This week’s post was co-authored by Robinson+Cole Labor and Employment Group lawyer Emily A. Zaklukiewicz.

This week, we continue our 2022 outlook series with a focus on labor and employment.  It goes without saying that over the last two years, the COVID-19 pandemic has revealed certain weaknesses and opportunities in the economy and in our workplaces.  In response, federal, state, and local governments have passed a number of laws and regulations addressing issues such as vaccination and workplace safety, paid leave, pay transparency, and other laws and several legislative trends have emerged.  The following are a few of the issues and trends that may impact manufacturers in 2022.

1. COVID-19 Vaccination Rules

We expect that federal, state, and local governments will continue to actively respond to the COVID-19 pandemic.  Last year, we saw many states and localities impose vaccination and/or testing requirements upon employers across various industries.  Further, the federal government imposed vaccination requirements upon certain federal contractors, healthcare facilities, and private employers employing 100 or more employees.  A myriad of legal challenges were brought in response, the most recent of which resulted in a decision by the U.S. Supreme Court staying the implementation of the federal Occupational Safety and Health Administration’s COVID-19 Emergency Temporary Standard, applicable to employers with 100 or more employees.  Similarly, last November, a Georgia federal court temporarily blocked the vaccine mandate for federal contractors.  In 2022, we may see additional developments concerning these federal initiatives as litigation on these issues continues.  We also expect that state and local governments will continue to implement their own initiatives, especially in the absence of federal regulation.

2. Paid Family and Medical Leave

In recent years, several states have implemented or expanded their paid family and medical leave laws, including California, Colorado, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Washington, and the District of Columbia. As a result, employers in states that have enacted paid family and medical leave laws may see increased use of family and medical leave, on a long-term basis, amongst employees and should be prepared to manage such leave from a human resources and operational perspective.

3. Wage Disclosure Laws

In recent years, several states and localities have imposed pay transparency obligations upon employers. These laws contain varying employer obligations including providing wage ranges to new employees, including wage ranges or compensation on job postings, among other obligations.  In light of these new requirements, employers should take steps to ensure they are in compliance with their relevant disclosure obligations in 2022 and beyond.  We expect to see more states and localities join this trend, aimed at closing discriminatory wage gaps that may exist and increasing pay equity, in the coming years.

4. The “Great Resignation”

On the heels of the COVID-19 pandemic, many manufacturers are grappling with staggering labor shortages as employees across the country are resigning from their jobs at unprecedented rates, a trend that some have coined the “Great Resignation.” This trend is attributable, in part, to workforce issues such as exhaustion, burn-out, and stress among employees, which have worsened during the pandemic. As manufacturers seek to attract and retain talent in 2022, we expect to see an increased focus on hiring, recruitment, and incentivization of prospective and current employees.  Further, we may see a shift in trends surrounding compensation, leave, benefits, and other offerings aimed at employee retention.  Lastly, employers seeking to address staffing issues may wish to increase their focus on employee engagement and morale, wellness and mental health, training and development, recognition and rewards, and their overall workplace culture in 2022.

5. Union Organizing

In 2021, the Biden administration designated both a new General Counsel and Chairman of the National Labor Relations Board (NLRB), both of whom have expressed the NLRB’s plans to significantly expand employee rights and protections under the National Labor Relations Act.  As a result, in 2022, we may see the labor movement gain momentum, with higher rates of union organizing activity among employees across various industries. Employers should consider monitoring this issue, training supervisors on labor laws, and seeking counsel when necessary.

Last week, Jeff kicked off our 2022 outlook for manufacturers, covering corporate compliance and litigation. This week, I am turning to the environmental, health, and safety issues that may occupy the minds and the time of manufacturers in 2022.

1. Emerging Contaminants

We have been talking about per- and polyfluoroalkyl substances (PFAS) for so long now they hardly seem to qualify as “emerging.” But this year, EPA is expected to take a number of specific actions that will directly impact manufacturers. At the end of last year, EPA issued its PFAS Strategic Roadmap, outlining its action plan for PFAS through 2024. Notably, the Roadmap begins by classifying PFAS EPA’s approach into three directives: Research, Restrict, and Remediate.

