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Has EPA's Environmental Justice Push Peaked?

15 May 2024 00:00:00 -0800

Upon assuming office, the Biden Administration began an ‘all of government’ approach to securing environmental justice for everyone, especially those living near industrial facilities and contaminated sites. Based on a series of executive orders, federal agencies used existing statutes and regulations, plus new guidance, to advance the new agenda.

EPA was no exception and, in fact, may have set the pace for infusing environmental justice considerations into permitting, regulations, compliance, and remediation activities. Administrator Regan went on a “Journey to Justice” tour in Texas, Louisiana, and Mississippi and created the Office of Environmental Justice and External Civil Rights to enforce several federal civil rights laws, including Title VI of the Civil Rights Act of 1964. Strategic plans, equity action plans, and guidance memos were written to guide EPA’s activities and annual reports extolling EPA’s accomplishments were published.

Emboldened by this new focus, citizen groups began filing complaints with EPA under EPA’s regulations implementing, among other laws, Title VI. Dozens of complaints under Title VI have been filed since January 2021. As part of the resolution process, EPA seeks to enter into an informal dispute agreement with the agency that is the subject of the complaint in order to resolve the issues raised by the complaint. Many of the complaints accepted by EPA are still pending but some have been closed, subjecting EPA to criticism from the complainants.

One example is the series of complaints filed against the State of Louisiana in early 2022. Generally, the complaints focused on permitting and emissions in the Industrial Corridor (along the Mississippi River), the permitting of the Formosa petrochemical facility in St. James Parish, and emissions from the Denka facility in St. John Parish. EPA accepted these complaints for investigation and even issued a public Letter of Concern regarding its preliminary findings that the state agencies had created disparate impacts due to their actions and inactions over the years. During the course of the investigation and informal dispute discussions, the Attorney General for the State of Louisiana filed a suit against EPA in federal court, alleging, among other things, that EPA’s regulations prohibiting disparate impact were not authorized by Title VI. In response, EPA promptly closed its investigation of the complaints.

The Attorney General was not done, though, moving ahead to obtain a preliminary injunction against EPA, which was not appealed. Today, EPA’s EJ’s web-site contains this announcement: “Pursuant to a preliminary injunction issued by the U.S. District Court for the Western District of Louisiana on January 23, 2024, EPA will not impose or enforce any disparate-impact or cumulative-impact-analysis requirements under Title VI against the State of Louisiana or its state agencies.”

This retreat is not a single event. EPA accepted for investigation a complaint against two Mississippi agencies regarding the deterioration of drinking water systems in Jackson, Mississippi. The situation got so bad that emergencies were declared. The complaints alleged that the water crisis was caused by the systematic deprivation of funding and support for modernizing and maintaining water systems in Jackson. However, EPA recently closed its investigation, finding that although “the impacts of the water crisis fell disproportionately on the majority Black community of Jackson,” there was still “insufficient evidence” of a relationship between funding and the racial composition of the community.

Another recent example comes from Texas. A complaint relating to Oxbow Calcinating was accepted by EPA. However, EPA closed that investigation “for prudential reasons,” finding, among other things, that the complainants had also filed a petition for objection to Oxbow’s Title V permit, which was “sufficiently related to the Complaint at hand that it is prudent for OECRC to close the complaint/investigation until the conclusion of the administrative proceedings.” However, a few months later, EPA rejected the petition for objection. It is unknown whether the complaint will be refiled or if EPA will accept it if it is.

EPA’s closure of its investigations draws a great deal of criticism from the complainants. This may be because EPA seems to have let people believe that it would use environmental justice actions to address all manner of impacts. However, EPA’s environmental justice authority is limited; plus, the burden under Title VI and/or EPA’s regulations must still be met and not every impact is adverse or disparate. Complainants should not be surprised that EPA cannot, and should not, act beyond its legal authority.

IRS Releases Health Savings Account Contribution Limits for 2025

09 May 2024 00:00:00 -0800

Starting in January, individuals will have the opportunity to increase their contributions to their health savings accounts (HSAs), as the IRS announced its annual inflation adjustments for HSA holders on May 9th.

For the 2025 calendar year, the maximum HSA annual contribution limit for those with self-only coverage under a high-deductible health plan (HDHP) will rise to $4,300. For individuals with family coverage, the limit will increase to $8,550. These amounts represent an increase from $4,150 and $8,300, respectively, in 2024. For individuals over 55 years or older by the end of 2025, individuals are eligible to make an additional $1,000 contribution to his or her HSA.

