The Eastern District of Texas has issued a preliminary injunction halting the Fair Pay and Safe Workplaces rule that was supposed to go into effect this week. The Associated Builders and Contractors (ABC) had filed the request for an injunction on October 7, claiming the rule amounted to a “blacklisting” of contractors. The court said the request met the four necessary criteria, including “a substantial likelihood of success on the merits of their case,” and “a substantial threat of irreparable injury.”
“The Fair Pay and Safe Workplaces final rule and guidance promote contracting efficiency by ensuring compliance with basic labor standards during the performance of federal contracts, level the playing field so that contractors who comply with the law don’t have to compete against those that don’t, and promote responsible stewardship of taxpayer dollars,” the Department of Labor said in its response.
The rule was set to go into effect on October 25, but agencies have been ordered to hold off, putting the policy in limbo. The rule had been under fire for two years from contracting groups, though the ABC request for injunction was the only legal action against it.
The judge wrote in her opinion:
“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.”
This seems unlikely to be settled during President Obama’s term.
The ruling of course follows a legal win last week for the government, when a court threw out the American Small Business League’s (ASBL) request for an injunction against the Small Business Administration that would have changed the way the SBA calculates what percentage of federal contracting dollars goes to small businesses.
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