To Require or Encourage COVID-19 Vaccine. . . That is the Question

By Abby Warren on Posted in Coronavirus, Health & Safety, Labor Relations

I am pleased to join as one of the regular contributors to the Manufacturing Law Blog. I am a labor and employment lawyer and I will be providing insights from that vantage point, which Matt Miklave has so ably contributed over the past several years. Matt is retiring from Robinson+Cole and we wish him well as he opens his own firm.

After months of countless updates on the status of the COVID-19 vaccine weaving its way through the regulatory approval process, the vaccine has arrived! Now many employers are grappling with a key question – what type of vaccination program can employers implement?

According to guidance issued by the Equal Employment Opportunity Commission (EEOC) on December 16, 2020, employers may implement a mandatory COVID-19 vaccine program for vaccines that have been authorized or approved by the Food and Drug Administration (FDA). As part of that program, employers may inquire as to whether an employee has been vaccinated and request proof of vaccination. That being said, according to the guidance, employers should review requests for reasonable accommodation from employees seeking an exemption from vaccination based on a disability or a religious reason. In reviewing such requests, employers would then determine if an unvaccinated employee would pose a “direct threat” to the health or safety of individuals in the workplace that cannot be reduced to an acceptable level by conducting a case-by-case analysis and taking an approach that is meant to limit potential risks. Continue Reading

Strategies for Privately-Held Manufacturers That Wish To Access Capital to Grow or to Exit

By Jeffrey White on Posted in Best Practices, Contracts, Industry Outlook

There are a lot of programs from service providers that seek to advise business owners on what to do after they have decided to sell their manufacturing business. I equate it to trying to jump on a ship just as it is entering port.

What happens, however, if you don’t know what to do or, more commonly, you don’t have the time to consider all of your options? This week, I had the pleasure of participating in a panel discussion with Tom Heide (CEO, Heide & Company) and Jeff Klaus (Regional President, Connecticut, Webster Bank) on these topics. We covered a broad range of issues, including the various options for accessing capital needed to grow, including debt and equity investments such as from family offices, private equity, and the like. If you are interested in the recording, please contact me at jwhite@rc.com.

Here are some of the takeaways offered by the program panelists:

  1. Know your value / be in control by being realistic; have a clear well-defined strategy and a set of objectives you want to accomplish; evaluate what resources you have and those you need so you can execute on that strategy. The key is in the execution.
  2. As an owner / operator you spend the vast majority of your time “working in” your business because you love it, but not so much time “working on” your business. That’s where the difference in incremental value is gained. If you don’t do that, you’re going to leave a lot of money on the table. That’s just a fact.
  3. Access to all forms of capital (debt, mezzanine, equity) is more widespread than ever for privately-held businesses with under $100 million in revenue.
  4. If you are considering growing your company through acquisition, seek the early advice of a commercial banker who works in acquisition finance to understand what may be possible for financing.
  5. Understand the importance of “recurring revenue,” particularly as it relates to your contracts, because that is where investors will start looking first.

EPA Issues Interim Strategy for Addressing PFAS in Wastewater Permits

By Megan Baroni on Posted in Environmental Compliance & Permitting

As we previously reported, EPA published a PFAS Action Plan in 2019 designed to enhance and improve data gathering, regulatory development, enforcement, and communication related to per- and polyfluoroalkyl substances (PFAS). EPA continues to make progress implementing the PFAS Action Plan and is working on a more formal framework for addressing PFAS under the Clean Water Act. In the meantime, EPA’s Office of Water recently issued an interim strategy for addressing PFAS in National Pollutant Discharge Elimination System (NPDES) permits.

The interim strategy makes a number of recommendations for the consideration of PFAS in the NPDES permit program. Some of these recommendations involve gathering and sharing information, but others may directly impact permit requirements.

According to the interim strategy, permit writers should consider incorporating requirements for monitoring PFAS at facilities where PFAS are expected to be present in wastewater discharges. Specifically, PFAS may be incorporated into an NPDES permit in the absence of monitoring data if, “because of the raw materials stored or used at the facility, products or byproducts of the facility operation, or available data and information from similar facilities, the permit writer has a strong basis for expecting that the pollutant could be present in the discharge.” Under the interim strategy, NPDES permits may also incorporate best management practices to control or abate a PFAS discharge.

The interim strategy also suggests consideration of PFAS in stormwater permits. In situations where PFAS are expected to be present in stormwater, permit writers may consider monitoring requirements as well as stormwater pollution controls specific to PFAS.

The interim strategy recommends the ongoing information sharing on the development of PFAS requirements in NPDES permits. It also calls for the development of a compendium to compile practices, trends, and developments to address PFAS in NPDES permits around the country.

