The Big Freeze: Trump Administration Halts Key DOL and OSHA Rulemaking Activities

Regulatory freezes during a change in administration are not uncommon, and President Obama issued a virtually identical memorandum upon taking office in 2009. However, the Trump administration’s directive takes on additional significance, as it appears to be the symbolic start of President Trump’s efforts to make good on his campaign promise of eliminating what he has characterized as overly-burdensome regulations. It also marks his first steps toward rolling back key components of President Obama’s regulatory agenda, including a number of labor and employment initiatives put in place by the Department of Labor and the Occupational Safety and Health Administration, among others.
 
Specifically, the January 20 memorandum instructs executive agencies to stop submitting pending regulations for publication in the Federal Register, and withdraw regulations that have been sent to the Office of the Federal Register but have not yet been published. Regulations that must be issued by statute or court order are excluded from these requirements, as are regulations that the Director or Acting Director of the Office of Management and Budget determines are necessary to address emergency situations or other urgent circumstances relating to health, safety, financial, or national security matters. 
 
Significantly, the memorandum also directs agencies to take a second look at any regulations that have already been finalized but have not yet taken effect, such as the Occupational Safety and Health Administration’s final rule on occupational exposure to beryllium, which would otherwise go into effect on March 10, 2017. Any such rules will be temporarily delayed for 60 days, at the end of which agencies are required to notify the OMB Director of any regulations that raise “substantial questions of law or policy” so that further appropriate action may be taken. Agencies are also instructed to consider proposing notice-and-comment rulemaking to either rescind or further delay pending final rules beyond the initial 60-day freeze. 
 
However, the impact of the January 20 memorandum is unclear with respect to a number of final rules that were intended to take effect before the change in administration, but that have since been delayed due to legal challenges brought by regulated employers and business associations. For example, a federal judge in Texas last month issued a preliminary injunction temporarily halting the Department of Labor’s new overtime rule, which would have newly extended the minimum wage and overtime protections of the Fair Labor Standards Act to millions of employees. The DOL has since filed an appeal with the Fifth Circuit. Because the overtime rule was originally slated to take effect on December 1, it is unclear whether it would be subject to the January 20 memorandum in the event that the injunction is lifted. 
 
The DOL’s final rule requiring government contractors to make extensive disclosures of past labor law violations is in a similar posture—the so-called “blacklisting” rule was blocked by the courts before its November 2016 effective date, and is also subject to an appeal by the agency. The DOL has also appealed a permanent injunction blocking its final “persuader rule,” which would have required employers and their attorneys to report all actions undertaken in opposition to union organizing efforts.
 
Recent rulemakings initiated by OSHA and the Environmental Protection Agency regarding chemical facility safety also face uncertain futures under the Trump administration. In 2013, President Obama issued an executive order in the wake of the catastrophic explosion at a fertilizer plant in West, Texas, which instructed OSHA to improve its Process Safety Management standard and EPA to update its related Risk Management Program. OSHA recently initiated a Small Business Advocacy Review Panel to solicit feedback on proposed revisions to the PSM standard, although further rulemaking steps will be put on hold for now. EPA’s revisions to its RMP rule were finalized in December and published in the Federal Register earlier this month. However, the final rule’s March 14, 2017 effective date falls within the Trump administration’s initial 60-day freeze, and it is believed that the RMP rule may be a prime target for even further delays or revisions by EPA. Revising or rescinding OSHA’s recent final rule regarding occupational exposure to crystalline silica, currently the subject of a legal challenge, may also be a policy goal under the new administration. 
 
Takeaways
 
Given that most of President Trump’s cabinet nominees have not yet been confirmed, it is too soon to tell how long the temporary freeze on new rulemaking activities will last or determine the ultimate fate of the final rules that are currently in limbo. Permanently rescinding or revising those rules—or even delaying them beyond the initial 60-day review period—will require formal notice-and-comment procedures that will take time. With respect to the DOL’s overtime, persuader, and blacklisting rules, it is possible that the agency’s new leadership will decide to abandon its legal challenges to the injunctions that have already put those regulations on hold. Nonetheless, the White House’s January 20 memorandum appears to signal that the new administration will be looking for ways to provide some relief to employers concerned about the burden and expense of complying with some of the Obama administration’s most controversial regulations.