Employment Issues Related to Teleworking

I recently presented a program on “Employment Issues Related to Teleworking” as part of the free Coronavirus Special Topic Conference Call Series hosted by the U.S. Department of Commerce in partnership with the Connecticut District Export Council. Below are some key takeaways from the program that affect many manufacturers. .

  • While not normal, the social and economic disruption is not “unprecedented.” The employment decisions made by business executives will be judged by the perfect 20/20 vision of hindsight months in the future. For that reason, do not assume that you can use COVID-19 as a rationale for making employment decisions that you normally would not make in tranquil settings.
  • Be mindful of which groups are allowed to telework versus which groups required to work on site.  Perceptions of fairness, unfavorable or risky exposure can create human resources and litigation issues later.
  • It is important to have written policies during times of disruption, including but not limited to, on the following topics:
    • Temporary nature of work from home assignments; importance of protecting business secrets (data security, co-mingling of personal data; shredding of printed copies when crisis over); preservation of work product; responsibility for payment of costs associated with telework.
  • Wage and hour requirements still apply to telework. Exempt employees paid on a “salary basis,” performing exempt duties. Non-exempt employees recording of hours worked, pay for all hours worked, payment of minimum wage and overtime.
  • OSHA and workers compensation apply to home work. OSHA distinguishes between “home office” and “home manufacturing.”  Workers compensation will cover workplace accidents (even if in home).
  • New federal and state leave laws complicate telework arrangements. Track leave even for employees teleworking.

For the full audio of the program, visit the Connecticut District Export Council’s website.

OSHA Issues COVID-19 Guidance for Workplaces

Last week, the Occupational Safety and Health Administration (OSHA) issued guidance on preparing workplaces for COVID-19. The guidance provides recommendations to help employers plan for the impact of COVID-19 on their businesses, workers, customers, and the public. While a number of states have implemented orders affecting certain workplaces, this guidance remains important for all employers to consider.

The guidance provides a number of recommendations applicable to all employers. First and foremost, OSHA recommends that employers develop an infectious disease preparedness and response plan if they don’t have one already. The plan should consider occupational exposure, non-occupational risk factors, individual risk factors of workers, and controls necessary to address the identified risks. The plan should include basic hygiene and infection-control practices, policies for identifying and isolating sick employees, and the implementation of flexible policies to accommodate sick employees and their family members.

OSHA developed an Occupational Risk Pyramid to help employers determine if there is a very high, high, medium, or lower risk of exposure in their workplace. High risk jobs tend to be in the medical, laboratory, and morgue fields. Medium risk jobs require frequent close contact with people, but have no obvious connection to COVID-19 (schools, high-volume retail). Lower risk exposure jobs are ones that do not require frequent close contact and have no suspicion of exposure to COVID-19.

Some of OSHA’s recommendations are broken down by the risk categories defined in the Occupational Risk Pyramid. For the high and very high risk categories, OSHA recommends engineering controls, like appropriate air handling systems, personal protective equipment (PPE), and administrative controls, such as enhanced medical monitoring, training, signage, and psychological and behavioral support.

For the lower risk category, engineering controls and PPE are not recommended. Instead, OSHA recommends that lower risk employers monitor public health communications about COVID-19 and ensure that employees have access to that information. These employers should also collaborate with workers to determine and implement an effective plan for communicating COVID-19 risks to employees.

In the medium risk category, the recommendations leave a bit more to the employer’s discretion. These employers should consider offering face masks or shields to ill employees and customers until they are able to leave the workplace. They should also limit or restrict customer and public access to the workplace where appropriate, and consider ways to minimize face-to-face contact, such as telephone communication or remote work.

While there is no specific standard governing COVID-19 exposure, in the guidance, OSHA references both the PPE standard and the General Duty Clause as potentially applicable requirements for preventing occupational exposure. The guidance is intended to assist employers in providing a safe and healthy workplace, and employers should be familiar with the recommendations and consider whether any of their workplace plans or procedures should be updated.

Aerospace Suppliers Should Brace for Headwinds

Below is an excerpt of a contributed article published in Industry Week on March 12, 2020.

In case you missed it, a Boeing 747—the “Queen of the Skies”—recently set a record by flying across the Atlantic from New York to London in under 5 hours at over 800 mph. The record was set with the aid of a significant tailwind of approximately 200 mph.

Tier 1 and 2 aerospace suppliers (in both engine and airframe) also have benefited over the past several years from a significant OEM demand tailwind. Dozens of articles have been written about the record boom in the commercial airspace market due to the huge growth of global passenger travel.  The outlook remains strong, assisted by airline travel costs being lower due to industry innovation and productivity improvements.

