ABC Files Lawsuit Against 'Blacklisting' Rule

October 10, 2016
ABC Files Lawsuit Against 'Blacklisting' Rule

As promised, the Associated Builders and Contractors (ABC) and its ABC Southeast Texas Chapter announced Friday they filed a lawsuit challenging the Fair Pay and Safe Workplaces final rule, commonly referred to as the “blacklisting” rule, which was released Aug. 25, 2016.

The suit was filed in the U.S. District Court for the Eastern District of Texas, Beaumont Division, by the Texas office of Littler Mendelson, P.C., ABC National’s general counsel. The firm will represent ABC, the ABC Southeast Texas Chapter and the National Association of Security Companies (NASCO) in the lawsuit.

Ben Brubeck, ABC vice president of Regulatory, Labor & State Affairs, said in a press release, “The Obama Administration has exceeded its authority by forcing government contractors and prospective government contractors to publicly disclose mere accusations that they have violated labor and employment laws.”

“ABC supports policies that provide value to taxpayers by ensuring that federal contractors compete on a level playing field, but this rule will require contractors to report alleged violations that have not been fully adjudicated and are being contested, which violates their first amendment and due process rights and is likely to harm fair and open competition in the federal marketplace.”

“The rule creates additional costs and regulatory burdens that will discourage qualified firms, particularly small businesses, from pursuing federal contracts, and will drive up costs to taxpayers,” said Brubeck. “In addition, it will cause litigation and delays that will disrupt the federal procurement process for critical goods and services purchased by the government.”  

According to the association, nationally ABC members performed more than 60 percent of all federal government construction contracts exceeding $25 million from FY2009 to FY2015.  

The blacklisting rule is among more than a dozen significant regulations targeting federal contractors recently issued by the Obama administration. In addition to the final rule violating the first amendment and due process rights of current and prospective federal contractors, the complaint raises a number of other critical legal issues the courts will resolve.

A national survey of ABC members conducted in September found that:

  • 51 percent of respondents said the rule’s onerous requirements, including reporting alleged violations that firms are still contesting, will force them to abandon the pursuit of federal contracts
  • 91 percent of contractors said the rule will impose a significant or extreme burden for their firm through new requirements to compile information needed to comply with final rule
  • 93 percent said the final rule will make the contracting process less efficient
  • 98 percent said the final rule will make the contracting process more expensive.

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