The Legal Intelligencer
(by Brian D. Lipkin)
When you are preparing or revising an employee handbook, this checklist may be helpful.
Acknowledgment
- Do employees sign a signature page, confirming they received the handbook?
- On the signature page, do employees agree to follow the policies in the handbook?
- Does the signature page state that this handbook replaces any previous versions?
- On the signature page, do employees agree that they will be “at-will” employees?
- Do employees agree that the employer may change its policies in the future?
Wage and Hour Issues
- Does the employer confirm that it will pay employees for all hours worked?
- Before employees work overtime, are they required to obtain a supervisor’s approval?
- During unpaid breaks, are employees completely relieved of all duties? (For example, while a receptionist takes an unpaid lunch break, this person shouldn’t be required to greet visitors or answer phone calls.)
- Are employees paid when they attend a business meeting during lunch?
- Are employees paid for attending in-service trainings?
- Are employees paid while they take short breaks?
Paid Time Off
- Has the employer considered combining vacation time, sick time, and personal time into one “bucket” of paid time off?
- Does the paid time off policy line up with the employer’s business objectives? (For example, does it provide incentives for employees to use paid time off during seasons when business is slower?)
- Does the handbook say what will happen to paid time off when employment ends? (In Pennsylvania, employers are not required to pay terminated employees for the value of their paid time off. Some employers choose to do this, as an incentive for employees to give at least two weeks’ notice.)
- If the Family and Medical Leave Act (FMLA) applies to the employer, does the handbook inform employees of their rights?
- Does the handbook list all types of leave that are available? (For example, does the employer offer bereavement leave? How about leave while an employee serves as a juror or witness? What about municipal laws that provide certain types of leave, such as paid sick leave?)
Reasonable Accommodations
- How should employees request a reasonable accommodation?
- Does the employer permit employees with disabilities to bring service animals to work (Employers should avoid blanket policies that ban all animals.)
- May employees deviate from grooming and uniform requirements for a religious reason, or a medical reason? (For example, an employee may have a religious reason to wear a headscarf, even if the employer has a blanket policy that would otherwise prohibit this.)
Discrimination and Retaliation
- Does the employer inform employees that they are protected against discrimination and retaliation?
- Is there an accurate list of protected categories? (Confirm all locations where the employer does business. Some states or municipalities may provide employees with greater protection than federal law. Are there any categories, such as sexual orientation, that the employer should add?)
- Do employees have a clear way to report discrimination and retaliation?
- Is there more than one way to report discrimination and retaliation? (In other words, employees shouldn’t be required to make a report to the same person who they believe is committing acts of discrimination.)
Restrictive Covenants/Trade Secrets
- Are employees required to keep the employer’s information confidential?
- Do employees confirm they are not subject to any restrictive covenants (such as non-compete agreements) that would limit their ability to work for the employer?
- Are employees prohibited from giving the employer confidential information that belongs to a previous employer?
Labor Law Issues
- If employees belong to a union, does the employer state that it doesn’t intend for the handbook to conflict with any collective bargaining agreement?
- Does the employer have a content-neutral policy on soliciting and distributing materials in the workplace? (In general, if an employer wants to limit union-related communications, the employer must apply the same rules to solicitations which don’t involve a union.)
- Does the handbook accurately reflect whether employees may wear union-related apparel, such as hats, buttons, T-shirts and lanyards?
- Are employees permitted to discuss their wages with each other? (Some employers try to prohibit this, but the National Labor Relations Act entitles employees to discuss their wages with each other. This rule applies to all employers—whether or not they have a union.)
Other
- If the employer has a progressive discipline policy, does the employer reserve the right to deviate from this policy?
- Does the employer reserve the right to inspect company computers and email accounts?
- Does the employer have a social media policy, or a medical marijuana policy?
- If the employer has other policies, how do they fit together with the handbook? (Does it make sense to incorporate the policies into the handbook? Or, should the handbook clarify which other policies will remain in effect?)
- Does the handbook contain any provisions that the employer is unlikely to enforce? (For example, does the handbook prohibit employees from using all social media? Does it prohibit employees from talking on the phone while driving?)
*Reprinted with permission from the 8/16/18 issue of The Legal Intelligencer. © 2018 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
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S&P Global
(by Sarah Smith)
The federal pipeline safety regulator may change the way it handles requirements for gas pipelines in areas where population density is on the rise, potentially addressing operator concerns about the disruptions that current policy can lead to.
