The Cybersecurity and Infrastructure Security Agency (CISA) recently issued “timely information about current security issues, vulnerabilities, and exploits surrounding” Industrial Control Systems (ICS).

The Advisories provide background on the vulnerabilities, and the manufacturers’ releases for remediation and mitigation to implement to protect against the vulnerabilities, which Industrial Control Systems operators may wish to consult. The Advisories can be accessed here.

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.

This week’s post was contributed by Robinson+Cole’s Kathleen M. Porter, Jennifer M. Driscoll, and Amy R. Roth.

Companies pursuing acquisitions that require a filing in the United States under the Hart-Scott-Rodino Act (HSR)[1] may, by year-end, face vastly expanded disclosure requirements necessitating far greater investments in time, effort, and planning.

In a June 27, 2023, announcement, FTC Chair Lina M. Khan proposed a “top-to-bottom” revision of the HSR premerger notification program. According to Khan, the reason for these proposed revisions is that much has changed in the 45 years since Congress passed the HSR Act—deal volume has soared, transaction structures and potential competitive impacts have become increasingly complex, and investment vehicles have changed—yet the HSR form has remained largely the same.

“Against the backdrop of these vast changes, the information currently collected by the HSR form is insufficient for our teams to determine, in the initial 30 days, whether a proposed deal may violate the antitrust laws,” said Khan. “Our staff are put in the position of expending significant time and effort to develop even a basic understanding of key facts.”

To enable examiners to better understand complex deals’ structures—and discover their potential anticompetitive effects from the outset—the FTC’s “key” proposals would require the acquiring and acquired parties to provide the following additional information in their HSR notifications:

  • Details about the transaction rationale and investment vehicles or corporate relationships;
  • Information related to horizontal products and services and non-horizontal business relationships, such as supply agreements;
  • Projected revenue streams, transactional analyses and internal documents describing market conditions, and the structure of entities involved, such as private equity investments;
  • Additional details regarding previous acquisitions;
  • Information regarding labor market issues; and
  • Disclosure of subsidies from foreign governments or entities that are strategic or economic threats to the United States.

Highlights of the Proposed New Requirements

Important proposed changes to the HSR notification filings would include the following:

  • Ultimate Parent and Controlled Entities Information
    • Identification of officers, directors, and board observers of all entities within the acquiring person and acquired entity
    • Identification of limited partners
    • Expanded minority shareholder information
    • Identification of other types of interest holders that may exert influence

The proposed additional information on the Ultimate Parent and the Controlled Entities is designed to ascertain the identity of individuals and entities that may influence business decisions or access confidential business information, which could affect a transaction’s competitive impact.

  • Transaction Information
    • Brief description of the business operations of all entities within the acquiring person
    • Narrative identifying and explaining each strategic rationale for the transaction including, for example, those related to products or services that could compete with a product or service of the other reporting person, expansion into new markets, hiring the sellers’ employees, obtaining certain intellectual property, or integrating certain assets into new or existing products, services, or offerings
    • Detailed diagram of the deal structure along with a corresponding chart explaining the entities involved in the transaction
    • Term sheet or draft agreement and timetable if a definitive agreement has not been executed
    • All transaction-related agreements, including schedules and exhibits
    • All agreements in effect in the prior year between any entities within the acquiring person and the acquired person
    • Narrative timeline of key dates and conditions for closing

The proposed additional transaction information is designed to provide examiners with a more in-depth understanding of the transaction and to enable them to prioritize their merger workload.

  • Competition and Overlaps
    • Documents provided by or for the supervisory team lead(s)
    • Forward-looking assessments of synergies or efficiencies
    • Drafts of transaction-related documents
    • Ordinary-course periodic plans and reports prepared within the prior year that broadly discuss premerger and future competitive dynamics and strategies
    • Horizontal Overlap Narrative: an overview of principal categories of current and planned products and services; any current competition with the other filing person in those products and services; and any licensing, non-compete, or non-solicitation agreements involving overlapping products or services
    • Supply Relationships Narrative: information about existing or potential vertical (or supply) relationships between the filing persons
    • Labor markets information regarding the transaction’s potential labor market effects, largest employee classifications, geographic market information for each overlapping employee classification, and workplace safety information
    • All acquisitions by buyer, seller, and target in the previous ten years within the overlapping markets
  • Additional Information
    • Information on subsidies from foreign governments or entities of concern, to identify foreign subsidiaries or countries that are or may be strategic or economic threats to the U.S.
    • Disclosure of any defense or intelligence contracts exceeding $10 million
    • A certification requirement requiring filers to affirm that they have taken necessary steps to prevent the destruction of documents and information related to the transaction, which would safeguard needed materials should a Second Request under HSR be issued.

