someone who is a current employee at the time can support an FCA claim. The facts of Felten are relatively straightforward.  Mr. Felten believed that his employer, a hospital, was violating the FCA and an analogous Michigan statute by paying kickbacks to physicians and physicians’ groups in exchange for referrals of Medicare, Medicaid, and TRICARE patients.  Mr. Felten filed a qui tam action against his employer, and also asserted that his employer retaliated against him by threatening and marginalizing him for insisting on compliance with the law. After the federal and state governments intervened and settled the qui tam claim, Mr. Felten amended his complaint to add new claims that he was terminated from his employment and, after termination, had been unable to obtain a comparable position because his now-former employer disparaged him to nearly 40 institutions in retaliation for his reports of unlawful conduct.  The district court granted the hospital’s motion to dismiss Mr. Felten’s claims based on the alleged post-termination disparagement, finding that the FCA’s anti-retaliation provision only applied to retaliatory conduct occurring during the employment relationship, and not to disparagement of an employee occurring after his employment has ended. The Sixth Circuit reversed this ruling, finding that an “employee,” for purposes of the FCA, includes both current and former employees of a government contractor.  The court noted that the Tenth Circuit held otherwise in its 2018 Potts v. Center for Excellence in Higher Education, Inc., 908 F.3d 610 (10th Cir. 2018) decision, but departed from its sister circuit’s reasoning.  Instead, the Sixth Circuit relied heavily on the Supreme Court’s decision in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), holding that under Title VII former employees may bring retaliation claims for actions occurring after the termination of their employment.  The court explained that some of the retaliatory actions prohibited by the FCA – such as, threatening, harassing, and discriminating – can refer to actions against former employees, and that some “terms and conditions of employment” persist after an employee’s termination.  The court also explained that a contrary result would incentivize employers to rush to fire employees who the employees believe may engage in FCA protected activity, undermining FCA’s purpose. Because of the circuit split the Sixth Circuit’s decision created, this may be a decision to watch for future developments.  Regardless of what may happen next, the Felten decision is a useful reminder that when an employee engages in potentially protected activity, whether under the FCA, other whistleblower statutes, or anti-discrimination laws, employers must act with care in personnel actions involving that employee.  In some cases, employers may win the battle but lose the war, showing that the “concerns” the employee reported were non-issues, but facing retaliation liability because of how managers or others treated the employee after he or she made the reports.  Felten emphasizes that this care must continue even after the employee departs the organization.

On March 31, 2021, in United States ex rel. Felten v. William Beaumont Hospital, the Sixth Circuit Court of Appeals held that an employer’s allegedly retaliatory conduct directed at an employee after the employee’s termination can give rise to a False Claims Act (FCA) retaliation claim.  In doing so, the Sixth Circuit embraced a minority position among courts nationwide and created a split with the Tenth Circuit, which held in 2018 that only retaliation against someone who is a current employee at the time can support an FCA claim. The facts of Felten are relatively straightforward.  Mr. Felten believed that his employer, a hospital, was violating the FCA and an analogous Michigan statute by paying kickbacks to physicians and physicians’ groups in exchange for referrals of Medicare, Medicaid, and TRICARE patients.  Mr. Felten filed a qui tam action against his employer, and also asserted that his employer retaliated against him by threatening and marginalizing him for insisting on compliance with the law. After the federal and state governments intervened and settled the qui tam claim, Mr. Felten amended his complaint to add new claims that he was terminated from his employment and, after termination, had been unable to obtain a comparable position because his now-former employer disparaged him to nearly 40 institutions in retaliation for his reports of unlawful conduct.  The district court granted the hospital’s motion to dismiss Mr. Felten’s claims based on the alleged post-termination disparagement, finding that the FCA’s anti-retaliation provision only applied to retaliatory conduct occurring during the employment relationship, and not to disparagement of an employee occurring after his employment has ended. The Sixth Circuit reversed this ruling, finding that an “employee,” for purposes of the FCA, includes both current and former employees of a government contractor.  The court noted that the Tenth Circuit held otherwise in its 2018 Potts v. Center for Excellence in Higher Education, Inc., 908 F.3d 610 (10th Cir. 2018) decision, but departed from its sister circuit’s reasoning.  Instead, the Sixth Circuit relied heavily on the Supreme Court’s decision in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), holding that under Title VII former employees may bring retaliation claims for actions occurring after the termination of their employment.  The court explained that some of the retaliatory actions prohibited by the FCA – such as, threatening, harassing, and discriminating – can refer to actions against former employees, and that some “terms and conditions of employment” persist after an employee’s termination.  The court also explained that a contrary result would incentivize employers to rush to fire employees who the employees believe may engage in FCA protected activity, undermining FCA’s purpose. Because of the circuit split the Sixth Circuit’s decision created, this may be a decision to watch for future developments.  Regardless of what may happen next, the Felten decision is a useful reminder that when an employee engages in potentially protected activity, whether under the FCA, other whistleblower statutes, or anti-discrimination laws, employers must act with care in personnel actions involving that employee.  In some cases, employers may win the battle but lose the war, showing that the “concerns” the employee reported were non-issues, but facing retaliation liability because of how managers or others treated the employee after he or she made the reports.  Felten emphasizes that this care must continue even after the employee departs the organization.

