Gay Sigel, Steve Siros, and Allison Torrence Speak at March 7 CLE Program
By E. Lynn Grayson
Jenner & Block Partners Gay Sigel, Steve Siros, and Allison Torrence will speak at the upcoming program Environmental, Health, and Safety Issues in 2017: What to Expect From the Trump Administration, hosted by Jenner & Block’s Environmental, Workplace Health & Safety Practice Group on Tuesday, March 7 from 12:00 pm to 1:00 p.m. With the Trump Administration beginning to take shape, federal environmental, health, and safety (EHS) policy is certain to shift to the right. This CLE program will provide an overview of the Trump Administration’s actions impacting EHS matters to date and prognosticate on changes that may be forthcoming. You are invited to join us for this special program in person or via webinar. If you plan to participate, please RSVP as indicated below.
Tuesday, March 7, 12:00—1:00 p.m. with lunch starting at 11:45 a.m.
Jenner & Block, 353 North Clark, Chicago, IL—45th Floor Conference Center
For more information about the program and to RSVP, please connect here.
Happy New Year from the Corporate Environmental Lawyer Blog
By Steven M. Siros and Allison A. Torrence
As we begin the New Year, we wanted to take a moment to look back at some of the major EHS developments in 2016 and think about what we can expect in 2017.
2016 was a busy year for the Corporate Environmental Lawyer blog, which is now in its sixth year with over 760 posts. In 2016, we had nearly 100 blog posts from 10 different authors and over 6,700 visits to the site.
Our five most popular blogs from 2016 were:
EPA Lacks Authority to Regulate Plastic Microbeads in Water, by E. Lynn Grayson
Court Orders New EPA Spill Prevention Rules, by E. Lynn Grayson
Bipartisan TSCA Reform Act Signed by President Obama, by Allison A. Torrence
Navigating Hawkes, the Newest Wetlands Ruling from the Supreme Court, by Matt Ampleman
ExxonMobil, 13 State Attorneys General Fight Back Against the Exxon Climate Probes, by Alexander J. Bandza
As always, we are monitoring a variety of issues that are important to you and your business, including, for example, RCRA regulatory changes, the future of climate change regulation, implementation of the TSCA Reform Act, and new developments in environmental litigation. You can find current information about these developments and more on the Corporate Environmental Lawyer blog. If you don’t find what you are looking for on our blog, we welcome your suggestions on topics that we should be covering. In addition, keep abreast of new developments in the EHS area through our Twitter @JennerBlockEHS.
We also look forward to the opportunity to share our thoughts and insights with respect to current EHS issues with you at an upcoming program:
The program will take place at Jenner & Block’s Chicago office and also will be available as a webinar. We will post a formal invitation to the program in a few weeks.
We also invite you to visit our newly redesigned Environmental and Workplace Health & Safety Law Practice website for more information about our practice. We look forward to another exciting year and to connecting with you soon.
New OSHA Penalties Announced
By Andi S. Kenney
On January 18, 2017, the Department of Labor published a final rule adjusting civil penalties under the Occupational Safety and Health Act for inflation as required by the Federal Civil Penalties Inflation Adjustment Act of 2015. As required by the Act, the adjustment is based on changes to the Consumer Price Index for all Urban Consumers. Unlike last year’s catch-up adjustment, which increased penalties by 78%, this year’s inflation adjustment is a little over 1%. The new penalties compared to the pre-August 2016 penalties can be found here.
OSHA Issues Final Beryllium Rule Reducing Workplace Exposure Limit 10-Fold
By Allison Torrence
The Occupational Safety and Health Administration (OSHA) published a final rule on Occupational Exposure to Beryllium in the Federal Register on January 9, 2017. The final rule reduces the permissible exposure limit (PEL) for beryllium to 0.2 μg/m3, averaged over 8-hours. The previous PEL for beryllium, established more than 40 years ago, was 2.0 μg/m3. The rule also establishes a new short term exposure limit for beryllium of 2.0 μg/m3, over a 15-minute sampling period.
