A Texas judge issued a preliminary injunction Monday agains the new Fair Pay and Safe Workplaces final rule — also known as the "blacklisting" rule. The new regulations were set to take effect October 25. Judge Marcia A. Crone wrote in the court order that the business groups who sued over the regulations "properly demonstrated immediate and ongoing injury to their members if the rule is allowed to take effect."
Judge Crone also said the regulations "appear to conflict directly with every one of the labor laws they purport to invoke by permitting disqualification based solely upon 'administrative merits determinations' that are nothing more than allegations of fault asserted by agency employees and do not constitute final agency findings of any violation at all."
The new regulations would require companies bidding for a federal contract worth at least $500,000 disclose any labor law violations committed in the past three years.
Associated Builders and Contractors (ABC) applauded the preliminary injunction against the new rule.
“Associated Builders and Contractors is pleased the court ruled that the Obama administration cannot order private businesses to publicly disclose mere accusations of labor law violations that have not been fully adjudicated,” said ABC Vice President of Regulatory, Labor & State Affairs Ben Brubeck. “By issuing this decision, the court has maintained the First Amendment rights of government contractors and protected them and taxpayers from the poorly crafted blacklisting rule.
“ABC supports policies that promote fairness and competition in government contracting while holding bad actors accountable, but has long maintained that this rule would violate the constitutional rights of contractors and drive up costs to taxpayers,” said Brubeck. “Not only does the court’s ruling protect the constitutional rights of government contractors and their employees from the latest attack by the Obama administration, but it will prevent a disruption to the federal government’s procurement process for critical goods and services that benefit the public.
“The ruling also pushes back against the Obama administration’s executive overreach and unfortunate attempt to circumvent the will of Congress, which has carefully crafted laws to deal with companies that violate contracting rules,” said Brubeck. “The administration should spend time improving its existing suspension and debarment process instead of creating a new regulatory regime that will increase costs, kill jobs, harm responsible small and large businesses, and stifle innovators from entering the federal contracting marketplace.”
A national survey of ABC members conducted in September found that:
- 51% of respondents said the rule’s onerous requirements, including reporting alleged violations that firms are still contesting, will force them to abandon the pursuit of federal contracts
- 91% of contractors said the rule will impose a significant or extreme burden for their firm through new requirements to compile information needed to comply with final rule
- 93% said the final rule will make the contracting process less efficient
- 98% said the final rule will make the contracting process more expensive.
ABC has consistently opposed the blacklisting proposal since the White House issued the Fair Pay and Workplaces Executive Order 13673 in July, 2014
