Regulations require an agency to enforce them. While states have their own agencies that enforce business regulations, this chapter will examine federal agencies. Federal agencies run the gamut from Amtrak to the Ballistic Missile Defense Organization to the Farm Credit Administration. There are literally hundreds of departments and agencies listed at www.usa.gov. We can’t look at every agency, but we’ll review the big players that enforce the regulations businesses most often face.

There are dozens of agencies that regulate financial markets. Many of them are highly specialized like the Commodities Future Trading Commission, Federal Reserve Board, and Federal Deposit Insurance Corporation. Unless you’re in banking, you will have little occasion to interact with these agencies. And because of their highly specialized nature, they are rarely covered in a global business law class. There are three federal agencies that are likely to be covered and more likely to be encountered. Those are the Department of Justice, Securities and Exchange Commission, and Federal Trade Commission.

The Department of Justice (DOJ) and its 40 components exist to enforce the laws and defend the interests of the United States. It also works to ensure public safety against foreign and domestic threats, works with states to control crime, and works to ensure fair and impartial administration of justice for all Americans. These missions are much broader than financial markets alone, however, it has mandates to enforce antitrust laws and to try federal white-collar crimes.

Many familiar departments fall under the DOJ, including Attorney General; Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Naturalization Service; and the Federal Bureau of Investigation. While the functions are different, they all work toward enforcing the laws of the United States.

The Antitrust Division has spent more than 60 years protecting the competitive process by enforcing the antitrust laws. The Antitrust Division enforces the Sherman Act and Clayton Act, which I discussed in Chapter 4. The Department of Justice brings criminal and civil enforcement actions to prohibit monopolies and antitrust behavior by businesses.

The Civil Division represents the United States in a host of areas. Key areas include recovering money owed to the United States or victims of fraud, loan default, bankruptcy, violation of consumer laws, or unsatisfied judgments. It also enforces consumer protection laws. If a company violates any of these areas, this division can bring suit against it.

The Criminal Division’s main focus is on counterterrorism and more traditional crimes like drug and organized crime, but it also plays a role in white-collar federal crimes. It enforces federal laws regarding intellectual property, asset forfeiture and money laundering, and fraud. Fraud involves corporate, securities and investment fraud, financial institution and insurance fraud, and government program and procurement fraud.

The Securities and Exchange Commission (SEC) regulates the U.S. securities markets. Its mission is to “protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation.” The goal of the laws and regulations that the SEC oversees is to ensure that all investors have access to certain information about companies and investments prior to buying stock. Companies are required to make public disclosures of financial and other information. The SEC oversees this public disclosure and enforces violations.

The hope is that with this transfer of information, the capital markets will be more active, efficient, and transparent. The SEC oversees securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. The SEC has power to bring enforcement actions against the individuals and companies that violate the laws or regulations. The typical investigation involves insider trading, accounting fraud, and providing false or misleading information.

The framework for the SEC to oversee the securities markets comes from the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Sarbanes-Oxley Act. The Securities Act of 1933 requires that investors receive financial and other significant information before the security is offered for public sale, and prohibits deceit, misrepresentations, or fraud about the sale of securities. The Securities Exchange Act of 1934 created the SEC and gave it disciplinary powers and required publicly traded companies to make periodic reports. The Investment Company Act of 1940 regulates the organization of companies that are primarily in investing, reinvesting, and trading in securities whose own securities are offered to the public. Finally, Sarbanes-Oxley gives the SEC authority to oversee reforms to corporate responsibility, financial disclosures, and accounting fraud. (See Chapter 22 for more on these laws.)

As with many of these agencies, the SEC oversees rule-making to implement legislation Congress has passed. Because the statutes the SEC enforces are broad, the rule-making process allows the SEC to provide guidance on how the law is interpreted and will be applied. The rule-making process follows the steps outlined in Chapter 5: release of the concept, rule proposal with comment period, and then rule adoption.

The role of the SEC has expanded in the aftermath of accounting scandals at large firms like Enron, WorldCom, and Adelphia, thanks to Sarbanes-Oxley. The SEC’s duties and authority is carried out by the Division of Corporate Finance, Division of Trading and Markets, Division of Investment Management, and Division of Enforcement. The Division of Enforcement can utilize civil action by filing a complaint with a U.S. District Court and seeking an injunction or monetary damages. It may also pursue administrative action such as sanctions in a proceeding in front of an administrative law judge.

The Federal Trade Commission (FTC) was created in the Federal Trade Commission Act of 1914 with the purpose of preventing unfair methods of competition. Since that time, the FTC has developed into an agency that does much more. It oversees consumer protection and competition in many sectors of the economy. The Wheeler-Lea Amendment gave the FTC broad authority to prevent “unfair and deceptive acts or practices.”

