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Department of Labor

Recommendations and Actions

DOL03: Expand Negotiated Rulemaking and Improve Up-Front Teamwork on Regulations

Background

The rulemaking process in the Department of Labor (DOL) has been characterized as cumber-some, slow, and adversarial. These problems have long been noted. For example, a 1985 General Accounting Office (GAO) report stated that delays in issuing rules stem "from the complexity of the administrative process and the issues addressed."(1)

Because there are strong and organized interests on opposing sides of regulatory issues for most DOL agencies, rules are commonly litigated after they are promulgated. As an attorney for the Administrative Conference of the United States (ACUS) has noted, ". . . agencies attempting to implement environmental, health, and occupational safety legislation find too frequently that their proceedings become a battleground for interest groups and other affected parties--in effect, little more than the first round in the expected litigation."(2) Concerns have been raised within and outside DOL that the process of developing rules and standards has become paralyzed due to concerns about reversal in court.

In many cases, litigation is a fact of life. As one manager pointed out, it is a "tool available to the public." However, whenever possible, DOL should seek opportunities to foster consensus through rulemaking and to streamline the development process. This will benefit the public by making administrative guidance more timely and by reducing costs.

Two practices that hold promise for improving consensus-building in the rulemaking process are negotiated rulemaking and the use of internal teams to develop rules. DOL has had some success by experimenting with both approaches, but they should be applied more widely.

Negotiated Rulemaking. Negotiated rulemaking brings together the parties affected by a regulation, the government agency, and a neutral mediator to develop a proposed rule for publication in the Federal Register. Developed in the early 1980's through ACUS' work to reform administrative procedures, the process was codified in the Negotiated Rulemaking Act.(3) Used with particular success in other policy areas by the Environmental Protection Agency (EPA), the Act provides a mechanism for creating advisory groups to work on a rule; the advisory group terminates when the rule or process is completed.

Even before passage of the Act, the Occupational Safety and Health Administration (OSHA) experimented twice with negotiated rulemaking. Since passage of the Act, DOL has published a Negotiated Rulemaking Policy in the Federal Register and developed a Negotiated Rulemaking Handbook, which explains the steps involved in the process and outlines criteria for selecting opportunities to use the approach.(4) Despite those efforts to establish the infrastructure for negotiated rulemaking, OSHA remains the only DOL agency that has used the technique, and OSHA has used it in only one additional case since the Act was passed.(5)

Although negotiated rulemaking may hold promise for all DOL agencies, it appears particularly applicable to OSHA, whose rules are often challenged. The challenges often involve very technical issues, which the agency tries to anticipate in developing the standard. In extreme cases, rules that trigger contentious debate can take 10 years or more to complete. The usual time involved to complete OSHA rules is four or five years. The lengthy rulemaking process stems in part from the technical issues involved in OSHA standards, which must meet both scientific and economic feasibility tests.(6) Similar issues are involved in the standards developed by EPA. Of the 15 rules EPA has developed through negotiated rulemaking, only two have been challenged, and in both cases the government's rule was sustained.(7)

Negotiated rulemaking will most likely succeed if a few critical conditions are met. First, the interests involved must be adequately represented by a committee of no more than 25 participants; if a larger group is needed, there may be too many interests for a structured negotiation to work. Second, the parties need an incentive to negotiate, and they must be prepared to do so in good faith. Next, the parties must be able to set priorities among their interests. Those interests should not involve fundamental values that cannot be compromised. Finally, the process works best if there is some urgency in resolving the issues.(8)

Team Approach to Rule Development. DOL agencies use a variety of procedures to develop regulations. Only sporadically have program, policy, and legal staffs worked as a team to develop regulations--an approach that often helps build consensus and avoid delay. The principal exceptions are the Mine Safety and Health Administration (MSHA), which consistently uses the team approach, and OSHA and the Pension and Welfare Benefits Administration (PWBA), which have used teams to develop some rules. The Employment Standards Administration (ESA) also employed teamwork effectively in 1993 to develop the implementing regulations for the Family and Medical Leave Act under a tight congressional deadline.

Although many DOL agencies have staffs dedicated to standards setting, MSHA does not have a self-contained standards office. Instead, a small staff works to develop rules for the administration by bringing together teams of field staff, technical experts, and attorneys. Inclusion of field personnel in the rulemaking process ensures consideration of practical implementation issues. The practice also provides field officers with an opportunity to develop new skills.

