New Kentucky Law Streamlines Occupational Licensing for Military-Affiliated Professionals

On March 26, Kentucky Gov. Matt Bevin signed HB 323, which will improve occupational licensure portability for veterans, military spouses, and National Guard and Reserve members.1 The bill will require administrative bodies that issue occupational licenses and other regulatory authorizations to endorse and license any applicant that is a member of the National Guard or Reserves, a veteran, or the spouse of a veteran or military member, provided he or she possesses or recently possessed an equivalent license in another state.

The out-of-state license will not be considered for recognition if the license has been expired for more than two years; the license has been revoked for disciplinary reasons or is otherwise not in good standing; or if the applicant demonstrates a substantive deficiency in training, education or experience that could pose a health or safety risk to the public.

While well-intentioned, occupational licensure has been linked to some unfavorable economic effects, such as increased unemployment, higher prices and muted geographic mobility.2,3,4 With over 25 percent of U.S. workers possessing a license, the ubiquity of occupational licensing can exacerbate the difficulty job seekers with military affiliation already have in securing employment.5

According to the U.S. Department of Labor, various military occupations offer training and experience in skills that are applicable to at least 962 disparate civilian occupations.6 Nevertheless, veterans routinely cite obtaining employment as one of the most challenging aspects of transitioning to civilian life.7 Occupational licensing regulations can magnify this difficulty when states fail to recognize out-of-state licenses and disallow applicants to use military experience and training in lieu of civilian credentials to fulfill licensing requirements. 

Spouses of military service members are particularly disadvantaged by licensing due to their propensity to work in tightly regulated industries (e.g., education, nursing and child care) and their frequent relocation across state lines.8 Specifically, military spouses are ten times more likely to have moved across state lines in the past year relative to their civilian counterparts.8 Because licensing procedures are largely determined by boards at the state level and can vary considerably, military spouses seeking to maintain licensure throughout geographic relocation can face substantial encumbrances.

The Kentucky bill should help alleviate some of these issues faced by veterans, military members and their spouses. By requiring licensing boards to endorse out-of-state licenses for military-affiliated applicants, the monetary and time costs of licensure are markedly reduced, potentially providing more employment opportunities for veterans, military members and especially their spouses.

Other states have taken similar legislative action to try to remove barriers to work for military-affiliated individuals seeking licensure. Alabama HB 388 (2018), which was signed last year, requires licensing boards to endorse military spouses licensed in another state with equally or more rigorous licensing standards.9 The bill also contains a provision that creates a temporary license for applicants from states with less stringent licensing requirements.

Vermont H 906 (2018) went into effect last year and sought to reduce the amount of redundant retraining members of the military must undergo to be eligible for a license.10 To that end, the bill credits members of the military with civilian experience and training for comparable military credentials.

As states continue to reassess their occupational licensing framework for unsound and overly burdensome provisions, a focus on reducing inefficient barriers and fostering license portability for veterans and military families is an important component that can ensure both efficient labor market utilization and public safety.

Sources

  1. Kentucky General Assembly. HB 323: AN ACT relating to reciprocal occupational licensure for members of the United States military, reserves, National Guard, veterans, and their spouses. 2019. Retrieved from https://apps.legislature.ky.gov/recorddocuments/bill/19RS/hb323/orig_bill.pdf
  2. Blair, P. Q., & Chung, B. W. (2018). How Much of Barrier to Entry is Occupational Licensing? (No. w25262). National Bureau of Economic Research.
  3. Kleiner, M. M., Marier, A., Park, K. W., & Wing, C. (2016). Relaxing occupational licensing requirements: Analyzing wages and prices for a medical service. The Journal of Law and Economics, 59(2), 261-291.
  4. Johnson, J. E., & Kleiner, M. M. (2017). Is Occupational Licensing a Barrier to Interstate Migration? (No. w24107). National Bureau of Economic Research.
  5. U.S. Bureau of Labor Statistics. (2018). Data on certificates and licensing. Retrieved from https://www.bls.gov/cps/cpsaat49.pdf
  6. U.S. Department of Labor. 2014. PILOT STUDY Translating Military Skills to Civilian Employment. Retrieved from https://wdr.doleta.gov/research/FullText_Documents/Pilot_Study_Translating_Military_Skills_to_Civilian_Employment_Acc.pdf
  7. Iraq and Afghanistan Veterans of America (2019). 2019 Member Survey. Retrieved from https://cultureondemand.com/iava-2019/
  8. U.S. Department of the Treasury and U.S. Department of Defense. 2012. Supporting Our Military Families: Best Practices for Streamlining Occupational Licensing across State Lines. Retrieved from http://archive.defense.gov/home/pdf/Occupational_Licensing_and_Military_Spouses_Report_vFINAL.PDF
  9. The Alabama Legislature. HB 388: Military Family Jobs Opportunity Act. 2018. Retrieved from http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2018RS/PrintFiles/HB388-int.pdf
  10. Vermont General Assembly. H.906 (Act 119): An act relating to professional licensing for service members and veterans. 2018. Retrieved from https://legislature.vermont.gov/Documents/2018/Docs/ACTS/ACT119/ACT119%20As%20Enacted.pdf

