Thursday, January 17, 2019
The National Federation of Independent Business (NFIB) reviews that its members celebrated a variety of important triumphs in 2018, including a delay of the Environmental Protection Agency’s (EPA) Waters of the U.S. rule, a dismissed court challenge to President Donald Trump’s two-for-one executive order on regulatory relief, and a rescission of the union persuader rule by the Department of Labor. The federation notes these successes helped fuel 45-year highs in small business optimism and plans for job creation.
NFIB notes there were also several smaller, less publicized victories that still have a big impact on small business owners. To recap, in recent years the Federal Trade Commission (FTC) brought actions against businesses for failing to abide by proper data security procedures, despite the fact that the agency has never issued a specific regulation outlining what measures a business should, and should not, implement in order to keep data safe.
In one of these cases, LabMD v. FTC, NFIB filed an amicus brief arguing that it’s not fair to expect businesses to comply with an evolving and unarticulated regulatory standard. The 11th Circuit Court of Appeals agreed, and while similar issues are likely to arise in the future, the court’s ruling that FTC’s action against LabMD was improper represented a win for small business.
Regarding workplace safety, in 2016 the Occupational Safety and Health Administration (OSHA) added an anti-retaliation provision to the record-keeping regulation, stating that employers cannot discharge or discriminate against any employee for reporting a work- related injury or illness. The preamble of the regulation included language stating that safety incentive programs and post-incident drug testing could violate this provision, thus hampering employers’ ability to determine liability and encourage facility safety. However, on Oct. 11 OSHA issued new guidance clarifying that safety incentive pro- grams and post-incident drug testing are permissible and are conducted to promote workplace safety and health.
Concerning community banking, S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, became law. The legislation, which was considered an NFIB key vote for the 115th Congress, helps protect smaller banks as well as small business’ access to the capital they need. Research indicates that small business owners have more difficulty acquiring credit at large financial institutions than at small community lenders. By providing regulatory relief to community banks and credit unions, S. 2155 will allow these institutions to serve small businesses better and continue to provide small business owners access to funds for growth.
Turning to overtime eligibility, in Encino Motor- cars LLC v. Navarro, the U.S. Supreme Court ruled that the Department of Labor overstepped its authority under the Fair Labor Standards Act in a 2011 decision on over- time eligibility. NFIB filed an amicus brief arguing the department’s decision that service advisers working for an automobile dealership were nonexempt and eligible for overtime under the Fair Labor Standards Act was an improper reversal of a long-standing regulatory interpretation. This win helps ensure regulatory stability and cost certainty for small business.
Separately, NFIB recounts that the Affordable Care Act (ACA) was ruled invalid by a Texas federal judge, although the Obama-era law remains in effect. On Dec. 14, Texas judge Reed O’Connor ruled the ACA’s mandate to buy insurance unconstitutional as it “is no longer fairly readable as an exercise of Congress’s tax power and continues to be unsustainable under the Interstate Commerce Clause,” according to his 55-page decision.
O’Connor’s ruling is partly credited to the principles established in the 2012 NFIB v. Sebelius decision, in which the federation was a lead plaintiff. The decision challenged the constitutionality of the individual mandate under the ACA that required individuals to obtain a mini- mum level of health insurance coverage or face a penalty. In NFIB v. Sebelius, the U.S. Supreme Court upheld the individual mandate under Congress’ taxing power.
Judge O’Connor’s ruling came one year after the ACA’s individual mandate penalty was repealed through the Tax Cuts and Jobs Act. Using the mandate’s elimination as support for his decision, O’Connor argued that the zeroed-out penalty makes the taxing power recognized in NFIB v. Sebelius inapplicable and leaves the ACA individual mandate without a constitutional basis.
O’Connor further ruled that the unconstitutional individual mandate was an essential part of the ACA, without which the rest of the act would not work. Therefore, he held that the entire ACA was invalid. In California, state attorney general Xavier Becerra voiced the state’s intent to seek to overturn O’Connor’s decision. David Addington, NFIB’s senior vice president and general counsel, says the case is likely to end up before the U.S. Court of Appeals for the Fifth Circuit and, perhaps, thereafter before the U.S. Supreme Court. “The ultimate word from the courts on the constitutionality of the Affordable Care Act may not come for some time,” says Addington. Despite judge O’Connor’s decision, the ruling does not affect 2019 enrollment coverage, Healthcare.gov stipulates.
