EPA Unveils PFAS Action Plan

On Valentine’s Day, EPA showed a little love for per- and polyfluoroalkyl substances (PFAS), announcing a sweeping plan to address PFAS contamination and protect public health. PFAS are a group of man-made chemicals that have been gaining a lot of attention, as described in our 2019 outlook. EPA Acting Administrator Andrew Wheeler announced the PFAS Action Plan in a press conference yesterday, calling it “the most comprehensive, cross- agency action plan for a chemical of concern ever undertaken by the Agency.” The Action Plan is 72 pages, but Acting Administrator Wheeler focused on five key elements, described below:

  1. Work Towards the Development of MCLs for PFOA and PFOS

EPA will propose regulatory determinations for PFOA and PFOS—two of the most common PFAS compounds—by the end of 2019. These regulatory determinations are the first step under the Safe Drinking Water Act (SDWA) towards the development of Maximum Contaminant Levels (MCLs). EPA has not set a time frame for the actual development of the MCLs, instead citing to the timing and procedures required by the regulatory process (including public comment). While EPA committed to issuing regulatory determinations for these two specific compounds, it will continue to evaluate the need to follow this same process for other PFAS compounds.

  1. Continue PFAS Enforcement Efforts

Despite the fact that EPA has not established an MCL for any of the PFAS compounds, it intends to continue enforcement efforts based on the current drinking water advisory of 70 parts per trillion. EPA has already brought eight enforcement actions based on this advisory, and it is assisting state agencies in dozens of other enforcement actions based on state PFAS standards. EPA has also started the regulatory process towards classifying PFOA and PFOS as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), a listing that will allow EPA (and private parties) broader enforcement authority.

  1. Expand PFAS Monitoring Efforts

More data means better understanding, and EPA plans to make use of its authority to expand PFAS monitoring to help guide its decision-making process. EPA plans to propose that PFAS be included in the next round of monitoring under the Unregulated Contaminant Monitoring Program in the SDWA. EPA may also use the Toxic Substances Control Act to require reporting of certain PFAS releases and potentially prohibit the use of certain PFAS compounds.

  1. Expand Scientific Research into PFAS Compounds

EPA plans to use research efforts to “close the gap” on a number of PFAS issues, including:

  • What are the human health and environmental effects?
  • What are significant sources of PFAS in the environment?
  • How do PFAS compounds move through the environment?
  • How can we effectively remediate PFAS?
  • What are the costs of PFAS remediation?

EPA plans to evaluate these issues not only for more common PFAS compounds like PFOA and PFOS, but also for emerging PFAS risks, such as GenX.

  1. Develop PFAS Risk Communication Toolbox

EPA will work with federal, state, tribal, and local partners to develop a comprehensive risk communication toolbox to ensure that PFAS messaging to the public is clear and consistent.

Because the Action Plan is just that—a plan—we will continue to track EPA’s progress. States continue to take a leading role in regulating PFAS, but the new EPA Action Plan now provides a road map for federal action.

Thought The Government was Closed? The Manufacturers’ Smorgasbord!

This week’s post is somewhat breathless because so much happened or is about to happen.  You may have thought the government has been closed for the past 35 days. But just like great magicians who get you to watch their right hand while their left hand is going about the business of the trick, the parts of the federal government and their state counterparts which were opened continued at a breakneck pace.

On the federal level, the National Labor Relations Board continued issuing decisions rolling back Obama-era workplace protections.

Last Friday, in SuperShuttle DFW, Inc. , 367 NLRB No. 75 (Jan. 25, 2019), the NLRB overruled the Obama-NLRB’s interpretation of the independent contractor test, stating it was returning to a more balanced approach to decide when individuals were acting as employees (who are protected under the law and can unionize) as opposed to independent contractors (who are not protected by the law and cannot unionize).  Given the rapid growth in the “gig” workforce, the NLRB’s decision will not be the last voice to weigh in on the issue.

