Proposal would impose significant cost and risk on government contractors

Washington, D.C. (August 25, 2015) – Today, Littler, the world’s largest employment and labor law practice representing management, and its Workplace Policy Institute (WPI) urged the U.S. Department of Labor and the Federal Acquisition Regulatory Council to immediately withdraw a proposed rule and guidance implementing the “Fair Pay and Safe Workplaces” Executive Order. In public comments submitted to the administration, WPI called the so-called “blacklisting” rule an “unprecedented executive overreach.” 

The proposal would impose new and burdensome regulations on those seeking to do business with the government by, among other things, requiring federal contractors and subcontractors for the first time to disclose any “violations” of 14 federal labor laws occurring in the three years prior to any procurement for government contracts/subcontracts exceeding $500,000, in addition to requiring updated disclosures of labor law violations every six months while performing covered government contracts. Such “violations” could then be used as a basis to deny awarding a federal contract to the company. 

WPI’s comments challenge the broad definition of “violations,” asserting that the proposed rule infringes upon due process by punishing contractors based on non-final decisions and without the opportunity for a hearing.

“This approach could cost contractors years of revenue and jobs based on non-final accusations that turned out to be without merit,” according to WPI Co-Chair Michael Lotito. “By the time these matters are resolved, it could be too late for the damage to be undone.”

WPI’s comments also find fault with the proposal’s disruption of laws established by Congress in an effort to seek a solution without a problem.

“In addition to supplanting 14 labor laws created by Congress with a new enforcement and sanction scheme, the proposals do not account for the time, resources and infrastructure that the private and public sector would need to expend, which would significantly hamper the federal contracting system,” added WPI Co-Chair Ilyse Schuman.

As a result, WPI’s comments point out that “less competition could very well translate into higher prices passed on to taxpayers.” Unknown future additions to the proposed overhaul, regarding, for example, the “state law equivalents” and subcontracting reporting requirements, prevent the public from understanding what the final rule may look like, in blatant violation of the Administrative Procedure Act, the comments state. 

Lotito noted that “it is critical that the administration hear the concerns of the government contractor community on the proposed rule and guidance. The Workplace Policy Institute was able to provide a voice for contractors on this important issue, and we hope that the administration listens to the contractors, upon which the country relies so heavily, and rescinds this proposed rule.”

For more information on these comments and other legislative and regulatory issues the WPI is working on, please contact its Co-Chairs Michael Lotito (mlotito@littler.com) and Ilyse Schuman (ischuman@littler.com). Please reach out to our Government Contractor and Affirmative Action/OFCCP Compliance practice groups to learn more about the Executive Order and proposed Blacklisting rules. 

About WPI

WPI facilitates the employer community’s engagement in legislative and regulatory developments that affect workplace and business strategies. WPI taps the deep subject-matter knowledge of Littler, the country’s largest employment and labor law firm devoted exclusively to representing management. Among other activities, WPI regularly delivers live workshops and presentations for employers, provides input on legislation, including testimony before Congress, and addresses agency regulations and case decisions, including preparing official comments.

About Littler

Littler is the largest global employment and labor law practice, with more than 1,000 attorneys in over 60 offices worldwide. Littler represents management in all aspects of employment and labor law and serves as a single-source solution provider to the global employer community. Consistently recognized in the industry as a leading and innovative law practice, Littler has been litigating, mediating and negotiating some of the most influential employment law cases and labor contracts on record for over 70 years. Littler Global is the collective trade name for an international legal practice, the practicing entities of which are separate and distinct professional firms.