President Donald Trump signed legislation Monday that officially repealed a rule that would have cost businesses hundreds of millions of dollars a year.
Trump signed legislation introduced in the House of Representatives overturning President Barack Obama’s 2014 Fair Pay and Safe Workplaces rule, which required government contractors and subcontractors to report all allegations of labor violations to the Department of Labor.
Manufacturers identified the blacklisting rule as one of the “most significant threats to the growing American businesses and to hiring more American workers” during a meeting with Trump earlier this month, Sean Spicer, White House press secretary said in a news conference Monday.
“The rule simply made it too easy for trial lawyers to go after American companies and American workers who contract with the federal government. The president saw that workers, tax and businesses truly suffered under this rule,” Spicer said.
The rule came to be known as the blacklisting rule because of the potential that contractors could have been barred from federal contracts due to labor complaints that had not been proved. (RELATED: Government Contractors Win Court Fight To Block Obama’s Labor Rules)
The rule, which came to be known as the blacklisting rule, would have allowed the government to deny federal contracts to large firms with any history of labor violations, and require firms competing for contracts to voluntarily provide the government with any allegations of employer misconduct.
Beyond the risk of losing government contracts, businesses were concerned with burden of compliance, which would have cost businesses $458 million in the first year alone, according to the Labor Department.
Several key parts of the so-called blacklisting rule were blocked by federal courts in December after the trade organization Associated Builders and Contractors (ABC) sued the Labor Department.
The problem with the rule, according to ABC, is that any lawyer could have crippled a business simply by filing a lawsuit alleging labor violations.
“The rule violated the due process rights of contractors by forcing them to report mere allegations of misconduct—which are often frivolous and filed with nefarious intentions by special interest groups—the same as fully adjudicated violations,” Ben Brubeck, vice president of regulatory affairs for ABC told The Daily Caller News Foundation in a statement.
“ABC is committed to working with the Trump administration and Congress to improve the government’s current procurement system to ensure that taxpayer-funded projects are awarded through a transparent and fair bid process that encourages competition from all qualified contractors,” Brubeck said.
Before Trump’s presidency, the Congressional Review Act of 1996, which allows rule to be overturned with a simple joint resolution stating that “such rule shall have no force or effect,” had only been used once. Since taking office January 20, Congress and the administration have repealed six rules using the act, including four on Monday.
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