Header graphic for print

Manufacturing Law Blog

OSHA Updates Reporting and Recordkeeping Rule – New Rules Take Effect January 1, 2015

Posted in OSHA Compliance, Workplace Accidents

OSHA just announced updates to its reporting and recordkeeping requirements for injuries and illnesses, found at 29 CFR 1904. The updates include changes to who is required to comply with the recordkeeping rules, and expands the work-related injuries that must be reported.

Recordkeeping

The list of industries exempt from routine recordkeeping (think OSHA 300 log) has been updated, and is now based on the North American Industry Classification System (NAICS); the existing rule was based on Standard Industrial Classification (SIC) codes.

OSHA exempts “low-hazard” industries from routinely keeping injury and illness records.  Generally, this list includes retail, service, publish and broadcasting, and other low-risk industries. The new list of “partially exempt industries” can be found at Non-Mandatory Appendix A to 29 CFR 1904 Subpart B.  Employers in these industries are not required to keep records of injuries and illnesses, unless otherwise required by OSHA.

Reporting

At the same time, OSHA has expanded the types of injuries that must be reported to OSHA.  All employers (even those exempt from the record-keeping) must report:

  1. All work-related fatalities within 8 hours.
  2. All work-related inpatient hospitalizations, all amputations and all losses of an eye within 24 hours.

Previously, only fatalities and hospitalizations of 3 or more employees were required to be reported.

The reporting deadlines are based on when the employer learns of the injury. So, employers are required to report fatalities within 8 hours of finding out about it, and hospitalizations, amputations and losses of an eye within 24 hours of finding out about it.

To further clarify employer obligations, OSHA notes that: “Only fatalities occurring within 30 days of the work-related incident must be reported to OSHA. Further, for an inpatient hospitalization, amputation or loss of an eye, then incidents must be reported to OSHA only if they occur within 24 hours of the work-related incident.”

Reports can be made by

  1. Calling OSHA’s free and confidential number at 1-800-321-OSHA (6742).
  2. Calling the closest Area Office during normal business hours.
  3. Using OSHA’s new online form – which will be available soon.

Why Manufacturers Should Look At The Federal Trade Commission (FTC)’s Website

Posted in Contracts, Litigation

As readers of this blog know, Pam looks at OSHA’s website often to stay up to date on news that impacts manufacturers.  I tend to look at the Federal Trade Commission (FTC)’s website to see if there are any recent orders or news items that impact manufacturers or distributors from a corporate compliance perspective.  The FTC tends to focus on two different areas:  (1) protecting consumers from deceptive or fraudulent practices in the marketplace; and (2) protecting competition by enforcing antitrust laws.

One area of the website that I would recommend is the FTC’s Business Center Blog.  For instance, this week, the Business Center Blog reported on a multi-million dollar settlement with a company in Texas that the FTC claimed made “baseless weight-loss claims about its green coffee extract to retailers, who repeated those claims in marketing finished products to consumers.”  In another post, the FTC Business Center Blog reports on a recent scheme impacting businesses where “a hacker poses as a senior executive and asks an employee to complete a financial transaction, like a confidential business investment or a payment to a vendor.  Once money is wired to a bogus account, it can be nearly impossible to recover.”

In addition to the Business Center Blog, the FTC’s website has a lot of information that can be helpful to manufacturers and distributors.  The website has an entire section on advertising and marketing, including “Made in the USA” claims.  In addition, I am often asked to counsel clients on their warranties and the FTC’s “Businessperson’s Guide to Federal Warranty Law” is one of the resources that I use during these engagements.

 

 

Cleaning House? – Environmental Issues to Consider

Posted in Environmental Compliance & Permitting, Environmental Enforcement

While spring is typically the time of year we think of for cleaning, I find fall a good time to do it. I probably never got over the feeling of new beginnings that come with fall and school starting. So, as I was cleaning my garage this past weekend (which truth be told is really a four-season job), and thinking about the fact that I was my turn to write, I started contemplating what a manufacturer should be thinking about it when it is “cleaning house.”   By “cleaning house,” I mean off-spec product, or scrap, or just stuff lying around and taking up space, and getting rid of it.  While just tossing the material in the dumpster sounds like an easy solution, the rules governing how to dispose of no-longer-wanted “stuff” are anything but simple.  Furthermore, missteps can cause material to constitute “solid waste” or “hazardous waste,” triggering onerous reporting and handling requirements.

Quick background:  The federal Resource Conservation and Recovery Act (RCRA), 42 USC 6901 et seq, is the law that governs hazardous waste, and the US Environmental Protection Agency has adopted regulations implementing RCRA, which are found at 40 CFR Parts 260 through 265.  EPA delegated authority to implement RCRA to many states, which means that the state regulations mirror, and are occasionally more stringent than, the federal regulations.