Reasons for Proposed Changes and Initial Reaction.

In its Notice of Proposed Rulemaking (NPRM), the FTC maintains that its proposed more “robust” HSR filings would benefit all parties by enabling examiners to “quickly identify transactions that do not require further investigation during the initial waiting period.”

However, most commentators have described the proposed revisions as burdensome, with one critic calling them an “everything but the kitchen sink approach.” Even the FTC acknowledges that many of the proposed changes would increase the burden on all filers and, by its own reckoning, increase the time required to prepare a filing by 12 to 222 hours, depending on the deal’s complexity. The FTC pegs the total additional labor costs at approximately $350 million.

Still, Commissioner Khan sees the proposed revisions as a mechanism to “more effectively and efficiently screen transactions” by appropriately shifting the burden of collecting information from the examiners to the filers. “Much of the key information,” she explained, “is known only to the firms proposing the mergers, such as the exact timeline of the proposed transaction, the deal rationale, and the structure of each relevant entity. Seeking this information on a voluntary basis can leave key gaps.”

“This proposal,” Khan concludes, “is designed to ensure that we can efficiently and effectively discharge our statutory obligations and faithfully execute on the mandate that Congress has given us.”

Next Steps

The new HSR disclosure proposals will, if implemented, require companies to build additional time into their filing preparation process—from a few weeks to a few months. Companies may wish to consider leveraging available technology to its fullest potential and implement robust digital systems—including appropriate AI tools—to facilitate gathering the required additional data and information.

The FTC is accepting public comments on the proposed changes until August 28, 2023. The American Bar Association Section of Antitrust Law is preparing a comment, and when that is made public, we will provide an overview of its most important points. In addition, several industry groups have reportedly asked the FTC for additional time to comment on the proposed changes.

[1] For an acquisition to be reportable under the HSR, both the size-of-transaction and size-of-person notification thresholds must be met (unless an exemption applies). For 2023, the minimum size-of-transaction notification threshold is $111.4 million, and the minimum size-of-person notification threshold is $222.7 million in total assets or annual net sales for one party and $22.3 million for the other. Acquisitions exceeding $445.5 million are reportable regardless of the size of the parties.

As many federal contractors and subcontractors know, the date for covered entities to certify compliance with their annual affirmative action plan requirements using the Contractor Portal of the Office of Federal Contractor Compliance Programs (OFCCP) was June 29, 2023.  On or before that date, and each year annually, such entities must certify compliance as it relates to covered establishments and/or functional/business units; such entities are certifying that they have developed and maintain an affirmative action plan for each such establishment or unit.  The OFCCP’s Contractor Portal opened March 31, 2023, and remained open until June 29, 2023. 

Via email bulletin on June 30, 2023, the OFCCP reiterated that the deadline for certification for 2023 was June 29, 2023 and had not been extended.  The agency also stated that it “will consider a contractor’s registration and/or certification timely if the contractor has a pending request for assistance as of June 29, 2023” and stated that the OFCCP’s Portal Technical Help Desk is open and available to answer questions and provide assistance.  The OFCCP also reiterated that it provides a user guide and frequently asked questions on its website in addition to providing assistance through the OFCCP Contractor Portal Technical Help Desk.

Previously, the OFCCP clarified that certain contractors who do not timely comply (including those that have not used the Contractor Portal to do so) are more likely to be audited by the agency and that those that have not certified timely may be included in a list provided to federal agency contracting officers, with the stated purpose being that the agencies will then notify the contractors of their obligations.  Therefore, contractors that have not complied with the affirmative action requirements or have complied but not certified such compliance using the OFCCP’s Contractor Portal, should do so as soon as possible. Contractors that have questions about registration, certification, coverage under the law, and similar issues may wish to contact competent counsel.

