Administrative State Hits Warp Speed

As my colleague Ryan Young noted on X, this week’s Federal Register is a bumper edition of new rules and regulations, almost triple the normal pace.

This is indeed a sign that the deadline for Congressional Review Act (CRA) scrutiny by the next Congress is drawing near. Regulators want to make sure their rules are going to be reviewed by this Congress and with a president who will veto any successful CRA efforts to strike down the rule.

However, it is also notable that the rules coming out this week are truly significant in their size and sweeping nature. And many of them are being proposed without clear authority for the agency to do so. Here are just some of them:

• The Federal Trade Commission finalized a ban on non-compete clauses. This was remarkable for several reasons. First, the final was more severe than the proposed rule, banning all non-competes, even for senior executives. Secondly, there is still significant debate over the effect of non-competes, which suggests that an approach that leaves it up to the states would be better than a national ban (I am personally not convinced that non-competes for junior employees have the beneficial effects that others claim for them.) Finally, there is considerable evidence that the FTC does not actually have the power to issue such a rule at all, as Commissioner Holyoak said front and center in her statement. This one is going to court, sooner rather than later.
• The Federal Communications Commission reinstated its Obama-era rule that subjects internet service provision to Title II regulation, which is the sort of rule used to regulate passenger railroads. What is particularly illuminating about this action is that when former FCC Chairman Ajit Pai rescinded the rule in 2017, there were apocalyptic claims about how this would ruin the internet for every user. In fact, speeds went up and costs declined. So much for evidence-based policy-making (and this Tweet is still up.) As my colleague Brian Rankin argues in the Wall Street Journal, there’s a good chance this qualifies as a major question under Supreme Court Doctrine. Back to court we go . . .
• The Department of Labor significantly expanded its overtime rule. In a couple of years, anyone earning up to just shy of $60,000 will have to be paid overtime if working over 40 hours a week. The Department claims that hundreds of thousands of workers will see more cash in their pay packets, when in fact companies will cap work hours or reduce valuable non-pay benefits such as time off in lieu. The last time the Department tried something like this, the courts said no. It’s likely they will again, as the Department is ignoring the text of the statute.
• The Department of Transportation said that airlines have to compensate passengers automatically in cash for any cancellations, long delays, lost luggage, or the like, rather than offering things like travel credits or air miles. Occasional travelers might be happy with this, but frequent flyers were generally content with the alternative, and there is good reason to think that the new rules might have perverse incentives, leaving passengers stranded and having to rebook on their own, which frequent flyers will find irritating and causal travelers mystifying.
• As you’d expect, environmental rules are wide and sweeping, with the EPA issuing new rules on power plants establishing emissions guidelines and CO2 performance standards. Also as you might expect, the EPA is trying once again to close down fossil fuel plants, in a manner worse than the Obama Clean Power Plan, which the courts decided contravened the major questions doctrine. This will be bad for the reliability of our electrical grid, will increase household energy costs at a time of persistent inflation, and cocks a snook at the Supreme Court.
• Finally, the Department of Energy is coming for your light bulbs again, because our energy and environment overlords want us to freeze in the dark.

This is also the administrative state kicking the hive of what Michael Brendan Dougherty called here “rule by swarm.” Private enterprises will have to adapt to these rules and their likely successors, and so will the agents who impose harms on the rest of us who just want to get on with our lives.

This isn’t going to let up. The Federal Register is on course for its first 100,000-page year.