Executive Order Creates New Opportunities

A new Executive Order that President Trump issued on February 24, 2017, provides stakeholders with new opportunities for pursuing their administrative objectives.[1]

The Executive Order requires the “head of each agency” to designate an agency official as its Regulatory Reform Officer (“RRO”) within 60 days of the date of the order. Each RRO is responsible for overseeing its agency’s regulatory reform initiatives and policies, which the Executive Order identifies as the following four items:

  1. Executive Order 13771 (Jan. 30, 2017), which requires that for every new regulation enacted, two need to be revoked;
  2. Executive Order 12866 (Sept. 30, 1993), which requires an analysis of every new regulation to ensure “that the benefits of the intended regulation justify its costs;”
  3. Section 6 of Executive Order 13563 (Jan. 18, 2011), which requires agencies to perform a regulatory “look back” to root out unnecessary or redundant regulations; and
  4. The termination . . . of programs and activities that derive from or implement Executive Orders, guidance documents, policy memoranda, rule interpretations, and similar documents, or relevant portions thereof, that have been rescinded.

Additionally, each agency is required to establish a Regulatory Reform Task Force (“Task Force”) to “evaluate existing regulations and make recommendations to the agency head regarding their repeal, replacement, or modification.” At a minimum, the Executive Order requires each Task Force to attempt to identify regulations that, among other things:

  1. eliminate jobs, or inhibit job creation;
  2. are outdated, unnecessary, or ineffective; and
  3. impose costs that exceed benefits.

To assist with this evaluation, the Executive Order requires an agency Task Force to seek input from entities affected by federal regulations including small businesses, consumers, and trade associations. Moreover, the Executive Order broadly defines the term “regulation” to include a statement “designed to implement, interpret, or prescribe law or policy.”[2]

Implications for the Coalition

Inasmuch as the Executive Order requires an agency Task Force to seek input from affected stakeholders, this could provide another opportunity for the Coalition to Promote Independent Entrepreneurs (“Coalition”) to engage with the Administration and advocate for greater clarity and certainty for independent entrepreneurs and their clients that their intended contractual relationships will be respected for purposes of federal laws.

For example, because of the broad definition of “regulation,” the Executive Order should provide an opportunity for the Coalition to urge the U.S. Department of Labor to rescind and replace Administrator’s Interpretation 2015-1, which broadly reinterpreted the economic realities test used to determine an individual’s status for purposes of the Fair Labor Standards Act (“FLSA”), and Administrator’s Interpretation 2016-1, which broadly reinterpreted the standard used to determine joint-employment for purposes of the FLSA.

[1] This is the Administration’s third directive on regulatory reform. Previously, on January 30, 2017, President Trump issued an Executive Order that requires an agency to eliminate two existing regulations for every new regulation it issues; and on January 20, 2017, White House Chief of Staff Reince Priebus ordered a 60-day freeze on all new or pending regulations.

[2] The term “regulations” means: “an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice of an agency, but does not include:

  1. regulations issued with respect to a military, national security, or foreign affairs function of the United States;
  2. regulations related to agency organization, management, or personnel; or
  3. any other category of regulations exempted by the Director.” Section 4, Executive Order 13771 (Jan. 30, 2017).

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