On March 30, 2021, the Office of Federal Contract Compliance Programs (OFCCP) announced that it was lowering the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark again this year.  Effective March 31, 2021, the new benchmark is 5.6 percent, down from 5.7 percent in 2020.  This marks the seventh consecutive year that the benchmark has been lowered since its inception in March 2014, when it was set at 7.2 percent. VEVRAA is designed to provide equal opportunity and affirmative action for Vietnam era veterans, special disabled veterans, and veterans who served on active duty during a war or in certain campaigns.  Contractors are required to establish annual hiring benchmarks for protected veterans and assess their progress against that benchmark. Contractors have the option of establishing their own benchmark or adopting OFCCP’s annual national benchmark. Additional information regarding VEVRAA compliance and the national benchmark can be found on the OFCCP website.

On March 2, 2021, the Office of Federal Contract Compliance Programs (OFCCP) amended its Corporate Scheduling Announcement List (CSAL) for supply and service contractors for fiscal year 2020 to remove all of the contractor establishments previously selected for Section 503, accommodation, and promotions focused reviews and compliance checks. This leaves only the 500 compliance evaluations listed in the previous CSAL scheduled for audit at this time. OFCCP also published an amendment to its scheduling methodology. Although this amendment reduces the number of contractor establishments selected for OFCCP audits in fiscal year 2020 from 2,250 to 500, we anticipate that the amendment may turn out to be the first step in an increase in OFCCP audit activity this fiscal year. It appears OFCCP may be refocusing its resources towards the more extensive compliance evaluations and away from the more limited focused reviews and compliance checks, and may issue another CSAL scheduling additional compliance evaluations at some point later in the year. According to FAQ guidance released by OFCCP in connection with the amended CSAL, the changes will not affect pending focused reviews from CSALs issued prior to fiscal year 2020.  In addition, as confirmed by OFCCP’s FAQs, the amendment to the supply and service CSAL will not affect construction contractors who were scheduled for compliance checks or other reviews on the fiscal year 2020 construction CSAL. The amendment to the supply and service CSAL appears to forecast a reversal of former OFCCP Director Craig Leen’s initiative to refocus OFCCP’s enforcement activity on disability and veteran-related compliance issues, as the focused review program had been an important part of Director Leen’s initiatives.  It appears that OFCCP will now instead conduct more compliance evaluations that review the full range of the contractor’s personnel activity and practices and also expose contractors to greater monetary costs and potential liability.

On February 9, 2021, the Biden administration took another step towards reversing the priorities of the Trump-era Office of Federal Contract Compliance Programs (OFCCP), by notifying the U.S. District Court for the Southern District of New York that it intended to rescind the Trump-era OFCCP January 2021 regulation broadening the religious exemption from Executive Order 11246’s nondiscrimination requirements. The notice came in litigation filed by 14 states and the District of Columbia challenging the issuance of the religious exemption regulation.  The notice indicates that OFCCP “intends to propose rescission of the rule,” and that this process will require notice-and-comment rulemaking that will take “several months.”  Beyond that statement and timeline, the notice did not provide insight into OFCCP’s intentions with respect to the religious exemption.  Contractors will have to await the issuance of a Notice of Proposed Rulemaking to learn if OFCCP intends to simply restore the religious exemption to its pre-January 2021 language, or propose a different, middle-ground approach. This early shift indicates that the new administration will not prioritize issues of religious liberty to the same extent as the Trump OFCCP.  It remains to be seen whether the Trump OFCCP’s focus on disability and veterans issues will also be lessened under the new administration.  Contractors should expect additional changes at OFFCP as the new administration continues to pursue its priorities.

