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American Regulatory Framework

American Regulatory Framework. “If you want something new, you have to stop doing something old.” Peter Drucker. Laws, Regulations, and Quality Clay Hodges. Introduction. Clay Hodges, MBA Over 20 Years of Experience in Manufacturing Safety and Regulatory Background

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American Regulatory Framework

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  1. American Regulatory Framework “If you want something new, you have to stop doing something old.” Peter Drucker. Laws, Regulations, and Quality Clay Hodges

  2. Introduction • Clay Hodges, MBA • Over 20 Years of Experience in Manufacturing • Safety and Regulatory Background • ISO 9001 Management Representative • Manufacturing Quality Manager • Production Manager Experience • Aerospace, Defense, and Medical • Manufacturing and Supplier Quality • Experience in Healthcare • Biomedical and Electronics Degrees C Hodges

  3. A Quality Approach • Reducing Mistakes In Safety Is Critical • Safety and Regulatory Issues Need a Systematic Process • A Quality Approach Makes Sense for Performance Based Standards • Identifying Root Causes And Implementing Corrective Action Makes Sense C Hodges

  4. Preview • Introduction And Background • Takeaways and Regulatory Impact • US Constitution and Administrative Procedure Act (APA) • OSHA and The Workplace • OSHA, Safety, and Quality • Summary and References C Hodges

  5. Background • First U.S. Regulatory Agency was the Interstate Commerce Commission • Created By The Interstate Commerce Act of 1887 • First Regulated Railroads • Regulated Truck Lines • Bus Lines And Telephone Companies • Dissolved December 29, 1995 C Hodges

  6. Take Away Points • Laws and Regulations Are Different • Laws –Constitution Based Rights • Regulations – Agencies Have Rights • In Many Cases, We Must Defer to The Agency Interpretations • In Theory, Regulations are Subordinate to Laws C Hodges

  7. Impact of Regulations What Do The Following Have In Common? • Prop 65, RoHS, And REACH • Toxics in Packaging Act (California)/(CONEG) • Dodd–Frank Section 1502 (Conflict Minerals) • ISO 9001, FDA QSR, cGMP, and 21 CFR Part 11 • FDA Letter of Guaranty • BMC (Box Makers Certificate) • Legal and Statutory Requirements (ISO 9001:2008 7.2 Customer Related Processes) C Hodges

  8. Impact of Regulations • Over 600 Agencies in US Government • From 2000-2013, Federal Agencies Published About 43,000 Final Rules in the Federal Register • Agencies Meet to Determine Penalty Amounts and Abatement Dates ICC ADA IRS FOIA CPSC FDA USPS EPA SSA C Hodges

  9. Impact of Regulations • Laws • U.S. Constitution (Power Separation and Checks) • Legislature Debates and Passes Laws • In 2012, 127 Laws Passed (217 in 2010) • Regulations • In 2012, 3,708 Regulations Published or About Nine Federal Rules Per Day (3,261-2010) • In 2012, Regulatory Costs About 1.806 Trillion • In 2010, Regulatory Costs About 1.752 Trillion • Legal and Statutory Requirements (Clause 7.2 Customer Related Processes) C Hodges

  10. Impact of Regulations • Regulatory Costs Per Employee (2008) • Large Firm (500 Plus Employees) $7,755 • Medium Firm (20-499 Employees) $7,454 • Small Firm (Zero-19 Employees) $10,585 From Small Business Administration, “The Impact of Regulatory Costs on Small Firms” For a 20 Person Shop, What Is The Revenue Required To Break Even? C Hodges

  11. Administrative Procedure Act (APA) • Each Agency: • Publish Rules – Similar to Legislative Action • Prosecute Violations – Executive Branch • Levy Fines – Like the Judicial Branch • If Agencies Follow Their Own Rules, Rules Have the Full Effect of Law • Agencies Provide Notice in Federal Register • Similar to Clause 5.5 Responsibility, Authority & Communication C Hodges

  12. Administrative Procedure Act (APA) • Agencies • Probable Cause Not Required. Can Investigate on Suspicion of a Violation or For Assurance of No Violation (U.S. v. Morton Salt, 338 U.S. 632 (U.S. Sup. Ct. 1950) Mallor, p. 652) • Right to Silence Only in Criminal Proceedings (Mallorp. 653) • Make Rules and Publish in Federal Register • States Publish Rules in State Publications • States/Local Governments May Be More Strict C Hodges

