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proprietary capacity and, therefore, the NLRA pre-emption was inapplicable. Once again, the decision was appealed to the Court of Appeals for the District of Columbia. The Court of Appeals found that the executive order was regulatory in nature and was preempted by the NLRA which guarantees the right to hire permanent replacements.[1] Thus, the Court of Appeals, reversing the ruling of the District Court, found the executive order to be unlawful.
There have also been other courts unable to find an appropriate nexus to support a presidential action through an executive order. In Liberty Mutual v. Friedman,[2] while applying the nexus test used in Contractors Association and Kahn, the court was unable to find a sufficient relationship between the Procurement Act and Executive Order 11246. In this case, the issue involved a regulation promulgated pursuant to Executive Order 11246 in which the government determined that providers of workers' compensation insurance to government contractors are government subcontractors and thus subject to affirmative action requirements governing equal employment opportunity. The court found that "the connection between the cost of workers' compensation policies, for which employers purchase a single policy to cover employees working on both federal and nonfederal contracts without distinction between the two, and any increase in the cost of federal contracts that could be attributed to discrimination by these insurers is simply too attenuated to allow a reviewing court to find the requisite connection between procurement costs and social objectives."[3] However, the court does distinguish this case from Contractors Association since in that case there was sufficient evidence to show that the executive was acting to protect the Federal Government's financial interest in the state projects thereby establishing a sufficiently close nexus sought by both Contractors Association and Kahn.[4]
Executive orders and proclamations have also been used to further the policy agenda of a President through control of the agency decision making process. Two very controversial orders which exemplify this use were President Reagan's Executive Orders 12291 and 12498.[5] On February 17, 1981, the President issued Executive Order 12291 which was designed "to reduce the burden of existing and future regulations, increase agency accountability for regulatory actions, provide for Presidential oversight of the regulatory process, minimize duplication and conflict of regulations, and insure well-reasoned regulations."[6] In essence, this order increased control over executive branch rulemaking.
- ↑ U.S. Chamber of Commerce v. Reich, 74 F.3d 1322 (D.C.Cir. 1996).
- ↑ 639 F.2d 164 (4th Cir. 1981).
- ↑ Id. at 171.
- ↑ Id. at 170-171; Cf. Fullilove v. Klutznick, 448 U.S. 448 (1980) (Powell, J., concurring: importance of legislative findings of discrimination to sustain Act of Congress mandating affirmative action in federal grants for local public works project).
- ↑ 3 CFR 127 (1981); 3 CFR 323 (1985).
- ↑ 3 CFR 1981 Comp., 127, 5 U.S.C. § 601 note, amended by Exec. Order No. 12498, 3 CFR 1985 Comp., 323, repealed by Exec. Order No. 12866, 58 Fed. Reg. 51735 (1993).
