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...
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