Leading business groups blasted the White House’s proposal to require companies bidding on federal contracts to disclose any past violations of labor laws, calling it a “blacklist” intended to boost the Obama administration’s union allies.
The accusations were made Wednesday as the associations filed official briefs with the Labor Department opposing the proposal, the last day of the public comment period for the proposed rule.
“What’s driving this whole initiative is not a concern about improving the integrity of the contracting process, but rather an attempt to give organized labor one more weapon to unionize employers through corporate campaigns,” said Randy Johnson, the U.S. Chamber of Commerce’s senior vice president of labor, immigration and employee benefits.
Geoff Burr, vice president of Associated Builders and Contractors, said many aspects of the proposal were “illegal” and would hurt the contracting industry. There were $22.7 billion in federal construction projections in 2014 alone, he said.
The proposed rule, announced by the Labor Department in May, would require any company bidding on a contract larger than $500,000 to report any violations within the last three years of 14 federal labor and safety laws, as well as violations of any equivalent state laws. If the company wins the contract, it must make follow-up reports at six-month intervals until the contract is completed.
The rule extends disclosure to any “administrative merits determinations,” that is, any complaints or charges issued against the company by a government agency “whether final or subject to appeal or further review.” Thus, the companies would be required to report as violations any complaint they are still contesting in court.
Burr called that the “most egregious” aspect of the proposed since it would treat “mere allegations of misconduct as violations of federal law, threatening to deprive contractors of their due process rights,” he said.
The rule was issued in response to a 2014 executive order from President Obama to “promote economy and efficiency in procurement by contracting with responsible sources who comply with labor laws.”
Organized labor applauded the executive order. AFL-CIO President Richard Trumka called it a “common-sense measure” to make the contracting system fairer. “Preventing tax dollars from being funneled to chronic violators of workers’ rights is good for workers, our economy and companies who play by the rules,” he said in a 2014 statement.
The Chamber argued Wednesday that, to the contrary, complying with the rule would create “a highly complex, dispersed and cumbersome set of standards, and a bureaucratic structure that will strain federal procurement resources, increase contractor costs and make the procurement system more inefficient.”
Republicans have opposed the proposed rule since it was announced. Last month, seven House lawmakers, including Education and the Workforce Committee Chairman John Kline of Minnesota, Oversight and Government Reform Committee Chairman Jason Chaffetz of Utah and Small Business Committee Chairman Steve Chabot of Ohio urged the White House to withdraw it.
“We do not see the need to implement measures through executive fiat to fix a problem that simply does not exist,” their letter said.
