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Manufacturing Law Blog

Thank you Jeff, Pam and our Followers

Posted in Uncategorized


I have decided to begin the next phase of my career inhouse practicing labor and employment law.  Therefore, it is time for my last post, albeit a goodbye, as an author of this blog.  You are in good hands as my colleague, Matt Miklave, has graciously agreed to take over the labor and employment role on this terrific blog team.

So, a number of big thank you’s are in order.  Thanks to my fellow firm colleagues and blog writers, Jeff and Pam, for sharing their legal intellect, for being tremendous team players and for consistently producing the excellent content that has made this blog so successful.  Jeff, to you in particular, thanks for capably captaining this blog ship over the last few years and inviting me onboard.  You’re a trustworthy captain that will always get his ship sailing smoothly to its destination.

Thanks so much to the blog followers and subscribers for your insightful comments, feedback and your trust in this blog’s content.  Keep reading.  There will definitely be ongoing worthwhile manufacturing legal news from these fine folks.

“We Need to Talk” – OSHA is Looking to Start a Dialogue on Chemical Management and Permissible Exposure Limits

Posted in Industry Outlook, OSHA Compliance

Everyone knows that the permissible exposure limits or PELs set forth in various OSHA standards are pretty old (most have not been updated since 1971), and that we’ve learned a lot about chemical exposure and human health in the years since those PELs were originally published.  OSHA knows it, too.  Furthermore, of the thousands of chemicals in the workplace, OSHA has adopted PELs for less than 500 of these chemicals.  OSHA is looking for guidance on a better way to address these exposures.

On October 9, OSHA issued a “Request for Information on Chemical Management and Permissible Exposure Limits.”  As OSHA explained in its press release, the administration is “launching a national dialogue with stakeholders on ways to prevent work-related illness caused by exposure to hazardous substances.”  The first step is to collect information on the management of chemical exposure in the workplace.

Here are some options OSHA is considering, and questions OSHA is asking:

  •  How can OSHA streamline the updating of PELs, as new toxicological and other human health information becomes available?
  • Is a tiered approach to risk a more appropriate way to assess risk?
  • Are there ways of preventing or limiting chemical exposure other than or in addition to PELs, such as task-based approaches?

This is a great opportunity for manufacturers who make or use chemicals in the workplace to weigh in on waht they believe could be effective, and protective, ways of handling chemical exposure.

Responses to the RFI should be submitted as comments on Docket No. OSHA-2012-0023 at http://www.regulations.gov.  Comments are due May 5, 2015 (180 days from October 9, 2014).

Dealing With Shipping Companies: A Consistent Challenge for Manufacturers/Distributors

Posted in Contracts, Supply Chain

One of the most important things for a manufacturer/distributor is ensuring that its products are shipped in a reliable fashion so they arrive on time and in good condition.  Similarly, manufacturers rely heavily on shipping companies to deliver the raw materials that are used in the production process.  If shipping companies fail to deliver on time, there can be catastropic results.

In my experience, many companies do not have “master agreements” or even a written contract with shipping companies.  Rather, the extent of the relationship may be a phone call asking the shipping company to pick up items from one place and bring them to another.  The risk of operating in this manner, however, is when goods are not delivered on time.  Many shipping companies will say in those situations that they can’t guarantee delivery on a certain date or time, but that the timelines provided are “best estimates.”

For that reason, I encourage manufacturers/distributors to develop terms and conditions that can be used with shipping companies that clearly set forth issues such as:  (1) insurance; (2) who is responsible when the items are damaged; (3) what efforts must be made if the deliveries run into issues on the road, etc.

The reason for instituting such measures can be traced back to the pressures shipping companies are being placed under.  For instance, a recent blog post by Adam Robinson of Cerasis explained the “trucking capacity” crunch.  The post noted that “[o]ver 5,000 trucking companies went out of business in 2012 and nearly 400,000 trucks have been taken off the road. In other words, there are about 8,000 fewer trucks available nationwide on any given day.”  As this shortage continues, it is important for manufacturers and distributors to minimize their risk by developing relationships based on contracts instead of a hand shake or telephone call.

Employee Separation Agreements: Is Your Company’s Agreement A Target For The EEOC?

Posted in Contracts, Employment Decisions, Litigation

When manufacturers determine that it is necessary to let go of an employee there is often an assessment of risk and a decision about whether a severance package should be offered in exchange for a separation agreement that contains a general release and waiver of claims against the company.  Given the recent trend in litigation by the Equal Employment Opportunity Commission (EEOC) over the past year targeting specific language used by companies in these types of agreements, I thought it would be helpful to review some of the language typically contained in releases that require employees to waive any federal discrimination claims: overly broad waivers, settlement provisions that prohibit filing charges with the EEOC or providing information to assist in the investigation or prosecution of claims of unlawful discrimination.

In one of the recent EEOC cases (EEOC v. CVS Pharmacy, Inc., N.D. Ill., No. 1:14-cv-863, 9/18/14), the agency alleged that CVS conditioned the receipt of severance benefits for certain employees on an overly broad severance agreement set forth in five pages of small print.  The EEOC alleged that the severance agreement interfered with the employees’ rights to file discrimination charges and/or communicate and cooperate with the EEOC.   Interestingly, the release language used by CVS is what has been suggested by the EEOC in its very own Enforcement Guidance.  See Enforcement Guidance on Non-Waivable Employee Rights under Equal Employment Opportunity Commission Enforced Statutes, EEOC notice 915.002 at §III(a).  While the court recently weighed in and found that the CVS language was consistent with current law, it is unlikely that the EEOC will back down on this enforcement initiative anytime soon.  

Manufacturers should carefully review the general release and waiver language contained in form separation agreements used by the company and consider whether the language could pose any risk of an EEOC challenge and/or plaintiff-employee challenge, including the following provisions:   

  • Non-disparagement:  Is there an explicit exception for communications with government agencies?
  • Covenant not-to-sue:  Does this clause state that it is not intended to prevent the filing of a complaint with any governmental agency?  The focus should not only be on the EEOC as there are other agencies that enforce similar laws, such as whistleblower protections under Dodd-Frank.
  • Release:  May the release be read to prohibit the employee from filing charges or participating in investigations? Is there an explicit provision clarifying that the Release is not intended to do so?
  • ADEA/OWBPA requirements:  
    • Is the release “written in a manner calculated to be understood” by the employee who will be executing the agreement and specifically refer to rights or claims under the ADEA?
    • Is there a clause allowing for 21-days to consider the agreement prior to signing and a 7-day revocation period after signing?
    • Does the agreement advise the employee in writing to consult with an attorney prior to signing?
    • NOTE: There are additional requirements for any termination of 2 or more employees (i.e. reduction in force, layoff, etc.)

It is always a best practice to avoid broadness and vagueness in any type of employment agreement, and to narrowly tailor any employee restrictions.  Not only does such practice prevent misunderstandings between the employer and the employee regarding expectations, but narrow restrictions are much more likely to be enforceable by a court.

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.


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.


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.