On January 27, 2021, the Commonwealth of Virginia became the first state in the country to adopt permanent COVID-19 workplace safety and health standards. As we noted in a previous article, Virginia adopted an emergency temporary workplace safety and health standard in July 2020 to aid in preventing the spread of the pandemic. With Governor Ralph Northam’s approval on January 27, 2021, the permanent standard superseded the July 2020 emergency temporary standard. The permanent standard applies to all employers in the Commonwealth of Virginia that fall within Virginia Occupational Safety and Health’s (“VOSH”) jurisdiction. Accordingly, most private employers in Virginia and employees of the Commonwealth and local governments must comply.  Private and public institutions of higher education are deemed to be in compliance if they have established plans certified by the State Council of Higher Education in Virginia and are acting in compliance with those plans, provided that the certified plans ensure an equivalent or greater level of protection for employees than the VOSH standard. Like the emergency standard, the permanent standard classifies occupations based on “exposure risk level” and requires adherence to various practices based on the risk level of a given occupation. An occupation can have a “very high,” “high,” “medium,” and “lower” exposure risk level based on the risk of transmission. In determining exposure risk levels, employers must consider: (1) the job tasked performed; (2) whether the workplace is indoors or outdoors; (3) the presence of the virus in the workplace; (4) the presences of a person known or suspected to have the virus; (5) the number of employees in relations to the size of the workplace; (6) working distance between employees; and (7) the frequency and duration of close contact employees have with co-workers and other people. The permanent standard further requires employers to ensure that employees practice social distancing in the workplace by making announcements, posting signs, decreasing the density of employees, and adhering to Virginia’s occupancy limits. Employers must also provide employees access to hand sanitizer and cleaning supplies, develop procedures for sanitation, and train employees on ways to prevent the spread of COVID-19. If employees must share a vehicle for work, they must wear the appropriate personal protective equipment (“PPE”). While the permanent standard resembles the July temporary standard, the standards differ in important ways. Under the permanent standard, employers must report to the Virginia Department of health if two or more employees test positive for COVID-19 within a 14-day period instead of reporting each positive COVID-19 test as required by the temporary standard. In addition, the permanent standard prohibits employers from requiring employees who are absent due to the pandemic to provide a negative test before returning to work. Rather, employers must use the symptom-based method based on the Centers for Disease Control and Prevention’s guidelines. The standard also regulates how face masks must be worn, sets limits on the use of face shields, and requires employers to implement ventilation controls in the workplace. Notably, the standard does not contain any provisions regarding how employers can manage employees with vaccine-related issues. Employers in Virginia should prepare and follow comprehensive infectious disease preparedness and response plans to address the requirements in the standard. When preparing the plan, employers should consider including all required training, safe conduct in the workplace, policies and expectations regarding what employees must do if they experience symptoms and receive a positive test, and provisions for returning to work. Although the standard does not address it, employers should also consider ways to handle vaccine-related employee issues in accordance with applicable law. Please feel free to contact us for general advice regarding compliance with the standard or assistance in preparing a complaint plan.

The new Biden administration wasted no time implementing changes at the Office of Federal Contract Compliance Programs (OFCCP).  On January 20, 2021, the day of President Biden’s inauguration, the administration moved promptly to appoint Jenny Yang to serve as the OFCCP’S Director. This appointment does not require Senate confirmation, and went into effect immediately.  The Government Contractor Update previously predicted that contractors should expect heightened pay equity enforcement from OFCCP under the Biden administration, and Director Yang’s appointment appears to be the first step towards the fulfillment of this prediction. Director Yang previously served in the Obama administration on the Equal Employment Opportunity Commission (EEOC) from 2013-2018 and as the EEOC’s Chair from 2014-2017. During her EEOC tenure, Ms. Yang was a fierce advocate for pay equity and closing the gender wage gap, as she spearheaded the Obama administration’s effort to collect pay data from federal contractors and other employers through Component 2 of the EEO-1 form. Although the Trump-era OFCCP disclaimed any intention to review Component 2 data, the Biden OFCCP under Director Yang can be expected to scrutinize this data in search of potential gender-based, or other, pay disparities. Notably, the OFCCP Director serves in the Department of Labor’s hierarchy, and the appointment of Director Yang prior to the Secretary of Labor’s confirmation appears to indicate that the Biden Administration strongly supports her priorities. Additional insight on Director Yang’s potential priorities can be found in her 2019 testimony before the House Committee on Education and the Workforce in support of the Paycheck Fairness Act. In her testimony, Director Yang emphasized her view that existing federal law is insufficient to redress the longstanding gender pay gap. In a point of particular concern for contractors, Director Yang expressed her belief that market compensation rates are not an appropriate justification for salary differentials. This belief is consistent with the views of many OFCCP enforcement personnel, who frequently push back against the use of market compensation studies in contractor compensation systems, even though such studies are widely used by corporate employers in setting salary ranges. OFCCP collected a record amount of settlements from contractors in 2020, but Director Yang’s appointment signals that federal contractors can expect more to come in 2021 and beyond. Contractors should begin preparing now to defend their compensation systems from potential OFCCP evaluations.  Some important steps federal contractors can immediately take include retaining legal counsel to conduct a privileged pay equity audit that will be protected from disclosure in the event of an OFCCP audit or employee lawsuit, bolstering written compensation policies to identify all relevant factors the contractor may seek to rely upon in the event of an audit, and reviewing the use of market compensation studies to ensure they are appropriately conducted and used in a way that does not perpetuate gender-based pay gaps.

The Biden Administration did not waste time in rescinding former President Trump’s controversial Executive Order 13950, which limited the ability of federal government contractors and grantees to conduct certain types of diversity and inclusion training. On January 20, 2021, the first day of the new administration, President Biden issued a new Executive Order on Advancing Racial Equity and Support for Underserved Communities Throughout the Federal Government. Among other initiatives, the new Executive Order rescinds Executive Order 13950 and requires federal agencies to review and consider rescinding any agency actions arising out of or relating to Executive Order 13950.  Executive Order 13950’s prohibitions had previously been paused by a preliminary injunction issued by the U.S. District Court for the Northern District of California on December 22, 2020. Executive Order 13950 had created much uncertainty among federal contractors about the types of diversity and inclusion training that can permissibly be provided. With the order’s rescission, contractors that had suspended or limited their training efforts can now comfortably proceed without facing a risk of OFCCP enforcement.

