The regulatory rollback has begun. On the campaign trail, President Donald Trump vowed to overturn “job-killing regulations” enacted by the Obama administration. To his credit, he is now following through.
In March, the president repealed the so-called “blacklisting rule,” which required federal contractors to disclose labor violations when bidding on new or renewed government contracts worth at least $500,000.
The rule—more benignly dubbed the Fair Pay and Safe Workplaces Directive—stems from a 2014 executive order by President Barack Obama. It was finalized last August, but blocked by court order in October.
The rule required prospective contractors to disclose any violations of 14 laws, including the Fair Labor Standards Act, Occupational Safety and Health Act, National Labor Relations Act, Americans With Disabilities Act, and Family and Medical Leave Act. Pervasive, prolonged, willful or serious violations could be used to block a company’s bid. The rule also limited the use of pre-dispute arbitration clauses in employment agreements on federal contracts.
The U.S. Chamber of Commerce and other business groups had urged Congress and the Trump administration to eliminate the regulations, arguing they would increase costs and discourage businesses from competing for government contracts. The government estimated the cost of the reporting requirements at $458 million in the first year.
Trade groups were particularly galled that companies would have to report citations that had yet to be adjudicated. “The rule violated the due process rights of contractors by forcing them to report mere allegations of misconduct—which are often frivolous and filed with nefarious intentions,” says Ben Brubeck, vice president of regulatory affairs at the Associated Builders and Contractors, a trade group for the construction industry.
Labor organizations favored the rule, arguing that it gave them leverage to improve wages and working conditions. “The message Donald Trump is sending…is that there are no consequences for companies that break American labor law,” says Joseph Geevarghese, executive director of Good Jobs Nation, a pro-labor group.
Ultimately, business won out. “Manufacturers were bogged down with a record number of regulations during the previous administration, and the blacklisting rule was one of the biggest threats to manufacturers’ ability to compete and create jobs,” says Jay Timmons, president and CEO of the National Association of Manufacturers. “If the blacklisting rule had not been lifted, [it] would have imposed $3.3 billion in compliance costs and created 21.7 million hours of paperwork for manufacturers—and would not benefit employees or employers.
“Manufacturers and their employees share the goal of safe, communicative and productive workplaces. But regulations like the blacklisting rule take us in the wrong direction—squandering resources that could be used to hire workers or increase salaries.”
More rollbacks are expected. Stay tuned.