When more people move into the areas around gas transmission pipelines, federal rules require pipe operators to shift the way they use their infrastructure, but the U.S. Pipeline and Hazardous Materials Safety Administration, or PHMSA, said July 30 that it is entertaining the idea of allowing companies to instead apply certain “integrity management” practices.
For the full article, click here. .
The Legal Intelligencer
(by Blaine A. Lucas and Alyssa E. Golfieri)
Pursuant to Section 901 of the Pennsylvania Municipalities Planning Code, 53 P.S. Section 10101 et seq., (MPC), the state law establishing the framework for zoning and land use development regulations in Pennsylvania, every municipality in the commonwealth that enacts a zoning ordinance is required to create a zoning hearing board. A zoning hearing board is a quasi-judicial body that implements a system of checks and balances on a governing body’s legislative power to zone and regulate land development.
Zoning hearing boards have exclusive jurisdiction over eight discrete types of matters: substantive challenges to the validity of land use ordinances; appeals from the determination of a municipality’s zoning officer, including appeals from the granting or denying of a permit, the issuance of a notice of violation/cease and desist order, or the registration of nonconforming uses, structures, or lots; appeals from the administration of a floodplain provision or ordinance; applications for variances from the terms of a zoning or floodplain ordinance; applications for special exceptions under a zoning or floodplain ordinance; appeals from determinations related to the transfer of development rights or performance density provisions of a zoning ordinance; appeals from a zoning officer’s preliminary opinion on a proposed use or development; and appeals from a zoning officer’s or municipal engineer’s administration of any ordinances that regulates erosion and sedimentation control or stormwater management on projects unrelated to subdivisions, land developments, and planned residential developments.
Based on the exclusivity and scope of their jurisdiction, it is self-evident that zoning hearing boards have an integral role in assuring the fair and equal application of zoning and land use regulations across the commonwealth. Recognizing the important role zoning hearing boards play and the fact that such boards are in the best position to interpret and apply their municipality’s land use ordinances, appellate courts give a board’s findings and conclusions much deference. As a result, it is critical when appearing before a zoning hearing board that applicants, appellants, witnesses, and the zoning hearing board members themselves have a thorough understanding of the applicable procedural and evidentiary requirements. Failure to do so could result in an unsatisfactory result before the zoning hearing board with little to no recourse on appeal.
While not an exhaustive list, below are seven common procedural and evidentiary requirements or principles applicable to zoning hearing board hearings, many of which can easily get overlooked, misunderstood or misapplied:
- Notice of public hearings: All hearings before a zoning hearing board must be advertised in a newspaper of general circulation once a week for two successive weeks, not more than 30 and no less than seven days from the date of the hearing. Under Section 1909 of the Pennsylvania Statutory Construction Act, the phrase “successive weeks” means calendar weeks; publication upon any day of the week constitutes sufficient publication for that week, but at least five days must elapse between each publication. The public notice must state the time and place of the hearing and the particular nature of the matter to be considered.
Additionally, written notice must be provided to the applicant/appellant, the zoning officer, any other persons the governing body has designated to receive written notice, and any person who has made timely request for written notice. Written notice must be given at such time and in such manner as proscribed by ordinance. Finally, written notice must be conspicuously posted on the affected tract of land at least one week prior to the hearing.
- Formal rules of evidence do not apply: Formal rules of evidence do not apply in zoning hearing board hearings, but “irrelevant, immaterial, or unduly repetitious evidence may be excluded.” Evidence is relevant if “it logically tends to establish a material fact, makes a fact at issue more or less probable, or supports a reasonable in[ference] or presumption regarding the existence of a material fact,” as in Joseph v. N. Whitehall Township Board of Supervisors, 16 A.3d 1209, 1218-19 (Pa. Commw. Ct. 2011).
- Hearsay evidence admissible only if corroborated: Zoning hearing boards are not bound by strict rules against hearsay. However, the law is well-established that in zoning hearing board hearings “hearsay evidence, properly objected to, is not competent evidence to support a finding of the [board],” see Walker v. Unemployment Compensation Board of Review, 367 A.2d 366, 370 (Pa. Commw. Ct. 1976); see also In re Appeal of Little Britain Township, 651 A.2d 606, 615 (Pa. Commw. Ct. 1994). On the other hand, hearsay evidence, if corroborated, may be considered competent evidence upon which a zoning hearing board may fully rely, see also Lake Adventure Community Association v. Dingman Township Zoning Hearing Board, 79 A.3d 708, 714 n.4 (Pa. Commw. Ct. 2013). Hearsay objections are commonly raised, and usually sustained, in zoning hearing board proceedings when nonexpert members of the public reference internet articles, third party studies and the like, on the basis that the opposing party has been denied the opportunity to cross-exam the author.
