“A supply chain crunch that was meant to be temporary now looks like it will last well into next year as the surging delta variant upends factory production in Asia and disrupts shipping, posing more shocks to the world economy.”

This is the opening paragraph from a recent Bloomberg article entitled “The World Economy’s Supply Chain Problem Keeps Getting Worse.”

Many of our manufacturing clients are facing shortages of all types along with the significant increase for raw materials. The Bloomberg article also reports the significant increases in cost just to ship products as the article notes that the cost of sending a container from Asia to Europe has increased 10 times since May 2020 and from Shanghai to Los Angeles has increased six-fold.

From a legal perspective, many of our clients are scrutinizing their contracts of all types, including their force majeure clauses. The force majeure discussion has changed over time.

In 2020, there was a lot of discussion about companies claiming force majeure due to the decrease in OEM and/or customer business. In 2021, there has been significant discussion about whether suppliers can fulfill orders due to the inability to obtain materials that have never posed a challenge in the past. There is no sign that these supply chain issues are going to subside anytime soon.

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

Earlier this year, we covered the topic of drug testing in the workplace. Since then, several states have passed legislation legalizing recreational use of cannabis, including Connecticut; this new law not only legalizes the recreational use of cannabis in the state, but also imposes various obligations and restrictions on employers, which are effective July 1, 2022. While certain employers in the manufacturing industry may be exempt from these employment-related restrictions in the new law, manufacturers may still be impacted. Continue Reading Connecticut’s Recreational Marijuana Law And Its Impact on the Workplace

In the past, we have provided some guidance about how to manage supply chain and other business to business disputes.

2020-2021 has been the year of supply chain disruptions and customer disputes. Not all disputes lead to a courtroom – many of them are resolved. However, there are certain practices when it comes to sending internal emails that are worthwhile to consider. Some of these are obvious.

  1. A lot of times when we talk about email practices, we look at it defensively, i.e., if there is a dispute. Some of my partners call email “God’s gift to trial lawyers.” I think the point they are making is that email can be misconstrued because typically “tone” is read in and also because it often is written quickly. So, as an initial rule, I encourage people to apply the 24 hour rule if the email is dispute oriented at all. Sometimes you can’t wait to respond, but if you can, it is always better to send a placeholder email.
  2. Avoid sarcasm or jokes because again, it often is not delivered the right way.
  3. Mind your cc’s. Ccs are often used as a weapon and when dealing with a customer/supplier/vendor, it can look like you are taking someone to the “principal’s office.” Also, there may be a strategic reason to keep executive management out of it until the right time.
  4. For smaller companies, you should encourage people to relay significant concerns in person or over the phone. On the quality side, I know a lot of folks want to email the world, but oftentimes I have seen engineers, etc. speculate about issues and then change their minds. But, that initial email is there forever. So, make sure folks adequately investigate something before putting it in writing.
  5. When we train quality/sales, etc. we always tell people that emailing people is fine. Often, when you give people rules, they say they will never email anyone again. It is more about helping them identify the risks themselves as opposed to telling them what to do.

Last month, Maine signed the nation’s first packaging-based extended producer responsibility program into law, signaling a possible sea change in the way we handle recycling in the United States.

Maine’s extended producer responsibility for packaging law, LD 1541, will shift the costs of dealing with product packaging, whether it is recyclable or not, from municipalities and consumers to producers. The law will require packaging producers to report on the types and quantity of packaging materials sold into the state. A to-be-formed Stewardship Organization will then charge these producers an annual fee intended to account for the disposal and recycling costs associated with those packaging materials. The fees collected will be passed along to municipalities that have traditionally borne the cost of recycling or disposing of all of this packaging. Unless they are otherwise exempt, producers will not be allowed to sell or distribute products in Maine without complying with the law.

Extended producer responsibility laws aim to provide incentives for producers to reduce the packaging materials they use and focus on packaging recyclability. Producers in Maine will soon be required to realize the impact of their packaging from cradle to grave (or reincarnation). The hope is that this realization will lead producers, who have control over the packaging they use, to choose more sustainable options. Similar laws in other jurisdictions have been shown to increase recycling rates and reduce packaging waste overall.

