FEDERAL CONTRACTORS BENEFIT FROM TRUMP ADMINISTRATION’S REPEAL OF BLACKLISTING ORDER

Last month, President Trump rescinded the Obama-era Fair Pay and Safe Workplaces executive order (a/k/a, the “Blacklisting Order”), which required companies to disclose violations of numerous federal employment and labor laws in order to qualify for contracts with the federal government, and practically created the risk that certain employers would be “blacklisted” from procuring federal contracts.[1] The repeal came through the Congressional Review Act of 1996 (the “CRA”), which provides a fast-track process for repealing agency regulations.[2]

The Blacklisting Order sought to encourage federal contractors to comply with 14 labor and civil rights laws.[3] The Order came about following a 2010 Government Accountability Office investigation which showed that contractors with many, repeated violations were being awarded millions in federal contracts each year.[4] The Blacklisting Order also called for paycheck transparency, and placed a ban on arbitration clauses for sexual harassment, sexual assault, or discrimination claims. In late 2016, a federal judge temporarily blocked parts of the Blacklisting Order.[5]

President Trump’s repeal of the Blacklisting Order is a win for federal contractor and subcontractor employers, who will now avoid the administrative burdens and financial insecurity of compliance. The revocation of the executive order eliminates a potential double-penalty for contractors who have already been penalized for labor and wage violations, returns freedom of contract to federal contractor employers to resolve employee complaints (including for harassment) in arbitration, and eliminates future administrative expense of providing new pay statements to employees, and complying with disclosures of labor violations.

President Trump has made reducing federal regulations a primary goal of his Administration, executing an executive order calling for the repeal of two existing regulations for every new regulation enacted,[6] and issuing a freeze on any new administrative regulations.[7] The following Obama-era regulations have been repealed, or targeted for repeal via CRA’s this year:

H.J. Res 38: Stream Protection Rule

H.J. Res 41: Resource Extraction

H.J. Res 40: Background Check Database

H.J. Res 44: Resource Management Planning 2.0

H.J. Res 37: Blacklisting Regulation   

H.J. Res 57: Every Student Succeeds Act—Accountability, state plans, and reporting

H.J. Res 58: Higher Education Act – Teacher Preparation Issues

H.J. Res 69: Non-Subsistence Take of Wildlife

H.J. Res 83: OSHA Rule

S.J. Res 34: Federal Communications Commission Internet Regulation

H.J. Res 42: Unemployment Insurance Drug Testing  

H.J. Res 43: Title X Planned Parenthood

H.J. Res 36: Methane Rule

H.J. Res 66: Department of Labor Savings – Part 1

H.J. Res 67: Department of Labor Savings – Part 2

Campbell Litigation will provide updates on additional executive orders that affect employers.

[1] See The White House Office of the Press Secretary, Executive Order- Fair Pay Safe Workplaces, July 31 ,2014. (https://obamawhitehouse.archives.gov/the-press-office/2014/07/31/executive-order-fair-pay-and-safe-workplaces); Dan Merica, Trump Tries to Make Good on Promises to Repeal Obama-Era Regulations, CNN Politics (Mar. 28, 2017), http://www.cnn.com/2017/03/27/politics/donald-trump-sign-regulation-obama-roll-backs/.  

[2] To repeal a regulation under the Congressional Review Act of 1996 (“CRA”), a joint resolution of disapproval must be submitted by Congress within 60 days of session after Congress receives the rule.  If the joint resolution passes, it is then submitted to the President, who may veto the resolution. See Richard S. Beth, Disapproval of Regulations by Congress: Procedure Under the Congressional Review Act, Congressional Research Service, (Oct. 10, 2011), https://www.senate.gov/CRSpubs/316e2dc1-fc69-43cc-979a-dfc24d784c08.pdf.

[3] Federal Register, Vol.81, No. 165, Rules and Regulations, August 25, 2016, https://www.gpo.gov/fdsys/pkg/FR-2016-08-25/pdf/2016-19676.pdf.

[4] United States Government Accountability Office, Report to Congressional Requesters: “Federal Contracting Assessments and Citations of Federal Labor Law Violations by Selected Federal Contractors,” September, 2010. (http://www.gao.gov/assets/310/309785.pdf).

[5] See Ben Penn, Trump Kills Obama’s “Blacklisting” Executive Order, Daily Labor Report (Mar. 28, 2017), https://www.bna.com/trump-kills-obamas-n57982085800/.

[6] The White House Office of the Press Secretary, Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs (Jan. 30, 2017), https://www.whitehouse.gov/the-press-office/2017/01/30/presidential-executive-order-reducing-regulation-and-controlling.

[7] The White House Office of the Press Secretary, Memorandum for the Heads of Executive Departments and Agencies (Jan. 20, 2017), https://www.whitehouse.gov/the-press-office/2017/01/20/memorandum-heads-executive-departments-and-agencies.

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