On January 8, 2021, the Office of Federal Contract Compliance Programs (OFCCP) issued an opinion letter on “Legal Protections for Religious Liberty in the Workplace.” The opinion letter builds on OFCCP’s recent regulations regarding the religious exemption to provide broad protection to employees against discrimination based on their religious practices. The opinion letter appears to signal that OFCCP leadership is concerned that certain aspects of religious faith may be deemed controversial, leading to adverse employment actions against employees who hold these views. Although LGBTQ issues are not directly addressed in the opinion letter, the opinion letter’s principles could conflict with the increasing protections that federal and state employment discrimination laws provide to LGBTQ employees. The primary guidance provided by the opinion letter comes in the form of answers to several hypothetical questions. These answers state that a federal contractor violates OFCCP’s non-discrimination regulations if it subjects an employee or applicant to an adverse employment action because: The contractor assumes the individual holds beliefs that others may find offensive; The individual is a member of a religion that has taken public policy positions that others may find offensive (providing, as examples, support or opposition for Israel and opposition to abortions); The individual supports or attends a religious-related cause or event that others may find offensive (providing, as examples, an anti-war rally, the March for Life, or a rally opposing anti-Semitism); The individual states to co-workers that he or she holds religious views others may find offensive (providing, as examples, a belief in traditional marriage). The opinion letter does limit this principle by noting that the individual’s statement could be unprotected if he or she has been told such comments are unwelcome, the comments are objectively hostile, or the comments constitute harassment. The opinion letter also states that as part of the “duty” federal contractors carry to provide equal employment opportunities to individuals of different religious faiths, contractors “should develop reasonable internal procedures” to ensure that religious accommodations are being “fully implemented.” The letter encourages contractors to “voluntarily” implement best practices such as centralized accommodation request systems, collaboration with employee resource groups, and training for managers and employees. It is unclear how lasting this OFCCP guidance will prove, given that it was issued less than two weeks before President-Elect Biden’s inauguration. The OFCCP Director position does not require Senate confirmation, so it can be filled immediately by appointment, and sub-regulatory guidance like opinion letters can be immediately withdrawn or changed by a new Director. To the extent the opinion letter creates tension between contractors’ obligations to employees of faith and other protected groups, contractors must keep in mind that other, non-OFCCP federal, state, and local non-discrimination laws continue to apply.  Still, the opinion letter emphasizes that federal contractors are subject to an additional layer of scrutiny with respect to their employment actions, and must consider OFCCP implications when making personnel decisions.

Come Jan. 20, former Vice President Joe Biden will be inaugurated as the U.S.' 46th president. In the run-up to the election, the Biden campaign focused on pay equity issues and closing the wage gap as part of its platform to appeal to female voters. For federal government contractors, this focus is likely to translate to renewed enforcement efforts on pay discrimination issues from the Office of Federal Contract Compliance Programs. Contractors should expect this increase in enforcement activity notwithstanding the fact that the Trump-era OFCCP extracted a record amount of discrimination settlements from federal government contractors in 2020. Although the OFCCP focuses on countering alleged discrimination by federal contractors in a variety of personnel transactions — such as hiring, promotions, pay and terminations — its compensation audits have been a source of particular frustration for contractors. The Obama-era OFCCP, which is the best predictor for the expected behavior of the upcoming Biden OFCCP, aggressively pursued pay discrimination enforcement against federal contractors. Contractors, and the attorneys who represent them, frequently complained that the agency operated in a nontransparent and unpredictable manner, issuing findings of sex and race-based compensation discrimination based on purely statistical analyses that contractors could not replicate and that did not consider important features of the contractor's compensation frameworks. This approach to compensation audits recently received a stunning rebuke from Administrative Law Judge Richard M. Clark, in the form of a 278-page order squarely rejecting an OFCCP enforcement action against Oracle America Inc., which alleged systemic pay discrimination against employees at its headquarters. The Oracle enforcement action was filed in the last days of the Obama administration and, in seeking to recover $400 million in wages allegedly underpaid to female, Asian and Black employees, was the OFCCP's largest-ever action. The administrative law judge's ruling against the OFCCP reads as a laundry list of common contractor complaints, noting the OFCCP's failure to identify an actual discriminatory practice causing the alleged pay disparity, lack of relevant anecdotal — i.e., nonstatistical — evidence of discrimination, disregard of important elements of Oracle's compensation framework and aggregation of dissimilar groups of employees for statistical comparison without addressing major nondiscriminatory factors that led to differences in their pay. As contractors frequently complain, the OFCCP focused on a statistical pay disparity without showing any credible evidence of pay discrimination, i.e., the illegal action or motive causing the disparity. The OFCCP's Oracle defeat followed a 2019 ruling against the agency in OFCCP v. Analogic Corp., rejecting its Obama-era enforcement action against Analogic that was based on similar deficiencies in the OFCCP's evidence and statistical analyses. On Dec. 9, 2020, OFCCP Director Craig Leen announced that the agency would not appeal the Oracle decision and promised that the "OFCCP will learn from the decision in an effort to continue improving the efficacy of its critically important compensation program." Leen devoted much of his tenure toward attempting to rein in some of the excesses in the OFCCP's compensation practices, which were on display in Oracle through a series of subregulatory directives and, ultimately, new regulations that became effective on Dec. 10, 2020. Among other things, the new OFCCP compensation regulations