Regulation

Have a listen here.

Iain Murray, CEI’s Vice President for Strategy, along with Freedom Association Director Rory Broomfield, won second place in the Institute for Economic Affairs’ Brexit Competition. The goal of the competition is to devise a strategy for Britain’s exit from the European Union.

NLRB Ambush Election HearingOn three separate panels, I testified last week against the flaws inherent in the National Labor Relations Board’s (NLRB) latest proposed rule.

The NLRB benignly purports to re-examine “Representation Case Procedures.” The rulemaking is commonly known as the ambush elections rule, as a result of a key component that could require elections in as few as ten days.

FIRST PANEL

On the first panel, I addressed the election date at the heart of the proposal. Approvingly quoting a letter from eighteen United States Senators who commented against the proposed rule, I noted that, “then-Senator John F. Kennedy stated that it was essential to allow ‘at least a 30-day interval between the request for an election and the hold of an election’ in order to ‘safeguard against rushing employees into an election where they are unfamiliar with the issues.’”

The crux of then-Senator Kennedy’s statement is a focus on safeguarding employees and on ensuring that effectively educating employees remains the Board’s focus.

ANALOGY TO STUDENTS’ STUDIES

Pointing out that the median times for elections are on the order of 40 days and that the proposal could call for elections in as few as ten days, I asked, “Would your students benefit from a 75-percent reduction in study time?”

I pointed out that workers, who already have a job and many of whom have families and hobbies, are challenged with essentially learning a crash course in labor law and labor economics—two arcane and intricate areas normally pursued by highly trained specialists with advanced degrees.

An absolute minimum of 30 days and really a routine minimum of sixty days are appropriate to learn such material.

[click to continue…]

Post image for First Ever Constitutional Ruling against Dodd-Frank Voids Destructive “Conflict Minerals” Section

Today’s ruling of the D.C. Circuit Court of Appeals that Dodd-Frank’s “conflict minerals” disclosure mandate violates the First Amendment is the first time ever a court has ruled that a provision of Dodd-Frank violates the Constitution. Regulations issued under Dodd-Frank have been struck down for reasons such as inadequate cost-benefit analysis and other procedural violations, but this is first time a provision has been found to be unconstitutional.

And it couldn’t happen to a more misguided and destructive provision of the law! As my Competitive Enterprise Institute colleague Hans Bader and I have written in blog posts, articles, and regulatory comments, the conflict disclosure mandate creates a compliance nightmare, hurts American miners and manufacturers, and does the greatest harm to those it was intended to help — the struggling worker in and nearby the Democratic Republic of Congo.

As explained by Mercatus Center scholars Hester Peirce and James Broughel in their book Dodd-Frank: What It Does and Why It’s Flawed, the “conflict minerals” mandate of Section 1502 is one the law’s many “miscellaneous provisions” that offer “a clear example of how a statute invoked as the answer to the financial crisis is, in reality, an odd conglomeration of responses to issues, many of which had nothing to do with the financial crisis.” Section 1502, championed by celebrities, including Ashley Judd and Ben Affleck, requires all types of firms to disclose their products’ use of five “conflict minerals” — including gold, tin, and tungsten — that can be sourced to war-torn regions of the Congo.

[click to continue…]

Post image for CEI’s Battered Business Bureau: The Week in Regulation

Two new economically significant regulations last week will impose more than half a billion dollars in compliance costs on the economy. The additional 57 regulations agencies finalized last week will hopefully be less impactful.

On to the data:

  • Last week, 59 new final regulations were published in the Federal Register. There were 79 new final rules the previous week.
  • That’s the equivalent of a new regulation every 2 hours and 51 minutes.
  • So far in 2014, 868 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,100 new regulations this year. This would be the lowest total in decades; this will likely change as the year goes on.
  • Last week, 1,766 new pages were added to the Federal Register.
  • Currently at 20,727 pages, the 2014 Federal Register is on pace for 74,025 pages, which would be the lowest total since 2009.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. 12 such rules have been published so far this year, two of them in the past week.
  • The total estimated compliance costs of 2014’s economically significant regulations currently ranges from $1.64 billion to $2.01 billion. They also affect several billion dollars of government spending.
  • Seventy-seven final rules meeting the broader definition of “significant” have been published so far this year.
  • So far in 2014, 184 new rules affect small businesses; 26 of them are classified as significant.

