The Associated Builders and Contractors of Southeast Texas and other trade associations scored a major victory on October 24, 2016, benefitting all federal contractors. In a lawsuit that the trade associations filed, the U.S. District Court for the Eastern District of Texas issued a nationwide temporary injunction to stop implementation of the dreaded “Blacklisting” Regulations, which had been set to go into effect on October 25, 2016.
The Fair Pay and Safe Workplaces regulations, which contractors dubbed the “Blacklisting” Regulations, were promulgated as a result of President Obama’s Executive Order 13673. Under the regulations, a contractor responding to a solicitation for a government contract exceeding $500,000 after October 25, 2016, would have been required to report any “administrative merits determination, arbitral award or decision, or civil judgment” rendered against the contractor in the preceding three years for violation of any of fourteen federal labor laws and their state equivalents. The listed labor laws include the Fair Labor Standards Act, OSHA, the National Labor Relations Act, the Davis-Bacon Act, the Service Contract Act, Title VII, the ADA, and others. The regulations also prohibit federal contractors and subcontractors from having pre-dispute arbitration agreements with their employees or independent contractors that would require the employees to arbitrate Title VII or sexual assault or sexual harassment claims. Another provision of the regulations, requiring contractors to provide a detailed wage statement for each pay period, was not affected by this ruling and will go into effect on January 1, 2017.
The federal court decided that the plaintiff trade associations’ members would be irreparably harmed if the Blacklisting Regulations went into effect. As a result, the disclosure requirements and the prohibition on certain pre-dispute arbitration agreements is enjoined nationwide for now. This injunction is temporary and lasts only as long as the litigation; however, that could be years. Because the court’s decision is based on a determination that the trade associations are likely to succeed on the merits of their case, the chances are good that the injunction eventually may be made permanent.