This followed closely on the heels of the decision in Alstate Maintenance, LLC, 367 NLRB No. 68 (Jan. 11, 2019), where the NLRB modified the test for determining when an employee engages in “concerted protected activity.”  The NLRB has long held that employees are protected when they engage in “group action,” even if they are not seeking union representation.  In Alstate, the Board found that the employer did not violate the law by firing a group of baggage handlers who walked off the job after one of them complained that “we” had not received sufficient tips previously.  Finding that use of the word “we” followed by a common act may not be evidence of “concerted” activity, the Board held that the employer could lawfully discharge the workers for leaving their posts.

Legal changes were not restricted to the federal level.  The New York City Council amended the New York City Human Rights Law to prohibit discrimination on the basis of sexual and reproductive health decisions.  These now-protected decisions include fertility-related medical procedures, HIV testing and counseling, emergency contraception, abortion procedures, and sterilization procedures, among others.

In Albany, Governor Andrew Cuomo announced that he will seek to increase penalties for wage theft in his 2020 budget submission.

In Hartford, the state legislature convened and a host of employment-related proposals were introduced, including paid family leave, increasing the minimum wage, and prohibiting confidentiality agreements in sexual harassment settlements.

At this pace, all manufacturers will have to keep an eye out for big changes coming to your workplace.

2019 Environmental, Health, and Safety Outlook For Manufacturers

This is the last of our three-part series of predictions for 2019. First Matt provided our thoughts and predictions in the labor/employment arena. Last week, Jeff gave our outlook for corporate compliance and litigation. Last but not least, this week I am providing our predictions for hot topics in environmental, health, and safety compliance, enforcement, and litigation.

Emerging Contaminants

If you haven’t yet heard of PFAS—per- and polyfluoroalkyl substances—you will. This group of man-made chemicals has been used for decades in all kinds of products, from firefighting foam to aerospace products, from building materials to outdoor apparel. PFAS are persistent in the environment and the human body, and preliminary evidence suggests that PFAS can lead to a variety of adverse health effects.

While the EPA has established health advisories for certain PFAS compounds, these advisories are not enforceable. Instead, the states have been busy developing their own regulatory standards. Some states are also requiring that parties investigate for PFAS compounds at regulated sites, even if there is no evidence that PFAS compounds were used or released at the site. And, as most people will tell you, if you test for PFAS, you usually find it.

PFAS detections are already the subject of a number of lawsuits, and we expect more cases to be filed in 2019. So far, the primary targets of these suits have been PFAS manufacturers, but the cast of defendants could be expanded to manufacturers of products that contain PFAS, landfill operators, and property owners, among others. PFAS are also becoming a hot due diligence topic, with increased attention and investigation focused on them in corporate and real estate deals. In short, these emerging contaminants will really hit the scene in 2019.

Targeted OSHA Inspections

According to its Congressional Budget Justification, OSHA plans to conduct about 1,500 fewer investigations in fiscal year 2019, for a target of 30,840 workplace inspections. While the overall number of inspections might be down, OSHA will emphasize the need for detailed, in-depth inspections in 2019. OSHA intends to focus its inspection efforts on the highest risk workplaces, conducting complex inspections (using drones?) that will aim to have the highest safety impact. OSHA also plans to balance the use of compliance assistance programs with enforcement tools to ensure that “mission critical field activities are given equal measure when compared to enforcement activity.”

Redefining Waters of the United States

At the end of 2018, the Trump administration released its proposed rule to redefine “waters of the United States”, the term that determines the scope of the federal Clean Water Act. The scope of the Clean Water Act impacts a number of manufacturing activities, from process discharges to site development.

As expected, the proposed rule scales back what qualifies as a water of the United States. If the rule is finalized, Clean Water Act jurisdiction would not extend to most roadside ditches, ephemeral streams, or wetlands that do not have a surface water connection to another jurisdictional water. This definition would provide clarity for manufacturers grappling with the current reach of the Clean Water Act. However, it will no doubt be subject to intense public comment and litigation from environmental groups that are looking to avoid any actual or perceived jurisdictional roll back. This will certainly be an issue to follow in 2019.

