Blacklisting Regulations for Government Contractors

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On March 27, 2017, President Trump signed a joint resolution from Congress invalidating the “blacklisting” regulations that implemented President Obama’s Fair Pay and Safe Workplaces Executive Order. The president also issued his own executive order revoking the prior order.

The invalidated regulations would have required federal government contractors to disclose many types of labor and employment law violations as part of the contracting process, and would have allowed federal agencies to deny contracts to employers based on the disclosures.

On July 31, 2014, President Obama issued Executive Order 13673, the Fair Pay and Safe Workplaces Executive Order. In order to implement the order, the Federal Acquisition Regulatory Council issued a final rule and the Department of Labor published related guidance on August 25, 2016. Please see our August 26, 2016, legal alert for a full summary of these regulations.

The regulations, however, were in large part blocked by a federal district court in Texas before they became effective.

The regulations were widely criticized by the government contractor community on a number of fronts, including because they required the disclosure of administrative actions before the allegations were fully adjudicated.

On March 6, 2017, Congress approved a joint resolution under the Congressional Review Act, disapproving of the blacklisting regulations. The regulations were effectively eliminated upon the president’s signing of the joint resolution, and the president’s executive order also revokes the original Fair Pay and Safe Workplaces Executive Order

With the invalidation of the blacklisting regulations, federal government contractors:

  • are not required to report labor and employment law violations or administrative allegations to federal agencies as part of the contract bid process;
  • are not required to comply with the paycheck transparency rules that were included in the regulations; and
  • are not subject to the blocked rules’ limitations on the use of mandatory arbitration clauses for certain employment disputes.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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