On Wednesday, October 25, Judge Marcia Crone of the US District Court for the Eastern District of Texas granted a nationwide preliminary injunction blocking most of the Fair Pay and Safe Workplaces (the so-called “blacklisting” rule) rule from taking effect. The rule, which we previously reported on here and here, requires federal contractors bidding on any deal worth more than $500,000 (other than contracts for off-the-shelf commercial items) to disclose labor law violations (including non-final agency determinations) going back 3 years. For contractors with contracts for goods or services of $1,000,000 or more, the rule also prohibits pre-dispute arbitration agreements with employees to resolve claims arising under Title VII of the Civil Rights Act, or related tort claims. In granting the preliminary injunction, the Court was particularly concerned with the aspect of the rule requiring disclosure of alleged violations of labor law that have not be finally determined.
Of note, the injunction does not affect the rule’s pay transparency provision, which requires federal contractors to provide wage statements and information regarding their hours worked, overtime hours, pay, and any additions or deductions to their pay to workers starting on January 1, 2017.
Despite the injunction, employers covered by the rule are advised to continue to prepare for eventual implementation of the rule as written. A preliminary injunction is, just that, preliminary, and the rule could end up going into effect at any time.