“Blacklisting” Rule Finally Dies, Marking Big Win for AGC Members 

Thanks in part to AGC’s advocacy efforts, contractors are enjoying a major victory today:  permanent nullification of regulations implementing President Obama’s Fair Pay and Safe Workplaces Executive Order, often referred to as the “blacklisting” rule.  On March 27, President Trump signed into law a joint resolution under the Congressional Review Act (CRA) by which Congress expressed disapproval of the rule and stripped it of all force and effect.
Under the blacklisting rule, both prime and subcontractors were required to report violations and alleged violations of 14 federal labor laws and “equivalent” state labor laws during the previous three years, and again every six months, on federal contracts over $500,000.  Prime contractors were also responsible for evaluating the labor law violations of subcontractors at all tiers.  A single alleged violation could have led a contracting officer to remove a contractor from an ongoing project or to deny to a contractor the right to compete for a contract.  The rule also required contractors to provide certain pay information to employees and independent contractors, and it limited the use of mandatory arbitration of employment disputes.  All but the paycheck transparency provisions had been on temporary hold since a federal court issued preliminary injunction in October 2016.
“To be clear, there should be no place in federal contracting for unsafe or unscrupulous firms.  Yet the former president’s measure did nothing to reform or improve the existing suspension and debarment process,” said AGC Chief Executive Officer Steve Sandherr.  “Instead, it created a new layer of bureaucracy that would have given federal officials broad discretion to punish construction firms based on any number of unsubstantiated allegations without establishing a process for those firms to defend themselves.  That is why the Associated General Contractors worked so aggressively to push for passage of today’s repeal measure.”
The CRA enables Congress to invalidate recently-issued federal agency regulations under certain circumstances.  Once Congress passes a joint resolution under the CRA and the president signs it into law, federal agencies may not issue the same, or a substantially similar, regulation absent authorization from Congress.  Accordingly, Congress’s and the president’s use of the CRA to “kill” the blacklisting rule is considered a better outcome than the President simply withdrawing the executive order and regulations.  Enactment of the present resolution also renders continued litigation over the rule moot.
Unwinding the paycheck transparency requirements that were already in effect at the time president Trump signed the resolution may take time, and some federal contracting officers may not be aware of this development.  Contractors responding to a request for proposal that includes FAR 52.22-60, Paycheck Transparency (Executive Order 13673), should ask the contracting officer to remove the provision in light of this development.  Contractors already performing work on a contract that incorporates FAR 52.222-60 should consider evaluating the burden of continued compliance, and, if significant, ask the contracting officer to remove the clause by modification.
For more information, contact Jimmy Christianson at 703-837-5325 or [email protected] or Denise Gold at 703-837-5326 or [email protected].

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