Federal Court Decision Paves the Way for Victory in NFIB’s Lawsuit Against OSHA’s Pro-Union Rule

Date: February 14, 2017

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Last fall the National Federation of Independent Business filed a lawsuit against a controversial rule pronounced—without the proper formalities—by the Occupational Safety and Health Administration under the Obama Administration. The Rule purports to require businesses to allow union representatives to accompany OSHA agents during health and safety inspections, even for non-unionized businesses. Obviously, that’s a concern from for small business owners, who have every interest in limiting access to company facilities only to authorized personnel and to government inspectors to the extent required by law. And of course, in this lawsuit, NFIB maintains that OSHA is over-reaching and has no authority to require businesses to permit union representatives into areas not otherwise open to the public.

The good news is that we recently received a decision from the federal district court in Dallas allowing our lawsuit to proceed. The judgement rejected OSHA’s motion to dismiss—finding that NFIB’s legal challenge had merit. This in turn paves the way for NFIB to strike-down the rule because the decision effectively held that the “Union Walk Around Rule” is illegal. Specifically, the Court ruled that the Rule was pronounced without allowing the regulated community fair notice and an opportunity to voice concerns, as is required by the Administrative Procedure Act’s notice-and-comment provisions.

Josh Thompson, one of the Pacific Legal Foundation attorneys representing NFIB in this matter, explains more here. Of course, this isn’t the end of the road, and there is a possibility that the Trump Administration may seek to rescind the illegal rule voluntarily still. But if not, NFIB will continue to press forward in this lawsuit because it raises an important issue for the entire small business community—not only in so far as it directly affects companies facing OSHA inspections, but because we think it’s important to reaffirm the importance of notice-and-comment requirements for new rules that impact small business.

As detailed in our Underground Regulations Report, federal agencies all too often seek to evade the requirements of notice-and-comment rulemaking by styling new rules as merely “guidance” or an “interpretive statement” of law. But when they are affirmatively changing legal standards that may impact small businesses, we maintain that they should at the very least allow affected industry an opportunity to raise objection. For now, we can hope that the Trump Administration will respect the letter of the law more than the Obama Administration. But in any event, it’s important to keep in mind that—in the future—we will, at some point, face another administration bent on affecting change through the sort of back-door parlor tricks that the Obama Administration played with OSHA’s Union Walk Around Rule. With that sobering thought, we maintain that this lawsuit raises an issue of tremendous importance to our system of limited government.

If you are facing an OSHA inspection, check-out our guide to dealing with OSHA inspections, available online here.

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