Occupational Licensing Consortium Convenes Second National Meeting

On November 28-30, the states a part of the occupational licensing policy learning consortium convened for the second annual meeting in Clearwater, Florida. The state teams had the opportunity to focus on four population groups who are disproportionately affected by licensure—individuals with criminal records, veterans and military spouses, dislocated workers and immigrants with work authorization. License portability, reciprocity, and interstate compacts were also major topics. States had the opportunity to connect with and learn from fellow consortium states, as well as hear from states outside of the consortium that have taken action on occupational licensure including Nebraska and Michigan. 

New funding allowed for four new states to participate in this year’s consortium meeting. Idaho, New Hampshire, North Dakota, and Vermont formed state teams made up of legislators, regulatory agencies, and governor’s staff and joined the original 11 states in Clearwater to begin action planning their licensure reform. These states who recently came aboard the project will be part of the consortium going forward.

CSG was also able to expand existing state teams to include more regulatory board members. Licensure reform is a challenging policy area with many competing interests. Bringing together all stakeholders is something CSG wanted to accomplish as a part of this effort. Pursuing licensure reform without input from the licensure boards is not something states have had much success with. In order to engage more regulatory agencies, CSG used additional funding to expand state teams to include these key stakeholders.

The focus on particular reforms from the consortium states as discussed at the meeting ranges widely from sunrise/sunset review, interstate compacts, communications/marketing plans, board consolidation, data collection/standardization, and laws for military families.

One additional point of discussion for the state teams was developing a transition plan for states with outgoing governors and legislators. With state teams being made up heavily of legislators and governor staff, some teams are needing to come up with a plan maintain momentum once these new state leaders take office. The partners at CSG, NCSL, and NGA have committed to developing a transitional memo that states can request which will explain the project and ask for support from the newly elected official.  

The consortium will formally meet one more time in the summer of 2019, but the project partners hope this is just the beginning of state occupational licensing reform.

Vermont Deputy Secretary of State Chris Winters said, “This was the best conference I’ve ever been a part of. I was so glad to be able to contribute, and was also really proud of my Vermont team and their focus. This conference has energized them.”

Each consortium state has accomplished things throughout this project, but the latest consortium meeting in Clearwater was a great time for states to reset focus, refine vision, and energize to pursue common sense licensure reform.

States Explore Occupational Licensure Reform

The consortium of states participating in the U.S. Department of Labor’s Occupational Licensing: Assessing State Policy and Practice project recently began their second round of project meetings to discuss occupational license reform. The 11 states–Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah and Wisconsin–are individually meeting to further review their licensure process, engage with policy experts and develop action plans. The state team meetings will culminate this year in the project’s second multistate learning consortium summit to be held Nov. 28-30 in Clearwater, Florida.

The Council of State Governments, along with its project partners the National Conference of State Legislators and the National Governors Association, continues to deliver technical assistance to the states during the project by facilitating meetings, issuing policy reports and collecting state licensing data. The partners recently published four reports that focus on the unique challenges and barriers specific to immigrants with work authorizationpeople with criminal recordslow-income, unemployed & dislocated workers; and veterans and military spouses.

The following is an update on the progress some of the states have made during the second round of meetings.

Kentucky

The Kentucky team’s meeting on Sept. 19 provided the group an opportunity to learn about the differences in state regulatory board structures as well as discuss opportunities for further research including sunrise/sunset review legislation.

“Occupational licensure is a topic that really encompasses a multitude of policy areas including workforce and economic development and veterans’ affairs,” said Brian Houillion, chief of staff and executive director of financial management and administration for the Kentucky Department for Local Government. “The goal is to take a look at what regulatory framework will best serve the needs of the state. For example, during the meeting we explored the different types of state regulatory board structures as part of our ongoing conversation on finding ways to improve our licensure board system.”

