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New Labor Dept. Rule: Contractors to Keep Established Workers

Photo: Peter Baxter

Companies that win established contracts must offer employment to its predecessors’ employees, the Labor Department announced Monday.

The Labor Department issued its final rules on the Federal Register, mandating the inclusion of a clause offering employees the right of first refusal of employment under the successors’ contract in positions for which they are qualified.

The new policy also applies to subcontractors and covers service contracts valued at more than $150,000.

President Barack Obama issued an executive order in Jan. 2009 requiring contractors to give predecessors’ employees the opportunity to keep their positions. The order also forbids the listing of employment openings until the right of first refusal is offered.

Click here to read the final rules.

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