This week we are pleased to have a guest post by Robinson+Cole Immigration Group lawyer Jennifer L. Shanley.

Recruiting the best talent is essential for many manufacturers’ ongoing success. Many times, the best talent is an individual who was born in another country and who needs sponsorship to work in the United States.

But how do manufacturers know that an individual would need sponsorship in order to work? The answer is simple: by asking the right permissible questions during the interview process, without opening the company to a claim of discrimination.

The Immigration Reform and Control Act of 1986 (IRCA) protects foreign nationals from discrimination based on citizenship and based on national origin. This doesn’t mean that employers are required to hire and sponsor a foreign national for work authorization. It remains a company choice whether to engage in immigration sponsorship and the employer has the right to determine what employment positions, if any, will be sponsored. If an employer will not sponsor an individual for work authorization, determining if a candidate requires sponsorship before the offer-stage is critical. Other employment laws may also contain similar protections for applicants.

Of course, many manufacturers regularly sponsor foreign nationals for work authorization, and yet it is still important for them to know, as early as possible, whether sponsorship will be required for a particular candidate.

To confirm if an employer needs to actively participate in gaining work authorization for the candidate, without raising a potential discrimination claim, the following two questions should be asked to every candidate:

  • Are you currently authorized to work in the U.S. on a full-time basis?
  • Will you now or in the future require sponsorship for employment status?

If employers adopt these two questions for every interview, it may limit the risk of discrimination based on national origin and citizenship status. Otherwise, asking poorly phrased questions such as “What is your visa status?” or “Are you a U.S. citizen?” may lead rejected candidates to perceive that they were discriminated against based on national origin or citizenship.

This week we are pleased to have a guest post by Robinson+Cole Labor and Employment Group lawyer Natale V. DiNatale.

The NLRB has reversed decades of precedent and made it far easier for unions to represent employees, including manufacturers, without a secret ballot election.  The NLRB’s new standard (announced in Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (2023)) emphasizes union authorization cards that are gathered by union officials and union activists who often employ high-pressure tactics to obtain a signature.  Employees often sign authorization cards without the benefit of understanding the significance of the cards.  Even if they don’t want a union, they may sign because they feel pressured by a coworker, don’t want to offend a colleague, or want to avoid being bothered.  The new standard still permits an election, but the NLRB will only conduct an election if the employer petitions for an election promptly, usually within two weeks of the union’s demand for recognition.  Even if an employer petitions for an election, the NLRB will set aside that election if the employer commits virtually any misstep during the period leading up to the election.  Thus, if the union loses the election and the Employer commits an unfair labor practice, the NLRB will look to union cards and likely order that the employer recognize and bargain with the union.  The impact of this new standard is that any union that gathers authorization cards from a majority of employees in an appropriate bargaining unit has a relatively easy path to recognition without an election and despite an election loss.

The New Process – Union Demand for Recognition & Employer Response

Under the NLRB’s new standard, once a labor union gathers authorization cards from a majority of employees, it must simply request that the employer recognize it as the representative of employees in an appropriate bargaining unit.  The NLRB did not address what makes a request for recognition sufficient (e.g. verbal vs. written) or to whom the union must make this request.  Once a union makes this request, an employer must file a petition for an election, “usually within two weeks.”  If it fails to do so, the employer essentially waives its employees’ ability to vote on unionization in a secret ballot election. 

If the employer does nothing, a union seeking representation may either file a representation petition (consistent with prior precedent) or file an unfair labor practice (ULP) claiming a refusal to bargain.  If, during that ULP proceeding, the union establishes that it has union authorization cards from a majority of employees in an appropriate bargaining unit, the Board will order the employer to recognize the union, without an election.  In that situation, the obligation to bargain will be retroactive to the union’s demand for recognition, so any changes that an employer makes to working conditions after the demand for recognition would be a separate violation of the NLRA.