require the agency to control for major, measurable criteria used by the contractor in determining compensation, produce nonstatistical evidence of discrimination supporting alleged violations in addition to identifying statistical compensation disparities, and identify specific contractor practices that allegedly cause statistical disparities in disparate impact cases. The regulations also require the agency to provide contractors with a predetermination notice prior to issuing a notice of violation and pursuing enforcement, and to disclose with the predetermination notice the agency's qualitative and quantitative evidence, as well as its statistical model and the reason for excluding any factors proposed by the contractor from its statistical analysis. The predetermination notice provides the contractor with an opportunity to address and refute the agency's claims, or seek resolution, prior to the commencement of formal enforcement proceedings. Despite Leen's statement that the OFCCP has learned from its Oracle defeat, and similar comments about the prior Analogic case, it is not clear whether this sentiment is widely held among the agency's staff. At least one key career employee in the Department of Labor's Office of the Solicitor, which litigated Oracle on behalf of the OFCCP, has filed a whistleblower complaint alleging that the OFCCP's decision to forego an appeal of the administrative law judge's decision in Oracle was based on unlawful political influence and interference. Moreover, as the old Washington, D.C., adage goes, "personnel is policy." Unlike other Department of Labor posts like the administrator of the Wage and Hour Division, the OFCCP's director does not require U.S. Senate approval. Under Biden, a progressive OFCCP director could immediately begin undoing Leen's subregulatory directives. Although it would take significantly longer for a new director to amend or eliminate the recent compensation audit regulations through a new round of notice and comment rulemaking, the regulations would also be vulnerable to change under a new administration. Even if Leen's regulations are not formally amended by the Biden OFCCP, they may not prove to be significant guardrails tempering the aggressiveness of the new administration's enforcement activity against federal contractors. The regulations are somewhat limited in scope, and do not address several agency practices that limit contractors' ability to counter the agency's pay discrimination analyses. For example, the regulation's listing of contractor compensation factors for which the agency should control in its statistical analyses does not include market compensation studies, which are often a significant factor used by private-sector employers in setting salary ranges for positions. The OFCCP frequently compares employees across positions while resisting controlling for the market compensation of the respective positions, claiming that market compensation is a tainted variable. Although the regulation's listing of factors is nonexclusive, the inclusion of market compensation would have bolstered contractors' legitimate reliance on market studies against the OFCCP's skepticism. The regulation also does not address the formation of pay analysis groups that aggregate groups of employees for statistical analysis. Contractors commonly argue that such groups result in pay comparisons among employees who would not be deemed similarly situated or perform equal work under Title VII and other federal nondiscrimination laws. Because these issues are not addressed in the regulation, the Biden OFCCP could use such methods to evade the spirit of the regulations even without repealing them. The new compensation regulations also contain ill-defined exceptions that could be broadly construed by a new administration. For example, the requirement that the OFCCP confirm its findings of statistical disparities with nonstatistical, qualitative evidence of discrimination is inapplicable if the statistical disparity is extraordinarily compelling. This standard could be watered down to attempt to justify cases based on purely statistical disparities without relevant non-statistical evidence of discrimination. Another example is the suspension of the requirement that the agency identify a specific discriminatory policy or practice in disparate impact claims where the OFCCP demonstrates that the different elements of the contractor's selection procedures cannot be separated for analysis. One tempering factor on the OFCCP's ability to aggressively interpret these exceptions, however, is the existence of the Oracle and Analogic decisions, which provide powerful arguments for contractors seeking to oppose defective statistical analyses and weakly supported pay discrimination claims. In addition, the OFCCP's well-publicized losses in those cases could lead more contractors to dig in their heels and resist the agency's discrimination findings. Contractors could also face more aggressive OFCCP action under a Biden administration due to the new administration's expected revival of the requirement for federal contractors — and others — to submit employee pay data as part of their annual EEO-1 submission. The Obama administration first implemented the requirement that contractors and other employers submit compensation data with the EEO-1 filing, and despite the Trump administration's attempt to discontinue the requirement, the U.S. District Court for the District of Columbia ordered the collection to go forward for the calendar years 2017 and 2018. The Trump-era OFCCP disclaimed any intention to review or rely upon EEO-1 pay data, claiming that it would not be useful to the OFCCP's mission. The Biden administration is expected to reinstate the requirement, and the Biden OFCCP could decide to review contractors' EEO-1 submissions to locate potential pay discrimination issues. This would present another avenue for contractors to face OFCCP scrutiny, in addition to the agency's annual compliance evaluations, and potentially give rise to increased Fourth Amendment litigation as contractors resist any OFCCP reviews that may be initiated based on EEO-1 submissions. Contractors should prepare for four years of increased OFCCP enforcement in the area of compensation. Even during the Trump administration, the agency prioritized enforcement efforts in the financial services, professional services and technology industries, and those dynamic and growing sectors of the economy will likely continue to face heightened scrutiny. Federal contractors should proactively prepare for an uptick in OFCCP activity by regularly conducting privileged pay equity audits to identify and resolve gender and race based compensation disparities. Doing so will not only assist contractors in escaping OFCCP enforcement but will also provide a valuable boost to the contractor's diversity, equity and inclusion efforts.

