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May 12, 2020

Opportunities: Leveraging Technology to Meet New Demands

Emerging Technologies in a Time of Pandemic

(by Ben Clapp, Julie Domike, Gina Falaschi, Justine Kasznica and Boyd Stephenson)

Most of the world is staying home, but businesses must still pay their bills. In late April the federal government estimated the U.S. economy contracted by 4.8 percent in the first quarter of 2020, mostly due to the Coronavirus pandemic. Because the real economic consequences of social distancing occurred in April, future numbers will likely be as bleak, if not worse.

Yet, some businesses are taking bold steps, innovating in communications with their customers, and leveraging pre-existing tools to retool how their customers interact with the company and its product. Companies that never before offered delivery are experimenting with last mile logistics. Farms whose regular restaurant or hotel customers are closed due to public health orders are retooling their supply chains to supply local households. And companies that previously relied on face-to-face interactions are turning to virtual solutions to bring their product to market, even in a field like wine production—where taste is an essential part of the purchasing decision. These companies described here provide just a few examples of how creatively leveraging existing technologies can allow a company to maintain operations.

Last Mile Logistics

The Coronavirus pandemic has shined a spotlight on last-mile delivery, with demand for food, medicine, and other deliveries skyrocketing due to social distancing requirements. While pandemic-driven demand has unquestionably strained existing last-mile delivery resources, retail suppliers that never before relied on delivery have developed their own solutions, provided by a number of companies with technology-based delivery systems and logistics platforms to demonstrate how emerging technologies can be employed to safely and efficiently bridge gaps between suppliers and their customers.

A sharp increase in food delivery orders from homebound individuals combined with the need to...

April 28, 2020

Recent Climate Change Developments in Pennsylvania: DEP Meeting on RGGI Modeling and Update to Climate Impacts Assessment

Client Alert

(by Kevin Garber, Jean Mosites and Casey Snyder)

RGGI Rulemaking Special Informational Meeting

On April 23, 2020, DEP presented modeling results of Pennsylvania’s potential participation in the Regional Greenhouse Gas Initiative (RGGI) cap and trade program at a special joint information meeting with the Air Quality Technical Advisory Committee and the Citizens Advisory Council.

DEP utilized consulting firm ICF International’s Integrated Planning Model to estimate the effects joining RGGI would have on Pennsylvania’s electricity generation, CO2 emissions and the PJM Interconnection. DEP is proposing an initial CO2 baseline budget allowance of 78 million short tons of CO2. If Pennsylvania’s regulation becomes effective in January 2022 as proposed by Governor Tom Wolf, the 78 million short ton CO2 budget would decrease annually by approximately 2.5 tons a year, arriving at a budget of 58 million tons in 2030, which is a 25 percent decrease from 2020. DEP proposed setting aside 9.3 million allowances annually for waste-coal-fired generators.

DEP asserted during the presentation that by joining RGGI:

Pennsylvania would realize “significant CO2 reductions” immediately beginning in 2022 and continuing through 2030 but DEP did not quantify the reductions. Pennsylvania would remain a leading electricity exporter at roughly historic generation levels. Wholesale energy prices would increase only slightly. Pennsylvania’s generation mix over the next decade would favor gas over coal but generation from renewables will not increase significantly. Pennsylvania would take a critical step toward meeting unspecified GHG reduction goals.

DEP offered relatively little data to substantiate the above claims. Its presentation did not address to any meaningful degree the effects joining RGGI will have on Pennsylvania’s economy and job market, how RGGI proceeds will be reinvested, or the estimated price of electricity at the household level. DEP did not disclose the initial proposed cost for CO2 allowances although the ICF model predicted...

April 20, 2020

Pennsylvania Enacts Act 15 of 2020 to Address Local Government Issues during the Pandemic

Client Alert

(by Blaine LucasStephen Korbel and Max Junker)

Modifies Public Meeting Rules, Suspends Land Use Application Processing Deadlines on a Limited Basis, Authorizes Taxing Bodies to Postpone the Property Tax Discount Date and Waive Late Fees and Penalties, and Authorizes the Remote Use of Notaries.

On April 20, in response to the COVID-19 pandemic, Pennsylvania Governor Tom Wolf signed Act 15 of 2020. Act 15 was unanimously approved by the Commonwealth’s Senate and House of Representatives, and takes effect immediately. As part of broader legislation regarding healthcare cost containment, Act 15 addresses a number of critical issues for Pennsylvania local governments, most notably how to conduct business in compliance with applicable statutory requirements when the physical presence of their officials, constituents, development applicants and other interested parties is either highly discouraged by public health officials or prohibited altogether. This can be particularly problematic for applicants for a variety of local government land use approvals, consideration and action on which usually are statutorily mandated to take place at public meetings and hearings.

Among other things, Act 15:

Eliminates the requirements for physical attendance at public meetings during the Governor’s declaration of a disaster emergency by permitting the use of “authorized telecommunications devices.” Provides for the limited suspension, or “tolling,” of statutory deadlines for municipal boards and agencies to hear and act upon a wide variety of land use and other development applications. Authorizes taxing districts to extend the deadline for payment of property taxes at a discount and to waive fees and penalties for late payments. Authorizes the remote use of notaries via communications technologies.

Use of Telecommunications Devices to Conduct Public Meetings

Until the expiration or termination of the COVID-19 disaster emergency, an agency, department, authority, board, council, governing body or other political subdivision included in the declaration may conduct hearings, meetings, proceedings or...

April 20, 2020

Update: U.S. DOT Agencies Extend Further COVID-19 HazMat Relief

Transportation Safety Alert

(by Boyd StephensonVarun ShekharJame Curry)

Babst Calland has updated this alert to capture new shipping paper guidance extended by the Pipeline and Hazardous Materials Safety Administration.

In response to the COVID-19 pandemic, U.S. Department of Transportation (DOT) agencies that regulate the surface transportation of hazardous materials (HazMat) have extended several forms of relief.  The Pipeline and Hazardous Materials Safety Administration (PHMSA) has waived some HazMat training requirements, delayed some equipment recertifications, provided guidance for complying with existing shipping paper rules while practicing safe social distancing, and adopted a temporary enforcement policy for transporting alcohol-based sanitizer.  The Federal Motor Carrier Safety Administration (FMCSA) and the Federal Railroad Administration (FRA) are implementing PHMSA’s waiver in their modes.  FMCSA has also allowed States to extend the effective dates for commercial driver’s licenses (CDL) and commercial learner’s permits (CLP).  Additionally, FRA has activated its emergency docket.  FRA has not extended any hazardous materials-specific relief.

Hazardous Materials Shippers, Carriers, and Package Manufacturers

Update: On April 10th, PHMSA issued a notice highlighting existing regulations that allow shipping papers to be transferred between parties while minimizing the risk of spreading COVID-19.  PHMSA reminds regulated parties that no physical contact is required to exchange shipping papers.  PHMSA suggests that shipping papers may transferred either electronically or by placing the physical copy on a table, stepping away while the shipping paper is signed, and then retrieving the signed shipping paper.  The notice also reminds shippers that they may ask another person to sign on their behalf verbally, in writing, or through electronic authorization such as an email or text message.  By following these requirements, individuals transporting HazMat should be able to comply with the regulations without special relief. On March 25th, PHMSA issued an updated policy declining to enforce recurrent training requirements under 49 C.F.R....

April 17, 2020

Regulated Entities Should Consider Benefits and Limitations of EPA’s COVID-19 Policy in Light of Post-Publication Developments

Environmental Alert

(by Lisa Bruderly, Julie Domike and Gary Steinbauer)

U.S. Environmental Protection Agency’s March 26, 2020 temporary COVID-19 enforcement discretion policy establishes the steps regulated parties must take to qualify for enforcement protection for noncompliance caused by COVID-19 (“COVID-19 Policy” or “Policy”).  Our previous Alert outlined the Policy’s scope, eligibility criteria, and expectations.  In less than a month, EPA’s Policy has generated significant controversy, conflicting media reports, congressional inquiries, and now a federal lawsuit.  Critiques of the Policy and EPA’s evolving messaging make clear that entities affected by COVID-19 should be thoughtful and strategic in their reliance on the potential relief provided by the Policy.

EPA’s Response to Backlash

In response to initial criticisms, EPA initiated several steps to explain its stance on environmental compliance and enforcement during the pandemic.  On March 30, 2020, EPA issued a news release to correct “the record on reckless reporting” by certain media outlets and clarify that the Policy applies on a case-by-case basis.  To quell legislative opposition, EPA sent members of Congress a letter on April 2, 2020, defending the Policy.  EPA has also created a Frequently Asked Questions webpage answering several questions on the scope and application of the COVID-19 Policy.

Environmental Groups Sue EPA and State Attorneys General Weigh-In

At the same time, environmental groups and the states have voiced concerns related to the Policy.  On April 1, 2020, a coalition of environmental groups, led by the Natural Resources Defense Council, petitioned EPA to promulgate an emergency rule requiring regulated parties to affirmatively report COVID-19-caused noncompliance and provide information similar to what EPA requires parties to document under the Policy.  On April 16, 2020, the coalition filed a lawsuit in the U.S. District Court for the Southern District of New York, requesting that the court order EPA to...

April 15, 2020

EPA Publishes Interim Guidance on Site Field Work Decision-Making Related to COVID-19 Impacts

Environmental Alert

(by Lindsay Howard and Matthew Wood)

The COVID-19 pandemic continues to disrupt nearly all aspects of American life and business, including ongoing response activities being conducted under the authority of the U.S. Environmental Protection Agency (EPA).  In connection with these impacts, on April 10, 2020, EPA published a memorandum entitled, Interim Guidance on Site Field Work Decisions Due to Impacts of COVID-19 (“EPA’s COVID-19 Field Work Guidance” or “Guidance”).  The Guidance offers guidelines, specific factors, and examples EPA Regions should consider in their decision-making processes to continue, reduce, or suspend on-site work.  Driving these case-by-case decisions are EPA’s two main priorities: (1) protecting the health and safety of the public, as well as EPA’s staff and cleanup partners; and (2) maintaining EPA’s ability to prevent and respond to environmental emergencies.  This Alert addresses questions regarding EPA’s guidelines and decision-making under the Guidance.

To What Sites Does EPA’s COVID-19 Field Work Guidance Apply?

EPA’s COVID-19 Field Work Guidance applies to ongoing and emergency response actions conducted at sites across the United States under multiple federal programs, including Superfund, RCRA, and TSCA, where EPA is the lead agency or has direct oversight of or responsibility for the work being performed.  EPA acknowledges that any number of parties may actually be performing the work covered by its Guidance, including EPA, states, tribes, other federal agencies, or potentially responsible parties (PRPs).  Although the Guidance does not apply directly to states, EPA specifies that Regions should share the Guidance with states and assist states conducting state-lead RCRA cleanups.

In What Types of Situations Will EPA Regions Reduce or Suspend Response Actions?

The Guidance identifies multiple situations that have informed (or may inform) Regions’ decisions to reduce or suspend response actions.  Among these are where state, tribal, or local officials request a suspension of the response...

April 13, 2020

Coronavirus may be basis to invoke force majeure provision of consent orders and consent decrees in Pennsylvania

The PIOGA Press

(by Kevin Garber, Sean McGovern and Jean Mosites)

On March 6, Governor Tom Wolf issued a Proclamation of Disaster Emergency throughout the Commonwealth under the Pennsylvania Emergency Management Services Code in response to the expanding COVID-19 coronavirus pandemic. On March 13, President Donald Trump declared a state of national emergency. Many other states and local governments are following suit. These government actions may be a basis to invoke the force majeure clause of consent orders and consent decrees between regulated parties and the Pennsylvania Department of Environmental Protection, other state and local environmental regulatory agencies or the U.S. Environmental Protection Agency.

The standard force majeure provision of most DEP consent orders and agreements allows deadlines in the order to be extended if circumstances beyond the reasonable control of the regulated party prevent compliance with the order. Similar provisions are often found in consent agreements with EPA and in consent decrees approved by federal and state courts.

These force majeure provisions typically require the affected party to notify the agency of the force majeure event when the party becomes aware or reasonably should have become aware of the event impeding performance. For example, the model DEP Consent Order and Agreement requires telephone notice within five working days and written notice, in some circumstances by notarized affidavit, within 10 working days describing the reasons for the delay, the expected duration of the delay, and the efforts being taken to mitigate the effects of the event and length of the delay. This model provision states that failure to comply with the timing and notice requirements invalidates a force majeure extension.

There are compelling reasons why the coronavirus pandemic, which is unlike any event experienced in this country, is beyond the contemplated scope of agency force majeure clauses such that strict adherence...

April 8, 2020

Update: U.S. DOT Agencies and TSA Extend COVID-19 HazMat Relief

Transportation Safety Alert

(by Boyd StephensonVarun ShekharJame Curry)

Babst Calland has updated this alert to capture new HazMat background check relief extended by the Transportation Security Administration (TSA).

In response to the COVID-19 pandemic, U.S. Department of Transportation (DOT) agencies that regulate the surface transportation of hazardous materials (HazMat) have extended several forms of relief.  The Pipeline and Hazardous Materials Safety Administration (PHMSA) has waived some HazMat training requirements and delayed some equipment recertifications.  The Federal Motor Carrier Safety Administration (FMCSA) and the Federal Railroad Administration (FRA) are implementing PHMSA’s waiver in their modes. FMCSA has also allowed states to extend the effective dates for commercial driver’s licenses (CDL) and commercial learner’s permits (CLP).  Additionally, FRA has activated its emergency docket.  FRA has not extended any hazardous materials-specific relief.  Finally, the Transportation Security Administration (TSA) is allowing states to extend HazMat endorsements (HME).

Hazardous Materials Shippers, Carriers, and Package Manufacturers

On March 25th, PHMSA issued an updated policy declining to enforce recurrent training requirements under 49 C.F.R. § 172.704(c)(2) against HazMat employers unable to train employees due to COVID-19.  Employers are still required to provide initial training to a new hazardous materials employee before the employee may perform regulated functions. On April 1st, PHMSA issued two surface transportation-related emergency special permits authorizing the filling and transportation of certain DOT specification cylinders up to 12 months after they are due for a periodic requalification during the COVID-19 emergency. PHMSA also authorized the transportation of certain cylinders overdue for retesting due to COVID-19 disruptions.

Truck Transportation

On March 18th, FMCSA issued an expanded emergency declaration waiving certain provisions of Parts 390 through 399—most notably the hours of service requirements—for drivers providing direct assistance in support of relief efforts.  Direct assistance includes transporting medical supplies, food, paper, and grocery products; precursors for...

April 8, 2020

Amidst Coronavirus Pandemic NHTSA Issues First Proposed Rule Modifying the Federal Motor Vehicle Safety Standards to Remove Barriers to Automated Vehicles

Transportation Safety Alert

(by Ashleigh Krick, Boyd Stephenson and Justine Kasznica)

Amidst the coronavirus pandemic, the National Highway Traffic Safety Administration (NHTSA or the Agency) is moving forward with Automated Driving Systems (ADS) rulemakings.  On March 30, 2020, NHTSA issued the first of several anticipated regulatory actions proposing to amend the Federal Motor Vehicle Safety Standards (FMVSSs) to remove barriers to ADS-equipped vehicles, including those without traditional manual controls.  As with prior guidance from NHTSA, the Agency seeks to prioritize safety while promoting technology innovation.

On March 30, 2020, NHTSA issued a Notice of Proposed Rulemaking (NPRM) proposing to amend several of the crashworthiness FMVSSs (200 Series) for vehicles equipped with ADS that do not have manual controls and vehicles that are designed to transport only property (Occupant-less Vehicles).  NHTSA proposes several new or changed definitions, textual clarifications, and applicability changes to preserve the same level of occupant protection provided in current standards, while clarifying the application of the standards to ADS-equipped vehicles.  Specifically, NHTSA addresses configurations where, due to the lack of manual controls, the “driver seat” should rather be considered a front “passenger seat.”  NHTSA also proposes to modify the applicability of the 200 Series to Occupant-less Vehicles.

NHTSA issued this NPRM in response to comments received from the Agency’s January 18, 2018 Request for Comments that sought input on regulatory barriers in existing FMVSSs for ADS-equipped vehicles with non-traditional interior designs.  Many commenters thought that most of the regulatory barriers in the 200 Series did not require extensive research as only minor textual changes—principally driver-related references—would be needed.  Commenters agreed that the current crash protection provided to vehicle occupants should be maintained for ADS-equipped vehicles.

What is NHTSA proposing?

Definitions. NHTSA proposes new definitions for “driver air bag,” “driver dummy,” “driver’s designated seating position,” “passenger seating...

April 7, 2020

Update: Paycheck Protection Program FAQs (as of Tuesday, April 7, 2020)

Client Alert

(by Moore Capito, Christian Farmakis and Andrew Terranova)

Yesterday, the Small Business Administration (the SBA) published “Frequently Asked Questions” (the FAQ) guidance regarding the Paycheck Protection Program (PPP Loan), enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Among other clarifications, below are some of the critical points that the SBA has clarified in the FAQ. The full FAQ can be found here. The SBA intends to update this document on a regular basis.

Monthly Payroll Verification by Lender

A lender is not to replicate an applicant’s calculation of “monthly payroll costs.” A lender’s minimal review of calculations based on a payroll report by a recognized third-party payroll processor, for example, would be reasonable. If the lender identifies errors in the borrower’s calculation, the lender should work with the borrower to remedy the error.  See FAQ #1.

Some Companies with More than 500 Employees can Apply for PPP Loan

Companies with more than 500 employees can qualify for the PPP loan if the company satisfies the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act. A company can qualify if it meets the employee-based or revenue-based size standard corresponding to its primary industry. Visit www.sba.gov/size for the industry size standards.

Additionally, a business can qualify for a PPP loan as a small business concern if it meets both tests in the SBA’s “alternative size standard” as of March 27, 2020. This test is satisfied if: (1) maximum tangible net worth of the business is not more than $15 million; and (2) the average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.  See...

April 3, 2020

U.S. DOT Agencies Extend COVID-19 HazMat Relief

Transportation Safety Alert

(by Boyd Stephenson, Varun Shekhar, Jame Curry)

In response to the COVID-19 pandemic, U.S. Department of Transportation (DOT) agencies that regulate the surface transportation of hazardous materials (HazMat) have extended several forms of relief.  The Pipeline and Hazardous Materials Safety Administration (PHMSA) has waived some HazMat training requirements and delayed some equipment recertifications.  The Federal Motor Carrier Safety Administration (FMCSA) and the Federal Railroad Administration (FRA) are implementing PHMSA’s waiver in their modes.  FMCSA has also allowed states to extend the effective dates for commercial driver’s licenses (CDL) and commercial learner’s permits (CLP).  Additionally, FRA has activated its emergency docket.  FRA has not extended any hazardous materials-specific relief.

Hazardous Materials Shippers, Carriers, and Package Manufacturers

On March 25th, PHMSA issued an updated policy declining to enforce recurrent training requirements under 49 C.F.R. § 172.704(c)(2) against HazMat employers unable to train employees due to COVID-19.  Employers are still required to provide initial training to a new hazardous materials employee before the employee may perform regulated functions. On April 1st, PHMSA issued two surface transportation-related emergency special permits authorizing the filling and transportation of certain DOT specification cylinders up to 12 months after they are due for a periodic requalification during the COVID-19 emergency.  PHMSA also authorized the transportation of certain cylinders overdue for retesting due to COVID-19 disruptions.

Truck Transportation

On March 18th, FMCSA issued an expanded emergency declaration waiving certain provisions of Parts 390 through 399—most notably the hours of service requirements—for drivers providing direct assistance in support of relief efforts.  Direct assistance includes transporting medical supplies, food, paper, and grocery products; precursors for those products; fuel; and equipment for constructing facilities to treat or house COVID-affected individuals.  Direct assistance does not include routine commercial deliveries, including mixed loads with a nominal quantity of...

April 3, 2020

PADEP Will Consider Requests to Temporarily Suspend Environmental Requirements Due to COVID-19

Environmental Alert

(by Lisa Bruderly and Daniel Hido)

As businesses in Pennsylvania struggle to deal with significant disruptions and challenges to their operations caused by the COVID-19 pandemic, environmental agencies have recognized the challenges that the pandemic presents to achieving compliance with environmental obligations. For example, on March 26, 2020, the U.S. Environmental Protection Agency (USEPA) issued a temporary policy for excusing COVID-19-related noncompliance (see Babst Calland’s March 30, 2020 Environmental Alert for further details). Similarly, on March 31, 2020, the Pennsylvania Department of Environmental Protection (PADEP) issued an Alert announcing that it would consider requests to temporarily suspend certain regulatory, permit, and/or other legal requirements due to COVID-19. It also provided the form needed to make such a request. This announcement reflects a thought change from PADEP’s previous assertion that COVID-19’s impact on businesses in Pennsylvania would not excuse compliance with environmental laws, stating that “ll permittees and operators are expected to meet all terms and conditions of their environmental permits, including conditions applicable to cessation of operations.”

What is Required to Request a Temporary Suspension?

Unlike USEPA’s temporary policy, which does not require regulated entities to submit documentation regarding an inability to meet routine compliance obligations, PADEP is requiring submittal of the request form. While PADEP did not elaborate on how it will review requests for suspension, it will generally evaluate (1) the reasons for the request in light of the COVID-19 pandemic, and (2) the risk of harm to the environment or public health if the request is or is not granted.

Importantly, it will not be enough for entities to show that COVID-19 has restricted their ability to comply with regulatory, permit, or other legal requirements; entities must demonstrate that strict compliance would prevent, hinder, or delay necessary action in coping with the COVID-19 emergency. This...

April 3, 2020

Update: Interim Final Rule Issued for Paycheck Protection Program

Client Alert

(by Moore Capito, Christian Farmakis and Andrew Terranova)

On April 2, 2020, the Small Business Administration (the SBA) published an Interim Final Rule regarding the Paycheck Protection Program (PPP Loan), enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Below are critical points that the SBA has clarified in the published guidance. The Interim Final Rule can be found here.

What is the interest rate of the loan?

The SBA has advised that the interest rate of the loan has been increased from a 0.5 percent fixed rate to a 1 percent fixed rate.

Do independent contractors count as employees for purposes of PPP Loan calculations or PPP Loan forgiveness?

No. Independent contractors have the ability to apply for their own PPP Loans, so they do not count for purposes of a borrower’s PPP Loan calculations or forgiveness.

How can PPP Loan proceeds be used?

The proceeds of a PPP loan are to be used for:

payroll costs (as defined in the Act and in 2.f.); costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; mortgage interest payments (but not mortgage prepayments or principal payments); rent payments; utility payments; interest payments on any other debt obligations that were incurred before February 15, 2020; and/or refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020.

If you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP Loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP Loan. If your EIDL loan was used for payroll costs, your PPP Loan must be used to refinance your EIDL loan. Proceeds from...

April 2, 2020

COVID-19 Updates to Pennsylvania & West Virginia Unemployment Laws

Employment & Labor Alert

(by Stephen Antonelli, Mychal Schulz and Brian Lipkin)

At this uncertain time, many employers are considering whether to lay off or furlough employees – particularly employees who are unable to work remotely.  Earlier this week, we provided guidance on an alternative to layoffs and furloughs, as some employers are exploring grants and loans that are available under the new federal and state stimulus programs.  With this Alert, we are providing an update on recent changes to Pennsylvania and West Virginia unemployment laws:

Increased Benefit Amounts  Normally, unemployment benefits are capped at $573 per week in Pennsylvania and $424 per week in West Virginia.  Under the Paycheck Protection Program provision of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the federal government will supplement state unemployment benefits by $600 per week.  Through July 31, 2020, unemployment benefits will be capped at $1,173 per week in Pennsylvania, and $1,024 per week in West Virginia.  As a result, for the next four months, some workers may actually earn more in unemployment benefits than they would have earned in wages.  For example, an employee who would otherwise receive $100 per week of state unemployment benefits will now receive an additional $600 per week from the federal government.  After the federal supplement of $600 per week expires, the employee may continue to collect unemployment benefits at the usual rate in each state Expanded Eligibility  Until recently, Pennsylvania and West Virginia limited unemployment benefits to certain employees.  In Pennsylvania, to receive unemployment benefits, an employee must have earned at least $116 per week, during at least 18 weeks in the past year.  In West Virginia, employees must satisfy two requirements within the past year: they must have earned a total of at least $2,200; and they must...

March 31, 2020

UPDATE: Assessing Your Organization’s Stimulus Program Options

Client Alert

(by Moore Capito, Christian Farmakis and Andrew Terranova)

Earlier today the U.S. Treasury Department (the Department) published additional information on the Paycheck Protection Program (PPP Loan), enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Below are critical points that the Department has clarified in the published guidance.

When can I apply?

Small businesses and sole proprietorships can begin submitting applications on Friday, April 3, 2020 Independent contractors and self-employed individuals can begin submitting applications on Friday, April 10, 2020.

How much money can be borrowed?

The Department clarified that salary, wages, commissions, or tips are capped at $100,000 on an annualized basis for each employee.

How much of the loan is forgiven?

Due to likely high subscription, the Department anticipates that not more than 25% of the forgiven amount may be for non-payroll costs.

What is the interest rate of the loan?

0.5% fixed rate.

Read the latest guidance information issued by the Department of Treasury below.

For a top-line overview of the program, click here.

If you’re a lender, more information can be found here.

If you’re a borrower, more information can be found here.

The application for borrowers can be found here.

For more information on the above program or for assistance in applying for the program, please contact Babst Calland Attorneys Moore Capito at 304.552.8986 or mcapito@babstcalland.com, Christian Farmakis at 412.394.5642 or cfarmakis@babstcalland.com or Andrew Terranova at 412.773.8717 or aterranova@babstcalland.com.

Click here for PDF. 

March 30, 2020

Assessing Your Organization’s Stimulus Program Options

Client Alert

(by Moore Capito, Christian Farmakis and Andrew Terranova)

The COVID-19 pandemic is impacting every business sector in the United States. Federal government and the Commonwealth of Pennsylvania have announced various stimulus programs to assist businesses eligible to receive certain economic benefits. Babst Calland’s Corporate and Commercial attorneys have been following the existing and new stimulus programs currently being offered.

This is a time-sensitive opportunity to consider how these programs may apply to your business. Various programs are summarized below for your convenience. Together, we can help you navigate this crisis and prepare your organization to continue thriving in the months and years ahead. To schedule a private conversation to help you evaluate whether these programs are right for your company, contact Attorney Moore Capito at 304.552.8986 or mcapito@babstcalland.com.

ECONOMIC INJURY DISASTER LOAN

Description

An Economic Injury Disaster Loan (EIDL) is a long-term, low-interest loan that provides small businesses with working capital of up to $2 million directly from the U.S. Treasury. The intent of this federal program is to provide six months of working capital to qualified applicants. In response to the impacts of the COVID-19 pandemic, the U.S. Small Business Administration (SBA) has lifted certain requirements to make it easier for small businesses to receive an EIDL.

Who is eligible to receive it?

Small businesses and sole proprietors in all 50 states, Washington, D.C., and U.S. territories may apply for an EIDL, so long as they do not exceed the size standard for the industry in which they operate. For a list of the size standards per industry, click here. Eligibility is also based on a series of factors set forth on the application.

What are the terms of the loan?

An EIDL has a maximum 30-year term, with a 3.75% interest rate for...

March 30, 2020

EPA Establishes Temporary Policy for Excusing COVID-19-Related Noncompliance

Environmental Alert

(by Lisa Bruderly, Ben Clapp and Gary Steinbauer)

In light of historic protective measures and travel bans to prevent community spread of COVID-19, the U.S. Environmental Protection Agency (EPA) issued an unprecedented temporary policy for exercising its enforcement discretion for environmental noncompliance caused by the COVID-19 pandemic.  On March 26, 2020, the EPA published a memorandum entitled, COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program (“EPA’s COVID-19 Policy” or “Policy”).  EPA’s COVID-19 Policy applies retroactively, beginning on March 13, 2020, and is in effect until EPA provides notice online within seven days of its termination.  This Alert addresses five critical questions about EPA’s COVID-19 Policy.

When Does EPA’s COVID-19 Policy Apply?

EPA’s COVID-19 Policy applies when environmental compliance is not “reasonably practical,” despite making every effort to comply.  Coverage under the Policy is not automatic.  It requires regulated entities to take, at a minimum, the following proactive steps: (1) minimize the effect and duration of any noncompliance; (2) identify the nature and date(s) of noncompliance; (3) identify how COVID-19 caused the noncompliance and describe the response actions taken; (4) return to compliance as soon as possible; and (5) document each of these actions.

What Compliance Monitoring and Reporting Obligations Does the Policy Cover?

Generally, EPA does not expect to assess penalties for violations of a wide-range of routine compliance monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification obligations if: (1) the regulated entity takes the steps outlined above and documents that COVID-19 was the cause of the noncompliance, and (2) EPA agrees with the entity’s determination.

