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Breaking: Injunction Issued to Halt Implementation of Fair Pay and Safe Workplaces Rule


Recently, Associated Builders and Contractors (and national trade associations) brought suit in Texas to challenge the implementation of the Fair Pay and Safe Workplaces rule.  This rule, which has also been referred to as the "Blacklisting Rule" would require that contractors who seek federal work to disclose recent labor law violations.  This rule arises out of Executive Order No. 13673 (issued by President Barack Obama on July 30, 2016) which was designed to achieve sweeping labor law reforms.  The Obama administration's goal with the Blacklisting Rule was to withhold government contracts from employers with a history of violations.  Opponents of the Fair Pay and Safe Workplaces rule argued that it violated contractors' First Amendment rights and would restrict open competition for federal contracts by forcing companies to disclose allegations of unadjudicated labor and employment law violations.  

Late Monday, Judge Marcia Crone from the U.S. District Court for the Eastern District of Texas, issued a nationwide injunction which halts the implementation of the Fair Pay and Safe Workplaces rule (which was set to go into effect on October 25, 2016 for employers with federal contracts of $50 million or more and next April for employers with federal contracts of $500,000.00 or more).  In Judge Crone's ruling, she held that the Associated Builders and Contractors (who brought suit originally) had "properly demonstrated immediate and ongoing injury to their members if the rule is allowed to take effect."  

However, note that the only area where the injunction was not granted was the "Paycheck Transparency" provision which would require contractors and subcontractors to provide employees with documentation of regular and overtime hours worked, pay and additions to or deductions from pay that are not currently included in employee paychecks.  The Paycheck Transparency provision will go into effect on January 1, 2017.

It goes without saying that this is quite a development.  Interesting to see how this one plays out, now that the injunction has been issued.


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