Even though the DOL has not been cleared to issue its contentious blacklisting rule under President Obama’s “Fair Pay and Safe Workplaces” Executive Order (“the Blacklisting Rule”) – and despite legal and congressional challenges – the National Labor Relations Board (“NLRB”) is forging ahead with its own plan to collect data that could tarnish federal contractors and bidders as a company with a history of labor disputes.

Under the Blacklisting Rule, federal contractors bidding on jobs worth at least $500,000 are required to report data on labor violations, such as citations by the Occupational Safety and Health Administration, in their contract bids. The federal government plans to implement the rule partly by compiling contractors’ information in a DOL database; newly appointed Labor Compliance Advisors at contracting agencies will use that data as part of determining contractor “responsibility” in awarding federal jobs. The DOL has a pending rule under White House review to carry out Obama’s Order and does not yet have the go-ahead to implement this new database.

Still, in a pro-labor friendly move that is not uncommon of the NLRB in recent years, the agency has started to collect data under the Blacklisting Rule’s disputed tracking system. The NLRB’s General Counsel on July 1 issued a memorandum regarding how staff should input data on federal contractors into the new system, which is not even up and running.

This policy shift could have a damaging impact on federal contractors that are in even the earliest stages of labor disputes, as the NLRB will add their names to the database DOL plans to set up to track contractors with labor violations. The information could include enforcement actions that have not been adjudicated fully on the merits.

This also gives the NLRB a new arrow in its quiver to pressure contractors into settling unfair labor practice charges, with the new ability to hang the DOL database over them. If a federal contractor believes that a Regional Director’s decision to issue a complaint could contribute to a subsequent disqualification for federal business, the dispute is more likely to be settled rapidly, and likely at the company’s disadvantage.

In fact the General Counsel’s memo makes clear that investigators may use the new database in settlement talks by instructing staff to “politely inform” (or more aptly “strong arm”) employers:

Please be advised that if you reach a resolution of this matter before the Region issues a complaint, such as by entering a pre-complaint informal settlement agreement with the Regional Director, no information on this case will be forwarded to this database.

In addition to the potential for unfair blacklisting of federal contractors simply because a NLRB complaint may be issued, thus interfering with their bids for federal jobs, the agency is unilaterally adding a new paperwork and compliance burden for employers.

The general counsel’s memo states that employers with an impending labor complaint must complete a new form with four data points that NLRB staff will input into the new central DOL database, which Labor Compliance Advisors at various agencies use to help select qualifying bidders. If the form is not filled out in time, the NLRB will also make a note of that in the system.

Notably, the Blacklisting Rule states that “administrative merit determination[s]” under the NLRA are enough to trigger a database listing – however, this does not mean an administrative law judge ruling after a full hearing with evidence presented by both sides. DOL’s proposed guidance demonstrates that such a merit determination may be made by a Regional Director – prior to a hearing or testimony from witnesses. This significantly lowers the bar for the NLRB to include an employer in this new database.

As the NLRB presses ahead with another internal policy that helps the labor agenda move forward, federal contractors should carefully review their policies and procedures, including a refresher training of managers, on how to avoid an unfair labor practice charge. Failure to resolve such charges at an early stage could result in damaging repercussions on future government bids.