Beltway Buzz – May 2024 No. 3 | Ogletree, Deakins, Nash, Smoak & Stewart, PC

Biden announces NLRB nominations. This week, President Biden announced that he will reappoint Lauren McFerran, chair of the National Labor Relations Board (NLRB), for another term. (Her current term expires December 16, 2024.) He also nominates Joshua L. Ditelberg, a management lawyer, to fill the Republican position on the Board, which has been vacant since December 2022. If McFerran is confirmed, Democrats would remain in government with a majority of the Board at least by August 2026, regardless of which presidential candidate wins the November elections later this year. It will be interesting to watch the nomination process unfold. Business groups have been critical of President Biden’s refusal to fill a Republican vacancy, but if the price to pay is Democratic hegemony, political maneuvering could become complicated.

The DOL’s overtime policy was questioned. This week, business groups banded together to file a legal challenge against the U.S. Department of Labor’s (DOL) overtime regulations. The complaint, which was filed in the same federal court that invalidated the DOL’s 2016 overtime rule, argues that the latest rule “largely repeats the errors contained in the 2016 Rule and does not address defects previously identified by the Court.” The complaint alleged that the dramatic increase in the salary base threshold exceeds the agency’s authority because it waives statutory exceptions to the Fair Labor Standards Act (FLSA) overtime requirements established by the U.S. Congress. Plaintiffs further argue that the automatic escalator rule violates the Administrative Procedure Act’s (APA) notice-and-comment requirements and that the DOL failed to adequately explain its policy change. Since the first stage of the increase is to apply from July 1, 2024, the complaint asks the court to quickly consider the case.

OSHA workaround regulations update. This week, lawmakers and business groups took steps to push back against a controversial regulation from the Occupational Safety and Health Administration (OSHA).

• A legal challenge was filed. A coalition of business groups filed a lawsuit challenging the regulation in the U.S. District Court for the Western District of Texas. The complaint alleged that OSHA exceeded its statutory authority in promulgating the rule and violated the APA because the agency failed to adequately explain the expansion of existing regulations and consider alternatives. The complaint also alleged that the ordinance violated property owners’ right to exclude third parties and was therefore unconstitutional under the Fifth Amendment to the United States Constitution.

• Resolution on the Congressional Review Act. Late last week, Republicans in the U.S. House of Representatives, led by Congresswoman Mary Miller (R-IL), introduced the Congressional Review Act (CRA) resolution to repeal the workaround rule. The CRA allows Congress – by a simple majority vote in each house – to repeal agency regulations. However, even if the resolution is approved in both the U.S. House of Representatives and the U.S. Senate (which is certainly a possibility, as some Democrats and Independents have been willing to join Republicans on other CRA resolutions this Congress), President Biden will likely veto the measure: yes as he did in the case of the employer’s joint resolution. Even in the face of the president’s veto, the resolution indicates the growing controversy surrounding this authority.

The CRA clock is ticking. As for the CRA, its statute is likely a significant reason why the administration recently finalized a number of regulations. This is because the CRA allows the new Congress to review “midnight regulations” that are finalized within sixty days of the previous Congress adjourning. Many regulatory oddballs predict that regulations finalized after this week could fall within sixty days of the current 118th Congress adjourning, leaving them vulnerable to potential repeal by a Republican Congress and the president in 2025. The administration, of course, wants to give the 119th Congress – which is to be due in January 2025 – a chance to use the CRA to overturn aspects of President Biden’s regulatory agenda, which is why he’s rushing to finalize the regulations sooner rather than later. This CRA provision for retrospective analysis has undoubtedly been a driving force behind the DOL’s recent finalization of, among others, the Independent Contractor Rule, the Overtime Rule, the “Shortcutting” Rule, and the Federal Trade Commission’s Non-Competition Rule.

OSHA finalizes changes to HazComm standard. On May 20, 2024, OSHA published a final rule updating its Hazard Communication Standard (HCS). The changes aim to bring the HCS – which has not been updated since 2012 – into line with the 2017 changes to the Globally Harmonized System of Classification and Labeling of Chemicals (GHS). The changes include revised criteria for classifying certain health and physical hazards, revised labeling rules, changes to the content of safety data sheets and new rules on trade secrets. The regulation enters into force on 19 July 2024, although the phasing-in dates do not start until January 2026.

A House subcommittee is examining union organizing tactics. On May 22, 2024, the Subcommittee on Health, Employment, Labor, and Pensions of the U.S. House of Representatives held a hearing titled “Labour’s Big Lies: Exposing Union Tactics to Undermine Free and Fair Elections.” The hearing focused on smear campaigns designed to intimidate employers into agreeing to union demands, so-called “neutrality agreements” that prevent employers from discussing the pros and cons of forming a union with workers, and union “sols” – professional union organizers, who provide employment with an employer that is not a member of a trade union and whose sole intention is to organize the workforce. Republicans used the hearing to promote legislation like the Workers’ Rights Act, the SALT Act and the Employee Choice Act that would eliminate exclusive representation and allow workers who opt out of union membership to negotiate their own terms of employment. Democrats, on the other hand, took the opportunity to promote the Protecting the Right to Organize (PRO) Act. All of these bills are real legislative bills, but the hearing highlights the importance of key policy issues in an election year.

Homestead Act 1862 On May 20, 1862, President Lincoln signed the Homestead Act of 1862. Dividing federal lands to private owners was a difficult problem, especially as the United States began to expand. Many Northerners favored the practice of homesteading, in which individual farmers owned and improved their own plots of land, while Southern slaveholders sought to acquire vast tracts of land to expand slavery into the territories. With the outbreak of the Civil War, the southerners’ arguments became moot and the Homestead Act was passed. The act provided up to 160 acres of land to adult citizens—including women, former slaves, and immigrants who declared their intention to become citizens—who did not fight for the South during the Civil War. Settlers could obtain permanent title to property if they stayed on the land and improved it for five years, not an easy task on the American frontier in the mid-19th century. More than 270 million acres of land were distributed under the Homestead Act of 1862, which was ultimately repealed by the Federal Land Policy and Management Act of 1976.