Under the Occupational Safety and Health Act, the Secretary of Labor is authorized to issue whatever standards are reasonably necessary or appropriate to provide safe or healthful places of employment. More than any other provision in federal regulatory law, this language is subject to a plausible nondelegation challenge, because it seems to ask the Secretary to choose among a wide array of intelligible principles for standard-setting. The constitutional challenge raises serious and unresolved questions for both regulatory policy and administrative law. In answering those questions, courts have three principal alternatives. The most aggressive approach would be to invalidate the statute in the hopes of encouraging, for the first time, sustained legislative deliberation about the proper content of occupational safety and health policy. The most modest approach, rooted in the Avoidance Canon, would be to construe the statutory language to produce floors and ceilings on agency action; that approach would require the Secretary to ban significant risks while forbidding the Secretary from regulating trivial or de minimis risks and also requiring the Secretary to show that any regulations are feasible. The third and preferable approach, also rooted in the Avoidance Canon, would be to construe the statute so as to require the agency to engage in a form of cost-benefit balancing. Such a construction would have the advantage of promoting greater transparency and accountability at the agency level. At the same time, it would raise difficult questions about the precise nature of such balancing in the context of occupational safety policy and also about legal constraints on agency assessment of both costs and benefits. Because of the distinctive nature of workplace safety, the best approach would give the agency considerable flexibility on questions of valuation while also permitting serious attention to distributional factors.
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Linkage and the Deterrence of Corporate Fraud
Corporate fraud is often presumed to be the type of crime that can be deterred. Those who embrace deterrence as a goal of law enforcement, however, often ignore the tradeoffs between the deterrence of potential offenders and the deterrence of those “mid-fraud perpetrators” who are already mid-way through illicit schemes when the government announces a change in policy. Unlike potential offenders, mid-fraud perpetrators have no incentive to cease criminal conduct in response to increases in sanctions or likelihood of detection. This is true because their cessation of future misconduct increases the probability that their prior conduct will be detected and punished. If a CFO has lied to a company’s shareholders in Quarter 1 about the company’s profits, his cessation of lying in Quarter 2 substantially increases the chances that someone will focus on and detect his previous lies in Quarter 1. The problem with linkage is that criminal sanctions aimed primarily at deterring new offenders may also encourage “ongoing” offenders to invest in techniques that decrease the likelihood of detection. Policymakers contemplating changes in law enforcement policy should therefore consider the linkage problem in calculating the benefits and drawbacks of different law enforcement strategies.