Preventing "tarring and feathering" :
"On Oct. 24, large companies that hold federal government contracts were saved from one of the last blasts of the Obama administration’s regulatory agenda when a Texas judge issued a preliminary injunction against the implementation of the Fair Pay and Safe Workplaces executive order. The executive order was scheduled to take effect Oct. 25.
The executive order, issued July 31, 2014, and made final with regulations announced in August, says that if a company or one of its subcontractors has allegations of violations of federal labor and employment laws, it may lose its federal contracts or the opportunity to bid on others.
"A large construction trade group won an injunction blocking a federal rule requiring companies seeking federal contracts to disclose past labor-law violations, a blow to the Obama administration in its effort to strengthen workers’ rights to fair pay and job safety.
The Associated Builders and Contractors filed the lawsuit in early October, alleging the Obama administration had exceeded its authority in setting the rule, which was set to start taking effect Tuesday and be phased in over time.
The suit against key administration officials, filed in federal court in Beaumont, Texas, said the rule would shoulder employers with added costs and other burdens and discourage them from seeking contracts, delaying the contracting process and damping competition that keeps costs lower for taxpayers. The trade group in its suit contended the rule will require contractors to report alleged violations that are still being contested, violating their due-process rights.
The regulation, which the Labor Department helped develop, is officially called the Fair Pay and Safe Workplaces rule, but employers refer to it as the “blacklisting” rule because they say it will unfairly ban businesses from bidding for contracts.
The U.S. District Court for the Eastern District of Texas issued a preliminary injunction late Monday night (October 24, 2016). In the written decision, U.S. District Judge Marcia Crone said it is in the public interest for contractors to deliver economical and efficient services to federal government agencies and this “would likely be impaired by the arbitrary and unnecessary burdens imposed” by President Barack Obama’s 2014 executive order that led to the rule and related guidance."
For further elucidation of some of the issues involved, here is a recent editorial regarding this case:
"On Monday federal Judge Marcia Crone of the Eastern District of Texas granted a preliminary injunction against this blacklist order because it requires that contractors report “mere allegations of labor law violations” that can then be used to disqualify them for federal contracts. This violates contractors’ Fifth Amendment rights by depriving “their liberty interests in reputation” and constitutes “irreparable harm.”
Judge Crone also found that the order’s reporting requirements amount to compelled speech and thus violate the First Amendment. The forced disclosure of alleged violations of labor laws may harm their reputation and create “increased costs, loss of customers, and loss of goodwill,” the judge said.
The contracting order, which was supposed to take effect Tuesday, has been a top priority of organized labor. The point is to provide unions with leverage to extract concessions from contractors that either aren’t unionized or that are negotiating with unions over a contract. When a company is pitching for new government business, a union could use the threat to make labor-law complaints to force the company to bend to union terms. By the time fact is sorted from fiction, the company will have lost out to competitors."