As we discussed previously on this blog, OSHA proposed this rule on August 7, 2015 and took extensive public comment before issuing this final version. OSHA estimates that approximately 62,000 workers are exposed to beryllium in their workplaces and that the rule will save almost 100 lives from beryllium-related diseases and prevent 46 new cases of chronic beryllium disease each year, once the effects of the rule are fully realized.
In addition to the PEL reductions, the final rule requires employers to use engineering and work practice controls (such as ventilation and change rooms) to limit worker exposure to beryllium; provide respirators when controls cannot adequately limit exposure; limit worker access to high-exposure areas; develop a written exposure control plan; and train workers on beryllium hazards. The rule also provides for medical exams to monitor exposed workers and medical removal protection benefits to workers identified with a beryllium-related disease.
The rule will take effect on March 10, 2017. Employers will have one year (until March 12, 2018) to comply with most of the requirements, two years (until March 11, 2019) to provide any required change rooms and showers, and three years (until March 10, 2020) to implement engineering controls.
More information on the Occupational Exposure to Beryllium rule is available on the OSHA website.
OSHA’S New Anti-Retaliation Rule: Effect on Safety Incentive Programs
By Gabrielle Sigel and Andi Kenney
On May 12, 2016, the U.S. Occupational Safety and Health Administration ("OSHA") issued a final rule addressing employers' workplace injury and illness reporting and recording obligations. 81 Fed. Reg. 29624-94. One portion of the new rule addresses retaliation against employees who report a work-related injury or illness (collectively, "injury") to an employer. Specifically, new § 1904.35(b)(1)(iv) provides: "You must not discharge or in any manner discriminate against any employee for reporting a work-related injury or illness." 29 CFR § 1904.35(b)(1)(iv). OSHA also added another new rule: An employer “must establish a reasonable procedure for employees to report work-related injuries and illnesses promptly and accurately. A procedure is not reasonable if it would deter or discourage a reasonable employee from accurately reporting a workplace injury or illness.” 29 CFR § 1904.35(b)(1)(i).
The new rule, particularly § (b)(1)(iv), was challenged in federal court, with plaintiffs seeking a nationwide preliminary injunction prohibiting the rule's enforcement. TEXO ABC/AGC, Inc. v. Perez, No. 3:16-CV-1998 (N.D. Tex. July 8, 2016). On November 28, 2016, the court denied plaintiffs' request for an immediate injunction, but said that its decision on the preliminary injunction does not reflect its decision on the merits of plaintiffs' legal challenges to the rule. Without the preliminary injunction, OSHA may begin enforcing the new rule as of December 1, 2016.
OSHA stated that, through new rule § 1904.35(b)(1)(iv), it was creating an "enhanced enforcement tool" to prevent retaliation for injury reporting. 29 Fed. Reg. 29671. Now, rather than having to wait for an employee complaint before filing a federal court lawsuit, as it had pursuant to § 11(c) of the OSHA Act, an OSHA inspector can issue an administrative citation and seek penalties, like it does for other alleged rule violations, without necessarily requiring an employee complaint or first going to federal court.
OSHA stated that this new enforcement tool was needed to address "the retaliatory nature of the employee incentive programs at some workplaces…." 29 Fed. Reg. 29673. OSHA cited studies and examples of injury rate-based incentive programs, "which reward workers for achieving low rates of reported injury and illnesses" and, purportedly, cause underreporting of work-related cases, including due to peer pressure. Id. OSHA concluded that, although the "specific rules and details of implementation of any given program must be considered" when evaluating whether the new rule has been violated, "it is a violation for any employer to use an incentive program to take adverse action, including denying a benefit, because an employee reports a work-related injury or illness, such as disqualifying the employee for a monetary bonus…." 81 Fed. Reg. 29674. OSHA also explained that if the incentive program "makes a reward contingent upon… whether employees correctly follow legitimate safety rules…, the program would not violate this provision." Id.
OSHA tried to clarify how it would use § 1904.35(b)(1)(iv) as an "enhanced enforcement tool." On October 19, 2016, it issued a memorandum to all OSHA Regional Administrators, interpreting § 1904.35(b)(1)(iv) ("the Interpretive Memo"). In the Interpretive Memo, OSHA stated that the rule "does not prohibit safety incentive programs. Rather, it prohibits taking adverse action against employees simply because they report work-related injuries or illness." Interpretive Memo, § II.C. OSHA gave an example of an employer-sponsored raffle awarded only in a month in which no employees report lost workday cases. Even if the reporting employee only would have had a chance to win the raffle, by withholding the raffle in a month when an employee reported a lost workday case, OSHA believes the employer is retaliating against that reporting employee. Id.