Kentucky was also recently awarded an additional $450,000 Department of Labor grant to further help improve the licensure process in the state.

“The grant allowed us to bring on a grant and project administrator to better facilitate the process of licensing reform,” said Houillion. “The additional staff will assist the state’s project team to complete the smaller steps that occur between meetings and stay on objective.”

Utah

During Utah’s Sept. 21 project meeting, the team learned from policy experts about competency-based testing, improving the processes of sunrise/sunset provisions, and licensure burdens specific to immigrants.

Utah state Sen. Todd Weiler, who is a member the state’s Occupational and Professional Licensure Review Committee, said the meeting was a continuation of the team “doing its due diligence by taking deep dives into policy areas and learning from the experts.” He added that one of the team’s primary purposes was to “do the laboring work before the Legislature considers additional reform.”

“Utah is in a transition state as it moves from an older model to a more up to date approach,” he added. “The project team is answering the questions about the health and safety objectives to be achieved through licensure and how to step away from the turf battle of professions and focus on how the customer is best served. The pendulum has swung to decrease regulation wherever it makes sense.”

Utah enacted a number of occupational licensure reform legislation last year that focused on improving licensure mobility, reducing regulation and assisting relocating military families. 

Maryland

Maryland’s Sept. 25 project team meeting centered on ways to expand licensure portability and improve stakeholder messaging. Victoria Wilkins, commissioner of the Division of Occupational and Professional Licensing at the Maryland Department of Labor, Licensing and Regulation commented on the importance of improving the state’s licensure process through the project.

“Anything that decreases regulations to get more people employed while still maintaining public health and safety is something we want to explore,” she said. “The project allows us to hold cross sectional learning meetings with a variety of stakeholders to improve the conversation about licensure.”

The state team is organized in a committee-based structure, which divides the group’s focus areas into the categories: identifying barriers, business needs, community relations, data and research, and addressing the “low hanging fruit” of licensure reform. Wilkins said the “low-hanging fruit” committee could, for example, address some licensure issues outside of the state’s legislative sessions.

“The Legislature only meets once a year, so the committee was established to identify what are some of the simpler changes that could be made in the meantime,” she said. “For instance, the passing score thresholds for plumber licensing exams were recently revised to bring them into uniformity with Maryland’s other licenses.”

The meeting’s guest speaker was Karen Goldman, attorney advisor for the Office of Policy Planning at the Federal Trade Commission, who presented her recently completed FTC policy report on licensure mobility. In the report, Goldman highlighted the important role that CSG’s National Center for Interstate Compacts serves when it comes to how states deal with structuring reciprocity. 

CSG National Conference

The Council of State Governments is providing additional opportunities for states to engage with policy experts and advance the conversation on occupational licensure reform during its annual National Conference, to be held in Greater Cincinnati-Northern Kentucky, Dec. 5-8. The conference will include multiple sessions to foster learning about licensure reciprocity through state compacts, lessons from military members and spouses state licensing policies, and specific case studies of how certain professions have handled reciprocity.

To find out more information about the conference, including how to register, please visit https://www.csg.org/2018nationalconference/Agenda18.aspx

Veterans’ Employment Service Unveils Resource for Military Spouses

By Jay Phillips

On June 28, 2018, the U.S. Department of Labor’s Veterans’ Employment and Training Services, or VETS, announced a professional license and credential finder portal for military spouses. The webpage comes after President Trump’s Executive Order Enhancing Noncompetitive Civil Service Appointments of Military Spouses. The webpage provides a comprehensive one-stop destination for occupational licensing portability, pulls resources from across the federal government, and highlights states with licensing rights for military spouses.

“Military spouses serve alongside our nation’s servicemen and women,” U.S. Secretary of Labor Alexander Acosta said in a press release announcing the webpage. “States should act to remove excessive regulatory barriers to work so that our military spouses can help support their families. This new site highlights states’ efforts to help military spouses secure good, family-sustaining jobs.”

Military spouses can use the portal to search for state laws, regulations and guidelines on occupational licensing. The website also includes information on how occupational licenses can be recognized from one state to another. Many states have specific standards for military spouses to encourage the obtainment of a license in their state. Methodologies range from endorsement, expediting, temporary licenses or a variety of combinations.