As of now, EPA has not provided much detail as to what may give it a “strong basis” to expect PFAS to be present in a discharge such that PFAS can be incorporated into an NPDES permit. Based on the language quoted above, however, it appears EPA may use not only information about the actual facility subject to the NPDES permit, but also information from similar facilities to make that determination. We will continue to follow these developments as the interim strategy is rolled out.

The Boeing 737 MAX is Back – What is the Impact for Manufacturers?

By Jeffrey White on Posted in Industry Outlook

It is hard to move the news cycle beyond vaccine updates, but this week brought such news. The aerospace industry received the announcement that many were expecting for a long time. The FAA has decided to allow Boeing to resume deliveries and commercial flights of the 737 MAX by the end of the year.

What is the impact? From an aerospace supply chain perspective, the distribution of a vaccine and the 737 MAX are connected because they each relate to the eventual return of people getting on airplanes, both for business and personal reasons. From a long-term perspective, the fundamentals of the aerospace industry remain solid and there will be a recovery.

However, I have heard some in the media and in the manufacturing industry try to suggest that the return of the 737 MAX will fix the problems in the industry in the short term.

I agree with many of the reactions set forth in a recent article published by Reuters, which attempts to “pump the brakes” on the immediate impact of the 737 MAX. Industry leaders such as Kevin Michaels and Richard Aboulafia underscore the stark reality.

Aboulafia states:

“The market really won’t need new-build planes for a few years, since there are 387 737 MAX’s waiting to return to service, and 450 already-built 737 MAX’s waiting to be delivered.”

Michaels concurs:

“This is great news but . . . It will take several years (for the 737 MAX supply chain) to get back to full production, maybe as many as three years.”

At the end of the day, the return of the 737 MAX is good news in the long-term for Boeing and for the aerospace supply chain. But, the short term challenges remain, as Boeing and Airbus expect that their suppliers will use this time of relatively-low demand in commercial airspace to invest in their businesses. Easier said than done.

“Georgia On [Manufacturers’] Minds”

By Matthew Miklave on Posted in Discrimination/Harassment, Employment Decisions, Family Medical Leave Act, Labor Relations, Litigation, Wage and Hour

Regular readers of this blog know that I have been cautioning manufacturers about what I expect will become a significant “snap back” in federal workplace regulations because of Joe Biden’s election as president.  It may be time to consider the changes which may lay ahead.

During his first term, President Biden will be able to appoint a majority of the National Labor Relations Board (Chairman Ring’s term ends in 2022, Member Emanuel’s term ends in 2021, and there is a current vacancy) and its “top cop” (General Counsel Robb’s term ends in 2021).  President Biden will also be able to appoint a majority of EEOC Commissioners (Chair Dhillon’s term ends in 2022, Commissioners Samuels and Burrows terms end in 2021 and 2023 respectively, with Vice Chair Sonderling’s term ends in July 2024) and the General Counsel (whose term ends in 2023).  And let’s not forget the United States Department of Labor, with Senator Bernie Sanders making an overt pitch to become the next Secretary of Labor.

Of course, all this puts Georgia in the spotlight.  It appears the two United States Senate runoff campaign will determine whether the Senate ends up in the hands of the Biden Administration or whether the GOP can stop extreme candidates from being placed at these key agencies.  Some people (and I confess to being one of them) believe that extremes in either direction negatively impact business.  The “back-and-forth” from one administration to another make it difficult to plan over the long term.

As we come into our year-end, all eyes will be fixed on Georgia.

OSHA COVID-19 Update

By Megan Baroni on Posted in OSHA Compliance

As COVID-19 cases have continued to rise across the United States, so have COVID-related OSHA complaints and investigations. OSHA has been tracking statistics on COVID-related complaints, referrals, inspections, and citations on a daily basis and posting the results posting the results on its website.

Federal OSHA has initiated over 1,000 investigations related to COVID-19. As of October 22, 2020, OSHA had issued just under 150 COVID-related citations. As we have previously reported, OSHA has not developed standards specific to COVID-19, but it is applying existing OSHA standards to COVID-related concerns. Some of the more frequently cited standards in these citations tend to fall into similar categories:

  • Respiratory protection: employers have been cited for lack of a written respiratory protection program, failure to perform fit testing and provide a medical evaluation to determine an employee’s ability to use a respirator, lack of adequate training.
  • General PPE requirements: employers have been cited for failure to assess the workplace to determine if hazards are present that require the use of PPE and failure to train employees on proper PPE use.
  • Recordkeeping and Reporting: employers have been cited for failure to properly record work-related COVID illnesses and report work-related COVID hospitalizations.
  • General Duty Clause: employers have been cited for failure to provide a work environment “free from recognized hazards that are causing or are likely to cause death or serious physical harm” as required by the General Duty Clause of the OSH Act.