The Bureau of Consumer Protection protects consumers against unfair, deceptive, or fraudulent business practices. The Division of Advertising Practices enforces federal truth-in-advertising laws with a focus on claims of foods, drugs, dietary supplements, and anything else claiming a health benefit; tobacco and alcohol advertising; protecting children online; and claims made in newspapers, through direct mail, or on the Internet.

The Division of Consumer and Business Education plans and implements campaigns aimed to educate consumers. It also partners with four other agencies on www.consumer.gov. This site is designed to be a one-stop shop for consumers regarding consumer issues with links to free annual credit reports and the national do not call registry.

The Division of Enforcement ensures enforcement of administrative and court orders in consumer protection cases. It conducts investigations and prosecutes civil actions involving fraudulent, unfair, or deceptive marketing and advertising practices. And the division enforces consumer protection laws, rules, and guidelines.

The Division of Financial Practices develops policy and enforces laws related to financial and lending practices that affect the consumer. The Division of Marketing Practices monitors fraudulent marketing. The Division of Privacy and Identity Protection oversees issues related to consumer privacy, credit reporting, identity theft, and information security.

The Bureau of Competition is the branch of the FTC empowered to prevent anticompetitive mergers and other antitrust practices discussed in Chapter 5. It reviews proposed mergers and other business activities for anticompetitive behavior. If it finds such behavior, the Bureau will recommend formal law enforcement action.

The Bureau of Economics supports the efforts of the FTC by evaluating the economic impact of the FTC’s actions. It provides economic advice for the enforcement of antitrust and consumer protection enforcement. It studies the effects of legislative options and regulations. And it analyzes markets and industries.

Several agencies play an active role in overseeing employment laws and policies. The four we’ll examine here are the Department of Labor, Equal Employment Opportunity Commission, National Labor Relations Board, and Occupational Health and Safety Administration. As with the prior section, there are many more we could examine, but these are the biggest players most likely to be covered in a text.

The Department of Labor was created by a law signed in 1913. Its purpose was to “foster, promote and develop the welfare of working people, to improve their working conditions, and to enhance their opportunities for profitable employment.” Since its earliest days the department has tried to balance the needs of labor, business, and the public at large.

The current mission of the department is to foster and promote the welfare of the job seekers, wage earners, and retirees of the United States by improving working conditions, protecting retirement and health care benefits, strengthen collective bargaining, and tracking employment trends. The laws it oversees include those guaranteeing a safe and healthy working environment, minimum and hourly wage and overtime pay, freedom from employment discrimination, and unemployment insurance.

The Department of Labor has numerous divisions, each focusing on a different segment of its directive and the laws it enforces. They include the Employee Benefits Security Administration, Mine Safety and Health Administration, and Bureau of Labor Statistics.

The Equal Employment Opportunity Commission (EEOC) was created by Title VII of the Civil Rights Act of 1964 with the purpose of eliminating employment discrimination in the workplace. The EEOC coordinates all regulations, practices, and policies; interprets laws; and monitors employment discrimination programs.

The EEOC enforces Title VII of the Civil Rights Act, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967, Sections 501 and 505 of the Rehabilitation Act of 1973, Titles I and V of the Americans with Disabilities Act of 1990, and the Civil Rights Act of 1991. Several of these laws are examined in Chapter 18. In a nutshell, the EEOC enforces these laws because they all contain some type of employment discrimination. The EEOC will investigate claims of discrimination. If it finds discrimination, it may prosecute the case, reach a settlement, or allow the claimant to pursue litigation on his or her own.

The National Labor Relations Board (NLRB) is an independent agency that enforces and administers the National Labor Relations Act (NLRA). See Chapter 17 for an explanation of that law. The NLRA governs interactions between unions and employers and guarantees the right of employees to organize and bargain collectively. The NLRA also provides that employees can’t be forced to organize into unions. The NLRB was created by Congress in 1935 to enforce the NLRA and reduce interruptions in the economy caused by labor interruptions.

The NLRB has two main jobs. The first is to prevent and correct unfair labor practices regardless of who committed it—labor or employers. The second function is to determine whether employees want to organize their workplaces. The NLRB is organized into two sections:

When a charge is filed with the NLRB that an unfair labor practice has occurred a field office conducts an investigation. The regional office can dismiss the charges at that point, seek a voluntary settlement, or issue a formal complaint that will be heard by an administrative law judge. That decision may be appealed to the board. The board’s decision then can be reviewed by a Court of Appeals.

The General Counsel strives to complete investigations and if needed file complaints within 7 to 15 weeks of the complaint being filed if a settlement can’t be reached.

