In the game of political football, succeeding presidents often overturn the actions of their predecessors. President Trump has honed that practice, with a particular focus on overturning many of the Executive Orders and other actions taken by President Biden, including actions affecting federal procurement policy. However, few presidential actions have been on the revolving carousel for so long as the “nondisplacement of workers” executive order.
Badge Flipping to Hire Employees
When a Federal government contractor supplants an incumbent contractor on a federal professional or technical services contract, the offeror has often bid, and expects to hire, some or all of the incumbent employees from that predecessor contractor. In fact, the contractor’s plan for transitioning the work, and the incumbent workforce, from the incumbent to the successor contractor, is often an important evaluation factor used by federal agencies in making its award decision.
The On Again-Off-Again Executive Order
On January 20, 2025, in his first day in office, President Trump issued Executive Order 14148, titled “Initial Rescission of Harmful Executive Orders and Actions.”[i] One item in that long list of enumerated items was the repeal of President Biden’s Executive Order 14055, titled “Nondisplacement of Qualified Workers Under Service Contracts,” that was issued on November 18, 2021.[ii] In a surprising delay, it was only on December 22, 2025, eleven months after President Trump’s executive action, that the Department of Labor took final action to rescind the Department’s December 14, 2023, nondisplacement implementing regulations.[iii]
Under President Biden’s Executive Order 14055, contractors and subcontractors performing on covered Federal service contracts must, in good faith, offer a right of first refusal of employment to qualified employees working on the predecessor contract. After a contentious, and litigation-filled, regulatory process, the Department of Labor issued its final implementing rule on December 14, 2023.[iv]
Surprisingly, the FAR Council never implemented the final 2023 Department of Labor regulations into the Federal Acquisition Regulation (FAR). There is no data to indicate how many agencies included the Labor Department’s requirements in their solicitations or contracts even in the absence of an official final FAR clause.
The genesis of this “nondisplacement” requirement dates to an Executive Order issued by President Clinton in 1994;[v] this Executive Order was implemented in the FAR. President George W. Bush revoked that Executive Order in 2001[vi] and on May 6, 2020, the FAR Council deleted all FAR references relating to this requirement. President Obama issued a new Executive Order in 2009,[vii] which was also incorporated into the FAR, but President Trump, in his first term in 2019, repealed the Obama Executive Order.[viii]
Conclusion
The nondisplacement rule has been a political football for 30 years. With the final 2025 Trump Administration actions to repeal the Biden Executive Order and rescind the Department of Labor rules, we’ll have to wait at least three more years to know whether the next President will reinstate this nondisplacement requirement on future covered federal contracts.
If you have any questions or need any additional information, please contact the author at achvotkin@protoraelaw.com or the Protorae Law attorney with whom you normally work.
[i] Executive Order 14148 of January 20, 2025, “Initial Rescissions of Harmful Executive Orders and Actions,” available at 2025-01901.pdf.
[ii] Executive Order 14055 of November 18, 2021, “Nondisplacement of Qualified Workers Under Service Contracts,” available at 2021-25715.pdf.
[iii] Department of Labor December 22, 2025, final rule “Nondisplacement of Qualified Workers Under Service Contracts: Rescission of Regulations,” available at 2025-23626.pdf.
[iv] Department of Labor December 14, 2023, final rule “Nondisplacement of Qualified Workers Under Service Contracts,” available at 2023-27072.pdf.
[v] Executive Order 12933 of October 20, 1994, “Nondisplacement of Qualified Workers Under Certain Contracts,” available at Federal Register :: Executive Orders.
[vi] Executive Order 13204 of February 17, 2001, “Revocation of Executive Order on Nondisplacement of Qualified Workers Under Certain Contracts,”, available at Federal Register :: Executive Orders.
[vii]Executive Order 13495 of January 30, 2009, “Nondisplacement of Qualified Workers Under Service Contracts,” available at E9-2484.pdf.
[viii] Executive Order 13897 of October 31, 2019,” Improving Federal Contractor Operations by Revoking Executive Order 13495,” available at 2019-24288.pdf.