State plan states have also been busy inspecting OSHA-related complaints, with over 3,500 inspections to date. While inspections have been taking place all over the country, many of the inspections have been focused in OSHA Region 2 (New York and New Jersey) and Region 5 (Ohio, Indiana, Michigan, Illinois, Wisconsin, Minnesota).

Perhaps not surprisingly, COVID-related OSHA complaints have targeted industries that have remained at work through the pandemic, as well as those with a high potential for exposure. To that end, many complaints have been received in the healthcare industry, but other employers have not been spared. A considerable number of complaints are also being filed for the retail and food industries, courier and delivery industries, and the warehousing and storage industries.

Historic $2.9 Billion Anti-Bribery Settlement Has Important Takeaways for Manufacturers

By Guest Contributor on Posted in Litigation, Trade Compliance

This week we are pleased to have a guest post from Edward Heath and Kevin Daly. Attorneys Heath and Daly are members of Robinson+Cole’s Manufacturing Industry Team and regularly counsel clients on trade compliance, anti-corruption compliance, and other corporate compliance issues.

It would be a mistake to think that the $2.9 billion settlement Goldman Sachs Group Inc. has agreed to pay in order to resolve allegations of widespread bribes to government officials in Malaysia and the United Arab Emirates has no relevance to those in the manufacturing industry. Although the settlement did involve a financial services firm, the underlying facts highlight important considerations for manufacturers with respect to the U.S. Foreign Corrupt Practices Act (FCPA).

The FCPA is the federal law that prohibits U.S. companies from paying, offering, or promising anything of value to a foreign government official in order to obtain or retain business opportunities. The DOJ and SEC share enforcement authority for the FCPA, and it is a major enforcement priority for both agencies. Total FCPA recoveries for the U.S. government total in the hundreds of millions of dollars annually, and in some years exceed $1 billion. The Goldman Sachs settlement is the largest FCPA settlement ever. Continue Reading

Manufacturers Fighting Disruptive Immigration Reform

By Guest Contributor on Posted in Employment Decisions, Labor Relations

This week we are pleased to have a guest post from Jennifer L. Shanley, a member of Robinson+Cole’s Immigration Group. Her preparation of temporary and permanent immigration petitions allow manufacturing, chemical, pharmaceutical, and biotechnology companies, including some Fortune 100 companies, to retain key business people, scientists, researchers, and other professionals.

The National Association of Manufacturers (NAM), along with several prominent business organizations, filed a lawsuit in federal court to stop the Department of Homeland Security’s (DHS) regulations governing the H-1B nonimmigrant visa program that would disrupt manufacturers’ ability to hire and retain critical high-skilled talent.

By way of background DHS announced an interim final rule that revises the definition of H-1B specialty occupation to include the requirement of a specific relationship between the required degree field(s) and the duties of the offered position. It also restricts eligibility for the program in several additional ways, including requiring employers to provide contracts, work orders, itineraries or similar evidence to prove employer-employee relationship when sending H-1B workers to third party worksites, ultimately providing the U.S. Citizenship and Immigration Services (USCIS) with the ultimate discretion on who meets the definition of employer and employee. The other rule issued by the Department of Labor increased the wage floor companies are required to pay employees to historically high rates. Continue Reading

3D Printing for Manufacturers Continues to Lag Behind

By Jeffrey White on Posted in Best Practices, Industry Outlook, Supply Chain

Back in 2013, I wrote a blog post about 3D printing and whether it was going to be the next “big thing.”  At the time, the commentary within manufacturing circles was mixed, at best, as manufacturing leaders wondered whether 3D printing would remain a specialty process mainly used by large OEMs such as Ford, GE, etc.

Seven years later, not much has really changed.  I recently read an article in Industry Week by Avi Reichental, a CEO of a 3D printing company, that is appropriately titled “Slow and Steady Wins the 3D Printing Race.”

The article still mentions GE’s efforts to use 3D printing along with some other stock examples that you see in many articles. Mr. Reichental then goes on to say: Continue Reading

New York City and State Paid Leave Laws Mean Changes for Manufacturers

By Matthew Miklave on Posted in Benefits, Coronavirus, Discrimination/Harassment, Employment Decisions, Family Medical Leave Act, Labor Relations, Wage and Hour

 

Effective September 30, the New York State Paid Sick Leave Law (NYSPSL Law) and amendments to the New York City Paid Safe and Sick Leave Law (NYCPSL Law) became effective requiring implementation of new leave accrual, record-keeping and reporting obligations.  Manufacturers with operations in New York State or New York City may need to update policies and records now.