The Maine law will not go into effect for a couple of years, but a number of other states are considering similar laws. This growing popularity of these laws appears to be a direct result of increased consumer and investor awareness of the challenges associated with recycling and the true economic impact of unsustainable business practices. They could signal a larger shift towards a reallocation of how we deal with the full life cycle of the products we create and consume.

Below in an excerpt from an article authored by Robinson+Cole Labor and Employment Group lawyers Alisha N. SullivanAbby M. Warren and Emily A. Zaklukiewicz that was published in Industry Week on July 21, 2021.

For many months, manufacturers have been navigating issues related to the COVID-19 vaccine and its impact on the workplace. This includes implementation of vaccination programs that require or encourage vaccination of frontline workers, who remain at a higher risk of COVID-19 exposure and infection.

Manufacturers have been tasked with remaining up to date on relevant legal obligations and practical considerations surrounding vaccination policies, incentive programs, reasonable accommodations, employee relations and communications, among other issues. In late May, the Equal Employment Opportunity Commission (EEOC) updated its technical-assistance guidance for the first time since December 16, 2020, clarifying several important topics related to workplace vaccination programs. Read the article.

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

In recent years, there has been an increased focus on ensuring that employees are receiving equal pay for equal work, which has resulted in a wave of new legislation geared towards closing the wage gap.  One recent trend has been the imposition of pay transparency requirements for employers, including wage range disclosure obligations requiring employers to provide or publicize wage ranges for vacant positions or promotions.  Specifically, several states have enacted pay transparency laws which vary significantly in terms of where, when, how, and to whom the necessary disclosures must be made, as well as the specific information that must be disclosed.  Failure to comply with these laws could result in significant liability for employers, including civil actions for violations.  As a result, it is important that employers understand their obligations under these laws in the states where they operate.

First, several states require employers to disclose pay ranges to certain prospective employees upon request. For example, California law requires employers to provide job applicants with the salary or hourly wage ranges for positions upon the applicant’s reasonable request, provided the applicant has completed an initial interview with the employer.  Similarly, Maryland law requires that employers provide a job applicant with the wage range for the position for which the applicant applied upon request, and Washington law requires that employers provide the wage scale or salary range for the position upon an job applicant or employee’s request, provided the request is made after an initial offer of employment.

Connecticut law takes one step further in requiring disclosure of wage ranges even if the applicant or employee has not expressly requested such information.  Specifically, Connecticut employers must provide prospective employees with wage range information before or at the time an offer of compensation is made, or at the applicant’s request, whichever occurs first, and must also provide employees with wage range information upon hire, upon a change in the employee’s position, or upon the employee’s first request for such information. Under this law, in establishing the wage range for a particular position, employers may reference any applicable pay scale, previously determined range of wages for the position, actual range of wages for employees who currently hold comparable positions, or the budgeted amount for the position.

Colorado has implemented perhaps the strictest disclosure requirements so far, in requiring that employers disclose the pay, or pay range, of a position in the job posting itself.  Specifically, covered employers in Colorado, meaning employers who employ one or more employees in the state, must disclose compensation and benefits information for all positions in the job posting for the position; the job posting must include (or include a link to) the hourly rate or salary compensation (or range thereof), a description of any bonuses, commissions, or other forms of compensation being offered for the job, and a description of all employment benefits that the employer is offering for the position; similar disclosure obligations apply for promotions as well.  Notably, these pay disclosure requirements apply to all positions in Colorado, including any remote positions which could be performed in Colorado.

In sum, employers should remain cognizant of their pay disclosure, notice, and posting obligations under the laws in the states where they operate and revise applicable hiring and employment documents, materials, procedures, and processes accordingly.

This post is the result of a collaboration between the manufacturing law practices of U.S. based law firm, Robinson & Cole LLP, and U.K. law firm, Brabners LLP. The article was drafted by R+C lawyers, Kevin Daly and Jeff White and Brabners lawyers, Roy Barry and Oliver Andrews.  