To be eligible to contribute to an HSA, an individual must be enrolled in a HDHP. In 2025, an HDHP will be defined as a health plan with an annual deductible of at least $1,650 for self-only coverage (up from $1,600 in the previous year) or $3,300 for family coverage (compared to $3,200 in 2024). Additionally, the maximum yearly out-of-pocket expenses (including deductibles, copayments, and other expenses excluding premiums) will increase to $8,300 for self-only coverage and $16,600 for family coverage in 2025, up from $8,050 and $16,100 in 2024, respectively. The IRS also announced that the expected-benefit HRA limit will be $2,150 in 2025, up from $2,100.

Employers can contribute tax-free money to their employees’ HSAs as long as the contribution limits are not exceeded when considering both employee and employer contributions. These employer contributions may be made at any time during the year and up until April 15^th of the following calendar year. Employer contributions generally are tax-deductible. Additionally, employer contributions are 100% vested when made, meaning they cannot be recouped from HSAs once they are made, including for employees who terminate employment.

For employees, HSAs offer triple-tax benefits: tax deductions on contributions, tax-deferred growth, and tax-free withdrawals if used for qualified medical costs. Qualified expenses include payments for doctor visits, dental exams, lab fees, physical therapy, prescriptions, equipment, and supplies.

Weeding Out: Marijuana's Blazing Trail from a Schedule I to a Schedule III Drug

03 May 2024 00:00:00 -0800

The Drug Enforcement Administration (“DEA”) has just announced its intention to reclassify marijuana from Schedule I to Schedule III of the Controlled Substances Act (“CSA”) following a recommendation from the Department of Health and Human Services in August 2023. But is reclassification the “pot of gold” advocates have been searching for or is it too early to exhale?

Current Classification of Marijuana

Marijuana is currently classified as a Schedule I controlled dangerous substance under the CSA. As a Schedule I drug, marijuana is deemed to have no recognized medicinal value and a high potential for abuse, and is categorized alongside the most dangerous substances such as heroin and LSD. Thus, it is illegal to produce, dispense, or possess marijuana.

Impact of Reclassification of Marijuana to Schedule III

Reclassifying marijuana from a Schedule I to a Schedule III substance would relax the stringent federal controls of the drug. For example, it would acknowledge marijuana’s medicinal value and identify marijuana as having low potential for physical and psychological dependence. This would allow doctors to prescribe marijuana officially and not just recommend it to qualifying patients. It would also permit FDA oversight over prescription marijuana.

Additionally, reclassification of marijuana would allow cannabis businesses to deduct business expenses on federal filings, which is currently prohibited under Section 280E of the Internal Revenue Code.

However, reclassification would not impact the legal landscape surrounding recreational marijuana, which would remain illegal under federal law regardless of state laws to the contrary.

For employers, rescheduling marijuana will bring challenges. Employers will need to consider the distinct implications of recreational vs. medicinal marijuana, the latter of which may trigger federal disability and anti-discrimination laws. Employers will also need to figure out how to balance workplace safety with an employee's need to use medical marijuana. Employers should consult with legal counsel regarding policy revisions, safety regulations, and employee drug testing to limit claims/charges/lawsuits of discrimination due to employees’ marijuana use.

What’s Next?

Reclassification of marijuana will not be immediate. The DEA’s proposal must first be viewed by the White House Office of Management and Budget followed by a public comment period and other administrative processes as governed by the Administrative Procedures Act. Regardless of the timeline, hopes are not high that reclassification will resolve the legal quagmire surrounding marijuana.

Management Update - Volume 13, Issue 5

01 May 2024 00:00:00 -0800

The FTC's Nationwide Ban on Non-Compete Agreements

25 Apr 2024 00:00:00 -0800

On April 23, 2024, the Federal Trade Commission (“FTC”) issued a final rule, by a 3-2 vote, banning non-compete agreements nationwide. The rule, once effective, bans all non-compete agreements between employers and employees. Existing non-compete agreements for most employees will also no longer be enforceable. Only those existing agreements with senior executives, earning greater than $151,164 annually, and who are in policy-making positions, are excluded from the ban. The final rule becomes effective 120 days after publication in the federal register.

The FTC issued its earlier proposed rule on January 5, 2023, prohibiting employers from using non-compete agreements with workers. The proposed rule also invalidated all existing non-compete agreements no later than the rule’s compliance date. The earlier proposed rule also significantly affected non-compete agreements in the sale of a business. The proposed rule banned any non-compete provisions in the sale of a business unless each selling party owned at least a 25% interest in the business entity being sold. Under the final rule recently issued, however, the proposed ban affecting non-compete agreements regarding the sale of a business was removed.

The final rule is already facing significant legal challenges. Various business groups, including the U.S. Chamber of Commerce, filed suit in Texas Federal Court arguing that the FTC lacks authority to issue rules regulating unfair competition. Various other legal challenges are expected, which may further delay or bar altogether the FTC’s enforcement of its final rule.

