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‘Blacklisting’ Rules for Government Contractors Proposed by Federal Agencies under Executive Order

Implementing President Barack Obama’s “Fair Pay and Safe Workplaces” Executive Order (E.O. 13673), often called the “Blacklisting” or “Bad Actors” executive order, the U.S. Department of Labor has issued proposed guidance (“DOL Guidance”) and the Federal Acquisition Regulatory (“FAR”) Council has issued proposed regulations (“FAR Proposed Rule”) requiring government contractors and subcontractors to report regularly on workplace law violations found by administrative agencies, the courts, and arbitrators. The government would take an employer’s record of violations into account when deciding whether to award future contracts, cancel existing contracts, and potentially demand remedial action to address a pattern of violations. The DOL Guidance and the FAR Rule proposals both have 60-day public comment periods closing on July 27, 2015. 

Signed by President Obama in July 2014, the Executive Order’s stated goal is to promote efficiency in government procurement by ensuring federal agencies contract only with “responsible” contractors who comply with federal and state workplace laws. The FAR regulations historically defined a responsible contractor as one having the means to perform the contract successfully and a satisfactory record of integrity and business ethics. Once final, the new regulations will add an employer’s workplace law compliance record as a criterion to determine whether an employer should be awarded, or be allowed to retain, federal contracts. 

The DOL proposed Guidance, which is a companion document to the FAR Council’s proposed regulations, seeks to define a “violation” and to explain how federal contracting agencies should analyze the violations data to determine whether to award or deny contracts. 

New Reporting Obligation 

Under the Executive Order, employers bidding on new contract solicitations with an estimated value greater than $500,000, after the effective date of the regulations, must report violations of 14 federal laws (and the equivalent state laws) as part of the competitive bid process and, if awarded the contract, at six-month intervals thereafter for the duration of the contract. 

The laws include:

  • Fair Labor Standards Act

  • Occupational Safety and Health Act 

  • National Labor Relations Act 

  • Family and Medical Leave Act 

  • Davis-Bacon Act 

  • Service Contract Act 

  • Title VII of the Civil Rights Act 

  • Americans with Disabilities Act 

  • Age Discrimination in Employment Act 

  • Executive Order 11246 (affirmative action and equal employment opportunity) 

  • Vietnam Era Veterans’ Readjustment Assistance Act 

  • Section 503 of the Rehabilitation Act 

  • Executive Order 13658 (federal contractor minimum wage) 

  • The state law equivalents of these laws and executive orders

“Violation” is defined to include agency determinations (including reasonable cause and interim determinations that may be appealed and reversed), arbitral awards, and civil judgments. 

Under the Executive Order, the contracting officer and a designated “Labor Compliance Advisor” (“LCA”) will review the employer’s violations data to determine whether the contractor has committed violations that are of a serious, willful, repeated, and/or pervasive nature. 

The DOL Guidance, in exhaustive detail, seeks to explain the meaning and application of these terms. The Guidance on this is complex and, at times, unclear. 

Paycheck Transparency, Pre-Dispute Arbitration Limitations

As an additional element, the proposed guidance and regulations implement the Executive Order’s requirements that contractors inform workers of their classification as an employee or independent contractor, exempt or non-exempt status under the FLSA, and detailed information and disclosures about employees’ pay. 

Finally, in one of the more controversial parts of the Executive Order and proposed regulations, employers with a contract exceeding $1 million are prohibited from requiring employees to enter into mandatory pre-dispute arbitration agreements for disputes arising out of Title VII of the Civil Rights Act or torts related to sexual assault or harassment. 

Jackson Lewis P.C. © 2022National Law Review, Volume V, Number 150

About this Author

Mickey Silberman, Labor and Employment law attorney, Jackson Lewis Law firm, Principal

Mickey Silberman is a Principal in the Denver, Colorado, office of Jackson Lewis P.C. He is the Chair of the Jackson Lewis Affirmative Action & OFCCP Defense Practice Group and the Co-head of the firm’s Pay Equity Resource Group.

Mr. Silberman and the practice group annually prepare thousands of affirmative action plans for employers in all industries and throughout the country. During the past several years, Mr. Silberman has directed the defense of hundreds of OFCCP audits, including successful defense of Corporate Management (“glass ceiling”) Reviews....

Samia Kirmani, Jackson Lewis Law Firm, Unemployment Counseling Attorney

Samia M. Kirmani is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. She concentrates her practice in employment counseling, training and litigation on behalf of management.

Ms. Kirmani provides practical legal advice to clients on various employment law issues, including discrimination, health and leave management, reductions in force, retaliation and whistleblower matters, individual separations, and employee relations issues. Ms. Kirmani also assists clients with policy creation, revision and...

Laura Mitchell, Jackson Lewis, Management Representation lawyer, Contractual Drafting Attorney

Laura A. Mitchell is a Principal in the Denver, Colorado, office of Jackson Lewis P.C. She represents management exclusively in all areas of employment law, focusing on affirmative action and government contractor compliance.

Ms. Mitchell is a Principal in the firm’s Affirmative Action and OFCCP Defense practice group, representing government and non-government contractors in Office of Federal Contract Compliance Programs (OFCCP) matters, preparing for and defending OFCCP audits, and counseling employers on issues stemming...

Leslie Stout-Tabackman, Labor Employment Attorney, Shareholder, Jackson Lewis Law Firm

Leslie Stout-Tabackman is a Principal in the Washington, D.C. Region office of Jackson Lewis P.C. She has a broad-based practice counseling and representing employers on compliance with federal and state workplace laws and regulations, and designing and implementing sound practices and policies.

Ms. Stout-Tabackman regularly counsels and represents clients with matters before the U.S. Department of Labor’s (DOL) Wage and Hour Division, including Fair Labor Standards Act (FLSA) issues and prevailing wage and benefits issues arising under the Service Contract Act...