Regulatory and Legal Reform

Press Releases

Supreme Court Decision is Game-Changing Transformation for Legal and Regulatory Landscape for Manufacturers

Washington, D.C. – Today, the United States Supreme Court overruled the Chevron doctrine—a requirement that federal courts defer to an administrative agency’s interpretation of an ambiguous statute—that had proven unworkable and incoherent.

“The legal and regulatory landscape has transformed in the blink of an eye. Manufacturers will not waste a moment in seizing this opportunity—an opportunity that we have never seen before—to leverage this decision to rein in the regulations that are holding back manufacturers from improving lives,” said National Association of Manufacturers President and CEO Jay Timmons. “The NAM Legal Center and our best-in-class advocacy team will be on the field, leveraging this decision and the new tools it gives us, to fight back new regulations we are facing today as well as whatever may come our way in the next administration. For anyone who wants to see manufacturing grow and succeed in America, today heralds the possibility for a much brighter future.”

“Today’s ruling is a game changer for manufacturers as Chevron was at least partly to blame for the unpredictability and overreach that have become synonymous with the modern regulatory state,” said NAM Chief Legal Officer Linda Kelly. “We are hopeful that this marks the end of an overbearing regulatory system that had become complex, and compliance in many cases that was contradictory from agency to agency. For the past 40 years, Chevron has tipped the scales in favor of unelected officials and against the regulated public. Now the onus is on Congress to provide clear guardrails and guidelines in its intent to ensure that laws are implemented in a manner that achieves their goal. Manufacturers are eager to work with lawmakers to develop policies that promote innovation, job creation, economic growth and improved quality of life for all Americans.”

“Manufacturers have been the subject of a regulatory onslaught, with agencies’ far-reaching decisions affecting companies of all sizes,” said NAM Managing Vice President of Policy Chris Netram. “The EPA, SEC and DOL—the aggressive nature of rulemaking and enforcement actions that exceed authority come from the alphabet soup of regulators. The NAM has been successful in fighting key rules in court, and today’s decision gives us the ability to challenge even more actions while ensuring future agency actions do not exceed the authority mandated by Congress.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Press Releases

Manufacturers Victorious Over SEC in Fifth Circuit Proxy Firm Case

Decision confirms that federal agencies are bound by the rule of law, even as administrations change

Washington, D.C.–Yesterday, the U.S. Court of Appeals for the Fifth Circuit ruled in the National Association of Manufacturers’ favor in NAM v. SEC, overturning the Securities and Exchange Commission’s rescission of critical provisions of its 2020 proxy advisory firm rule. NAM Chief Legal Officer Linda Kelly released the following statement on the ruling:

“This decision confirms that federal agencies are bound by the rule of law, even as administrations change. Manufacturers depend on the SEC to be a steady regulatory hand at the wheel of America’s world-leading capital markets—an obligation the agency abandoned in rescinding the commonsense, compromise 2020 proxy advisory firm rule.

“The NAM Legal Center is proud to have secured this critical victory, which strikes down the SEC’s unlawful about-face and preserves important provisions from the 2020 rule designed to protect manufacturers and Main Street investors from proxy firms’ outsized influence. We will continue to fight in court to uphold the 2020 rule—and to work with the SEC and with Congress to ensure appropriate oversight of these powerful actors.”

Background:

  • The NAM has long called for increased oversight of proxy advisory firms. In July 2020, the SEC issued final regulations to enhance transparency and accountability for proxy firms, a move NAM President Jay Timmons called a “long-sought, major win for the industry and millions of manufacturing workers.” In October 2020, the NAM filed a motion to intervene in ISS v. SEC (ISS’s attempt to overturn the rule) in support of these reforms—a case that is still ongoing in the U.S. Court of Appeals for the D.C. Circuit.
  • In June 2021, the SEC announced that it was suspending enforcement of the 2020 rule; the NAM filed suit against the SEC in October 2021 challenging this unlawful suspension. The U.S. District Court for the Western District of Texas ruled in the NAM’s favor in that case, vacating the SEC’s suspension of the rule.
  • In July 2022, the SEC rescinded critical portions of the 2020 rule, a move that Timmons said “epitomizes ‘arbitrary and capricious’ rulemaking”; the NAM later filed suit to challenge the rescission. The Fifth Circuit decision overturns the SEC’s 2022 rescission of important provisions that increased transparency into proxy firms’ recommendations.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Policy and Legal

NAM, ACC Challenge EPA’s National Drinking Water Rule

The NAM and the American Chemistry Council yesterday filed a petition challenging the Environmental Protection Agency’s first-ever national drinking water standard limiting the presence of six types of per- and polyfluoroalkyl substances, or PFAS.

