Author Archive

Attaching Provisions to Agency Spending Bills … | Steve Amitay

… that will Debar Government Contractors for FLSA violations

Dear NASCO Members and Members of the Government Security Contractors Caucus:

Last week several major government contractor associations (the Acquisition Reform Working Group and the Professional Services Council) as well as the U.S. Chamber of Commerce sent letters to Congress in response to an ongoing and now successful effort by Dem. Rep. Keith Ellison (MI) to amend (add to) each FY ’15 Appropriations bill a provision that will prevent contractors found to have violated the Fair Labor Standards Act (FLSA) from continuing to receive federal contracts.

While the first attempt in May failed with the Commerce/State/Justice Appropriations bill, in the last month and most recently last week, the amendment has been successfully attached to three House FY ’15 appropriations bills (Defense, Energy & Water, and Transportation). Of note, 25 GOP members voted with the Dems to attach the amendment to the Defense bill in late June.

In his remarks introducing the amendment that made it on to the Defense bill, Ellison has said that the purpose of the amendment is to guarantee: “if there is a Federal contractor who has been found to engage in wage theft, that they may not benefit from this appropriation.” Ellison cited a report issued by Democrats on the Senate Committee on Health, Education, Labor, and Pensions finding that “32 percent . . . of the largest Department of Labor penalties for wage theft were levied against Federal contractors.”

As the ARWG Letter explains, the amendment “prohibit funds appropriated under the bill from being used to enter into a contract with any person who discloses, via the Federal awardee Performance and Integrity Information System (FAPIIS), a civil, criminal, or administrative proceeding that resulted in a finding of fault and liability, or any other compromise with an acknowledgement of fault that could have resulted in a civil, criminal, or administrative proceeding, related to the Fair Labor Standards Act (FLSA).“ The specific language of the amendment is at the end of this e-mail.

The ARWG letter continues “As such, this amendment acts as an automatic, de facto debarment of federal contractors while entirely circumventing long-standing and proven suspension and debarment procedures included in the Federal Acquisition Regulation (FAR), specifically FAR Part 9.4. FAR Part 9.4 provides federal agency suspension and debarment officials with broad authority to undertake suspension and debarment actions and also requires that certain processes be followed.”

Similarly, the U.S. Chamber letter noted, “There is a sufficient process to take into account contractor compliance with a variety of workplace laws and requirements, including the FLSA, and which already lead to the suspension and debarment from federal contracting if the violations are recurring or severe. This amendment would ignore the existing process, impose draconian penalties for violations, and lead to many current contractors being debarred. This would ultimately result in job losses and major disruptions in supplying the federal government with necessary goods and services.”


While it is expected that attempts will be made by Ellison to attach the amendment to all the remaining appropriations bills that are going through the House, so far no Senate appropriations bill contain the provision. More so, the above mentioned business coalitions are getting more aggressive in their opposition to the provision.

The strategy then is:

(1) educate House members of the impact of this amendment and try to keep it from being accepted on any other appropriations bills moving through the House;

(2) educate Senate appropriators that this is in several House bills and they need to make sure it does not get added into any Senate bills;

(3) work to make sure all key parties know these amendments must be removed from any final conference versions of the individual appropriations bills or an omnibus appropriations package.

With essentially the defense and IT contracting industry and the U.S. Chamber leading the fight, there really is no utility for NASCO to get directly involved but I will stay abreast of the issue.



What will Obama do on employer mandate?

“The Hill”
By Elise Viebeck and Benjamin Goad

The White House needs to make a decision soon on whether ObamaCare’s controversial employer mandate will take effect in 2015.
 With the mandate set to take effect in January, businesses are awaiting final world from the administration on whether they will be required to track and report how many of their employees are receiving coverage.

Federal officials are late in delivering the final forms and technical guidance necessary for firms to comply, raising suspicions that the mandate could once again be delayed.

The mandate has been pushed back twice before, both times in late summer.

 The delays to the mandate have angered House Republicans, who are now taking President Obama to court for what they say is his refusal to follow the letter of the law.

Another delay to the mandate would be sure to create a political firestorm and draw charges that the administration is playing politics with ObamaCare ahead of the midterm elections.

But support for the mandate on the left has begun to soften in recent months, with influential figures and former Obama administration officials questioning whether it’s needed to make the law work.

Seven business lobbyists interviewed by The Hill said it is unlikely the administration will defer the employer mandate wholesale one more time, given the intense political pressure from Republicans.

But many groups are expecting partial relief to be announced prior to November, perhaps in the form of looser reporting requirements that would be easier to follow.

“I’d be shocked if they did another [full] delay … but it wouldn’t surprise me if something else came out before the election,” said one source who requested anonymity in order to speak freely.

Almost one year ago, the Obama administration announced it would postpone enforcement of the mandate until 2015.

