A preliminary injunction against the implementation of major and contentious provisions of the Fair Pay and Safe Workplaces Executive Order (E.O.), also known as the “blacklisting” rule, has been issued by a federal court in the Eastern District of Texas. The injunction will temporarily block implementation and enforcement of the E.O.’s (1) disclosure and disqualification requirements regarding past labor violations, and (2) prohibition on pre-dispute arbitration agreements.
The Federal Acquisition Regulatory (FAR) Council and the Department of Labor (DOL) issued a final guidance to implement the E.O. on August 25, 2016. The main provisions at issue were slated to take effect on October 25, 2016.
The plaintiffs argued to the court that the disclosure requirement and related penalties were unlawful for several reasons, and the court temporarily enjoined implementation of the labor violations reporting requirements and the pre-dispute arbitration provisions, finding it plausible that plaintiffs lawsuit will ultimately succeed.
Further litigation is expected and a final determination regarding the legality of the E.O could take several years as the parties continue to argue the issues before the trial court and then seek appellate review. Federal Contractors should monitor further developments in this case, but avoid significant investments in compliance efforts pending further judicial guidance.
The paycheck fairness provisions of the E.O., which require contractors to include information regarding overtime pay and exempt status with each paycheck and to provide certain notices to independent contractors, have not been enjoined and are still scheduled to go into effect in connection with solicitations or contract amendments made on or after January 1, 2017.