Obama Order “Ends Corporate Immunity” for Federal Contractors

Public Justice executive director Paul Bland says Obama’s new executive order will end the practice of corporate-paid arbitrators settling discrimination suits, and this has the Chamber of Commerce fuming

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Story Transcript

JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore.

On Thursday, President Obama signed an executive order requiring potential U.S. government contractors to disclose past labor law violations. That means it will make it harder for companies with shoddy labor records to land federal contracts. This will impact 28 million employees of the 24,000 businesses with federal contracts in the U.S. A report released last year by Democratic senator Tom Harkin found that in 2012, taxpayers provided more than $80 billion in contracts to companies who had been perpetual violators of basic U.S. labor laws. President Obama’s executive order would only go into effect in 2016.

Now joining us to unpack the recent executive order is Paul Bland. Paul is the executive director of Public Justice, a national public interest law firm that handles consumer, environmental, and civil rights cases.

Thanks for joining us, Paul.

PAUL BLAND, EXECUTIVE DIRECTOR, PUBLIC JUSTICE: Thanks so much for having me, Jessica.

DESVARIEUX: So, Paul, when I heard about this executive order in some of the key provisions, like the fact that prospective contractors will now be required to disclose labor law violations from the past three years before they can get a contract, I thought to myself, wait, why aren’t we doing this now? What’s been the business relationship like between the federal contractors and the government in the past?

BLAND: Well, there’s definitely been a situation where the government’s overlooked a lot of problems. You have some contractors who have terrible labor records, who treat whistleblowers badly, who discriminate against people based on their gender, against people of color, this sort of thing. And I think it’s a great thing to have some transparency and to force these contractors to come out and really set out there full record in a public way that people can look at it. So I think it’s a great step forward in that respect.

DESVARIEUX: But, Paul, there are also other key provisions in this executive order. What to you is the most significant that will affect everyday people?

BLAND: By far the most important part of this executive order is that it it bans corporations who contract with the federal government from having forced arbitration clauses for their employees. And what that means is that right now, tens of millions of American workers, if they have a claim against their employer, they’re being discriminated against based on their race or their gender or things of that sort, they can’t go to court, but instead they have to go to a private arbitration system. It’s sort of corporate tribunal. And, basically, their employer picks a company who picks the arbitrator. And it’s a system which is very badly biased against the workers.

So there’s an academic at Cornell who has taken every single case which has gone forward in front of the largest major mandatory arbitration company in America in the workplace and compared them up to tens of thousands of cases in court. And he’s found that over many thousands of cases, essentially every case that’s gone to arbitration [that if (?)] the workers are able to go to court, they’re substantially more likely to win their case than if they have to go to forced arbitration, and if they do when a case in court, they’re far more likely to get a better recovery than if they were to go to forced arbitration. And today’s executive order is going to put an end to that for all the corporations that have federal government contracts. It’s the biggest step forward in civil rights in the United States probably since the 1991 civil rights restoration act.

DESVARIEUX: Wow. And I can assume that companies aren’t too excited about this executive order. Which lobbying groups were against this order?

BLAND: The Chamber of Commerce has this complete love affair with forced arbitration. And the reason is obvious: because the Chamber of Commerce fights against almost anything which would allow some kind of statute, a civil rights statute, consumer protection, environmental, that are being forced against corporations. And because forced arbitration’s been a way to sort of buy corporate immunity, the Chamber’s always been in favor of it.

I mean, as an indication of how strongly the Chamber feels about this, a number of years ago Senator Franken was able to get through the Congress an amendment that was similar to this, but only applied to defense contractors. And the Chamber of Commerce urged members of the Senate to filibuster the Defense Department Appropriations Act, even though at the time we were in the middle of two shooting wars in Afghanistan and Iraq. I mean, the business community, people were saying that they would rather sort of defund the military in the middle of a war than to have effective enforcement of civil rights laws. It was crazy.

DESVARIEUX: Yeah. And, I mean, what do you think, though, made President Obama even do this? Because these forces are quite powerful.

BLAND: Well, I think that there’s been a growing movement, particularly among women’s groups and people who are concerned about gender discrimination, to fight back. And I think if you look at when President Obama first elected, the very first thing he did is he came down on a train from Illinois, much like President Lincoln had come down on a train from Illinois when he became president, and he brought Lily Ledbetter with him. And the first bill that he passed was the Lilly Ledbetter pay equity legislation.

Well, what’s happened is in the years since then, increasingly corporations have used forced arbitration clauses, so someone like Lily Ledbetter, a woman who’s paid less than a man because of her gender, those cases have been taken out of the court system. They’ve got into this private corporate tribunal system that’s sort of secretive, a forced arbitration system. This is something that President Obama’s has cared about for a long time. If the Congress weren’t broken, the Congress itself probably should have and would have done something about this. But since the Congress has been refusing to do anything, the president’s had to step forward and take action. I think it’s great.

DESVARIEUX: Do you have any criticisms of the executive order at all? Do you feel like it doesn’t go far enough in some areas?

BLAND: The thing that I would have really liked to have seen them do would be to also extend it to wage and hour laws. So, for example, under the Fair Labor Standards Act, people are allowed to get overtime for certain types of claims, or that there is a minimum wage. There’s a variety of different protections under the wage and hour laws. An executive order only deals with gender and race discrimination. It doesn’t extend to the wage and hour violations. And that’s a really important body of laws that are broken a lot, and forced arbitration clauses have been used, really, to get them. And so I think it would’ve been great if the executive order could have gone further there.

DESVARIEUX: Alright. Paul Bland, thank you so much for joining us.

BLAND: Thanks so much for the chance to be with you.

DESVARIEUX: And thank you for joining us on The Real News Network.

End

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