Last month, I offered the first in a series of blog posts that attempt to simplify the various laws that are often described as a single law: “Buy America,” “Buy American,” “Made in the USA,” “Made in America,” and “Build Back Better.” 

First, I want to return to the cliffhanger from the last post: 

Did you know that George Washington wore a brown suit to his inauguration? Washington did not want to wear a military uniform. He also did not want to wear a civilian suit that was made anywhere but the United States. 

Question:  Where do you find a suit in 1789? 

Answer:  You ask Henry Knox, your Secretary of War, to get it for you of course. 

Question:  Where did Knox get the suit from?

Answer:  The Hartford Woolen Manufactury after Washington wrote to Knox on January 29, 1789, and suggested he go to Hartford, Connecticut, “where I perceive a Manufactury of them is established.”

Economic nationalism has existed since the founding of the country. Two of the more well-known nationalist policies are “Buy American” and “Buy America.”  Yes, these are two different laws that have different requirements.

“Buy American” was passed by Congress in 1933 and signed by President Hoover during his last day of office.  It applies to all purchases of goods by the U.S. federal government valued at more than $10,000. The law requires that such goods purchased be produced in the U.S. although the requirement may be waived under certain circumstances. 

“Produced in the U.S.” = 100% manufactured in the U.S. with a set percentage of the cost of components coming from the U.S.

Historically, the set percentage of cost of components was 50%, but things have changed over time: 

  • Raised to 55% in 2021
  • Raised to 60% in October 2022
  • Set to increase to 65% in 2024 and 75% by 2029

In contrast, the “Buy America” Act was a provision of Surface Transportation Assistance Act of 1982.  It relates to mass transit related procurements that are funded at least in part by federal programs. The Buy America Act bars the award of federal financial assistance for infrastructure unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the U.S.

For Iron and Steel Products:

  • “Produced in the U.S.” = All manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.

For Manufactured Products:

  • “Produced in the U.S.” = (1) the product was manufactured in the United States; and (2) the cost of the product’s components mined, produced, or manufactured in the United States exceeds the required percentage of the total cost of the product’s component.

Got it straight?  In our next post, we will discuss the Biden’s Administration “Build America, Buy America (BABA) law,” along with the important topic of seeking waiver of its requirements.

Earlier this week, a class action lawsuit was filed against Delta Air Lines alleging that the company is misleading the flying public with its claims of carbon neutrality. The complaint is the latest in the growing trend of greenwashing lawsuits filed against companies of all kinds alleging that their environmental and sustainability claims do not actually match with reality.

In the case, the plaintiff, Mayanna Berrin, alleges that Delta’s claim that it has been carbon-neutral since March 2020 is false and misleading. Berrin acknowledges that Delta has been clear that, at least at present, it achieves carbon neutrality largely by purchasing offsets (after all, that language appears right on the in-flight napkin). And she does not allege that Delta is purchasing an insufficient amount of carbon offsets, at least on paper, to account for Delta’s global emissions. Instead, Berrin criticizes the accuracy and reliability of the offsets issued by voluntary carbon offset market and alleges that these carbon offsets often “overpromise and underdeliver” on their total carbon impact. According to Berrin, these market deficiencies particularly apply to Delta’s offsets, making its claims of carbon neutrality false and misleading.

The allegations in Berrin’s complaint are largely based on media reports on deficiencies in carbon offsets generally, as opposed to deficiencies specifically identified in the offsets Delta has purchased. For example, Berrin generally criticizes the offset market for:

  • Unreliable accounting and inaccurate projections,
  • Double and triple counting of projects,
  • The use of non-additional offsets based on reductions that would have occurred regardless of carbon market involvement,
  • Failure to provide immediate offsetting, and
  • Relying on projects that are impermanent (such as creating of forests that are ultimately destroyed by natural disaster).

Berrin then alleges that Delta’s own offsets fall victim to these deficiencies.

Among other things, the complaint cites to Delta CEO Ed Bastian’s February 14, 2020 announcement that the airline was going carbon neutral by March 2020. The complaint states that, in announcing Delta’s commitment, Bastian noted that carbon offsets are “not the solution.” However, the complaint fails to mention that Bastian also said that Delta would continue to use jet fuel “for as far as the eye can see.”

