U.S. Chamber Recommends Action in Five Key Areas to Strengthen Nation

In her annual State of the American Business address, U.S. Chamber of Commerce President and CEO Suzanne Clark called on Congress to adopt a legislative agenda that strengthens the United States in five key areas: building, people, energy, global leadership, and the rule of law.

“Business demands better from our government...” Clark said. “The polarization, gridlock, regulatory overreach, and inability to act smartly and strategically for our future is making it harder for all of us to do our jobs and move this country forward.” 

Clark outlined several actions Congress and the Biden administration should pursue during 2023, including:

• Pass a permitting reform bill to deliver on the investment made in infrastructure
• Secure the nation’s border, protect Dreamers and increase the number of employment-based visas
• Fix worker shortages by improving access to childcare and incentivizing work 
• Accelerate permitting for new American energy exploration and production, finalize a legally required five-year program for offshore leasing and make it easier to build energy infrastructure
• Work in partnership with the private sector to achieve climate resilience through innovation
• Resume free and fair trade negotiations and pursue new deals
• Tackle head-on the challenges with China, while maximizing the benefits America can and must derive from continuing to do business with the world’s second-largest economy in areas consistent with our national security and values 
• End lawsuit abuse by going after litigation funders
• Enact policy changes to help law enforcement and prosecutors make communities safe and fight organized retail crime. 

Just as important as the actions Congress and the Biden administration should take are those they should stop pursuing, Clark said. “The unprecedented regulatory overreach has accelerated over the past two years,” she said in the address. “When I gave this speech last year, I pledged that if government didn’t stop getting in the way through overregulation, we would lead the fight to stop it. And that’s why the chamber sued the FTC, the SEC and the CFPB last year. And we won’t hesitate to do it again if that’s what’s needed to protect business interests, preserve innovation and competition, and position our economy for growth.

“Our message to our partners in government today is very simple,” Clark continued. “Do your jobs, so we can do ours. Make government work, so businesses can keep working … so companies of all sizes can keep doing the things that society needs, expects, and trusts us to do. America is a great and capable nation, and together, we can do the big thinking and take the smart steps to secure the future we deserve and strengthen this country that we all love.” 

FTC Seeks Public Comment on Proposed Noncompete Clause Ban

The Federal Trade Commission started 2023 with a proposed new rule that was immediately condemned by business groups. The would prohibit employers from using noncompete clauses.

“Today’s actions by the Federal Trade Commission to outright ban noncompete clauses in all employer contracts is blatantly unlawful,” Sean Heather, senior vice president for international regulatory affairs and antitrust, said in a statement. “Since the agency’s creation over 100 years ago, Congress has never delegated the FTC anything close to the authority it would need to promulgate such a competition rule. The chamber is confident that this unlawful action will not stand. 

“Attempting to ban noncompete clauses in all employment circumstances overturns well-established state laws which have long governed their use and ignores the fact that, when appropriately used, noncompete agreements are an important tool in fostering innovation and preserving competition,” he added.

In the announcement of the proposed rule, agency Chair Lina Khan alleged noncompete clauses, which are commonly used to protect trade secrets and competition, are blocking workers from freely switching jobs, depriving them of higher wages and better working conditions while also depriving businesses of a talent pool they need to expand.

The FTC’s proposed rule would generally prohibit employers from using noncompete clauses by making it illegal for an employer to:

• Enter into or attempt to enter into a noncompete with a worker
• Maintain a noncompete with a worker
• Represent to a worker, under certain circumstances, that the worker is subject to a noncompete

The agency is seeking public comment on the proposed rule following a preliminary finding that noncompete clauses violate Section 5 of the Federal Trade Commission Act. FEDA members are encouraged to share their thoughts on the rule and its potential impact by clicking here.

Poll Shows 96 Percent of Workers View Health Insurance as “Extremely” or “Very” Important

A strong majority of Americans are highly satisfied with their employer-sponsored health coverage, a new poll from public opinion research firm Seven Letter Insights finds.

The poll was commissioned by the Protecting Americans Coverage Together campaign — a coalition that includes the U.S. Chamber of Commerce — and comes as a new Congress begins its first session. A total of 2,334 people from a representative sample of the overall population were surveyed. “Nearly half of Americans receive health care coverage through their employer, and it’s clear they want to protect what’s working for them,” said Corey Astill, vice president of health and retirement at Business Roundtable. “This survey validates the investments U.S. businesses are making in their workers. It’s imperative that public policy continues to bolster — not weaken — employer-sponsored insurance.”

The survey found that:

• 54 percent of respondents were “highly satisfied” with their insurance
• 87 percent called their plans “affordable”
• More than 70 percent agreed their health insurance is worth what they pay for it

Additionally, 96 percent of employees reported viewing their health insurance as either “extremely important” (83 percent) or “very important (13 percent). As a result, 89 percent of Americans said they preferred to obtain their health coverage through an employer rather than other means.