The trade relationship between the U.S. and UK is an economically and historically important one for both nations. While the two nations recommitted to their longstanding alliance at the recent G7 summit, a number of trade-related disputes remain pending. Some recent tariff easing suggests that the two countries are seeking to resolve these issues, and further changes to the tariff environment could be coming. Continue Reading Small Steps on Big Issues: Recent Developments in the U.S.-UK Trade Relationship

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 June 21, 2021, OSHA made big news by publishing its COVID-19 Emergency Temporary Standard for the Healthcare Industry (ETS). While the ETS does not apply to most manufacturing facilities, OSHA also updated its general COVID-19 guidance earlier this month.

This guidance is intended to assist all employers and workers not subject to the ETS in mitigating the spread of COVID-19. The main recommendations in the guidance are summarized below:

  • Workplaces with Fully Vaccinated Employees. Employers no longer need to take as many steps to protect fully vaccinated employees from COVID-19. However, unvaccinated or at-risk workers still need to be protected. As such, employers are strongly advised to support their employees in getting vaccinated by granting them paid time off to receive the vaccine and paid time off to recover from any of vaccine side effects.
  • Protecting Unvaccinated or At-Risk Employees:
    • Work from home. Any COVID-19 infected workers, or ones who have had close contact with someone who tested positive for COVID-19, should work from home, or receive paid time off as needed.
    • Physical distancing. Unvaccinated and at-risk workers should maintain a 6 feet distance from others, or be separated at fixed workstations behind transparent shields or other solid barriers.
    • Facemasks. Employers should provide facemasks at no cost for their unvaccinated and at-risk workers. Employers should also suggest that unvaccinated visitors wear facemasks in the workplace.
  • Other workplace safety guidelines:
    • Educating Employees on COVID-19. Managers should be trained on COVID-19 transmission risks and be frequently updated on any workplace COVID-19 policies. Employees should also be informed of their rights to protection against COVID-19 in the workplace.
    • Ventilation Systems. Employers should maintain adequate ventilation systems. Air filters with a Minimum Efficiency Reporting Value (MERV) 13 or higher should be installed where feasible.
    • Cleaning and disinfection. If someone who has been in the facility within 24 hours is suspected of having or confirmed to have COVID-19, the CDC cleaning and disinfection recommendations should be followed.
    • Record and report. Employers are responsible for recording work-related cases of COVID-19 illness on Form 300 logs. Employers must also follow regulatory requirements when reporting COVID-19 fatalities and hospitalizations to OSHA.
    • Retaliation. No employees should be discharged or discriminated against for raising a reasonable concern about workplace COVID-19 infection, or exercising any of their rights under the COVID-19 policies and procedures.
    • Other applicable mandatory OSHA standards. All of OSHA’s standards that apply to protecting workers from infection remain in place. These mandatory OSHA standards include: requirements for personal protective equipment, respiratory protection, sanitation, protection from bloodborne pathogens, OSHA’s requirements for employee access to medical and exposure records and, of course, the General Duty Clause.

This post was authored by Linn Foster Freedman and is also being shared on our Data Privacy + Cybersecurity Insider blog. If you’re interested in getting updates on developments affecting data privacy and security, we invite you to subscribe to the blog.

Since the Colonial Pipeline and JBS meat manufacturing security incidents, attention is finally being paid to the cybersecurity vulnerabilities of critical infrastructure in the U.S. and in particular, the potential effect on day to day life and national security if large and significant manufacturers’ production are disrupted. In the wake of these recent incidents in the manufacturing sector, Unit 42 of Palo Alto Networks has published research that may be considered a warning to the manufacturing sector and is worth notice. The warning is about the activities of Prometheus, “a new player in the ransomware world that uses similar malware and tactics to ransomware veteran Thanos.”

According to the Executive Summary, Unit 42 “has spent the past four months following the activities of Prometheus” which “leverages double-extortion tactics and hosts a leak site, where it names new victims and posts stolen data available for purchase.” Prometheus claims to be part of REvil, but Unit 42 says it has “seen no indication that these two ransomware groups are related in any way.” Unit 42 further states that Prometheus claims to have victimized 30 organizations in different industries, in more than a dozen countries, including the U.S.

