81 FR 71644 - Post-Employment Conflict of Interest Restrictions; Revision of Departmental Component Designations

OFFICE OF GOVERNMENT ETHICS

Federal Register Volume 81, Issue 201 (October 18, 2016)

The U.S. Office of Government Ethics (OGE) is issuing a proposed rule to revise the component designations of two agencies for purposes of the one-year post-employment conflict of interest restriction for senior employees. Specifically, OGE is proposing to revoke two existing component designations and add five new component designations, based on the recommendations of the agencies concerned.

[Federal Register Volume 81, Number 201 (Tuesday, October 18, 2016)]
[Proposed Rules]
[Pages 71644-71646]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-25054]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 81, No. 201 / Tuesday, October 18, 2016 / 
Proposed Rules

[[Page 71644]]



OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2641

RIN 3209-AA14


Post-Employment Conflict of Interest Restrictions; Revision of 
Departmental Component Designations

AGENCY: Office of Government Ethics.

ACTION: Proposed rule.

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SUMMARY: The U.S. Office of Government Ethics (OGE) is issuing a 
proposed rule to revise the component designations of two agencies for 
purposes of the one-year post-employment conflict of interest 
restriction for senior employees. Specifically, OGE is proposing to 
revoke two existing component designations and add five new component 
designations, based on the recommendations of the agencies concerned.

DATES: Written comments are invited and must be received on or before 
November 17, 2016.

ADDRESSES: You may submit comments, in writing, to OGE on this proposed 
rule, identified by RIN 3209-AA14, by any of the following methods:
    Email: [email protected]. Include the reference ``Proposed Rule 
Revising Departmental Component Designations'' in the subject line of 
the message.
    Fax: (202) 482-9237.
    Mail/Hand Delivery/Courier: Office of Government Ethics, Suite 500, 
1201 New York Avenue NW., Washington, DC 20005-3917, Attention: 
``Proposed Rule Revising Departmental Component Designations.''
    Instructions: All submissions must include OGE's agency name and 
the Regulation Identifier Number (RIN), 3209-AA14, for this proposed 
rulemaking. All comments, including attachments and other supporting 
materials, will become part of the public record and subject to public 
disclosure. Comments may be posted on OGE's Web site, www.oge.gov. 
Sensitive personal information, such as account numbers or Social 
Security numbers, should not be included. Comments generally will not 
be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Kimberly L. Sikora Panza, Associate 
Counsel, Office of Government Ethics, Suite 500, 1201 New York Avenue 
NW., Washington, DC 20005-3917; Telephone: (202) 482-9300; TTY: (800) 
877-8339; FAX: (202) 482-9237.

SUPPLEMENTARY INFORMATION:

I. Substantive Discussion; Revocation and Addition of Departmental 
Components

    The Director of OGE (Director) is authorized by 18 U.S.C. 207(h) to 
designate distinct and separate departmental or agency components in 
the executive branch for purposes of 18 U.S.C. 207(c), the one-year 
post-employment conflict of interest restriction for senior employees. 
The representational bar of 18 U.S.C. 207(c) usually extends to the 
whole of any department or agency in which a former senior employee 
served in any capacity during the year prior to termination from a 
senior employee position. However, 18 U.S.C. 207(h) provides that 
whenever the Director determines that an agency or bureau within a 
department or agency in the executive branch exercises functions which 
are distinct and separate from the remaining functions of the 
department or agency and there exists no potential for use of undue 
influence or unfair advantage based on past Government service, the 
Director shall by rule designate such agency or bureau as a separate 
component of that department or agency. As a result, a former senior 
employee who served in a ``parent'' department or agency is not barred 
by 18 U.S.C. 207(c) from making communications to or appearances before 
any employees of any designated component of that parent, but is barred 
as to employees of that parent or of other components that have not 
been separately designated. Moreover, a former senior employee who 
served in a designated component of a parent department or agency is 
barred from communicating to or making an appearance before any 
employee of that component, but is not barred as to any employee of the 
parent, of another designated component, or of any other agency or 
bureau of the parent that has not been designated.
    Under 18 U.S.C. 207(h)(2), component designations do not apply to 
persons employed at a rate of pay specified in or fixed according to 
subchapter II of 5 U.S.C. chapter 53 (the Executive Schedule). 
Component designations are listed in appendix B to 5 CFR part 2641.
    The Director regularly reviews the component designations and 
determinations and, in consultation with the department or agency 
concerned, makes such additions and deletions as are necessary. 
Specifically, the Director ``shall, by rule, make or revoke a component 
designation after considering the recommendation of the designated 
agency ethics official.'' 5 CFR 2641.302(e)(3). Before designating an 
agency component as distinct and separate for purposes of 18 U.S.C. 
207(c), the Director must find that there exists no potential for use 
of undue influence or unfair advantage based on past Government 
service, and that the component is an agency or bureau, within a parent 
agency, that exercises functions which are distinct and separate from 
the functions of the parent agency and from the functions of other 
components of that parent. 5 CFR 2641.302(c).
    Pursuant to the procedures prescribed in 5 CFR 2641.302(e), two 
agencies have forwarded written requests to OGE to amend their listings 
in appendix B. After carefully reviewing the requested changes in light 
of the criteria in 18 U.S.C. 207(h) as implemented in 5 CFR 
2641.302(c), OGE is proposing to grant these requests and amend 
appendix B as explained below.
    The Department of Labor has requested that OGE revoke the 
designation of the Employment Standards Administration (ESA) in 
appendix B to part 2641, and in the place of ESA designate the Office 
of Federal Contract Compliance Programs (OFCCP), Office of Labor 
Management Standards (OLMS), Office of Workers' Compensation Programs 
(OWCP), and the Wage and Hour Division (WHD) as distinct and separate 
components of the Department of Labor for purposes of 18 U.S.C. 207(c). 
These four entities were the major program components of ESA until 
November 8, 2009, when the Secretary of the Department of Labor 
dissolved ESA into its constituent components. OFCCP, OLMS, OWCP,

