Business Costs & Regulation

Federal Regulators Take the Ball And Run With It

Frustration with Congress and fear of GOP gains are pushing agency heads to act.

A not-so-subtle shift is under way in Washington as executive agencies use every means they have to act on their own as soon as they can. That will mean a wide array of decisions in 2010 with important implications for businesses and individuals.

In some cases, the motive is frustration with Congress. Officials are tired of waiting for the House and Senate, which have full agendas and perennial gridlock. A few agencies are hoping to forestall action, trying to do as much as they can now because they fear losing their authority.

In other instances, it’s fear of the midterm elections, which will put a lot more Republicans in Congress and give the GOP greater ability to block or delay Obama administration goals. Agencies will do their best to set agendas and adopt changes before November, knowing it’s always harder to undo something that’s already in place.

Much of the new activity involves organized labor. With labor’s agenda stalled, especially its prize goal of replacing secret ballot elections with card check, Obama appointees are eager to help in other ways. A faster union election process, the motive unions cite for card check, is likely as soon as the National Labor Relations Board can get a quorum confirmed to set guidelines. Unions charge that many employers take advantage of the system now, delaying elections and using the extra time to pressure workers. Among the options being studied by the NLRB: telephone and Internet balloting. To make up for lost time, the NLRB may use the rulemaking process rather than wait for cases to work their way up. “The NLRB could make changes through case adjudication, but rulemaking will get it done faster,” says John J. Toner, an attorney with Seyfarth Shaw law firm.

The National Mediation Board will also give unions a big boost on elections at airlines and railroads, where the board has jurisdiction. Under current rules, unions can only organize if they win a majority of all eligible workers; anyone who doesn’t vote is considered an automatic “no.” The new rules will allow a union to win the right to organize with a majority of the votes that are cast. Critics say the board is being hasty and unfair. “The board rammed this proposal through without giving the minority member a chance to respond. That shows how far the board is willing to go to make changes,” Toner says.

Look also for OSHA to introduce an ergonomics rule through the backdoor. The Occupational Safety and Health Administration is barred from issuing a rule similar to the one rescinded by Congress in 2001. But OSHA plans to get around that by requiring firms to count musculoskeletal disorders in injury reports and eventually use that data in setting rules to deal with workplace safety hazards.

A potentially bigger cost to employers may come from greenhouse gas rules. The Environmental Protection Agency will impose caps on greenhouse gas emissions because lawmakers are stuck on climate change legislation. But it will be a long timebefore EPA can put anything into effect. New rules will face years of court challenges.

Consumer protection will be a key theme of rules from financial agencies. The Federal Reserve is trying to make up for lost time. Many lawmakers say the Fed let consumers down and should be stripped of its authority in that area. They want to create a separate consumer agency. To forestall that effort, the Fed plans consumer protection rules on everything from ATM fees to gift card expirations. “I don’t think there’s any question about the fact that a lot of what they have been doing is an attempt to catch up to keep the power they have had,” says Robert A. Eisenbeis, chief monetary economist at Cumberland Advisors and former executive vice president at the Federal Reserve Bank of Atlanta. “It’s pure turf protection.”

The Transportation Department is also promising to help consumers. By midyear, new rules will effectively establish a passenger bill of rights similar to the legislation stuck in Congress. A key element: No more endless runway waits in cramped planes. Travelers will get the right to deplane after three hours, with airlines facing fines of $27,500 per passenger if they fail to comply.

With reporting by Andrew Schneider.

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