Labor Department Accused of Backdoor Regulating

Several witnesses at a House hearing charged the government regularly circumvents time-consuming rulemaking requirements by simply writing letters that appear to be legally binding.

In the wake of OSHA's short-lived attempt to regulate telecommuters' home offices, several witnesses at a House hearing charged the government regularly circumvents time-consuming rulemaking requirements by simply writing letters that appear to be legally binding.

The home office fiasco resulted when a guidance letter written by OSHA to a Texas employer was publicized.

Entitled "Is the Department of Labor Regulating the Public Through the Backdoor," the hearing was held Feb. 15 by the House Government Reform Committee's Subcommittee on National Economic Growth, National Resources and Regulatory Affairs.

The Subcommittee's Chair, David McIntosh, R-Ind., has introduced legislation that would require all non-regulatory statements released by federal agencies to place on the first page notice that the statement is not legally binding.

In his opening statement, McIntosh acknowledged that federal agencies often issue such "guidance documents" with the intention of being "customer friendly."

But when the legal effect of such documents is unclear, the public may experience the "help" as coercive.

"Regrettably," said McIntosh, "the subcommittee's investigation suggests that some guidance documents are intended to bypass the rulemaking process ... Such "backdoor" regulation is an abuse of power and a corruption of our Constitutional system."

To illustrate the magnitude of the problem, McIntosh ordered OSHA to produce all of the guidance documents generated by the agency since 1996.

The documents were placed in 31 boxes, totaling more than 38,000 pages, and stacked near the panel witnesses.

The only witness to disagree with McIntosh's assessment of the issue was Henry Solano, the Labor Department's solicitor.

Solano argued that "non-codified documents" do not create new laws or change existing laws. Instead, the documents help the public to apply existing regulations to their particular circumstances.

"Companies, labor organizations, individuals, and others regularly ask for guidance," said Solano, "and the Department routinely responds to these requests, as it has for decades."

Other panel members included employers and employees who complained about confusing and onerous letters that appeared to be making policy instead of applying existing rules.

Testifying on behalf of the National Manufacturers Association was Michael Baroody, who served as the assistant secretary for policy in the Labor Department during Ronald Reagan's second term. Baroody charged the entire Clinton Administration with backdoor rulemaking.

"One has the sense that the Administration, perhaps having gotten in its final year an intimation of its own mortality, is in a rush to make policy by administrative fiat where it has failed to so by legislative means or by following regulatory order."

Baroody did not specifically endorse McIntosh's legislative proposal, but he called upon federal agencies to exercise restraint.

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