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. Boutros, Michael D. Wexler, Alex Meier, Daniel P. Hart, Robert 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.

By Andrew H. Perellis, Joshua M. Henderson, Patrick D. Joyce, and Craig B. Simonsen

Seyfarth Synopsis:  The U.S. Supreme Court upheld this week a key component of administrative law that tells judges to defer to an executive agency’s interpretation of its own ambiguous regulation.  Kisor v. Secretary of Veterans Affairs, No. 18-15 (US June 26, 2019).  The case challenged so-called “Auer” or “Seminole Rock” deference.  Auer deference has recently been criticized by conservative justices on the court.

The specific question considered was whether the Court should overrule Auer v. Robbins, 519 U.S. 452 (1997) and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945).  In context, the specific question being considered was: what deference, if any, should courts give to an executive agency’s interpretation of its own regulation, an interpretation that has not gone through Administrative Procedure Act (APA) notice and comment rulemaking?

We have blogged frequently on Auer deference and its impact on case law, precedent, and regulatory and agency authority — and ultimately on business and employers.  These cases run the gamut of legal issues across various agencies.  See for instance Ninth Circuit Issues En Banc Decision Upholding DOL’s 20% Tip Credit Rule; Ball is Now in DOL’s Court, Supreme Court to Rule on Case Addressing Bathroom Access Based on Gender Identity, Fourth Circuit Holds that “Sex” Under Title IX Incorporates Gender Identity, Texas District Court Enjoins Federal Gender Identity Protection Of Students, Judicial Deference to Informal Agency Interpretations: Could this be the Beginning of the End for Auer?, and Eighth Circuit Rejects OSHA’s Attempt to Expand the Scope of its Machine Guarding Standard.

Historically, courts have struggled with the extent of deference to give an agency’s interpretations of its own regulations.  Under the APA § 553(b)(A), only substantive interpretations, having the force of law, require notice and comment rulemaking.  Agency interpretive rules and general statements of policy are exempt from notice and comment rulemaking because interpretative rules are non-substantive.  The Auer doctrine, however, accords substantial deference to an Agency’s allegedly non-substantive interpretation of its own regulations, even if presented in an unofficial manner such as in an amicus brief.

In its decision, the Court announced that “the only question presented here is whether we should overrule those decisions, discarding the deference they give to agencies.  We answer that question no.  Auer deference retains an important role in construing agency regulations.  But even as we uphold it, we reinforce its limits.  Auer deference is sometimes appropriate and sometimes not.  Whether to apply it depends on a range of considerations that we have noted now and again, but compile and further develop today.  The deference doctrine we describe is potent in its place, but cabined in its scope.”

While affirming the Auer doctrine, the Majority decision elaborated on when deference should be accorded.  Based on its articulation, going forward, expect close scrutiny of the initial question of whether the agency regulation is in fact ambiguous, using its toolkit of rules for statutory and regulatory construction.  Absent ambiguity, there is “no plausible reason for deference.”  Even if ambiguous, a court must assure itself that the agency interpretation is “reasonable,” based on the text, structure and history of the statute and underlying regulation. But more: not all reasonable interpretations are entitled to deference.  The interpretation must be within that realm that Congress intended the agency to resolve; it must be the agency’s “authoritative” or “official position,” and not an ad hoc statement (informal memoranda and litigation positions probably do not qualify); the interpretation must implicate the agency’s substantive expertise; and, the interpretation must reflect the agency’s “fair and considered judgment,” rather than a post hoc rationalization or a “new” interpretation that creates “unfair surprise” to regulated parties.

It remains to be seen how the lower courts and agencies will apply the new “Kisor Doctrine.”  At a minimum, the agency can no longer presume that a court will ipso facto defer to an agency’s interpretation, but instead must provide the interpretation within a context that compels the court to conclude that the agency interpretation is well-founded and persuasive.

As a final note, both Chief Justice Roberts and Justice Kavanaugh made a special point of stating that the Kisor decision does not touch upon the issue of Chevron deference – the doctrine of judicial deference to an agency’s interpretation (by promulgated regulation) of statutes enacted by Congress.

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

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

Seyfarth Synopsis: Illinois Governor J.B. Pritzker is expected to sign a 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. 

Across the country, states are moving to legalize medical and recreational cannabis.  In states that legalize recreational cannabis, 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 Illinois legislature has just taken the route of full legalization of recreational marijuana.  On May 31, 2019, it approved House Bill 1438, which will create the “Cannabis Regulation and Tax Act.” That same day, Illinois Governor Pritzker tweeted that he intends to sign the 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 legally 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 House Bill 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. The Act does not regulate drug testing and, thus, additional indicia might include a positive test result for cannabis if the employee is sent for a reasonable suspicion test.

