by Federal contractors are on notice that the Department of Labor (DOL) has proposed a new regulation that would require them to hire the employees of an acquired company if the company also has certain federal contracts. On July 15 ,2022, the DOL published a proposed rule to provide workers of federal service contracts the right of first refusal of employment with an acquiring company. https://www.dol.gov/newsroom/releases/whd/whd20220714
The proposed rule is intended to implement the requirements of an Executive Order issued last November that states that contractors and subcontractors on most federal service contracts must offer service employees employed under a predecessor contract the right of first refusal of employment with the successor company. The rule would:
- Establish standards and procedures for implementing the Executive Order;
- Specify the obligations of the DOL and contractors in assuring the requirements of the Executive Order are met;
- Establish an agency investigation process that protects covered workers from displacement; and
- Identify sanctions and remedies that the DOL may impose on contractors not meeting their obligations.
If the contractor’s obligations regarding displaced workers sounds familiar, it is because offering displaced service workers first refusal on a job with the new company had been required under an Executive Order issued in 2009. The requirements under the 2009 order were rescinded in 2019 due to a change in administrations.