Here are a few things to consider:

First, is material still good product? By that I mean, is it still good for what it was intended. An example is wall paint in its original container, but you recently repainted all the walls in the facility a different color, so you no longer need the paint for touch-ups.   If you decide to just throw it out, you’ve discarded that paint, and it’s now “solid waste.”  Depending on the type of paint it is, it might now be “hazardous waste.”  Instead, perhaps you can sell or donate the paint.

If the material is not “good” any more, can it be reclaimed?  Certain materials are considered “solid waste” when reclaimed, while others are not. The answers are not intuitive, and you need to look at the regulations carefully.

Is there exclusion from the definition of “solid waste” that might apply? For example, shredded circuit boards (assuming certain rules are followed), certain process scrap metal and domestic sewage are all not a “solid waste.”

If the material is a solid waste, the next question is whether it is a hazardous waste.  There are two ways a waste can be a hazardous waste – it can be a listed waste; you just look at the lists to figure out whether your material is on one of them.  Alternatively a waste can “exhibit the characteristic of a hazardous waste.”  There are four characteristics – ignitability (based on flashpoint), corrosivity (based on pH), reactivity (unstable, or reacts with water, or can easily detonate), and toxicity (as determined by the Toxicity Characteristic Leaching procedure).

If you have a hazardous waste, it needs to be managed and disposed of properly. If your facility routinely generated hazardous waste, you already know what to do. If not, the rules governing “generators” of hazardous waste are even more cumbersome and complicated than those governing the definition of hazardous waste. It is important to not wait too long to dispose of the waste – the rules limit the time a hazardous waste can be stored. It is also important to make sure that proper paperwork is completed by the transporting company and retained by the generator.

So, enjoy the house cleaning, but be mindful!

 

 

 

Expansion of the Joint Employer Standard May Challenge Manufacturers

Posted in Uncategorized

In this installment of the blog’s 360, I am going to spin off the temporary employee discussion and address the joint employer relationship.  Joint employment has certainly been a big Mcissue for McDonald’s these days and one that manufacturers should also keep on their radar. 

The National Labor Relations Board recently issued a complaint against McDonald’s USA, LLC and is claiming that the franchisor may be jointly responsible for the potential labor violations of its franchise owners because together they jointly exert significant control over the same employees.  The decision to target McDonald’s USA, LLC departs from longstanding precedent that corporations are not responsible for the actions of franchise owners, who pay for the right to use the company brand, but control day-to-day operations, such as wages and terms of employment.

While McDonald’s is in the spotlight today, the NLRB’s proposal to expand the joint employer standard was spelled out in more detail in a recent amicus brief filed in a case that had nothing at all to do with franchisors.  Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recycling & FPR-II, LLC, d/b/a LeadPoint Business Services & Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, Case 32-RC-109684.  Interestingly, the NLRB chose this case because it involves a union that wants a company at the table in collective bargaining involving subcontracted workers.  The union claims in its brief that

The difficulties presented by this triangulated workforce structure has created a second-tier workforce of employees working for lower wages and fewer benefits than the standard employees performing the exact same work. 

The  NLRB essentially argues that a joint employment relationship should be found whenever “industrial realities” make an entity essential for meaningful bargaining.  Both this case and the McDonald’s case are pending. 

Stay tuned.  The NLRB has announced that the issue of whether, and under what factual scenarios, a business will be alleged to be a joint employer will be a focus of NLRB enforcement actions.  While the law remains unsettled in this area, as a preventative measure, manufacturers should examine their business relationships with other entities where the control of the workforce, including wages and working conditions, may be shared. 

 

The Liability Risks of Temporary Employees

Posted in Contracts, Crisis Management Counseling, Employment Decisions, Labor Relations, Litigation, OSHA Compliance, Workplace Accidents

Last week, Pam addressed the issue of temporary workers from an EHS perspective.  Now, in this installment of one of our “360″ posts, I’ll comment on the liability risks of having temporary employees.

First, an introductory note.  I understand from my conversations with manufacturing executives that many companies need to use staffing agencies in order to locate skilled workers.  In most cases, companies will hire the temps that work out after a trial period.  Although there are liability risks, the reality is that most businesses need to hire the temp workers in order to maintain production levels.

With that said, there are a number of issues that a host employer should consider while it has temp workers on site.