“Employees value their employer-sponsored health coverage, and they believe it is fundamentally important for employers to offer it,” said Katie Mahoney, vice president of health policy at the U.S. Chamber of Commerce. “ESI (employer-sponsored insurance) is working for the people with access to it, and the goal of policymakers should be to strengthen and bolster the system to help more people.”

Agency Leadership Causing Mergers to Cost More, Take Longer

Antitrust practitioners who work with the Federal Trade Commission (FTC) have a more critical perception of the agency and the Department of Justice (DOJ) than compared to prior administrations, a survey from the USC Gould School of Law found.

The survey asked 100 antitrust practitioners their views on the FTC and DOJ in an attempt to identify whether respondents perceived any substantive shifts from prior administrations to the Biden administration, the impact of such shifts on merging parties and notable differences between the DOJ and FTC enforcement procedures. Of those who responded, 66 percent said the FTC’s current merger enforcement practices harm innovation and competition and 69 percent believed that the agency has become “less receptive to arguments regarding pro-growth competitive innovation.” Further, 58 percent said that when reviewing a merger, the FTC has reduced or eliminated its consideration of potential efficiency gains.

The findings were not quite as harsh on the DOJ. Only 35 percent believed the current DOJ’s merger enforcement practices harm innovation and competition and 52 percent said the DOJ has become less receptive to arguments regarding the benefits of mergers to innovation.

“The costs of the FTC’s regulate first, ask questions later agenda are becoming clear,” wrote Sean Heather, senior vice president, international regulatory affairs and antitrust for the U.S. Chamber, wrote in response to the survey. “Under current leadership, mergers cost more, take longer and have become less certain. In interviews, practitioners agreed that ‘the time spent on lawyer hours, internal client hours, economic expert hours and other internal costs to a merger’ have risen. Delays are longer too. Merging parties and their counsel ‘have reported a lack of communication from agency staff until very late in the process, the initiation or termination of second requests without a clear explanation, and the refusal or inability to explain theories of harm motivating an agency’s investigation.’ Finally, some companies have abandoned deals altogether where timing of financing windows matter greatly.

“Mergers and acquisitions are important drivers of innovation and competition in the American economy,” Heather continued. “Where the Federal Trade Commission and Department of Justice intentionally make that process more difficult, its consumers who ultimately pay the price.”

Planned Referendum Will Let Voters Decide Future of Law that Would Harm Restaurants

The Save Local Restaurants Coalition, a group of small business owners, restaurateurs, and business associations, has collected enough signatures to force a referendum on the controversial Fast Food Accountability and Standards Recovery (FAST) Act.

The act, which passed the California legislature in late August, would establish a 10-person council to regulate wages and working conditions for employees of fast food restaurants with more than 100 locations. Further, it allows California cities and counties with more than 200,000 people to create their own local councils to make recommendations to the newly formed state council. If it is enacted, the board could raise the minimum wage for covered restaurants to as much as $22 an hour, far above the state’s current $15.50 floor.

“The FAST Act would have an enormous impact on Californians, and clearly voters want a say in whether it should stand,” the Save Local Restaurants Coalition said. “The measure would establish an unelected council to control labor policy in the counter-service restaurant industry, cause food prices to increase by as much as 20% during a period of decades-high inflation, and harm thousands of small family-, minority-, and women-owned businesses across the state.”

More than 1 million California residents signed a petition to oppose the FAST Act and a referendum on the law will be placed on the November 2024 ballot once the signatures are verified by the California Secretary of State. The implementation of the law has been paused in the meantime.

“With over a million signatures submitted for a referendum, it’s clear that voters agree this law is bad for California and bad for America,” said Glenn Spencer, senior vice president for employment policy at the U.S. Chamber of Commerce.

Agreement Averts Supply Chain Disruption that Would Have Cost Economy $2 Billion Daily

The country’s railroads will continue operating after Congress passed a law, signed by President Joe Biden Friday, Dec. 2, imposing a labor agreement between the nation’s 12 largest railroad unions and rail companies.

The law is the culmination of negotiations between unions representing 115,000 workers and the rail companies that have been ongoing for most of 2022. The Biden administration became involved in negotiations and in September appeared to broker a breakthrough agreement that would have instituted an immediate 14.1 percent wage increase and a 24 percent wage increase by 2024, along with five $1,000 lump sum payments to all employees and additional personal leave. However, many workers wanted further concessions, including paid sick leave, leading the members of four of the 12 unions to vote against the contract. That put the possibility of a strike back on the table if an agreement were not reached by Dec. 9.

At Biden’s urging, Congress intervened by using its authority over interstate commerce to impose the terms of the contract that were previously agreed upon in September. The House actually passed a version of the bill that would have added seven days of paid sick time to the contract, but the Senate voted it down, leaving the prior agreement as the chosen option.

