Trump Ends Obama Contracting Rule

President signs resolution overturning Obama's 'blacklisting' executive order

President Trump signs a resolution overturnign an Obama-era contracting rule / Getty Images
March 27, 2017

President Trump on Monday repealed Barack Obama's blacklisting rule that would have benefitted labor unions in federal contracting.

Trump signed a resolution passed by the House and Senate overturning the rule, which would have forced companies bidding for government contracts to report all allegations of unfair labor practices filed against them. Previously, contractors only needed to disclose incidents in which they had been found guilty of labor violations.

President Obama issued the "blacklisting" executive order in 2014, saying it would lead to "economy and efficiency in procurement by contracting with responsible sources who comply with labor laws." The Labor Department announced the final rule in August 2016.

Labor law experts observed that the rule could tilt the scales in favor of labor organizations. Veteran union attorney Robert Schwartz said in a blog post that it gave "unions unprecedented new leverage against companies" during disputes because they could imperil federal contract opportunities with allegations, rather than proven violations.

The National Labor Relations Board, the federal government's top labor arbiter, handles unfair labor practice complaints. The agency investigates allegations and either files official complaints against the defendant, encourages settlement between the two parties, or dismisses the charges. The agency handled more allegations in 2016 than in 2015, but the number of settlements and official charges fell. Workers issued 1,272 complaints in 2016, equal to the number issued in 2015, even though allegations increased by 5 percent over the year. Settlements were reached in 6,010 cases, a 7 percent decline.

Rep. Virginia Foxx (R., N.C.), chairman of the House Education and Workforce Committee, praised Trump for "rejecting this misguided approach."

"This duplicative rule would have served only to empower union bosses," Foxx said in a statement. "There has long been a system in place to hold federal contractors accountable, and the best way to ensure fair pay and safe workplaces is to enforce that system effectively."

Several private sector companies and industry associations challenged the rule in federal court, leading Dederal Judge Marcia A. Crone to issue a temporary injunction against its implementation in October. Associated Builders & Contractors, which filed the suit, praised Trump for eliminating the rule.

"The rule violated the due process rights of contractors by forcing them to report mere allegations of misconduct—which are often frivolous and filed with nefarious intentions by special interest groups—the same as fully adjudicated violations," ABC spokesman Ben Brubeck said in a statement. "ABC is committed to working with the Trump administration and Congress to improve the government’s current procurement system to ensure that taxpayer-funded projects are awarded through a transparent and fair bid process."

Published under: Unions