In 2022, EPA aims to greatly expand monitoring of public drinking water supplies for PFAS. It also intends propose a rule to establish national primary drinking water regulations for two of the main PFAS compounds—PFOA and PFOS. To use an often-repeated phrase, when you look for PFAS compounds, you find them. This increased sampling, likely detection, and ultimate regulation of PFAS in public water supplies will likely lead to further legal action, as water suppliers and regulators alike look for the parties responsible for the PFAS they are almost certain to find when they start looking.

EPA is also expected to use Clean Water Act wastewater discharge permits as a way to reduce PFAS discharges. In 2022, EPA plans to restrict PFAS discharges from certain industrial categories—organic chemicals plastics, and synthetic fibers; metal finishing; and electroplating— as well as to study the potential for a number of other industries to contribute PFAS to the nation’s waterways through their discharges.

EPA has long talked about designating PFOA and PFOS (and potentially other PFAS compounds) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). 2022 may be the year. EPA has committed to proposing that designation for PFOA and PFOS in 2022, with a final rule coming in 2023. It also plans to undertake formal efforts to determine whether other PFAS compounds should share this designation. The “hazardous substances” designation will allow EPA greater authority to seek information on, and require cleanup of, PFAS, and it will also open PFAS contamination up to the wild world of Superfund litigation.

We could devote the rest of this post to the potential for PFAS-related developments in 2022, but alas, there are other things we need to keep our eye on as well. But it is important to note that EPA is planning actions to further regulate PFAS across the board—under the programs listed above as well as the Toxic Substances Control Act, Clean Air Act, and others. And this is to say nothing of proposed state actions related to PFAS, which we also expect to heat up in 2022.

Contrary to what you might think based on the content of this post so far, PFAS is not the only emerging contaminant on our radar. Another one to watch in 2022 is microplastics. Microplastics are exactly what they sound like—tiny, often microscopic particles of plastic that can either be directly released into the environment or formed as a result of breakdown of larger plastics. California has already started down the road of developing regulations for microplastics, even while the scientific community still works to determine the potential human health and environmental impacts associated with them. Notably, California is working towards developing analytical testing methods for microplastics in 2022, which may kick off a wave of studies to determine how pervasive they truly are—and what to do about it.

2. ESG Developments

While we continue to wait for more formal and consistent disclosure regulations from the U.S. Securities and Exchange Commission regarding ESG—environmental, social, and governance—factors, manufacturers are already dealing with ESG in a variety of ways. It is finding its way into corporate filings, board rooms, courtrooms, press releases, the media (traditional and social), and the minds of both investors and consumers. And it is having real consequences on the bottom line.

Many manufacturers have been making climate change-related disclosures for years, albeit under a general standard of materiality that is generally left to the interpretation of the discloser. In some cases, these disclosures have been used to tout a company’s sustainability profile, and advertising and marketing efforts typically follow suit. But as consumers and investors grow increasingly interested in—and educated about—environmental issues, these sustainability statements can sometimes have the opposite impact. Many manufacturers have been the targets of greenwashing lawsuits, with plaintiffs alleging consumer protection violations when a manufacturer’s claims about a particular product do not match up with reality. These claims have also found their way into shareholder derivative suits, as we have previously reported. We can expect to see this activity continue, and likely increase, in 2022, as consumers and investors continue to meaningfully dig in to corporate sustainability claims as they evaluate their purchases and investments.

3. Environmental Justice Guidance

In 2022, EPA is expected to issue important guidance that has the potential to advance the Biden Administration’s environmental justice agenda. The document, “Guidelines for Cumulative Risk Assessment Planning and Problem Formation,” will provide a framework to analyze cumulative risk in situations of exposure to multiple environmental hazards. The guidance, which has been in the works for years, will be particularly important in assessing the impacts on vulnerable and disadvantaged communities. The guidance will be used in a broad range of environmental programs and is expected to impact cleanup priorities and enforcement decisions.

