On Oct. 24, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction that prevents the Federal Acquisition Regulatory (FAR) Council from implementing the final blacklisting rule, officially titled Fair Pay and Safe Workplaces, which was scheduled to go into effect on Oct. 25. Read ABC’s press release here.  

Specifically, the court’s decision blocks the federal government from implementing any provision of the FAR Rule or the U.S. Department of Labor Guidance relating to the new reporting and disclosure requirements on government contractors and subcontractors and the restriction on arbitration agreements. As a result, these provisions of the final blacklisting rule will not go into effect on Oct. 25.   

Prior to the Oct. 24 decision, the final rule was scheduled to go into effect on Oct. 25, 2016, and be implemented in phases, impacting prime contractors and subcontractors pursuing federal contractors of $500,000 or more when fully put into action. Prime contractors pursuing federal contracts of $50 million or more issued on Oct. 25, 2016, would have been the first group to comply with the final rule.

The preliminary injunction does not block implementation of the paycheck transparency provisions of the final rule. The rule’s paycheck transparency provisions are still scheduled to take effect on or after Jan. 1, 2017, requiring contractors to provide wage statements (which include the number of hours worked, pay rate and any deductions), and notice of any independent contractor relationship and overtime exemptions to their covered workers.

ABC, its ABC Southeast Texas Chapter and the National Association of Security Companies (NASCO) filed its legal challenge on Oct. 7 and filed a motion for temporary restraining order and preliminary injunction on Oct. 13. ABC was represented by Maury Baskin of the law firm Littler Mendelson, PC, ABC's general counsel.

It is unknown at this time whether the U.S. government plans to appeal the district court’s decision. Further developments on the legal challenge will be available in Newsline.   

To learn more about the impact of the decision, ABC’s general counsel Littler Mendelson, P.C. has prepared an analysis of the court’s ruling.  

ABC has consistently opposed the blacklisting proposal since the White House issued the Fair Pay and Workplaces Executive Order 13673 in July, 2014 and has:

• Supported legislative efforts to protect contractors from the policy
• Submitted comments in August 2015 urging the withdrawal of the FAR and U.S. Department of Labor (DOL) proposals along with more than 300 ABC member companies
• Joined 19 other business trade groups in sending a Nov. 6, 2014, letter to DOL Secretary Thomas Perez and Director of the White House Domestic Policy Council Cecilia Muñoz requesting the president withdraw the executive order
• Spoken out against the executive order in an Oct. 13, 2014, White House listening session hosted by Secretary  Perez, Director Muñoz and Deputy Director at OMB Beth Cobert.

• 51 percent of respondents said the rule’s onerous requirements, including reporting alleged violations that firms are still contesting, will force them to abandon the pursuit of federal contracts
• 91 percent of contractors said the rule will impose a significant or extreme burden for their firm through new requirements to compile information needed to comply with final rule
• 93 percent said the final rule will make the contracting process less efficient
• 98 percent said the final rule will make the contracting process more expensive.