Controversy Over Obama Contractor Safe Workplaces Rule Won’t End With Its Repeal

President Trump is likely to sign a repeal of the Obama administration’s Fair Pay and Safe Workplaces rule any day, but controversy over contractor disclosure requirements could linger.

Already one tiny agency appears willing to row against the tide of repeal. The independent Chemical Safety Board on March 1 voted 4-0 to declare “unacceptable” the Federal Acquisition Regulatory Council’s response to a request for stronger reviews of potential contractors’ workplace safety programs.  

The Chemical Safety Board had investigated an April 2011 explosion at a fireworks storage facility in Waipahu, Hawaii, leased by Donaldson Enterprises, in which five workers died. In its January 2013 investigative report, the board had recommended that the FAR council “establish an additional contractor responsibility determination requirement” that would require a focus on “incident prevention and environmental and system safety,” the board’s summary said, noting that such a requirement does not currently exist.

“At a minimum, the language should specifically require the review of a prospective contractor’s environmental and safety programs; safety record and incident history; ability to use safe methods for any work involving hazardous materials (including explosives); and suitable training and qualifications for the personnel involved in the work, including prior relevant safety experience,” the board said.

At a meeting with the FAR Council, the CSB was promised a letter explaining how the FAR might be adjusted following the Donaldson Enterprises case, but no letter ever came, the board’s internal documents said. CSB in 2015 submitted comments to the FAR on a related proposed rule implementing Obama’s Fair Pay and Safe Workplaces order. But when the FAR council issued its Aug. 25, 2016, final rule on the Obama order, it wrote that the CSB’s proposed changes were “beyond the scope.”

Further dialogue or advocacy, the chemical board staff concluded, “is unlikely to persuade the FAR Council to act and more than 270 days have passed since the CSB Recommendation was issued.” So this month, the board voted to change the status of its recommendation to “Closed-Unacceptable Response/No Response Received.”

Asked whether the board voted with knowledge that the Fair Pay and Safe Workplaces order is likely to be repealed, a CSB spokeswoman told Government Executive, “The CSB stands behind its recommendation.”

President Obama’s original order aimed to protect contractor employees from wage theft and unsafe working conditions by requiring employers bidding on federal contracts to disclose violations and alleged violations of 14 federal labor laws and similar state labor laws. Contractors resisted it as burdensome “blacklisting” and blocked in court parts of the final rule in court.

After the Senate voted on March 6 to repeal it (following a House vote on Feb. 2), the Professional Services Council, a contractors group, said, “This vote is a significant step that will return fairness and due process to the government contracting community, while retaining the labor law enforcement mechanisms that ensure compliance and accountability.”

There is other unfinished business with the Obama rule. Some of the provisions not blocked in court took effect in January, including the paycheck transparency sections, as noted by Eric Leonard, a partner at the Wiley Rein law firm specializing in government contracting.

The paycheck provisions “were not as onerous as the other obligations,” he told Government Executive. “But they required certain contractors to adjust their payroll system and pay stubs in compliance with the rules. And that required notices to certain exempt personnel and independent contractors to let them know they’re being treated as independent contractors,” he added. “Contractors are happy not to deal with them going forward, but unwinding them may mean some costs.”

The nonprofit Project on Government Oversight, which tracks federal contractor misbehavior, wrote in a blog post that “we hope the elimination of the labor law violation disclosure rule will not have a negative effect on federal contractor oversight. Some companies have been voluntarily reporting these violations in the FAPIIS database, but it’s barely a trickle of information,” wrote investigator Neil Gordon. “Fortunately, the impact of this rollback may be mitigated because contracting officials have a growing array of online data resources at their disposal. In addition to FAPIIS, there are a variety of free online corporate accountability tools, such as POGO’s Federal Contractor Misconduct Database and Good Jobs First’s Violation Tracker—which contains some of the violation data contractors would have been required to disclose.”