Regulation: Between a Rock and a Hard Place

True story: A fortune 500 company implements a new wellness plan for employees. It’s designed by consultants who use the Affordable Care Act (Obamacare) as a template. Workers are incentivized to get regular exercise, quit smoking and lose weight; with contest prizes and discounts from their health insurance premiums rewarding successful efforts.

The U.S. Equal Employment Opportunity Commission promptly files suit against the company for discriminating against obese employees and others with unhealthy lifestyles. The EEOC says that their mandate to punish discrimination isn’t subject to a law that promotes something different.

True story: An employee for a small business that provides contract workers to backfill positions in the Federal Government sues her employer for fostering an atmosphere of sexual harassment. A Federal worker in her department took her mobile phone from her desk and used it to make explicit photographs. According to the law, the employer must either a) move the woman to another position, or b) discipline the offending photographer. Unfortunately, there is no other position besides the one she is contracted for, and the selfie-star works for the Feds, and so can’t be touched without the due process of the civil service system.

The employer is left with a choice between paying the employee not to work, or leaving her in place and defending against a claim he had nothing to do with and can’t fix.

True story: An employee who is on a “final” performance improvement plan (PIP) with termination the stated result of non-performance, informs the Human Resources Manager that she has been diagnosed with depression. She does not request any accommodation under the Americans With Disabilities Act, but says she “Just wanted her to know.” In compliance with HIPAA (which mandates up to a $50,000 fine for a first offense of  sharing employee medical information), the HR manager maintains complete confidentiality.

Ten days later the PIP is reviewed, the employee is found to have not made the necessary changes, and she is terminated. She sues the employer, claiming that the real reason for termination was her medical condition.

Despite the testimony under oath by both the HR Manager (that she didn’t share the information, since it is prohibited by law), and the company executives (that they were not informed), the EEOC judged the company guilty due to “temporal proximity.” That is, the incidents of the reporting and the termination occurred closely enough together that, regardless of prior documentation, everyone else is assumed to be lying.

The Washington Post calls it “The Fourth Branch of Government”; agencies that have been given lawmaking power by Congress, and which now account for over 80% of the rules businesses have to abide by. These laws (or regulations) are implemented without vote or accountability. In 2007, for example, Congress passed 138 laws (and that’s before they were gridlocked) and Federal Agencies finalized 2,926 new regulations.

In 1960 there were about a dozen agencies , like the Securities and Exchange Commission, that had rule-making power. Today, there are over 140 Federal agencies empowered by Congress to make new regulations and enforce them. We’ve come to accept that the EPA, OSHA, HHS, EEOC, DOL and scores of others can create new laws and penalize employers who violate them, even when the “violation” is to comply with a different agency’s rules.

Some regulation to protect public safety and promote ethical dealings in the workplace is clearly necessary. Empowering a million bureaucrats to determine this country’s legal system without accountability isn’t.

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