Executive Summary: President Trump has signed a Joint Resolution (H.J. Res. 37) disapproving federal agency rules implementing the Fair Pay and Safe Workplaces Executive Order (EO 13673) (also known as the “Blacklisting” EO) signed by former President Obama in 2014. President Trump also issued an EO on March 27, 2017, revoking EO 13673. The revocation of the Fair Pay and Safe Workplaces EO and its implementing regulations means federal contractors will not be required to comply with the EO’s requirement to disclose violations of 14 different federal workplace laws and their state-law equivalents. Additionally, contractors will not be required to comply with the EO’s paycheck disclosure requirements nor will its prohibition on mandatory arbitration of certain Title VII or sexual assault or harassment claims take effect.

Background

President Obama signed EO 13673 on July 31, 2014. As discussed in more detail in our prior Alert, the EO required federal contractors and subcontractors bidding on contracts over $500,000 to disclose any violations that they have incurred under 14 different federal workplace laws (and their state-law equivalents) in the last three years. It also prohibited contractors and subcontractors with contracts exceeding $1 million from requiring employees to arbitrate their Title VII or sexual assault or harassment claims. Additionally, it required contractors to provide employees with paycheck details regarding hours worked, overtime hours, and additions or deductions to their pay and required formal notice to an individual if that person is classified as an independent contractor. The day before the EO was to take effect, a federal district court in Texas temporarily halted implementation of the “blacklisting” requirements and the arbitration prohibition. The court did not halt implementation of the paycheck transparency requirements, which took effect January 1, 2017. See On Eve of Implementation, Federal Court Presses Pause on Nearly Every Provision of Fair Pay and Safe Workplaces "Blacklisting" Executive Order.

While litigation over the EO was pending, House and Senate leaders introduced a Joint Resolution of Disapproval on January 30, 2017, to block implementation of the blacklisting rule through the Congressional Review Act. Under the Congressional Review Act, Congress may pass a resolution of disapproval to prevent a federal agency from implementing a rule or issuing a substantially similar rule without Congressional authorization. According to a Press Release from the House Education and Workforce Committee, the joint resolution “would block the blacklisting rule from taking effect and prevent future administrations from promulgating a similar rule.” Both the House and Senate passed the Joint Resolution, which President Trump signed on March 27, 2017.

Impact on Employers

Although the blacklisting and arbitration provisions were already on hold pursuant to the federal court injunction, the Joint Resolution blocks the implementation of all of the EO’s provisions and its regulations, including the paycheck disclosure requirements. Additionally, the Joint Resolution precludes future administrations from implementing “substantially similar” rules without Congressional approval. While the Joint Resolution does not revoke the federal agency rules, President Trump’s EO revoking EO 13673 urges all executive departments and agencies to “consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing the revoked Executive Orders.”