On December 15, 2020, the District of Columbia Council unanimously passed the Ban on Non-Compete Agreements Amendment Act of 2020, under which the District of Columbia joins California and a small handful of jurisdictions across the country that have prohibited the enforcement of covenants not to compete. The new law began as an effort to limit the enforcement of non-compete agreements against low wage employees, but on December 1, 2020 was amended to prohibit non-competes against all virtually all employees who perform work in D.C.  The primary exception to the prohibition is for “medical specialists,” defined as licensed physicians who have completed a medical residency and are paid at least $250,000 per year.  Non-compete agreements may continue to be enforced against medical specialists, so long as certain procedural requirements are followed prior to the agreement’s execution.  In addition, non-compete agreements entered by the sellers of a business in connection with the business’ sale remain enforceable.  Importantly, however, the new law also prohibits employer policies that forbid employees from working for competitors during the employment relationship. Although non-compete agreements are prohibited, confidentiality or non-disclosure agreements protecting confidential and proprietary information and trade secrets are still enforceable.  The new law is less clear, however, whether non-solicitation agreements that prohibit employees from working with the employer’s customers or recruiting its employees are enforceable.  Many employers use non-solicitation agreements to impose a more limited restriction that prevents a departing employee from abusing a customer relationship.  The language of the law does not appear to prohibit non-solicitation agreements, but, unlike similar non-compete prohibitions in other states, the law does not expressly preserve the enforceability of non-solicitation agreements. D.C. employers that rely on non-compete agreements should take the following steps: The new law’s prohibitions on the enforcement of non-compete agreements are not applicable to pre-existing agreements entered prior to the effective date of the law (which Polsinelli estimates will become effective in late February after congressional review).  Accordingly, employers that do not have covenants not to compete with their D.C. employees should consider now whether they wish to implement these agreements. Ensure on a going forward basis that employees entering positions that would typically be required to execute a non-compete are instead required to sign confidentiality and non-solicitation agreements instead. Hospital and other medical employers should update their onboarding processes for physicians to ensure that the physician is provided with any non-compete agreement and the other information required by the law sufficiently in advance to satisfy the new law’s requirements. Review existing “moonlighting” policies and, if necessary, modify them to comply with the new law. In addition to rendering non-competes void and unenforceable, the new law also provides employees with a private right of action to recover attorney’s fees and statutory remedies of $500 to $3,000 per violation in cases of prohibited agreements.  The D.C. government can also bring enforcement actions. Finally, the law also prohibits retaliation against employees who seek to exercise their rights under the act or oppose illegal agreements. Polsinelli attorneys are prepared to provide additional guidance to D.C. employers regarding these recent changes.

On December 7, 2020, the Office of Federal Contract Compliance Programs issued a Final Rule codifying an expansion of the agency’s exemption from Executive Order 11246’s nondiscrimination requirements for federal contractors who are religious corporations, associations, educational institutions, or societies.  The new rule, which goes into effect on January 8, 2021, defines certain key terms in a way that provides a broader scope of exemption than recognized by the EEOC under Title VII’s corresponding religious exemption. The pre-existing religious exemption in OFCCP’s regulations provided that certain of Executive Order 11246’s non-discrimination obligations did not apply to a contractor or subcontractor “that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on . . . of its activities.”  OFCCP’s Final Rule provides definitions of the previously-undefined terms “religious corporation, association, educational institution, or society” and “particular religion” that broadens the scope of the exemption. The new rule implements a four-part test for contractors to establish that they are a religious entity within the scope of the exemption. Contractors must establish that they: Are organized for a religious purpose, as typically shown by the entity’s governing documents (i.e., articles of incorporation, bylaws, or a mission statement); Hold themselves out to the public as carrying out a religious purpose; Engage in activity consistent with, and in furtherance of, the religious purpose; and Either (1) operate on a non-profit basis, or (2) present strong evidence that the entity’s purpose is “substantially religious.” The new regulation instructs that an organization’s satisfaction of these standards is to be measured by reference to the organization’s own sincere understanding of its religious tenets, and that religious entities may, but are not required to, be affiliated with a house or worship or composed of individuals sharing the same religious tradition. The regulation’s comments make clear that OFCCP should defer to the contractor’s view that an activity has religious meaning, providing the example of a drug rehabilitation center that sincerely believes that its work is a form of ministry. Although the regulation itself refers to an exemption “with respect to the employment of individuals of a particular religion,” OFCCP’s new definition of “particular religion” broadly construes the exemption.  The exemption applies not only to a particular employee’s religion, but also to the employee’s “acceptance of or adherence to sincere religious tenets as understood by the employer as a condition of employment,” even if the employee is not a member of the employer’s particular sect. Finally, the Final Rule adds a rule of construction provision to OFCCP’s regulations requiring that they be construed in favor of a broad protection of religious exercise. Even as expanded by the Final Rule, the religious exception will likely be inapplicable to the bulk of contractors, and does not fully exempt even religious contractors from OFCCP’s requirements. In addition, religious contractors will remain subject to other federal, state, or local non-discrimination laws not enforced by OFCCP that may not provide the same exemption. Nonetheless, contractors who believe they may qualify for the exemption should work with counsel to review its requirements and ensure they have documentary evidence clearly demonstrating the organization’s compliance with each of the four requirements for the contractor to obtain religious status under the regulation.