There are clear signs from the OEMs, however, that headwinds are coming for suppliers–and these signs were occurring even before the coronavirus effects on the economy and air travel took hold.

Read the full article.

Unfolding Coronavirus Conditions Present Unprecedented Challenges For Manufacturers

The patchwork of federal, state and local laws addressing leaves of absence, protections of people with disabilities and a manufacturer’s general obligation to provide a safe workplace come head-to-head with public reports of an evolving situation.  Right now, the CDC admits that “[m]uch is unknown about how the virus that causes COVID-19 spreads.”  Manufacturers should be prepared to respond before an identified local outbreak.

As manufacturers face the complex issues presented by coronavirus, courts, legislatures and policy makers will address the legal challenges in greater detail.  Today, a manufacturer’s legal response will depend on (i) the location of the manufacturer’s facilities, (ii) the manufacturer’s current policies and practices, (iii) local and state legal obligations, (iv) the location of the customer or event, and (iv) the practical make-up of the specific manufacturer’s business.

The CDC has published Interim Guidance for Businesses, which can be found here.  Among other things, the CDC cautions that manufacturers should make sure that employment decisions are based on factors unrelated to the employee’s country of origin, race or ancestry, or other discriminatory criteria; encourage employees who are ill or may have been exposed to the coronavirus to work from home (if possible) or take leave; cancel business travel to areas of high infection or risk; and adopt cleaning and hygiene policies which can help stop the spread of disease generally.

It may also be wise for manufacturers to anticipate issues that may arise, train local managers and supervisors on appropriate responses and obtain prompt legal advice from skilled practitioners.  A list of issues that manufacturers may want to consider are set out below.

  • Does the manufacturer require an employee to report any trip outside the United States, to a level 2 or 3 infected area, or to an area which may have exposed the employee to a person who traveled outside the United States or to an infected area?
  • Does the manufacturer require employees traveling to a level 2 or 3 infected area to stay home from work on either paid or unpaid leave? If paid leave is available, what rates apply and does the exempt or non-exempt status of the employee matter?
  • Will the manufacturer require an employee returning to work after being ill or in self-quarantine to provide a “fitness for duty” examination or medical clearance?
  • Will the manufacturer permit employees who fear workplace exposure from others to work from home or take leave?
  • If a manufacturer refuses to allow an employee to work, must the manufacturer pay the employee for the time or can it allow the use of paid sick, vacation or personal leave?
  • Does the manufacturer have a contingency staffing plan in the event of a local outbreak and are protections in place to make sure contingency labor has been trained?
  • Have any union bargaining representatives been consulted about the manufacturer’s contingency planning?

Manufacturers should keep in mind that not only do state and local leave laws differ by jurisdiction, but the severity of the coronavirus situation may vary greatly as well.  Local managers should  be trained on the company’s policies and be given flexibility to quickly respond to local developments.

DOJ’s Latest FCPA Pressure Tactic: Charging Multiple Violations for Single Alleged Payment Scheme

This week, we are pleased to have a guest post from Kevin Daly.  Attorney Daly is a member of the firm’s Manufacturing Industry Group and also its Trade Compliance Team.

The Foreign Corrupt Practices Act (“FCPA”) prohibits paying or offering bribes to foreign officials to obtain business advantage. In some instances, the paying or offering of bribes prohibited by the FCPA may involve multiple electronic communications sent over time. A federal court in New Jersey recently considered the novel issue of whether multiple communications in furtherance of a single bribe can be charged as multiple offenses under the FCPA. Continue Reading

Labor Board Showing Valentine’s Love to . . . A Labor Union?

I think by now regular readers of this column know I embrace my inner geek.  I read decisions when they are issued in areas where I am trying to identify trends, anticipate future events, and give clients and friends some insight they may not get from others.  And you know that I have been keeping tabs on the National Labor Relations Board now that it is being led by a unanimous Republican-led, Trump-appointed group of decision-makers.

You might imagine my surprise when I read a recent unanimous decision where the Board reversed the administrative law judge and held that the firing of a union advocate was illegal.  The case is called  Rhino Northwest, LLC, 369 NLRB No. 25 (Feb. 6, 2020) and it is an interesting read.

Employees at this Company would be assigned jobs based on a referral list.  Rhino Northwest had a written policy that if an employee did not accept an available assignment for 90 days, she or he would be “deactivated” from the list and would not be referred jobs in the future.  An  employee who was “deactivated” could be “reactivated” on request.