What’s going on: The organizations are seeking to overturn the final rule—issued in April by the EPA—in the D.C. Circuit Court of Appeals on the grounds that it exceeds the agency’s authority under the Safe Drinking Water Act of 1974 and “is arbitrary, capricious and an abuse of discretion,” in violation of the Administrative Procedure Act.

  • Under the rule, PFAS in municipal water systems are limited to near-zero levels. Systems nationwide will have three years to monitor for the chemicals and two subsequent years to install technology to reduce the compounds’ levels in the water.
  • The water systems will (and, in fact, have already begun to) sue manufacturers to cover their costs. Meanwhile, plaintiffs’ attorneys are using the standard in product liability and greenwashing suits against manufacturers.
  • PFAS are a diverse group of chemicals that have been used widely for decades due to their unique ability to douse fires and resist grease, stains and corrosion. Today they’re a key component in a wide range of critical products, from semiconductors, to the components of the electrical grid, to renewable-energy production equipment.

Why it’s problematic: The final regulation of PFAS “is wholly infeasible and threatens these vital substances’ continued application in manufacturing processes,” said NAM Chief Legal Officer Linda Kelly, adding that the agency’s rulemaking is based “on a deeply flawed cost-benefit analysis” and fails to follow Safe Drinking Water Act procedure and other statutory requirements.

  • “In many instances, there is no viable alternative for these chemicals, and companies may be forced to change plans dramatically” to follow the new rule, NAM Managing Vice President of Policy Chris Netram said in April.
  • “In everyday life, including emergency situations like a fire or operating room circumstance, there’s a real reliance on these products—it’s not just about job losses and costs but fundamental decisions that have widespread ramifications,” Netram added recently.

What should be done: The rule should be vacated as soon as possible, the NAM and the ACC told the court.

Policy and Legal

NAM, Partners File Opening Brief in Suit Against EPA

On Thursday, the NAM, joined by other business groups, filed the opening brief in their pending lawsuit against the Environmental Protection Agency.

What’s going on: In March, the groups petitioned the D.C. Circuit to review the EPA’s reconsideration of the National Ambient Air Quality Standards for fine particulate matter (or PM2.5), which lowers the allowable level to 9 micrograms per cubic meter of air from 12, a 25% reduction. The agency handed down the final, tightened rule in February.

  • In their brief, the coalition argues that the EPA lacks the authority under the Clean Air Act—the law that authorizes it to establish the NAAQS—to “reconsider” a decision made in 2020 to not lower the PM2.5 standard; that the agency failed to take into account the cost and feasibility of a tightened standard; and that it failed to give a “reasoned explanation for key aspects of its decision.”
  • The groups participating in the suit with the NAM are the U.S. Chamber of Commerce, the American Chemistry Council, the American Petroleum Institute, the American Forest & Paper Association, the American Wood Council, the National Mining Association and the Portland Cement Association.

Why it’s important: The tighter NAAQS rule could result in many parts of the U.S. being designated as in nonattainment, which would trigger significant new costs for manufacturers and others attempting to obtain air permits in those locations.

  • Many of these areas “are indisputably handicapped in their ability to reduce emissions to meet the new NAAQS” due to factors beyond municipalities’ and manufacturers’ control (i.e., wildfires, which affect most of the contiguous U.S. at some point each year).
  • The new rule could also prevent manufacturers from building or modifying facilities in certain areas, undermining the Biden administration’s own “Investing in America” agenda, as it would stifle investment in manufacturing and kill—not create—well-paying manufacturing jobs.

What should be done: The rule should be vacated as soon as possible, the groups told the court.

Policy and Legal

Texas Sues to Block DOL Overtime Rule

Texas has filed suit in an effort to vacate a Biden administration regulation that would make millions more workers eligible for overtime pay (Reuters, subscription).