The new tool provides spouses with information they need to continue their careers following relocation to another state. Finding solutions for veterans and military families to barriers related to occupational licensing is a priority of CSG. A current CSG project funded by the Department of Labor, Occupational Licensing: Assessing State Policy and Practice, prioritizes veterans and military spouses as a target population for licensure reform.

CSG’s National Center for Interstate Compacts is also a vital resource for military families looking for reciprocity of licensure. Compacts vary in authority and structure based on the occupation but are a proven best-practice for enhancing reciprocity among states in occupational licensing.

New Occupational Licensing Analysis Opposes Traditional Theory

A commonly cited argument for occupational licensing reform states that licensing results in restricted employment growth and higher wages for licensed workers, which in turn increases consumer costs. Higher wages benefit licensed workers, but wage disparity leads to inefficiency and unfairness, including reducing employment opportunities and depressing wages for excluded workers.

However, CSG’s analysis of data from the Bureau of Labor Statistics (BLS) finds no evidence that licensing has any effect at all on wages and employment growth for electricians and massage therapists. Using original CSG time-series licensing data along with occupational employment data from BLS’ Occupational Employment Statistics (OES) program, this analysis compares wage trends before and after licensure, to a control state that does not license the occupation at all. Plotting wages for the licensed state and the control state, with hourly median wages on the vertical axis and year on the horizontal axis, while drawing a vertical line at the year of initial licensure shows any potential licensing effect. Deviations from wage trends prior to licensure can be attributed to licensing if the effect is similar across several state comparisons.

(SEE ATTACHMENT FOR PLOTTED DATA)

When comparing the time series data plotted for licensed and non-licensed states, there is no evidence that these occupations becoming licensed has an effect on wages and employment. The result is most convincing for electricians. When looking at the plotted time series data, the trend lines barely changes at all upon initial licensure. If a licensing effect did exist, we would expect the line to trend upward for wages and downward for employment after a state licenses electricians.  However, when comparing with the control states that do not license, the trend lines hardly deviates at all upon initial licensure. This result is consistent across all three sets of state comparisons.

The result seems to hold even for an occupation within an entirely different industry. The trend lines for massage therapists are more erratic, but still do not seem to support a possible licensing effect. There must be other effects at work causing the wage and employment lines to shift, but these shifts do not occur in sync with the treatment state adopting a license requirement.

If most economists agree with the assumption that occupational licensing increases wages for licensed workers and decreases what are some possible explanations for this result? It may be the case that a licensing effect takes many years to be seen. The increase in wages and decrease in employment growth could be a slow, gradual process over the course of many years that eventually restricts entrants into the profession, but does not do so initially.

Secondly perhaps the licensing requirements adopted are not severe enough to deter an aspiring practitioner from entering the occupation.

Electricians

StatesExperienceNo. Of
Exams
Length of
Renewal
Continuing
Education
Initial
Cost
Renewal
Cost
Iowa16000, h13187575
Kentucky4, y11615050
Massachusetts8000, h1345330104

Massage Therapists

StatesTraining
Hours
No. Of
Exams
Length of
Renewal
Continuing
Education
Initial
Cost
Renewal
Cost
Illinois600124837087.5
Michigan5001354290115
Nebraska10001224322127

The above tables from CSG, NCSL, and NGA’s Occupational Licensing Database outline the licensing requirements for electricians and massage therapist in each treatment state where a license was adopted. Based on previous literature, if a licensing effect did exist for these occupations, you would expect the effect to be even more noticeable in the graphs for Nebraska and Iowa. The training and experience requirements for these two states are double the requirements for the other states who also recently adopted a license, yet the trend lines do not suggest that a more severe licensing effect exists.

This result is important to policy makers who are looking for new ways to grow their state’s economy. Occupational licensing reform has been a workforce priority of the two most recent presidential administrations with President Obama’s administration releasing a 76-page policy framework for state officials, and the Trump administration awarding large grants to enhance state occupational licensing portability of which CSG was a co-recipient.

Enhancing portability of state licensing and creating more a more equitable system for vulnerable populations like veterans and military families, people with criminal records, immigrants, and long-term unemployed workers is a crucial need. However, it is not clear from this evidence that deregulation will have the economic impacts that some believe.