On November 10, 2020, OFCCP published its Final Rule on “Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination.”  We previously covered OFCCP’s Notice of Proposed Rulemaking on the subject, which promised to provide additional certainty to contractors regarding OFCCP’s standards for finding discrimination-based violations. In the Final Rule, OFCCP made significant changes to the Notice of Proposed Rulemaking, the most significant of which are described below: OFCCP replaced the concepts of “statistical evidence” and “nonstatistical evidence” from the Notice of Proposed Rulemaking with “qualitative evidence” and “quantitative evidence” in the Final Rule.  Qualitative evidence largely corresponds to the previous category of “nonstatistical evidence” and encompasses testimony and other documentary evidence giving rise to an inference of discrimination.  In a positive note for contractors, OFCCP has somewhat backed away from the Notice of Proposed Rulemaking’s classification of manager discretion or subjective decision making as qualitative/nonstatistical evidence of discrimination, and now considers the existence of discretion or subjectivity to be qualitative evidence only where there is additional evidence showing the discretion has been used in a discriminatory manner.  Given that subjectivity is an almost inherent aspect of performance evaluation, this is a welcome development.  The Final Rule also makes clear that an employee’s subjective belief that he or she has been discriminated against does not constitute qualitative evidence. The Final Rule’s new category of “quantitative evidence” is broader than the “statistical evidence” of the Notice of Proposed Rulemaking.  The prior category of statistical evidence focused on OFCCP’s preferred tool of linear regression analysis, and required OFCCP to find disparities of two standard deviations or greater in order to provide evidence of discrimination.  The Final Rule retains the two standard deviation threshold, but now also includes cohort analyses in which OFCCP compares the outcomes of specific employees as “quantitative evidence.”  Troublingly, the Final Rule does not provide standards for conducting cohort analyses, leaving the door open for OFCCP to pursue enforcement actions based on cherry-picked comparisons. The Final Rule establishes specific standards for findings of discrimination in disparate treatment and disparate impact cases.  For disparate treatment cases, OFCCP must provide quantitative evidence of discrimination, provide qualitative evidence that supports a finding of discriminatory intent and a finding that the discriminatory intent caused the disparate treatment, and show that the disparity is practically significant.  This move to require qualitative evidence in nearly all cases is a welcome development.  However, the Final Rule contains an exception to the qualitative evidence requirement in cases where the quantitative evidence is “extraordinarily compelling,” without defining that standard (as opposed to the Notice of Proposed Rulemaking’s three standard deviation threshold for purely statistical violations).  It remains to be seen how strictly OFCCP will apply the “extraordinarily compelling” standard in practice. For disparate impact cases, OFCCP must provide quantitative evidence of discrimination, identify the contractor’s specific policy or practice causing the adverse impact, and show that the disparity is practically significant.  The requirement for identification of a specific policy or practice is a positive development, as OFCCP previously brought claims based on statistical disparities without identifying how the contractor allegedly discriminated.  Again, however, the Final Rule contains an exception for situations where “the elements of a contractor’s selection procedures are incapable of separation for analysis.”  As with disparate treatment cases, it remains to be seen whether the exception will swallow the rule. The Final Rule codifies many aspects of OFCCP Director Leen’s 2018 directives in a form that will be more binding on the agency. Contractors facing preliminary findings of discrimination can evaluate OFCCP’s evidence against the Final Rule’s standards to seek to rebut the agency’s claims .As noted, however, the Final Rule does contain exceptions that lack specific standards for their application and could allow OFCCP to evade the Final Rule’s requirements. That said, OFCCP is likely to take a more aggressive approach to enforcement under a Biden administration, and the Final Rule provides contractors with tools to refute some OFCCP allegations of discrimination.