On behalf of herself and others similarly situated, Berrin seeks unspecified damages, disgorgement of profits, and an order from the court to stop Delta from making any claims determined to be false or misleading.

Below is an excerpt of an article, co-authored with Robinson+Cole Labor and Employment Group lawyer Sapna K. Jain, published in the Hartford Business Journal on May 1, 2023.

With Memorial Day weekend, the unofficial start to summer, just a few weeks away, employers may be preparing to welcome summer interns into the workplace. What are the legal requirements that may impact the hiring or engagement of summer interns, what training and new hire obligations may exist, and how might employers define the goals and strategy for their particular internship program? Read the article.

There is massive confusion both in the manufacturing community and the popular press. Even some of the well-respected industry publications have had a hard time getting it right. 

We see and hear the terms all the time:  “Buy America,” “Buy American,” “Made in the USA,” “Made in America,” “Build Back Better.” While all of these terms have a tinge of economic nationalism, very few manufacturers can unravel not only what each of the terms means but what type of economic opportunity might exist.

This is the first in a series of posts that attempts to simplify (if possible) the various laws that exist and how they may be relevant for manufacturers.

First, let’s get the misconceptions out of the way:

  • “Buy American” and “Buy America” are the same thing.
  • They are the same thing as “Made in America” and “Made in the USA.”
  • These are new laws passed by the Biden administration.
  • All these laws are controlled by one agency.

All of these statements are wrong. 

Second, a history lesson. Economic nationalism or “protectionist” policies have been around since the United States was founded. 

Did you know that George Washington wore a brown suit to his inauguration? Washington did not want to wear a military uniform. He also did not want to wear a civilian suit that was made anywhere but the United States. 

Question:  Where do you find a suit in 1789? 

Answer:  You ask Henry Knox, your Secretary of War, to get it for you of course. 

Question:  Where did Knox get the suit from?

Answer:  Wait until our next blog post! 

We will answer that question and also begin by explaining the differences between “Buy American” and “Buy America.” Yes, amazingly, they are different laws. 

Below is an excerpt of an article co-authored with Robinson+Cole Labor and Employment Group lawyer Natale V. DiNatale and Environmental, Energy + Telecommunications Group Jon Schaefer published by the Connecticut Business and Industry Association (CBIA) on April 12, 2023.

OSHA is poised to revive a policy that would require employers to permit union officials to take part in agency inspections even if the union does not represent employees at the facility being inspected. 

OSHA previously maintained such a policy between 2013 and 2017. 

The policy arose out of a memo issued in response to a labor union’s inquiry. Known as the Fairfax Memo—a reference to the memo’s author—the policy was withdrawn in 2017 as the interpretation underpinning it faced legal challenges.

During the fall of 2022, OSHA issued a notice suggesting a return to the Fairfax Memo, but this time through promulgation of a regulation. 

The notice stated that a rule would be published in May of 2023 and that “[t]his rulemaking will clarify the right of workers … to specify … a union representative to accompany an OSHA inspector during the inspection process/facility walkaround, regardless of whether the representative is an employee of the employer …” Read the article.

This week’s post is authored by Emilee Mooney Scott and is also available on Robinson+Cole’s Environmental Law + blog. Thank you to Emilee for contributing. Emilee is a partner in the firm’s Environmental, Energy + Telecommunications Group, focusing her practice on a variety of environmental compliance and transactional matters, including emerging contaminants.

In mid-March EPA released its proposal for the first set of Maximum Contaminant Levels (MCLs) under the Clean Water Act for per- and polyfluoroalkyl substances (PFAS).  In contrast to non-enforceable health advisory levels introduced in 2016 and revised in 2022, MCLs constitute enforceable drinking water standards that will impact drinking water utilities and industry nationwide.  The proposal for enforceable drinking water standards marks the latest step in the evolution of PFAS from an emerging contaminant to a contaminant subject to enforceable regulations. 

The proposed rule sets standards for six PFAS compounds as follows:

*More information on how the Hazard Index will be calculated is available in an EPA fact sheet.