  1. Training:  Who trains the temps?  In some situations, I have heard that the staffing agency trains its employees prior to their assignment.  The quality and depth of that training can vary.  For that reason, under some circumstances, it is important to assess whether the temp workers have been adequately trained to handle their particular job assignment.  For instance, if they are using a machine that can injure them it is important to train them as if they are a brand new worker because if they are injured the host employer may be held responsible.
  2. Post-Accident Investigations:  When a temporary worker gets injured at the host employer, the situation can get very complicated.  Beyond the potential for an immediate OSHA investigation, it is likely that the staffing agency will want to conduct its own investigation.  It is not unheard of for the staffing agency to send its own representatives to the facility to demand access in order to conduct an audit and investigation.  While there are legitimate reasons for this, the host employer needs to proceed with caution and with the advice of legal counsel because the findings of the third party staffing agency could undermine the host employer’s own investigation and/or expose the host employer to additional liability.
  3. Pre-Contract Due Diligence:  A common piece of advice that I give to manufacturers/distributors is to ensure that they know who they are in business with.  For instance, when was the last time you visited or audited your suppliers?  The same advice goes for staffing agencies.  As Nicole has told me on many ocassions, the government can take a hard line with host employers even if the staffing agency was responsible for certain obligations (such as taxes, etc.).  For that reason, it is important to spell out the terms of the relationship in a written contract even if the staffing agency uses a form agreement.  I have counseled manufacturers/distributors on so-called “take it or leave it contracts” before so this is something that I can provide further counsel on for those that are interested.

These are just three of the liability issues that may arise.  I am happy to address others so feel free to contact us and we will address them in a future post.

In Case You Missed It, You Need To Protect Your Temps, Too

Posted in Contracts, Employment Decisions, Industry Outlook, OSHA Compliance

We occasionally write what we refer to among ourselves as a “360” post, as in 360 degrees, or looking at an issue from all sides. I’ll write about EHS, Nicole about labor or employment issues, and Jeff will focus on other potential liability, all associated with a single factual scenario.  The way the law and various agencies view the relationship between the temporary worker and the host employer is such a significant topic, we decided to go with an extended “360” – we are going to take 3 weeks to look at this one issue, each time from a different perspective. We’ll start with OSHA…

 ”Host employers need to treat temporary workers as they treat existing employees. Temporary staffing agencies and host employers share control over the employee, and are therefore jointly responsible for temp employee’s safety and health. It is essential that both employers comply with all relevant OSHA requirements.”

 — David Michaels, PhD, MPH, Assistant Secretary of Labor for Occupational Safety and Health

 That quotation is the first thing you see on OSHA’s webpage dedicated to protecting temporary workers. Yes, OSHA has a webpage dedicated to protecting temporary workers.   This is all part of the Temporary Worker Initiative, launched in April 2013.  OSHA had found that temporary workers were much more likely to be injured on the job, and the injuries were often severe or even fatal. Many of these injuries occurred in the first few days on the job.

OSHA considers the staffing agency and the host employer “joint employers.”  This means that they both have a responsibility to ensure that the temporary worker is provided a safe workplace.  That said, each job and each job site is different, and the agency and host need to coordinate between them as to who is the best to provide compliance with certain requirements.

Examples OSHA gives – a staffing agency may be best positioned to provide audiometric testing, while a host should comply with standards related to machine guarding, which is more site specific.  Another example – an agency is well positioned to provide HazCom training, but the host needs to provide training on specific chemical hazards associated with the job function the temporary worker might be performing. In any case, both employers will have an obligation to make sure that all requirements have been complied with, even those being performed by the other.

We strongly recommend that our clients who work with staffing agencies clearly spell out each party’s responsibilities in their contract. For example, which OSHA training is the agency expected to provide, and which is the host expected to provide?  It’s also a good way to make sure that the staffing agency understands its responsibilities under OSHA.  There is not a right or wrong way to do allocate such responsibilities, but it is critical that the employee is provided a safe workplace, and it’s just smart to spell out the plan ahead of time.

Expansion Of Manufacturing Reinvestment Account Program Helps Connecticut Manufacturers

Posted in Benefits

Today Governor Malloy signed legislation that expanded Connecticut’s Manufacturing Reinvestment Account (MRA) program, doubling the amount of tax benefits available and expanding the definition.  In 2010, Connecticut was the first state in the nation to begin offering MRA’s which are similar to individual retirement accounts for businesses. 

The tax benefit of establishing an MRA includes a Connecticut income tax deduction for the amount contributed to the account so long as the monies are utilized for qualified purchases in Connecticut, such as training, equipment and facilities.  Under the recently enacted tax legislation and beginning January 1, 2014, contributions to the MRA continue to be 100% deductible for Connecticut income tax purposes in the year in which the contribution is made, but “qualified distributions” from the account are no longer considered taxable income.  The legislation also reduces the number of manufacturers that can participate in the MRA program from 100 to 50, but increases the maximum number of employees a manufacturer may have to be eligible as a small manufacturer, from 50 to 150.

 

Two Provisions In Commercial Contracts That Every Manufacturer/Distributor Should Review

Posted in Contracts, Litigation, Supply Chain

There are two provisions in nearly every commerical contract that I tend to be asked about more than others.  These provisions are:  (1) indemnification clauses; and (2) “forum selection” clauses.  Most manufacturers and distributors are familiar with the first.  Not as many are familiar with the second.