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 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

Right to Privacy in the Workplace Act

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”) should generally not be subject to adverse employment action on that basis alone. Arguably, then, employers need to carefully consider whether to test for cannabis pre-employment or consider a positive test result given that job applicants are neither on duty nor on call. In terms of drug tests during employment (e.g., reasonable suspicion and post-accident), while the Act leaves open the possibility of relying on a positive cannabis test result as additional indicia of impairment, cannabis can remain in the system for weeks and, thus, employers should exercise caution and work with employment counsel before taking action against incumbent employees based solely on a positive cannabis test result. Employers also should consider training their managers on the signs of impairment and, if an employee is referred for any drug test, steps to take if the employee tests positive for cannabis.

Further, 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 laws 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.

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.

The new law does not strip employers of the right to conduct drug tests pursuant to a drug testing or substance abuse policy and, in fact, expressly preserves it. Yet, Illinois employers should review their current practices and policies in advance of the January 1, 2020 deadline.  Employers should be vigilant in documenting all signs and evidence of potential impairment, including any violations of occupational safety rules.  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 will need to track the forthcoming regulations closely, and may need to further revise their policies to accommodate unexpected interpretations of the law.

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.

By Benjamin D. Briggs, James L. Curtis, Adam R. Young, Ariel D. Fenster, and Craig B. Simonsen

Seyfarth Synopsis: Smoke produced during surgical procedures is carcinogenic and can carry pathogens.  Employers who fail to abate surgical smoke hazards may face liability from employee injuries and OSHA citations.

Surgical smoke is created during numerous surgical and medical procedures.  As NIOSH has explained, “during surgical procedures using a laser or electrosurgical unit, the thermal destruction of tissue creates a smoke byproduct. Research studies confirmed that this smoke plume can contain toxic gases and vapors such as benzene, hydrogen cyanide, and formaldehyde, bioaerosols, dead and live cellular material (including blood fragments), and viruses. At high concentrations the smoke causes ocular and upper respiratory tract irritation in health care personnel, and creates visual problems for the surgeon. The smoke has unpleasant odors and has been shown to have mutagenic potential.”

Sources report that surgical smoke has similar carcinogenic properties to cigarette smoke.  The smoke vapors can also carry pathogens, such as infectious bacteria and viruses.  Finally, dense surgical smoke can distract surgeons and staff, obscure a surgeon’s vision, and result in disruptive coughing while the surgeon is holding surgical instruments.  Consequently, smoke can result in injuries and illnesses to the patient, physician, or operating room staff, including exposures to blood borne pathogens.

The hazards posed by surgical smoke can be abated through the use of a local exhaust ventilation (LEV) system — local suction or overhead exhaust — as well as through Personal Protective Equipment (PPE), in the form of antiviral surgical masks.  However, there may be widespread underutilization of these abatements.  NIOSH’s  Health and Safety Practices Survey of Healthcare Workers, summarized in Secondhand Smoke in the Operating Room? Precautionary Practices Lacking for Surgical Smoke, Am. J. Ind. Med. (Nov. 2016), 59(11):1020-1031, reported that 4,533 survey respondents reported exposure to surgical smoke: “4,500 during electrosurgery; 1,392 during laser surgery procedures.  Respondents were mainly nurses (56%) and anesthesiologists (21%). Only 14% of those exposed during electrosurgery reported local exhaust ventilation (LEV) was always used during these procedures, while 47% reported use during laser surgery.  Those reporting LEV was always used were also more likely to report training and employer standard procedures addressing the hazards of surgical smoke.  Few respondents reported use of respiratory protection.”

Numerous reports indicate that operating room personnel continue to demonstrate a lack of knowledge of these hazards and lack of compliance with recommendations for evacuating smoke during surgical procedures.

OSHA and Tort Liability

Under the OSH Act’s General Duty Clause, health care employers have a general duty to address recognized hazards with a feasible means of abatement.  Federal OSHA  announced an enforcement position on the issue of surgical smoke, explaining in a Standard Interpretation Letter that employers could be liable for unabated exposures to surgical smoke.  Further, under OSHA state plans that require an Injury and Illness Prevention Plan (such as California and Washington State), employers are required to train employees on the hazards in their workplaces.  States such as Rhode Island and Colorado have taken it a step further enacting “Surgical Smoke Evacuation Laws” which require facilities to adopt and implement policies that prevent human exposure to surgical smoke via the use of a surgical smoke evacuation systems.  Accordingly, health care employers who fail to train perioperative personnel on abatements for surgical smoke face potential OSHA liabilities.  Employees and patients who suffer from a cancer or infectious disease at the workplace could similarly bring worker’s compensation or, in limited circumstances, tort claims.