- Discovery: When compared to other legal proceedings, options for discovery in zoning hearing board hearings are very limited. The MPC provides no authority to depose a witness, file interrogatories, or submit requests for production of documents. Discovery is only available via subpoena. Section 908(4) of the MPC provides that the “chairman or acting chairman of the [zoning hearing board] or the hearing officer presiding shall have power to … issue subpoenas to compel the attendance of witnesses and the production of relevant documents and papers, including witnesses and documents requested by the parties.”
It is important to note that although Section 908(4) confers subpoena power upon a zoning hearing board, it does not confer upon the board any enforcement powers to compel compliance or to hold a person or entity in contempt for the failure to do so. Accordingly, the holder of the subpoena is left to seek enforcement from the Court of Common Pleas, see Leonard v. Pennsylvania State Police, 558 A.2d 174 (Pa. Commw. Ct. 1989).
- Civil versus criminal designation of zoning hearing board hearings: Prior to 1988, the MPC authorized municipalities to adopt zoning ordinances with enforcement provisions that imposed imprisonment as a penalty for violation convictions or failure to pay fines. Due to the threat of imprisonment, zoning enforcement proceedings during this time were treated as criminal in nature. Accordingly, anyone subject to enforcement was afforded protection under the Pennsylvania Rules of Criminal Procedure.
However, in 1988 the General Assembly comprehensively amended the MPC and overhauled its enforcement provisions. It eliminated imprisonment as a permissible form of penalty for conviction or failure to pay a fine. Instead, a municipality can pursue the alleged violator of a zoning ordinance in a “civil enforcement proceeding,” and, if found liable, the violator can be required to pay a judgment of up to $500 for each day a violation continues, as well as court costs and reasonable attorney fees. In addition to civil enforcement actions, the MPC authorizes a municipality to pursue injunctive relief for zoning ordinance violations. The MPC requires a municipality to issue a detailed notice of violation to the property owner before pursuing either of these enforcement remedies, and also provides for appeals of such notices to the zoning hearing board. The General Assembly’s commentary on this amendment explains that the decriminalization of zoning enforcement proceedings “is deemed to be more in keeping with the nature of [zoning ordinance] violations and the reality that criminal prosecution for [such] violations are far from commonplace,” General Assembly of the Commonwealth of Pennsylvania, Local Government Commission, SB 353, PN 1880, Pennsylvania Municipalities Planning Code: Commentary for Proposed Amendments 1988 (April 1988).
Ten years after the comprehensive MPC amendment, the Pennsylvania Supreme Court cleared up any confusion still looming about the civil versus criminal nature of zoning enforcement proceedings in the Town of McCandless v. Bellisario, 709 A.2d 379 (Pa. Commw. Ct. 1998). In the Town of McCandless, the court explained that “while the enforcement of municipal ordinances that provide for imprisonment upon conviction or failure to pay a fine or penalty must follow the Rules of Criminal Procedure, the same is not true for municipal ordinances that do not provide for imprisonment upon conviction or failure to pay a fine or penalty … the higher degree of protection provided by the Rules of Criminal Procedure does not apply to municipal ordinance enforcement actions where imprisonment is not a remedy for a conviction or failure to pay a fine.”
- Fifth Amendment privilege against self-incrimination: The Fifth Amendment of the U.S. Constitution not only protects an individual against being involuntarily called as a witness against himself in a criminal prosecution, “but also privileges him not to answer official questions put to him in any other proceeding, civil or criminal, where the answers might incriminate him in future criminal proceeding,” see Lefkowitz v. Turley, 414 U.S. 70, 77 (1973). As the Pennsylvania Supreme Court confirmed in Town of McCandless, zoning hearing board hearings are civil proceedings where imprisonment is not a remedy for conviction or failure to pay a fine. Therefore, witnesses called during a zoning hearing board hearing may “plead the Fifth,” but, due to the civil nature of the proceeding, must do so on the stand on a question-by-question basis, seePhiladelphia v. Fraternal Order of Police, Lodge No. 5, 521 A.2d 517, 519 (Pa. Commw. Ct. 1987).