Even if the FTC’s final rule remains intact after intense judicial scrutiny, much of the Louisiana law on non-compete agreements will remain unaffected. Non-compete law in Louisiana is governed by a single statute, La. R.S. 23:921. This provision presumes non-compete agreements are unenforceable unless they meet one of eight narrowly construed exceptions. Each of the exceptions is based on relationships. They include the buyer and seller of the goodwill of a business, the employer/employee relationship, the franchisor/franchisee relationship, the computer employer/computer employee relationship, the corporation/shareholder relationship, the partner/partnership relationship in anticipation of dissolution, the partner/partnership relationship regardless of dissolution, and the limited liability/member relationship. Six of Louisiana’s exceptions to the general prohibition on non-compete agreements (unrelated to employees) remain unaffected by the FTC’s final rule.

Moreover, Louisiana law specifically allows a non-solicitation of customers agreement between employers and employees. Such a provision allows an ex-employee to continue working in the industry, but prohibits the ex-employee from soliciting customers of their former employer. This provision also appears unaffected by the FTC’s final rule. Confidentiality provisions prohibiting employees from disclosing an employer’s confidential information also remain intact after the final rule.

The final rule may never become law. Significant legal challenges to the rule will continue. If the final rule does become law, much of the Louisiana non-compete law remains viable. Louisiana businesses should continue taking advantage of the law as it exists today, until the viability of the FTC’s final rule is judicially determined, which may take years.

U.S. Department of Labor Issues Final Rule to Increase Minimum Salary Threshold for OT Eligibility

24 Apr 2024 00:00:00 -0800

On April 23, the U.S. Department of Labor (DOL) issued the long-awaited final rule increasing the minimum salary threshold necessary for an employee to possibly qualify as exempt from overtime.

Effective July 1, 2024, the salary threshold will increase from $684 per week or $35,568 annually to $844 per week or $43,888 annually, and to $1,128 per week or $58,656 annually on January 1, 2025.

Effective July 1, 2024, the minimum salary threshold to qualify for the highly compensated employee exemption will increase to $132,964 per year, and then increase again to $151,164 on January 1, 2025.

July 1 is not that far off. Employers need to begin the process of determining which of their currently exempt employees are likely to lose the exemption when the increased salary thresholds go into effect.

Federal Trade Commission Votes to Ban Most Non-Compete Agreements Throughout the United States

24 Apr 2024 00:00:00 -0800

The FTC just voted to approve a final rule that will effectively ban new non-compete agreements and clauses. In addition, the rule voids all existing non-compete agreements and requires employers to notify current and former employees that their non-compete provisions are no longer in effect. (This provision does not apply to senior executives.)

The rule also applies to some agreements requiring employees to refund employers for training costs.

Although the rule does not specifically apply to other types of limitations, such as nondisclosure agreements, the FTC indicated that they could be subject to the rule if they were so broad that they had the effect of a noncompete agreement.

The new rule goes into effect 120 days after its publication in the Federal Register. It is highly likely that the rule will be even further delayed by legal challenges. For right now, employers need not make any notifications to workers regarding existing noncompetition agreements or provisions.

Some of the High-Points of the Final Pregnant Worker Fairness Act Regulations!

23 Apr 2024 00:00:00 -0800

By now, most of us are aware that last week the EEOC published the final regulations for the Pregnant Worker Fairness Act, all 400 pages of them. I thought that it might be helpful to hit some of the high points of the Regulations.

The Regulations will become effective around June 12, 2024, although the Act itself is already in effect.

Big Picture:

The PWFA and Regulations require employers to make “ADA-like accommodations” for known limitations related to, affected by, or arising out of pregnancy, childbirth, and related medical conditions, including but not limited to IVF treatments and abortions.

The Regulations allow for some exceptions for religious organizations, but they will be taken on a case-by-case basis; meaning they will be few and far between.

A “known limitation” is one communicated by the applicant, employee or their representative. This is probably going to place a slightly higher burden of communication upon the employee than does the ADA.

“Related to, affected by, or arising out of" means that the pregnancy, childbirth or related medical condition need not be the only, sole, original or substantial cause of the limitation for which the accommodation is requested. This will greatly expand an employer’s obligation to make reasonable accommodations.

The “limitation” requiring and accommodation:

Need not rise to level of disability.
May be modest, minor, or episodic.
Must be of the applicant/employee themselves-not family
Can be related to maintain employee/fetus health or to seek healthcare related to the pregnancy, childbirth, or related medical condition. (Employees can seek reasonable accommodation to alleviate pain or risk to health).