OSHA specified, however, that it would not issue a citation for violation of § 1904.35(b)(1)(iv) unless OSHA has "reasonable cause to believe that a violation occurred—in other words, that an employer retaliated against an employee for reporting." Interpretive Memo, § II. Moreover, OSHA has the burden of proof to show that an employee was discriminated against.
Next Steps for An Employer
An employer should evaluate any safety-related incentive programs based on three criteria: (1) what benefit is conveyed or withheld; (2) who receives the benefit (or could suffer from a withheld benefit); and (3) what triggers the benefit being conveyed or withheld. If the benefit is withheld based on any employee's report of a workplace injury or illness, the employer could be at risk for an OSHA citation under §§ 1904.35(b)(1)(i) and/or (b)(1)(iv). The employer also should evaluate whether, even if a reporting employee does not qualify for the benefit, the employee could suffer consequences, including negative reactions by supervisors, if the employee reports an injury. On the other hand, a very small benefit garnered through an incentive program may not be seen as reasonable discrimination.
OSHA's issuance of a citation should depend on factual and legal determinations, including finding that an employee who reported an injury would have qualified for the incentive program's benefit and that the denial of the benefit "could well dissuade" a reasonable employee from reporting the injury. Interpretive Memo, fn. 6. However, any safety incentive program based on reported injuries may well be viewed skeptically by an OSHA inspector and may lead to a more in-depth evaluation of the employers' entire recordkeeping program.
To avoid a potential for liability, an employer should consider ceasing any incentive program that is based on injury reporting. An employer may continue to track reported injuries or have goals for limited or no reported injuries, but the employer will remain at risk for an OSHA citation and penalties if any significant benefit or withdrawal of benefit is attached to the fact or number of injuries reported. OSHA continues to support safety-based incentive programs based on factors other than reported injuries. Programs tracking other metrics, such as whether employees comply with safety rules (e.g., consistently wearing eye protection), attend training, or other leading indicators of safety compliance or positive safety performance, would not subject an employer to scrutiny under OSHA's new rule.
OSHA Issues Final Rule On Walking-Working Surfaces and Fall Protection
By Andi Kenney
On November 18, 2016, OSHA finally published a final rule updating the walking-working surfaces and fall protection standards for general industry. Percolating since 1990 (55 FR 13360), reopened in 2003 (68 FR 23528) and again in 2010 (75 FR 28862), revisions to the walking-working surfaces and fall protection standards were long overdue. OSHA’s 500+ final rule gives employers new options to combat slip, trip and fall hazards (Subpart D) while adding employer requirements to ensure those new options provide for enhanced safety. It adds a new section under the general industry Personal Protective Equipment standard (Subpart I) that specifies employer requirements for using personal fall protection systems and clarifies obligations for several specific industries, including telecommunications, pulp, paper and paperboard mills, electrical power generation, transmission and distribution, textiles and sawmills.
The final rule addresses fall protection options (including personal fall protection systems), codifies guidance on rope descent systems, revises requirements for fixed and portable ladders, prohibits the use of body belts as part of a personal fall arrest system, and establishes training requirements on fall hazards and fall protection equipment. OSHA Administrator Dr. David Michaels stated, "The final rule will increase workplace protection from those hazards, especially fall hazards, which are a leading cause of worker deaths and injuries." OSHA notes the final rule also increases consistency between general and construction industries, which it believes will help employers and workers that work in both industries.
The rule is effective January 17, 2017, but some of the requirements are phased in over time. Phased-in or delayed compliance dates include:
• May 17, 2017
Training exposed workers on fall and equipment hazards
• November 20, 2017
Inspecting and certifying permanent anchorages
• November 19, 2018
Installing personal fall arrest or ladder safety systems on new fixed ladders over 24 feet and on replacement ladders/ladder sections, including fixed ladders on outdoor advertising structure
Equipping existing fixed ladders over 24 feet, including those on outdoor advertising structures, with a cage, ell, personal fall arrest system, or ladder safety system
• November 18, 2036
Replacing cages and wells (used as fall protection) with ladder safety or personal fall arrest systems on all fixed ladders over 24 feet
OSHA estimates the rule will affect 112 million workers at nearly 7 million worksites and will prevent 29 fatalities and over 5800 injuries annually.
