Trump Kills Obama’s ‘Blacklisting’ Executive Order

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By Ben Penn

President Donald Trump March 27 permanently blocked a controversial executive order that required federal contractors to disclose labor law violations, concluding several years of active lobbying and litigation.

Trump, as expected, signed H.J. Res 37 following final congressional approval of the bill March 6. The measure, authorized by the Congressional Review Act, invalidates former President Barack Obama’s Fair Pay and Safe Workplaces executive order and implementing rules from the Labor Department and Federal Acquisition Regulatory Council.

Dubbed the “blacklisting” order by the business community, the 2014 rule would have required federal contractors to report recent violations of labor and employment laws when bidding on a new or renewed contract worth at least $500,000. Many contractor trade groups took issue with the fact that employers would also need to report nonfinalized allegations.

A federal judge placed the rule on hold last fall, but lawmakers moved forward with a resolution of disapproval to prevent a future White House from issuing a similar EO.

The litigation can now be rendered moot. In October, the judge in Texas issued a temporary injunction, preventing most of the EO from ever being implemented.

But she left intact the executive order’s paycheck transparency requirements. By signing the resolution, Trump has also repealed the paycheck transparency portion, which required employer reports to employees on hours, paycheck deductions and 1099 status.

Congressional Review Act Rarely Used Before

The Obama rule became vulnerable to a CRA motion because it was finalized last August, late enough in the year to allow the next president to override it.

The 1996 CRA was only used once prior to this year, but Trump has taken advantage of it several times in 2017 to undo Obama regulations.

While the court’s reasoning may have defeated the most contentious piece of “blacklisting” regulations on its own, business opponents pressed for Congress to advance the CRA motion anyway.

A major reason for Congress to intervene, they argued, was that the measure would keep any “substantially similar” rule from being issued in the future, unless Congress granted specific approval.

“The interesting question will be, if there is a new administration” from a different political party, “how close to Fair Pay and Safe Workplaces they can get without drawing a lawsuit based on the fact that this resolution is now signed by the president,” Eric Crusius, who represents government contractors as a senior counsel at Holland & Knight in Washington, told Bloomberg BNA.

President Bill Clinton sought to impose related requirements on contractors at the tail end of his administration, only to see President George W. Bush quickly repeal that rule.

The next Democratic White House may still attempt a new initiative to use federal purchasing power to require labor violation transparency but would need to navigate an ambiguous “substantially similar” standard that hasn’t been tested in court.

“We’ll have to wait and see when there is a change of administration and it is tested,” Karla Walter, director of employment policy at the Center for American Progress, told Bloomberg BNA.

Walter, who has long fought for the EO’s implementation, said Trump’s repeal doesn’t stop a future legislative effort. “I think it’s important to note that just because there is this barrier in terms of executive action, that doesn’t stop Congress from acting in this space,” she said.

‘Punch in the Gut’ to Workers

A repeated critique of “blacklisting” has been that it called for companies to also report mere allegations that haven’t been fully adjudicated. They also took issue with the rules for being redundant because of existing debarment procedures.

Worker advocates instantly chastised the repeal as an example of Trump betraying his promises to side with workers.

“The order simply required businesses to disclose any labor law violations when applying for large Federal contracts,” Christine Owens, executive director of the National Employment Law Project, said in a statement. “By repealing these protections, Mr. Trump and congressional Republicans let contractors with even the worst track records off the hook--a punch in the gut to workers, taxpayers and law-abiding businesses.”

To contact the reporter on this story: Ben Penn in Washington at bpenn@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

For More Information

The resolution is available at http://src.bna.com/noo.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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