Final ‘Blacklisting’ Rule Expected Soon

NLRB preparing to implement the proposed rule

By Allen Smith, J.D. Aug 3, 2016
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​A blacklisting rule seeking to make federal contractors' workplaces safer is expected soon. 

The final "blacklisting" rule to prevent businesses that had broken labor laws from working with the federal government is expected soon, and the National Labor Relations Board (NLRB) already is preparing to follow the proposal.

The U.S. Department of Labor (DOL) issued proposed guidance on May 27, 2015, to implement the Fair Pay and Safe Workplaces order (Executive Order 13673), which President Barack Obama signed July 31, 2014. The executive order was intended to bar companies with frequent labor law violations from receiving federal contracts, which is where the "blacklisting" label originated. The Federal Acquisition Regulatory (FAR) Council also issued a proposed blacklisting rule on May 27. The FAR Council assists in the coordination of governmentwide procurement policy and regulation.

"According to the spring regulatory agenda, the final blacklisting rule will be published in August," said Linda Jackson, an attorney with Littler in Washington, D.C. "While deadlines in the regulatory agenda are often aspirational, it is an election year, so the agencies are fully expected to issue the final rule on time."

NLRB Implementation

The NLRB, for one, seems eager to implement the rule. "Assuming the final rule's effective date is either immediate or to be phased in within the new year, the NLRB certainly appears to be revamping its existing case management platform to better track employer violations in preparation for its implementation," Jackson said.

Anne Purcell, associate general counsel with the board, issued a memo on July 1 stating that, beginning with NLRB complaints issued on or after July 1, the agency will start collecting from employers four data points necessary to link the case management platform data with data gathered by other enforcement agencies. 

These four data points are the charged party's:

  • Commercial and Government Entity (CAGE) code, if it has one. This is a five-character identification number assigned by the Department of Defense's Defense Logistics Agency, and many federal agencies use it. 
  • Data Universal Numbering System (DUNS) number, if it has one.  This is a nine-digit number used by Dun & Bradstreet that serves as a standard business identifier. The number is required for government contractors of many federal government agencies. A DUNS number is needed to obtain a CAGE code, Jackson noted.
  • DUNS number four-character suffix. This suffix may be assigned to establish additional central contractor registration records for identifying alternative electronic fund transfer accounts.
  • Employer Identification Number or Taxpayer Identification Number, which are used for tax purposes.
The proposed rule noted that, "In an ideal scenario, a contracting agency's ALCA [agency labor compliance advisor] would be connected to a database that would provide instant access to all of a prospective contractor's labor violations. However, such a system is not feasible in the near future in light of budget and other constraints." 

The case management platform is not a new system created specifically for the blacklisting rule, Jackson observed. "It appears the NLRB is simply using it as the tool by which it will manage and provide reportable violation data to the ALCAs," she said. Under the blacklisting rule, each federal contracting agency would be required to have an ALCA.

Get Ready

The bottom line for federal contractors is they should prepare for the implementation of the executive order, as the NLRB's preparation indicates that the DOL will soon issue the final rule, Jackson said. 

While litigation over the executive order is likely, federal contractors should still get ready, she added.  

She recommended that contractors:
  • Examine their own case-management system for compliance.

  • Develop internal mechanisms for determining and providing the required information to the government, including potentially mitigating information.

  • Self-audit to determine whether there are areas in which their compliance efforts could improve via training or policy changes. 

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