Federal Contractor ‘Blacklisting’ Challenge Passed by Senate

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By Tyrone Richardson

A measure that would permanently block new requirements that federal contractors disclose labor and employment law violations got final congressional approval March 6.

The Senate voted 49-48 for a disapproval resolution (H.J. Res. 37) that would scrap regulations and guidance implementing former President Barack Obama’s Fair Pay and Safe Workplaces executive order (E.O. 13,673). The resolution, authorized by the Congressional Review Act, passed the House in February.

The resolution now goes to President Donald Trump, who is expected to sign it.

“The so-called blacklisting rule is yet another Obama-era regulation that exceeds the authority of government, is duplicative and violates due process rights for businesses,” Sen. Johnny Isakson (R-Ga.), chairman of the HELP Committee’s Employment and Workplace Safety Subcommittee, said in a written statement following the vote.

Passage in both chambers of the GOP-controlled Congress came despite criticism from Democrats and worker advocates, who said the order would ensure that federal contractors abide by labor standards and civil rights laws.

The executive order was dubbed the “blacklisting” rule by business groups. It requires federal contractors to disclose labor and employment law violations when bidding on a new contract worth at least $500,000. The rule also requires contractors to provide wage statements to certain workers, detailing their total and overtime hours, pay rates, gross wage and any itemized deductions.

The disclosure requirements have been in limbo since a federal judge in Texas put much of the implementing regulations on hold in October. That decision, which allowed the separate pay information obligations to go into effect, is currently on appeal.

New Report Alleges Labor Violations

The Senate vote came the same day Sen. Elizabeth Warren (D-Mass.) released a report concluding that “major federal contractors regularly engage in illegal practices that harm workers financially and endanger their health and safety.”

Republicans have defended the resolution, saying the Obama-era rule thwarted job creation due to “overreach” that allows government bureaucrats to “blacklist” contractors based on unproven allegations.

During a speech moments prior to the vote, Majority Leader Mitch McConnell (R-Ky.) encouraged Senate members to support the effort to remove the order. U.S. businesses shouldn’t be blocked from earning government contracts based on allegations, but only on the basis of facts, he said.

“We all agree companies should be held accountable and workers’ rights should be protected. Current law does just that,” McConnell said. “The ‘blacklisting’ rule isn’t about helping workers, it’s about empowering the powerful, like union bosses, and it would make a system designed to project workers less efficient.”

Democrats such as Sen. Richard Blumenthal (Conn.) urged senators to vote down the challenge, saying the executive order was intended to ensure that contractors “play by the same rules.”

“This executive order is not about exclusion or about blackballing,” he said. “In fact, it’s about inclusion and working with companies to bring them into compliance so they obey the law, knowing what the rules are and wanting everybody to play by the same rules, not having an unfair advantage.”

To contact the reporter on this story: Tyrone Richardson in Washington at trichardson@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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