Earlier this week, government contractors won a significant battle when a federal court in Texas ruled that President Obama overstepped his authority and enjoined the implementation of the majority of the burdensome “Fair Pay and Safe Workplaces” Executive Order (E.O. 13673), along with the enforcement of the corresponding Federal Acquisition Regulations (“FAR”) and Department of Labor Guidance.  The Executive Order, which was scheduled to be implemented on October 25, 2016, would have required all federal contractors submitting bids for government contracts worth over $500,000 to self-report their violations and, significantly, their alleged violations of 14 Federal labor laws (along with “equivalent” State laws) over the past three years, which contracting officers would consider when reviewing each bid.  The Order also barred the use of arbitration agreements in Title VII cases, and required contractors to provide certain paycheck information to their employees.

On October 24, 2016, the federal court issued a nationwide preliminary injunction, meaning that the Order is at least temporarily suspended regarding the reporting and arbitration requirements.  The portions of the Order regarding “paycheck transparency” reporting will go into effect unchecked.  While the Department of Labor has not made an official decision yet, the government is fully expected to appeal the preliminary injunction.  The advice to contractors is to celebrate an important victory for now, but continue to prepare for implementation in the event the injunction is stayed or reversed on appeal.

The case, Assoc. Builders & Contractors, et al. v. Rung, et al., No. 1:16-cv-00425, (E.D. Tex. Oct. 24, 2016 ), is available here.