AGC and its members are on the verge of a major legislative victory: nullification of the regulations implementing President Obama’s Fair Pay and Safe Workplaces Executive Order, often referred to as the “blacklisting” rule. Following a concerted AGC advocacy effort, the House of Representatives voted to nullify the rule through use of the Congressional Review Act (CRA) on Feb. 2, and the Senate passed the joint resolution by a slim margin on March 9. The legislation now moves to the President Trump’s desk for signature.
Under the blacklisting rule, both prime and subcontractors would be required to report violations and alleged violations of 14 federal labor laws and “equivalent” state labor laws during the previous three years, and again every six months, on federal contracts over $500,000. Prime contractors would also be responsible for evaluating the labor law violations of their subcontractors at all tiers during both contract solicitation and contract performance. A single alleged violation could lead a contracting officer to either deny a prime contractor the right to compete for a federal contract or to remove a prime or subcontractor from an ongoing project. The rule also requires covered contractors to provide certain pay information to employees and independent contractors, and it limits the use of mandatory arbitration of employment-related disputes. Most of the rule’s mandates – all but the paycheck transparency provisions – have been on hold since a federal court issued preliminary injunction in October 2016.
The CRA enables Congress to invalidate recently-issued federal agency regulations under certain circumstances. Once Congress passes a joint resolution under the CRA and the President signs it into law, federal agencies may not issue the same or a substantially similar regulation absent authorization from Congress. Accordingly, use of the CRA to “kill” the blacklisting rule is considered a better outcome than rescission of the executive order and regulations by the new administration. If the resolution is signed into law as expected, it will also render continued litigation over the matter moot.