Regulations for the Family and Medical Leave Act were developed this year by a so-called Tiger Team involving ESA, the Office of the Solicitor, policy staff, PWBA, and the Women's Bureau. The group identified issues for regulation, developed issue papers providing recommendations where there was clear consensus and options where there was not, and presented the issues to a large group representing all DOL agencies. This process left only a small number of issues for resolution by the department's senior management. The team incorporated the policy decisions into draft regulations.

The breadth of involvement by a range of agency personnel in the early stages helped bring issues to the surface and resolve them effectively; it also served to focus top managers on policy issues rather than regulatory language. Teamwork methods appear to offer more efficiency than the more common method in which program offices draft a regulation and send it to the other offices for review, often without participant meetings to discuss and resolve issues.

The team approach also promotes more discussion of whether regulations are the best way to achieve the agency's objectives in specific situations. Some regulations might be replaced with less formal advisory processes (use of such processes must conform to the Administrative Procedure Act and the Federal Advisory Committee Act if outside parties are involved). In other situations, DOL may be using alternatives to regulations because staff do not want to wait several years to bring the issue to resolution.

Actions

1. DOL should expand the use of negotiated rulemaking.

Successful use of negotiated rulemaking, particularly for discrete issues for which the interested parties may be readily identified, would improve the department's regulations by providing a way to reach consensus with those affected by the rule. Based on the experience of other agencies, DOL could also expect to face less litigation, if not eliminate it entirely, for rules developed through this process.

2. DOL should employ a team concept in the development of rules.

Although the team approach may appear more applicable to short-term drafting exercises, the department should also seek ways to use teams in the often protracted process of developing standards involving complex scientific issues. Teams should include program, policy, and legal personnel; field office staff should be involved through direct participation or in an advisory role.

Implications

Negotiated rulemaking involves a trade-off between more substantial up-front costs for improved customer service and the potential for greater short- and long-term savings. The up-front costs include expenditures for necessary administrative support, outside participants' expenses, mediation services, and the costs associated with holding a public meeting. Potential short-term savings result from reduced litigation over the implementation of the rule. Potential long-term savings follow from the fact that the rule should be more accurate, clear, and specific and have a higher compliance rate as a result of the consensus process. Accordingly, fewer resources will be expended from a life-cycle perspective to enforce the rule and litigate violations, based on the assumption that negotiated rules will continue to be less likely to yield court challenges. Given the history of other agencies, such as EPA, that have more experience conducting negotiated rulemaking than DOL, this seems a valid assumption.

Team approaches to rulemaking may offer savings in staff time devoted to the process, a possible reduction in the size of some of the standards offices, or the freeing of staff to perform other duties. Use of the team approach may affect the need for specialists in standards. Some DOL agencies are placing policy analysts in program staffs rather than maintaining separate policy offices; a similar approach might be worth exploring for standards units.

Fiscal Impact

These recommendations will yield some savings due to reduced overhead and have the potential to yield substantial long-term savings due to a reduction in litigation. However, the amount of savings will depend on the level of future rulemaking by the agency and cannot be estimated.

Endnotes

1. U.S. General Accounting Office, Strong Leadership Needed to Improve Management At The Department of Labor, GAO/HRD-86-12 (Washington, D.C.: U.S. General Accounting Office, October 1985), p. 43.

2. Pritzker, David M., "Working Together for Better Regulations," Natural Resources and Environment, vol. 5, No. 2 (Fall 1990). Reprinted in American Bar Association, Section of Business Law, 1992 Annual Meeting, Reg Neg: Bringing Peace to Regulated Industry Through Negotiated Rulemaking (American Bar Association, August 10, 1992), p. 1.

3. 5 U.S.C. 561-570.

4. The policy was published at 57 Fed. Reg. 61925 (December 29, 1992). The handbook was published as U.S. Department of Labor, Administrative Law Counsel, Division of Legislation and Legal Counsel, Office of the Solicitor, Negotiated Rulemaking Handbook (December 1992).

5. Administrative Conference of the United States, Federal Agency Experience with Negotiated Rulemaking (Washington, D.C., March 1, 1993), pp. 4-5.

6. Conversation with OSHA staff. The extreme cases cited were a confined spaces rule, which took 17 years to develop, and a "lock-out tag-out" rule, which took more than 10.

7. Administrative Conference of the United States, pp. 8-14.

8. American Bar Association, p. 13.

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