Many employers that have been operating under the cover of OSHA interpretive letters and statements in the preambles of the proposed rules because the standards in place were so outdated and/or ill-suited to particular work environments. For them, the final rule offers an opportunity to confirm that their policies are compliant. However, those employers should scrutinize the final rule to ensure the interpretations they were relying on were incorporated and that no additional actions are required.
Some have suggested that Congress may seek to overrule these changes using the Congressional Review Act (“CRA”) (5 U.S.C. §§801-808), but that action is risky because the CRA is such a blunt instrument. The CRA can only be used to repeal a regulatory act in its entirety; it cannot be used to amend the regulation. Moreover, repudiation by Congress of a final rule prohibits the agency from issuing a substantially similar rule in the future. Congress has only used the CRA once—to overrule the ergonomics regulation OSHA adopted at the end of the Clinton Administration. Congress should recognize that the provisions of this final rule are too important to too many employers for it to act reflexively by disapproving the entire rule and prohibiting further action on these issues.
A copy of the final rule is found here. More on the final rule, including OSHA’s Fact Sheet, can be found on OSHA’s website here. We previously blogged on this rule in 2010.
Trade Associations Obtain Nationwide Injunction Against Portions of the “Fair Pay and Safe Workplaces” Regulatory Scheme, and Agencies Stand Down (For Now)
By Cynthia Robertson, Elliot Tarloff, Gabrielle Sigel, and Alexander Bandza
Portions of the Fair Pay and Safe Workplaces regulations, specifically those related to reporting violations of labor laws and restricting mandatory arbitration, have been enjoined on a nationwide basis by the District Court for the Eastern District of Texas (“District Court”). The paycheck transparency provisions were upheld by the District Court and remain enforceable. Following the District Court’s Order, on October 25, 2016, federal executive agencies issued guidance to their senior procurement officials to halt implementation of the Fair Pay and Safe Workplaces regulations enjoined by the Court, and confirmed that the paycheck transparency provisions (FAR 52.2005, 22.2007(d) and clause 52.222-60) remain in effect.
As reported, the government is still weighing whether to appeal the injunction. Although it seems likely that the government will appeal the District Court’s order and argue that the District Court does not have the authority to issue the injunction on a nationwide basis, it remains uncertain whether the government could actually obtain this relief. When faced with a similar TX federal district court nationwide injunction of executive action and regulation in the context of immigration, the U.S. Court of Appeals for the Fifth Circuit upheld the district court’s authority to issue that nationwide injunction. On review, the Supreme Court split 4-4, leaving the Fifth Circuit’s decision in place. Effectively, this means that TX federal district courts and the Fifth Circuit can stall the administration’s desired policies on a nationwide basis until the Supreme Court acquires another Justice. Because we are in an election year and do not know the identity of the next Supreme Court Justice or when that Justice would be confirmed, the ultimate outcome of this injunction remains elusive at this time. However, even with some legal uncertainty, we anticipate that most government contractors would prefer to forego all but the paycheck transparency requirements until there is a greater likelihood that the enjoined regulations will be upheld than exist at this time. Indeed, even beyond the strength of the substantive arguments, the District Court briefing and oral argument made clear that had the regulations had gone into effect, the government was not yet ready to accept any reports of purported “violations” because the electronic portal to receive such data was not yet complete.
Background and Full Summary of Order
President Obama issued the Fair Pay and Safe Workplaces Executive Order (13673) (the “Order”) in July 2014. The Order established three mandates that were to be implemented by the Federal Acquisition Regulatory Council (the “FAR Council”) and the Department of Labor (“DOL”): (1) reporting labor law “violations” under fourteen different federal employment and labor laws; (2) restricting the use of mandatory arbitration provisions; and (3) establishing paycheck transparency through wage statement and notice requirements. The FAR Council issued a final set of rules and the DOL issued final guidance implementing the Order on August 25, 2016.