If the result of a state adopting a license for certain occupations is negligible for these economic indicators, perhaps policymakers should focus their efforts on things other than deregulation when figuring out how to grow their state economies. Some argue that removing these licensing barriers will result in an influx of new practitioners into the occupation which will stimulate job growth. The evidence from CSG’s analysis does not show that this would be the case. If an occupation becoming licensed does not affect wages or employment, then deregulating an occupation likely won’t affect these outcomes either.

Plotted BLS Data

U.S. Licensing System

By Heather Perkins

The current economic cost of professional and occupational regulation directly impacts one quarter1 of the working population in the U.S. The number of professions or occupations requiring a government license is nearly one quarter2 of the current working population. The majority3 of this increase has been the result of the increasing number of professions or occupations requiring a license. Recent domestic evidence also shows that states vary dramatically in their rates of licensure, ranging from 12 percent to 33 percent.

  Download the Article in PDF / E-Reader Compatible Format



About the Author
Adam Parfitt 
is executive director of the Council on Licensure, Enforcement and Regulation (CLEAR), a position he has held for the last ten years. Previously he served as the organization’s Director of International Relations. Prior to his time with CLEAR. Adam worked with several associations of state government officials.


Professional and occupational regulation is predominantly a state function, undertaken and protected under Article X of the U.S. Constitution. Article X grants states the authority to regulate activities affecting the health, safety and welfare of their citizens. Practitioner disciplinary matters follow each state’s administrative procedures act. Exceptions to this state oversight are the growing numbers of municipal-level licensing and professionals employed by the federal government to work within state borders.

Recent Scrutiny
Research suggests that nearly one quarter4 of the working population in the U.S. requires a government license for their profession or occupation, a number that has risen from 5 percent in the 1950s. The vast majority5of this increase has been the result of the increasing number of professions or occupations requiring a license. Meanwhile, economists suggest that the wage effect of professional and occupational licensing can be as high as 15 percent.6 Little wonder, then, that close attention is being paid to this policy lever, its implications and implementation.

Indicative of the higher profile enjoyed by professional and occupational regulation, a recent White House press release7 called for reforms to the existing system, stating:

“While licensing can offer important health and safety protections to consumers, as well as benefits to workers, the current system often requires unnecessary training, lengthy delays, or high fees. This can in turn artificially create higher costs for consumers and prohibit skilled American workers like florists or hairdressers from entering jobs in which they could otherwise excel.”

Recent developments have focused upon the following perceived shortcomings within the system:

  • The scale and growth in the number of professions and occupations affected by professional or occupational regulation, in addition to the disparity in approaches across the states;
  • Perceived attendant restrictions on professional mobility, affecting both civilian populations and military families (the latter disproportionately affected by deployments to military bases in different jurisdictions);
  • Applicability related to new working patterns (including telework and telepractice);
  • Issues of fairness, related particularly to those with qualifications from foreign institutions, as well as those with a criminal record;
  • The availability of consumer information about providers and practitioners; and
  • Issues related to oversight and broader governance.

Scale and Growth of Professional and Occupational Regulation
A recently published list of licensing best practices8provides a guide to the focus of future reforms in the field:

Ensure that Licensing Restrictions are Closely Targeted to Protecting Public Health and Safety, and are Not Overly Broad or Burdensome

1. In cases where public health and safety concerns are mild, consider using alternative systems that are less restrictive than licensing, such as voluntary state certification (“right-to-title”) or registration (filing basic information with a state registry).

2. Make sure that substantive requirements of licensing (e.g., education and experience requirements) are closely tied to public health and safety concerns.

3. Minimize procedural burdens of acquiring a license, in terms of fees, complexity of requirements, processing time and paperwork.

4. Where licensure is deemed appropriate, allow all licensed professionals to provide services fully of their current competency, even if this means that multiple professions provide overlapping services.

5. Review licensing requirements for the formerly incarcerated, immigrants and veterans to ensure that licensing laws do not prevent qualified individuals from securing employment opportunities, while still providing appropriate protections for consumers.

The desire to ensure that regulation is proportionate and reflective of the risk to the public is echoed elsewhere, notably in a recent report9 from the Professional Standards Authority in the U.K., which developed a “continuum of assurance” as part of efforts to provide “a methodology for assessing and assuring occupational risk of harm.”10

The Professional Standards Authority’s model contains two stages: profiling the risk of harm that results from the practice of a profession; and determining the external risk factors that may exist. The latter includes the numbers of practitioners and potential clients, methods by which the risk can be managed (including through the use of technology), the economic cost (including effects on cost and supply), innovation, perceived risk and unintended consequences.