4. Employee Safety Related to COVID-19

If you are a regular reader, you know that we spent significant time in 2021 covering the myriad OSHA developments related to COVID-19. And while the Emergency Temporary Standard (ETS) related to vaccines and testing appears to be on life support, OSHA has made it clear that it will do everything in its power to protect the nation’s workforce from COVID-19. Will that be through the ETS, another OSHA standard, or already-adopted guidance and the General Duty Clause? Only time will tell, but we can expect to see increased inspection and enforcement in 2022.

Thank you to my colleagues Jonathan Schaefer and Abby Warren for their contributions to this post.

We take a break from our regularly scheduled “2022 outlook” programming to bring you breaking news on the seesaw that is the enforcement of OSHA’s Emergency Temporary Standard (ETS) regarding COVID-19 vaccination or testing. As we previously reported, it was on, then it was off. Then it was on, and now it is off again. Yesterday, the United States Supreme Court reinstated the stay of OSHA’s ETS, ultimately sending the rule back to the Sixth Circuit to await a full review on the merits.

In the 6-3 opinion, the Supreme Court held that, while OSHA has the authority to regulate “occupational dangers,” it does not have the authority to regulate “public health more broadly.” The Supreme Court held that, while COVID-19 might be present in workplaces, it is not necessarily an occupational hazard in most. “Permitting OSHA to regulate the hazards of daily life—simply because most Americans have jobs and face those same risks while on the clock—would significantly expand OSHA’s regulatory authority without clear congressional authorization.”

While the ultimate fate of OSHA’s ETS will continue to play out in the courtroom, U.S. Secretary of Labor Marty Walsh released a statement urging employers to require workers to get vaccinated or tested weekly.  Secretary Walsh also referenced OSHA’s existing COVID-19 guidance as a resource for employers to keep workers safe from COVID-19. Secretary Walsh concluded by saying:

“Regardless of the ultimate outcome of these proceedings, OSHA will do everything in its existing authority to hold businesses accountable for protecting workers, including under the Covid-19 National Emphasis Program and General Duty Clause.”

Manufacturers should continue to monitor the fate of the OSHA ETS as it heads back to the Sixth Circuit. In addition, the Executive Order related to COVID-19 vaccination/testing for federal contractors that we previously summarized, while currently stayed, may be reinitiated as well. Manufacturers should continue to monitor legal developments related to the Executive Order.

In late 2012, we created the Manufacturing Law Blog with the goal of providing our manufacturing clients with a holistic approach to the unique issues they face in their global operations.  Starting in 2016, we began a new tradition of dedicating our first three posts of the year to a yearly outlook from our different vantage points.

This year, I’m starting us off by addressing corporate compliance and litigation issues that manufacturers might expect to face in 2022:

  1. Reshoring – Hype or a fundamental change? Yes, there will be reshoring, but I am not convinced that this trend will explode in 2022 as there are significant challenges for doing so particularly when the manufacturing involved is labor-intensive.  That said, I do believe the attitude towards manufacturing domestically has changed throughout the supply chain during the COVID era.
  2. “Buy American” – Efforts to require manufacturers to buy domestically have been around for many years. Other countries are imposing “protectionist” laws to require more investment.  I expect to see more foreign direct investment into the United States for this reason.
  3. Force Majeure – This legal phrase was the “word” of 2020-2021 as it offers a basis to excuse contractual performance. We are starting to see some of these cases work their way through the courts, and we will be watching closely to see if any of them has a lasting impact on manufacturers.  You don’t need to be a lawyer to predict that the word “pandemic” will be in all force majeure clauses going forward.
  4. Acquisition Activity – There is no shortage of potential buyers of manufacturing companies, including strategic buyers and private equity buyers. There has been an increase in so-called proprietary deals (i.e., where one buyer negotiates exclusively) as opposed to auctions.  I think this will continue in 2022.
  5. Creative Solutions to Supply Chain Issues – Everyone wants to talk about the supply chain crisis that is impacting both consumers and industrial companies. In 2022, I will be working with companies as they develop creative solutions to these issues.  As an example, some companies are trying to find alternative ports of entry.

