White House Urges Federal Regulators to Support Economic Recovery in Light of COVID-19

A new executive order directs federal agencies to focus their efforts on regulatory barriers to economic recovery.  Specifically, the May 19, 2020 order directs agencies to respond to the COVID-19 pandemic public health emergency by reviewing and rescinding, modifying, waiving, or providing exemptions from regulations that may inhibit economic recovery, consistent with public health and safety, national security concerns, and operational and budgetary feasibility.

The order further urges agencies to identify regulatory standards and consider whether the rescission of, or waivers from, such rules is appropriate, and to consider exercising appropriate discretion with respect to enforcement, or extensions of time for compliance, if that serves the purpose of promoting job creation and economic growth.  Finally, the order directs agencies to accelerate procedures for which employers or others can receive a pre-enforcement ruling with respect to whether proposed action in response to COVID-19 is consistent with federal statutes and regulations administered by the agency.  This includes urging agencies to consider declining enforcement of regulatory requirements against those employers that have attempted in reasonable good faith to comply with statutory and regulatory standards.

While directed specifically at COVID-19, this latest action is consistent with efforts at deregulation the Administration has prioritized since 2017.  It is also consistent with the focus of Republican leadership in the U.S. Senate, which has indicated that its focus in the next legislative response to COVID-19 will be on economic recovery and providing a shield from liability and the inevitable litigation that will ensue as the economy reopens.

Employers are facing significant uncertainty as businesses reopen, and in these unprecedented times, there are often few easy solutions.  In that light, employers may wish to consider seeking direction from agencies with respect to their responsibilities under regulations and guidance as they respond to COVID-19.  While such guidance may not be legally binding, it may be helpful if and when an employer is called upon to defend its actions, whether to regulators or in court.  Reaching out to regulators may make sense to obtain support for an argument that an employer was acting in good faith, and not intentionally or recklessly ignoring applicable standards.  Employers contemplating such requests should consult counsel to discuss the pros and cons of these options more fully.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.