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Shopfloor Legal

NAM Fights Paperwork Ruling that Could Cost Manufacturers Millions

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The National Association of Manufacturers joined with other trade associations in filing an amicus brief against the abrupt implementation of an onerous Obama-era labor regulation. The rule would require employers to provide data that the government isn’t even capable of processing yet—at a cost of more than a billion dollars to businesses.

For decades, the Equal Employment Opportunity Commission (EEOC) has required employers to report annual workforce data using broad “job bands” to aggregate and monitor diversity in the workforce. A 2016 Obama-era regulation (that was later delayed pending further review) extends this required employer reporting, forcing businesses to also report pay data relating to race, sex and ethnicity to the EEOC as well. Now, following a ruling by a judge last month, employers have been told that not only do they have to start reporting this new separate band of information—but the pay data is due on September 30, leaving them insufficient time to collect that information.

Manufacturers will have to pick one payroll period’s worth of data from 2018 to report before the September deadline. As the amicus brief notes, collecting this sort of data proactively, a much easier task, would still require 18 months of lead time—doing so retroactively in less than six months is simply impractical. The NAM-submitted brief also notes the complexity of implementing such a change: “The EEO-1 Report requires 180 data points. The Revised EEO-1 Report, by contrast, would require employers to submit 3,660 data points for each employer location.” Moreover, “EEOC’s Revised EEO-1 Report exceeds $400 million in pure labor costs alone, and carries a total burden of $1.3 billion per year for all businesses employing 100 or more employees.”

There is no switch to flip that would allow employers to begin complying with this new regulation by the proposed deadline. What’s more, EEOC publicly admits it is “not capable of collecting” the data. The government also filed a response explaining that any collection without proper lead time and infrastructure will result in poor quality data. So, manufacturers are facing a regulation being implemented on an impractical timeline requiring them to collect data that has “never been organized or previously produced.” The NAM continues to fight against this burdensome regulation—made worse by an unrealistic timeline—that does nothing to guarantee equal pay for equal work.

For more information, contact Callie Harman, Director of Labor & Employment Policy (charman@nam.org) or Leland Frost, Associate General Counsel (lfrost@nam.org).

Supremes Hear False Claims Act Challenge

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This morning, the U.S. Supreme Court heard oral arguments in Cochise Consultancy v. United States. The case concerns the statute of limitations for a relator in a False Claims Act (FCA) qui tam lawsuit in which the United States has declined to intervene. Relators, also known as whistleblowers, may bring a lawsuit for alleged fraud against the government and potentially receive a share of any recovery as a reward. The FCA establishes two distinct statute-of-limitations periods: six years for relators’ claims and no more than 10 years for claims brought by a government official or with the knowledge of a government official.

After serving time in prison for being part of a fraudulent subcontracting scheme, the relator in this case alleged that Cochise violated the FCA. Cochise argued the statute of limitations barred the claim because it requires a violation to be brought within six years of the violation or three years “after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed.” The Supreme Court is addressing the issue of whether the “government knowledge” period of up to 10 years applies only when the government intervenes in the case or whether that period also applies to relators even when the government has chosen not to pursue the claim.

The National Association of Manufacturers (NAM) filed an amicus brief in the Supreme Court urging a limited time frame for private relators to bring FCA cases. The NAM’s brief argues that a relator in an FCA action is limited to the six-year statute of limitations. The shorter statute of limitations would reduce the number of very old claims that manufacturers would be forced to defend—at significant expense and with the disadvantage of faded memories and dated evidence.

NAM Comments on Proposed DOL Association Retirement Plans Rule

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When the Department of Labor (DOL) announced last fall that it was proposing a rule that would make it easier for small businesses to offer retirement benefits to their employees, the NAM praised the decision, calling it “a significant step toward allowing small manufacturers to use competitive 401(k) plans to attract talent in a tightening labor market.” Now, the NAM has partnered with the American Society of Association Executives (ASAE) to submit official comments to help DOL implement its proposed Association Retirement Plans (ARP) rule.

