Dive Brief:

• Judge Marcia A. Crone, with the U.S. District Court for the Eastern District of Texas, issued a preliminary injunction late Monday night against the Fair Pay and Safe Workplaces rule, which opponents have dubbed the "blacklisting" rule.
• The judge's action blocks the Obama Administration's regulation, which requires that contractors seeking federal work disclose recent labor law violations, from taking effect today, as originally scheduled.
• In her decision, Crone said the groups that initiated the suit earlier this month — including the Associated Builders and Contractors — had "properly demonstrated immediate and ongoing injury to their members if the rule is allowed to take effect," according to Politico.

Dive Insight:

The ABC, which has been a vocal opponent of the FPSW rule since it was announced, lauded the Texas court's decision. "The court has maintained the First Amendment rights of government contractors and protected them and taxpayers from the poorly crafted blacklisting rule," the association said in a release.

Opponents of the rule claim that it would violate contractors' First Amendment rights and restrict open competition for federal contracts by forcing companies to disclose allegations of unadjudicated labor and employment law violations. The ABC has also said that the new regulation would result in higher regulatory costs for smaller firms, which would in turn shrink the number of available bidders for a project and boost taxpayer costs. 

On the other hand, proponents of the rule say it ensures that only contractors who comply with labor and employment laws are able to participate in federally funded projects. Therefore, the new rule requires that contractors disclose a certain portion of their labor compliance history when bidding on those types of projects. 

Before Monday's action halting the new regulation, the Department of Labor had planned to start its phased rollout of the executive order today, with full implementation scheduled for October 2017. According to an ABC survey last month, more than half of its member respondents said the new rule's requirements would keep them from pursuing federal work, and 91% said it would impose an "extreme" burden from a compliance standpoint. Survey respondents also pointed to cost as a major concern, as 98% responded that the contracting process would become more expensive as a result of the regulation.