Continued TSCA Reform

Toxic Substances Control Act (TSCA) reform is an EPA priority, and we can expect that to continue in 2019. With the appointment of Alexandra Dapolito Dunn as the Assistant Administrator of the Office of Chemical Safety and Pollution Prevention, EPA is poised to continue rolling out its draft risk evaluations for the 10 substances prioritized in July 2017 (well, that is, after the shutdown of course). These risk evaluations will likely be subject to scrutiny from the regulated and environmental communities for a number of reasons—the conditions of use evaluated by EPA, the thoroughness of the risks identified, and, potentially, the public nature of the scientific studies addressing potential risks. Manufacturers may want to keep an eye towards the TSCA reform process in 2019 to ensure that they have adequate input into this risk evaluation process.

2019 Corporate Compliance & Litigation Outlook for Manufacturers

As we embark on the sixth year of the Manufacturing Law Blog, we continue our annual tradition of making predictions.  Last week, Matt provided his thoughts and predictions in the labor/employment arena.  This week, I am providing our outlook for corporate compliance and litigation.

Contract Management

As we have documented in the Blog for the last several years, there has been a shift in the manufacturing community about how to handle contract management.  There was a time when manufacturers in the supply chain would sign contracts and accept whatever was placed in front of them in order to make the sale.  Over the past 2-3 years, manufacturers of all sizes have realized that implementing a contract management system or “playbook” is a sound approach.

This is not the traditional law firm solution, which includes redlining contracts and making suggestions that have no chance of being accepted.  Many of our clients do not have any leverage so we need to identify potential risks and/or suggest creative language to attempt to mitigate the risk as much as possible.  In other words, I expect that manufacturers will continue to implement internal systems to better assess the risks they are taking particularly if we are faced with an economic downturn.

Supply Chain Compliance

Another area that many manufacturers dealt with in 2018 is the increased pressure being placed on the supply chain to comply with a host of regulatory regimes.  Everyone generally has heard of the alphabet soup of compliance such as GDPR, REACH, FCPA, Prop 65, Conflict Minerals, ITAR, EAR, etc.  These compliance obligations have always been passed down the supply chain.  The difference that we saw in 2018 is that OEMs and other larger customers are enforcing these compliance obligations in a more robust fashion using electronic programs, checklists and other means to ensure that their suppliers are actually complying.  It is not enough to just affirm in a contract that you will comply.  So, the question is – how does a privately held manufacturer comply without breaking the budget?  Again, like with contract management, there are ways to comply with these regulations and satisfy your obligations without breaking the bank.  I expect more manufacturers to dust off compliance plans and develop training programs with the help of a manufacturing law firm.

Trump

2018 was the year of the “tariff” for manufacturers.  You could not read a manufacturing news story without mention of it.  There is a lot of hype around tariffs and other trade regulations.  Some companies have been able to absorb the costs by passing it on to their customers and others have not.  In 2019, I expect that these discussions will continue.  One area that I expect to see renewed focus on in 2019 is the impact that these policies will have on foreign direct investment (FDI).  Some of our non-U.S. based clients/contacts have pulled back their investments in the U.S. while others have pushed ahead based upon the belief that companies need to be based in the U.S. to adequately address these economic policies.

Time for 2019 Manufacturing Law Predictions: Drum Roll Please!

When it comes to 2019 employment and labor developments for manufacturers, I predict ….

much more of the same.

The election of President Trump and a Republican controlled House and Senate in November 2016 brought a roll-back back from the aggressive enforcement policies of the Obama administration.  Simply speaking, the Federal Government has limited or overruled regulations impacting the relationship between manufacturers and their employees.  In response to this trend, some states and local municipalities (cities and countries) pushed back, for example, enacting regulations and ordinances raising the minimum wage, prohibiting salary history or criminal conviction inquiries, mandating greater benefits for parents, imposing training requirements to combat workplace harassment, and more.

Likely we will see this trend continue in 2019.  The “Blue Wave” which put the U.S. House in the hands of Democrats for the first time in eight years also impacted state legislatures and governorships.  While the Federal Government remains deeply divided, Democrats won control of all branches of government in seven states on election night.  Thirteen states are now exclusively controlled by Democratic Governors and Legislatures, including California, New York and Connecticut – states that traditionally have been pace-setters when it comes to expanding employment protections for employees.

