United States: Blacklisting For Past Labor Violations -- Executive Order 13673

Last Updated: September 13 2015
Article by Tony B. Griffin

Officially known as "Fair Pay and Safe Workplaces," Executive Order 13673 now consists of proposed guidance from the Department of Labor (DOL) and proposed regulations from the Federal Acquisition Regulatory Council (FAR). It is generally considered to be one of the broadest, most demanding, and potentially most expensive of the Executive Orders issued by the President in 2014. The order, guidance, and regulations will require federal prime contractors and subcontractors with a construction, service or supply contract of $500,000 or more to self-report any violation of 14 different federal labor and employment laws (and also comparable state laws) for the prior three years. The laws of general application to employers are:

The Fair Labor Standards Act - basic wage hour law 
The Occupational Safety and Health Act (OSHA) 
The National Labor Relations Act (NLRA) - union activity 
The Family and Medical Leave Act (FMLA) 
Title VII of the Civil Rights Act of 1964 - race, national origin, sex, pregnancy, and religion; discrimination, harassment, and retaliation 
The Americans with Disabilities Act Amendments Act (ADAAA) - discrimination and reasonable accommodations 
The Age Discrimination in Employment Act (ADEA) - discrimination and retaliation

Laws applicable to federal government contractors:

The Davis Bacon Act - area wage and benefit determinations and job classifications 
The Service Contract Act 
Executive Order 11246 - equal employment opportunity and affirmative action; special provisions for construction companies 
Section 503 of the Rehabilitation Act of 1973 
The Vietnam Era Veterans Readjustment Assistance Act 
Executive Order 13658 - establishing a minimum wage for federal contractors

Covered contractors and subcontractors will have to check a box during the initial bidding process declaring whether they have had a violation of any of the above laws in the last three years. Once a bidder is selected as a finalist, it will have to disclose the specifics of any violation on a publicly available website. After disclosure, the contracting officer in charge of the project will be responsible for determining whether the disclosed violation(s) qualified as a "serious, repeated, willful, or pervasive" violation(s) to determine whether the company satisfies the requirement for having a satisfactory record of integrity and business ethics. Those terms have little meaning under most of the 14 labor and employment laws. For example, a violation will be considered "serious" if it affects more than 25 percent of the workers at a worksite; if it involves more than $5,000 in fines or $10,000 in back pay; if it involves harassment or retaliation for protected activities; or if it involves interference with a government investigation, including failure to provide requested information or access to property.

A senior official from within each federal agency will be designated as a "labor compliance advisor" to assist the contracting officer in making determinations. Contractors are allowed to provide any favorable information regarding terms of settlements, remedial actions taken, and factual and legal disputes that were in existence. The contracting officer could decide to require a labor compliance agreement, or refer the company to the federal agency responsible for enforcing a particular law to consider a suspension or debarment action, or simply use the past violation(s) as a reason for denial of an award of a government contract. There is no bright line test for determining how many violations or how egregious the violations have to be before a particular remedial action is selected by a contracting officer to apply to a company.

In addition to the initial disclosure of violations, prime and subcontractors would have to update the report of violations every six months during a project. Prime contractors will have the duty to obtain the initial and six-month update reports from subcontractors, or they may have the option to turn that responsibility over to the Department of Labor, keeping in mind the potential problems that might cause. If the prime contractor collects the subcontractor's reports, then the prime contractor will be responsible for making a determination if a subcontractor qualifies for consideration for a subcontract. The reporting requirements do not apply to contracts that are for commercially available, off-the-shelf items.

One of the principal problems with the proposed DOL guidance and FAR Council regulations is that a broad definition of "administrative merits determinations" is used, requiring companies to report as violations agency findings which often are not final decisions. Example: Wage and Hour (WH-56) summary of unpaid wages letters and forms. These are initial back pay calculations made by an investigator at the lowest level of the agency. They are often changed as a result of negotiations or additional facts being brought forward on behalf of the company. Further, companies can seek review at higher levels of the DOL, and in Davis Bacon and Service Contract Act situations; they can also seek due-process hearings in front of two administrative levels, then the federal courts. Though few cases actually go that far in the process, the proposed guidance and regulations show the importance of setting forth facts and law which support the company in any labor and employment cases. If a settlement occurs, it becomes more important than ever to make sure that the word "settlement" is used, that "waiver" of any prior government positions on debarment be stated, and that the employer is not admitting liability even though it agrees to comply with the particular law in question. Most government agencies will not sign off on such settlement letters, but at least the employer can unilaterally draft such letters to go along with WH-56 forms or other government documents used in settling an investigation.

Likewise, an OSHA citation which has not been fully developed would be considered a reportable "violation," as well as an Equal Employment Opportunity Commission "reasonable cause" finding on a discrimination, harassment, or retaliation charge, even though the underlying case may not have been litigated. The same applies to National Labor Relations Board complaints of unfair labor practices, which is nothing more than the NLRB becoming a prosecutor on behalf of an employee or union. Hearings would be held in front of an administrative law judge, then possibly reviewed by the NLRB, and ultimately reviewed by a federal court of appeals. Even so, in the proposed regulations and guidelines, an NLRB complaint would be considered a reportable "violation."

There are two other requirements in the proposed guidelines and regulations for employers seeking contracts of $1,000,000 or more. First, employers are barred from requiring their employees to enter into mandatory arbitration agreements to resolve disputes arising out of Title VII of the 1964 Civil Rights Act or any tort-related court action relating to sexual assault or harassment. This prohibition through an Executive Order arguably flies in the face of the Federal Arbitration Act, passed by the Congress and given broad support by the federal courts, including the U.S. Supreme Court.

Second, anyone being treated as an independent contractor must be given notice of his or her status in writing. This would further fan the flames of an issue that has already received considerable attention and is the focus of numerous investigations and lawsuits by the IRS and the DOL claiming that individual contractors are actually employees, with wage and benefit rights and tax liability for the employer.

The proposed regulations and guidance could be phased in as soon as 2016. There appears to be little dispute that the new procedures would considerably slow the federal government bidding process and would be expensive to maintain the necessary recordkeeping and reporting systems in place, especially by large contractors. The purpose of this early notice is to put all companies that may be covered on alert that they need to be preparing for what is coming, unless stopped by the courts or congressional action. If the provisions go into effect, it almost certainly will cost most companies a fairly significant amount to implement. At a minimum, an internal compliance plan should be drafted sooner rather than later, and all labor and employment law "violations" should be funneled through one person or office for tracking purposes. A company official or team may be assigned to go back at least two and a half years to find and organize all paper and electronic files on labor law investigations and civil actions, making sure to collect all paperwork or other evidence that puts the company in the best light. For any existing labor law investigations or cases which have not been finalized, consider how best to pursue and close them on favorable terms with favorable documentation. This applies not only to agency investigations but also to arbitration and any civil court actions that involve alleged labor law violations in the 14 identified areas. A critical task will be for prime contractors and subcontractors to work together to develop a plan for obtaining information, making sure that what is provided is complete, and assessing the level of responsibility in complying with the laws.

You can also be active with trade associations, who will likely be involved in bringing legal actions in court or lobbying members of Congress. And never underestimate the impact of a personal phone call or letter from senior company officials to your representatives in Congress. Many industry groups are urging the DOL and FAR Council to withdraw or revise these regulations due to the forecasted disruption to procurements and added costs to contractors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Bradley Arant Boult Cummings LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Bradley Arant Boult Cummings LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions