Audit, Compliance and Risk Blog

Effective March 2, 2020, the Environmental Protection Agency (EPA) has issued rules governing the agency’s administrative civil inspection procedures (40 CFR s. 31.1). These new rules meet a requirement created by President Trump’s Executive Order (EO) 13892 (“Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication”), issued October 9, 2019 (I wrote about this EO HERE). The new rules apply to on-site civil inspections conducted by EPA personnel, and to federally credentialled contractors and Senior Environmental Employment (SEE) employees conducting inspections on EPA’s behalf; they do not apply to criminal investigations, nor to state and state-credentialled inspections.

Effective May 26, 2020, the Occupational Safety and Health Administration (OSHA) revised its (interim) enforcement guidance for its inspectors and personnel use when investigating whether an employer properly classified a workplace illness involving COVID-19. This guidance expands and replaces the version OSHA issued on April 10 -- it does not affect the agency’s broader enforcement guidance for cases considering whether an employer unreasonably exposed employees to COVID-19 (which I wrote about here), although it’s easy to imagine scenarios where inspectors could be called upon to investigate both types of potential violations. OSHA states this guidance will remain effective until the present public health crisis ends, unless revised again.

As Canadian employers begin to engage in the “re-opening” of the local economy, they face numerous legal and logistical challenges. Health and safety, privacy and human rights issues abound, and further uncharted waters lie ahead.

BLG’s Labour and Employment team provides a non-exhaustive list below of issues and challenges employers need to keep in mind.

Compliance with employee health and safety and public health requirements

Until effective vaccines and/or therapies for COVID-19 become available, employers will need to continue taking all reasonable steps to ensure that their workplaces are compliant with public health guidelines and requirements as well as their obligations to protect the health and safety of employees. Employers will need to remain current and proactively assess their workplaces, and make modifications in planning for the return of their employees. This will affect physical workspaces and require that employees are properly informed, equipped and monitored to ensure compliance.

Effective March 12, 2020, the US Department of Justice (DOJ) prohibits its US attorneys from entering into settlements in which DOJ lowers penalties for defendants that agree to conduct “supplemental environmental projects (SEPs)”, if the SEP involves payments to a third party. This action is the latest in a series of DOJ moves against SEPs since President Trump took office. The first such step was a June 2017 DOJ management memorandum directing US attorneys NOT to agree to SEPs that include payments to third parties (I wrote about that memo HERE). The second was an August 2019 memorandum restricting use of SEPs in Clean Water Act (CWA) cases against state and local governments, in which DOJ rejected arguments that recent legislation allows them (I wrote about that memo HERE).

The worldwide spread of the COVID-19 virus has affected commercial operations, logistics and finances across industry sectors. The social, health and economic uncertainty caused by the pandemic puts pressure on the limited resources and budgets of individuals and businesses alike. In such circumstances, we can expect the number of legal disputes to increase now and into the future.

When someone receives occupational direction and/or compensation from more than one entity, who’s the boss? Sometimes it’s obviously one or the other, sometimes it’s not clear which one is, and sometimes the answer may be “both.” These unclear situations are fairly common; consider franchise operations where the franchisor exerts some controls over how the franchisee does business, workplaces where “temp agencies” supply workers who receive at least some directions from the host but get paid by the agency, and worksites where a prime contractor integrates services by subcontractors and their employees. Identifying the boss(es) has important implications, not just for who writes a paycheck but for who is subject to legal responsibilities and prohibitions.

On April 23, a six-member majority of the United States Supreme Court issued a decision that narrows the uncertainty about when a discharge of water pollutants to groundwater may require a Clean Water Act (CWA) permit (County of Maui v. Hawaii Wildlife Fund). The decision directly vacates the Ninth Circuit Court of Appeals decision it reviews, and effectively over-rules decisions by the Fourth and Sixth Circuits that differed with the Ninth Circuit but are also inconsistent with the Supreme Court’s new analysis. It also overturns guidance issued by the Environmental Protection Agency (EPA) in 2019 categorically excluding discharges from point sources to groundwater from regulation under the CWA National Pollutant Discharge Elimination System (NPDES) permit program; EPA's policy applied nationwide except in those three judicial circuits.

I wrote recently about guidance from the Occupational Safety and Health Administration (OSHA) and the Centers for Disease Control and Prevention (CDC) to help employers protect their workers against COVID-19 (coronavirus) infection. (see HERE). 

The 2016 Amendments to the Toxic Substances Control Act (TSCA; the “Frank R. Lautenberg Chemical Safety for the 21st Century Act”) assigned the Environmental Protection Agency (EPA) a variety of new responsibilities and powers to review and regulate chemicals in commerce in the United States. These changes include additional requirements to review chemicals already in use (I summarized this piece of the new TSCA here). Despite all the changes to EPA priorities since 2016 (i.e., during the Trump Administration), EPA has marched forward with these chemical reviews. These reviews include formal statutory requirements to identify separate lists of 20 “high priority” – i.e., potentially high risk – chemicals for accelerated reviews, and 20 “low priority” chemicals EPA considers not to need further review. I wrote about EPA’s 2019 proposals for these lists here.

On March 26, 2020 the Environmental Protection Agency (EPA) issued a temporary enforcement policy, effective retroactively to March 13 and continuing until repealed or revised. The agency cites the overarching need for public health and safety, and anticipates that “the pandemic may affect facility operations and the availability of key staff and contractors and the ability of laboratories to timely analyze samples and provide results.” In particular, EPA references likely personnel shortages, and proliferating travel and social distancing restrictions. Accordingly, EPA’s new policy sets out conditions under which an entity can reduce or suspend its compliance activities, including monitoring and reporting, for the duration of a period during which “compliance is not reasonably practicable.”

Because the new policy does not provide useful thresholds or criteria for coronavirus-induced impracticality, there’s no realistic way to anticipate its impacts. Regulated entities and their organizations have generally expressed appreciation, while environmental and other organizations that distrust the contemporary EPA have generally expressed outrage. The remainder of this note will summarize the scope and organization of the new policy, leaving the reader to judge how it may be implemented.