Texas judge temporarily blocks rule on labor-law disclosure requirements for contractors

Washington – New labor-law disclosure requirements for prospective federal contractors and subcontractors issued as part of President Barack Obama’s Fair Pay and Safe Workplaces Executive Order 13673 are on hold after a Texas judge issued a preliminary injunction one day before the regulation was set to go into effect.

Judge Marcia A. Crone of the U.S. District Court for the Eastern District of Texas issued the preliminary injunction on Oct. 24. Crone’s 32-page decision delayed a pending federal requirement for employers to disclose any of 14 types of labor-law violations – including those related to safety and health, family and medical leave, civil rights protections, collective bargaining, and wages – cited over the previous three years when they bid for contracts valued at $500,000 or more.

In her decision, Crone wrote that the regulations “appear to conflict directly with every one of the labor laws they purport to invoke by permitting disqualification based solely upon ‘administrative merits determinations’ that are nothing more than allegations of fault asserted by agency employees and do not constitute final agency findings of any violation at all.”

Crone granted the injunction after a legal challenge was filed Oct. 7 by Associated Builders and Contractors, its southeast Texas chapter and the National Association of Security Companies. ABC members performed more than 60 percent of all federal government construction contracts from fiscal years 2009 through 2015.

Ben Brubeck, ABC vice president of regulatory, labor and state affairs, hailed the decision. “Associated Builders and Contractors is pleased the court ruled that the Obama administration cannot order private businesses to publicly disclose mere accusations of labor law violations that have not been fully adjudicated,” Brubeck said in a press release. “By issuing this decision, the court has maintained the First Amendment rights of government contractors and protected them and taxpayers from the poorly crafted blacklisting rule.”

Sen. Lamar Alexander (R-TN), chairman of the Senate Health, Education, Labor, and Pensions Committee, issued a press release calling the decision “good news for our nation’s federal contractors and subcontractors.”

“An administration could use these regulations to play political favorites, picking and choosing which businesses are ineligible to receive federal contracts – even blocking them for a labor violation that hasn’t been proven. The court should act to block these regulations for good,” Alexander said.

At press time, the Department of Labor had not issued a response to the preliminary injunction.