Federal Court Halts ‘Blacklisting’ Rule

On October 24, 2016, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction temporarily halting the regulations implementing President Obama’s Fair Pay and Safe Workplaces Executive Order. The court ruled that the rule would cause “irreparable harm” to contractors and subcontractors if it were to take effect. The rule was to take effect on October 25.

Commonly referred to as the “blacklisting” regulation, the rule would require contractors and subcontractors to disclose violations – and alleged violations – of 14 federal labor, safety and health, and employment laws, as well as related state laws, before they could win a federal contract valued at more than $500,000.

The final rule, issued in August by Federal Acquisition Regulation Council and Department of Labor, phases in the requirements by initially only applying to contractors bidding on projects worth $50 million or more. The threshold would then drop to contracts valued at $500,000 or more on April 25, 2017, then finally applying to subcontractors with contracts of $500,000 or more on October 25, 2017.

IEC and its coalition allies continue to work through the legislative process to amend, if not completely defeat, the blacklisting rule. Currently pending before Congress are provisions in both the House and Senate versions of the National Defense Authorization Act (NDAA) that would limit the regulation’s application to Department of Defense contractors.