EPA expects regulated parties to use existing statutory, regulatory, and permitting requirements for reporting COVID-19-related noncompliance, unless COVID-19 response actions themselves hinder reporting, in which case EPA expects facilities to document and maintain noncompliance-related information internally and make it available...

March 26, 2020

Pennsylvania Legislature Considering Modification of Public Meeting Rules, Suspension/Tolling of Land Use Application Deadlines during COVID-19 Emergency Declaration

Client Alert

(by Blaine Lucas, Stephen Korbel and Max Junker)

Among the many challenges facing Pennsylvania municipalities during the Coronavirus pandemic is how to conduct business in compliance with applicable statutory requirements when the physical presence of their officials, constituents, development applicants and other interested parties is either highly discouraged by public health officials or prohibited altogether. This can be particularly problematic for applicants for a variety of local government land use approvals, consideration and action on which usually are statutorily mandated to take place at public meetings and hearings.

In an effort to address these issues, the Pennsylvania General Assembly is currently considering House Bill No. 1564 on an expedited basis.  Among other things, HB 1564 would relax the requirements for physical attendance at public meetings during the Governor’s declaration of a disaster or emergency by substituting a variety of telecommunications alternatives. It also would provide for the suspension, or tolling, of statutory deadlines for municipal boards and agencies to hear and act upon a wide variety of land use and other development applications during the pendency of such a declaration.  Notably, HB 1564 provides that an applicant can request, and a municipality at its discretion may proceed with, consideration and action on an application using telecommunication alternatives.

HB 1564 is on a fast track, with the House approving it on March 25, 2020, and the Senate expected to act upon it in the next several days. HB 1564 can be viewed here.

The following are the key provisions of HB 1564.

Use of Telecommunication Devices to Conduct Public Meetings

If the declaration is of a disaster or emergency which would render the conduct of public business dangerous to the health or safety of the members of the governing body, officials or members of the public, the governing body may exercise...

March 25, 2020

DOL Announces April 1 Effective Date and Additional Guidance on Families First Coronavirus Response Act

Employment & Labor Alert

(by Molly MeachamAlexandra Farone and Chelsea Heinz)

This is a follow-up to Babst Calland’s client alert on the Families First Coronavirus Response Act provisions and related new leave requirements.  The Department of Labor announced that the effective date will be April 1, 2020.  The leave is not retroactive and begins April 1.  Each company’s number of employees to determine whether it meets the 500-employee threshold will be calculated at the time the leave is to be taken.  The Department of Labor released Question and Answer guidance available here, providing additional preliminary information on calculating the employee threshold, leave calculations, rate of pay calculations, and interactions with other types of leave.  The full regulations have not yet been released, and are expected prior to the April 1 effective date.

The model notice issued by the Department of Labor is available here, and was issued along with a Frequently Asked Questions regarding the notice requirements available here.  The notice does not need to be displayed until April 1, 2020 and most employers will want to wait to publish the notice until their FFCRA policy is ready to avoid employee confusion.   The notice must be posted in a conspicuous place on the employer’s premises, which may include email, company intranet, or physically at the workplace depending upon current operations.

Please contact any of Babst Calland’s Employment and Labor attorneys if you need advice on the Families First Coronavirus Response Act and its requirements.

Click here for PDF. 

March 20, 2020

Seeking Clarity around Governor’s Order to Close Pennsylvania Businesses that are not “Life-sustaining”

Client Advisory

(by Jim Corbelli and Molly Meacham)

In the late afternoon of March 19, 2020, and without advanced notice, Pennsylvania Governor Tom Wolf issued an Order for all “non-life-sustaining businesses” in the Commonwealth to close their physical locations.  The Order was effective at 8 p.m. last evening with enforcement to begin at 12:01 a.m. on Saturday, March 21.  A copy of the Order can be found here.  There are many questions that arise from the Governor’s Order, and it can be expected that further clarifications will be forthcoming from the Governor’s office. The Governor’s office has also issued a press release with additional information.

In a press conference at 2 p.m. today, the Governor stated that the guidelines are being revised based upon feedback from businesses and other stakeholders, and that the forthcoming guidelines will be in line with the federal government’s Cyberspace and Critical Infrastructure Security Agency (CISA) guidance that has identified 16 “Critical Infrastructure Sectors,” as available here.  In addition, the Governor encouraged businesses to seek a waiver if they believe that they have been incorrectly categorized as “non-life-sustaining.”  The waiver process is meant to “cut through red tape” and the Governor stated that decisions will issue via email.

While further guidance remains pending, this Alert will summarize the current Order and suggest methods to address confusion regarding the Order or to seek relief from its provisions.

The Order provides that “No person or entity shall operate a place of business in the Commonwealth that is not a life sustaining business regardless of whether the business is open to the members of the public.” The Order does not prevent working from home. The Order further provides specific guidance on what the Governor has decided is a “life sustaining business.” A list of businesses and industries that...

