By Leon Rodriguez, Adam R. Young, Thomas E. Ahlering, Sara Fowler, Jake R. Downing, Jessica M. Stricklin, Jay A. Gitles, Michael Rechtin, Suzanne L. Saxman, Aaron M. Gillett, Jason Priebe, and Scott A. Carlson

Seyfarth Synopsis:  Stay ahead of the curve! The future is rapidly changing for health care providers. To keep up with emerging trends, changes and needs, it is important to get the latest information and ideas that can be leveraged to make strategic, compliant business decisions in the future while delivering patients a culture of excellence.

Please join Seyfarth Shaw, at our Chicago office (Willis Tower, 233 S. Wacker Drive, Suite 8000, Chicago, IL 60606), on Thursday, September 12, for an engaging presentation with speakers from each of Seyfarth Chicago’s departments, along with other health care leaders.

Additionally, our Key Note Speaker and Seyfarth Shaw partner, Leon Rodriguez, will analyze the current political landscape in Washington on major health care issues. With his previous service as the Director of the Office for Civil Rights in the U.S. Department of Health and Human Services under the Obama Administration, Leon offers a unique perspective on health care issues and the politics surrounding them in D.C.

Additional topics will include:

  • Leading presidential candidates’ plans for health care
  • Legislation we might expect from Congress in the near term
  • Recent developments on biometric privacy, medical marijuana and the Chicago Fair Workweek Ordinance
  • Trends in executive compensation in the health care sector
  • Critical issues of concern when leasing health care related property
  • Consolidation of hospitals and physician practice groups
  • Cybersecurity, record retention and management

There is no cost to attend, but registration is required, and seating is limited.  8:00 a.m. – 8:30 a.m. for breakfast and registration, and 8:30 a.m. – 11:00 a.m., for the panel presentation.

If you have any questions, please contact Kelsey Rustigian at krustigian@seyfarth.com and reference this event.

Seyfarth Shaw LLP is an approved provider of Illinois Continuing Legal Education (CLE) credit. This program is pending approval for 2.5 hours of CLE credit in CA, IL, NY, NJ, TX, GA and VA.

By Benjamin D. Briggs, Joshua M. HendersonPatrick D. JoyceAdam R. Young, and Craig B. Simonsen

Seyfarth Synopsis:  The Nanotechnology Research Center (NTRC), part of the National Institute for Occupational Safety and Health (NIOSH), has identified new safety hazards from the expanding nanotechnology industry.

We have previously blogged on future issues related to the safety of automation and technology in the workplace, including, National Safety Council Congress: Executive Forum Industry 4.0 – EHS in the Future of the Workplace, Future Enterprise – Workplace Safety Compliance Comes to the Forefront for Expanding Healthcare IndustryA Global Perspective on the Future of Wearable Technology, and Robotics, Automation, and Employee Safety for the Future Employer.

One of the potential safety issues facing employers relates to the use of nanomaterials and processes involving nanotechnology in the workplace. In a recent publication  (NIOSH Publication Number 2019-147, August 2019), the NTRC summarized its research aimed at understanding the potential effects on human health of exposure to engineered nanomaterials and seeking to develop methods to control or eliminate exposures.

According to NIOSH, nanoparticles are extremely small particles (between 1 and 100 nanometers, 10-9 m) that are designed to have certain new or unique characteristics, like strength, elasticity, or reactivity.  The concept is that these new and unique characteristics or properties make advanced materials and products possible.

The U.S. Occupational Safety and Health Administration (OSHA) has published a Fact Sheet, Nanotechnology: Working Safely with Nanomaterials (OSHA FS-3634 – 2013) to educate the public on safety hazards related to nanomaterials.  The Fact Sheet indicates that “workers who use nanotechnology in research or production processes may be exposed to nanomaterials through inhalation, skin contact, or ingestion.  The “fact sheet” provides basic information to workers and employers on the most current understanding of potential hazards associated with this rapidly-developing technology and highlights measures to control exposure to nanomaterials in the workplace.”