 

Thank you to Jonathan Schaefer for this post. Jon focuses his practice on environmental compliance counseling, occupational health and safety, permitting, site remediation, and litigation related to federal and state regulatory programs.

On December 21, 2021, the U.S. Supreme Court took its first step into the fray over federal vaccine mandates. As we have previously posted, legal challenges to the Biden administration’s various vaccine mandates have been working their way through the courts since November. Most recently, the U.S. Court of Appeals for the Sixth Circuit ruled last Friday that OSHA’s Emergency Temporary Standard (ETS) for COVID-19, which includes a vaccine-or-testing mandate, could continue after it was halted by another court the day after it went into effect. In an unusual move, the Supreme Court announced it will hold a special hearing on January 7 to hear arguments on both the ETS and a regulation from the Centers for Medicare and Medicaid Services (CMS) requiring vaccines for health care workers. The Supreme Court has not yet issued any rulings to stay either requirement. Both requirements are set to go into effect in January.

The January 7 hearing will occur just before the Supreme Court is set to begin its regularly scheduled term. The hearing also moves these legal challenges from the so-called “shadow docket,” which has been subject to criticism lately. The Supreme Court has repeatedly upheld state-implemented vaccine mandates in a variety of circumstances. However, the future of OSHA’s ETS and the federal contractor vaccine mandate will likely turn on whether Congress authorized the executive branch to institute these types of requirements. While the Justices’ questions during the January 7 hearing will likely give some insight into how they may rule, the date of a ruling on the future of these requirements is not known.

Thank you to Jonathan Schaefer for his contributions to this post. Jon focuses his practice on environmental compliance counseling, occupational health and safety, permitting, site remediation, and litigation related to federal and state regulatory programs.

On Friday, the U.S. Court of Appeals for the Sixth Circuit lifted a stay of OSHA’s Emergency Temporary Standard (ETS) on COVID-19 vaccination and testing for employers with 100 or more employees. As we previously posted, the Fifth Circuit almost immediately issued a stay of the ETS after its release. The Sixth Circuit’s ruling puts the ETS back on track as its January 4, 2022, compliance deadline approaches. Multiple parties have already filed emergency motions with the U.S. Supreme Court to eliminate the ETS entirely. The legal ping-pong match will surely continue into 2022.

Meanwhile, OSHA issued a statement on Saturday that no citations will be issued for noncompliance with the ETS before January 10, 2022. OSHA will also exercise discretion and not issue citations for noncompliance with testing requirements under the ETS before February 9, 2022, if “an employer is exercising reasonable, good faith efforts to come into compliance with the standard.” While OSHA’s statement provides covered employers some breathing room, time is running out to put in place the necessary measures to comply with the ETS. That is, if the Supreme Court does not volley in before January 4, 2022.

A few months ago, I was asked by the U.S. Department of Commerce to join a panel discussion on how to develop relationships with international distributors and representatives.

Most lawyer presentations on this subject begin by suggesting that manufacturers send their international partners one-sided contracts.  These contracts focus on legal terms such as consequential damages, non-solicitation, warranty, etc.  Many lawyers often overlook that some of these standard U.S. law terms may lead to distrust and/or misunderstanding due to differences in laws and cultural norms.  And, they may not even be enforceable.

The bottom line is that no contract, no matter how well written, will eliminate all risk.  There are certain industry realities that one has to grapple with, including that international partners often have just as much leverage as you do.  The objective should be to find a win/win.

So, when I talk to clients I think about two objectives.  The first objective is ensuring accountability.  The second objective is ensuring transparency.

Accountability (on both sides) can be achieved multiple ways, including by ensuring that the payment model is win/win, the margins work for both sides, deciding whether the distributor’s territory is exclusive, and deciding whether the distributor/sales representative is integrated with your business.

Transparency can be achieved through trip reports (note:  build the requirement into the contract) and potentially audit rights, among other things.