Having been encouraged to consider alternative policy levers, some states have attempted to deregulate, or de-license, existing professions and occupations. Research suggests11 however, that such initiatives are rarely successful. A recent Bureau of Labor Statistics report commented that “In nearly every instance that we analyzed, de-licensing and de-licensing attempts have been met not only with stiff resistance but also usually (when successful) with a movement to reinstitute licensing. Clearly, these results reflect the lobbying power of the occupations in question and their professional associations.”12 The report goes on to suggest additional reasons for such resistance, including the likelihood that the costs (of delicensing) to members of licensed practitioners is high, at the same time as the benefits to the public are arguably widespread, but limited. Other possibilities include the unwillingness of state legislatures to deny the states a source of revenue, given that most regulatory boards are, at a minimum, self-sustaining. While sunset laws exist in a variety of states, historically many appear reluctant to recommend de-licensure, or find legislatures reluctant to act upon such recommendations.

Concerns about the economic cost of professional and occupational regulation are not confined to domestic governments and think tanks. Recent years have seen the Organization for Economic Cooperation and Development, or OECD, produce significant work related to this topic. Among the initiatives has been the development of a Services Trade Restrictiveness Index,13 which “provides policy makers and negotiators with information and measurement tools to open up international trade in services and negotiate international trade agreements. The STRI indices take the value from 0 to 1, where 0 is completely open and 1 is completely closed.”

State Variations in Regulatory Practice
Recent domestic evidence also shows that states vary dramatically in their rates of licensure, ranging from a low of 12 percent of workers in South Carolina to 33 percent in Iowa. Such significant differences in licensing prevalence are frequently cited by opponents of licensure, who suggest that jurisdictions are not treating occupations equivalently, to the detriment of both market participants and consumers. A Reason Foundation report14 from 2007 tabulated each state’s licensing requirements by occupation. The report found that on average, states require licenses for 92 occupations. A separate report by Institute for Justice compared licensing requirements for low and moderate-income occupations that are licensed in at least one state. This report found that 15 occupations were licensed in 40 states or more, with the average occupation being licensed in only 22 states.15

This variation is further demonstrated in Table A, indicating the percentage of workers licensed in each state. While a large number of states fall within the 20 to 25 percent range, three states license in excess of 30 percent of their workforce, while five states license fewer than 15 percent.

  Download “Table A: Share of Workforce Licensed or Certified, by State”  in PDF / E-Reader Compatible Format

Supreme Court Case: North Carolina State Board of Dental Examiners v. Federal Trade Commission
The implications of a recent Supreme Court case16are slowly becoming evident with occupational regulators considering the potential need to make likely significant changes to their regulatory arrangements, such as:

  • Requiring public member majorities on regulatory boards
  • Multi-party board membership
  • Providing umbrella boards with policy oversight
  • Establishing an independent review board to oversee rulemaking
  • Creating majority public review bodies for scope of practice actions
  • Making boards advisory only
  • Expanding the powers of sunrise/sunset review
  • Giving attorneys general additional oversight powers.17

Former California Attorney General Kamala Harris summarized the Supreme Court case as follows:

The North Carolina Board of Dental Examiners was established under North Carolina law and charged with administering a licensing system for dentists. A majority of the members of the board are themselves practicing dentists. North Carolina statutes delegate authority to the dental board to regulate the practice of dentistry, but did not expressly provide that teeth whitening was within the scope of the practice of dentistry. Following complaints by dentists that non-dentists were performing teeth-whitening services for low prices, the dental board conducted an investigation. The board subsequently issued cease and desist letters to dozens of teeth-whitening outfits, as well as to some owners of shopping malls where teeth-whiteners operated. The effect on the teeth-whitening market in North Carolina was dramatic, and the Federal Trade Commission took action. In defense to antitrust charges, the dental board argues that, as a state agency, it was immune from liability under the federal anti-trust laws. The Supreme Court rejected that argument, holding that a state board on which a controlling number of decision-makers are active market participants must show that it is subject to “active supervision” in order to claim immunity.”18

In response, states have taken a variety of steps:

  • California’s attorney general provided guidance19 about what should be considered “active supervision” for the purposes of the state action immunity doctrine, and identified measures that could be taken to guard against antitrust liability for board members. The opinion identified possible steps, including changing the composition of boards, adding additional supervision by state officials, reducing exposure for damages claims, and ensuring board members receive legal indemnification and antitrust training.
  • In Oklahoma, an executive order was issued20 which required those state boards with a majority of members who are active market participants in the occupation or profession directly or indirectly controlled by the board, to submit each non-rulemaking action to the Office of the Attorney General for review and analysis. Where the attorney general concludes the board action may violate law, the board must defer or reconsider the proposed action.21
  • In North Carolina, the General Assembly’s Program Evaluation Division, or PED, reviewed both structure and operation of the 55 independent occupational licensing boards. The ensuing report22stated that there was insufficient state-level oversight to ensure efficient and effective public protection, recommending a legislative review of several occupational licensing boards’ authority and the consolidation of several others.
  • Massachusetts Gov. Charlie Baker issued an executive order23 directing the review of any acts, rules, regulations or policies (proposed by independent licensing boards) with the potential to limit competition in a relevant market for professional services. The review evaluates whether the proposed act, rules, regulations or policies advance the goal of ensuring the health, safety and welfare of the public sufficiently, so that it should be permitted regardless of any potential anticompetitive impact. Several types of acts warrant particular attention, including scope-of-practice rules, and territorial restrictions.
  • Activity has also been recorded in Iowa, Maine and West Virginia, in addition to other jurisdictions.

The Supreme Court decision has also raised concerns that individual board members may be liable for damages for antitrust liability related to their service. Indeed, some organizations have called for legislation that “indemnifies state boards and members from any damages or litigation fees related to claims against them to which the immunity applies.”24

Some states, such as Massachusetts and Rhode Island, clearly provide immunity and indemnification to at least some of their boards via statutory language. Other states, such as Illinois, Michigan, New Jersey, New York, Oklahoma and Texas, have indemnification statutes that may protect state agencies, but legislation here offers less clarity about whether indemnification extends to professional board members.

Private litigation has followed the Supreme Court ruling, most notably in the cases of Teladoc Inc. v. Texas Medical Board25, and Henry v. North Carolina Acupuncture Licensing Board.26In the former case, Teladoc, a provider of telehealth services, filed suit after the Texas Medical Board enacted a 2015 rule requiring face-to-face contact between an individual and a doctor before a prescription is issued. Teladoc claimed that rules placing limits on video consultations violate the Sherman Act. A district court ruling denied the medical board’s motion to dismiss the complaint, finding that the board was not actively supervised by the state.

The latter case saw several licensed physical therapists and patients sue the North Carolina Acupuncture Licensing Board for sending cease-and-desist letters to physical therapists who offered “dry needling” services. The physical therapists in receipt of the letter were accused of engaging in the illegal practice of acupuncture. The plaintiffs maintain that the board’s efforts violate federal antitrust law and a bid to dismiss the lawsuit against the board has been unsuccessful to date.

Conclusion
The recent award of a substantial U.S. Department of Labor grant27 to “Identify licensing criteria to ensure that existing and new licensing requirements are not overly broad or burdensome and don’t create unnecessary barriers to labor market entry; and improve portability for selected occupational licenses across state lines,” should ensure that interesting developments follow in this fascinating, and often under-reported field.