The OSHA Fact Sheet notes that “some examples of workplaces that may use nanomaterials include chemical or pharmaceutical laboratories or plants, manufacturing facilities, medical offices or hospitals, and construction sites.”

The NTRC Publication focuses on these areas from an occupational safety and health perspective to assist industry in preparing for the future by:

  • Increasing understanding of potential health risks to workers making and using nanomaterials.
  • Preventing occupational exposures to nanomaterials.
  • Evaluating potential worker health risks from advanced material and manufacturing processes.

For instance, the NTRC prioritizes the growing number of engineered nanomaterials for laboratory and field research, focusing on the ones that have the greatest potential for exposure and harm to workers.  NTRC conducts field investigations and epidemiological studies for a realistic understanding of exposure and risks to nanomaterial workers.  It also issues recommendations on how to use engineering controls and personal protective equipment to mitigate exposure to engineered nanomaterials, along with providing nanomaterial businesses with “guidance” on how to keep workers safe.

In that continuing effort, the NTRC recently published its “Continuing to Protect the Nanomaterial Workforce: NIOSH Nanotechnology Research Plan for 2018-2025.” (NIOSH Publication Number 2019-116, January 2019).  This Plan seeks to be “a roadmap to advance (1) understanding of nanotechnology-related toxicology and workplace exposures and (2) implementation of appropriate risk management practices during the discovery, development, and commercialization of engineered nanomaterials along their product lifecycle.”

Employer Takeaway

As we continue to move boldly into the future of nanotechnology, industries must make sure employees are knowledgeable and trained to work safely with these materials and the related processes and machines.  Company policies and training materials must be updated to adjust to these new hazards.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) or Workplace Policies and Handbooks Teams.

By Jeryl L. Olson and Craig B. Simonsen

Seyfarth Synopsis: The EPA has posted an interesting flyer on “Our Nation’s Air,” the Status and Trends Through 2018.

According to the EPA Administrator Andrew Wheeler, “one of America’s great but untold environmental success stories is that we have made – and continue to make – great improvements in our air quality, thanks largely to state and federal implementation of the Clean Air Act and innovation in the private sector.”

The Agency has posted a “flyer” on the Status and Trends Through 2018, which we provide here.

Taken from https://gispub.epa.gov/air/trendsreport/2019/documentation/AirTrends_Flyer.pdf.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Environmental Compliance, Enforcement & Permitting Team.

By Benjamin D. Briggs, Brent I. ClarkIlana R. Morady and Craig B. Simonsen

Seyfarth Synopsis: The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) published this week a notice of proposed rulemaking (NPRM) on changes to “hours of service” (HOS) rules to “increase safety on America’s roadways.”  The proposal, if adopted, would update existing regulations for commercial motor vehicle (CMV) drivers.  

FMCSA’s proposed rule– which is designed to alleviate “unnecessary burdens” placed on drivers while maintaining safety — suggests five “key revisions” to the existing HOS rules:

  • The Agency proposes to change when drivers need to take their 30-minute break. Instead of requiring the break in the first eight hours of on-duty time, the agency has proposed requiring the break within the first eight hours of drive time, offering drivers more flexibility in its use.
  • The Agency proposes to modify the sleeper-berth exception to allow drivers to split their required 10 hours off duty into two periods: one period of at least seven consecutive hours in the sleeper berth and the other period of not less than two consecutive hours, either off duty or in the sleeper berth. Neither period would count against the driver’s 14‑hour driving window.  The proposal provides this illustration: a driver could decide after taking a 3-hour break (or any off-duty or sleeper berth break of at least 2 consecutive hours) [and] pair it with a sleeper berth break of 7 hours, (thus totaling 10 hours off duty).
  • The Agency proposes to allow one off-duty break of at least 30 minutes, but not more than three hours, that would pause a truck driver’s 14-hour driving window, provided the driver takes 10 consecutive hours off-duty at the end of the work shift.
  • The Agency proposes allowing drivers to extend their 14-hour on-duty period by up to two hours in the event of adverse conditions, such as weather or congestion.
  • The Agency proposes a change to the short-haul exception available to certain commercial drivers by lengthening the drivers’ maximum on‑duty period from 12 to 14 hours and extending the distance limit within which the driver may operate from 100 air miles to 150 air miles.

