Congress to Take Action to Undo the Contractor Blacklisting Rule

House Majority Leader Kevin McCarthy announced on the House Floor today that Congress will take direct aim at formally rescinding "Fair Pay and Safe Workplaces", also known as the contractor "blacklisting" rule. We have written extensively about this blacklisting rule in prior blog posts and alerts, including the 2014 Executive Order that framed the basis for it, the proposed and final rule-makings that made it part of the Department of Labor’s regulations as well as the Federal Acquisition Regulation (FAR). On the eve of the effective date of the FAR rule, a federal district court in Texas entered a preliminary injunction halting application of most aspects of the rule. However, in the waning days of the Obama Administration the Department of Justice announced it intended to fight that lower court ruling.

Majority Leader McCarthy’s statement is significant because he has highlighted the blacklisting rule among a handful of Obama-era regulations that Congress intends to rescind. Specifically, the Congress will use the Congressional Review Act (CRA) to overturn the blacklisting rule. The CRA allows Congress to overturn regulations enacted within the last 60 legislative days of a prior Presidential term. However, the CRA also requires a certain portion of time to be devoted to consideration of each such action. Therefore, the application of the CRA is limited by the amount of time it takes to fulfill this procedural requirement, particularly in light of competing legislative priorities.

The CRA has been used only once, due to the fact that both houses of the in-coming Congress and Administration must all be aligned politically to overturn a federal rule of the prior Administration. That alignment has not occurred since the CRA was enacted.