  13. OSHA And The Workplace • Irving v United States (392) • Reinforces Employer Responsibility for Safety • OSHA Inspections Discretionary (Internal Audits – Clause 8.2.2) • Compliance Officer Integral to OSHA Enforcement • Safety a Result of Enforcement??? • Inspectors Have Discretion Applying Regulations • Inspections May Be Conducted Differently C Hodges

  14. OSHA And The Workplace • Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc • Agencies Interpret Their Level of Authority • Courts Must Defer To The Agency Interpretation • Agencies Create/Interpret Law • BEFORE Chevron “Deference” • Congress Granted Authority To Agencies • Judicial Branch Interpreted Questions C Hodges

  15. OSHA And The Workplace U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) • July 22, 2014 • Two Opposing Court Decisions About The Affordable Care Act • U.S. Court of Appeals DC Circuit Reference “Deference” 19 Times • United States Court of Appeals, Fourth Circuit Reference “Deference” 29 Times C Hodges

  16. OSHA And The Workplace • Occupational Safety and Health Act of 1970 (OSH Act) December 29, 1970 • In 1970, 14,000 People Killed at Work • About 38 Per Day • OSHA Covers About 130 Million Workers • Four Million People Seriously Injured • Currently - About 13 People Killed At Work Each Day • Root Cause Analysis and Corrective and Preventive Actions Help C Hodges

  17. OSHA And The Workplace Raleigh MSA: 2013 = 8, 2012 = 7, 2011 = 15 119,719 1992-2012 62,435 2002-2013 Affected by The High Unemployment Rate C Hodges

  18. OSHA, Safety, And Quality • Safety And Quality Need A Performance Driven Framework To: • Identify and Meet Requirements • Perform Workplace / Risk Analysis • A Quality Approach Provides: • Identified Requirements • Corrected Nonconformities • Risk Assessment / Internal Audits • Process Maps and Improvements C Hodges

  19. OSHA, Safety, And Quality • Safety And Quality Need To: • Address Workplace Hazards and Risks • Identify Accident Root Causes • Maintain Records (Compliance/Training) • A Quality Approach Provides (ISO 9001): • Infrastructure and Work Environment • Corrective and Preventive Action • Documents and Records C Hodges

  20. OSHA, Safety, And Quality • Differences In Quality and Regulatory: • ISO 9001. Clause 7.2 The Firm Determines the Customer, Statutory, and Regulatory Requirements and Compliance Methods • Regulatory Agencies Determine Requirements and Publish Regulations • Citation and Penalty Is Immediate (Regulatory) • The Corrective Action is A Legal Document and Must Be Corrected By the Citation Deadlines (Discretion) • Requires Verification of Correction C Hodges

  21. OSHA, Safety, And Quality • Differences In Quality and Regulatory: • Record Retention in Business Determined by the Business • Regulatory • An SDS (MSDS) Is An Exposure Record (29 CFR 1910.1020(c)(5)(iii)) • Retention: Exposure / Medical Records for Each Employee Shall Be Preserved and Maintained for the Duration of Employment Plus 30 Years (29 CFR 1910.1020(d)(1)(i)) C Hodges

  22. OSHA, Safety, And Quality • A Quality Management System Approach: • Addresses Safety Requirements • Addresses Environmental Requirements • Changing the Quality/Regulatory Situation • Current Methods Will Keep Giving Us What We Already Have • Modified Approach Needed • Requires Leadership Vision and Support • Must Consider All Stakeholders C Hodges

  23. OSHA, Safety, And Quality • Essential Strategies • Integrate Safety/Regulatory Into the Firm • Balance, Efficiency, Effectiveness, and Reliability • Develop a Trust Culture • Actively Manage Change • Include All Affected Levels in Work Flow Design • Become a Learning Organization (Peter Senge’s book, The Fifth Discipline) • Motivate People to Create the Place Where They Want To Work C Hodges

  24. Summary • US Constitution (Laws) • Administrative Procedure Act (Regulations) • Legal Cases Affecting Regulations • OSHA Creation and OSHA Statistics • US v Morton Salt • Probable Cause Not Needed • Irving v United States • Inspector Discretion C Hodges

  25. Summary • Chevron Deference • Courts Must Defer To How The Agency Interprets Their Authority • Overview – OSHA, Safety, and Quality • Questions, Comments, Discussion • References C Hodges