[[Page 71645]]

and WHD are each headed by a director who now reports directly to the 
Secretary of Labor.
    OFCCP enforces, for the benefit of job seekers and wage earners, 
the contractual promise of affirmative action and equal employment 
opportunity required of those who do business with the Federal 
Government (Government contractors and subcontractors). Specifically, 
OFCCP administers and enforces three legal authorities requiring equal 
employment opportunity: Executive Order 11246, as amended; Section 503 
of the Rehabilitation Act of 1973, as amended; and the Vietnam Era 
Veterans' Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 
4212. These authorities prohibit Federal contractors and subcontractors 
from discriminating on the basis of race, color, religion, sex, sexual 
orientation, gender identity, national origin, disability, and 
protected veteran status, and also require Federal contractors and 
subcontractors to take affirmative action to ensure equal employment 
opportunity in their employment processes.
    OLMS administers and enforces most provisions of the Labor-
Management Reporting and Disclosure Act of 1959 (LMRDA). The LMRDA is a 
law that promotes union democracy and financial integrity in private 
sector labor unions through standards for union officer elections and 
union trusteeships and safeguards for union assets, and also promotes 
labor union and labor-management transparency through certain reporting 
and disclosure requirements. In addition to the LMRDA, OLMS administers 
provisions of the Civil Service Reform Act of 1978 and the Foreign 
Service Act of 1980 relating to standards of conduct for Federal 
employee organizations, which are comparable to LMRDA requirements. 
OLMS' role as an independent enforcement agency overseeing unions gives 
it a unique and critical role within the Department of Labor with a key 
stakeholder.
    OWCP administers four major disability compensation programs that 
provide wage replacement benefits, medical treatment, vocational 
rehabilitation, and other benefits to certain workers or their 
dependents who experience work-related injury or occupational disease. 
Specifically, the OWCP administers the Energy Employees Occupational 
Illness Compensation Program, the Federal Employees' Compensation 
Program, the Longshore and Harbor Workers' Compensation Program, and 
the Coal Mine Workers' Compensation Program, each of which serve 
specific employee groups by mitigating the financial burden resulting 
from workplace injury.
    WHD enforces the federal minimum wage, overtime pay, recordkeeping, 
and child labor requirements of the Fair Labor Standards Act. WHD also 
enforces the Migrant and Seasonal Agricultural Worker Protection Act, 
the Employee Polygraph Protection Act, the Family and Medical Leave 
Act, the wage garnishment provisions of the Consumer Credit Protection 
Act, and various employment standards and worker protections provided 
in several immigration-related statutes. WHD also administers and 
enforces the prevailing wage requirements of the Davis Bacon Act and 
the Service Contract Act, and other statues applicable to federal 
contracts for construction and the provision of goods and services.
    According to the Department of Labor, the functions of OFCCP, OLMS, 
OWCP, and WHD are distinct and separate from each other, and also 
distinct and separate from every other agency within the Department. 
This distinction was previously recognized when OGE designated the now-
abolished parent agency, ESA, as a separate component of the Department 
of Labor for purposes of 18 U.S.C. 207(c). The action that abolished 
the ESA left OFCCP, OLMS, OWCP, and WHD in its place. The four 
departments were each created by distinct authorities that are separate 
not only from each other but also from the organic statute for the 
Department of Labor; have been explicitly delegated distinct 
responsibilities following dissolution of the ESA; exercise distinct 
and separate functions to implement and enforce distinct and separate 
statutes; as noted above, are each headed by a political appointee who 
reports directly to the Secretary of Labor; and are relatively the same 
size as other components designated by the Department of Labor in 
appendix B to part 2641. Given the manner in which OFCCP, OLMS, OWCP, 
and WHD work independently from other component agencies and the 
general management of the Department of Labor, there exists no 
