The Center News: April 2016

A Publication of the National Association of ManufacturerstheCenter for Legal Action

Center Perspectives
By Patrick Forrest, Vice President and Deputy General Counsel, and Leland Frost, Associate General Counsel

DOL Persuader Rule Chills Employer and Employee Communications
The Manufacturers’ Center for Legal Action (MCLA) is suing to challenge the “persuader rule” finalized by the U.S. Department of Labor (DOL) on March 23. The long-anticipated rule drastically redefines “persuader” activity under Section 203 of the Labor-Management Reporting and Disclosure Act. The final rule greatly limits the ability of employers, particularly small businesses, to obtain advice from labor relations experts and, in turn, deprives employees of their right to obtain balanced information about union representation. The final rule is scheduled to take effect on April 25 and applies to arrangements, agreements and payments made on or after July 1 of this year.

The rule, first proposed by the DOL in 2011, requires employers and third-party lawyers and other labor consultants to disclose their relationships more frequently than under the current standard. Under that standard, employers and their consultants file reports only when consultants communicate directly with workers. Under the new rule, employers must file reports when consultants are giving certain guidance to the employer without contacting employees directly, such as conducting informational seminars or providing materials to distribute to and persuade workers. The government’s expansion of what constitutes “advice” vastly broadens the persuader definition and, in effect, restricts manufacturers’ ability to communicate with their workforce. Further, the rule expands possible criminal liability related to disclosure and will result in employers not seeking out important counsel to guide them on employer and employee-related questions.

The DOL has tried to deprive employers and employees of their legal right to important counsel before. In 1988, the National Association of Manufacturers (NAM) filed a brief in UAW v. Dole arguing that “indirect” persuader activity should not fall under the rule. Our argument prevailed in a decision authored by then-federal appellate judge Ruth Bader Ginsburg.

The MCLA is fighting against this new persuader rule even more vigorously. On March 30, the NAM led a coalition of associations in filing a lawsuit against the new rule. Our complaint argues that the rule violates manufacturers’ constitutional rights of freedom of speech and freedom of association. The new rule is also too vague and therefore prohibited by the Fifth Amendment's due process clause.

MCLA in the Courts
Class Actions

Court misses opportunity to clarify key class action issue: The Supreme Court recently affirmed a lower court’s certification of a class that included uninjured claimants. The case involved the use of statistical sampling and the creation of an “average” employee to determine both injury and damages in a class action brought under the Fair Labor Standards Act. The NAM will continue to advocate the exclusion of uninjured class members in class action litigation.

More Information: Tyson Foods, Inc. v. Bouaphakeo (U.S. Supreme Court)
Environmental

Federal magistrate judge recommends keeping public trust GHG case on life support: A federal magistrate judge kept alive an attempt to achieve regulation by judicial fiat. The suit was filed by a group of young plaintiffs seeking to require various government agencies to mandate the further reduction of greenhouse gas emissions. A federal judge will now review the magistrate’s recommendation, and we plan to file objections.

More Information: Juliana v. United States (U.S. District Court for the District of Oregon)

California appeals court seeks further briefing on cap-and-trade rules: A state appeals court asked the NAM and other parties for additional briefing on issues relating to California's cap-and-trade auction allowance system. Our challenge to the rule as an unconstitutional tax has been awaiting oral argument for more than a year, and the court is expected to schedule arguments after the new round of briefing is concluded in May.

More Information: California Chamber of Commerce v. California Air Resources Board (Cal. Ct. App.)

NAM opposes "conduit theory" that would expand EPA jurisdiction under the Clean Water Act: The NAM filed a brief opposing a lower court decision that adopts a relatively new “conduit” theory, which would require many nonpoint sources of pollution to secure permits from the Environmental Protection Agency (EPA). The conduit theory does not conform to federal law, would be expensive to implement and does not mesh with the regulatory requirements for point sources.

More Information: Hawaii Wildlife Fund v. County of Maui (U.S. Court of Appeals for the Ninth Circuit)

NAM opposes expanded reach of hazardous waste law: Last August, the NAM urged the reversal of a federal court ruling imposing liability for “disposal” of a hazardous substance into the air. Traditionally, “disposal” refers to the discharge of material directly on land or in water. Because emissions can travel long distances by air, the court’s ruling would create unforeseeable and expansive liability. Oral arguments were held on April 4.