  26. References • Business Law and the Regulatory Environment, 10th Ed. Mallor, et al. McGraw-Hill Primis, 2000. ISBN 0-390-18854-9 • The Legal, Ethical, and Regulatory Environment of Business, 8th Ed. Fisher and Phillips. West Legal Studies in Business, 2004. ISBN 0-324-15474-7. • http://www.bls.gov/iif/oshwc/cfoi/cfch0012.pdf. Census of Fatal Occupational Injuries. Accessed May 1, 2014. • http://www.bls.gov/iif/oshwc/cfoi/cfoi_msa_2013.pdf. Fatal occupational injuries by Metropolitan Statistical Area (MSA), 2013. Accessed May 1, 2014. • http://www.federalregister.govThe Federal Register. Accessed May 1, 2014. • http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR Code of Federal Regulations. Accessed May 1, 2014. C Hodges

  27. References • http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=GOVMANThe Government Manual. Accessed May 1, 2014. • http://www.osha.gov/oshstats/commonstats.html OSHA Statistics. Accessed May 1, 2014. • https://www.whitehouse.gov/sites/default/files/omb/inforeg/2014_cb/draft_2014_cost_benefit_report-updated.pdf. Accessed May 1, 2014. • http://fas.org/sgp/crs/misc/R43056.pdf. Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register. Accessed May 1, 2014. • https://cei.org/studies/ten-thousand-commandments-2014. Accessed May 1, 2014. • http://www.sba.gov/sites/default/files/The%20Impact%20of%20Regulatory%20Costs%20on%20Small%20Firms%20(Full).pdf Accessed May 1, 2014. C Hodges

  28. Questions • Comments • Discussion C Hodges

  29. C Hodges

  30. C Hodges

  31. Something to Consider The links contained in this presentation were used as research in developing this presentation. Readers should review and research the issues and form their own opinions. The information provided is for general guidance only, is from a quality systems perspective, and is not a substitute for advice from a licensed and qualified attorney. The readers understand that each case may be different and statutes that apply may change over time. The presenter is not an attorney and is not providing legal advice. The websites used for this presentation were considered reliable research sources and the author provides this information “as is” and does not guarantee that the sites are complete or accurate. The presenter does not assume any liability for errors, omissions, or misunderstandings. C Hodges

  32. OSHA And The Workplace • Employer • If The Employer Creates, Exposes, Corrects, or Controls The Workplace, OSHA Holds Them Responsible for Employee Safety • Employer: Temporary or Contract Employee Agency • Client Employer: Firm Using Temporary or Contract Employees • Client Responsible for Training Employees and Providing Safety Equipment to Employees • Employee Competence ISO 9001:2008 6.2.2 C Hodges

  33. Question • A Commercial, For-Hire, Semi-Tractor Trailer is At A Company’s Dock Picking Up Freight • OHSA 29 CFR 1910.178 (k)(l) “The brakes of highway trucks shall be set and wheel chocks placed under the rear wheels to prevent the trucks from rolling while they are boarded with powered industrial trucks“ • Why must the Wheels Be Chocked? • Who Enforces This? C Hodges

  34. OSHA And The Workplace • OSHA Top Ten Citations FY 2013 • Fall Protection (29 CFR 1926.501) • Hazard Communication Standard (29 CFR 1910.1200) • Scaffolding (29 CFR 1926.451) • Respiratory Protection (29 CFR 1910.134) • Electrical, Wiring Methods (29 CFR 1910.305) C Hodges

  35. OSHA And The Workplace • OSHA Top Ten Citations FY 2013 • Powered Industrial Trucks (1910.178) • Ladders (1926.1053) • Control of Hazardous Energy Lockout / Tagout (1910.147) • Electrical Systems Design (1910.303) • Machinery and Machine Guarding (1910.212) C Hodges

  36. Constitution And APA • Government Authority • Constitution Limits Government Power • APA – Few Limits on Government • Checks and Balances • Constitution – Separation of Powers • APA – All Power Resides in The Agency • Legislative Branch • Constitution – Make and Pass Laws • APA – Enabling Legislation for Regulations C Hodges

  37. Constitution And APA • Judicial Branch • Constitution – Interpret and Explain Laws • Apply Fines Established by Legislature • APA – Restricted Oversight • Executive Branch • Constitution – Enforce Laws Passed by Congress • APA – Enforce Rules and Regulations Developed in The Agency (Executive Branch) • APA – Agency Interprets Its Rules C Hodges