potential for the use of undue influence or unfair advantage based on 
past Government service.
    Accordingly, OGE is proposing to grant the request of the 
Department of Labor and is proposing to amend the agency's listing in 
appendix B to part 2641 to remove the ESA from the component 
designation list and to designate OFCCP, OLMS, OWCP, and WHD as new 
components for purposes of 18 U.S.C. 207(c).
    The Department of Transportation has requested that OGE designate 
the Pipeline and Hazardous Materials Safety Administration (PHMSA) as a 
distinct and separate component of the Department of Transportation for 
purposes of 18 U.S.C. 207(c). Created pursuant to the Norman Y. Mineta 
Research and Special Programs Improvements Act of 2004, PHMSA is 
responsible for regulating safety in pipeline transportation and 
hazardous materials transportation, see 49 U.S.C. 108, and administers 
the Natural Gas Pipeline Safety Act of 1968, among other authorities. 
PHMSA is headed by an Administrator who reports directly to the 
Secretary of Transportation. The Administrator is statutorily 
authorized to carry out the duties and powers related to pipeline and 
hazardous materials transportation and safety, as well as other duties 
and powers prescribed by the Secretary.
    According to the Department of Transportation, PHMSA is responsible 
for exercising functions that are distinct and separate from the 
Department of Transportation and from the functions of other Operating 
Administrations within the agency. PHMSA is the only mode within DOT 
charged with regulating pipeline safety. It is also the only mode with 
the primary delegated authority to regulate hazardous material 
packaging, and is responsible for drafting all hazardous material 
regulations. In light of the distinct and separate functions of PHMSA, 
there is no potential for the use of undue influence or unfair 
advantage based on based on past Government service. PHMSA is 
comparable in size to several other Department of Transportation 
divisions that are currently designated as separate components in 
appendix B to part 2641, and with the designation of PHMSA, each of the 
Operating Administrations of the Department of Transportation will be 
designated as separate components for purposes of 18 U.S.C. 207(c).
    Accordingly, OGE is proposing to grant the request of the 
Department of Transportation and amend the listing in appendix B to 
part 2641 to designate the Pipeline and Hazardous Materials Safety 
Administration as a new component for purposes of 18 U.S.C. 207(c).
    The Department of Transportation also has requested revocation of 
the designation of the Surface Transportation Board (STB) in appendix B 
to part 2641. The STB, the successor to the Interstate Commerce 
Commission, was established in 1996 as an independent entity within the 
Department of Transportation. On December 28, 2015, the Surface 
Transportation Board Reauthorization Act of 2015 (Pub. L. 114-110) 
established the STB as a wholly-

[[Page 71646]]

independent federal agency. Because the STB is now an independent 
agency and is no longer administratively aligned with the Department of 
Transportation, OGE is proposing to grant the request of the Department 
of Transportation and amend the listing in appendix B to part 2641 to 
remove STB from the component designation list.
    As indicated in 5 CFR 2641.302(f), a designation ``shall be 
effective on the date the rule creating the designation is published in 
the Federal Register and shall be effective as to individuals who 
terminated senior service either before, on or after that date.'' 
Initial designations in appendix B to part 2641 were effective as of 
January 1, 1991. The effective date of subsequent designations is 
indicated by means of parenthetical entries in appendix B. The new 
component designations made in this proposed rule would be effective on 
the date the final rule is published in the Federal Register.
    As also indicated in 5 CFR 2641.302(f), revocation of a component 
designation is effective 90 days after the publication in the Federal 
Register of the rule that revokes the designation. Accordingly, the 
component designation revocations proposed in this rule would take 
effect 90 days after the publication of the final rule effectuating 
these proposed changes. Revocations are not effective as to any 
individual terminating senior service prior to the expiration of the 
90-day period.