Once published in the Federal Register, the public comment period will be open for 45 days.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) TeamWorkplace Counseling & Solutions Team, or the Workplace Policies and Handbooks Team.

By Andrew H. PerellisJeryl L. OlsonPatrick D. Joyce, and Craig B. Simonsen

Seyfarth Synopsis:  Consistent with guidance issued by the Environmental Protection Agency (EPA) in March 2018, the Agency has now proposed to codify changes to the New Source Review (NSR) applicability regulations to clarify the requirements that apply to sources proposing to undertake a physical or operational change under the NSR PSD preconstruction permitting program.  The proposal would “make it clear that both emissions increases and decreases from a major modification at an existing source are to be considered during Step 1 of the two-step NSR applicability test.”  The process is known as “project emissions accounting” (previously known as project netting).

EPA Administrator Andrew Wheeler, in his related announcement, said that the Agency’s new rule “is an important step towards President Trump’s goal of reforming the elements of NSR that regularly discouraged facilities from upgrading and deploying the latest energy efficient technologies.”  “By simplifying the permitting process and implementing a common-sense interpretation of our NSR rules, we will remove a major obstacle to the construction of cleaner and more efficient facilities.”

In the March 2018 guidance memorandum, then Administrator Scott Pruitt explained that “EPA’s current NSR rules were reasonably interpreted to provide that, at the outset of the process to determine NSR applicability, emissions decreases projected to result from a proposed project could be taken into account along with any projected emissions increases.”  The proposed rule would codify and implement Pruitt’s 2018 guidance memorandum by making minor revisions to the text of the NSR permitting rules, to provide clarity, and to deliver more certainty to the regulated community.

This rulemaking is an important step in ensuring the guidance becomes law, providing industry important opportunities to accelerate the air permitting process.

EPA will accept public comment on the proposal for 60 days after it is published in the Federal Register.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Environmental Compliance, Enforcement & Permitting Team.

By Joshua M. Henderson, Ilana R. Morady, and Craig B. Simonsen

Seyfarth Synopsis: Cal/OSHA’s new emergency regulation for workers exposed to wildfire smoke creates new obligations for many employers.

An emergency regulation on Protection from Wildfire Smoke applies to outdoor workers and to workers in semi-indoor places. Examples include day laborers, agricultural workers, landscapers, construction workers, and sanitation workers. Requirements (described below) kick in when the current Air Quality Index (AQI) for airborne particulate matter (PM 2.5) is 151 or greater, and where employers should reasonably anticipate that employees could be exposed to wildfire smoke.

Employers covered by the emergency regulation must take the following steps to protect workers who may be exposed to wildfire smoke:

  • Identify harmful exposure to airborne particulate matter from wildfire smoke at the start of each shift and periodically thereafter by checking the AQI for PM 2.5 in regions where workers are located.
  • Reduce harmful exposure to wildfire smoke if feasible by, for example, relocating work to an enclosed building with filtered air, or to an outdoor location where the AQI for PM 2.5 is 150 or lower.
  • If employers cannot reduce workers’ harmful exposure to wildfire smoke so that the AQI for PM 2.5 is 150 or lower, they must provide:
  1.  Respirators such as N95 masks to all employees for voluntary use, and
  2. Training on the new regulation, the health effects of wildfire smoke, and the safe use and maintenance of respirators.

The regulation will be effective through January 28, 2020, with two possible 90-day extensions. Cal/OSHA plans to convene an advisory committee in Oakland on August 27 to establish a permanent regulation using the regular rulemaking process. Meeting details and documents are posted on Cal/OSHA’s website.

For more information on this or any related topic, please contact the authors, your favorite Seyfarth attorney, or any member of the Seyfarth Workplace Safety and Health (OSHA/MSHA) Team.

