Recent Developments
June 21, 2017—The Supreme Court recently broadened the scope of “derivative sovereign immunity” available to contractors working for the USG. In Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016), the contractor argued, among other things, that it was not subject to suit based on “derivative sovereign immunity,” also known as “Yearsley immunity.” Significantly for contractors, the U.S. Supreme Court rejected the Ninth Circuit’s limitation of Yearsley as a “narrow rule,” concluding instead that what is critical was not “the involvement of public works, but the contractor’s performance in compliance with all federal directions.” Although the contractor in Ewald was ultimately not entitled to immunity because it violated Navy instructions, the Court indicated that a contractor “who simply performed as the Government directed” would be entitled to immunity. With this important clarification in contractor immunity law, contractors should find increased success regardless of type of contract, and achieve more consistent results across appellate circuits.
January 20, 2017--President Trump's Chief of Staff issued a memorandum to the heads of the executive departments and agencies calling for a regulatory freeze pending review – a practice that is relatively routine for new incoming presidential administrations. Specifically, the memorandum prohibits agencies from sending any regulation to the Office of Federal Register (OFR) prior to review and approval; requires agencies to immediately withdraw unpublished regulations for review and approval; and mandates that agencies temporarily postpone the implementation of published, but not yet effective, regulations for 60 days.
September 29, 2016--the Department of Labor released its final rule requiring federal contractors to provide their employees with at least one hour of paid sick leave for every 30 hours of work in connection with a covered contract, which must be allowed to accrue to at least 56 hours per calendar year. The rule, published in the Federal Register on September 30 and set to go into effect 60 days thereafter, applies to new contracts—with certain exceptions—that result from solicitations issued on or after January 1, 2017, or that are awarded outside the solicitation process on or after that date.
February 25, 2016--The Obama Administration published a proposed rule implementing Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. The proposed rule, which the Department of Labor estimates would increase benefits for 828,000 federal contractor employees, would require federal contractors to provide employees with up to seven days of paid sick leave annually and impose significant new administrative requirements on contractors, which are likely to be addressed in contractor and industry comments submitted over the next 30 days prior to the publication of the final rule.
September 11, 2015. In a recent Memorandum and related speech, the Department of Justice announced a major new initiative designed to target and pursue “accountability from the individuals” who “perpetrate corporate wrongdoing.” Media reports describe this action as the first major policy announcement by the new Attorney General, Loretta Lynch. This DOJ memorandum click here sets forth six specific guiding principles for federal prosecutors. Among the principles is a DOJ prohibition “absent extraordinary circumstances” against releasing “culpable individuals” from civil or criminal liability when resolving or settling a civil matter (such as a False Claims Act matter) with a corporation and urges prosecutors to “consistently focus on individuals as well as the company.”
November 13, 2014. President Obama issued a Presidential Memorandum click here authorizing the U.S. Agency for International Development pursuant to Public Law 85-804 to indemnify contractors performing Ebola-response contracts in Africa "with respect to claims, losses, or damage arising out of or resulting from exposure, in the course of performance of the contracts, to Ebola." This Presidential action is the latest example of how contractors should request contract-based indemnification (via FAR Clause 52.250-1) from any U.S. Government Agency for activities that pose unusually hazardous risk including Ebola-related risks.
July 31, 2014. President Obama signed an Executive Order click here that requires contractors to report labor law violations and requires contractors to agree that certain claims would not be arbitrated without the voluntary post-dispute consent of employees or independent contractors. Employers seeking federal contracts will be required to report certain labor law violations, including "arbitral awards" or "administrative merits determinations," that occurred within the prior three years when bidding on contracts. These reports will be used by Contracting Officers to determine if an offeror is "responsible" and thus eligible to receive an award. The new Executive Order will be implemented through amendments to the FAR. Employers will have an opportunity to submit public comments to the proposed FAR rule.