II. Matters of Regulatory Procedure

Regulatory Flexibility Act

    As Director of the Office of Government Ethics, I certify under the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) that this proposed rule 
will not have a significant economic impact on a substantial number of 
small entities because it affects only Federal departments and agencies 
and current and former Federal employees.

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply 
to this proposed rule because it does not contain information 
collection requirements that require the approval of the Office of 
Management and Budget.

Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
chapter 25, subchapter II), this proposed rule would not significantly 
or uniquely affect small governments and will not result in increased 
expenditures by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100 million or more (as adjusted for 
inflation) in any one year.

Congressional Review Act

    The proposed rule is not a major rule as defined in 5 U.S.C. 
chapter 8, Congressional Review of Agency Rulemaking.

Executive Orders 12866 and 13563

    In promulgating this rule, the Office of Government Ethics has 
adhered to the regulatory philosophy and the applicable principles of 
regulation set forth in Executive Orders 12866 and 13563. This proposed 
rule has not been reviewed by the Office of Management and Budget under 
Executive Order 12866 because it is not a ``significant'' regulatory 
action for the purposes of that order.

Executive Order 12988

    As Director of the Office of Government Ethics, I have reviewed 
this proposed rule in light of section 3 of Executive Order 12988, 
Civil Justice Reform, and certify that it meets the applicable 
standards provided therein.

List of Subjects in 5 CFR Part 2641

    Conflict of interests, Government employees.

    Approved: October 12, 2016.
Walter M. Shaub, Jr.,
Director, Office of Government Ethics.

    Accordingly, for the reasons set forth in the preamble, the Office 
of Government Ethics proposes to amend 5 CFR part 2641, as set forth 
below:

PART 2641--POST-EMPLOYMENT CONFLICT OF INTEREST RESTRICTIONS

0
1. The authority citation for part 2641 continues to read as follows:

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 18 
U.S.C. 207; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

0
2. Amend appendix B to part 2641 as follows:
0
a. Revise the listings for Parent: Department of Labor and Parent: 
Department of Transportation.
0
b. Effective [DATE 90 DAYS AFTER THE DATE OF PUBLICATION OF THE FINAL 
RULE IN THE FEDERAL REGISTER], remove the Employment Standards 
Administration component from the listing for Parent: Department of 
Labor.
0
c. Effective [DATE 90 DAYS AFTER THE DATE OF PUBLICATION OF THE FINAL 
RULE IN THE FEDERAL REGISTER], remove the Surface Transportation Board 
component from the listing for Parent: Department of Transportation.
    The revisions read as follows:

Appendix B to Part 2641--Agency Components for Purposes of 18 U.S.C. 
207(c)

* * * * *

Parent: Department of Labor

Components:
    Bureau of Labor Statistics.
    Employee Benefits Security Administration (formerly Pension and 
Welfare Benefits Administration) (effective May 16, 1997).
    Employment and Training Administration.
    Employment Standards Administration (expires 90 days after the 
date of publication of the final rule in the Federal Register).
    Mine Safety and Health Administration.
    Occupational Safety and Health Administration.
    Office of Disability Employment Policy (effective January 30, 
2003).
    Office of Federal Contract Compliance Programs (effective upon 
publication of the final rule in the Federal Register).
    Office of Labor Management Standards (effective upon publication 
of the final rule in the Federal Register).
    Office of Workers' Compensation Programs (effective upon 
publication of the final rule in the Federal Register).
    Pension Benefit Guaranty Corporation (effective May 25, 2011).
    Wage and Hour Division (effective upon publication of the final 
rule in the Federal Register).
* * * * *

Parent: Department of Transportation

Components:
    Federal Aviation Administration.
    Federal Highway Administration.
    Federal Motor Carrier Safety Administration (effective January 
30, 2003).
    Federal Railroad Administration.
    Federal Transit Administration.
    Maritime Administration.
    National Highway Traffic Safety Administration.
    Pipeline and Hazardous Materials Safety Administration 
(effective upon publication of the final rule in the Federal 
Register).
    Saint Lawrence Seaway Development Corporation.
    Surface Transportation Board (effective May 16, 1997; expires 90 
days after the date of publication of the final rule in the Federal 
Register).
* * * * *
[FR Doc. 2016-25054 Filed 10-17-16; 8:45 am]
 BILLING CODE 6345-03-P