The Occupational Health and Safety Administration (OSHA) was created in 1970 under the Occupational Safety and Health Act of 1970. The act provides that each employer “shall furnish” a place of employment free from recognized hazards and “shall comply” with the standards, rules, and regulations promulgated under the act.

OSHA’s role is to protect the safety and health of American workers by setting and enforcing standards, providing training, and encouraging process improvement in the workplace. OSHA, in combination with state partners, has approximately 1,100 inspectors who conduct on-site inspections of employers. OSHA also creates protective standards, enforces those standards, and helps employers comply with the standards.

Since 1971, OSHA has helped cut workplace fatalities by 62 percent and occupational injury and illness rates by 42 percent. Its inspectors oversee more than 8.9 million worksites. In 2006, less than 1 percent of inspections or 467 came under OSHA’s Enhanced Enforcement Program for those employers that repeatedly and willfully violate the law. OSHA offers education and compliance assistance to small businesses.

Since the late 1960s Congress has passed laws that focus on protecting the environment. Two of the agencies that enforce those laws are the Environmental Protection Agency and the Fish and Wildlife Service.

In the late 1960s and early 1970s, Congress began aggressively regulating the environment. In order to enforce its new laws, Congress created the Environmental Protection Agency (EPA).

The EPA was established in 1970 as part of a federal government push to provide cleaner water, air, and land. The EPA focuses on pollutants that can damage the environment and harm people. It also tries to find ways to reverse and repair the damage that’s already been done. To accomplish this it performs environmental research in laboratories around the country and sponsors research. It also strives to further environmental education.

The EPA administers more than 20 environmental laws through regulations it proposes and adopts. Those acts include the Atomic Energy Act, Energy Policy Act, and Oil Pollution Act. However, the EPA is known more for enforcing the following acts:

One tool that the EPA uses is regulation. It develops new regulations as laws are passed and then enforces those regulations. It also offers financial assistance to state environmental programs and provides grants to educational institutions that research areas that need an influx of scientific knowledge.

Evolving from its earliest beginnings in 1871 as the U.S. Commission on Fish and Fisheries into a 1940 reorganization that created the current agency, the Fish and Wildlife Service (FWS) works with others to conserve, protect, and enhance fish, wildlife, plants, and their habitats. It takes a multipronged approach to fulfilling its mission. From conserving land and resources to achieving recovery and preventing extinction, the agency integrates science, stewardship, and partnerships to administer the Endangered Species Program.

The FWS enforces federal wildlife laws and has been a leader in implementing the Endangered Species Act since it passed in 1973. The FWS works with other agencies to conserve threatened and endangered species by ensuring that their actions do not jeopardize species or habitats. The agency also provides grants to help states and landowners.

While there are several hundred more agencies, we’ll look at two more. The Federal Communications Commission and U.S. Patent and Trademark Office regulate important areas of the economy.

The Federal Communications Commission (FCC) was created by the Communications Act of 1934. The FCC regulates communications in most of its forms: interstate and international communications by radio, television, wire, satellite, and cable.

Five commissioners direct the FCC. The FCC has been organized into seven bureaus. The Consumer and Governmental Affairs Bureau interacts with consumers to educate them about goods and services, as well as receive their input on the commission’s work. Its divisions develop consumer policy concerning regulated entities such as common carrier (telephone), broadcast, wireless, satellite, and cable companies. It has the power to resolve complaints about slamming, truth-in-billing, telemarketing, and monitoring trends that affect consumers.

The Consumer Inquiries and Complaints Division can mediate and attempt to settle unresolved disputes arising from consumer complaints.

The Enforcement Bureau is tasked with enforcing the Communications Act and the commission’s rules in order to promote robust competition and innovation in the market. The key areas of enforcement are consumer protection enforcement, local competition enforcement, and public safety enforcement. The FCC has many other bureaus and offices within it. For example, the Media Bureau regulates AM and FM radio, television stations, cable television, and satellite services. Wireless telecommunications regulates the use of radio spectrum.

As with the other agencies, the FCC also regulates under its authorizing legislation. Consumers and businesses can comment on proposed regulations.

While the name has changed during the last 200 years, the U.S. Patent and Trademark Office (USPTO) mission remains the same. As articulated in Article I of the Constitution, it is to secure to inventors for limited times the right to use and profit from their discoveries. The USPTO is fairly unique because it is fully funded by fees. Chapter 21 examines intellectual property and the laws the USPTO enforces.

The USPTO grants patents and trademarks. The staff is highly trained because they must analyze the science behind new inventions and ensure that nobody else made the discovery prior to the applicant. By granting patents and registering trademarks, the USPTO protects valuable products of companies. Unlike other agencies, the USPTO does not enforce the patent and trademark laws. That responsibility rests with the owner of the patent or holder of the trademark.