For the last few months, we have been following the troubled rollout of the “Fair Play and Safe Workplaces” rules, an Obama-era Executive Order that placed new requirements on contractors prohibiting certain labor practices. It is now becoming increasingly clear that the controversial act is likely to be a casualty of the new administration’s deregulatory agenda.
The order, a summary of which can be found here, was especially noteworthy for what became known as the “Blacklist” provision. This portion of the order, to be enshrined in new proposed FAR clauses, would force contractors to disclose “violations” of several labor statutes, which would then be considered by the Government in determining that contractor’s responsibility and, therefore, eligibility to receive a contract award. The order defined “violation” very broadly, to include administrative agency determinations and interim determinations, meaning that a contractor would be forced to report an allegation to the Government before the final adjudication of the matter was complete. Similarly, the order placed responsibility on a prime contractor to report the labor “violations” of its subcontractors, placing a new compliance burden on both primes and subs. Many in the contracting industry felt that the order put federal contractors in a difficult spot, squeezed between the rigors of a new responsibility, along with its increased costs to track and report labor law allegations on one side, and the prospect of being denied awards – or even debarred – for reporting adverse labor determinations, or alleged violations, on the other.
In October of 2016, a federal judge in Texas, responding to a lawsuit challenging the implementation of the order’s provisions filed by the Associated Builders and Contractors of Southeast Texas, issued an injunction preventing the implementation of the order from moving forward. The judge found that the order constituted an overreach of the Executive Branch’s authority, as Congress had never intended for the labor laws it passed to be enforced as a weapon against government contractors. In-depth analyses of the judge’s order and the injunction can be found here.
The future of “Fair Play and Safe Workplaces” has remained up in the air since the ruling in October, with little indication as to if and when it will be allowed to move forward. The Executive Branch’s attention has likely been pulled in other directions, as election and then transition drama took precedence over the more substantive aspects of governing. However, that changed last Monday when the U.S. House of Representatives made the first move to permanently block the implementation of Fair Play and Safe Workplaces by reviving a Clinton-era law intended to give Congress the power to block Executive Branch regulations.
In a 236-187 vote, House of Representatives passed a measure disapproving Fair Play and Safe Workplaces. The power to disapprove of pending administrative rules was granted to Congress by the 1996 Congressional Review Act, and has only been successfully deployed once since then, in 2001 to disapprove an Occupational Safety and Health Administration rule on ergonomic workplace injuries. If the resolution passes the Senate and receives the signature of the President, Fair Play and Safe Workplaces will be permanently blocked. For now, it remains on hold pending the outcome of litigation in Texas.
Given the current political climate in Washington, it is safe to assume that this is not the only time regulations affecting government contractors will be challenged. Both Congress and the President have strongly indicated that they plan to pursue a deregulatory agenda, and control over who can and cannot receive federal grants and contracts is often considered the low-hanging fruit of regulation. To that end, there are many, many, many actions affecting federal contractors that are likely on the chopping block.
Key Takeaway For Government Contractors
The restrictions and requirements of the Fair Play and Safe Workplaces order are no longer likely to be implemented, so continue to be vigilant in making sure that the following clauses do not appear in your prime contracts:
- 222-57 – Representation Regarding Compliance with Labor Laws (Executive Order 13673).
- 222-58 — Subcontractor Responsibility Matters Regarding Compliance with Labor Laws (Executive Order 13673).
- 222-59 — Compliance with Labor Laws (Executive Order 13673).
- 222-61 — Arbitration of Contractor Employee Claims (Executive Order 13673).
More changes are likely to come sooner rather than later, as the new administration seeks to back away from the previous administration’s regulatory position. We will continue to follow new developments to the law, and keep you informed of those items that could have an effect on your business.
Edward T. DeLisle is Co-Chair of the Federal Contracting Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.
Carl J. Vernetti is an Associate in the Federal Contracting Group and focuses his practice on federal procurement issues. He has broad experience with matters concerning prime and subcontractors looking to do business with the government.