The move was denounced as politically driven, given that businesses warning have been they are likely to layoff and cut hours for workers once they are required to either provide healthcare coverage or pay a fine.

The White House angered conservatives again in February by allowing medium-sized businesses to avoid penalties under the mandate until 2016.

The private sector welcomed the changes, but critics argued the moves were an abuse of Obama’s executive power, and that argument is now the centerpiece of Speaker John Boehner’s (R-Ohio) lawsuit.

While that impending legal action is facing an uphill climb in court, lobbyists said the publicity generated by the lawsuit has limited the White House’s options.

“The administration is stuck between a rock and a lawsuit — not that we’re fans of the lawsuit,” said one business representative.

“The reality is that the employer mandate is going forward on January 1 no matter what, in my view,” said another.

And yet, delayed or not, the mandate poses a variety of challenges for businesses.

Interest groups say they’re in a holding pattern until the Treasury Department releases two more forms and a set of specific enforcement guidelines.

Those materials, expected prior to July 4, are considered necessary to constructing databases that will help fulfill the mandate’s complex requirements.

The Treasury Department says the documents will be ready soon and noted that it released final regulations on the mandate in February.

“These forms will be made available in draft form in the near future,” said a spokesman for the Internal Revenue Service.

Since that month, however, a growing number of Democrats have muddied the waters by questioning how much the mandate really matters to the healthcare law.

Skeptics include the party’s likely 2016 standard-bearer, Hillary Clinton, and former Obama spokesman Robert Gibbs.

Rep. Henry Waxman (D-Calif.), who helped craft the healthcare law, said he was “concerned” about the potential for lost revenue if the mandate is scrapped.

But he said another delay would not doom the healthcare law. “I don’t think it would be disastrous,” he said. “It wasn’t disastrous last year.”

On the other side of the debate, Families USA President Ron Pollack argued that Democrats should support the mandate as another way to broaden access to health insurance.

“It is a big mistake for people who care about expanding health coverage to put repeal or weakening of the employer mandate on the agenda,” said Pollack, who has pressed the administration to enforce the policy on time.

“I just don’t think any mechanism that moves us toward greater coverage should be eliminated.”

Away from the public debate, the lobbying battle over the administration’s final decision is heating up.

Business groups are airing concerns about the missing forms on Capitol Hill and in “quiet conversations” with administration officials.

Some of the groups are proposing that the administration scale back the 2015 penalties for failing to comply. Others say that a form of self-verification should suffice for reporting which employees have healthcare coverage.

Lobbyist Yvette Fontenot, who helped draft the employer mandate as an aide to former Senate Finance Committee chairman Max Baucus (D-Mont.), said the administration should explore its options.

“We didn’t have a very good handle on how difficult operationalizing the provision would be at that time,” said Fontenot, who is now a partner at government affairs firm Avenue Solutions.

“I don’t have any doubt that there are other approaches … that make some sense in ensuring employers pay their fair share.”

Obama amends EO’s to prevent contractor discrimination against LGBT employees | Steve Amitay

Dear NASCO Members and Members of the Government Security Contractors Caucus:

As previously reported upon last month, today the White House released an amendment to Executive Order 11246 (which prohibits federal contractors and subcontractors from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin, and in March 2014 was expanded to prohibit discrimination against veterans and disabled individuals) that further expands EO 11246 to also prohibit discrimination against employees for “sexual orientation” and “gender identity.”

Here is a link to the Executive Order Amending EO 11246

Here is a brief article on the amendment.

Obama amends executive orders to protect gay, transgender workers

July 21, 2014 | By Ryan McDermott
President Obama amended Monday two executive orders that prohibit the federal government and its contractors from discriminating against gay and transgender workers.

Executive Order 11246, issued by President Lyndon Johnson, prohibits federal contractors from discriminating “against any employee or applicant for employment because of race, color, religion, sex or national origin.”

With Obama’s amendment, the order will add sexual orientation and gender identity to the protected categories.

However the order does make an exception for religious corporations.

Executive Order 11246, “shall not apply to a Government contractor or subcontractor that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution or society of its activities.”

However, religious corporations are not exempt from the other protected categories in the original order.

Executive Order 11246 governs only federal contractors and federally-assisted construction contractors and subcontractors who do over $10,000 in government business in one year.

Obama also amended Executive Order 11478, which was issued by President Richard Nixon that bars discrimination against federal employees on the basis of race, color, religion, sex, national origin, disability and age.

That order was amended by President Bill Clinton to include sexual orientation and now Obama has amended it again to include gender identity in the protected categories.

Steve Amitay

Update on EEOC Efforts to Curb Employer Use of Criminal Background Checks – EEOC Suffers a Major Defeat

When the EEOC released its much criticized and confusing April 2012 Enforcement Guidance on employer use of arrest and conviction records in employment, and then effectively stated its intent to use the Guidance to aggressively go after employers for their use of employee background checks as alleged violation of Title VII of the Civil Rights Act of 1964, as observed by the Federal Judge in the “Freeman” case discussed below, “the EEOC…placed many employers in the “Hobson’s choice” of ignoring criminal history and credit background, thus exposing themselves to potential liability for criminal and fraudulent acts committed by employees, on the one hand, or incurring the wrath of the EEOC for having utilized information deemed fundamental by most employers.”