By Bernie Olshansky and Ilana R. Morady

Seyfarth Synopsis: As the mercury rises, California employers must comply with regulatory requirements to keep their employees cool.  Employers should be aware of Cal/OSHA’s existing requirements for outdoor workplaces and proposed rules which could turn up the heat on indoor employers.

California Keeps It Cool

For many years, Cal/OSHA has distinguished itself from Federal OSHA by, among other things, requiring all California employers with outdoor work areas to take steps to prevent heat illness.  For example, employers with outdoor work areas must train all employees about heat illness protection and keep their employees well hydrated.  Employers must also provide shady areas for five minute cool-down breaks when employees feel the heat.  (These breaks are on the clock and separate from rest breaks employers need to provide under the Labor Code).  Finally, employers must develop and implement written procedures for complying with the heat illness regulatory requirements. The regulation is contained in 8 CCR 3395.

Proposed Rules May Put Indoor Employers in the Hot Seat

Now, Cal/OSHA has a proposed an indoor heat illness standard that’s making its way through the rule-making process. The final draft of these proposed rules would impose a number of requirements when it’s a good day to head to the beach—and indoor temperatures equal or exceed 82 degrees Fahrenheit.

For indoor work areas that can’t beat the heat, employers would need to provide:

  • Cool-down areas that are blocked from direct sunlight and radiant heat sources (e.g. the sun, a fire pit, or an overzealous espresso machine) and that are either open-air or ventilated. Employees would need to have access to cool-down areas at all times and employers would be required to encourage employees to take breaks to chill out.
  • Drinking water.
  • Emergency response procedures.
  • Close observation of employees under certain circumstances.
  • Training on heat illness related topics.
  • A written heat illness prevention plan.

Additional requirements would apply to employers that have employees working under hotter conditions, namely: if employees wear clothes that restrict heat removal (like waterproof or biohazard gear), employees work in or near radiant heat, or the thermostat hits 87 degrees.  In these cases, employers would need to:

  • Keep records of temperatures and evaluate environmental risk factors for heat.
  • Use engineering control measures (e.g. air conditioning) to minimize the risk of heat illness. If the temperature cannot be reduced to 87 degrees F (or 82 degrees F in some cases), employers would need to implement administrative controls and provide personal heat protective equipment.

Workplace Solutions: As summer heats up, employers must comply with existing California heat regulations.  Seyfarth’s Workplace Safety and Health Group can help you check the forecast for future regulations.

Edited by: Elizabeth Levy

By Andrew S. BoutrosMichael D. WexlerAlex MeierDaniel P. HartRobert B. Milligan

Seyfarth Synopsis:  On June 24, 2019, the Supreme Court issued its decision in Food Marketing Institute v. Argus Leader Media and resolved fractured circuit splits about the parameters for when the government may withhold information from a Freedom of Information Act (“FOIA”) request based on responsive information being confidential or a trade secret.

Earlier this year, we reported on this case when the Supreme Court granted certiorari and predicted that the case would have significant ramifications for the protections given to sensitive information submitted by companies to the government.

And it has. The Court did away with the former requirement that the company requesting confidential treatment demonstrate it would suffer “substantial competitive harm,” which, in practice, could be quite costly to prove up and, as a practical matter, required the company to prove harm based on the occurrence of a hypothetical event. Now, an entity seeking shelter under FOIA’s confidentiality exemption, Exemption 4, need only show that (1) the commercial or financial information is customarily and actually treated as private by its owner; and (2) that the information was provided to the government under an assurance of privacy. The decision creates a far more accommodating framework for entities seeking to protect information as confidential under FOIA Exemption 4.

FOIA Exemption 4

FOIA Exemption 4 protects “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” Prior to the FMI decision, the Supreme Court had never weighed in on what that meant, leaving a wide range of circuit-level decisions. In early decisions, the courts adhered to the ordinary, everyday usage of the term “confidential,” viewing it as commercial or financial information that the person would not want in the public sphere. A company’s price lists would be one such example. This interpretation generally comports with the understanding of what constitutes “confidential information” for purposes of non-disclosure agreements.

