From: bizjournals.com

It sounds simple enough: The federal government shouldn’t do business with companies that violate labor laws.

That’s the premise behind a proposed regulation that would require companies to disclose any labor law violations when they’re pursuing federal contracts worth more than $500,000.

But business groups contend the regulation will raise the cost of contracting, both for companies and the federal government, and could lead to fewer contracts and subcontracts for small businesses. They also argue the regulation is unfair, since initial determinations by agencies in labor law cases have to be disclosed as violations, even though they “are a far cry from determinations of guilt,” in the words of the National Association of Manufacturers.

Plus, the regulations give labor unions another weapon they can use against companies in organizing campaigns, according to the U.S. Chamber of Commerce.

“Long on the wish list of organized labor, unions will file frivolous cases against employers which can then be used against employers to unfairly deprive them of federal contracts under this proposal,” said Randy Johnson, senior vice president of labor, immigration and employee benefits for the U.S. Chamber of Commerce. “The one way to make sure this does not happen is to recognize the union — employers will be caught between a rock and a hard place.”

The proposed rule implements an executive order issued a year ago by PresidentBarack Obama. It contended that ensuring that federal contractors follow labor laws not only would protect workers, it also would lead to cost savings for the federal government.

“Contractors that consistently adhere to labor laws are more likely to have workplace practices that enhance productivity and increase the likelihood of timely, predictable, and satisfactory delivery of goods and services to the Federal Government,” the executive order stated.

Under the proposed rule, companies seeking federal contracts of more than $500,000 would have to disclose whether they had violated any of 14 federal labor laws or state equivalents over the past three years. Contracting officers would then decide whether these violations should disqualify businesses from receiving a government contract.