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Senate Takes Aim at Federal Contractor 'Blacklisting' Rule

Tonight the Senate will take one of the first steps toward erasing former President Obama’s harmful labor and employment regulatory policies. One that, according to estimates from the National Association of Manufacturers, cost $80 billion and added over 400 million paperwork hours to employers. Burdening employers with so many roadblocks is not a recipe for economic growth or job creation.

To start rolling back these destructive rules put out by labor agencies, the Senate will take up a joint resolution of disapproval later today under the Congressional Review Act to repeal the Department of Labor’s and other agencies’ Blacklisting rules. The House passed the measure in early February.

This is exactly the kind of red tape that the Congressional Review Act was intended to eliminate.

The Blacklisting rule does far more harm than good. The government couldn’t produce an official estimate of its benefits (because of a lack of data supplied by agencies), but found more than $400 million in costs to the government and employers in the first two years of the rule. In addition, the rule adds a burden of 2.1 million hours of paperwork on the regulated community.

As I describe in a previous post, the Blacklisting rule “institutes new reporting provisions, requiring contractors who bid on federal contracts in excess of $500,000 to report alleged as well as actual labor violations from the last three years. Reported violations of any of the 14 federal labor statutes may be used to block a company’s bid.”

One of the big problems with the rule is it will block company bids over alleged violations, not just actual violations. Like many other Obama-era labor regulations, this gives unions great leverage to extract concessions from employers during organizing campaigns; the Teamsters admitted as much in a blog post last year. This aspect of the rule may provide incentive to labor unions, attempting to organize a workplace, to file frivolous labor-related charges against companies that bid on federal contractors in order to extract favorable union election conditions, like greater access to the workplace or a card-check election.

Hopefully Republicans will continue to use the Congressional Review Act to undo Obama’s labor regulation legacy, which harms economic growth and causes job loss.

UpdateH. J. Res. 37, “Disapproving the rule submitted by the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration relating to the Federal Acquisition Regulation” passed out of the Senate on March 6, 2017 with a vote of 49-48 and will now go to President Trump’s desk for his signature.