But, in National Parks & Conservation Association v. Morton (1974), the D.C. Circuit adopted a much different and somewhat counterintuitive test, holding that the government may invoke FOIA Exemption 4 and refuse disclosure of so-called confidential information requested under FOIA only if the disclosure is likely either to (1) impair the government’s ability to obtain necessary information in the future (“impairment”); or (2) cause substantial harm to the competitive position of the person from whom the information was originally obtained (“competitive harm”).

Most circuits adopted this test or something very similar to it, even though lower courts and litigants generally criticized the test as unmoored from any ordinary understanding of what qualified as confidential information. Although the Supreme Court had previously declined to grant certiorari in cases where the test was challenged, that changed when it agreed to hear the FMI case.

The Food Marketing Institute Case

The Argus Leader, a South Dakota newspaper, submitted a FOIA request to the United States Department of Agriculture (“USDA”) seeking the name, unique identifier, address, store type and the yearly Supplemental Nutrition Assistance Program (“SNAP”) sales figures for every store in the United States. The USDA produced all the data requested, except for the yearly revenue, which it withheld under Exemption 4. After exhausting its administrative remedies, Argus sued the USDA in district court.

The district court initially granted summary judgment in the government’s favor. The Eighth Circuit reversed and instructed the district court to consider whether releasing store-level SNAP data would likely result in substantial harm to the stores that submitted the data.

After a two-day bench trial, the district court ruled in favor of Argus and in support of the data’s release. The USDA made known that it intended to release the data to Argus, which in turn caused Food Marketing Institute (“FMI”) to obtain leave to intervene and then file an appeal.

Now on appeal for the second time, the Eighth Circuit affirmed the district court’s judgment. The circuit court found that, although the SNAP data could be commercially useful, that was not enough to show that FMI’s members, retail food stores that participate in SNAP, and others would experience a substantial likelihood of competitive harm.

FMI then filed for certiorari and asked the Supreme Court to abandon the competitive harm test or, alternatively, apply the test and find that the district court and circuit court erred. FMI urged the Court to reject the D.C. Circuit’s National Parks test and instead apply the plain meaning of the term “confidential,” as the D.C. Circuit had done when determining what constituted “commercial or financial” information. FMI objected to National Parks’ focus on whether the information’s release would cause “substantial competitive harm,” which represents a reversal of the test when assessing whether information is confidential or a trade secret: whether the information provides a competitive advantage by virtue of the information not being broadly known.

The Supreme Court Reverses the Eighth Circuit

In a 6-3 decision, the Supreme Court reversed the Eighth Circuit, holding that the National Parks test grafted requirements onto Exemption 4 that lacked any textual support. After quickly finding standing, the majority turned to the “ordinary, contemporary, common meaning” for the undefined term “confidential.” From dictionary definitions, the Court viewed the core aspects of confidentiality as requiring that the information be “customarily kept private” or “closely held” and that the receiving party provide some assurance that it will remain secret.

The Court did not find any indication that confidentiality required the disclosing party to demonstrate that, if the information were shared, that some harm would result from the disclosure. Rather, the Court criticized National Park’s introduction of the “substantial competitive harm” test as a “relic from a ‘bygone era of statutory construction’” that resulted from elevating legislative history over the statute’s text and structure. The Court also found significant that subsequent cases had actually created two definitions of what qualified as “confidential” based on whether the disclosure was voluntary or involuntary. The Court did not address whether a party could disclose information to the government without requiring the government to keep it confidential and then later assert that it is confidential information protected under Exemption 4.

The three dissenting Justices agreed with the outcome and that the National Parks test had gone too far in requiring the disclosing party to prove harm but were of the view that the majority went too far in jettisoning from the test any harm requirement. The dissent advocated for the test to incorporate an additional element: whether release of the information “will cause genuine harm to an owner’s economic or business interests.” The dissent considered this requirement to be more accommodating than National Parks while still preserving FOIA’s preference for disclosure and narrow construction of its exemptions.

