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On July 2, 2015, in the case of Gate Guard Services, L.P., v. Perez, Secretary of Labor, the U.S. Court of Appeals for the Fifth Circuit held that the Department of Labor’s (DOL) prosecution of a Fair Labor Standards Act (FLSA) case was so egregious, in both the investigation, processing and, finally, in the defense of its actions in court, that the DOL was ordered to pay Gate Guard’s attorney’s fees–which may be as much as $1 million.

The DOL cited Gate Guard, a small company which contracts with oil companies to provide them with gate attendants at remote drilling sites, with mischaracterizing their employees’ employment status as independent contractors. The initial demand from the DOL was $6 million in back wages and unpaid overtime, and the matter was eventually litigated when Gate Guard sought a declaratory ruling, and attorney’s fees, that it was in compliance with the FLSA.

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Confined spaces refers to such spaces as manholes, crawl spaces, and tanks, and other spaces that are not designed for continuous occupancy and are often difficult to exit in the event of an emergency. These spaces can present life-threatening hazards including exposure to toxic substances, electrocution, explosions and asphyxiation. These hazards can be safeguarded against if addressed prior to entering the confined space to perform work. OSHA has added a new subpart to its regulations to provide protection for construction workers working in confined spaces, replacing its one training requirement for confined space work with a comprehensive standard that includes a permit program that was designed to protect workers from exposure to many hazards associated with work in confined spaces. OSHA’s Final Rule, 80 Fed. Reg. 25366 (May 4, 2015) (codified at 29 C.F.R. Part 1926), incorporates several provisions to address construction-specific hazards, accounts for advancements in technology, and improves enforceability of the requirements. The Final Rule is effective on August 3.

Additional Sources: OSHA, Confined Spaces; OSHA FactSheet re Confined Spaces in Construction: Crawl Spaces and Attics; U.S. Department of Labor, Frequently Asked Questions re OSHA’s New Standard for Construction Work in Confined Spaces

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In the case of Michigan, et al., v. EPA, decided June 29, 2015, the U.S. Supreme Court, in a 5 to 4 ruling, held that EPA, when deciding whether it was appropriate and necessary to regulate Hazardous Air Pollutants (HAP), such as mercury and other toxic pollutants emitted from electric utility power plants, must consider the costs of compliance “at this stage” of the rulemaking proceedings.

In its 2012 rulemaking, EPA excluded any consideration of costs when deciding it was “appropriate”–as required by the Clean Air Act (CAA), 42 U.S.C. § 7412(n)(1)(A)–to impose the requirements of these new rules on these utilities. In the 1990 amendment to the CAA, EPA was directed by Congress to develop National Emission Standards for Hazardous Air Pollutants, but it also established a “unique procedure” to determine the applicability of the HAP program to fossil-fueled power plants. EPA was accordingly directed to perform a study of the hazards to public health reasonably anticipated to occur as a result of emissions by power plants of HAP pollutants after the imposition of the requirements of the law. This study was completed in 1998. However, EPA also determined that it was free to interpret the term “appropriate” so as to allow the agency to ignore the consideration of costs when it made the initial decision to regulate.

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On June 30, 2015, the U.S. Court of Appeals for the Fifth Circuit affirmed the trial court’s decision to grant Kurt Mix, a former BP engineer, a new trial after it was discovered that the jurors had been exposed to extrinsic evidence bearing on the general prosecution of BP employees in the wake of the Deepwater Horizon oil spill. The case is United States of America v. Mix.

Mix was involved in efforts to calculate the amount of oil flowing from the Macondo well, the site of the Deepwater Horizon accident, and developing plans to staunch the flow of oil into the Gulf of Mexico. He was charged with obstruction of justice for deleting text messages between himself and his supervisor related to, the Government alleges, the flow rates. Mix was acquitted on one charge and convicted on the other charge. His counsel, without the permission of the court, contracted the jurors to “obtain feedback about the defense’s failed trial strategy”, and they learned that the forewoman of the jury reported to some of her fellow jurors that she overheard a conversation in a courthouse elevator that other BP employees were being prosecuted in the wake of the spill.

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Today, Pillsbury attorneys Julia Judish and Ken Taber published their client alert titled New York City Bars Employers From Considering Criminal History Before Extending A Job Offer. This Alert discusses Mayor de Blasio’s recent approval of the Fair Chance Act, a new law that generally prohibits New York City employers from discriminating against job applicants with a criminal record and prohibits inquiries about job applicants’ criminal records before a job offer is extended. This new law applies to all private-sector New York City employers with 4 or more employees and, for or purposes of calculating coverage, the Act includes individual independent contractors performing work for the employer if those individuals do not themselves have employees. The new law is effective on October 27, 2015.