Notes

1 Occupational Licensing: A Framework for Policymakers, Department of the Treasury, Office of Economic Policy, the Council of Economic Advisers, and the Department of Labor (2015), p.3.
2 Ibid.
3 Ibid.
4 Occupational Licensing: A Framework for Policymakers, Department of the Treasury, Office of Economic Policy, the Council of Economic Advisers, and the Department of Labor (2015), p.3.
5 Ibid.
6 Ibid, p.4.
https://obamawhitehouse.archives.gov/the-press-office/2016/06/17/fact-sheet-new-steps-reduce-unnecessary-occupation-licenses-are-limiting.
https://obamawhitehouse.archives.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf   (p.42).
9 Right-touch assurance: a methodology for assessing and assuring occupational risk of harm (http://www.professionalstandards.org.uk/docs/default-source/publications/right-touch-assurance—a-methodology-for-assessingand-assuring-occupational-risk-of-harm.pdf?sfvrsn=0).
10 Right-touch assurance: a methodology for assessing and assuring occupational risk of harm, p.1.
11 https://www.bls.gov/opub/mlr/2015/article/the-delicensing-of-occupations-in-the-united-states.htm.
12 Ibid.
13 http://www.oecd.org/tad/services-trade/services-traderestrictiveness-index.htm.
14 Summers, A. (2007). Occupational licensing: Ranking the states and exploring alternatives. Los Angeles: Reason Foundation.
15 Carpenter D., Knepper L., Erickson A. and Ross J. (2012), License to Work, A National Study of Burdens from Occupational Licensing. Institute for Justice, p.5.
16 North Carolina State Board of Dental Examiners v. Federal Trade Commission (https://www.supremecourt.gov/opinions/14pdf/13-534_19m2.pdf).
17 Citizen Advocacy Center, Addressing the Supreme Court’s North Carolina Decision: Options for the States.
18 California Attorney General Opinion 15-402, issued 9/10/15.
19 Opinion of Kamala D. Harris, Attorney General, and Susan Duncan Lee, Deputy Attorney General, No. 15-402 (Sept. 10, 2016), 98 Ops.Cal.Atty.Gen. available at https://oag.ca.gov/system/files/opinions/pdfs/15-402_0.pdf.
20 State of Oklahoma Executive Department, Executive Order 2015-33 (July 17, 2016).
21 Ibid.
22 North Carolina General Assembly Program Evaluation Division, “Occupational Licensing Agencies Should Not be Centralized, but Stronger Oversight is Needed,” Final Report to the Joint Legislative Program Evaluation Oversight Committee, Report No. 2014-15 (Dec. 17, 2014), available at http://www.ncleg.net/PED/Reports/documents/OccLic/OccLic_Report.pdf.
23 Office of the Governor of the Commonwealth of Massachusetts, “To Ensure Proper Review of the Regulation of Professional Licensing by Independent Boards,” Executive Order No. 567 (March 28, 2016), available at http://www.mass.gov/governor/legislationexecorder/execorders/executive-order-no-567.html.
24 AICPA – https://www.aicpa.org/Advocacy/State/DownloadableDocuments/Memo-NC-Dental-Supreme-Court-Decision-August-2016.pdf.
25 Teladoc, Inc., et al. v. Texas Medical Board, et al., No. 1:15-cv-00343 (W.D.Texas, Apr. 29, 2015).
26 Henry, et al. v. North Carolina Acupuncture Licensing Bd., et al., No. 15-831 (M.D.N.C. Oct. 7, 2015).
27 https://obamawhitehouse.archives.gov/the-press-office/2017/01/12/us-labor-department-awards-75m-fund-researchimproving-geographic.

North Carolina Looks To Ease Occupational Licensure Requirements For Military Families

The North Carolina Senate unanimously passed SB-8 on March 15th which eases occupational licensure burdens on veterans by allowing military members and their spouses to practice their profession with a license from another state while transitioning to the requirements of North Carolina. The bill, sponsored by Senators Andy Wells, Harry Brown, and Louis Pate, is a positive step towards helping military families working jobs that may require a license.

Recognizing professional licenses issued by other states relieves some of the burden put on military families who relocate regularly. Rather than being put out of work while getting re-licensed in a new state, families can continue working while they move towards satisfying qualification requirements for licensure in North Carolina.

The bill only applies to military members and spouses who have performed the occupation in another state where the requirements are “substantially equivalent” to North Carolina’s. Qualifying participants receive a temporary practice permit that is valid for one year. Military families are also no longer required to pay the application fee for licensure if one is typically required in the field in which they work.

Research suggests relicensing policies impose a considerable cost of time and money on workers looking for jobs in another state. Variations in state licensing laws cause military families difficulties while pursuing their careers as they move between states.

CSG executives signed a resolution late last year supporting intergovernmental collaboration on occupational licensing for military spouses. The resolution reports that thirty-five percent of military spouses work in occupations that require a professional license including teaching, childcare services, and nursing. Additionally, sixty-eight percent of married veterans report their spouse’s ability to maintain a career impacted their decision to remain in the military by a large or moderate extent.

CSG recently won a $7.5 million dollar grant from the U.S. Department of Labor to guide a group of 10 states in improving licensure portability across state borders. The action plan prioritizes military families as a part of the targeted population in need of greater licensure opportunities.

Relieving financial and administrative burdens on these families who sacrifice for the sake of our country is a small way of repaying them for their service. State and local governments who streamline occupational licensing opportunities will ease the transition for military members and their spouses to move across state lines.

North Carolina’s SB-8 is currently working its way through House Standing Committees, but is receiving bipartisan support, and sponsors anticipate it becoming a law in the upcoming weeks.