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Walberg Statement: Hearing on "The Blacklisting Executive Order: Rewriting Federal Labor Policies Through Executive Fiat"

Federal contractors are essential to government operations. Most employers provide quality, cost effective services while complying with labor and employment law. Unfortunately, there are a few bad actors. We can all agree bad actors who deny workers basic protections, including wage and overtime protections, should not be awarded federal contracts funded with taxpayer dollars.

For that very reason, the federal government has had a system in place for decades which, if used effectively, would deny federal contracts to bad actors. In the event that a contractor fails to maintain a satisfactory record of integrity and business ethics, the contracting agency can suspend or debar the contractor, disqualifying the employer from contracts government wide.

Rather than dealing with these contractors directly under the existing system, on July 31, 2014, President Obama signed an executive order adding a burdensome, redundant, and unnecessarily punitive layer onto the federal procurement system.

The executive order will require employers to report instances in which they, or their subcontractors, have violated or allegedly violated various federal labor laws and equivalent state laws during a proceeding three year period. Prior to awarding a contract, each agency’s contracting officer and a newly created Labor Compliance Advisor will review this information and decide whether the employer’s actions demonstrate a lack of integrity or business ethics.

While the new reporting requirements are significantly burdensome, particularly for small employers, the subjectivity of the decision making process and deprivation of due process are deeply troubling. The Labor Compliance Advisor will advise the contracting officer as to whether an employer’s record amounts to a lack of business integrity.

However, this subjective determination will include alleged violations, creating a new, dangerous precedent that employers are guilty until proven innocent. Ultimately, the employer could be blacklisted based on alleged violations that are later found to have no merit, putting some good employers on the brink of going out of business.

We all share the same goal, however, rather than implement another layer of bureaucracy, the administration should work with Congress and stakeholders to use the existing system to crack down on bad actors and ensure the rights of America’s workers are protected.

 

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