
President Obama signs the Fair Pay and Safe Workplaces executive order in Washington on July 31, 2014. (Andrew Harrer/Bloomberg News)
Marcia Crone, a little-known federal district court judge in Beaumont, Tex., played David to President Obama’s Goliath when she blocked most of an executive order that would have widespread impact on companies nationwide.
His “Fair Pay and Safe Workplaces” directive was years in the making when it was suddenly halted, at least temporarily, the day before it took effect. It would allow federal agencies to say no work for federal contractors with workplace violations.
Now, administration officials are plotting how to proceed in the wake of Crone’s action.
The Labor Department was ready to implement the 2014 order last Tuesday, when Crone issued her last-minute decision stopping those plans — to the delight of industry agents and the dismay of employee advocates.
“[I]t is in the public interest to ensure the delivery of economical and efficient services from government contractors to federal government agencies, which would likely be impaired by the arbitrary and unnecessary burdens imposed by the Executive Order,” Crone wrote. The former Houston lawyer was appointed to the bench in 2003 by President George W. Bush.
Under the order, companies doing business worth at least $500,000 with the federal government would have been required to disclose three years of state and federal labor law violations.
“Our tax dollars shouldn’t go to companies that violate workplace laws,” Obama said when he signed the order.
But they do.
A 2010 Government Accountability Office (GAO) investigation found “the federal government has awarded contracts to companies that had been cited for large back-wage liabilities by Labor.” Of the 50 largest firms with wage and hour violation fines from fiscal years 2005 through 2009, over 60 percent of the assessed monetary penalties “were made against companies that subsequently received contracts in fiscal year 2009,” the report said. Twenty-five of the 50 largest fines were against 20 federal contractors “for over $80 million in back wages.” Government agencies “awarded over $9 billion in federal contract obligations to these 20 contractors during fiscal year 2009.”
GAO provides this salient point: “None of the 20 federal contractors had been debarred or suspended from federal contracts.” Furthermore, the report said GAO “does not know the extent, if any, that contracting officials considered” the fines when awarding federal contracts.