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Today, Cal/OSHA issued a high heat advisory urging all employers and, in particular, employers in the Sacramento Valley and adjacent foothills to protect their outdoor workers from heat illness. It advised that temperatures are expected to rise to highs of 115 degrees through Friday morning. Information is available online (Heat Illness Prevention and Water. Rest. Shade. Campaign) on the heat illness prevention requirements and training materials. A Heat Illness Prevention e-tool is also available on Cal/OSHA’s website.

Cal/OSHA issued its first high heat advisory for 2015 on June 16, 2015 for Southern California.

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Responding to an inquiry from the U.S. Court of Appeals for the Fifth Circuit, the Texas Supreme Court ruled Friday, in a 5 to 4 decision, that the “coercive nature” of the administrative proceedings employed by the Environmental Protection Agency (EPA) under Comprehensive Environmental Response, Compensation, and Liability Act’s (CERCLA) cleanup and cost recovery provisions amount to a “suit”, and a potentially responsible party’s (PRP) receipt of a CERCLA letter from EPA, inviting the recipient to negotiate with EPA “is effectively a demand”. Moreover, with respect to judicial review, “as a practical matter, courts afford PRPs no hope of relief, and consequently they have no choice but to comply with EPA’s directives”. The case is McGinnes Industrial Maintenance Corporation v. The Phoenix Insurance Company and The Travelers Indemnity Company. Chief Justice Hecht wrote the majority opinion.

This decision was triggered by ongoing cleanup actions taken at the San Jacinto Waste Pits Superfund Site, which is located in Harris County, Texas, in the vicinity of Pasadena, Texas. According to the Court, in the 1960’s McGinnes Industrial Waste Corporation (McGinnes) dumped pulp and paper mill waste sludge into disposal pits near the San Jacinto River. EPA began investigating possible environmental contamination in 2005 and, in 2007, notified McGinnes’ parent company that it was a PRP at the site, and invited the parent company to begin negotiating an order for the cleanup of the site, and the reimbursement of EPA’s expenses to date. When McGinnes and its parent company failed to respond to these EPA communications, EPA issued a Unilateral Administrative Order (UAO) directing McGinnes to conduct an remedial investigation and feasibility study; a failure to comply with this UAO would expose McGinnes to $37,500 per day in daily penalties and very costly punitive damages.

McGinnes was covered by a standard-form commercial general liability (“CGL”) insurance policies at the time it was “dumping” waste at the site, and it asked for a defense in accordance with the terms of the insurance policy. The insurers refused, arguing that these EPA administrative proceedings are not a “suit,” as specified by the policy. McGinnes then sued its insurers in federal court, but the court agreed with the insurers’ position, granting their motion for summary judgment. On appeal to the Fifth Circuit, that Court of Appeals asked the Texas Supreme Court to answer the question” “Whether EPA’s PRP letters/and or administrative order, issued pursuant to CERCLA, constitute a ‘suit’ within the meaning of the CGL policies, triggering the duty to defend” — to which the Texas Supreme Court answered: “Yes”.

Dissenting justices Boyd, Johnson, Guzman and Lehrmann argued that the Court was, in effect, rewriting these insurance policies, and described the ruling as a “disturbing decision”.

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The Washington State Department of Labor & Industries (L&I) recently posted on its L&I Blog a blog titled “I survived,” a cautionary tale about how fall protection saved a construction work from a 30′ plunge. In early May, Apollo, Inc. employee Tanner Kane was using a bar to pop forms off the top of a retaining wall. Suddenly, he was catapulted over a 30′ retaining wall. According to his work partner, Carrie Johnson, “It was crazy; one minute he was there, and in a blink of an eye he was gone.” Because Tanner was using a fall protection system and was tied off to the horizontal lifeline installed for the job, he survived the potential 30′ fall with no significant injuries. Tanner’s coworkers activated the rescue plan and Tanner was able to self-rescue with help from Johnson.

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Beginning July 1, 2015, in Washington, to protect against unlicensed electrical contractors fraudulently obtaining electrical work permits, electrical contractors purchasing electrical permits using the paper application form will be required to print their name and mark their affiliation with the company on the permit application. The customer service representative will then check the license information to confirm that the person purchasing the permit is authorized under Washington Administrative Code section 296-46B-901(3) to do so. If the person identified on the permit application is someone other than the assigned administrator, master electrician, owner, principal of the corporation, or a documented authorized signer, the customer service representative will not sell the permit.

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Today, Pillsbury Paula Weber and Erica Turcios published their client alert titled Uber Hits a Speed Bump in California: Labor Commissioner Rules Driver is an Employee. This Alert discusses a recent decision that may signal a more stringent application of the test for determining independent contractor status. The California Labor Commissioner ruled in Uber Techs., Inc. v. Berwick, Labor Comm’n, Case No. 11-46739 EK (June 3, 2015), Super. Ct. Case No. CGC-15-546378, that an Uber driver is an employee of Uber, not an independent contractor.