In early October 2016, industry trade groups sued for injunctive relief before the District Court for the Eastern District of Texas (“District Court”), to prevent the FAR Council and DOL from implementing and enforcing their final rules and guidance. On October 24, 2016, the Court granted the injunction in part, enjoining on a nationwide basis enforcement of two aspects of the regulations: the “Reporting Regulations” and the “Arbitration Regulations,” summarized at greater length below. The Court upheld the “Paycheck Transparency Regulations,” which will go into effect on January 1, 2017.
The bulk of the District Court’s analysis addresses the plaintiffs’ challenge to the Reporting Regulations. Applying the traditional standard of review for the issuance of a preliminary injunction, the District Court initially determined that plaintiffs had a substantial likelihood of success on the merits that the Reporting Regulations were unlawful—and, more importantly, the District Court described that plaintiffs had attacked the Reporting Regulations on “multiple independent grounds, each of which is sufficient to render these government actions void and unenforceable.” Slip Op at 12.
First, the District Court found that the Reporting Regulations likely unambiguously exceed the FAR Council’s and Department of Labor’s authority and are otherwise inconsistent with federal labor laws. Specifically, the District Court described that “the [Challenged Regulations] arrogate to contracting agencies the authority to require contractors to report for public disclosure mere allegations of labor law violations, and then to disqualify or require contractors to enter into premature labor compliance agreements based on their alleged violations of such laws in order to obtain or retain federal contracts. By these actions, the Executive Branch appears to have departed from Congress’s explicit instructions dictating how violations of the labor law statutes are to be addressed.” Slip Op. at 14. The District Court analyzed the NLRA and the other labor laws and found that they could not be so interpreted. See Slip Op at. 12-17.
Second, the District Court found that the Reporting Regulations likely violate the First Amendment restrictions on compelled speech (the “Compelled Speech Argument”). “That is so because the [Reporting Regulations] impose an immediate disclosure requirement that obligates federal contractors . . . for the first time to report for public disclosure any ‘violations’ . . . regardless of whether such alleged violations occurred while performing government contracts, and without regard to whether such violations have been finally adjudicated after a hearing or settled without a hearing, or even occurred at all.” Slip Op. at 17. The District Court described that these requirements were “[f]ar from being narrowly tailored.” Slip Op. at 18. Instead, the Reporting Regulations “compel government contractors to ‘publicly condemn themselves by stating that they have violated one or more labor or employment laws. The reports must be filed with regard to merely alleged violations, which the contractor may be vigorously contesting or instead has chosen to settle without an admission of guilt, and, therefore, without a hearing or final adjudication.” Slip Op. at 19-20. The District Court rejected the government’s argument that these disclosures covered only “non-controversial, factual information” and further found that the government had failed to substantiate that these public disclosures would in any way advance the government’s interest in promoting performance of government contracts. See Slip Op. at 20-21.
Third, the District Court found that the Reporting Regulations likely violate the due process rights of government contractors (the “Due Process Argument”). “The FAR Rule likely violates the due process rights of Plaintiffs’ government contractor members by compelling them to report and defend against non-final agency allegations of labor law violations without being entitled to a hearing at which to contest such allegations.” Slip Op. at 22. That is so, because a government contractor that reports a violation may suffer a business or reputational injury—even where the violation is simply an alleged violation, and the contractor is later vindicated, but where the injury “cannot be undone.” Slip Op. at 24.
Fourth, the District Court found that the Reporting Regulations are likely arbitrary and capricious, and therefore unlawful, under the Administrative Procedure Act (the “Arbitrary and Capricious Argument”), in two respects. First, the requirements are likely to bog down the “already overloaded procurement process” and otherwise “lead to delays and arbitrary and inconsistent results in the assessment of contractor responsibility to the detriment of the procurement system.” Slip Op at 24-25. The District Court described that government agency contracting officers cannot be expected to reach timely, meaningful evaluations of reported violations as required by the Reporting Regulations. Second, the District Court separately found that the Reporting Regulations are likely to impose substantial costs without quantifiable benefits.