Accordingly, it is imperative that health care employers implement means and methods to control surgical smoke and provide appropriate training to employees on the issue.  Failure to do so can result in significant legal liabilities.

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

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

Seyfarth Synopsis: The Illinois General Assembly has been working on a marijuana legalization bill this session.  The Senate Bill would protect employer rights to ban marijuana and discipline employees for use. 

Across the country, states are moving to legalize medical and recreational marijuana.  In states that legalize recreational marijuana, employers and drug testing services have seen significant increases in positivity rates for marijuana metabolites.  Wider marijuana 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 marijuana users and regarded-as disabled employees.  See our recent blog concerning a related Arizona court decision.

Illinois is taking the route of full legalization of recreational marijuana.  Bills are pending in the House and Senate.  The House bill, HB0902, as introduced “creates the Cannabis Legalization Equity Act.”  The act would provide that “notwithstanding any other provision of law, except as otherwise provided in the Act, the following acts are lawful and shall not be a criminal or civil offense under State law or the law of any political subdivision of this State or be a basis for seizure or forfeiture of assets under State law for persons 21 years of age or older”:

  1. Possessing, consuming, using, displaying, purchasing, or transporting cannabis accessories;
  2. Possessing, growing, processing, or transporting on one’s own premises no more than 24 mature cannabis plants and possession of the cannabis produced by the plants on the premises where the plants were grown;
  3. Possessing outside one’s premises no more than 224 grams of cannabis; and
  4. Assisting another person who is 21 years of age or older in any of the acts described in items (1) through (3).

The House bill would also provide an excise tax at the rate of 10% of the sale price of the sale or transfer of cannabis from a cannabis cultivation facility to a retail cannabis store or cannabis product manufacturing facility.  As equity and social justice is one of the primary objectives for the House bill, it mandates that at least 51% of the licenses issued by the Department of Agriculture for cannabis cultivation facilities and at least 51% of the licenses issued by the Department of Financial and Professional Regulation for retail cannabis stores “shall be in communities disproportionately harmed by the war on drugs.”

In Senate bill, SB0007, the Cannabis Regulation and Taxation Act, is lengthy and comprehensive.  Notable for employers, SB0007 would allow that:

Nothing in this Act shall prohibit an employer from adopting reasonable employment policies concerning smoking, consumption, storage, or use of cannabis in the workplace provided that the policy is applied in a nondiscriminatory manner.

Good news for employers, as drafted the Senate bill would also provide that “nothing in this Act shall limit an employer from disciplining an employee or terminating employment of an employee for violating an employer’s employment policies or workplace drug policy.”

Illinois Governor J.B. Pritzker, said recently that he’s “reached an agreement with key lawmakers” on a plan to legalize recreational marijuana in the state starting next year.

Implication for Employers

For employers, marijuana legalization will mean necessarily re-assessing company policies, especially as they relate to drug testing, and the use of recreational marijuana by key security personnel and sensitive positions within the company.  The final draft is likely to contain language from the Senate bill, which should provide some safe harbor for well-crafted policies and reasonable drug enforcement.  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.

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.

By James L. Curtis, Daniel R. Birnbaum, Patrick D. Joyce, Matthew A. Sloan, and Adam R. Young

Seyfarth Synopsis: The growth of the gig economy has transformed the modern workforce and upended traditional models for developing a workplace safety culture and worker safety training.  New and inexperienced workers confront evolving safety hazards.  Given this transformed environment, employers must address safety hazards proactively or face OSHA citations or other liability.

By 2018, 57 million American workers had joined a part of the gig economy, more than one third of the entire workforce.  Gig economy workers range from traditional independent contractors to temporary workers who might work just a few hours a week.  Some of these workers may use gig work as a supplement to a traditional job, while 29% had gig economy work arrangements as their primary source of income.  Gig economy jobs offer informal employment arrangements, flexible work hours, desirable alternative work locations, and unique compensation structures.  With employment opportunities for students and new workers, the gig economy workforce is disproportionately young.  Given the lack of a formal employee/employer structure, gig economy jobs often lack traditional means of workplace training and supervision.