Not to be outdone, local governments are also aggressively working to expand the scope of employee protections.  In some cases the race for legislating can seem like a competition between state and local actors over which can adopt the most “progressive” employment protections possible.

While debates about the “proper” role of government in the relationship between manufacturers and employees are beyond this blog, the fact that state and local governments are working to adopt local employment regulations creates significant issues for manufacturers.  First, understanding the complexities of local legislation takes time and some localities are better than others at spreading the word about new requirements.  Second, especially when it comes to local municipality ordinances, regulations can be adopted and implemented even before many manufacturers know the issue is being discussed, meaning that those local governments may not have the best information to make an informed decision.  Finally, manufacturers with operations in multiple locations have to harmonize conflicting requirements, resulting in employee confusion and consuming the resources of experience HR professionals.

Fortunately or unfortunately, I predict this “local” trend will continue.  The best advice for manufacturers to address these developments is to maintain constant vigilance as to proposed changes in state and local law.

January 1, 2019 Deadline for Manufacturers Bidding on New York State Contracts

Before ringing in the New Year, manufacturers bidding on competitive New York State contracts should keep in mind that after January 1, 2019, entities submitting bids must certify that they have adopted a sexual harassment policy that meets New York State’s mandated minimum standards, and provide annual training for all employees, including those working outside the State of New York.  Adopted by the New York State General Assembly in April 2018, these new requirements become effective on January 1.  Manufacturers can review the New York State minimum standards and obtain copies of the model Sexual Harassment Training Program here.

OSHA’s Use of Drones During Workplace Inspections

These days, it is not uncommon to see drones flying overhead. But employers beware…you might see one during your next workplace inspection. Earlier this year, OSHA issued a memo formalizing its use of drones for inspection activities, and, according to a recent report by Bloomberg Law, it used drones for 9 inspections this year.

The memo indicates that OSHA can use drones for a number of purposes, including inspection of inaccessible or unsafe areas, for technical assistance in emergencies, and during compliance assistance activities. The memo sets forth the parameters OSHA must follow when using drones, but it also indicates that OSHA is exploring the option of obtaining a Blanket Public Certificate of Waiver or Authorization (COA) from the FAA to operate drones nationwide.

The memo states that OSHA must obtain express consent from an employer prior to using a drone on any inspection. In addition, on-site personnel must be notified of the inspection to ensure cooperation and safety. The flight report and any data collected by the drone becomes a part of the inspection case file.

OSHA’s use of drones has the potential to expand its violation-finding capabilities during any inspection. Drones allow OSHA a bird’s-eye view of a facility, expanding the areas that can be easily viewed by an inspector. While most inspections can and should be limited in scope, OSHA can cite employers for violations that are in plain sight. Employers must consent to the drone use, but the question remains as to how the scope of an investigation might change if an employer refuses. In addition, it is unclear if that policy will change if OSHA is granted a Blanket Public COA from the FAA to use drones nationwide for inspection purposes.

Employers should be aware of this policy and the fact that drones may be a requested part of their next OSHA inspection. Employers may want to give some thought to their facilities and whether drones can be safely flown without causing damage to equipment or processes. If employers allow OSHA to use drones during an inspection, the employer may wish to be involved in the development of the flight plan and attempt to get copies of any collected data. And remember, your express consent is required.

Doing Business in China: Risks for Manufacturers

One of the blogs that we really enjoy is the China Law Blog, which is written primarily by Dan Harris of Harris Bricken.  Dan recently wrote a post about the pitfalls of relying on a representation by a non-Chinese company that they own a manufacturing facility in China.

As Dan states directly:

Here’s the deal. No American or European or Australian company (or any other non-Chinese company) can own a Chinese factory directly. It is possible the American or European or Australian company that claims to own a Chinese factory owns a Chinese company (a WFOE maybe or a China Joint Venture) that in turns owns a Chinese factory, but the odds of this being the case are really slim.

Dan goes on identify the risks of relying on a representation that a Chinese manufacturer is owned by a non-Chinese company.  All of these points are valid.