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Fully Functioning NLRB Likely to Be Up and Running By August: Bad News for Employers

In January, the D.C. federal appeals court ruled in the case of NLRB v. Noel Canning that President Obama’s January 2012 recess appointments to the NLRB of Democrats Sharon Block and Richard Griffin and Republican Terence Flynn exceeded the recess appointment power granted to President’s in the Constitution and thus the appointments were invalid. Therefore, the NLRB decision against Noel Canning was made with just two valid members of the five member Board. As three valid Board members are the minimum needed for a quorum to take Board actions and make decisions, then the decision against Noel Canning was too invalid. Since the D.C. Court ruling, in two other similar challenges to NLRB decisions, two other federal appellate courts have also ruled the NLRB recess appointments were unconstitutional and thus NLRB decisions in those cases were invalid. The Supreme Court will take up the Noel Canning case next term and there is a strong possibility that the Court will agree with the Noel decision and thus invalidate the Board’s decisions/rules/appointments requiring a quorum that the Board has made since January 2012. The specter of the mass annulment of Board actions/decisions, despite statements from the Obama Administration and the NLRB that the Board would not be deterred in its mission, has indeed, much to chagrin of Big Labor, caused the Board to adopt a “go slow” approach, especially in area of issuing regulations.

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Mandatory Employer Use of E-Verify A Pillar of Comprehensive Immigration Reform

As expected, despite the protests from civil libertarians and privacy advocates, the much anticipated “comprehensive immigration reform” bill (S. 744) introduced earlier this week by the Senate “Gang of Eight” will require all employers — on a phased-in basis based on employee size — to use the E-Verify system to determine whether a new hire is eligible to work in the United States.(See Section 3101).

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NASCO Contract Security D.C. Summit Brief

On June 12 and 13 (starting with a evening cocktail reception on June 11) NASCO will be holding its 8th Annual Contract Security D.C. Summit. The NASCO Summit is the premier national event focused on the intersection of public policy and the business of contract security. The agenda is packed with sessions and speakers that will address national policy issues, legal issues, labor issues, federal contracting issues, and federal and state legislative issues of interest to contract security employers.

Speakers include, Rep. Michael McCaul, Chairman of the House Homeland Security Committee; Jeff Kessler of Imperial Capital, the leading financial analyst for the security industry; Theane Evangelis Kapur of Gibson, Dunn and Crutcher, who co-wrote the contract security industry’s amicus brief for the upcoming pivotal employee class action case before the California Supreme Court (Duran v. U.S. Bank); various officials from the Federal Protective Service and other DHS agencies, Labor/Employment policy and Political experts from the U.S. Chamber of Commerce; and more. All events including the sessions, two cocktail receptions and a dinner are within a block of each other right off Capitol Hill. Click here for a registration form.

For more information on this topic please email Jeff DiDomenico at Valiant or Click Here for a free assessment.

DOL to Finally Release Rule Curtailing “Advice” Exemption to “Persuader” Activities Reporting

In June 2011, the U.S. Department of Labor (DOL) proposed a new Rule that would significantly narrow the DOL’s interpretation of the “advice” exemption of the Labor-Management Reporting and Disclosure Act (LMRDA). In a December 2012 Report filed by DOL to the federal Office of Information and Regulatory Affairs, DOL stated that it planned to take issue with the Final Rule in April 2013.

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Update on Efforts in Congress to Provide for Universal FBI Background Checks for Security Officers

For the past several years, NASCO, and individual NASCO members, have worked to expand the ability of employers to obtain FBI checks on security officers as authorized by the 2004 Private Security Officer Employment Authorization Act (PSOEAA). An obstacle to obtaining expanded FBI checks under the PSOEAA is its requirement that the authorized FBI check to be obtained from a state agency.

While NASCO has worked with several states (Colorado, Kentucky, Missouri) to set up PSOEAA FBI check programs, and NASCO also worked with Minnesota to set up a program that conducts PSOEAA checks on officers in states with no statewide security officer regulations, other states do not have the resources or desire to provide, or expand current, security officer FBI background checks.

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4 Non-Federal Contracting Related Issues of Interest to the Contract Security Industry in the 113th Congress

a. Liability Immunity for Reporting Suspicious Activity

During the last Congress, legislation (the “See Something Say Something Act”) was introduced in both the House and Senate that expands the current legal immunity for “good faith” reporting of suspicious activity (that could be related to an act of terrorism). Currently such immunity is only available in the passenger transportation sector, and the bill would expand it to all reporting of such suspicious activity to authorities.

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