Between 1962 and 1979, the Federal labor relations program authorized the suspension of collective bargaining provisions for installations or activities located outside the United States where determined necessary in the national interest. Since 1979 this authority was vested by statute in the President (5 U.S.C. 7103(b)) where he finds such suspension is necessary in the interest of national security. This authority was previously invoked in November 1979 under Executive Order No. 12171, when the Drug Enforcement Administration's overseas units were removed from coverage of the Federal labor relations program.

Past experience indicates that the Executive order will not affect the traditional bargaining issues which are of concern to some 10,000 U.S. citizen employees of the Department of Defense in overseas bargaining units.

Employees at overseas bases generally bargain on the same matters of personnel policy and working conditions as their counterparts at Federal activities in the United States. They bargain on such issues as promotion plans, grievance procedures, safety and health matters, duty hours, equitable overtime assignment practices, and many other subjects. Overseas employees are subject to most of the same personnel policies and regulations as their U.S. counterparts as well as those applicable only in overseas areas. Additionally, various aspects of their daily lives are affected to varying degrees by treaty provisions and agreements negotiated between the United States and the host countries (SOFAs).

Recently, labor organizations representing U.S. citizen employees in overseas areas have sought to bargain on matters affecting the implementation of a SOFA. The union proposals demanded exceptions from SOFA implementing policies of the United States dealing with (1) the registration of privately owned vehicles in Korea, and (2) ration control policies directed at ensuring that duty free goods purchased in government exchanges are not illegally disposed of in the host country. The proposals would have exempted U.S. citizen employees from policies designed to carry out SOFA requirements and understandings jointly agreed upon by U.S. and Korean Government representatives.

The Federal Labor Relations Authority has ruled that such proposals relate to conditions that affect conditions of employment in overseas areas. This Executive order is the President's determination that such proposals substantially impair the implementation of a SOFA. Further, it is the President's determination that bargaining on such proposals would result in complicating the execution of country-to-country agreements and exacerbate relations with the host government such that the suspension of certain labor-management relations provisions is necessary in the interest of national security. However, the Executive order is narrowly drawn and the exemption of any specific proposal must be grounded on a finding that it would substantially impair the implementation of a treaty, agreement, or understanding between the United States and the host nation.

Employees in the Republic of Panama are not affected by the Executive order because labor relations in the former Canal Zone are governed by special provisions of U.S.-Panama agreements and the Panama Canal Act of 1979.