The rise in the gig economy has brought with it new, previously unknown occupational hazards.  Labor groups, advocacy organizations, and state legislative bodies have concentrated their efforts to encourage gig companies to address safety risks in this changed environment.  With little presence in the gig economy, traditional labor groups have expressed an interest in organizing gig workers.  Government regulators are also scrambling to keep up with and adapt prior enforcement methods to the gig environment.  Finally, aggressive plaintiff’s lawyers are finding new ways to hold gig companies liable for accidents and injuries to gig workers.  Safety training, culture, practices, supervision, and enforcement must be adapted to meet the new economy.

Specific safety issues raised in the gig economy include:

  1. Many companies that exist in the gig economy operate in higher-risk industries. Gig businesses have transformed passenger transportation and freight delivery services, where workers utilize the public roads and highways.  Transportation accidents in general comprise nearly half of all workplace fatalities.
  2. Many companies in the gig economy possess transient workforces that may not be experienced in the field or may be returning to the field after pursuing a different career. Absent proper new-hire and refresher safety training, these workers may lack the knowledge and skills necessary to perform their jobs adequately.  Safety training may be necessary to ensure gig workers can do the job safely.  Similarly, given their independent nature, these workers may need personal protective equipment or other traditional workplace protection designed to reduce workplace risk.
  3. Workers in the gig economy may not know who to contact to report safety concerns. It is also possible gig workers may choose not to report concerns at all.  Unlike workers in a traditional workforce, who are taught to be the eyes and ears for their co-worker, the gig economy worker may not bring safety concerns to the company’s attention, which may result in unaddressed hazards.  Gig companies may need to develop new methods for reporting safety concerns and injuries.
  4. The gig economy, characterized by flexibility and independence, has a tendency to attract younger workers. Younger workers often have less work history and less experience with occupational safety hazards.  These workers can be at greater risk of exposure to safety hazards.  Worse, young workers may have an unfounded sense of invincibility as it relates to workplace hazards.  Absent an instilled safety culture, these workers may have a greater likelihood of sustaining an injury or illness.

Regulatory agencies have been slow to adapt to the gig economy.  Interest groups like the National Council for Occupational Safety and Health have lobbied OSHA to enforce workplace safety issues in the gig economy under a “dual employer” theory.  This would make the gig company responsible for safety compliance, even though the gig worker is not an employee of the gig company.

The gig economy also invokes safety concerns that impact the temporary workplace, and temporary workers have been an area of increasingly aggressive enforcement from OSHA.  OSHA historically takes the position that staffing agencies and host employers are “jointly responsible” for maintaining a safe work environment for temporary workers, including training requirements.  Since initiating its Temporary Worker Initiative, OSHA compliance officers give closer scrutiny to any onsite temporary workers to ensure that they are adequately protected.  OSHA’s website explains employers’ responsibilities with regard to temporary workers and safety training.

OSHA has also expressed health and safety concerns related to young workers, including specific recommendations on young workers’ safety training, supervision, pressure to work quickly, and the ability of young workers to cope with stress.  OSHA has identified food service and outdoor work as two industries that frequently employ younger workers and are prominent in the gig economy.  As such, OSHA indicates it will continue to aggressively enforce its protection of younger workers.

The rise of the gig economy also intersects with the rise of OSHA’s aggressive use of the General Duty Clause to address workplace violence.  Recent decisions, such as Integra Health Management, Inc., have highlighted workplace violence in the workforce.  This is one of the most well-recognized and reported safety issues in the gig economy.  Indeed, gig economy companies have focused on incident investigation and risk assessments to reduce workplace violence safety concerns.

Ultimately, companies looking to operate in the gig economy must understand the risks to their organizations and adopt procedures to meet these concerns.  Gig companies should consult with counsel and safety professionals to learn how to address these hazards and mitigate risks and liabilities.

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) Team.

By James L. Curtis and Craig B. Simonsen

Seyfarth Synopsis: A Democratic lead House subcommittee has proposed a large budget increase for both the Occupational Safety and Health Administration and the Mine Safety and Health Administration.

The Democratic budget proposal would allocate more than $660.9 million for OSHA in fiscal year 2020 – around $103 million more than the Trump administration’s proposed budget for the Agency. The White House’s proposal had OSHA slated for a small increase over its $557.2 million FY 2019 budget.

Additionally, MSHA would be allocated almost $417.3 million – around $41.3 million more than the White House’s proposal – under the draft bill.  MSHA had a $373.8 million budget in FY 2019.

If approved, these new budgets would substantially increase OSHA and MSHA’s enforcement capabilites.  We will keep an eye on this as it moves through Committee.

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