More Information: Pakootas v. Teck Cominco Metals, Ltd. (U.S. Court of Appeals for the Ninth Circuit)

Court grants NAM motion to intervene in Boiler MACT case: The D.C. Circuit granted a motion by the NAM and other industry groups to intervene in a challenge by the Sierra Club to the EPA’s latest reconsideration of the Boiler MACT rule. The Sierra Club is seeking more stringent standards, which the NAM opposes.

More Information: Sierra Club v. EPA (U.S. Court of Appeals for the D.C. Circuit)

Industry group files brief against the EPA's effort to amend state emissions plans: The NAM is a member of the SSM Litigation Group, which is challenging the EPA’s rule regarding emissions during startups, shutdowns and malfunctions (SSM). The EPA concluded that 36 state emissions plans are inadequate because they allow defenses to emissions violations during SSM events. The EPA’s position is not supported by statute or legal precedent, and its rule unreasonably harms manufacturers by creating difficult compliance burdens.

More Information: Walter Coke, Inc. v. EPA (U.S. Court of Appeals for the D.C. Circuit)

NAM, allies and states file final reply brief in Clean Power Plan litigation: The NAM and other coalition members challenging the EPA’s latest rules targeting greenhouse gas emissions from electric utilities filed a final brief arguing that the EPA lacks statutory authority to assert such a broad and novel regulatory power.

More Information: West Virginia v. EPA (U.S. Court of Appeals for the D.C. Circuit)
Government Contracting

NAM seeks to rein in expanded liability under the False Claims Act: The NAM filed a brief asking a federal appeals court to overturn a lower court’s decision imposing $663 million in False Claims Act liability against a company that complied with the government’s technical requirements and did not defraud the government.

More Information: United States ex rel. Harman v. Trinity Inds., Inc. (U.S. Court of Appeals for the Fifth Circuit)

NAM stands strong against suits claiming fraud by implication: The Supreme Court will soon decide whether government contractors can be liable for making false claims for failing to comply with every statutory, regulatory and contractual requirement. The NAM filed a brief urging the court to reject suits for so-called “implied false certifications” in which a contractor has no intent to defraud the government.

More Information: Universal Health Services, Inc. v. United States (U.S. Supreme Court)
Labor

NAM prevails on attempt to expand Davis-Bacon wage requirement: The D.C. Circuit agreed with the NAM that the construction of the privately funded CityCenterDC isn’t subject to the prevailing wage requirements of the Davis-Bacon Act. The DOL had sought to apply Davis-Bacon requirements because the project was located on land leased from the federal government.

More Information: District of Columbia v. Department of Labor (U.S. Court of Appeals for the D.C. Circuit)
OHSA

Manufacturers challenge the Occupational Safety and Health Administration (OSHA) Silica Rule: The NAM joined the American Foundry Society to fight a newly announced silica rule that will severely stunt the economy and burden manufacturers. This rule places undue burdens and irreparable harm on manufacturers, especially small and medium-sized businesses, some of which could be forced to shut their doors.

More Information: American Foundry Society v. OSHA (U.S. Court of Appeals for the D.C. Circuit)
Patents, Copyrights and Trademarks

NAM urges Supreme Court to allow flexibility in patent settlements: The NAM filed a brief advocating sensible, business-friendly applications of antitrust laws and explaining the importance of exclusive licenses for settlements.

More Information: SmithKline Beecham Corp. v. King Drug Co. (U.S. Supreme Court)
Product Liability

NAM urges New York court to reject “cumulative exposure” asbestos theory: Manufacturers filed a brief urging a New York state court to affirm a decision rejecting testimony on causation that did not require an assessment of the dose required to cause injury, or identifying how much exposure occurred.

More Information: In re New York City Asbestos Litigation (New York Supreme Court)

Federal appeals court gets it right on washing-machine case: A federal appeals court ruled that class certification was improperly granted in the lawsuit against Electrolux relating to front-loading washing machines. The court agreed with the NAM's argument that doubts about certification should not favor the party seeking to have a case certified.

More Information: Brown v. Electrolux Home Prods., Inc. (U.S. Court of Appeals for the 11th Circuit)
Questions or Comments?

Contact Senior Vice President & General Counsel Linda Kelly at lkelly@nam.

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