If the employer timely files a petition for an election, the NLRB will process the petition according to its new expedited election rules (effective December 26, 2023), which likely means an election in about three weeks from the date that the employer files the petition.  In another dramatic break from precedent, “if the employer commits an unfair labor practice that requires setting aside the election, the petition will be dismissed, and the employer will be subject to a remedial bargaining order.”  Cemex Construction Materials Pacific, LLC, 372 NLRB at 26 (emphasis added).

The standard for ordering bargaining without an election is much broader that the narrow “Gissel” standard authorized by the US Supreme Court in 1969.  Gissel Packing Co., 395 U.S. 575 (1969).  Thus, if the employer commits “unfair labor practices that frustrate a free, fair, and timely election, the Board will dismiss the election petition and issue a bargaining order, based on employees’ prior, proper designation of a representative . . .,” i.e., whether the authorization cards establish majority support.  Cemex Construction Materials Pacific, LLC, 372 NLRB at 28.

For a bargaining order, the question is whether “the employer rendered a current election (normally the preferred method for ascertaining employees’ representational preferences) less reliable than” authorization cards.  While the Board provided certain examples of conduct that erode majority support evidenced by authorization cards (“nip-in-bud” discharges of union supporters; coercive statements; and unlawful granting or withholding of benefits made just before an election), the standard is broader.  Thus, during the “critical period” between the petition and the election, the NLRB has set aside an election based on certain violations unless the “violations are so minimal or isolated that it is virtually impossible to conclude that the misconduct could have affected election results.”  The new standard does not require a finding that every ULP is disruptive of the election process, but requires consideration of all relevant factors, including:

  • number of violations;
  • severity of violations;
  • extent of dissemination;
  • size of the bargaining unit;
  • closeness of the election (if one has been held);
  • proximity of the conduct to the election date; and
  • number of unit employees affected.

Further, the NLRB acknowledged that it has found, under specific factual circumstances, that an employer’s maintenance and dissemination to all employees of certain generally applicable handbook rules and policies have required setting aside an election, which is especially important considering the Board’s new, much stricter standard (announced in Stericycle, Inc. 372 NLRB No. 131 (2023)) for evaluating handbook rules and policies.

Takeaway – The Focus is on Union Authorization Cards

With the emphasis that the NLRB’s new standard places on union authorization cards, it becomes more important for employees to understand their significance.  If an employee does not understand the full legal weight of signing a card or what it means to have a union, employees who would otherwise reject a union may sign an authorization card to avoid offending their coworkers or because of group pressure.  Also, while it’s improper for union organizers and adherents to coerce employees or misrepresent the nature and purpose of an authorization card, gathering that evidence and establishing it before a judge can be challenging.

It is important to know that manufacturers need not wait.  Manufacturers are permitted to speak with their employees about unions and union authorization cards.  The NLRB specifically recognized that an employer is free and legally permitted to persuade employees with lawful expressions of its views concerning unions.

It is also important to know that manufacturers that accept and examine union authorization cards or that otherwise gain independent knowledge of a union’s majority support are at risk of a bargaining order.  Manufactures could have a union without employees ever hearing from their employer or having the opportunity to vote in a secret ballot election.

At this critical time, it’s important for manufacturers to gather internal stakeholders (e.g., HR, legal, compliance and senior management) to set priorities, identify risks and develop action items so that a plan is in place before the issue arises.  Manufacturers may want to provide supervisor training so that supervisors understand the simple rules for communicating with employees about unions and ensure that workplace policies comply with the new NLRB standard for evaluating the lawfulness of common workplace policies.  Manufacturers should also consider contacting competent legal counsel to identify, discuss, and mitigate any existing or potential risks.

Below is an excerpt of an article co-authored with Environmental, Energy + Telecommunications Group lawyer Jon Schaefer, published by EHS Today on August 31, 2023.

Across the country, manufacturers are learning they need to ensure employees working both inside and out are adequately protected from heat-related risks. Earlier in the summer, OSHA issued the first-ever Hazard Alert for heat to remind employers of their obligation to protect workers against heat illness or injury in outdoor and indoor workplaces. The alert accompanied an announcement that OSHA would be ramping up enforcement of heat-safety violations and increasing inspections in high-risk industries.

