Contractor Group Receives Temporary Restraining Order (TRO) Against Blacklisting Regulations
On October 7, a lawsuit was filed to enjoin the implementation of the regulation (Associated Builders and Contractors of Southeast Texas v. Fed. Acquisition Regulatory Council, Case No. 1:16-cv-00425, (E.D. Texas). Associated Builders and Contractors and the National Association of Security Companies alleged that their members will be irreparably harmed if the court allows federal agencies to begin enforcing the rules and are requesting a Temporary Restraining Order (TRO). The court scheduled a TRO hearing for Friday, October 21, 2016, just four days before the Executive Order’s requirements begin to go into effect. Late in the day on Monday October 24, 2016, the TRO was granted. One of the most contentious provisions of the Fair Pay and Safe Workplaces Executive Order and final rules is that during the procurement contract bidding process and post award, certain preliminary labor law decisions must be reported as “violations,” despite the fact they are not final and may be appealed or reversed. The lawsuit alleges the “unprecedented” Order and Rules (1) exceed the Executive Branch’s authority, (2) are preempted by the National Labor Relations Act and other federal labor and employment laws, and (3) violate the constitutional rights of government contractors. In particular, the suit argues that compelling contractors to disclose such preliminary decisions, for which they risk losing contracts, violates their “due process” and First Amendment rights. The enjoined implementation of the reporting requirements and the arbitration clause. However, the paycheck fairness requirements were not enjoined and are expected to come in play starting January 1. .
The requirements of the paycheck fairness requires contractors and subcontractors with a contract that exceeds $500,000 to provide any employee subject to the FLSA, the DBA or the SCA (generally speaking, every employee) a “wage statement” for each pay period, effective January 1, 2017. It must include hours worked, overtime hours, pay and any addition or subtractions from pay. For exempt individuals, hours worked is not required if the employees have been informed in writing that they are exempt from overtime pay. If the pay period is not weekly, but biweekly or semi-monthly, the wage statement has to be broken down weekly. This statement can be provided electronically as long as the employer regularly provides pay documents by electronic means and the employees have access to a computer at work. It must be provided in languages other than English if a “significant portion” of the workforce does not speak English.Each time an independent contractor is engaged to work on the government contract, he or she must be provided a statement that he or she is considered an independent contractor.
It is expected that the litigation will be in court for years, and the TRO should last as long as the litigation is in process.