The Key Takeaways

The Court’s decision has significant ramifications for industries that provide important, valuable data to the government, particularly where the confidential information is subject to a mandatory reporting or disclosure obligation. The decision also generally supports the proposition that companies can maintain property rights in their confidential information through written agreements (such as those used with employees and third parties) and that courts should give effect to those agreements.

As a result of this decision, government contractors will likely be able to protect more information that is disclosed to the government. In contrast, government contractors that regularly seek such information through FOIA requests may receive much less information in response.

Prior to disclosing confidential information, entities faced with a government request to disclose information should clearly identify and label confidential information as confidential and also seek to obtain written assurances from the government that such information will be treated as such. Entities should also review their internal policies and procedures to proactively identify materials that warrant confidential treatment and to establish procedures for how such materials should be handled when distributed to the government or other third parties. Of course, once implemented, all such policies should be vigilantly enforced so that such policies are not used as evidence of a company’s non-compliance with its own procedures.

Andrew S. Boutros and Michael Wexler are partners in Seyfarth’s Chicago office, Alex Meier is an associate and Daniel P. Hart is a partner in Seyfarth’s Atlanta office, and Robert B. Milligan is a partner is Seyfarth’s Los Angeles office.  If you have any questions, please contact Andrew S. Boutros at aboutros@seyfarth.com, Michael Wexler at mwexler@seyfarth.com, Alex Meier at ameier@seyfarth.com, Daniel P. Hart at dhart@seyfarth.com, or Robert B. Milligan at rmilligan@seyfarth.com.

By Andrew H. Perellis, Jeryl L. Olson, Patrick D. Joyce, and Craig B. Simonsen

Seyfarth Synopsis: The Illinois Supreme Court recently affirmed that the Illinois Pollution Control Board’s clean construction or demolition debris (CCDD) rules were not arbitrary and capricious. County of Will v. Pollution Control Board, Docket Nos. 122798 and 122813 (June 20, 2019).

In 2011, following a 2010 legislative directive, Pub. Act 96-1416 (eff. July 30, 2010), the Illinois Environmental Protection Agency (IEPA) proposed rules for the use of clean construction or demolition debris (CCDD) and uncontaminated soil (US) as fill material at so-called “clean construction or demolition debris fill operations.” The underlying legislation included a provision requiring that the rules must include “standards and procedures necessary to protect groundwater” and provided an unexclusive list of 12 ways to do so that the Board may consider. One of those ways was groundwater monitoring. As a result, IEPA’s initial proposed rules included a requirement for groundwater monitoring at fill sites.

Starting later in 2011, the Illinois Pollution Control Board Board (Board) held hearings on IEPA’s proposed rule and received comments from the public. In 2012, the Board issued its first opinion and order regarding IEPA’s proposed rule, accepting the majority of the rule, but declining to adopt IEPA’s proposal to require groundwater monitoring at fill sites. In the Matter of: Proposed Amendments to Clean Construction or Demolition Debris (CCDD) Fill Operations: Proposed Amendments to 35 Ill. Adm. Code 1100, R2012-009 (Feb. 2, 2012). The Board indicated that “the record does not included evidence to demonstrate that CCCD or [US] are a source of groundwater contamination” and are not otherwise “wastes.” Id.

At the request of IEPA and several State legislators, the Board opened a subdocket to consider the question of groundwater monitoring and held more hearings on the proposed rule. Id. (Aug. 23, 2012). After multiple hearings and two more opinions and orders, the Board affirmed its decision to remove groundwater monitoring requirements from IEPA’s proposed rule. Id. (Aug. 6, 2019).

IEPA and the Will County then brought an appeal before the Illinois Appellate Court, which affirmed the decision of the Board. 2017 IL App (3d) 150637-U (September 12, 2017). Thereafter, a further appeal was brought before the Illinois Supreme court.