The District Court held that the Arbitration Regulations are also unlawful because the Federal Arbitration Act (“FAA”) contains a strong preference in favor of arbitration provisions. Slip Op. at 27. Under settled Supreme Court doctrine, the District Court found that there was no congressional command to override the FAA in this instance, as compared to Congress’ express curtailing of the FAA upon enactment the Franken Amendment, which restricts certain mandatory arbitration provisions in the context of DoD’s contracts. Slip Op. at 27-28.
The District Court concluded that the other factors that must be considered likewise augured in favor of issuing an injunction. Plaintiffs were likely to suffer irreparable harm in the absence of an injunction, including First and Fifth Amendment injuries. In contrast, Defendants were unlikely to suffer any harm from the issuance of an injunction, which would merely preserve the status quo. The District Court also found that the injunction would be in the public interest by preventing the Executive Branch from acting in a manner contrary to law. See Slip Op. at 29-31.
The District Court did not find, however, that “Plaintiffs ha[d] established a substantial likelihood of success on their claims regarding” another aspect of the Challenged Regulations—the “Paycheck Transparency Requirement”—and likewise had failed to establish that “they will suffer irreparable harm as to the implementation of those provisions. Slip Op. at 31. Accordingly, the District Court did not enjoin implementation of those regulations.
Nationwide Application and Subsequent Agency Confirmation
Finally, with respect to the scope of relief, the District Court determined that it was appropriate to enjoin the Reporting Requirements and the Arbitration Requirements “on a nationwide basis.” Slip Op. at 32 (emphasis added). The plaintiff industry groups were well aware of the advantages of seeking to block the administration’s Order and implementing regulations in Texas. With appeals going to the U.S. Court of Appeals for the Fifth Circuit, widely considered be the most conservative federal appeals court in the country, and the Supreme Court split 4-4 on this issue, the federal government may not be able to obtain a stay of any injunction, leaving the district court and 5th Circuit rulings in place.
On October 25, 2016, federal executive agencies halted implementation of the Fair Pay and Safe Workplaces regulations that would have required reporting of labor law violations and placed restrictions on mandatory arbitration that had been enjoined by a Texas federal district court the day before. Agency leadership in OFPP, DoD, GSA, and NASA advised their senior procurement officials that “agencies are hereby directed to take all steps necessary with their workforces to comply with the Court Order and ensure the enjoined sections, provisions, and clauses of FAR Case 2014-025 are not implemented unless and until receiving further direction.” The guidance confirms that only the paycheck transparency provisions remain in effect (FAR 52.2005, 22.2007(d) and clause 52.222-60).
To be compliant with the Court Order, agencies received the following instructions:
Ensure new solicitations do not include representations or clauses that the enjoined coverage of the rule would have required – i.e., the representation at 52.222-57 and its commercial items version at paragraph(s) of 52.212-3, and 52.222-58 and the clause at 52.222-59, to direct disclosure of labor law violation decisions by offerors or contractors, or clause 52.222-61, that would require an offeror or contractor to agree to restrict use of mandatory pre-dispute arbitration agreements.
If a solicitation has been issued with representations or clauses listed in paragraph 1, amend those solicitations immediately to remove those representations and clauses. Additionally, agencies shall not take any action on information, if any, submitted in response to those representations and clauses.
Ensure contracting officers do not implement the procedures in 22.2002-2, 22.2002-3, 22.2002-4 or associated changes in FAR Parts 9 and 42.
GSA has also halted actions to release the changes for the System for Award Management (SAM) to support bidder and contractor submission of information on labor law decisions.
Agencies were directed to share the guidance widely among their workforces to ensure full awareness of and compliance with the Court Order. Although the guidance makes it less likely that any of the enjoined FAR clauses would appear in new solicitations or contracts, contractors would be wise to conduct their own review as well to ensure the defunct clauses are not inadvertently included.
* * *
A copy of the opinion is available here. A copy of the agency memorandum is available here.