While in the past focus on heat-safety violations may have been limited to the construction and agriculture industries, OSHA is now equally focused on heat-safety violations found in indoor work environments, such as manufacturing facilities. This expanded focus includes the manufacturing and warehouse industries. OSHA emphasized this focus in April 2022 when it established a National Emphasis Program (NEP) on Outdoor and Indoor Heat Hazards that, in part, focused on the manufacturing and warehouse industries. OSHA has also been conducting an annual heat awareness campaign for the last decade and in 2022, began its heat enforcement program.

Despite this enhanced focus on inspections and enforcement, OSHA has yet to put in place a national standard for workplace heat-safety rules. After being pressured to do so for more than a decade, OSHA started working on heat-safety standards in 2021. On August 30, 2023, OSHA released a “Regulatory Framework” meant to outline potential options for the elements of a future OSHA standard. This framework shows that OSHA is focused on a programmatic standard where employers are required to create a plan to evaluate and control heat hazards in their workplaces, but also permit some customization of those plans based on various factors. In the short term, this framework provides employers with an indication of the type of items OSHA may be looking for during a heat illness or injury inspection. However, this framework is far from a final OSHA standard and any final heat-safety standard will almost surely be challenged in the courts, potentially further extending implementation.

What Can Employers Do Now?

Read more.

The Cybersecurity and Infrastructure Security Agency (CISA) recently issued “timely information about current security issues, vulnerabilities, and exploits surrounding” Industrial Control Systems (ICS).

The Advisories provide background on the vulnerabilities, and the manufacturers’ releases for remediation and mitigation to implement to protect against the vulnerabilities, which Industrial Control Systems operators may wish to consult. The Advisories can be accessed here.

This post was authored by Linn Foster Freedman and is also being shared on our Data Privacy + Cybersecurity Insider blog. If you’re interested in getting updates on developments affecting data privacy and security, we invite you to subscribe to the blog.

This week’s post was contributed by Robinson+Cole’s Kathleen M. Porter, Jennifer M. Driscoll, and Amy R. Roth.

Companies pursuing acquisitions that require a filing in the United States under the Hart-Scott-Rodino Act (HSR)[1] may, by year-end, face vastly expanded disclosure requirements necessitating far greater investments in time, effort, and planning.

In a June 27, 2023, announcement, FTC Chair Lina M. Khan proposed a “top-to-bottom” revision of the HSR premerger notification program. According to Khan, the reason for these proposed revisions is that much has changed in the 45 years since Congress passed the HSR Act—deal volume has soared, transaction structures and potential competitive impacts have become increasingly complex, and investment vehicles have changed—yet the HSR form has remained largely the same.

“Against the backdrop of these vast changes, the information currently collected by the HSR form is insufficient for our teams to determine, in the initial 30 days, whether a proposed deal may violate the antitrust laws,” said Khan. “Our staff are put in the position of expending significant time and effort to develop even a basic understanding of key facts.”

To enable examiners to better understand complex deals’ structures—and discover their potential anticompetitive effects from the outset—the FTC’s “key” proposals would require the acquiring and acquired parties to provide the following additional information in their HSR notifications:

  • Details about the transaction rationale and investment vehicles or corporate relationships;
  • Information related to horizontal products and services and non-horizontal business relationships, such as supply agreements;
  • Projected revenue streams, transactional analyses and internal documents describing market conditions, and the structure of entities involved, such as private equity investments;
  • Additional details regarding previous acquisitions;
  • Information regarding labor market issues; and
  • Disclosure of subsidies from foreign governments or entities that are strategic or economic threats to the United States.

Highlights of the Proposed New Requirements

Important proposed changes to the HSR notification filings would include the following:

  • Ultimate Parent and Controlled Entities Information
    • Identification of officers, directors, and board observers of all entities within the acquiring person and acquired entity
    • Identification of limited partners
    • Expanded minority shareholder information
    • Identification of other types of interest holders that may exert influence

The proposed additional information on the Ultimate Parent and the Controlled Entities is designed to ascertain the identity of individuals and entities that may influence business decisions or access confidential business information, which could affect a transaction’s competitive impact.

