Government regulations af-fect every aspect of business, from the federal tax code and wage requirements to safety and health rules. At times, rulemaking processes follow unanticipated trajectories, ending up mired in draft stages for years, or delayed indefinitely even after gaining final approval.
Recently, two rulemakings originating from the U.S. Department of Labor (DOL) took unexpected turns. Although the rules came from different DOL agencies and pertained to different issues, both carried over from the Bush administration, have yet to be fully resolved and stand to significantly impact the open shop construction industry.
OSHA’s Proposed Crane Safety Rule
Last fall, DOL’s Occupational Safety and Health Administration (OSHA) released a long-awaited proposed rule outlining safety measures for cranes and derricks in construction. Earlier this year, employer groups, organized labor and others weighed in on OSHA’s proposal. Public feedback was generally supportive, but a small number of employer groups—Associated Builders and Contractors (ABC), Associated General Contractors (AGC) and the National Association of Home Builders (NAHB)—identified concerns with specific areas of the proposed rule. These associations quickly drew the ire of health and safety advocates, who claimed the employer stakeholders were wrong to offer critiques because of their involvement in a 2004 “negotiated rulemaking” (reg-neg) in which the construction industry met to hash out general guidelines for a future rule on crane safety. Many of the health and safety advocates stated publicly that anything less than complete praise for the rule at this stage in the rulemaking process was considered negative and contrary to the spirit of negotiated rulemaking.
In reality, these organizations had two objectives in mind: improve the proposed rule by helping OSHA clarify confusing regulatory text and significantly reduce any burdens the proposed rule could impose as currently written. The groups sought to help OSHA publish the best regulation possible and to make crane operations safer on worksites around the country.
Unfortunately, some stakeholders refused to see the efforts of these groups as anything less than obstructionist, essentially stating that employers were bent on delaying this crucial safety regulation indefinitely.
Groups that do not agree with a proposed rule have a responsibility to make OSHA aware of their concerns, especially when a failure to do so could result in hazards. Trade associations and labor groups do their members a disservice if they do not provide OSHA with well-informed and thoughtful feedback and suggestions.
Even OSHA has acknowledged that, despite the efforts of the reg-neg participants and agency staff during the past five years, a significant number of concerns regarding the proposed rule remain—concerns the agency has yet to address.
Currently, the crane rule must be revised to make it easier for its primary audience—construction employers and crane operators—to use. It appears unlikely OSHA’s final rule on cranes and derricks will come any earlier than 2010, and the actual publication date remains unknown.
DOL’s Final Rule Revising Financial Disclosure Reports for Unions
Another rulemaking that has taken a bizarre turn involves DOL’s revisions to Form LM-2, which tracks union finances. DOL set out to craft the LM-2 rule to promote and ensure greater transparency in union expenditures. The record developed by DOL’s Office of Labor Management Standards (OLMS) prior to issuing the final rule clearly demonstrated the need for the revised requirements. As the agency recognized when it released the proposed revisions, the rule “promote[d] both labor organization’s own interests…and the interests of the public and government.”
Unfortunately, within weeks of the LM-2 rule’s publication, DOL announced it was delaying implementation of the rule until April and reopened the regulatory record to solicit additional public feedback. Then, in an unexpected move, DOL announced an additional delay of the final rule until October and publicized yet another round of post-final rule comments. This time, DOL admitted the additional time also was being requested to consider complete rescission of the LM-2 rule.
DOL’s actions have been unusual, even erratic. No new developments justify delaying or scrapping the LM-2 rule. In addition, the rule clearly meets the Obama administration’s current eight-point standard for regulatory review.
What is causing this strange behavior from DOL? Quite simply, efforts are under way to dramatically reduce OLMS’ enforcement capability. This would prevent individual union members and the public from seeing how union leaders are spending their members’ funds.
Past OLMS statistics speak volumes about widespread union corruption in recent years. According to OLMS’ 2008 annual report, the agency obtained more than 900 convictions for embezzlement and other crimes uncovered through financial reporting. OLMS also recovered more than $91.5 million in misappropriated union funds since 2001. In fiscal year 2008 alone, the agency obtained 103 criminal convictions and more than $3 million in restitution. Clearly, corruption among union leaders continues to threaten union members and public funds.
Last month, ABC, several employer groups and members of Congress voiced strong opposition to DOL’s efforts to rescind the LM-2 rule. Opponents of DOL’s actions have noted that any attempt to delay or rescind the final rule would be entirely without merit and solely based on political motives. Furthermore, opponents point out that doing so would risk DOL’s credibility and jeopardize the Obama administration’s goal of promoting financial and governmental transparency.
Stakeholders will have to wait until October to learn the fate of the LM-2 rule, but it is important to note that DOL’s actions may not withstand judicial scrutiny, particularly if it opts to rescind the final rule.
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Friday, September 3, 2010