Trade Associations File Suit Challenging the “Fair Pay and Safe Workplaces” Regulatory Scheme as Unlawful and Unconstitutional
By Alexander J. Bandza and Gabrielle Sigel
As we previously reported here, the Department of Labor (DOL) and the Federal Acquisition Regulatory Council (FAR Council) issued the Final Rule and Final Guidance implementing President Obama’s Fair Pay and Safe Workplaces Executive Order (E.O. 13673), signed on July 31, 2014. Despite strenuous objections, including from groups representing defense contractors, on August 25, 2016, DOL and FAR Council finalized the rules (the “Fair Pay Regulations”) by which those who seek to contract with the government (contracts over $500,000) must disclose alleged and final wage and labor law “violations,” including non-final agency allegations of labor law violations and determinations subject to appeal. Certain portions of the Fair Pay Regulations take effect as early as October 25, 2016.
In Associated Builders and Contractors of Southeast Texas v. Fed. Acquisition Regulatory Council, Case No. 1:16-cv-00425, E.D. Tex. (filed Oct. 7, 2016), Associated Builders and Contractors of Southeast Texas (“ABC-Texas”), Associated Builders and Contractors, Inc. (“ABC”), and the National Association of Security Companies (”NASCO”) filed suit in federal district court against members of the DOL and FAR Council challenging E.O. 13673 and the Fair Pay Regulations. ABC and ABC-Texas represent nearly 21,000 member construction contractors and related firms in Texas and throughout the country. NASCO represents companies that employ more than 400,000 trained security officers.
Plaintiffs’ Complaint alleges six counts of legal violations:
The Fair Pay Regulations are unlawful under the Administrative Procedures Act because they stem from the President’s actions in excess of his rulemaking authority under the Federal Property and Administrative Services Act.
The Fair Pay Regulations should be precluded as a matter of law because the fourteen existing labor and employment laws addressed in the Fair Pay Regulations, such as the Occupational Safety and Health Act, already contain “comprehensive, carefully balanced remedial scheme[s],” which evidences Congress’s original intent to preclude additional remedies under other laws, such as those under the Fair Pay Regulations.
The Fair Pay Regulations unlawfully compel speech in violation of the First Amendment because government contractors would be required to disclose an “unprecedented list” of non-final court actions, arbitrations, and “administrative merits determinations,” which is in effect a requirement to “publicly condemn themselves on a highly controversial issue…even in the absence of any final adjudication of the merits regarding the alleged violation in the courts.”
The Fair Pay Regulations violate the U.S. Constitution’s Fifth Amendment due process clause because they compel disclosure of non-final court and administrative actions, and injure the contractors’ “right to be free from stigmatizing governmental defamation,” without due process of law.
The Fair Pay Regulations are arbitrary and capricious government action because they impose “drastic new requirements” without adequate explanation and without recognizing the reliance interests of the regulated community.
The Fair Pay Regulations violate the Federal Arbitration Act (“FAA”) because the Regulations forbid mandatory pre-dispute arbitration agreements for certain contracts, which contravenes the FAA and its policy favoring arbitration agreements.
Plaintiffs are seeking a preliminary injunction enjoining the government from implementing the Fair Pay Regulations, a declaratory judgment that the Regulations are invalid, and a final order vacating the Regulations and enjoining the government from implementing them. On October 13, 2016, Plaintiffs moved for a temporary restraining order and preliminary injunction against the government to immediately stop implementation of the Regulations.
A copy of the complaint is available here.
Jenner & Block Webinar: The Top Environmental, Health and Safety Issues for 2016 - What You Need to Know
By Allison A. Torrence
On Tuesday, February 23rd, from 12:00– 1:15 pm CT, Jenner & Block Partners Lynn Grayson and Steven Siros will present a CLE webinar on The Top Environmental, Health and Safety Issues for 2016 - What You Need to Know. The webinar will provide an overview of key environmental, health and safety issues in 2016 including the following topics:
Issues relating to the Corps’ jurisdiction under the Clean Water Act;
Fallout under the Safe Drinking Water Act after Flint;
U.S. EPA’s Clean Power Plan regulations, UNFCCC COP 21, and the potential regulation of aircraft GHG emissions;
Status of TSCA reform efforts;
Litigation relating to GMOs under FIFRA;
RCRA waste regulation amendments;
OSHA penalty updates;
U.S. EPA challenges;
Water scarcity and sustainability; and
Technological innovation and its impact on environmental practitioners.
