Federal Court Halts Key Provisions of DOL’s Davis-Bacon Act Amendments

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On June 24, 2024, the U.S. District Court for the Northern District of Texas issued a preliminary injunction against key sections of the U.S. Department of Labor (DOL) amendments to the Davis-Bacon Act (DBA) regulations that apply nationwide. This ruling temporarily halts the enforcement of specific provisions within the DOL final rule, “Updating the Davis-Bacon and Related Acts Regulations,” which became effective on October 23, 2023.

The Court found several final rule provisions violate the DBA’s statutory language, congressional intent, and the Regulatory Flexibility Act (RFA). The blocked provisions include those within 29 CFR 5.2, which codify distinctions between material suppliers and contractors/subcontractors and require contractors to pay prevailing wages to delivery truck drivers for onsite work exceeding a significant minimal amount. Additionally, the provision within 29 CFR 5.5(e), which imposes DBA requirements by operation of law even if omitted from covered contracts, was also blocked.

The Court found that the DOL overstepped its authority by including an operation-of-law provision contradicting the DBA’s express statutory language. This provision would mandate that DBA labor standards and wage determinations apply even if erroneously omitted from contracts, which the Court found inconsistent with the principles of due process and basic contract law. The DBA explicitly requires federal contracts to outline minimum wages for “laborers and mechanics employed directly on the site of the work.” The Court emphasized that the DBA is not self-implementing. Thus, DOL lacks the authority to enforce this provision.

Furthermore, the Court determined that DOL improperly expanded DBA coverage to workers beyond mechanics and laborers and included work not performed directly onsite. The DBA’s language limits its application to construction, alteration, or repair, which does not encompass activities like trucking or material supply.

The Court also highlighted DOL’s failure to comply with the RFA. The DOL did not adequately assess the economic impact on small businesses, including costs associated with compliance, such as producing certified wage reports and bearing interest costs on restitution wages. This oversight led the Court to conclude that the final rule violates the RFA.

This preliminary injunction will remain active indefinitely as the litigation progresses, and the Court will later determine whether to make the injunction permanent. The developments in this case will continue to be monitored closely.