Audit, Compliance and Risk Blog

Is your organization one of the many with policies restricting employees’ use of social and other electronic media? If so, you need to consider last month’s National Labor Relations Board (NLRB) decision, finding that Costco’s policy violates the National Labor Relations Act (NLRA). This decision is another recent example of a regulator’s interpretation of ambiguous employer policies in ways that protect employee rights by using the employer’s ambiguity against it – and reinforce that employment law best practices require clarity and narrow drafting.

When an employer becomes concerned that an employee may be incapable of performing his or her job, one response is formal evaluation of that employee’s “fitness for duty (FFD).” Although most cover physical abilities, referrals are also made for psychological FFD evaluations, to determine whether an employee has a psychological impairment that makes him or her unable to perform effectively and safely. These may be triggered when an employee is exhibiting signs of psychological or emotional stress, including those that manifest in hostile or threatening behaviors, or in other behaviors that lead co-workers, or the employer, to be concerned for their safety.

Environmental compliance has been an important issue for large, multi-national companies for many years, and in recent years it has taken on added importance for their suppliers. Case in point: Walmart, Procter & Gamble, IBM – many Fortune 500 companies – are requiring that their vendors audit and quantify the greenhouse gas (GHG) emissions in their supply chains. Indeed, many of these high-profile organizations have undertaken ambitious plans for reducing their carbon footprint. (A big driver of this activity is stronger environmental regulation and pressure from environmental organizations, customers, investors and the like.) For example, in early 2010 Walmart announced a goal to eliminate 20 million metric tons of GHG emissions from its global supply chain by the end of 2015. Procter & Gamble has the stated objective of generating 100% of its energy from renewable resources – with a target of generating 25% of that by 2020.

Does your organization ever conduct internal investigations to evaluate complaints about working conditions, claims of harassment or other inappropriate behavior, or concerns about individual, or group, law-breaking? If so, investigators probably try to keep the investigation confidential, in order to avoid internal embarrassment while preserving the status quo until the investigation reaches its conclusion.

The Federal Trade Commission (FTC) administers a broad range of consumer protection statutes, primarily by issuing “guidelines” for organizations to follow when they design products, packages and advertising materials. Generally these guidelines are not directly enforceable, but FTC uses them as the basis for deciding whether a particular activity is lawful. FTC provides organizations that conform to the guidelines with a “safe harbor” against prosecution for violation of one of its statutes, and focuses enforcement on businesses that fail to conform.

The Occupational Safety and Health Administration (OSHA) establishes national standards that employers must meet in order to protect workers. Employers who fail to meet OSHA audit and compliance requirements are subject to enforcement actions by OSHA or delegated state agencies. Employers who perform the worst can be subject to OSHA’s Severe Violator Enforcement Program (SVEP), established in 2010 as the latest in a series of enhanced enforcement programs for those employers that OSHA considers the most dangerous and/or recalcitrant. SVEP has always offered the possibility that an employer can demonstrate its rehabilitation and exit the program, and just last month OSHA finally published clear guidelines for doing so.

This month the Securities and Exchange Commission (SEC) published new environmental compliance rules (Rule 13q-1 and associated Form SD), requiring annual disclosures by publicly listed “resource extraction issuers” of payments they make to the U.S. federal government, or foreign governments, related to commercial development of oil, natural gas or minerals. SEC’s rules implement a Congressional mandate contained in 2010’s massive Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

Environmental compliance can be a complex business.  In fact, in certain situations, the Resource Conservation and Recovery Act (RCRA), and other legislation, may actually deter use of innovative waste management technologies and best practices. Here are three questions to ask about your organization:

Late last month the Securities and Exchange Commission (SEC) adopted new rules (Rule 13p-1 and associated Form SD), requiring annual disclosures by public companies that manufacture any products in which “conflict minerals” are “necessary to the functionality or production.” These conflict minerals comprise a short list of important metals, when they originate in the Democratic Republic of the Congo (Congo or DRC) or an adjoining country. SEC’s rules implement a Congressional mandate contained in 2010’s massive Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

If your business generates "hazardous" wastes, then you must manage them in compliance with applicable federal and state environmental laws and regulations. But did you know that the same regulations also require you to take steps to avoid generating such wastes in the first place? Regulations refer to these as "waste minimization" efforts.