Highlights from selected final rules published last week:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Post image for CEI’s WorkplaceChoice.org Scores Paycheck Fairness Act

The Competitive Enterprise Institute scored Wednesday’s vote in the U.S. Senate on the passage of S. 3772, The Paycheck Fairness Act, a bill that would fundamentally change the Equal Pay Act of 1963, which prohibits employers from paying women less than men for performing the same work in the same workplace.

The score will be incorporated into CEI’s Congressional Labor Scorecard that can be seen in full on CEI’s labor policy website, WorkplaceChoice.org.

CEI opposes numerous provisions of the proposed bill:

  • Sections 3(a) and (b) proposes to sharply curtail employers’ defense to discrimination claims based on “any factor other than sex,” and their ability to discipline employees.
  • Section 3(c) would expose employers for the first time to compensatory and punitive damages for unintentional sex discrimination and promote class action lawsuits. It would also broaden a “loser-pays-all” attorney’s fees provision against the defendant employer, though the same does not and would not apply to an unsuccessful employee plaintiff.
  • Section (4) would mandate that the EEOC and the Office of Federal Contract Compliance Programs “provide training to Commission employees and affected individuals and entities on matters involving discrimination in the payment of wages.” A plain reading could afford plaintiffs and their attorneys training in how to sue employers.
  • Sections (6) and (7) would require the Secretary of Labor to tell employers, unions, and the general public how to eliminate pay disparities between men and women, rewarding compliant ones. The Secretary would conduct studies, publish materials, convene a national summit, and become involved in state and community education on the topic.
  • Section (8) and (9) would require new federal regulations “for the collection of pay information data from employers as described by the sex, race, and national origin of employees.” Data would be mined in the Current Employment Statistics survey and re-instated Equal Opportunity Survey, taking limits off the Office of Federal Contract Compliance Programs in use of the data for enforcing against employers. Public availability of the data appears to be aimed at helping the plaintiffs’ trial bar sue employers.

This bill would make America more litigious and saddle virtually all the nation’s businesses with more red tape and costs, even though gender-based employment discrimination is already illegal. The same legislation received a vote last Congress—during an election year—and there was scant reason to believe Senators would change their position. As expected, this political stunt was voted down.

For the 113th Congress’ Senate vote 103 on cloture on the motion to proceed to the Paycheck Fairness Act, S. 2199, the vote was 53 Yeas to 44 Nays, with three Senators (Coburn, Cornyn, and Cruz) not voting. Sixty votes were needed for cloture to proceed to the bill, and thus the bill will not be discussed on the Senate floor.

Only Senator King, an Independent of Maine who caucuses with the Democrats, split with his caucus on this vote. All Republicans opposed cloture, and all Democrats supported cloture, with the lone exception of Majority Leader Harry Reid who opposed cloture for the procedural reason that he is thereby afforded the opportunity to resurrect the cloture motion.

“In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses.” So began a 3-to-0 ruling Wednesday by the Sixth Circuit Court of Appeals in EEOC v. Kaplan Higher Education Corp. (Apr. 9, 2014). CEI joined the Pacific Legal Foundation’s amicus brief in support of the employer sued by the EEOC, the federal civil-rights agency. (EEOC stands for Equal Employment Opportunity Commission.) As former assistant attorney general Roger Clegg (now at the Center for Equal Opportunity) notes,

The Obama Administration sued Kaplan for running credit checks on employee applicants – similar, by the way, to the ones the EEOC itself uses. Kaplan had learned that some of its employees had misappropriated student payments and, to provide safeguards against this behavior, it began screening its applicants for major red flags in their credit history. The EEOC sued Kaplan, arguing that it cannot use credit checks, because use of credit checks has a disparate impact on black applicants.

Anyway, putting aside the inherent dubiousness of the whole lawsuit, there were also severe methodological problems with the Obama Administration’s evidence, which relied on “race raters” to determine, by scrutinizing driver’s license photos, the race of the applicants. So the trial judge threw out the case. Today, I’m happy to report, the court of appeals affirmed that decision – and in no uncertain terms, I might add, much I’m sure to the Obama administration’s chagrin.

