Wednesday, October 26, 2016

Federal Court Issues Preliminary Injunction Blocking Most of Fair Pay and Safe Workplace Provisons

Just before the provisions of the Fair Pay and Safe Workplaces Executive Order were scheduled to become effective, a U.S. District Court (Eastern Texas) issued a preliminary injunction blocking most of the provisions implementing the President's Executive Order (EO) on Fair Pay and Safe Workplaces (FPSW). Most notably, the provision imposing new reporting requirements regarding labor law violations by Government contractors and subcontractors has been suspended.

For background on the EO and regulations, see Fair Pay and Safe Workplaces and other discussions linked in that post.

The injunction was in response to a suit filed by the Associated Builders and Contractors of Southeast Texas. The association argued that;

  1. The Executive Order, FAR rule, and DOL guidance exceed the President's, FAR Council's and DOL's authority and are otherwise preempted by other federal labor laws.
  2. The Executive Order, FAR rule, and DOL guidance violate the First Amendment (prohibiting compelled speech)
  3. The Executive Order, FAR rule, and DOL guidance violate the due process rights of government contractors and offerors (compelling them to report and defend against non-final agency allegations of labor law violations without being entitled to a hearing at which to contest such allegations).
  4. The new rule and guidance are arbitrary and capricious and entitled to no deference
  5. The Executive Order and the FAR Council rule violate the Federal Arbitration Act.

The Court ruled that the Plaintiffs (the Association) satisfied the prerequisites for a preliminary injunction, that they have demonstrated a substantial likelihood of success on the merits as to their claims, have shown irreparable harm in the absence of immediate relief, and the public interest supports issuance of an injunction to maintain the status quo of many decades pending a final decision on the merits. Specifically, the Government is enjoined for implementing any portion of the FAR Rule or DOL guidance relating to the new reporting and disclosure requirements regarding labor law violations.

The Court also noted that FPSW violated the Administrative Procedures Act (APA) as an arbitrary and capricious action that does not provide an adequate explanation for imposing drastic new requirements, a cumbersome process with the potential of bogging down the already overloaded procurement process, and the significant additional costs and expenses on government contractors without a demonstration that the FPSW will promote economy and efficiency in Government contracting. This cost/benefit disconnect is very obvious to just about everyone.

This injunction should please every current and prospective Government contractor. We have yet to find a contractor favoring the FPSW regulations.

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