26 October 2016

Breaking News: Fair Pay and Safe Workplaces Executive Order Temporarily Halted

On October 24, 2016, a U.S. District Court Judge in the Eastern District of Texas has ordered a nationwide preliminary injunction blocking the main reporting provisions of the controversial Fair Pay and Safe Workplaces Executive Order and final rule and guidance (Assoc. Builders and Contractors of SE Texas v. Rung, 10/24/16). The injunction temporarily blocks implementation and enforcement of the Executive Order’s (a) labor/employment law violation disclosure and disqualification requirements; and (b) prohibition on certain types of pre-dispute arbitration agreements.

The controversial “blacklisting” rule requires federal contractors and subcontractors to disclose violations of a myriad federal and state labor and employment laws resulting from civil litigation, arbitration awards or agency determinations. It permits federal agencies to deny contracts to employers that are deemed to lack a satisfactory record of integrity and business ethics based on disclosure of violations. In late August 2016, the Federal Acquisition Regulatory (FAR) Council and the Department of Labor (DOL) issued a final rule and guidance to implement Executive Order 13673. The “Blacklisting” rule was to be phased in starting October 25, 2016 for contracts of $50 million or more, with a substantially lowered threshold of $500,000 triggering on April 25, 2017.

Significantly, the Executive Order’s paycheck fairness provisions, which require covered contractors to include information detailing overtime pay and exempt status with each paycheck and to provide notices to independent contractors, have not been enjoined. These provisions will still go into effect in connection with solicitations or contract amendments on or after January 1, 2017.

Note that this is only a preliminary injunction. Next steps will likely involve an appeal by the federal government and a full hearing on the request for a permanent injunction.

Stay tuned for additional developments.

If you have questions or would like more information, feel free to contact one of Miller Johnson’s Affirmative Action and Government Contracts Practice Group attorneys.