At the Washington Post, UCLA Law Professor Eugene Volokh provides these excerpts from the court’s ruling:

The EEOC’s personnel handbook recites that “[o]verdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.” Because of that concern, the EEOC runs credit checks on applicants for 84 of the agency’s 97 positions. The defendants (collectively, “Kaplan”) have the same concern; and thus Kaplan runs credit checks on applicants for positions that provide access to students’ financial-loan information, among other positions. For that practice, the EEOC sued Kaplan. Specifically, the EEOC alleges that Kaplan’s use of credit checks causes it to screen out more African-American applicants than white applicants, creating a disparate impact in violation of Title VII of the federal Civil Rights Act. See 42 U.S.C. § 2000e-2(a)(1), (a)(2), (k). Proof of disparate impact is usually statistical proof in the form of expert testimony; and here the EEOC relied solely on statistical data compiled by Kevin Murphy, who holds a doctorate in industrial and organizational psychology. For two reasons, however, the district court excluded Murphy’s testimony on grounds that it was unreliable. First, the EEOC presented “no evidence” that Murphy’s methodology satisfied any of the factors that courts typically consider in determining reliability under Federal Rule of Evidence 702; and second, as Murphy himself admitted, his sample was not representative of Kaplan’s applicant pool as a whole. The district court therefore granted summary judgment to Kaplan. The EEOC now argues that the district court “erred” — a telling, oft-repeated, and mistaken choice of word here — when it excluded Murphy’s testimony. We reject the EEOC’s arguments and affirm.

  . . . . . . . .

The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself. The district court did not abuse its discretion in excluding Murphy’s testimony.

[click to continue…]

Earlier today, Reps. Mike Pompeo (R-Kan.) and G.K. Butterfield (D-N.C.) introduced a bill in the House that would establish federal standards for the labeling of genetically engineered (GE) foods and preempt a growing patchwork quilt of state action on GE labeling. The underlying motivation behind the “Safe and Accurate Food Labeling Act of 2014” (H.R. 4432) is praiseworthy, so the congressmen deserve an A for effort. However, the execution leaves more than a little to be desired.

This year, an estimated 25, or more, states will consider legislation or ballot initiatives that would mandate special labeling for many GE foods. As I’ve written before, those proposals are bad policy, make no sense scientifically, would needlessly raise the cost of producing and selling safe, nutritious and wholesome food, and are arguably unconstitutional on several grounds. Nor would they give consumers any actual knowledge about what’s “in their food” – the ostensible purpose of those state measures.

The U.S. Food and Drug Administration’s current policy requires foods to be labeled when a material difference has been made in their composition – and the labels must say what the actual change is, not simply what technique was used to make the change. So, in many ways, the FDA’s current policy does a far better job of telling consumers what’s in their food than a GE labeling mandate ever could.

By explicitly preempting state labeling laws and making clear that FDA policy on GE food labeling is the law of the land, H.R. 4432 would serve an extremely valuable function. And, because the packaged food items found in most grocery stores are the epitome of interstate commerce, ensuring that oversight of their safety and labeling be governed at the national level, rather than state-by-state, perfectly reflects the plan established by the framers of the U.S. Constitution.

Unfortunately, in order to attract support for this perfectly reasonable preemption measure, H.R. 4432 offers GE skeptics the enticement of increasing the FDA’s regulatory power. The proposal would grant FDA the authority to keep all new GE foods off the market until agency heads and the presidential administration they work for feel politically safe to grant approvals. Like most other “gatekeeper” regulatory agencies, the FDA would not even need to reject approval for products they don’t like. They would need only decline to make an approval or disapproval determination indefinitely.

Supporters point to a 180-day statutory deadline in the bill, which they argue will force the FDA to make timely approval decisions. But it’s worth noting that the FDA faces identical 180-day statutory deadlines for making approval/disapproval decisions on a host of other products, ranging from new pharmaceuticals and medical devices, to new veterinary drugs and new GE food animals. The agency disregards those deadlines on a routine basis because there is no triggering mechanism that automatically grants a producer the right to put safe and effective products on the market when a recalcitrant FDA refuses to act.

Want to know just how effective that 180-day deadline is? Just ask AquaBounty, the developers of a GE salmon that would help fish farmers deliver one of America’s favorite seafoods to market in a less expensive and more environmentally sustainable way. The FDA determined several years ago that the AquaBounty salmon was safe for consumers and the environment, but its approval has been held up by the Obama Administration simply because their supporters in the environmental movement object to the technology.

