Proposed rules on contractor ‘blacklisting’ order published

by Judith E. Kramer

The controversial proposed “blacklisting” regulations implementing President Barack Obama’s Fair Pay and Safe Workplaces Executive Order have been published in the May 28 edition of the Federal Register for notice and comment. The proposed regulations were issued by the Federal Acquisition Regulation (FAR) Council.

The order, which the proposed regulations interpret, applies to prospective and existing contractors with contracts over $500,000. The order provides that employers can be denied federal contracts if they have violated or have allegedly violated a number of federal, state, or local labor and employment laws within the past three years.

Under the order, a contractor may be blacklisted from federal contracts based on alleged workplace law violations, such as Equal Employment Opportunity Commission probable cause determinations and the U.S. Department of Labor’s (DOL) Occupational Safety and Health Administration citations that are later found to lack merit.

The proposed regulations also obligate contractors to discover and report any workplace law violations every six months during the performance of a contract and ensure that most subcontractors meet the order’s standards.

When federal contractors and subcontractors make the mandated disclosures, newly appointed labor compliance advisers (LCAs) will consult with contracting officers to assist them in determining whether a contractor or bidder is “responsible,” with a suitable record of “integrity and business ethics,” and thus eligible to bid on or hold the contract.

The LCAs will be responsible for “promoting awareness of labor law compliance among agency leadership, contracting officers and contractors, and for coordinating with the DOL and other agencies to ensure that the government has consistent and effective policies for combating labor violations.”

The DOL has provided guidance, also published in the May 28 Federal Register, on the Executive Order. The guidance is to assist agencies in determining whether the mandated disclosures are administrative merits determinations, arbitral awards or decisions, or civil judgments issued for serious, repeat, willful, or pervasive violations of major federal and state labor and employment laws.The public will have 60 days—until July 27, 2015—to submit comments on the proposed regulations and the proposed guidance.

Note to employers

Federal contractors and companies considering the federal contracting business should familiarize themselves with the provisions of the Executive Order and should consider submitting comments on the proposed regulations. Because of the far-reaching implications of the order and the likelihood that the regulations also will be expansive, a judicial challenge is expected against the proposed regulations.

Judith E. Kramer is an attorney with Fortney & Scott, LLC, in Washington, D.C., and an editor of Federal Employment Law Insider. She can be contacted at jkramer@fortneyscott.com.

About Federal Employment Law Insider:
Excerpted from Federal Employment Law Insider written by attorneys at the law firm of Fortney & Scott, LLC. FEDERAL EMPLOYMENT LAW INSIDER does not attempt to offer solutions to individual problems but rather to provide information about current developments in federal employment law. Questions about individual problems should be addressed to the federal employment law attorney of your choice. Contact the attorneys at Fortney & Scott, LLC.
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