  • Transaction Information
    • Brief description of the business operations of all entities within the acquiring person
    • Narrative identifying and explaining each strategic rationale for the transaction including, for example, those related to products or services that could compete with a product or service of the other reporting person, expansion into new markets, hiring the sellers’ employees, obtaining certain intellectual property, or integrating certain assets into new or existing products, services, or offerings
    • Detailed diagram of the deal structure along with a corresponding chart explaining the entities involved in the transaction
    • Term sheet or draft agreement and timetable if a definitive agreement has not been executed
    • All transaction-related agreements, including schedules and exhibits
    • All agreements in effect in the prior year between any entities within the acquiring person and the acquired person
    • Narrative timeline of key dates and conditions for closing

The proposed additional transaction information is designed to provide examiners with a more in-depth understanding of the transaction and to enable them to prioritize their merger workload.

  • Competition and Overlaps
    • Documents provided by or for the supervisory team lead(s)
    • Forward-looking assessments of synergies or efficiencies
    • Drafts of transaction-related documents
    • Ordinary-course periodic plans and reports prepared within the prior year that broadly discuss premerger and future competitive dynamics and strategies
    • Horizontal Overlap Narrative: an overview of principal categories of current and planned products and services; any current competition with the other filing person in those products and services; and any licensing, non-compete, or non-solicitation agreements involving overlapping products or services
    • Supply Relationships Narrative: information about existing or potential vertical (or supply) relationships between the filing persons
    • Labor markets information regarding the transaction’s potential labor market effects, largest employee classifications, geographic market information for each overlapping employee classification, and workplace safety information
    • All acquisitions by buyer, seller, and target in the previous ten years within the overlapping markets
  • Additional Information
    • Information on subsidies from foreign governments or entities of concern, to identify foreign subsidiaries or countries that are or may be strategic or economic threats to the U.S.
    • Disclosure of any defense or intelligence contracts exceeding $10 million
    • A certification requirement requiring filers to affirm that they have taken necessary steps to prevent the destruction of documents and information related to the transaction, which would safeguard needed materials should a Second Request under HSR be issued.

Reasons for Proposed Changes and Initial Reaction.

In its Notice of Proposed Rulemaking (NPRM), the FTC maintains that its proposed more “robust” HSR filings would benefit all parties by enabling examiners to “quickly identify transactions that do not require further investigation during the initial waiting period.”

However, most commentators have described the proposed revisions as burdensome, with one critic calling them an “everything but the kitchen sink approach.” Even the FTC acknowledges that many of the proposed changes would increase the burden on all filers and, by its own reckoning, increase the time required to prepare a filing by 12 to 222 hours, depending on the deal’s complexity. The FTC pegs the total additional labor costs at approximately $350 million.

Still, Commissioner Khan sees the proposed revisions as a mechanism to “more effectively and efficiently screen transactions” by appropriately shifting the burden of collecting information from the examiners to the filers. “Much of the key information,” she explained, “is known only to the firms proposing the mergers, such as the exact timeline of the proposed transaction, the deal rationale, and the structure of each relevant entity. Seeking this information on a voluntary basis can leave key gaps.”

“This proposal,” Khan concludes, “is designed to ensure that we can efficiently and effectively discharge our statutory obligations and faithfully execute on the mandate that Congress has given us.”

Next Steps

The new HSR disclosure proposals will, if implemented, require companies to build additional time into their filing preparation process—from a few weeks to a few months. Companies may wish to consider leveraging available technology to its fullest potential and implement robust digital systems—including appropriate AI tools—to facilitate gathering the required additional data and information.

The FTC is accepting public comments on the proposed changes until August 28, 2023. The American Bar Association Section of Antitrust Law is preparing a comment, and when that is made public, we will provide an overview of its most important points. In addition, several industry groups have reportedly asked the FTC for additional time to comment on the proposed changes.

