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Texas judge issues preliminary injunction on implementation of “Fair Pay and Safe Workplaces” Regulations

             On October 24, 2016, a federal judge blocked the nation-wide implementation of portions of the controversial “Fair Pay and Safe Workplaces” regulations. Judge Marcia Crone of the United States District Court for the Eastern District of Texas issued a preliminary injunction on behalf of trade groups challenging the constitutionality of the regulations. The ruling came shortly before the first phase of the Fair Pay and Safe Workplaces rules was scheduled to go into effect on October 25, 2016. Contractors are hesitant to celebrate the ruling as a complete victory, though, because the preliminary injunction only delays implementation pending trial. There is still a possibility that the Government may appeal the preliminary injunction or amend the Fair Pay and Safe Workplaces rules to remove those controversial portions.

            The decision halts the nation-wide implementation of those portions of Executive Order 13673 and the FAR Rule and DOL Guidance implementing that Executive Order which restrict access to arbitration and impose new reporting requirements on federal contractors to disclose labor violations. The federal court found that the trade groups met the legal standard for a preliminary injunction on those issues because their members would be directly affected by the regulations, had a substantial likelihood of success on the merits of the their constitutional claims at trial, and faced a substantial threat of irreparable harm if the implementation was not delayed. The portions of the Fair Pay and Safe Workplaces rules regarding paycheck transparency are not affected by the preliminary injunction. The paycheck transparency provisions are set to take effect on January 1, 2017.

By Kristin Tisdelle - Associate at Smith Pachter McWhorter PLC