Hours before the Fair Pay and Safe Workplaces final regulations were to take effect, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction to block most of the regulations, including the contentious disclosure provisions.  In a 32-page order, Judge Marcia Crone enjoined two key sections of the regulations: (1) the requirement that federal contractors and subcontractors monitor and disclose violations of 14 federal labor laws and certain state laws; and (2) the prohibition on mandatory arbitration of claims arising under Title VII or involving claims of sexual assault or harassment.  The court left in place the “paycheck transparency” section of the regulations, which will take effect on January 1, 2017.  Relying on recent Fifth Circuit precedent that enjoined the Administration’s immigration policy nationwide, the court stated that this injunction also applied on a nationwide basis. Continue Reading Federal Court Enjoins Fair Pay and Safe Workplaces Regulations

Just in time for Labor Day, the Labor Department and FAR Council issued a final rule and accompanying “Guidance” to implement the Fair Pay and Safe Workplaces Executive Order.  The new regulations will take effect on October 25, 2016.  The regulations—which run to nearly 900 pages—contain a number of changes from the proposed regulations to demonstrate that the Department listened to stakeholders during the lengthy comment period.

Despite some concessions to industry comments, the final regulations still establish substantial compliance obligations.  In light of those burdens, the contracting community is well advised to invest time to understand these provisions.  In this post, we summarize key changes and examine the way ahead for contractors.  Continue Reading “Fair Pay and Safe Workplaces” Final Rule and Guidance Released

On May 28, 2015, the Federal Acquisition Regulatory (FAR) Council published proposed regulations that create additional obstacles for offerors seeking to obtain government contracts.  As we previously discussed, these regulations implement the “Fair Pay and Safe Workplaces” Executive Order 13673 that President Obama signed on July 31, 2014.  The regulations, which were accompanied by and incorporate proposed implementing guidance published by the Department of Labor (DOL), would amend the FAR to require contractors to disclose certain labor law violations when submitting bids for federal work.  The purpose of the Executive Order and proposed regulations is to advance the longstanding principle that contractors must be responsible in order to conduct business with the federal government.  The government’s goal is to promote and maintain economy, efficiency, and integrity in the procurement process by only awarding contracts to contractors who comply with labor laws.  Continue Reading Proposed “Fair Pay and Safe Workplaces” Regulations Clarify New Responsibilities for Government Contractors

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Alex Acosta was confirmed by the Senate to be the next Secretary of Labor.  He now takes responsibility for several high-profile issues with critical implications for government contractors.

As we have previously written, the Labor Department was an exceptionally active regulator from 2013 through the end of the Obama Administration.  Although few of us expect that pace to continue, Secretary Acosta will have to balance two competing pressures.  On one hand, the President has already signed a law repealing one of the Labor Department’s most controversial regulations (the Fair Pay and Safe Workplaces rule) and directed agencies to review current regulations with a critical eye.  On the other hand, Acosta will be leading a department charged with enforcing the laws that protect or favor workers’ rights, which sometimes compete with the priorities of their employers.  Continue Reading Challenges and Priorities for the New Secretary of Labor

Congress recently began the process to legislatively overturn the regulations implementing President Obama’s “Fair Pay and Safe Workplaces” Executive Order.  Under the Congressional Review Act, Congress can dismantle regulations that were finalized in the waning days of a presidential administration.  Our colleagues in the Public Policy & Government Affairs practice provide some details of the CRA here and here.  The process begins with a joint “resolution of disapproval” in Congress.  If the resolution is signed into law — a safe assumption when the presidency changes parties — the underlying regulation has no effect, and any “substantially similar” rule cannot be re-issued without specific re-authorization legislation.

On Thursday, the House passed the disapproval resolution for the Fair Pay and Safe Workplaces regulations on an almost straight party-line vote. It now goes to the Republican-controlled Senate and then to the White House, where the President’s advisors would recommend that he sign it.

Most of the Fair Pay and Safe Workplaces provisions had already been blocked since the U.S. District Court for the Eastern District of Texas issued a nation-wide injunction in October 2016, but this legislative strategy would dismantle the regulations altogether.  A portion of the regulations regarding pay transparency was allowed to take effect for new solicitations issued on or after January 1, 2017, but that portion will be overturned by this disapproval legislation.  Contractors should remember, however, that separate Labor Department regulations govern pay transparency.  Those regulations still remain in effect.