“We commend members of Congress for averting a catastrophic rail strike,” U.S. Chamber President and CEO Suzanne Clark said in a statement. “The legislation passed reflects the deal struck between the major freight railroads and the leadership of the 12 rail unions and ratified by a majority of rail workers.  American workers, businesses and consumers will benefit from this outcome as it provides generous benefits for rail workers and certainty that rail service will not be interrupted. We must remember that our economy depends on the hard work of rail workers and the railroads, and averting a strike is a win for our country. We thank President Biden and Congress for helping secure America’s rail service.”

Trade groups warned that failure to avert the strike could cost the U.S. economy at least $2 billion a day – affecting 30 percent of U.S. cargo shipments and leading to a 1 percent decline in the nation’s gross domestic product if the strike were to last a month.

“Delivering for America is what our industry does best. A strike of this nature will bring the free flow of critical goods and services in America to a halt, hamstring an already fragile supply chain during a time of continued economic uncertainty, and lead the country down an untenable path,” said Seth Waugh, vice president of government relations for the National Association of Wholesaler-Distributors. “President Joe Biden, the self-proclaimed ‘most pro-union President in history,’ worked directly with the rail worker unions to come to an agreement in September that would have prevented a rail strike. Now, several of those union bosses are attempting to hold America’s economy hostage by beckoning a crisis that is 100 percent preventable.” 

More than 400 business and trade groups, including FEDA, sent a letter to congressional leaders on Nov. 28 urging them to act to prevent a railroad shutdown. “No one wins when the railroads stop running,” the letter stated. “Congress recognized their necessity to interstate commerce and America’s economic health with the passage of the Railway Labor Act and past congressional interventions in rail labor disputes when other steps fail. Indeed, Congress has intervened 18 times since 1926 in labor negotiations that threaten interstate commerce and there is no reason why Congress should deviate from this record today. While a voluntary agreement with the four holdout unions is the best outcome, the risks to America’s economy and communities simply make a national rail strike unacceptable. Therefore, absent a voluntary agreement, we call on you to take immediate steps to prevent a national rail strike and the certain economic destruction that would follow."

House Republicans Pledge to Take Up Bill to Cut New IRS Funding

With Republicans expected to have a narrow majority in the House of Representatives once the new Congress is sworn in next year, one of the first votes that could be undertaken would rescind additional funding for IRS enforcement.

The Inflation Reduction Act of 2022 provided $45.6 billion in additional enforcement funding to the IRS with the aim of increasing scrutiny on taxpayers with more than $400,000 in taxable income. That could lead to more tax audits on small and family-owned businesses. A proposed law, the Family and Small Business Taxpayer Protection Act, H.R. 9092, would revoke that additional enforcement funding and House Republicans have already pledged to vote on the bill early next year.

Last week, business groups sent a letter to the bill’s sponsor, Rep. Adrian Smith (R-NE), and one of its co-sponsors, Rep. Michelle Steel (R-CA), supporting the passage of the Family and Small Business Taxpayer Protection Act. FEDA was one of the co-signers of the letter.

“It is disheartening that Congress would earmark $45.6 billion (58 percent) for enforcement efforts while only providing $3 billion (4 percent) for taxpayer services from the $80 billion allocated to the IRS in the Inflation Reduction Act of 2022,” the letter states. “Before considering how to penalize taxpayers, the agency should address the immense backlog facing the agency and how to better assist taxpayers with compliance.”

The full letter is available here.

New Regulations Would Impact Ice Makers and Refrigeration Equipment

The U.S Department of Energy (DOE) published several new rules regarding foodservice equipment.

Beginning Dec. 1, new testing procedures for automatic commercial ice makers will be updated to the latest industry standards. The update includes the establishment of a relative humidity test condition; provides additional detail regarding certain test conditions, settings, setup requirements, and calculation; covers voluntary measurement of potable water use; clarifies certification and reporting requirements; and adds enforcement provisions. The final rule, which will be mandatory for equipment testing starting Oct. 27, 2023, also provides additional detail to the DOE test procedure to improve the representativeness and repeatability of the current test procedure.

More details are available here.

The DOE also published 2024-2028 proposed hydrofluorocarbons (HFCs) allocation rules as required by the American Innovation and Manufacturing (AIM) Act of 2020. The AIM Act directs the Environmental Protection Agency to address HFCs by phasing down the production and consumption of listed HFCs, managing these HFCs and their substitutes, and facilitating the transition to next-generation technologies. To address this, the EPA is proposing to amend the consumption baseline to reflect updated data and to make other adjustments based on lessons from the implementation of the HFCs phasedown program. The EPA proposes to codify the existing approach to how allowances must be expended for import of regulated substances, revise recordkeeping and reporting requirements and implement other modifications to existing regulations.

Companies wishing to share their feedback regarding the timing or degree of additional requirements in the EPA's HFC allocation proposal should submit a formal comment to the DOE by Dec. 5 for the best chance of ensuring consideration. For more information and to submit a comment, please click here.