Under the DOL’s ARP proposal, small businesses connected by either geography or industry would be able to band together through a trade association or local business group to offer a single retirement plan for their employees – reducing the cost of offering retirement benefits and thus allowing growing companies to better attract and retain skilled workers.

Employees at small businesses constitute the backbone of our national workforce, and they face an imminent retirement savings crisis. Just 53 percent of workers at companies with fewer than 100 employees have access to a workplace retirement plan, and only 37 percent of small business workers participate in such a plan. Reducing the costs for smaller employers offering a 401(k) will bolster retirement savings for hard-working Americans across the country.

In the comment letter, the NAM and ASAE urged the DOL to clarify that members of manufacturing associations qualify as sharing a common interest under the rule, remove state-level barriers to employer participation in an ARP, and ensure the long-term stability of the program. We also asked the DOL to move quickly toward implementation so that small manufacturers and their employees can benefit from these important reforms in the near term. Once finalized, the ability of employers to offer ARPs will help ensure the financial security of American workers and support a thriving manufacturing workforce.

NAM’s Manufacturers’ Center for Legal Action to Be Recognized for Innovative In-House Compliance Practice

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National Association of Manufacturers (NAM) members know the Manufacturers’ Center for Legal Action’s (MCLA) Manufacturers’ Compliance Institute (MCI) for the valuable free legal information it provides through partnerships with world-class law firms. Now, the broader legal network is recognizing the MCI for its innovative work.

The Association of Corporate Counsel (ACC) Awards honor the work of leading in-house practitioners and legal departments, and the MCI will be honored at an ACC awards reception on October 25. The MCI will be recognized with a 2018 Corporate Counsel In-House Innovator Award, which honors in-house legal departments that develop innovative contributions for their organizations.

Through the MCI, NAM members can use an online portal to request access to a free 30-minute call with a respected major law firm. Many small to medium-sized manufacturers have no internal legal resources, yet are subject to scores of regulatory and legal requirements. The MCI program was designed to address the growing number of inquiries from member companies seeking practical guidance on regulatory and other legal issues. The MCI provides quick answers to often complex compliance questions while protecting member confidentiality.

Since the MCI’s launch in 2015, it has expanded from a partnership with one law firm to include six law firms with specialties in the areas of most concern to our members: Littler for labor and employment law; Sidley for environmental compliance; Squire Patton Boggs for global trade; Shook Hardy & Bacon for product safety; Wiley Rein for intellectual property; and Crowell & Moring for California Proposition 65 compliance.

The MCI has responded to hundreds of member inquiries and has helped NAM members better understand the maze of regulations that manufacturers must deal with daily, improved their ability to stay legally compliant and helped protect their investments and their reputations. In addition, training webinars offered through the program have reached thousands of individuals in our member companies, greatly facilitating their understanding of the legal and regulatory environment.

In Supreme Court Brief, MCLA Defends Manufacturers Against Overreaching Investigation

By | Briefly Legal, Environment, Manufacturers’ Center for Legal Action, Shopfloor Legal | No Comments

On Thursday, the National Association of Manufacturers (NAM) continued its fight against state attorneys general targeting manufacturers. The Manufacturers’ Center for Legal Action (MCLA) filed an amicus brief in the U.S. Supreme Court, arguing against the misguided efforts of Massachusetts Attorney General Maura Healey to silence energy manufacturers.

The NAM’s amicus brief asks the U.S. Supreme Court to consider and reverse a ruling by the Massachusetts Supreme Court that upheld the validity of the attorney general’s subpoena, which sought decades of ExxonMobil’s communications relating to climate change. ExxonMobil challenged the authority of Massachusetts courts to enforce the subpoena because ExxonMobil’s limited commercial activity in the state (licensing agreements with independent gas stations) is unrelated to the focus of the subpoena.

The Massachusetts Supreme Court upheld the subpoena despite the tenuous connection between the company’s advertising and the subpoena. That low bar threatens all manufacturers by massively expanding the range of venues through which plaintiffs or government officials may pursue claims against manufacturers. The NAM’s amicus brief argues that subpoenas like this are valid only when the nature of the company’s in-state conduct has a substantial relationship with the focus of the subpoena.