We had previously blogged about Board’s rulemaking on CCDD. New Illinois Proposed Rule Eliminates Groundwater Monitoring Requirement for Clean Construction and Uncontaminated Soil Fill Operations. Significantly, we noted, the Board’s proposal eliminated provisions previously proposed by the IEPA requiring groundwater monitoring for fill operations accepting CCDD and uncontaminated soil. After hearing testimony and considering comments on IEPA’s proposal, the Board considered the question and concluded that there was no evidence showing that CCDD or uncontaminated soil fill operations caused groundwater contamination. In addition, the Board found that the significant cost of groundwater monitoring outweighed any environmental benefit.

The rules ultimately promulgated by the Board required stronger ‘front-end’ testing and certification requirements for CCDD and US, but not a ‘back-end’ groundwater monitoring requirement.”

Before the Illinois Supreme Court was the issue of whether the appellate court ruled correctly that the Board’s decision was not arbitrary or capricious. In affirming the appellate court’s judgment, the Illinois Supreme Court, for the first time in a case reviewing action by the Board, used a three-part analysis that it had initially employed in a non-environmental case, Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462, 495-96, 524 N.E.2d 561, 120 Ill. Dec. 531 (1988). Quoting Greer, the Court stated:

“While it is probably not possible to enumerate all the kinds of acts or omissions which will constitute arbitrary and capricious conduct, the following guidelines apply. Agency action is arbitrary and capricious if the agency: (1) relies on factors which the legislature did not intend for the agency to consider; (2) entirely fails to consider an important aspect of the problem; or (3) offers an explanation for its decision which runs counter to the evidence before the agency, or which is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Id. at 505-06.”

The Supreme Court did not pronounce that this three-part test necessarily applies for future decisions involving review of the Board’s decision. Rather, the Supreme Court concluded that the Greer “approach provides a useful rubric in this case where the parties’ arguments would be otherwise difficult to cabin analytically” because the parties exclusively discussed “the Greer guidelines” in their briefs.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Environmental Compliance, Enforcement & Permitting Team.

By Adam R. Young, Michael L. DeMarino, Jennifer L. Mora, and Craig B. Simonsen

Seyfarth Synopsis: Illinois Governor J.B. Pritzker signed the new recreational cannabis bill, which contains extensive provisions regarding the extent of an employer’s right to ban and otherwise discipline employees for cannabis use.  The legislation takes effect on Jan. 1, 2020.

Across the country, states are moving to legalize medical and recreational cannabis.  In states that have legalized recreational cannabis, 11 so far, employers and drug testing services have seen significant increases in positivity rates for cannabis metabolites.  Wider cannabis use will require employers to take action to ensure safe work environments for their employees, especially in safety sensitive settings.  Drug policies must be updated and must address discrimination concerns.  To that end, we are closely monitoring new forms of discrimination claims from medical cannabis users and regarded-as disabled employees.  See our recent blog concerning a related Arizona court decision.

Illinois’ Cannabis Regulation and Tax Act

The Act provides that effective January 1, 2020, Illinois residents 21 years of age or older may legally possess up to 30 grams of cannabis flower, no more than 500 milligrams of THC contained in cannabis-infused products, and 5 grams of cannabis concentrate. They also will be able to make cannabis purchases from licensed cannabis dispensaries. Non-Illinois residents will be able to possess 15 grams of cannabis flower, no more than 250 milligrams of THC in cannabis-infused product, and 2.5 grams of cannabis concentrate.

The Act also provides an excise tax imposed on purchasers for the privilege of using cannabis. The rate of the excise tax is either 10%, 20% or 25% of the purchase price, depending on whether the sale is for a “cannabis-infused product” and the level of delta-9-tetrahydrocannabinol (THC) (i.e., strength).