The three takeaways from this discussion are:

  1.  Signing them up can be easy.
  2.  Ensuring Win/Win – “Partnership” is just as important.
  3. Accountability and transparency in any contract is critical

Over the last few months, manufacturers have been paying close attention to two COVID-19 vaccination mandates issued by the federal government pertaining to employers.  First, on September 9, 2021, President Biden issued an Executive Order which imposed several COVID-19 safety standards and protocols, including mandatory vaccination, upon certain federal contractors and subcontractors.  Second, at the direction of the White House, the Occupational Safety and Health Administration (OSHA), on November 5, 2021, published an emergency temporary standard (ETS), to minimize the risk of COVID-19 transmission in the workplace which included a mandatory vaccination or COVID-19 testing protocol for employers with 100 or more employees.  What is the current status of these mandates and what, if anything, should employers be doing to prepare for, and comply with, them?

With regard to the Executive Order pertaining to federal contractors and subcontractors, covered contractor employees must be “fully vaccinated” by January 18, 2022, according to guidance issued by the White House’s Safer Federal Workforce Task Force.  Therefore, by that date, such employees must be fully vaccinated and have submitted appropriate documentation to their employer, or requested and been granted a medical or religious exemption from such vaccination. Covered federal contractors and subcontractors must also ensure that all employees and visitors comply with the Centers for Disease Control and Prevention’s guidance on physical distancing and masking while in the workplace, among other measures.  This mandate is currently in effect and the relevant federal agencies have been in contact with a number of covered contractors and subcontractors as it relates to their federal contracts.  Therefore, covered employers should consider implementing policies and procedures to meet these compliance requirements including a process for gathering requests for medical and religious exemptions from vaccination, collecting appropriate vaccination documentation, implementing additional safety measures for unvaccinated employees, among other actions.  It is important to note that under this mandate, there is no COVID-19 testing alternative to mandatory vaccination although testing may be used as an additional safety measure for employees who are granted a medical or religious exemption from vaccination.  Additionally, workplaces that are covered by this mandate are exempted from the OSHA ETS.

With regard to the OSHA ETS impacting employers with 100 or more employees, which required covered employers to mandate COVID-19 vaccination or weekly testing of their employees, that standard faced a number of legal challenges after it was issued.  Following the initial challenges, the U.S. Court of Appeals for the Fifth Circuit issued an order to stay implementation and enforcement of the standard on November 12, 2021; after the Court’s order, OSHA suspended any activities related to implementation and enforcement of this standard.  Petitions for review of the OSHA ETS were filed across the country and these petitions were consolidated and will be heard by the Sixth Circuit.  At this time, this standard is not in effect.  At this time, employers with 100 or more employees are not required to comply with this order but should consider collecting documentation of vaccination from employees, even if they choose not to require vaccination, in order to prepare in the event that the OSHA ETS survives the various legal challenges; such employers may also wish to determine how they will comply if this standard survives and the timing and actions that will be required in order to do so.

This issue is changing weekly, if not daily, so covered employers should remain vigilant in following developments, legal changes and guidance, and court decisions that may impact their compliance efforts.  Employers that have questions about the status of the two mandates and their applicability should seek legal counsel.

Thank you to Jonathan Schaefer for his contributions to this post. Jon focuses his practice on environmental compliance counseling, occupational health and safety, permitting, site remediation, and litigation related to federal and state regulatory programs.

Unless you’ve been living under a rock, you know that OSHA issued its long-anticipated COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS) at the end of last week. The ETS requires covered employers to either (1) develop, implement, and enforce a mandatory vaccination policy or (2) allow unvaccinated employees to test regularly and be subject to a mask policy. The ETS also contains COVID-specific recordkeeping, reporting, and training requirements. Most requirements in the ETS were set to go into effect by December 5. But by the time we finished reading the 154-page rule, the Fifth Circuit had stayed its implementation.

There is no doubt the legal landscape surrounding the ETS will have changed by the time you read this post. But regardless of what is happening in the courts, it is important for manufacturers to understand the scope and applicability of the rule. It could be back in effect as quickly as it was stayed, and the compliance timelines, at least in the originally published rule, were tight.