What’s going on: “Republican Texas Attorney General Ken Paxton in a complaint filed in Sherman, Texas, federal court on Monday said the rule violates federal wage law by basing eligibility for overtime on how much workers are paid rather than the duties they perform.”

  • The expanded rule, released by the Department of Labor in late April, violates states’ constitutional right to structure the pay of state employees and thus how to allocate their budgets, Texas said.
  • Attorneys for the Lone Star State added that the regulation—which the department has said would make about 4 million additional workers eligible for overtime pay—will force states to “eliminate or alter employment relationships and cut or reduce services and programs.”
  • Also on Monday in Texas, software company Flint Avenue filed a suit saying “the rule is arbitrary and capricious, and that the DOL lacked the authority to issue the change” (Bloomberg Law, subscription).

What it would do: The expanded rule drastically bumps up the salary threshold for determining a worker’s overtime pay eligibility.

  • Under it, starting in 2025, most employees making less than $58,656 will be owed time-and-a-half wages when they work more than 40 hours in a single workweek (Bloomberg Law, subscription).
  • The current threshold is about $35,500.

Why it’s important: The new overtime rule “places new constraints on employers, reduces flexibility for the workers who will be reclassified and may force companies to make painful choices that limit both job creation and growth opportunities available to employees,” NAM Managing Vice President of Policy Chris Netram said in April.

  • “This … regulatory hurdle will complicate manufacturers’ efforts to fill the millions of jobs our industry is projected to create within a decade.”
Policy and Legal

NAM Files Suit to Block OSHA “Walkaround” Rule

The NAM and allied groups are challenging the U.S. Occupational Safety and Health Administration’s recently finalized “walkaround” rule.

What’s going on: On Tuesday, the NAM, joined by like-minded business organizations, filed a lawsuit in the Western District of Texas to block OSHA’s final rule revising the Worker Walkaround Representative Designation Process. That rule was finalized in April and is set to go into effect May 31.

  • The new rule would allow nonemployees—including union representatives, plaintiffs’ attorneys, community organizers and even competitors—to accompany OSHA inspectors on workplace safety inspections.

Why it’s a problem: Not only does the final rule fail to advance the agency’s mission of ensuring workplace safety, but it is beyond the scope of OSHA’s authority. What’s more, it violates businesses’ rights, the NAM said.

  • The new regulation “infringes on manufacturers’ right to exclude others from their property, threatens new liabilities and risks compromising manufacturers’ intellectual property. The NAM Legal Center is filing suit to prevent this harm,” NAM Chief Legal Officer Linda Kelly said.
Press Releases

Manufacturers Challenge OSHA’s Unlawful Walkaround Rule

The NAM Legal Center Joins Industry Groups Seeking to Block Rule

Washington, D.C. – Today, the National Association of Manufacturers, joined by other business groups, filed suit in the Western District of Texas to challenge the Occupational Safety and Health Administration’s final rule amending the Worker Walkaround Representative Designation Process (Walkaround Rule).

The Walkaround Rule will allow an unlimited number of third parties, such as union representatives, plaintiffs’ attorneys and community organizers, to accompany OSHA inspectors on safety inspections.

“OSHA’s rule does nothing to advance its mission of improving workplace safety,” said NAM Chief Legal Officer Linda Kelly. “This rule is well beyond the scope of OSHA’s authority, and it infringes on manufacturers’ right to exclude others from their property, threatens new liabilities and risks compromising manufacturers’ intellectual property. The NAM Legal Center is filing suit to prevent this harm.”

Background:

  • For more than 50 years, OSHA’s walkaround regulation authorized only an employee of an employer to serve as another employee’s representative during an OSHA inspection.
  • In 2013, then-Deputy Assistant Labor Secretary Richard Fairfax issued a letter—commonly referred to as the Fairfax Memo or Sallman Letter—to a member of the Service Workers International Union, which stated that a nonemployee affiliated with a union or community organization could serve as a representative of employees during an OSHA inspection at a worksite without a collective bargaining agreement.
  • In 2017, a trade group challenged the Fairfax Memo as unlawfully issued outside the notice-and-comment process and inconsistent with OSHA’s regulation that authorized only an employee of an employer to serve as another employee’s representative during an OSHA inspection.
  • A federal court in Texas agreed with the trade group, and the Trump administration later rescinded the memo.
  • In August 2023, OSHA released the proposed Walkaround Rule, and the NAM submitted comments urging OSHA to withdraw it.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Policy and Legal

House Committee Approves PBM Reforms

The House Ways and Means Committee unanimously passed legislation Wednesday that includes much-needed reforms to pharmacy benefit managers, underregulated middlemen that raise health care costs for manufacturers and manufacturing workers (Fierce Healthcare).

