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November 2016

October 2016

Trade Associations Obtain Nationwide Injunction Against Portions of the “Fair Pay and Safe Workplaces” Regulatory Scheme, and Agencies Stand Down (For Now)

Robertson Tarloff Sigel BandzaBy Cynthia Robertson, Elliot Tarloff, Gabrielle Sigel, and Alexander Bandza

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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. 

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Federal Court Approves $14.7 Billion Volkswagen Settlement

Torrence_jpgBy Allison Torrence

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On October 25, 2016, Judge Charles Breyer of the U.S. District Court for the Northern District of California approved a $14.7 billion partial settlement in the Volkswagen “defeat device” MDL litigation. The settlement resolves injunctive relief claims brought by the United States and the State of California, as well as consumer class action claims related to Volkswagen’s 2.0 liter vehicles.

The United States had sued Volkswagen (and its subsidiaries, including Audi and Porsche) in January 2016, alleging that over 500,000 vehicles sold by Volkswagen in the United States from 2009 through 2016 contained software, known as a “defeat device”, that senses when the vehicle is being tested for compliance with emission standards. The defeat devices produced compliant emission results during testing but then reduced the effectiveness of emission control systems during normal driving. The United States alleged that the defeat devices cause increased NOx emissions up to 40 times allowable levels in 2.0 liter vehicles and 9 times allowable levels in 3.0 liter vehicles.

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Trade Associations File Suit Challenging the “Fair Pay and Safe Workplaces” Regulatory Scheme as Unlawful and Unconstitutional

Bandza Sigel
 
By Alexander J. Bandza and Gabrielle Sigel
 
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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.

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170 Nations Agree to Legally Binding Accord to Limit Global Warming HFCs

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By Allison Torrence

On October 15, 2016, representatives from 170 countries concluded negotiations in Kigali, Rwanda that resulted in a legally binding accord to limit hydrofluorocarbons (HFCs) in an effort to combat climate change. HFCs are chemical coolants used in air conditioners and refrigerants. Chemical companies developed HFCs in the late 1980s after the Montreal Protocol banned ozone-depleting coolants called chlorofluorocarbons (CFCs). HFCs do not harm the ozone layer, but they have 1,000 times the heat trapping potential of carbon dioxide.

The Kigali accord is an amendment to the 1987 Montreal Protocol (which was ratified by the U.S. Senate during the Regan Administration). Thus, the Kigali accord has the legal force of a treaty without further ratification by the current U.S. Senate. Although HFCs make up a small percentage of greenhouse gasses in the atmosphere, because of their extremely high warming potential, the reductions called for in the Kigali accord will lead to the reduction of the equivalent of 70 billion tons of carbon dioxide, which is approximately two times the amount of carbon dioxide emitted globally each year.

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Ninth Circuit Denies Rehearing Petition in Novel Aerial Deposition CERCLA Case

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By Allison Torrence

The State of Washington and the Confederated Tribes of the Colville Reservation are trying to expand the reach of CERCLA, but have been blocked, once again, by the U.S. Court of Appeals for the Ninth Circuit. The case of Pakootas v. Teck Cominco Metals, Ltd., Case No. 15-35228 (9th Cir. Panel decision July 27, 2016), involves claims by the State of Washington and the Tribes against a smelter located in British Columbia. In August, a three-judge panel of the Ninth Circuit ruled in favor of the defendants in this case. Yesterday, the full Ninth Circuit denied the plaintiffs’ petition for rehearing.

The case involves hazardous air emissions (lead, arsenic, cadmium and mercury), which were emitted from the smelter’s smokestack, carried by wind, and deposited on the Upper Columbia River Superfund Site in Washington. Plaintiffs maintained that such air emissions constituted “disposal” of hazardous waste under CERCLA, thus the smelter had arranged for the disposal of hazardous waste pursuant to CERCLA and was a responsible party at the Superfund Site.

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Paris Climate Agreement Will Enter Into Force On November 4th

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By Allison Torrence

UNFCCC3As we previously reported, two weeks ago, UN Secretary-General Ban Ki-moon announced that more than 55 countries, including the United States and China, had formally joined the Paris Climate Agreement, officially crossing one of the two thresholds required to bring the Agreement into force. The Paris Climate Agreement was adopted by the 195 Parties to the UN Framework Convention on Climate Change (UNFCCC) at a conference known as COP21 in December 2015. It will enter into force 30 days after at least 55 countries, accounting for 55% of global greenhouse gas emissions, deposit their instruments of ratification.

On Wednesday, October 5th, the UN announced that the European Union and 10 additional countries have deposited their instruments of ratification. Now, countries that have ratified the Paris Climate Agreement account for more than 55% of global greenhouse gas emissions, surpassing the second requirement for the Agreement to enter force. Thus, the Paris Climate Agreement will enter into force on November 4, 2016.

UN Secretary-General Ban Ki-moon made a statement to mark this “momentous occasion”:

“Global momentum for the Paris Agreement to enter into force in 2016 has been remarkable. What once seemed unthinkable is now unstoppable.

Strong international support for the Paris Agreement entering into force is testament to the urgency for action, and reflects the consensus of governments that robust global cooperation is essential to meet the climate challenge.”

The Paris Climate Agreement calls on countries to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low-carbon future, as well as to adapt to the increasing impacts of climate change. Specifically, governments must take actions to limit global temperature rise to well below 2 degrees Celsius, and to strive for 1.5 degrees Celsius. The Paris Climate Agreement also requires developed countries fund $100 billion in investments to assist developing countries meet the Agreement’s goals.

More information about the Paris Climate Agreement is available at the UNFCCC website.