Prometheus came on the scene in February 2021 as a new variant of the strain Thanos. Unit 42 is unable to provide information on how the Prometheus ransomware is being delivered, but surmise that it is through typical means, such as “buying access to certain networks, brute-forcing credentials or spear phishing for initial access.” It then first kills backups and security processes and enables the encryption process. It then “drops two ransom notes” that contain the same information about the fact that the network has been hacked and important files encrypted and instructions of how to recover them. If the ransom demand is not met, the data will be published on a shaming site and publishes the “leak status” of each victim. According to Unit 42 “[M]anufacturing was the most impacted industry among the victim organizations we observed, closely followed by the transportation and logistics industry.”

What we have seen in the past is that when ransomware groups are successful in one industry, they use the information learned from initial attacks to target other companies in that sector. They leverage the knowledge from one attack to future attacks assuming that since the first one was successful, subsequent attacks will be successful as well. Since industry specific networks are similar, it is seamless to attack one victim, learn from it, then leverage that knowledge to attack similarly situated victims.

With threat attackers’ focus on the manufacturing sector right now, we anticipate seeing more attacks against manufacturers from groups such as Prometheus.

Last week, Coca-Cola was sued by Earth Island Institute for deceptive marketing regarding its sustainability efforts “despite being one of the largest contributors to plastic pollution in the world.”

In the Complaint, Earth Island Institute, a not-for-profit environmental organization, alleges that Coca-Cola is deceiving the public by marketing itself as sustainable and environmentally friendly while “polluting more than any other beverage company and actively working to prevent effective recycling measures in the U.S.” Coca-Cola has developed a number of initiatives to advertise its commitment to plastic waste reduction and recycling, in part through its “Every Bottle Back” and a “World Without Waste” campaigns. It touts its goal to collect and recycle one bottle or can for each one it sells by 2030. Coke also claims that its plastic bottles and caps are designed to be 100% recyclable. The Complaint presents a number of examples of these allegedly misleading statements across a range of mediums, including on its website, in advertising, on social media, and in other corporate reports and statements.

Meanwhile, according to the Complaint, Coca-Cola is the world’s leading plastic waste producer, generating 2.9 million tons of plastic waste per year. It uses about 200,000 plastic bottles per minute, amounting to about one-fifth of the world’s polyethylene terephthalate (PET) bottle output. This plastic production also relies on fossil fuels, resulting in significant CO2 emissions.

This waste generation is complicated by significant deficiencies in recycling. Despite the public’s common understanding that plastic bottles can be recycled, only about 30 percent of them actually are. According to the Complaint, the plastics industry has long understood this problem, but it has sought to convince the consumer that recycling is viable and results in waste reduction. The Complaint even quotes former president of the Plastics Industry Association as saying, “If the public thinks that recycling is working, then they are not going to be as concerned about the environment.”

The Complaint alleges that not only has Coca-Cola failed to implement an effective recycling strategy, it has actively opposed legislation that would improve recycling rates. According to the Complaint, Coke has actively fought against “bottle bills”—laws that would impose a small fee on plastic bottle purchase that would be returned to the consumer when that bottle is returned to a recycling facility. Jurisdictions with these laws tend to have better recycling rates, albeit at a small additional cost to the consumer at the point of purchase.

The Complaint does not allege that Coke has violated any environmental laws. Instead, Earth Island Institute seeks to hold Coke accountable under the Washington, D.C. Consumer Protection Procedures Act. The Complaint alleges that Coca-Cola’s misrepresentations mislead consumers, and that Coke’s products “lack the characteristics, benefits, standards, qualities, or grades” that are stated and implied in its marketing materials. Earth Island Institute does not seek damages; it only seeks to stop Coca-Cola from continuing to make these statements.

This case is the latest example of ESG—Environmental, Social, and Governance—factors playing out in practice.