Among the many subjects to receive President-elect Trump’s attention in advance of his swearing in on January 20 are venerable defense contractors and their performance of major systems contracts.  The Boeing Company (Boeing) and Lockheed Martin (Lockheed) have both felt the “heat of the tweet” – Boeing for the projected cost of the next generation of presidential aircraft and Lockheed for its F35 Joint Strike Fighter.  The pointed attention has led some to question the authority of a president to alter existing contractual relations or to impact the award of future contracts.  Can a president require contractors to lower prices on existing contracts or direct that future awards not be made to companies that fail to adopt practices the president favors, e.g., retaining jobs in the United States?  A president always has the bully pulpit to pressure high-profile government contractors to “voluntarily” take actions to their detriment and in favor of the government, but what legal tools or contractual remedies are available if a president forces a particular outcome? Continue Reading Contracting by Tweet: What Impact Can the New Administration Have on Existing Contracts and Future Awards?

Congress has weighed in on Executive Order 13673, known officially as the “Fair Pay and Safe Workplaces Order” and unofficially as the “Blacklisting Order.”  While the Office of Management and Budget reviews the Labor Department’s draft of the final regulations and guidance, the House and Senate Armed Services Committees have added language to the Fiscal Year 2017 defense authorization bills that would blunt the impact of any forthcoming rules, at least for defense contractors.

The House version of the FY2017 National Defense Authorization Act (“NDAA”) would grant a blanket exemption from the Fair Pay and Safe Workplaces regulatory regime to contractors doing business with the Department of Defense and the National Nuclear Security Administration.  The Senate version of the NDAA takes a slightly narrower approach: it would keep the Fair Pay and Safe Workplaces regulations in place, but it would only allow the Department of Defense to apply the rules against contractors who have been formally suspended or debarred for violating one of the covered labor laws.

In a statement of administration policy, the White House lambasted the House version of the bill, laying the groundwork for a possible veto.  In the Senate, Democratic leaders have filed an amendment to strike the exclusion provision, but that amendment has merely been filed, not made pending, so its path forward remains uncertain.  Although we expect to see final regulations and guidance very soon, the provisions in the defense policy bills mean that uncertainty for federal contractors will remain until the end of this year.

On May 4, the Labor Department and Federal Acquisition Regulatory (“FAR”) Council submitted to the White House Office of Management and Budget (“OMB”) their final versions of regulations and guidance (respectively) implementing Executive Order 13673, entitled “Fair Pay and Safe Workplaces” (“FPSW Order”).  The FPSW Order, which requires contractors bidding on government contracts to disclose past violations of any one of at least 14 federal labor laws and their state law counterparts, has been met with harsh criticism from contractors and members of congress since its July 2014 issuance by President Obama.  (See our blog post here for more analysis of the proposed regulations implementing the Order.)  The most recent attack occurred just one week prior to the Labor Department and FAR Council submissions: the House Armed Services Committee adopted an amendment that would exempt the entire Department of Defense (“DOD”) from the FPSW Order. Continue Reading Battle over “Blacklisting” Order: Obama Administration Moves Forward with Fair Pay Order as House Members Attempt to Exempt DOD

“[W]e respectfully request that no further presidential directives primarily focused on government contractors be issued for the foreseeable future,” wrote four government contractor associations in a letter to the White House dated August 3, 2015. The letter was released publicly on Tuesday, August 11, 2015, and signed by representatives of the Aerospace Industries Association, the National Defense Industrial Association, the Professional Services Council, and the Information Technology Industry Council. The four associations argued that the president’s 12 executive orders pertaining to government contracting, resulting in 16 new regulations, have “significantly increase[d] the costs of doing business with the government.” Illustrating this point, the letter references an estimate that “nearly thirty cents of every contract dollar goes toward compliance with unique government regulations.” Continue Reading Contractors (Respectfully) Request that the President Stop Issuing Executive Orders Focused on Contractors