Reps. Pompeo and Butterfield do deserve credit for trying to resolve the growing problem of confusing, expensive, and scientifically meritless state labeling proposals for GE food. But, the “Safe and Accurate Food Labeling Act of 2014” contains a serious flaw that will hopefully be corrected once the bill moves to committee.

Obama RacineAlthough President Obama occasionally clings to the claim that his administration is the “most transparent” in history, with more and more revelations, this gets farther and farther from the truth. Clearly, we have an epidemic on our hands.

Over the past couple years, I have uncovered case after case of federal government officials, particularly those at the Environmental Protection Agency (EPA), knowingly and willingly moving select correspondence “off-line”, away from required, official email accounts. We have even found senior appointees at EPA, Department of Energy, and the White House Office of Science and Technology Policy using email accounts controlled by environmental pressure groups.

Regardless of intent, although I would argue these practices on their face indicate a desire to evade disclosure, the use of non-official email accounts for work purposes circumvents federal-recordkeeping responsibilities. Since employees have chosen to not search them in response to Freedom of Information Act (FOIA) requests or congressional oversight requests, this allows government officials to avoid revealing their actions to taxpayers who finance their salaries.

These corrupt practices are not isolated to the federal government. In requests the Competitive Enterprise Institute (CEI), assisted Colorado’s Independence Institute with, we show the practice extends to activists employed in state government. In Colorado, this means Gov. John Hickenlooper’s Chief-of-Staff, the governor’s Chief Strategy Officer and Director of the Office of Policy and Research to Colorado, Alan Salazar, and the Director of Environmental Programs for the Colorado Department of Public Health and Environment (DPHE), Martha Rudolph.

On October 15, 2013, I filed a FOIA request on behalf of CEI for all non-official account emails of former EPA Region 8 (Rocky Mountain West) administrator James Martin, a former Environmental Defense (ED) lawyer who we had already showed was using a private account to correspond on work-related issues with former ED colleagues and state officials. After these revelations, like another high-level EPA official — former administrator Lisa Jackson, also known as “Richard Windsor” in a false-identity account I also discovered — Martin resigned from his post in February 2013. Under congressional scrutiny after these revelations, he turned over more emails, which I obtained from the EPA.

[click to continue…]

Earlier, we wrote about a Wisconsin town whose ordinance holds parents liable for bullying by their children, including certain speech. We and law professor Eugene Volokh noted that this raised serious First Amendment issues. Now, a New Jersey judge has done the same thing by judicial construction, by allowing New Jersey school districts to drag students and their parents into lawsuits brought against school districts by alleged victims of bullying or discriminatory harassment. (New Jersey’s anti-bullying law is so broad that it violates the First Amendment by banning non-violent speech, notes the civil-liberties group Foundation for Individual Rights in Education.)

On March 12, a New Jersey Superior Court Judge ruled in V.B. v. Flemington-Raritan Regional School District that that school district, and the Hunterdon Central Regional High School, “could name 13 students and their parents as third-party defendants in a bullying suit,” dragging them into a lawsuit against the school districts, and potentially forcing them to share the massive cost of paying any damages awarded by a judge or jury against the school district. Judge Yolanda Ciccone allowed the parents to be sued based on conduct and offensive comments both in school (where teachers and schools officials, not parents, were in charge) and outside of school. She based this ruling partly on speech that is protected by the First Amendment outside the schoolhouse, such as unkind remarks on Facebook, writing that “Plaintiff’s complaint includes several allegations of that acts of bullying and harassment took place on Facebook, and that plaintiff had to contact Facebook directly to have to [sic] offending statements removed.”

Never mind that federal judges have ruled that the First Amendment applies with added force to students’ speech outside of school, meaning that vulgar speech that is banned in school may be protected speech when it occurs away from school, as cases like Klein v. Smith (1986) illustrate. Similarly, the federal appeals court in New Jersey has issued two First Amendment rulings in favor of students disciplined for creating fake web profiles lampooning their principals, holding that the speech was protected outside of school even if it would be unprotected in school, in Layshock v. Hermitage School District (2010) and J.S. v. Blue Mountain School District (2011).

[click to continue…]

Have a listen here.

Senior Fellow Angela Logomasini talks about her new Consumer’s Guide to Chemical Risk.