Federal Court Strikes Down the Fair Play and Safe Workplaces Order

Oct 25, 2017

This ruling eliminates onerous reporting requirements for contractors

The revisions to the Fair Play and Safe Workplaces Rule (FAR), enacted by Executive Order 13673 and the Department of Labor, have been contested by the construction industry since they were promulgated. Contractors have argued that the Order places an unreasonable and unconstitutional reporting burden on construction firms.

Edward T. DeLisle and Carl J. Vernetti, writing in Federal Construction Contracting Blog, review a decision by the U.S. District Court for the Eastern District of Texas that vindicates the construction industry’s position on this issue.

The authors assert that “the order and its accompanying revisions to the FAR place a new, heavy compliance burden on contractors in the form of tracking labor law proceedings, enhanced vetting of potential subcontractors, and generating new documentation to meet paycheck transparency mandates.”

The District Court “issued an injunction” halting, nationwide, the implementation of most of the Order. Contractors are no longer bound by the “reporting requirements for labor regulations” or “the restriction on the use of arbitration provisions.” The paycheck transparency provision was left in place.

The Court found that:

  1. The FAR Council and the Department of Labor “probably exceeded” their authority in implementing the reporting requirement.
  2. The “reporting requirements likely violate the First Amendment rights of contractors.”
  3. The FAR revisions “run afoul of government contractors’ due process rights.”
  4. The reporting requirements “constitute arbitrary and capricious agency action, in violation of the Administrative Procedure Act.”
  5. The revised provision ignores the Federal Arbitration Act, which has long been held by courts to give contractors the right to include arbitration clauses in their contracts.

This is an extraordinarily forceful vindication of the position contractors have held for years.

Source—

Federal Court Puts a Halt to “Fair Play and Workplaces,” Edward T. Delisle and Carl J. Vernetti, Federal Construction Contracting Blog, Nov. 4, 2016.