On October 21, 2020, the Office of Federal Contract Compliance Programs (OFCCP) continued to address the highly-controversial diversity and inclusion (D&I) training restrictions in Executive Order 13950.  Specifically, OFCCP issued a Request for Information (RFI) regarding contractor D&I training efforts, as required by the Executive Order, and also held a stakeholder call in which Director Craig Leen addressed several issues surrounding OFCCP’s response to the Executive Order. In the RFI, OFCCP provided some hints as to its enforcement and compliance assistance efforts for the Executive Order’s D&I training restrictions.  Echoing its prior guidance, OFCCP clarified that “training is not prohibited if it is designed to inform workers, or foster discussion, about pre-conceptions, opinions, or stereotypes that people – regardless of their race or sex – may have regarding people who are different, which could influence a worker’s conduct or speech and be perceived by others as offensive.”  As with prior agency guidance, this statement makes clear that while discussions of implicit bias are not absolutely prohibited, those discussions cannot single out specific racial or sex groups as being more likely to harbor biases than others, and must focus on the workforce as a whole. The RFI also invited federal contractors who are unsure about the compliance status of their D&I training materials to seek compliance assistance from OFCCP.  According to the RFI, if a contractor voluntarily submits materials to OFCCP for review, OFCCP will “exercise its enforcement discretion and not take enforcement action” if the contractor “promptly comes into compliance with the Executive Order as directed by OFCCP.”  However, OFCCP reserves the right to pursue enforcement action if it determines that the contractor refused to correct any identified issues.  The RFI also hints that OFCCP may begin requesting D&I training materials in its neutrally-scheduled compliance evaluations, though this request may require OFCCP to obtain approval to modify its OMB-approved Scheduling Letter.  As of October 21, 2020, OFCCP has not requested OMB approval to update its Scheduling Letter in light of the Executive Order. If a contractor wishes to respond to the RFI, the deadline is December 1, 2020. The RFI makes clear that responses are entirely voluntary and contractors may choose not to respond.  However, if someone other than a contractor representative authorized to submit the materials on behalf of the contractor provides information to OFCCP, for example an employee who attended a training session, OFCCP will not exercise its enforcement discretion and could pursue an enforcement action.  Accordingly, there is some risk that a contractor may be subjected to an enforcement action as a result of this RFI even if it does not choose to participate. Director Leen stated similar themes in the October 21, 2020 stakeholder call. Director Leen emphasized that there is overlap between Executive Order 13950’s restrictions on D&I trainings and the pre-existing non-discrimination obligations in Executive Order 11246.  Director Leen characterized Executive Order 13950 as clarifying Executive Order 11246’s prohibition of race or sex stereotyping in the specific area of training programs, and noted that OFCCP would act on any employee complaints it received under the new Executive Order.  This means that all federal contractors must comply with Executive Order 13950, even if they do not have a contract containing the Executive Order’s required clause.  Director Leen closed his remarks by expressing that every employee should feel “completely welcome and included” in contractor diversity efforts, and that “merit and merit alone” should govern contractors’ personnel actions. Although the RFI and stakeholder call provided some insight into OFCCP’s views and enforcement strategy on Executive Order 13950, they did not provide the specific guidance that contractors have sought.  Polsinelli has worked with several government contractor clients to assess their obligations and the compliance status of their D&I efforts under Executive Order 13950, and will continue to update the contractor community on developments regarding the Executive Order.

The September 22, 2020, issuance of Executive Order 13950 limiting federal government contractors’ ability to conduct diversity, inclusion, and unconscious or implicit bias training has roiled the contractor community. Although the Executive Order provided broad categories of themes that it prohibits as subjects of diversity training, it does not provide contractors with substantial guidance as to what specific types of training the Executive Order prohibits. On October 7, 2020, the Office of Federal Contract Compliance Programs (OFCCP) issued an FAQ guidance document regarding the Executive Order, which provides some, but far from sufficient, guidance to contractors. OFCCP’s FAQ guidance largely quotes directly from the Executive Order without providing additional insight into the Executive Order’s terms. That said, the FAQ does clarify two points: First, even if a federal contractor does not have a government contract subject to the Executive Order (generally, one issued after November 21, 2020), “OFCCP may investigate claims of sex and race stereotyping pursuant to its existing authority under Executive Order 11246.” To that end, OFCCP earlier established a hotline for employees of contractors to submit complaints of prohibited diversity training programs. Accordingly, all federal contractors should ensure their training programs comply with the Executive Order, regardless of whether their contracts contain the Executive Order’s prohibition. Second, OFCCP addressed the scope of unconscious or implicit bias trainings. The FAQ clarifies that such trainings are not necessarily prohibited. However, bias trainings cannot single out a single group as being unconsciously or implicitly racist, sexist, oppressive, or biased. Instead, the training must be “designed to inform workers, or foster discussion, about pre-conceptions, opinions, or stereotypes that people – regardless of their race or sex – may have regarding people who are different, which could influence a worker’s conduct or speech and be perceived by others as offensive.” Although OFCCP’s FAQ may not have provided the details sought by contractors, a September 28, 2020, memorandum from the Office of Management and Budget (OMB) regarding similar restrictions on federal sector diversity trainings provides some additional guidance. OMB emphasizes that trainings must promote “fair and equal treatment.” The memorandum advises agencies to search for concepts like critical race theory, white privilege, intersectionality, systemic racism, positionality, racial humility, and unconscious bias as potentially prohibited.  Although these are also broad concepts, the OMB memorandum provides some additional guidance on what contractors should look for and avoid. Notably, neither OMB nor OFCCP addresses the thornier question of what contractors must do if employees themselves discuss prohibited topics or themes during discussion portions of trainings. Given the lack of clear guidance to date from the Executive Order, OFCCP, OMB, or any other official source, contractors should conduct a close review of any diversity and inclusion training materials they use to ensure that they are consistent with the “fair and equal treatment” principle and do not include the themes described in the Executive Order. The effect of the Executive Order remains an evolving issue that contractors should closely follow.