OVERVIEW

On Aug. 24, 2016, the Obama administration issued the Fair Pay and Safe Workplaces (or “blacklisting”) final rule, which would have threatened federal contractors’ due process rights, injected unwarranted subjectivity and added needless and duplicative layers of bureaucracy into the federal acquisition process.

The blacklisting final rule required federal contractors and subcontractors for the first time to report for public disclosure on the Federal Awardee Performance and Integrity Information System any “violations” of 14 federal labor and employment laws and state equivalents within the preceding three-year period, as well as a promise to disclose future violations with reports filed every six months, as a condition of winning a federal procurement exceeding $500,000.

In a concurrent guidance issued by the U.S. Department of Labor, federal contractors were required to disclose any “administrative merits determination, arbitral award or decision or civil judgment,” as defined in the guidance issued by the DOL.  The final rule directed each federal agency’s contracting officers to determine if a company’s reported violations of the identified labor laws render such offerors “nonresponsible” based on “lack of integrity and business ethics,” in consultation with new federal agency labor compliance advisors.

ABC was an outspoken critic and opponent of the illegal blacklisting rule from when it was first proposed on July 31, 2014, via President Obama’s Executive Order 13673. On Oct. 24, 2016, implementation of most of the rule’s onerous and duplicative reporting and disclosure requirements were temporarily blocked when a U.S. District Court judge ruled in favor of ABC’s lawsuit requesting a preliminary injunction.

UPDATE

The 115th Congress, passed resolution H.J. Res. 37, which President Trump signed into law on March 27, 2017, utilizing the Congressional Review Act to block the blacklisting final rule from taking effect and prevent future administrations from promulgating a similar regulation—essentially permanently eliminating the final rule via regulatory or executive action unless it is passed by a future Congress and signed into law by the president.

On Nov. 6, 2017, three federal agencies issued a final rule amending the Federal Acquisition Regulation to withdraw the blacklisting final rule and rescind President Obama's Executive Order 13673. Additionally, the U.S. Department of Labor withdrew the corresponding guidance document.

To circumvent the 115th Congress’ successful use of the Congressional Review Act to kill the rule, blacklisting advocates intend to lobby the 117th Congress to pass the blacklisting proposal through legislation. In addition, they are pushing for the Biden administration to pass a similar rule through executive actions, which would likely undergo significant revisions to avoid triggering violation of the Congressional Review Act and/or undergo a legal challenge from ABC and industry stakeholders.