The NYSPSL law, adopted at the start of the Coronavirus Pandemic in March, requires every manufacturer with employees working in New York to provide paid or unpaid leave to those employees.  The amount of leave and whether paid or unpaid depends on the size and income of the business (summarized below):

Size and Income of Manufacturer Amount of Annual Leave Paid or Unpaid
0 to 4 Employees, < $1,000,000 in annual net income Up to 40 hours Unpaid
0 to 4 Employees > $1,000,000 in annual net income Up to 40 hours Paid
5 to 99 Employees Up to 40 hours Paid
100 or more employees Up to 56 hours Paid

 

Employees begin to accrue leave on the later of September 30, 2020 or their date of employment.  Leave accrues at the rate of 1 hour of leave for every 30 hours of work.  While leave may begin to accrue as early as September 30, employees are not eligible to take leave until January 1, 2021.  Manufacturers may grant employees the full allotment of leave at the start of the calendar year but may not reduce the amount of leave once granted based on the number of hours worked.  Employees may carry over to the next year any accrued and unused sick leave, but a manufacturer may limit the amount of leave taken each year (40 hours for manufacturers of fewer than 100 employees, 56 hours for manufacturers of 100 or more employees).  Manufacturers may grant more leave than the amount required by the law.

Sick leave may be used in any reasonable increment set by the manufacturer.  Employees may use sick leave for a mental or physical illness, injury or health condition of the employee or the employee’s covered family member; for diagnosis, care or treatment of a mental or physical illness, injury or health condition of, or the need for a medical diagnosis for, the employee or the employee’s covered family member; or for an absence due to domestic violence, a sexual offense, stalking or human trafficking, or to avail themselves or a family member of covered services as a result (including civil or criminal proceedings and attendance at victim’s services organizations).

Importantly, the new sick leave benefit appears to be in addition to the Emergency Paid Sick Leave benefits provided by the federal government beginning on April 1, 2021 under the Families First Coronavirus Response Act (FFCRA).  The new sick leave benefits are also in addition to New York Emergency COVID-19 Paid Sick Leave Law adopted in March 2020.  Cumulatively, this means every manufacturer in New York must conform existing leave policies.

While the NYPSL law does not require manufacturers to allow employees to begin using leave until January 1, 2021, manufacturers must begin tracking leave as of September 30.  Upon request, a manufacturer must provide an employee within three  business days with information about her or his leave accrual and use.

New York City Amends Local Law to Conform   

Following New York State, effective September 30, 2020, the New York City Council amended the NYCPSL Law to conform to the New York State law.  In doing so, however, the City Council expanded paid sick leave benefits for domestic workers and imposed additional obligations on manufacturers with respect to their employees located in New York City.

The Amended New York City law requires manufacturers to provide employees either in their paystubs or in a separate document with both the amount of sick time earned and used during the pay period, as well as the current leave balance.  Manufacturers must provide and post written notice of the amended law to all employees within 30 days of its effective date (i.e., by October 30, 2020) or the employee’s date of hire (whichever is later).  This written notice must be posted and provided to employees in English and the primary language of the employee.  Significantly, with the amendment, New York City abolished the requirement that covered employees work in New York City at least 80 hours per year, meaning that manufacturers much track the work hours of even casual or part-time employees.

In addition, the New York City law now provides for up to 40 hours paid sick leave for domestic workers regardless of the number of employees or the manufacturer’s net annual income level.  This change represents a substantial increase in the amount of leave available to domestic workers, as the prior  version of the local law provided two days of paid sick leave per year.  (New York State’s Domestic Workers Bill of Rights provides for up to three days leave for domestic workers, although not specifically for sickness.)

While the amendments became effective in September, a manufacturer need not allow employees to use the extended leave benefits until January 1, 2021.

Unanswered Questions

These new leave laws present a host of unresolved issues for manufacturers.  Neither law addresses the issues presented by manufacturers with operations outside of New York State.  In assessing the amount of leave to provide employees, do employees working outside of New York State or City count toward determining the amount of leave to provide employees?  Furthermore, for employees working both in and out of New York State and City, for leave accrual purposes, do manufacturers count all time worked or only the time spent in the particular jurisdiction.

Many are hopeful that the New York Department of Labor and/or the New York City Department of Consumer Affairs (the agencies with authority to issue implementing regulations) will provide guidance soon.

Given the complex interplay between the federal, New York State and New York City leave laws, employers of New York State or City employees may wish to confer with qualified legal counsel now to comply with notice obligations and harmonize leave policies.

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