Congress Disapproves Blacklisting Rule

Congress Disapproves Blacklisting Rule

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Volume 40 | Issue 35

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President Obama’s Fair Pay and Safe Workplaces Executive Order – the so-called “blacklisting” order – required prospective federal contractors and their subcontractors to disclose past labor law violations during the federal procurement process, and imposed other obligations and restrictions on covered contractors. Last October, a Texas federal court issued a nationwide preliminary injunction putting key provisions of the final rule implementing that order on hold. Last month, the House passed a resolution disapproving the rule. Yesterday, the Senate followed suit. If, as expected, President Trump signs the disapproval resolution, the rule will be revoked in its entirety.

Background

President Obama issued Executive Order 13673: Fair Pay and Safe Workplaces (EO) on July 31, 2014. The so‑called “blacklisting” order required prospective federal contractors and their subcontractors to disclose past violations of any of 14 federal labor and employment laws during the competitive bidding process, imposed new paycheck transparency obligations and wage statement requirements on covered contractors, and restricted their use of mandatory arbitration agreements. The order applied to federal contracts valued at more than $500,000.

On August 25, 2016, the Federal Acquisition Regulatory Council (FAR Council) issued a final rule implementing the EO and the DOL issued guidance to assist federal agencies with implementation. (See our September 28, 2016 For Your Information.) Business groups filed a legal challenge soon after. Hours before the rule was to take effect, a Texas district court issued a nationwide preliminary injunction, blocking implementation of key provisions. On October 25, the court enjoined enforcement of both the public disclosure and pre-dispute arbitration agreement provisions. However, it declined to put the paycheck transparency provisions on hold, allowing them to take effect for new contracts on January 1, 2017. (See our October 27, 2016 FYI Alert.)

Congress Acts

On February 2, the House passed a joint resolution (H. J. Res. 37) — Labor Law Violation Disclosure Disapproval – under the Congressional Review Act (CRA) to disapprove the blacklisting rule and permanently block the government from enforcing its requirements, including the paycheck transparency provisions. A resolution introduced under the CRA, which can be passed by a simple majority, allows Congress to prevent a rule from taking effect or continuing, and bars reissuance of the same or a substantially similar rule without congressional authorization. Yesterday, by a vote of 49-48, the Senate passed the joint resolution of disapproval, clearing the way for President Trump to nullify the blacklisting rule by his signature.

In Closing

If, as expected, President Trump signs the joint disapproval resolution, the FAR rule implementing the blacklisting EO will have no further force or effect. In that event, federal contractors will be relieved of the EO’s requirement to disclose labor law violations, restrictions on arbitration agreements and paycheck transparency obligations that went into effect earlier this year.

Produced by the Knowledge Resource Center of Conduent HR Services

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