The Act’s Employment Provisions

Relevant to employers is Section 10-50, which states that the Act is not to be construed as prohibiting an employer from “adopting reasonable zero tolerance or drug free workplace policies, or employment policies concerning drug testing, smoking, consumption, storage, or use of cannabis in the workplace or while on call provided that the policy is applied in a nondiscriminatory manner.” The Act does not require employers to permit an employee to be under the influence of or use cannabis in the employer’s workplace or while performing the employee’s job duties or while on call. Employers also retain the right to discipline an employee or terminate their employment if they violate the employer’s employment policies or workplace drug policy.  While the Act defines the term “workplace” to include the “employer’s premises” (any building, real property, and parking area under the control of the employer or area used by an employee while in performance of the employee’s job duties, and vehicles (leased, rented or owned)), it goes on to state that “workplace” may be further defined by the employer’s policy so long as the policy is consistent with the Act.

The Act provides guidance to employers in determining whether an employee is impaired or under the influence while working. Specifically, an  employer can meet this showing if it has a good faith belief that an employee manifests specific, articulable symptoms while working that decrease or lessen the employee’s performance of their job including:

  • Symptoms of the employee’s speech, physical dexterity, agility, coordination, demeanor, irrational or unusual behavior, or negligence or carelessness in operating equipment or machinery;
  • Disregard for the safety of the employee or others, or involvement in any accident that results in serious damage to equipment or property;
  • Disruption of a production or manufacturing process; or
  • Carelessness that results in any injury to the employee or others.

The list is non-exhaustive, which leaves room for an employer to rely on other indicia of impairment.

If an employer disciplines or terminates an employee because they are under the influence or impaired by cannabis, the employer must provide the employee a reasonable opportunity to contest the basis of the determination. The Act says nothing about whether an employer can rely solely on a positive test result for cannabis to show an employee was impaired or under the influence. As we know, given that cannabis can remain in the system for a few weeks, a positive test result does not necessarily mean an employee is under the influence or impaired.  Further, the exact parameters of what employers will have to do to provide a reasonable opportunity to contest the basis remains undefined.

No Private Right of Action

The Act expressly states that employees do not have a private right of action against an employer for:

  • subjecting an employee or applicant to reasonable drug and alcohol testing under the employer’s workplace drug policy, including an employee’s refusal to be tested or to cooperate in testing procedures;
  • disciplining the employee or terminating employment, based on the employer’s good faith belief that an employee used, possessed, was impaired by or was under the influence of cannabis in violation of the employer’s workplace policies while in the employer’s workplace, performing the employee’s job duties or while on call; and
  • injury, loss or liability to a third party if the employer neither knew nor had reason to know that an employee was impaired

Implication for Employers

Although the Act states that “cannabis should be regulated in a manner similar to alcohol,” this is easier said than done. Cannabis, unlike alcohol, is still illegal under federal law and signs of cannabis impairment are not as easily detectable as alcohol impairment. Moreover, it also is easier to prove alcohol impairment with an alcohol test. The same cannot be said for a drug test given that cannabis can remain in the system for several weeks.

Employers should also bear in mind that the Act designates recreational cannabis used in compliance with the Act as a “lawful product” subject to the protections against discrimination provided under the Illinois Right to Privacy in the Workplace Act. This means that an employee who lawfully uses cannabis outside of work and is not impaired or under the influence of cannabis during working hours (while on duty or while “on call”) will generally not be subject to adverse employment action. But because cannabis remains an illegal controlled substance under federal law, employers in Illinois are put in a difficult situation. Fortunately, the Act does not require employers who must comply with applicable federal rules and regulations to become non-compliant. It is therefore likely the Act will be interpreted to allow employers to continue to maintain employment policies prohibiting any cannabis use where necessary to comply with applicable federal law but it is not certain whether such policies would result in a violation of the Illinois Right to Privacy in the Workplace Act.

For employers, cannabis legalization will mean necessarily re-assessing company policies, especially as they relate to drug testing, and the use of recreational cannabis by key security personnel and sensitive positions within the company.  Employers should be vigilant in documenting all signs and evidence of impairment. At the end of the day, employers will have to walk a fine line of balancing their drug policy objectives against applying that policy in a nondiscriminatory manner.  Further, employers may need to revise their policies to give employees an opportunity to contest impairment determinations.

For more information on this or any related topic, please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) or Cannabis Law Practice Teams.