A Texas judge has granted a preliminary injunction preventing the Federal Acquisition Regulatory (FAR) Council from implementing the Obama administration’s Fair Pay and Safe Workplaces final rule. The rule, commonly referred to as “blacklisting,” was set to take effect Tuesday.

The regulations were issued in August to apply an executive order and would have required companies to disclose past determinations and pending accusations of labor law violations. The Associated Builders and Contractors (ABC) filed a legal challenge on October 7 and a motion for a temporary restraining order and preliminary injunction on October 13.

“Associated Builders and Contractors is pleased the court ruled that the Obama administration cannot order private businesses to publicly disclose mere accusations of labor law violations that have not been fully adjudicated,” said ABC vice president of regulatory, labor and state affairs Ben Brubeck in a statement. “By issuing this decision, the court has maintained the First Amendment rights of government contractors and protected them and taxpayers from the poorly crafted blacklisting rule.”

The first phase of implementation of the requirements was scheduled for Tuesday, October 25, for bids valuing $50 million or more. When fully put into action, subcontractors, such as glaziers bidding on jobs worth $500,000 or more, would be subject to the rule.

In a 32-page order issued Monday, Judge Marcia A. Crone of the U.S. District Court for the Eastern District of Texas asserted that the plaintiffs “properly demonstrated immediate and ongoing injury to their members if the rule is allowed to take effect.”

“The Executive Order, FAR Rule, and DOL Guidance explicitly conflict with those labor laws that already specify debarment procedures, after full hearings and final adjudications, for contractors who violate the requirements specifically directed at government contracting,” the order reads. “It defies reason that Congress gave explicit instructions to suspend or debar government contractors who violate these government-specific labor laws only after a full hearing and final decision, but intended to leave the door open to government agencies to disqualify contractors from individual contract awards without any of these procedural protections. The DOL Guidance does not offer any support for its overbroad claims in this regard.”

Crone concluded that the executive order and rule “conflict directly with every one of the labor laws they purport to invoke by permitting disqualification based solely upon ‘administrative merits determinations’ that are nothing more than allegations of fault asserted by agency employees and do not constitute final agency findings of any violation at all.”

“[A]gency employees who are assigned to administer these labor laws issue thousands of complaints, cause findings, wage notices, and citations each year, many of which are dismissed or significantly reduced after they are contested, often after lengthy proceedings,” the order reads. “There is no statutory basis to treat these ‘administrative merits determinations’ as final and binding while they are still being contested or when they are settled without admission of fault. Thus, it appears to be a denial of fundamental statutory and constitutional rights for the Executive Order and FAR Rule to so act.”

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