On October 9, 2019, new Presidential Executive Orders were issued to 1) Promote the rule of law through improved guidance documents through transparency and fairness. The new EOs set a new standard for how guidance documents may be used. 2) increase the difficulty for federal agencies to use the language of guidance documents in enforcement proceedings.
Here are some points to clarify how these new Executive Orders would affect guidance documents related to agencies that could impact bakery.
- Some guidance will need to go through a 30-day notice period and review by OMB/OIRA.
- Agencies can’t use guidance documents to establish a violation of law without reference to the statute and regulations. Section 3 and 4 of the Executive Order requires fair notice to the regulated public before using the guidance document to take any adverse enforcement action.
- These are all fundamental steps to provide a more transparent fair and predictable regulatory system. This Executive Order significantly improves practices for developing, using and managing guidance documents across the board.
- Significant guidance documents lead to an annual effect on the economy of $100 million or more or adversely affect the economy in a material way. This could also trigger a need for a full economic impact analysis.
- The Executive Orders would not apply to independent agencies, for example, such as the NLRB or Securities and Exchange Commission. Independent agencies are generally not covered by Presidential Executive Orders though they are sometimes encouraged to comply. Further the NLRB does not operate through guidance documents.
- It is possible the Executive Orders will have some practical value in terms of interagency dynamics.
- Industries often seek guidance from federal agencies to help them comply with complex rules. These agency policy statements, memorandums, circulars, bulletins and letters are not legally binding but often serve as the basis for enforcement. Critics view such guidance as an improper shortcut around formal binding rulemaking.