The proposed MCLs follow lifetime health advisory levels for PFOA, PFOS, GenX and PFBS issued by EPA in the summer of 2022.  The health advisory levels for PFOA and PFOS are 0.004 parts per trillion, which is a level that cannot yet be reliably detected in laboratories.  While the 4 ppt proposed MCL for PFOA and PFOS is low relative to the levels in place for other constituents, it is at least detectable using current technology.

In the preamble to the proposed rule, EPA indicated that no safe level for PFOA and PFOS has been identified.  Therefore, EPA is setting the non-enforceable, health-based Maximum Contaminant Level Goal (MCGL) at zero for both PFOA and PFOS.  Given that EPA requires the MCLs to be set “as close as feasible” to the MGCLs, the regulated community should be aware that EPA may move to further lower the limits for PFOA and PFOS as technology improves.   

EPA has scheduled a public hearing on the proposed MCLs for May 4, 2023.  Interested participants may register to speak by April 28, 2023 through the EPA event website.

We are also tracking a number of other PFAS-related developments, including that in August 2022, EPA released a proposed rule that would designate PFOA and PFOS as CERCLA hazardous substances.  A number of states (including California and Maine) have passed laws banning the use of PFAS in certain applications. 

While the pandemic may be behind us, many employees in manufacturing workplaces who worked on the front lines during the last few years, may be having difficulty remaining engaged at work and satisfied with their job. Whether it is called the “employee experience,” “employee satisfaction,” or “employee engagement” – this concept generally means the amount of their energy that employees are willing to invest in their work and workplace.  Regardless of what you call it, it is far more than a personnel issue, it directly impacts retention, attrition, productivity, safety in the workplace, and ultimately the “bottom line.”  So where should manufacturers start in taking the temperature of workers  and their satisfaction?

First, manufacturers should consider gathering information about the current level of employee engagement. This can be done through formal channels such as employee engagement surveys and focus groups but also through informal conversations with stakeholders (e.g., town hall meetings, small group meetings, etc.). There are a number of vendors who offer surveys, many of which can be tailored, or such surveys can be conducted by internal personnel. For manufacturers who may not have the resources to conduct a formal survey or assessment, engaging in discussions around several standardized inquiries to diverse stakeholders at all levels of the organizations can also provide insight into the status of employee engagement. In addition, metrics for key data points may also be helpful in providing insight into the workplace including: turnover and attrition rates, employee use of various benefits, safety incidents, absences, use of vacation, and similar data.  In this phase, the information solicited should help in answering the following kinds of questions:

  • What makes our employees feel valued?
  • Do employees feel their work is important?
  • Do employees perceive salary and benefits as fair?  What about competitive?
  • Do our benefits actively reflect trends and needs of our employees?  For example, if we know that employees value flexibility, are we providing that and if not, should we be?
  • How do we recognize employees and how is it being received by them?
  • Do employees believe they “fit in” at work and why?
  • Are we providing the right support to employees including personnel, tools, equipment, and a safe work environment?  Are there barriers to our employees feeling comfortable?
  • Do we have a mechanism for inviting dialogue with employees and are they using it? If not, how can we improve that?
  • According to the data gathered, how are we doing? Where do we need to improve?

Second, manufacturers should review the information received. If reliable data is obtained, employers will be able to understand the current status of engagement and the answers to questions such as those listed above. When surveys are conducted using a vendor and/or electronic platform, companies may be provided with a certain degree of analysis beyond aggregation of results, that may also prove helpful. Depending on how the data is gathered, it will need to be analyzed by the company to understand what the data is showing.

Third, key decisionmakers and stakeholders should determine the priorities and goals and then craft a plan to best attain those goals. Plans should be focused on tangible action items and the steps needed to perform each item. Ideally, one person or several people take ownership for implementation of the plan, the individuals are held accountable for working toward the goals in the plan, and the company is updated on its progress with regularity. Investing in this third step, at the highest level of the organization, is critical to the successful implementation of a plan to increase employee engagement.

While 2023 may be a year of rebuilding the workplace in various industries, for manufacturers, it may be an opportunity to gain valuable insight into the workplace and into employees, many of whom worked through a tumultuous and difficult several years.