Fundamentally, an indemnification clause is typically designed to provide protection to a party in the event a lawsuit or claim is filed against it by a third party.  For instance, a distribution agreement will typically have an indemnification clause that states that if the distributor is sued by an end user of a product, the distributor can seek indemnification from the manufacturer.  Similarly, a manufacturer may have a supply agreement that states that it can seek indemnification from its suppliers to the extent that the raw materials do not meet certain agreed upon standards.  For that reason, it is important to review these clauses periodically with your legal counsel particularly because these clauses can take on many forms.  For instance, some clauses allow the party that is sued to pick their own legal counsel and also control the litigation while other clauses may not.

The other type of clause that is less known is the “forum selection” clause.  This clause generally is contained at the end of the commerical agreement and may not stand out.  This clause typically addresses a situation wherein two commerical parties have a dispute about a contractual agreement.  A forum selection clause typically answers two questions.  First, will the dispute be resolved in court or through arbitration?  Second, if a lawsuit is filed, where must it be brought (i.e., what state or country in some situations)?  In Connecticut, for instance, the law on forum selection clauses can be confusing, but what is clear is that certain language (a.k.a. “magic words”) often needs to be used for these clauses to acheive their purpose.  For that reason, it is also important to review these clauses with your counsel as well on a periodic basis.

Federal Research Funding – Not Just for Large Companies

Posted in Industry Outlook, Product Development

When it’s my turn to write the blog post, if I don’t already have a topic ready to go, I visit the EPA and OSHA websites, to see what’s “new” there.  This is how why I found myself on EPA’s “Small Business Innovation Research” or “SBIR” page.  This was after following a link to EPA’s announcement that 21 small businesses in 14 states will receive funding to “develop and commercialize innovative, sustainable technologies to address current environmental issues,” to use EPA’s words.

To give some examples, here are the companies in Connecticut and Massachusetts that are receiving funding in FY 2014:

It turns out that EPA is only one of 11 agencies involved in the federal government’s SBIR initiative.  Here are the others. You can get to their SBIR pages through the SBIR webpage, sbir.gov.

  • Department of Agriculture
  • Department of Commerce – National Institute of Standards and Technology
  • Department of Commerce – National Oceanic and Atmospheric Administration
  • Department of Defense
  • Department of Education
  • Department of Energy
  • Department of Health and Human Services
  • Department of Homeland Security
  • Department of Transportation
  • National Aeronautics and Space Administration
  • National Science Foundation

SBIR’s mission is to “support scientific excellence and technological innovation through the investment of Federal research funds in critical American priorities to build a strong national economy.”   There is a special emphasis on manufacturing. Executive Order 13329 requires SBIR agencies to give high priority within the SBIR programs to manufacturing-related research and development (R&D). “Manufacturing-related” is defined as “relating to manufacturing processes, equipment and systems; or manufacturing workforce skills and protection.”

The goals of SBIR are:

  • Stimulate technological innovation
  • Meet Federal research and development needs.
  • Foster and encourage participation in innovation and entrepreneurship by socially and economically disadvantaged persons.
  • Increase private-sector commercialization of innovations derived from Federal research and development funding.

Funding is disbursed in 2 phases: proof of concept (Phase I) and to continue R&D (Phase II). Phase III would be commercialization; this is not funded through SBIR.

For purposes of participating, here’s the definition of a “small business:”

a for-profit organization with no more than 500 employees. In addition, the small business must be independently owned and operated, at least 51 percent owned by U.S. citizens or lawfully admitted resident aliens, not dominant in the field of operation in which it is proposing, and have its principal place of business in the United States.

FYI 2015 Phase I Funding from EPA is now open, closing September 11, 2014.  Other agencies also have funding rounds open now. Companies need to register at FedConnect.

 

Family Medical Leave Act Webinar: From Vegas Trips to Fake Doctors’ Slips

Posted in Employment Decisions, Family Medical Leave Act

As virtually every HR professional will tell you, the Family and Medical Leave Act (FMLA) is one of the most confusing and complicated employment laws to administer. While providing job-protected leave for employees with serious health conditions or other qualifying events, it also presents the opportunity for misuse—or blatant abuse—by employees who want to mask attendance or performance problems, or who simply want more time off from work than otherwise would be allowed.

Please join me and my colleague, Jean Tomasco, for a free Robinson+Cole, LLP webinar on the Family Medical Leave Act (FMLA).  It is scheduled to be held on July 17th from noon-1:00 pm ET.  The program agenda includes FMLA developments at the U.S. Department of Labor, medical certification requirements and recent cases addressing leave, retaliation and interference. 

For more information on the program and to sign up , you can click here or here.