Following  a union organizing campaign, which the union won, an employee was “deactivated” from the list.  The employee happened to be a big union supporter and ran a competing business.  During the election campaign, senior management made a good deal about the fact that this union supporter ran a competitive business and questioned whether that competitor had a union contract.  (The employee asserted, somewhat proudly I think, that he was a union company.)

Once the election was over, Rhino Northwest deactivated the employee.  The HR director said he was deactivated because he had not worked in 90 days.  Others testified it was because he ran a competitive business, which was against another written policy.

After a full trial, the administrative law judge found the discharge to be lawful.

The NLRB did not agree.  Stressing that the issue was not whether Rhino Northwest could have fired the employee for running a competitive business, but whether the company’s stated reason was the true reason, the Labor Board examined the record and rejected the Company’s defense.  A key part of the decision centered on the fact that other managers had known about the employee’s competition for a long time and even referred work to him, without issue.  The Board was also troubled by the fact that the reasons for the actions were not consistent.  People could not get their story straight.

I do not think this signals a “softer” or more “employee-friendly” NLRB.  Perhaps the Board just could not reconcile the facts to the Company’s theory.  Or, perhaps, the Board was just showing some Union love around Valentine’s Day.

 

The U.S.-Mexico Patent Prosecution Super-Highway

This week, we are pleased to have a guest post from John L. Cordani, Jr.  John is a member of Robinson+Cole’s Manufacturing Industry Team and regularly counsels clients on intellectual property issues involving patent procurement, licensing, and litigation.

For the past several years, the patent offices in the United States and Mexico have operated under a type of patent examination fast-tracking and work-sharing agreement known as a Patent Prosecution Highway (PPH). This agreement between the United States Patent and Trademark Office (USPTO) and the Mexican Institute of Industrial Property (IMPI) was set to expire in June of this year, and the status of the program going forward was uncertain.

But on January 28, the Offices announced a new agreement that promises to improve upon the PPH system by creating an even “more streamlined approach” to obtaining a Mexican patent once a corresponding U.S. patent is granted than that presently offered under the PPH. Read the full article on IPWatchdog.com

IoT Manufacturers – What You Need to Know About California’s IoT Law

This week we are pleased to have a guest post from Deborah George, a member of Robinson+Cole’s Data Privacy + Cybersecurity Team. Attorney George focuses her practice on data privacy and security, cybersecurity, and compliance with related state and federal laws, advising clients on the development of privacy and security plans, including WISPs, policies and procedures to comply with state and federal data privacy and security laws and regulations, and website and mobile app privacy policies and terms of use.

California has another privacy law that took effect on January 1, 2020 and it’s not the California Consumer Privacy Act (CCPA). This privacy law regulates Internet of Things (IoT) connected devices. SB 327 was enacted in 2018 and became effective on January 1, 2020. The California IoT law requires manufacturers of connected devices to equip the device with a reasonable security feature or features that are all of the following:

  • appropriate to the nature and function of the device;
  • appropriate to the information the device may collect, contain, or transmit; and,
  • designed to protect the device and any information contained therein from unauthorized access, destruction, use, modification, or disclosure.

So which manufacturers must comply with this new law and what is considered a connected device?

A manufacturer is defined as the person who manufactures, or contracts with another person to manufacture on the person’s behalf, connected devices that are sold or offered for sale in California. This seems clear enough, if you manufacture a connected device that is sold or offered for sale in California, the California IoT law applies.

What is a connected device?

A connected device means any device or other physical object that is capable of connecting to the Internet, directly or indirectly, and that is assigned an Internet Protocol address or Bluetooth address. Smart phones, watches, speakers, wearable devices, televisions, thermostats, doorbells — the list is almost endless — are all examples connected devices.

What is a reasonable security feature?

The law states it shall be deemed a reasonable security feature if either of the following requirements are met:

(1) The preprogrammed password is unique to each device manufactured; or
(2) The device contains a security feature that requires a use to generate a new means of authentication before access is granted to the device for the first time.

California joins Oregon as one of two states that require reasonable security features for IoT devices. For more information on the Oregon IoT law, see a previous post from the Data Privacy + Cybersecurity Insider blog here. Both of these laws mean that manufacturers must incorporate these security measures into connected devices. As a practical matter, these security features mean that IoT devices will be less vulnerable to attack since they will no longer work with the “generic” default password set by a manufacturer.

A Look Back and Ahead: 2020 Employment Law Predictions

Our tradition includes using our first January post to make predictions about “what’s to come” in the year ahead. But first, let’s see how I did over the last year. “Time for 2019 Manufacturing Law Predictions: Drum Roll Please!” (Jan. 9, 2019).

