Obama “Blacklisting” Rule Blocked By Trump

(Reposted from the Labor & Employment Law Navigator Blog – Click Here to Subscribe)

On March 27, 2017, President Donald Trump signed a resolution that permanently blocked an executive order previously issued by President Obama, which had required federal contractors to disclose labor law violations.

The Fair Pay and Safe Workplaces executive order signed by President Obama in 2014 had been called the “blacklisting” order by those in the business sector, as it required federal contractors and subcontractors bidding on large ($500,000) contracts to report violations of certain federal and state labor and employment laws that occurred in the last 3 years, and to update those disclosures every six months, as well as track the compliance by subcontractors, regardless of whether the violations had been finalized.

In order for the resolution to get to President Trump’s desk, it had to pass both the House and Senate, which it did by narrow margins. A significant aspect of the resolution is that it was passed by Congress under the Congressional Review Act (CRA), which was part of the 1996 Contract with America that was enacted under then House Speaker Newt Gingrich. By passing the resolution under the CRA, this means that a federal agency cannot create a substantially similar rule in the future without Congressional approval.

The “blacklisting” rules were widely criticized by federal contractors as being costly, requiring companies to report mere allegations that had not been fully adjudicated, and as duplicating existing debarment procedures.

A similar rule to President Obama’s “blacklisting” order had been issued by President Clinton near the end of his term, but that rule was quickly repealed by President Bush. This action by President Trump renders moot an action pending in the Eastern District of Texas, wherein a federal judge had temporarily blocked implementation of portions of the rule last fall.