Portions Of Fair Pay And Safe Workplaces Regulations And Guidance Preliminarily Enjoined

On October 24, 2016, the mandatory disclosure and arbitration provisions of the Fair Pay and Safe Workplaces ("FPSW") Regulations and Guidance were preliminarily enjoined by the United States District Court for the Eastern District of Texas in Associated Builders and Contractors of Southeast Texas v. Rung, No. 1:16-cv-425-MAC. The paycheck transparency provisions remain, unaltered and in full force effective January 1, 2017.

U.S. District Court Judge Marcia A. Crone preliminarily enjoined the FPSW's entire mandatory disclosure requirements finding the regulations (1) are preempted by other federal labor laws, (2) improperly infringe a contractor's First Amendment rights against "compelled speech"; (3) violate contractor Fifth Amendment rights "by compelling them to report and defend against non-final agency allegations of labor law violations without being entitled to a hearing at which to contest such allegations" violate; and (4) are arbitrary and capricious and entitled to no deference.

Judge Crone also preliminary enjoined the arbitration provisions of FPSW holding that the regulations violate the Federal Arbitration Act and its "liberal federal policy favoring arbitration agreements." The nearly identical Franken Amendment to Department of Defense Appropriations Act of 2010 notwithstanding, the Court found that the FAR Council "does not possess similar authority to modify Congressional enactments such as the FAA."

While striking down the mandatory disclosure and arbitration provisions, the Court did not enjoin any aspect of the FPSW...