General Applicability

Generally, the ETS applies to all private employers with a total of 100 or more employees at any time the ETS is in effect. There are several exemptions and nuances to this applicability. For starters, any employer already subject to one of the following requirements, is not covered by the ETS:

In counting to 100, it is important to note that all employees are counted across all of the company’s locations in the United States. This includes part-time, seasonal, and work from home employees; those that do not report to a workplace; and those that work exclusively outdoors.

Mandatory Vaccination Policy or Testing/Masking Requirement

As promised, the ETS requires covered employers to either (1) require employees to be vaccinated, or (2) develop a testing program for unvaccinated employees that includes wearing face coverings. Employers choosing the mandatory vaccination option must allow employees to claim exemptions for disabilities, sincerely held religious beliefs, and medical necessity. Employers that opt for the testing/face covering option will be required to track the status of unvaccinated employees and their testing results, monitor face covering compliance, and determine whether the employer is responsible under other laws, regulations, or collective bargaining agreements to pay for the testing.

OSHA’s COVID-19 Vaccination and Testing ETS website has sample templates for both a mandatory vaccination policy and a vaccination or testing and face covering policy.

Regardless of the type of policy put in place, covered employers will be required to determine the vaccination status of each covered employee. Unlike the rules for determining whether you have 100 or more employees, for the vaccination determination requirement, covered employees do not include those that work from home, remotely, or exclusively outdoors.

Employers must provide accommodations for previously unvaccinated employees to get vaccinated, including up to 4 hours paid time, including travel time, at the employee’s regular rate of pay, as well as reasonable time and paid sick leave to recover from any side effects associated with the vaccinations.

Employers that choose mandatory vaccination will likely have a number of employees that qualify for one of the exemptions described above. In those instances, OSHA encourages the employer to find the safest work option, such as remote work. However, OSHA also assumes that many of these employees will be subject to testing to allow their employers to comply with the ETS. If so, an employer that chooses mandatory vaccination to avoid the logistical issues associated with testing might find themselves in that position anyway.

Information Requirements

Covered employers must provide each covered employee with information, in a language and at a literacy level that the employee understands, regarding:

  • the requirements of the ETS;
  • workplace policies and procedures established to implement the ETS;
  • vaccine efficacy, safety, and the benefits of being vaccinated (by providing the CDC document “Key Things to Know About COVID-19 Vaccines”);
  • OSHA’s protections against retaliation and discrimination; and
  • laws that provide for criminal penalties for knowingly supplying false statements or documentation.

Recordkeeping and Reporting

The ETS will also impose specific reporting obligations for COVID-19 fatalities and hospitalizations upon covered employers. These reporting obligations largely track employers’ existing reporting obligations found in 29 C.F.R. § 1904.39, except that, with regard to COVID-19 fatalities and hospitalizations, OSHA has eliminated the requirement that, to be reportable, the fatality must have occurred within 30 days and the hospitalization must have occurred within 24 hours of the work-related incident. Because COVID symptoms can be delayed, OSHA did not feel a temporal reporting restriction was appropriate.

While the timeline to comply with the ETS is in flux, it is important to stay on top of developments to ensure that you have sufficient time to react and be in compliance when and if the ETS takes effect.

This week’s post was co-authored by Robinson+Cole Labor and Employment Group lawyer Emily A. Zaklukiewicz.

As 2021 comes to an end, many employers are preparing to meet record and reporting obligations. For employers with 100 or more employees who are required to file the EEO-1 Component 1 Report (EEO-1 Report) annually, this may involve ensuring that the relevant personnel information is accurate. While the annual deadline for submitting the EEO-1 Report is typically March 31 (subject to change and extension), employers must generally choose a “snapshot” period for their EEO-1 Report by selecting one pay period in the fourth quarter of the relevant survey year (i.e., the year prior to submission). One issue related to reporting obligations that has arisen in recent years is how to properly report employee with non-binary genders on the EEO-1 Report. Continue Reading Reminder to Employers Regarding EEO-1 Reporting Obligations