An executive order from the Obama administration which forced companies to disclose if they were facing any allegations of unfair labor practices before bidding on federal contracts was rolled back on Monday.
Known as the “blacklisting” rule, but officially called the “Fair Pay and Safe Workplaces” executive order, the Senate passed a resolution to overturn the rule, because it would have drained businesses of hundreds of millions of dollars in regulatory costs.
House Majority Leader Kevin McCarthy (R., Calif.) referenced a study from Watchdog.org that estimated compliance “will cost companies $454.6 million in the first year alone.”
According to an article in The Washington Free Beacon, “Sen. Lamar Alexander (R., Tenn.), chairman of the Senate Committee on Health, Education, Labor, & Pensions, said that the executive order was overly burdensome because it would punish companies before investigations into the allegations could be completed.”
Prior to the rule, contractors had to disclose only actual violations after they were proven by agency investigations.
“The harmful Obama administration ‘blacklisting’ regulation … could have prevented our nation’s federal contractors from receiving a federal contract for an alleged labor violation before any wrongdoing has been proven,” Alexander stated in a press release.
Issued in 2014 and finalized by The Department of Labor, President Obama in August 2016 claimed that the union-friendly blacklisting rule would produce “economy and efficiency in procurement by contracting with responsible sources who comply with labor laws.”
In the article, veteran union attorney Robert Schwartz was quoted saying the the rule gave unions the power to use frivolous or even false labor violations to potentially ruin federal contract opportunities for businesses. In fact, there was a five percent increase in the number of charges filed by workers and unions in 2016, but a lower amount of settlements and less officials charges.
A lawsuit filed by Associated Builders & Contractors was successful in getting a federal judge to issue a temporary injunction against the rule, because of it’s potential to violate companies’ due process rights. “Congress has taken an important step in removing burdensome and duplicative reporting requirements and eliminating a costly barrier to entry that would have discouraged many small contractors from bidding on government contracts,” said ABC spokesman Ben Brubeck.
“Rolling back this rule will also help to reduce costs in federal procurement,” commented White House sources. “The administration is committed to reducing onerous regulatory burdens on America’s businesses and using existing authorities to continue enforcing the nation’s workplace laws.”
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