To register for this free Webinar click here.
U.S. EPA Releases 2015 Enforcement Statistics
By Steven M. Siros
The United States Environmental Protection Agency ("U.S. EPA") recently announced its 2015 enforcement statistics, noting that for fiscal year 2015, U.S. EPA initiated enforcement actions resulted in $404 million in penalties and fines. In addition, companies were required to invest more than $7 billion to control pollution and remediate contaminated sites; convictions for environmental crimes resulted in 129 years of combined incarceration for convicted defendants; and there was a total of $39 million committed to environmental mitigation projects that benefited communities throughout the United States.
The largest single penalty was the result of a Clean Air Act settlement with two automobile manufacturers that resulted in a $100 million penalty, forfeiture of emissions credits and more than $50 million being invested in pollution control and abatement measures. U.S. EPA's 2015 enforcement numbers were up from 2014 ($100 million in fines and penalties collected in 2014).
Please click here to go to U.S. EPA's 2015 enforcement statistics website.
Lynn Grayson and Steven Siros Publish Article on U.S. Legal and Regulatory Developments in Nanotechnology
By Allison A. Torrence
Lynn Grayson and Steven Siros have published an article in the most recent issue of DRI’s Toxic Tort and Environmental Law Newsletter titled Nanotechnology: U.S. Legal and Regulatory Developments. In the article, Ms. Grayson and Mr. Siros discuss how nanotechnology affects every sector of the U.S. economy and impacts our lives in a myriad of ways through the 1,600 nanotechnology-based consumer goods and products we use on a daily basis. The article provides an overview of how nanotechnology is defined, insights on the regulatory framework and recent developments, possible concerns about nanomaterial use, and risk management considerations for U.S. businesses utilizing nanotechnology.
The full article is available here.
OSHA Penalty Limits to Increase Almost 80% in the Next Year, With Annual Inflation Adjustments Authorized Thereafter
By Alexander J. Bandza
Buried in the landmark Bipartisan Budget Act of 2015 (H.R. 1314) (“2015 Budget Act”) signed by the President on Monday, November 2, 2015, Section 701 requires the Occupational Safety and Health Administration (OSHA) to begin indexing its penalty limits to inflation, much like the US EPA and other federal agencies do now. This section, called the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” (“2015 Penalties Act”), also has “catch-up” provisions, which mean that the existing $7,000 penalty limit (for other-than-serious and serious violations under OSHA, originally set in 1990) can be increased to approximately $12,477 per violation, and the existing $70,000 penalty limit (for willful and repeat violations) can be increased to approximately $124,765 per violation. OSHA must adjust these penalties through an interim final rulemaking no later than August 1, 2016.
Workers Comp: Will the Opt-Out Initiative Alter the 100 Year Old Social Compact Between Employers and Employees for Work-Related Injuries and Illnesses?
By Andi Kenney
Dissatisfaction with existing workers compensation programs seems to be the norm these days. Employers are fed up with the costs of the programs, the sense that they provide incentives for employees to make false claims or to exaggerate real claims, and the bureaucratic process for claims resolution, among other issues. Employees are frustrated by the process for pursuing claims and the compensation schedules. As a result, the majority of states are considering changes to their workers compensation programs.
US EPA Publishes Proposed List of National Enforcement Initiatives for FY2017–19
By Alexander J. Bandza
On September 15, 2015, US EPA’s Office of Enforcement and Compliance Assurance published a proposed list of national enforcement initiatives (NEIs) for fiscal years 2017–19. This latest NEI list includes NEIs from the last round (FY2014–16) as well as three new potential NEIs that US EPA is considering.
OSHA Proposes 10-Fold Reduction in Beryllium Workplace Exposure Limit
By Allison A. Torrence
On August 7, 2015, the Occupational Safety and Health Administration (OSHA) published a proposed rule in the federal register that would reduce exposure limits for occupational exposure to beryllium. Beryllium is a strong but lightweight metal (it is stronger than steel, but lighter than aluminum) used primarily in the aerospace and defense industries and is classified as a strategic and critical material by the U.S. Department of Defense. OSHA estimates that approximately 35,000 workers are potentially exposed to beryllium in approximately 4,088 establishments in the United States.