March 20, 2020

The Coronavirus May be a Basis to Invoke the Force Majeure Provision of Consent Orders and Consent Decrees in Pennsylvania

Environmental Alert

(by Kevin Garber, Sean McGovern and Jean Mosites)

On March 6, 2020, Governor Tom Wolf issued a Proclamation of Disaster Emergency throughout the Commonwealth under the Pennsylvania Emergency Management Services Code in response to the expanding COVID-19 coronavirus pandemic.  On March 13, President Donald Trump declared a state of national emergency.  Many other states and local governments are following suit.  These government actions may be a basis to invoke the force majeure clause of consent orders and consent decrees between regulated parties and the Pennsylvania Department of Environmental Protection, other state and local environmental regulatory agencies or the U.S. Environmental Protection Agency.

The standard force majeure provision of most PADEP consent order and agreements allows deadlines in the order to be extended if circumstances beyond the reasonable control of the regulated party prevent compliance with the order.  Similar provisions are often found in consent agreements with USEPA and in consent decrees approved by federal and state courts.  These force majeure provisions typically require the affected party to notify the agency of the force majeure event when the party becomes aware or reasonably should have become aware of the event impeding performance.  For example, the model PADEP Consent Order and Agreement requires telephone notice within five working days and written notice, in some circumstances by notarized affidavit, within 10 working days describing the reasons for the delay, the expected duration of the delay, and the efforts being taken to mitigate the effects of the event and length of the delay.  This model provision states that failure to comply with the timing and notice requirements invalidates a force majeure extension.

There are compelling reasons why the coronavirus pandemic, which is unlike any event experienced in this country, is beyond the contemplated scope of agency force majeure clauses such that strict...

March 19, 2020

The Families First Coronavirus Response Act

Employment & Labor Alert

(by Molly Meacham, Alexandra Farone and Chelsea Heinz)

The Families First Coronavirus Response Act (the “Act”) was enacted on March 18, 2020 and adds two additional types of leave connected to the coronavirus (“COVID-19”) pandemic.  Employers should immediately institute policies relating to these new leaves to ensure proper compliance and to avoid violating the Family and Medical Leave Act or the Fair Labor Standards Act.

Key Provisions Related to Coverage

The new leave provisions apply to private sector employers with fewer than 500 employees and provide eligible workers with additional paid and unpaid time off over and above any existing leave already provided by their employer.  Businesses that were too small to be previously subject to FMLA are now covered by these provisions. Under the Act, the Secretary of Labor is given the authority to issue regulations that would exclude health care workers and emergency responders from the Act, as well as businesses with less than 50 employees where the regulations would jeopardize the business as a going concern.  Unless and until the Secretary of Labor issues such regulations, the provisions of the Act apply to all private sector employers with less than 500 employees. Any leave payments made pursuant to the Act are capped as described below at the amount of the tax credits created to reimburse employers (maximum aggregate over both leaves of $15,110 per employee). The Act is effective not later than April 2, 2020, and remains in effect until December 31, 2020.  Under the Act the Department of Labor is to issue a mandatory workplace poster relating to the new leave provisions by March 25, 2020.

Emergency Paid Sick Leave

Full-time employees regardless of tenure are immediately eligible for 80 hours of paid sick leave on the Act’s effective date. Part-time employees...

March 18, 2020

Business Continuity During the COVID-19 Pandemic; Leveraging AI/Machine Learning Contract Review

Client Advisory

(by Christian Farmakis)

Dear Clients and Friends:

Clearly, in light of the COVID-19 pandemic, this is a time for reflection and a time for staying on top of our personal and professional priorities.

With the Coronavirus pandemic having a widespread effect on business continuity, supply chains and revenues, Babst Calland and its alternative legal service provider, Solvaire, are currently advising C-suite executives and managers as they seek to quickly assess their contract provisions, evaluate their exposure and make effective operational and financial risk-based decisions. Of particular concern, key suppliers may desire to invoke “force majeure”, delay or termination provisions during this time of uncertainty. Similarly, our clients may desire to invoke these same provisions to delay or terminate unessential projects.

By employing a series of AI/machine learning and other legal technologies, we can conduct accelerated and thorough searches across huge document sets revealing key information about each contract before our professional staff even begins reviewing the documents. During this time, we understand the unprecedented challenges your organization and internal teams may be facing. Our team is here to help. Solvaire has 20 years of project management and quality control experience to organize and manage contract review projects from start to finish.

We employ flexible staffing models and can quickly ramp up staffing based on deadlines and need. Our reviewers and staff are fully capable of working remotely, allowing us to comply with the latest CDC Guidelines regarding social distancing.

Projects can be customized to fit your timeline and needs. Representative contract clause extraction provisions include force majeure, material adverse effect, termination, insurance, delay, term, governing law, payments and notice information, among others. Our legal technologies can also be quickly “trained” to find critical contract provisions unique to your business or industry.

Our entire team stands ready to assist in your business continuity. Please take care...