A court decision is slowing President Barack Obama’s latest push for a massive increase in federal regulation over businesses, but the fight is far from over.
A federal judge this week issued a preliminary injunction blocking a new Federal Acquisition Regulatory Council “blacklisting” rule that would force federal contractors and subcontractors bidding on jobs worth $500,000 or more to report any alleged violations of labor laws in the last three years. Contractors fear the proposed rule will give competitors an edge.
“The executive order and FARC rule present an imminent and non-speculative threat to plaintiffs’ members’ First Amendment rights by virtue of the fact that their public reports of alleged violations may be used by their competitors and adversaries to gain competitive advantage over plaintiffs and their members,” U.S. District Judge Marcia Crone of the Eastern District of Texas wrote late Monday, only hours before the rule was supposed to go into effect.
“They will likely suffer increased costs, loss of customers, and loss of goodwill, regardless of whether they are actually disqualified from government contracts, by being labeled labor law violators,” Crone said in her decision.
The Southeast Texas chapter of Associated Builders and Contractors (ABC) and the National Association of Security Companies (NASC) requested the stay against the Fair Pay and Safe Workplaces rule — finalized in August — while they challenge implementation of the Obama executive order in court. (RELATED: Small Businesses Ask Obama’s Labor Board To Delay New Overtime Rules)
But the Department of Labor (DOL), which issued guidance on the regulations, may appeal the injunction, continuing the intensifying battle between businesses and the Obama administration.
“The Fair Pay and Safe Workplaces final rule and guidance promote contracting efficiency by ensuring compliance with basic labor standards during the performance of federal contracts, level the playing field so that contractors who comply with the law don’t have to compete against those that don’t, and promote responsible stewardship of taxpayer dollars,” DOL said after Crone’s ruling became public.
“We are confident that the rule and guidance are legally sound and the Department of Justice is considering options for next steps,” DOL said.
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