President Trump repeals “contractor blacklisting” rule

On March 27, President Trump put his signature to a resolution of disapproval that nullifies the controversial so-called “contractor blacklisting rule” (see PAYROLL MANAGEMENT GUIDE 2470, dated September 6, 2016). The final rule, which implemented President Obama’s Fair Pay and Safe Work Places Executive Order, required prospective contractors to disclose violations of 14 basic workplace protections from the last three years, including those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. The rule also barred federal contractors from enforcing mandatory pre-dispute arbitration agreements as to workers’ claims of sexual assault or civil rights violations; in addition, it included certain pay transparency requirements.

What was nullified

The “Fair Pay and Safe Workplaces” final rule, submitted by the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration, related to the Federal Acquisition Regulation, was published in the Federal Register August 25, 2016. The rule was prompted in large part by a 2012 Senate report which found that in 2012, taxpayers provided more than $80 billion in contracts to companies that had committed significant violations of basic labor laws. Nearly 30 percent of companies receiving the highest penalties for violations of federal labor law were also federal contractors, according to the report. Between 2007 and 2012, 49 federal contractors were accountable for almost 1,800 separate enforcement actions taken by the DOL; they paid $196 million in back wages and initial penalties over that period.

H.J. Res. 37 was introduced in the House on January 30. It cleared that Chamber on February 2 with a 236-187 vote. A month later, on March 7, the resolution of disapproval passed in the Senate with a much narrower, strict party-line vote of 49-48. Although the Trump Administration had said on February 1 that the president would likely sign H.J. Res. 37 if it passed, the president has only just now signed it, along with three other resolutions of disapproval unrelated to labor and employment.

President Trump’s statement

“When I met with manufacturers earlier this year—and they were having a hard time, believe me—they said this blacklisting rule was one of the greatest threats to growing American business and hiring more American workers,” the President said at the signing of H.J. Res. 37. “It was a disaster they said. This rule made it too easy for trial lawyers to get rich by going after American companies and American workers who contract with the federal government—making it very difficult.”

Rep. Virginia Foxx, chairwoman of the House Committee on Education and the Workforce, also released a statement. “The flawed blacklisting rule was always completely unnecessary. There has long been a system in place to hold federal contractors accountable, and the best way to ensure fair pay and safe workplaces is to enforce that system effectively,” Chairwoman Foxx said. “Now that the blacklisting rule is finally behind us, it is time to come together to ensure the rights of all American workers are protected.”

New Executive Order

To reinforce his intent, the president issued a new Executive Order March 27 revoking Obama’s Fair Pay and Safe Workplaces EO 13673 of July 31, 2014; section 3 of EO 13683 and EO 13738, which amended the Fair Pay and Safe Workplaces EO. The new Trump EO also directs all executive departments and agencies, as appropriate and to the extent consistent with law, to consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing the revoked Executive Orders.

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