Here is one more to consider.  A lot of manufacturers run into problems when they are dealing with a Chinese company and they do not think about whether it is government owned or not.  Such information is critical when assessing compliance risks, including most notably, potential violations of the Foreign Corrupt Practices Act (FCPA).  For that reason, it is imperative for manufacturers to have a direct line of sight into their business relationships in China regardless of what their customer/supplier tells them at the outset.

 

 

 

Is Your Manufacturer Handicap Accessible? 

Before answering that question, manufacturers should ask whether the they host a website where individuals can access information about products and services, view demonstrations, submit requests for price quotes or apply for a job.  If so, then the website may not be handicap accessible.

Title III of Americans with Disabilities Act (“ADA”) requires goods, services, privileges or activities provided by places of public accommodation be equally accessible to people with disabilities.  Title I of ADA prohibits discrimination against persons with disabilities with respect to hiring decisions.  For over 20 years, the United States Department of Justice (“DOJ”) has taken position that company websites must be accessible to persons with disabilities.

While these ADA mandates have been on the books for many years, there remains no single Federal standard for determining whether a website is sufficiently accessible.  The World Wide Web Consortium has promulgated voluntary guidelines (web content accessibility guidelines or “WCAG” for short), which have evolved over time.  In 2018, the current standard (WCAG 2.1) was published.  These voluntary guidelines have not be universally adopted.

Planned regulations by the Obama Administration were withdrawn by DOJ following President Trump’s executive order seeking to reduce federal regulations.  But the absence of a federal standard may do more harm than good.  In the first six months of 2018, one author counted over 1,000 lawsuits challenging the accessibility of business websites (over 600 of these lawsuits were filed in New York alone).

In September 2018, in response to congressional inquiries, the DOJ published a letter regarding website accessibility.   In the DOJ’s response, the DOJ asserted that:

  • DOJ has long held websites must be accessible to persons with disabilities.
  • Places of public accommodation have flexibility as to how to comply with ADA’s requirements for nondiscrimination and effective communication.
  • Failure to comply with a specific voluntary technical standard for website accessibility does not necessarily indicated non-compliance with ADA.
  • Congress has the ability to provide greater clarity through legislative process.

As several cases work their way through appellate review, the absence of any clear standard likely means manufacturers will face the risk of legal challenge based on inaccessible websites.  The Manufacturing Law Blog will continue to watch and report on these developments.

Non-Compete Cautionary Tale

A recent court decision underscores the need for manufacturers to exercise caution when seeking to impose Post-Employment Restrictions on key employees.

Manufacturers often seek to bind employees to Post-Employment Restrictions (non-compete, non-solicitation and confidentiality obligations) in order to protect customer lists, pricing information and other confidential or “inside” information which gives them a competitive advantage in the market-place.  While never a ‘first line” of defense, they serve an important role in protecting manufacturers from unfair competition.  But, as we have cautioned repeatedly (see e.g. I’m New – And It’s No [Trade] Secret” (Oct. 27, 2014) and “Even More Reason for Manufacturers to Update Their Employment Agreements” (June 15, 2015)), these agreements must be carefully drafted to be effective when needed.

The decision in Oxford Global Resources, LLC v. Hernandez (September 2018) offers one example why.

In this case, the Massachusetts-based Oxford Health entered into an employment agreement with Hernandez to work in California.  The employment agreement contained traditional post-employment restrictions preventing post-employment competition, solicitation and use of confidential information for a period of time.  The agreement expressly provided that Massachusetts law would govern and that any litigation would have to be filed in Massachusetts.  When Hernandez quit to work for a competitor, Oxford Health sued in Massachusetts state court.

Ultimately, the court dismissed the lawsuit and the Massachusetts Supreme Court affirmed.  In essence, the Court reasoned that even though Massachusetts had an interest in enforcing contracts made under state law, California had a greater interest since the employee lived and worked in California and California public policy overwhelmingly disfavors post-employment restrictions.  Thus, Hernandez was free to work for a competitor even though his employment agreement expressly prohibited him from doing so.

The Oxford Health case is merely one recent example of the growing hostility to the use of Post-Employment Restrictions.  Manufacturers seeking to protect their business secrets and good will should periodically review their approach to doing so under applicable state law.

A special thanks to the good folks at Ogletree Deakins for bringing this decision to our attention.

LexBlog