This is the first in a series of posts that provide industry and legal outlooks for manufacturers as we head into 2016. I will start with corporate compliance and litigation. Matt will follow with labor/employment. And, Megan will conclude the series with Environmental Health & Safety (EH&S).
Here are 5 things (of many) that I will be watching in 2016:
1. Will the Department of Justice Expand Its Efforts To Criminally Prosecute Manufacturing Executives?
As we have highlighted in several previous posts, the Department of Justice (DOJ) has teamed with several federal agencies in 2015 to pursue company officials. This campaign extended to nutritional supplement companies, food companies, and for violations relating workplace safety (OSHA) to name just a few. I expect this trend to continue and for that reason, all manufacturers and distributors should review their compliance programs and seek legal advice early in the process.
2. Will Conflict Minerals Compliance Become More Complicated?
In 2016, we will be watching to see if the European Union (EU) adopts conflicts minerals regulations relating to the importing of certain materials. This has the potential to impact scores of European companies. For background on the U.S. law, see this previous post. The mere mention of “conflict minerals compliance” often causes a strong reaction among our clients and friends so this will be something to watch.
3. Will Government Incentive Programs Directed to Manufacturers Continue?
While the answer to this question is almost certainly yes, I will be watching to see if manufacturers continue to pursue these programs with vigor. Although there are often promises that these incentives (including loans) can be put in place efficiently that is not often the case.
4. What will happen to California Proposition 65?
It seems like there are articles about legislative changes to California Proposition 65 that come out every day. It is often one of the most misunderstood laws on the books, which is unfortunate given the potential drastic impact it can have on a manufacturer. One case I will continue to watch is Mateel Environmental Justice Foundation v. California Office of Environmental Health Hazard Assessment, et al., No. RG15754547 (California Superior Court, Alameda County), which seeks to rescind the “safe harbor” for lead.
5. Will the Scrutiny of Business to Business (B2B) Contracts Continue?
There was a substantial uptick in disputes in 2015 with respect to commercial contracts in the supply chain. While these disputes almost never end in litigation, manufacturers and distributors (regardless of their leverage) are ensuring that certain provisions (such as the dreaded “anti-assignment clause”) are reviewed and modified if at all possible. I expect this to continue in 2016.