WHOLESALE DISTRIBUTION BEST PRACTICES

Leading wholesaler-distributors depend on NAW Institute for Distribution Excellence groundbreaking research studies because they help solve real-world business challenges.

 

YOUR 5-YEAR GROWTH ROADMAP


 

Order copies of Facing the Forces of Change®: Navigating the Seas of Disruption for everyone on your team!

 

NAW News

Regulatory Agenda

- January 2017

One of the measurable good-news outcomes of the Presidential election is the clear promise President-elect Trump made to roll back as many of the Obama Executive Orders and regulations as possible, as quickly as possible.

The Trump transition team, Congressional Leaders and the business community are all deeply involved now in figuring out which Executive Orders can simply be undone by the new President; and which regulations can be easily reversed, which can be repealed by an act of Congress, which may be unraveled by withdrawing the government from ongoing litigation, and which are deeply entrenched and will require more complicated responses.

Congressional Review Act (CRA):

The Congressional Review Act is a rarely-used but powerful tool that Congress can use to repeal some executive branch regulations. Under the CRA, Congress can pass legislation to reverse a specific regulation with an expedited floor procedure – in order words, with a time limit on debate and not subject to a Senate filibuster so it can pass with a simple majority vote. A CRA resolution must be introduced within 60 legislative days in the House/60 session days in the Senate (not calendar days) of Congress being notified of a new regulation, and a successfully-passed CRA resolution must be signed by the president or his/her veto overridden.

Given the veto power of a sitting president whose regulation is challenged by a CRA resolution, the utility of the law is obviously limited. In fact, there has been only one successful CRA revocation of a regulation. In late 2000, in the last months of the Clinton Administration, OSHA proposed very controversial ergonomics regulations. In early 2001, within 60 session-days of the issuing of the regulation, Congress passed a CRA resolution revoking the Ergonomics regulations, and sent that resolution to newly-elected President Bush for his signature. (As an ironic aside, President Clinton had signed into law in 1996 the statute that created the CRA and allowed the revocation of his OSHA regulation.)

We have today the same circumstances that allowed the only successful previous CRA action: regulations issued late in the final year of a president’s last term in office, with a president of the opposition Party elected in November who can and will sign CRA resolutions the following year.

Congressional Leaders and Committee chairs are now reviewing the list of regulations issued late enough last year to be eligible for CRA action. While we fully expect the CRA to be used in the next months, there are two significant issues worth noting.

First, while CRA resolutions cannot be filibustered, they are allotted 10 hours of debate floor time, and will have to compete with Cabinet and sub-cabinet nominations, two budgets and at least one reconciliation bill for scarce floor time in the Senate in the early weeks of the session.

Second, and more significant, use of the CRA to reverse a regulation could have unintended consequences. Under the terms of the statute, if a regulation is repealed by enactment of a CRA, that same issue cannot be regulated again in the future. That extreme result – especially of a broadly- or carelessly-written CRA – will clearly influence the decisions on which regulations to include in CRA actions.

Given the uncertainty of the process going forward or decisions on which regulations and executive orders to tackle and how to tackle them, all we can provide as of this writing is a list of some of the workplace regulations and orders, their status, and how they might be addressed.

Overtime rule: This rule has been blocked by a temporary federal court injunction which is now on appeal to the appellate court. There is also a pending motion for summary judgment that the federal district judge could rule on soon. While a CRA would be timely, the incoming Trump Administration could instead simply withdraw the government’s appeal of the injunction and either let the issue end there, or begin a new rule-making on a more reasonable update to the outdated FLSA rules.

Joint Employer Standard: This NLRB issue is currently in the courts as well, on appeal in the DC Circuit. There is also legislation to repeal the changes to the standard.

Persuader rule: This Labor Department rule has also been challenged in court, and is currently subject to a court-ordered nationwide preliminary and later permanent injunction. DoL has appealed the decision, but the Trump Administration could abandon the appeal and let the injunction stand.

Blacklisting Rule: This rule, too, is subject to a temporary injunction blocking some parts of the rule. Business-side attorneys are optimistic that the court will eventually rule for the plaintiffs and strike down the rule. The rule also falls within the timeframe for a CRA challenge.

NLRB’s Ambush Election Rule: This is a final rule, not subject to a CRA. A new GOP majority on the NLRB could re-visit the issue and begin a new rule-making, but it is not likely to be on the top of a priority list.

Protected concerted activity: The NLRB has broadly expanded its reach into both union and non-union workplaces by expanding the definition of “protected concerted activity.” This is not a rule-making but a series of case decisions, so it will take a GOP-majority NLRB time to find opportunities to reverse the Board’s overreach in this area.

Micro Bargaining units: The NLRB continues to apply their “Specialty Healthcare” decision regarding what constitutes an appropriate collective bargaining unit to more companies and industries, and several micro-bargaining unit cases are in court. Like concerted activity and joint employer, these NLRB actions were case decisions and not rule-makings so a new GOP Board will have to look for cases that allow them to redefine the “specialty” standard.