(SOURCE: The Weekly Propane Newsletter, January 14, 2019)
NFIB notes there were also several smaller, less publicized victories that still have a big impact on small business owners. To recap, in recent years the Federal Trade Commission (FTC) brought actions against businesses for failing to abide by proper data security procedures, despite the fact that the agency has never issued a specific regulation outlining what measures a business should, and should not, implement in order to keep data safe.
In one of these cases, LabMD v. FTC, NFIB filed an amicus brief arguing that it’s not fair to expect businesses to comply with an evolving and unarticulated regulatory standard. The 11th Circuit Court of Appeals agreed, and while similar issues are likely to arise in the future, the court’s ruling that FTC’s action against LabMD was improper represented a win for small business.
Regarding workplace safety, in 2016 the Occupational Safety and Health Administration (OSHA) added an anti-retaliation provision to the record-keeping regulation, stating that employers cannot discharge or discriminate against any employee for reporting a work- related injury or illness. The preamble of the regulation included language stating that safety incentive programs and post-incident drug testing could violate this provision, thus hampering employers’ ability to determine liability and encourage facility safety. However, on Oct. 11 OSHA issued new guidance clarifying that safety incentive pro- grams and post-incident drug testing are permissible and are conducted to promote workplace safety and health.
Concerning community banking, S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, became law. The legislation, which was considered an NFIB key vote for the 115th Congress, helps protect smaller banks as well as small business’ access to the capital they need. Research indicates that small business owners have more difficulty acquiring credit at large financial institutions than at small community lenders. By providing regulatory relief to community banks and credit unions, S. 2155 will allow these institutions to serve small businesses better and continue to provide small business owners access to funds for growth.
Turning to overtime eligibility, in Encino Motor- cars LLC v. Navarro, the U.S. Supreme Court ruled that the Department of Labor overstepped its authority under the Fair Labor Standards Act in a 2011 decision on over- time eligibility. NFIB filed an amicus brief arguing the department’s decision that service advisers working for an automobile dealership were nonexempt and eligible for overtime under the Fair Labor Standards Act was an improper reversal of a long-standing regulatory interpretation. This win helps ensure regulatory stability and cost certainty for small business.
Separately, NFIB recounts that the Affordable Care Act (ACA) was ruled invalid by a Texas federal judge, although the Obama-era law remains in effect. On Dec. 14, Texas judge Reed O’Connor ruled the ACA’s mandate to buy insurance unconstitutional as it “is no longer fairly readable as an exercise of Congress’s tax power and continues to be unsustainable under the Interstate Commerce Clause,” according to his 55-page decision.
O’Connor’s ruling is partly credited to the principles established in the 2012 NFIB v. Sebelius decision, in which the federation was a lead plaintiff. The decision challenged the constitutionality of the individual mandate under the ACA that required individuals to obtain a mini- mum level of health insurance coverage or face a penalty. In NFIB v. Sebelius, the U.S. Supreme Court upheld the individual mandate under Congress’ taxing power.
Judge O’Connor’s ruling came one year after the ACA’s individual mandate penalty was repealed through the Tax Cuts and Jobs Act. Using the mandate’s elimination as support for his decision, O’Connor argued that the zeroed-out penalty makes the taxing power recognized in NFIB v. Sebelius inapplicable and leaves the ACA individual mandate without a constitutional basis.
O’Connor further ruled that the unconstitutional individual mandate was an essential part of the ACA, without which the rest of the act would not work. Therefore, he held that the entire ACA was invalid. In California, state attorney general Xavier Becerra voiced the state’s intent to seek to overturn O’Connor’s decision. David Addington, NFIB’s senior vice president and general counsel, says the case is likely to end up before the U.S. Court of Appeals for the Fifth Circuit and, perhaps, thereafter before the U.S. Supreme Court. “The ultimate word from the courts on the constitutionality of the Affordable Care Act may not come for some time,” says Addington. Despite judge O’Connor’s decision, the ruling does not affect 2019 enrollment coverage, Healthcare.gov stipulates.
(SOURCE: The Weekly Propane Newsletter, January 14, 2019)