  38. Constitution And APA • Constitution • Founding Document of USA • Adopted Sep 17, 1787 (Mar 4, 1789) • Administrative Procedures Act (1946) • Framework to Establish & Enforce Regulations • High Barrier for Judicial Review • Must Exhaust Administrative Remedies • Arbitrary and Capricious / Abuse of Discretion • Contrary to Law That Enables Agency Actions C Hodges

  39. OSHA And The Workplace • OHSA Created Because More People Were Killed at Work than In Vietnam • Vietnam Over 58,000 Killed (3/8/65-3/29/73) • At Work, Each Year: • About 2 Million Disabled • Est. 100,000 Die Due to Illnesses • On Average, Over 4,500 Die At Work • That Adds Up To A Lot (Reduce Injuries, Illnesses, and Deaths - Quality Goals and Objectives C Hodges

  40. Summary • Contrast of US Constitution to APA • Regulatory Impact • OSHA and The Workplace • Legal Rulings and Their Impact • US v Morton Salt • Irving v United States • Chevron USA Inc v Natural Resources Defense Council, Inc C Hodges

  41. OSHA Administration and Records • Enforcement Records • From Enforcement Activity (Citations) • Accident Investigation Findings (Employer Initiated) • Job-Related Injury and Accident Records • OSHA Form 300 - “Log of Work-Related Injuries and Illnesses” • OSHA Form 301 - “Injury and Illness Incident Report” • Employer Maintains and Supplies to OSHA • Employee Accidents / Illnesses Records Kept 30 or More Years C Hodges

  42. OSHA Administration • How OSHA Works • Congress Creates OSHA (OSHA Act) • OSHA Develops and Publishes Standards • OSHA Conducts Unannounced Inspections • Citations (Notice of Penalty) Issued • Employer has 15 Days to Request Hearing • If Employer Contests, Administrative Hearing • Appeal to OSHA Review Commission • Appeal Review Commission Decision to U.S. Court of Appeals (30 days) • Possible Appeal to U.S. Supreme Court C Hodges

  43. Employee Related Regulations • Fair Labor Standards Act • Social Security Act • Workers Compensation Act • OSHA • Office of Science and Technology (OSTP) • Source Executive Office (US President) • Source of Scientific, Engineering, and Technological Analysis • Supports Policies, Plans, and Programs of US Government C Hodges

  44. Regulatory Agencies (Continued) Clay • Office of Science and Technology (OSTP) • Economy, National Security, Health • Foreign Relations and Environment • Advises President of Technological Considerations in Areas of National Concern • Consolidated Omnibus Budget Reconciliation Act (COBRA) • Right to Continue Health Benefits Provided by Group Health Plan • Limited Time • Special Considerations C Hodges

  45. Regulatory Agencies (Continued) • Family Medical Leave Act (FMLA) • 12 Workweeks Unpaid Leave 12 Month Period • Birth of Child, Adoption, Foster Care • Care for Immediate Family Member • Medical Leave C Hodges

  46. Administrative Oversight • Regulatory Agencies Make Guidelines, Rules, and Regulations: • Nonlegislative and Nonjudicial • APA Provides Limits and Review Criteria • APA Limits Investigations. Must be: • Conducted for Legitimate Purpose • Information Must be Relevant • Information Demands – Specific and Not unreasonable Burdensome • Cannot Compromise Operations Conducted by Another Agency or Government Arm (Mallor. p. 663) C Hodges

  47. Constitution And APA • Constitution • Presumption of Innocence • Freedom From Unreasonable Search • Right to Remain Silent • Administrative Procedures Act (1946) • Presumption of Innocence - ??? • Freedom From Unreasonable Search - ??? • Right to Remain Silent ??? C Hodges

  48. C Hodges

  49. OSHA Machine Guarding C Hodges

  50. Impact of Regulations • What Do The Following Have In Common: • Prop 65, RoHS, And REACH (MOC) • Toxics in Packaging Act (California)/(CONEG) • Dodd–Frank Section 1502 (Conflict Minerals) • DEQ Air Permits • ISO 9001, FDA QSR, cGMP, and 21 CFR Part 11 • FDA Letter of Guaranty • UCC (Uniform Commercial Code) • BMC (Box Makers Certificate) C Hodges

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