An applicant or employee is “qualified” if she can currently perform the essential functions of her job or her inability to do so is “temporary.”

“Temporary” means the applicant/employee will be able to perform the essential functions “in the near future”.

“In the near future” means up to forty (40) weeks.

Temporary suspension of one or more essential function may be required if the employee can resume performing the essential functions in the near future unless the employer can establish undue hardship.

Additional factors to be considered when evaluating the suspension of essential function: length of time of suspension, other work that employee can perform, nature and frequency of the essential function, has employer-provided similarly situated employees with suspension of essential functions, can temporary workers be hired to perform the essential functions and, can employer simply not perform the essential functions for the duration of the employee’s leave.

This does not mean that 40 weeks of leave is guaranteed. An employer may still argue undue hardship.

“Undue hardship” is similar to ADA and means “significant difficulty or expense.”

Certain “predictable assessments” will almost always be a reasonable accommodation:

allowing an employee to carry or keep water near and drink, as needed (This is different than a water break.)
allowing an employee to take additional restroom breaks, as needed;
allowing an employee whose work requires standing to sit and whose work requires sitting to stand, as needed; and
allowing an employee to take breaks to eat and drink, as needed.

Other examples of reasonable accommodations include: closer parking/flexible hours/proper size uniform and PPE/additional bathroom time/leave time/relieved of strenuous duties/avoid exposure to dangerous compounds/telework/changing schedule/prenatal health appointment/limited exposure to secondhand smoke/time off for IVF treatment/termination of pregnancy.

Employer and employee must engage in ADA-like “interactive process.” DOCUMENT!

Like ADA, employers can limit damages if they can show that they made a good-faith effort to accommodate. DOCUMENT!

Employers cannot require employees to accept an accommodation without first discussing it. The Regulations do not say that the employer and employee must agree on the accommodation.

Employers may not require employees to take leave if another reasonable accommodation would allow the employees to keep working.

Employers can ask questions to verify that the limitation is related to pregnancy, childbirth, or related medical condition, but an informal conversation will usually be sufficient.

Employee requests for accommodation can be minimal: 1. Identify limitation related to PCRMC, and 2. Requires adjustment to work due to limitation.

I am having trouble getting to work at my scheduled starting time because of morning sickness. This will be sufficient.

Employee can choose to use paid leave or unpaid leave to same extent that employer allows other employees to use leave.

Providing “interim accommodation” while employer determines if requested accommodation is reasonable is not required but will be a “best practice.”

Suggestions:

Confirm that you have put up the PWFA poster.

Train your supervisors to spot PWFA issues and requests for accommodation and to push them to HR.

Develop your written PWFA policy.

Develop your PWFA Accommodation Request form. You cannot require an employee to complete the form, but HR can fill it out and use it to track requests.

Stranger Danger: OSHA's New Rule Permits Enigmatic Third Wheel at Inspections

11 Apr 2024 00:00:00 -0800

Who exactly can tag-along with an OSHA Compliance Safety and Health Officer (CSHO) during a worksite inspection of a workplace? A new OSHA rule seeks to dramatically broaden this group to include union agents, even in non-union workplaces.

Employers and employees typically have the right to have a third-party representative present during an OSHA inspection of a workplace. Traditionally, the employee representative must be an employee of the employer at the site being inspected. However, a new OSHA rule, which takes effect on May 31, 2024, “clarifies” that the employee representative may also be a non-employee third-party not affiliated with the employer. Additionally, the new rule no longer limits employees' options for third-party representation during OSHA inspections to persons with formal credentials, such as an industrial hygienist or safety engineer. Thus, the new rule broadens the scope of representation, potentially altering the dynamics of workplace inspections and introducing new challenges for employers.

Employers should be wary of the potential implications of the vague new “Walkaround” Rule. For example, the new rule inevitably invites labor activists or even plaintiffs’ attorneys into non-union workplaces to potentially influence union organizing campaigns. Moreover, the new rule leaves much to be desired in terms of how outside representatives will be selected in non-union workplaces. The unclear process ultimately grants the CSHO considerable discretion in determining who accompanies them during inspections.

Employers should take every precaution possible when OSHA knocks on their door for inspections. This includes asking the pertinent questions; raising appropriate objections to third-party representatives when necessary; and lawfully limiting access to an employer’s worksite and the third-party representatives’ involvement during onsite inspections. Neglecting these measures could lead to regrettable consequences for employers, as the presence of OSHA’s newfound third wheel may result in unforeseen challenges and adverse outcomes that extend far beyond an unfavorable OSHA inspection. A starting point should be a legal review of an employer’s solicitation and distribution rules.

Management Update Newsletter Volume 13, Issue 4

01 Apr 2024 00:00:00 -0800