What’s going on: PBM reforms contained in the Preserving Telehealth, Hospital and Ambulance Access Act include increasing transparency into PBMs’ business practices and delinking PBM compensation from medicines’ list prices. These changes will help reduce prices for seniors who rely on Medicare prescription drug plans.

Why it’s important: “When Americans face soaring prices for medicines or treatments, there’s a good chance that is because a PBM has driven up the price,” NAM President and CEO Jay Timmons said Wednesday.

  • “These middlemen operate with minimal transparency, and their practices distort the market, increasing the list prices patients pay for medicines while making it more difficult for manufacturers to offer quality, affordable health care benefits.”

What’s next: The legislation approved Wednesday applies to the Medicare market. The NAM is calling on Congress to enact similar changes in the commercial insurance market to lower health care costs for manufacturing employees who participate in employer-sponsored plans.

Policy and Legal

FAA Authorization Moves Forward

In a bipartisan vote Wednesday, the Senate moved to advance Federal Aviation Administration reauthorization—but lawmakers still face a looming deadline to pass the legislation (The Hill).

What’s going on: “Senators voted 89 to 10 to overcome the first procedural hurdle and move toward consideration of the package ahead of the May 10 deadline.”

  • The draft 1,069-page bill—which already has been punted three times—sets the agency’s priorities. It would authorize billions of dollars in appropriations for the FAA, as well as hundreds of millions of dollars for the National Transportation Safety Board, from fiscal year 2024 through 2028.
  • But all 100 senators must agree to fast-track the measure for it to pass before next Friday.

Why it’s important: The FAA reauthorization bill renews statutes governing the agency’s civil aviation programs, as well as revenue collection authority. From air traffic operations to airport development, these functions are critical to the U.S. economy and the ability of Americans to travel.

However . . . Both Democrats and Republicans want amendment votes on the measure, and “lawmakers acknowledge it could be a bumpy ride” to passage.

A hot-button issue: One sticky wicket amendment that’s likely to get a vote would remove language in the bill that adds 10 flights at Ronald Reagan Washington National Airport.

  • Senators from the Washington, D.C., area say the airport cannot handle any more traffic. Virginia and Maryland are home to Dulles International Airport and Baltimore Washington International Airport, respectively.
Input Stories

EPA Chemical Rule Will Add Delays, Costs for Manufacturers

a sign on the side of a building

The EPA recently finalized a rule that establishes a process for conducting risk evaluations for certain chemicals—but it will only hamstring U.S. manufacturing competitiveness if implemented, the NAM said this week.

What’s going on: In a final rule issued late last month under the Toxic Substances Control Act, the EPA “will now consider exposure to chemicals in air and water and, when possible, combined risks from exposure to multiple chemicals” (Chemical & Engineering News).

  • “The [agency] will also consider risks to workers without assuming that they are wearing personal protective equipment [and] … chemical uses required for national security or critical infrastructure.”

Why it’s important: The final regulation will unnecessarily cost manufacturers in both time and money.

  • The “new TSCA risk evaluation rule adds too many additional barriers and requirements on manufacturers and risks creating de facto bans on chemistries essential to both existing technologies and the development of new innovative materials,” the NAM said Monday.
  • “Manufacturing relies heavily on new and existing chemicals, which are the building blocks of technologies that make modern life possible,” NAM Vice President of Domestic Policy Brandon Farris told the agency last December. “To ensure continued access to the newest chemicals which can make essential technologies even more effective and efficient, TSCA should be administered in a manner that protects health and the environment while avoiding unnecessary adverse economic impacts on business enterprises.”

What should be done: The agency should revise the final rule, the NAM said.

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