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Federal Court Deals Blow To Perez’s Nascent AG Campaign, DOL “Blacklisting” Rule Blasted

This week, the Associated Press reported that high on the “liberal wishlist” for a potential Hillary Clinton Administration is for current Labor Secretary Tom Perez to be nominated for Attorney General:

But Perez’s prospects for the AG spot took a significant blow this week when a federal judge in Texas granted a preliminary injunction against an Obama Administration Executive Order developed in part by Perez’s Department of Labor known as the “blacklisting” rule:

A large construction trade group won an injunction blocking a federal rule requiring companies seeking federal contracts to disclose past labor-law violations, a blow to the Obama administration in its effort to strengthen workers’ rights to fair pay and job safety. The Associated Builders and Contractors filed the lawsuit in early October, alleging the Obama admin had exceeded its authority in setting the rule, which was set to start taking effect Tuesday and be phased in over time. … The regulation, which the Labor Department helped develop, is officially called the Fair Pay and Safe Workplaces rule, but employers refer to it as the “blacklisting” rule because they say it will unfairly ban businesses from bidding for contracts.

The federal judge found that the Executive Order would damage federal contractors with “arbitrary and unnecessary burdens,” likely violates their due-process rights, and infringes on their First Amendment rights:

The U.S. District Court for the Eastern District of Texas issued a preliminary injunction late Monday night. In the written decision, U.S. District Judge Marcia Crone said it is in the public interest for contractors to deliver economical and efficient services to federal government agencies and this “would likely be impaired by the arbitrary and unnecessary burdens imposed” by President Barack Obama’s 2014 executive order that led to the rule and related guidance. …

But the judge sided with the plaintiffs otherwise. She said in her decision that the rule likely violates employers’ due-process rights by compelling them to report and defend against “non-final” agency allegations without being entitled to a hearing.

The judge also said there is merit to the plaintiffs’ claim that the rule infringes on employers’ First Amendment rights in the form of “compelled speech.” That is because the rule would obligate contractors and subcontractors to report for public disclosure labor law violations that have occurred since Oct. 25, 2015, regardless of whether the alleged violations occurred while doing government contract work, had been fully adjudicated or settled without a hearing, or had occurred at all, she said.

Meanwhile, the chairmen of the labor committees in the House and Senate praised the decision:

House Education and the Workforce Chairman John Kline (R-Minn.) said the preliminary injunction “affirms that the administration’s extreme blacklisting regulation is fundamentally flawed and will do more harm than good.” Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) issued a similar statement and said “the court should act to block these regulations for good.” Alexander warned that an administration could use the regulations to prevent businesses from receiving federal contracts “for a labor violation that hasn’t been proven.”

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