[1] For an acquisition to be reportable under the HSR, both the size-of-transaction and size-of-person notification thresholds must be met (unless an exemption applies). For 2023, the minimum size-of-transaction notification threshold is $111.4 million, and the minimum size-of-person notification threshold is $222.7 million in total assets or annual net sales for one party and $22.3 million for the other. Acquisitions exceeding $445.5 million are reportable regardless of the size of the parties.

As many federal contractors and subcontractors know, the date for covered entities to certify compliance with their annual affirmative action plan requirements using the Contractor Portal of the Office of Federal Contractor Compliance Programs (OFCCP) was June 29, 2023.  On or before that date, and each year annually, such entities must certify compliance as it relates to covered establishments and/or functional/business units; such entities are certifying that they have developed and maintain an affirmative action plan for each such establishment or unit.  The OFCCP’s Contractor Portal opened March 31, 2023, and remained open until June 29, 2023. 

Via email bulletin on June 30, 2023, the OFCCP reiterated that the deadline for certification for 2023 was June 29, 2023 and had not been extended.  The agency also stated that it “will consider a contractor’s registration and/or certification timely if the contractor has a pending request for assistance as of June 29, 2023” and stated that the OFCCP’s Portal Technical Help Desk is open and available to answer questions and provide assistance.  The OFCCP also reiterated that it provides a user guide and frequently asked questions on its website in addition to providing assistance through the OFCCP Contractor Portal Technical Help Desk.

Previously, the OFCCP clarified that certain contractors who do not timely comply (including those that have not used the Contractor Portal to do so) are more likely to be audited by the agency and that those that have not certified timely may be included in a list provided to federal agency contracting officers, with the stated purpose being that the agencies will then notify the contractors of their obligations.  Therefore, contractors that have not complied with the affirmative action requirements or have complied but not certified such compliance using the OFCCP’s Contractor Portal, should do so as soon as possible. Contractors that have questions about registration, certification, coverage under the law, and similar issues may wish to contact competent counsel.

Last month, I offered the first in a series of blog posts that attempt to simplify the various laws that are often described as a single law: “Buy America,” “Buy American,” “Made in the USA,” “Made in America,” and “Build Back Better.” 

First, I want to return to the cliffhanger from the last post: 

Did you know that George Washington wore a brown suit to his inauguration? Washington did not want to wear a military uniform. He also did not want to wear a civilian suit that was made anywhere but the United States. 

Question:  Where do you find a suit in 1789? 

Answer:  You ask Henry Knox, your Secretary of War, to get it for you of course. 

Question:  Where did Knox get the suit from?

Answer:  The Hartford Woolen Manufactury after Washington wrote to Knox on January 29, 1789, and suggested he go to Hartford, Connecticut, “where I perceive a Manufactury of them is established.”

Economic nationalism has existed since the founding of the country. Two of the more well-known nationalist policies are “Buy American” and “Buy America.”  Yes, these are two different laws that have different requirements.

“Buy American” was passed by Congress in 1933 and signed by President Hoover during his last day of office.  It applies to all purchases of goods by the U.S. federal government valued at more than $10,000. The law requires that such goods purchased be produced in the U.S. although the requirement may be waived under certain circumstances. 

“Produced in the U.S.” = 100% manufactured in the U.S. with a set percentage of the cost of components coming from the U.S.

Historically, the set percentage of cost of components was 50%, but things have changed over time: 

  • Raised to 55% in 2021
  • Raised to 60% in October 2022
  • Set to increase to 65% in 2024 and 75% by 2029

In contrast, the “Buy America” Act was a provision of Surface Transportation Assistance Act of 1982.  It relates to mass transit related procurements that are funded at least in part by federal programs. The Buy America Act bars the award of federal financial assistance for infrastructure unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the U.S.

For Iron and Steel Products:

  • “Produced in the U.S.” = All manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.

For Manufactured Products:

  • “Produced in the U.S.” = (1) the product was manufactured in the United States; and (2) the cost of the product’s components mined, produced, or manufactured in the United States exceeds the required percentage of the total cost of the product’s component.

Got it straight?  In our next post, we will discuss the Biden’s Administration “Build America, Buy America (BABA) law,” along with the important topic of seeking waiver of its requirements.