I boldly predicted that on the federal level the government would continue to roll back the aggressive enforcement policies of the Obama administration and that some states (at least the 13 states where Democrats control by the governorships and legislatures) would continue to expand enforcement and employee protections. I agree that I was not going out on much of a limb with those predictions. And not surprisingly, they both came true.

The National Labor Relations Board (NLRB) overturned case precedent at a stunning rate, adopted and implemented revised election rules in record time, and otherwise pumped the brakes on “anti-business” practices. See U.S. Government Agencies’ Fast Track Changes to Legal Standards (Part 1)” (April 12, 2019). The Department of Labor also got in the act by adopting new rules for overtime pay and a new rule validating business arrangements that might otherwise result in a “joint employer” finding. See “For Manufacturers, ‘It’s Déjà Vu All Over Again!’” (Sept. 19, 2019).

Speaking of “joints,” a record number of states either decriminalized or outright legalized medical or recreational marijuana. Pot is now legal for recreational or medical reasons in over 32 states. See Legal Pot = Manufacturing Storm Clouds (the Refrain)” (Oct. 31, 2019) and “Legal Pot = Storm Clouds for Manufacturers” (May 29, 2019). The states also flexed their muscles with respect to non-compete and other post-employment restrictions. See Protecting a Manufacturer’s Competitive Advantage: Recent Developments in Post-Employment Restrictions” (Oct. 10, 2019). And New York State decided to compete with California to see which could claim the title of “most employee-friendly” or “least business-friendly.” SeeManufacturers Face New Discrimination Rules” (June 28, 2019). (I think California still holds that title, but it is getting to be a closer contest.)

I could go on, but I think I made the point. What can we expect in 2020? The same thing, only more of it.

With another presidential election on the horizon, putting the entire of House of Representatives and one-third of the Senate in play, we can expect both sides to retreat to their political bases. In Washington, the Trump Administration will push through as many regulatory changes as possible, hoping to prevent the next administration (whether in 2021 or 2025) from overturning their own overturning of the other side’s precedent. Meanwhile, at least in those states controlled by the “other party,” we can expect increased regulation of the employment landscape. I see more minimum workplace standards, increased paid sick and child care leaves, and a closer look of private agreements used to circumvent the will of the state governments. (Pay close attention to laws like those introduced in several legislatures targeting arbitration agreements.)

Manufacturers, particularly with operations in multiple states, should remain vigilant in regard to these contrasting trends. Remember, now is not the time to panic. We have plenty of time to panic.

 

2020 Corporate Compliance & Litigation Outlook for Manufacturers

We kicked off our seventh year writing the Manufacturing Law Blog with Megan’s predictions for EH&S and Matt weighed in about labor and employment.  So, now it is my turn:

Sales Growth

You might wonder why I would start a compliance/litigation discussion with a business issue, but for most industrial companies these issues are interrelated.  We have been working with our clients for years in finding ways to develop an approach to sales that will drive revenue while mitigating legal risk.  The most concrete example is encouraging our clients to adopt a contract management system that gives salespeople flexibility while identifying the truly strategic issues that can lead to significant losses.  The secret to success for many manufacturers, particularly those companies that are not “build to print,” is having processes in place at the quotation stage.  How many times have you heard someone say that we should have never taken on a project or that we priced it incorrectly, resulting in many non-recurring expenses that can never be recovered?  With that said, I have seen a lot of manufacturers get control of this process at the outset, and I expect more of the same in 2020.

International Growth

In 2019, we saw a number of international clients invest in their U.S. operations.  I expect this to continue in 2020, due to both a relatively healthy economy and other political forces, such as tariffs.  We have also received a number of calls from international companies that are looking to open up facilities in the United States.  Typically, the first things people would want to talk about is tax planning and corporate structures.  Over the past few years, however, international companies usually want to talk about where their customers are located first, and then delve into issues about building manufacturing facilities and the various regulatory challenges that arise from that event.

Customer/Supply Chain Disputes

We are seeing more business-to-business disputes – particularly in the manufacturing sectors that are struggling.  As a general principle, most manufacturers try to avoid litigation with their customers for obvious reasons.  And the same can be said of suppliers.  There are always bad contracts signed and poor terms and conditions drafted, and if things are going well, companies usually work out their disputes.  In 2020, I would look at a sector like aerospace as a harbinger of things to come.   We all have read about Boeing, but the engine OEMs are also starting to show signs of seeking to renegotiate deals with their suppliers and recover monies owed under long-term agreements.  I expect the supply chain to continue to get squeezed in 2020 and beyond, and I don’t think this will be limited to aerospace.

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