Trump Clears Way for Contractors Violating Labor Laws to Receive Large Government Contracts

Republicans Eliminate Fair Pay and Safe Workplaces Act adopted under Obama Administration

In yet another blow to working Americans, President Donald Trump signed a law repealing an Obama administration act called the “Fair Pay and Safe Workplaces” rule (the “Act”), which required large contractors to disclose violations of labor laws, and to take actions to address such violations, in order to compete for large government contracts.  More specifically, under the Act, contractors seeking government contracts valued at $500,000 or more would have to disclose labor violations, such as those relating to workplace sexual harassment or minimum wage and overtime violations.  Additionally, those contractors would also have to take actions to address such matters as a prerequisite for being able to compete for government contracts.

This is no longer the case.

In March, the Senate voted 49-48 to repeal the Act, a vote that was divided along party lines.

The Impact of the Repeal

Formerly, federal contractors seeking large contracts had a strong incentive to comply with labor laws.  In addition to fines, judgements, and other penalties that could result for labor law violations, there was a big hammer that could be used for failure to comply with the Act – removal from consideration of federal contracts, some worth tens or even hundreds of millions of dollars per year.  While big companies may not think twice at having to pay a few hundred thousand dollars in fines or judgment, companies such as Tyson Foods – with annual revenue of nearly $300 million with the federal government – certainly would not want to be blocked from this revenue stream.

What Should be Done

The president campaigned on a populist platform aimed at helping working Americans.  Actions like this, however, do nothing to help workers.  Repeal of the Act does not create new jobs, all it does is to allow companies that violate workplace laws to compete against fair companies that uphold the law.  Since companies that violate the law will likely have lower costs as a result of their violations, they also stand to have an edge in competing against other companies with respect to bidding on federal projects, where price is always a key factor in determining which company will be awarded a project.

As a law firm devoted to helping working women and men, we hope that Congress will not reverse any additional protections that have previously been enacted.