Perez Says Blacklisting EO Is Not an "Atom Bomb" Approach

Employment Law

This week, HR Policy and other business groups aired their concerns with the Office of Management and Budget on the Fair Pay and Safe Workplaces (a.k.a. "Blacklisting") Executive Order, as Labor Secretary Thomas Perez testified in a Senate hearing that the order's enforcement provisions "facilitate voluntary compliance" with federal labor laws rather than having to resort to the suspension and debarment process, which "really is the atom bomb."  The executive order (EO) installs a Labor Compliance Adviser (LCA) at each agency to help contracting officers determine whether companies bidding on new contracts constitute a "responsible source."  If companies report having had violations of federal labor laws or "equivalent state laws" within the preceding three years, according to the EO, LCAs will "advise the contracting officer whether agreements are in place or are otherwise needed to address appropriate remedial measures, compliance assistance, steps to resolve issues to avoid further violations, or other related matters."  The trouble with Perez's claim that the EO offers a softer-touch approach to compliance is that the EO empowers LCAs to exert significant pressure on contractors to settle legal claims; they risk losing contracts if they continue to contest claims even where they have a legitimate defense.  The Office of Management and Budget is currently reviewing the proposed regulations and guidance for the EO, and is expected to clear them for publication within the next 60 days.