Healey’s investigation is just part of a larger effort nationwide to target energy manufacturers, purportedly over climate change. But as manufacturers have argued, and the Supreme Court has concluded, the courts are not the right venue for setting climate change policy. That work belongs in the legislative and executive branches, and the MCLA, as well as the Manufacturers’ Accountability Project, will continue to work to ensure that attorneys general, trial lawyers and activists do not succeed in their efforts to undermine our judicial system.

NAM Seeks Supreme Court Review of $1 Billion “Public Nuisance” Claim Against Manufacturers

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The NAM’s  Manufacturers’ Center for Legal Action (MCLA) filed a brief today that asks the U.S. Supreme Court to hear one of the most significant tort liability cases in a generation. In ConAgra Grocery Products v. California, 10 California counties sued companies that sold paint containing lead pigment more than 70 years ago. A California court held two companies liable for $1.15 billion in damages to remove this paint from private homes and buildings built prior to 1950 in several California counties and cities. California at the time even promoted the use of lead paint. The companies are now asking the U.S. Supreme Court to review the case, and the MCLA today filed an amicus brief in support.

Beyond the staggering and unwarranted judgment itself, the California court’s ruling threatens manufacturers by validating a new form of tort liability. In recent years, plaintiffs’ lawyers have sought to hold companies liable for selling legal and regulated products, claiming that their use creates a public nuisance. Courts have largely rejected these so-called “public nuisance” claims—until now.

If the U.S. Supreme Court does not reject these overbroad public nuisance claims, manufacturers could be hit with a flood of new lawsuits. Municipalities are already pursuing public nuisance claims seeking billions of dollars from energy manufacturers for alleged climate change impacts. Through the Manufacturers’ Accountability Project, the MCLA is already pushing back against these misguided efforts. Other governments are seeking to use public nuisance law to hold companies liable for harm allegedly caused by chemicals manufactured and used decades ago. It is just a matter of time before other legal and useful products will also be targeted.

The MCLA’s amicus brief in support of Supreme Court review argues that the California court’s holding violates the constitutional rights of the defendants. We highlight the sustained campaign to turn the public nuisance doctrine into a “catch-all” tort for social and environmental issues. We stress that such issues are ill-suited for courts and should remain a legislative and regulatory matter.

A Supreme Court Victory for Manufacturers’ Free Speech Rights

By | Shopfloor Legal, Shopfloor Main | No Comments

The U.S. Supreme Court last week struck down a Berkeley, California, city ordinance that required retailers to post misleading warnings in their stores about mobile phones. The ruling helps manufacturers by upholding their First Amendment right to choose how to speak about their own products.

The case—CTIA – The Wireless Association v. Berkeley, California—involved a Berkeley city ordinance that sought to require mobile phone retailers to post in-store signs that warn customers about the alleged dangers of radio wave emissions from mobile phones. A group of companies sued to challenge the requirement, arguing that it unconstitutionally compels speech in violation of the First Amendment to the U.S. Constitution.

The 9th Circuit Court of Appeals ruled against the companies, concluding that all compelled commercial speech is subject to the most deferential standard of judicial review (known as “rational basis” review). The plaintiffs asked the Supreme Court to review and reverse the judgment.

The National Association of Manufacturers’ Manufacturers’ Center for Legal Action (MCLA) filed an amicus brief in support of review because governments should not be able to dictate how manufacturers advertise, promote or describe their products unless there is a compelling public need for such disclosures. If such compelled disclosures are subject to merely rational basis review, then the federal, state and local governments would be empowered to force manufacturers to speak out against their own products—especially those that the government disfavors.

The Supreme Court granted review and summarily ordered the 9th Circuit to reconsider its ruling in light of another recent Supreme Court decision that reaffirmed strong protections against compelled speech. This ruling protects the right of manufacturers to speak—or not speak—about their products without unwarranted government intrusion. The MCLA is proud to have submitted a brief in support of this great result for manufacturers.

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