Earlier this week, a class action lawsuit was filed against Delta Air Lines alleging that the company is misleading the flying public with its claims of carbon neutrality. The complaint is the latest in the growing trend of greenwashing lawsuits filed against companies of all kinds alleging that their environmental and sustainability claims do not actually match with reality.

In the case, the plaintiff, Mayanna Berrin, alleges that Delta’s claim that it has been carbon-neutral since March 2020 is false and misleading. Berrin acknowledges that Delta has been clear that, at least at present, it achieves carbon neutrality largely by purchasing offsets (after all, that language appears right on the in-flight napkin). And she does not allege that Delta is purchasing an insufficient amount of carbon offsets, at least on paper, to account for Delta’s global emissions. Instead, Berrin criticizes the accuracy and reliability of the offsets issued by voluntary carbon offset market and alleges that these carbon offsets often “overpromise and underdeliver” on their total carbon impact. According to Berrin, these market deficiencies particularly apply to Delta’s offsets, making its claims of carbon neutrality false and misleading.

The allegations in Berrin’s complaint are largely based on media reports on deficiencies in carbon offsets generally, as opposed to deficiencies specifically identified in the offsets Delta has purchased. For example, Berrin generally criticizes the offset market for:

  • Unreliable accounting and inaccurate projections,
  • Double and triple counting of projects,
  • The use of non-additional offsets based on reductions that would have occurred regardless of carbon market involvement,
  • Failure to provide immediate offsetting, and
  • Relying on projects that are impermanent (such as creating of forests that are ultimately destroyed by natural disaster).

Berrin then alleges that Delta’s own offsets fall victim to these deficiencies.

Among other things, the complaint cites to Delta CEO Ed Bastian’s February 14, 2020 announcement that the airline was going carbon neutral by March 2020. The complaint states that, in announcing Delta’s commitment, Bastian noted that carbon offsets are “not the solution.” However, the complaint fails to mention that Bastian also said that Delta would continue to use jet fuel “for as far as the eye can see.”

On behalf of herself and others similarly situated, Berrin seeks unspecified damages, disgorgement of profits, and an order from the court to stop Delta from making any claims determined to be false or misleading.

Below is an excerpt of an article, co-authored with Robinson+Cole Labor and Employment Group lawyer Sapna K. Jain, published in the Hartford Business Journal on May 1, 2023.

With Memorial Day weekend, the unofficial start to summer, just a few weeks away, employers may be preparing to welcome summer interns into the workplace. What are the legal requirements that may impact the hiring or engagement of summer interns, what training and new hire obligations may exist, and how might employers define the goals and strategy for their particular internship program? Read the article.

There is massive confusion both in the manufacturing community and the popular press. Even some of the well-respected industry publications have had a hard time getting it right. 

We see and hear the terms all the time:  “Buy America,” “Buy American,” “Made in the USA,” “Made in America,” “Build Back Better.” While all of these terms have a tinge of economic nationalism, very few manufacturers can unravel not only what each of the terms means but what type of economic opportunity might exist.

This is the first in a series of posts that attempts to simplify (if possible) the various laws that exist and how they may be relevant for manufacturers.

First, let’s get the misconceptions out of the way:

  • “Buy American” and “Buy America” are the same thing.
  • They are the same thing as “Made in America” and “Made in the USA.”
  • These are new laws passed by the Biden administration.
  • All these laws are controlled by one agency.

All of these statements are wrong. 

Second, a history lesson. Economic nationalism or “protectionist” policies have been around since the United States was founded. 

Did you know that George Washington wore a brown suit to his inauguration? Washington did not want to wear a military uniform. He also did not want to wear a civilian suit that was made anywhere but the United States. 

Question:  Where do you find a suit in 1789? 

Answer:  You ask Henry Knox, your Secretary of War, to get it for you of course. 

Question:  Where did Knox get the suit from?

Answer:  Wait until our next blog post! 

We will answer that question and also begin by explaining the differences between “Buy American” and “Buy America.” Yes, amazingly, they are different laws.