- Standard of review on appeal: Pennsylvania courts have consistently recognized that land use appeals filed with the court of common pleas pursuant to Article X-A of the MPC challenging a zoning hearing board’s determination are not lawsuits, but rather statutory appeals. Consequently, appeals of a zoning hearing’s determination may not raise any issue not first raised before the zoning hearing board nor may a judge engage in fact finding, authorize discovery, or enter judgments, as in Human Development of Erie v. Zoning Hearing Board of Millcreek Township, 600 A.2d 658 (Pa. Commw. Ct. 1991).
A trial court’s scope of review in a land use appeal is limited to determining whether the zoning hearing board committed an error of law or abused its discretion, see Mars Area Residents v. Zoning Hearing Board, 529 A.2d 1198, 1199 (Pa. Commw. Ct. 1987). A zoning hearing board abuses its discretion when its findings are not supported by substantial evidence, i.e. such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, see Valley View Civic Association v. Zoning Board of Adjustment, 462 A.2d 637 (Pa. 1983). A trial court may no substitute its interpretation of the evidence for that of the zoning hearing board, see Taliaferro v. Darby Township Zoning Hearing Board, 873 A.2d 807, 811 (Pa. Commw. Ct. 2005).
Under Section 1005-A of the MPC, a trial court is only permitted to reopen the hearing record and take additional evidence not otherwise submitted before the zoning hearing board if moved by a party. In applying Section 1005-A, the Commonwealth Court has consistently held that, upon receipt of a motion to reopen the hearing record, a trial court faces compulsion to do so “only where the party seeking the hearing demonstrates that the record is incomplete because the party was denied an opportunity to be heard fully, or because relevant testimony was offered and excluded,” as in Kretschmann Farm v. Township of New Sewickley, 131 A.3d 1044, 1061 (Pa. Commw. Ct. 2016). If the hearing record is opened, then the standard of review changes and the court is required to make its own findings of fact.
Blaine A. Lucas is a shareholder and Alyssa E. Golfieri an associate in the public sector services and energy and natural resources groups of the Pittsburgh law firm of Babst, Calland, Clements & Zomnir. Lucas coordinates the firm’s representation of energy clients on land use and other local regulatory matters. He also teaches land use law at the University of Pittsburgh School of Law. Golfieri focuses her practice on zoning, subdivision, land development, code enforcement and public bidding matters.
*Reprinted with permission from the 6/21/18 issue of The Legal Intelligencer. © 2018 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
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Comcast Newsmakers
Tim Miller of Babst Calland talks to host Eric Minor about the Ohio Valley’s energy industry topics such as legal, regulatoryand NG drilling developments, infrastructure, legislative and construction and job growth outlook.
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Law 360
(by Mike Curley)
Babst Calland has added two shareholders and an associate to its practice, bolstering its roster in support of emerging technologies and new businesses.
The Pittsburgh-based firm announced Tuesday that Justine M. Kasznica and Carl A. Ronald joined as shareholders and Michael E. Fink joined as an associate in its Corporate and Commercial Group.
“The addition of these technology and startup-focused attorneys supports the firm’s strategy to expand its multidisciplinary team to serve the needs of clients developing new technologies, new companies and new ideas,” Managing Shareholder…
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Pittsburgh Business Times
(by Patty Tascarella)
Continuing to add lawyers focused on technology and early-stage companies, Babst Calland on Monday confirmed three hires in Pittsburgh, including two from the local office of a Philadelphia firm.
Justine Kasznica and Carl Ronald both joined Babst Calland as shareholders. They previously had worked for Baer Crossey McDemus and Kasznica had led the Philadelphia-based firm’s Pittsburgh office for the past year.
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PGHTECH FUSE
Marcellus, Utica Shale Plays Account for 41 Percent of U.S. Natural Gas Output
The law firm of Babst Calland today released its annual energy industry report: The 2018 Babst Calland Report – Appalachian Basin Oil & Gas Industry: Forging Ahead Despite Obstacles; Legal and Regulatory Perspective for Producers and Midstream Operators. This annual review of shale gas development activity in the Appalachian Basin acknowledges an ongoing rebound despite obstacles presented by regulatory agencies, the courts, activists, and the market. To request a copy of the Report, contact info@babstcalland.com.
In this Report, Babst Calland attorneys provide perspective on issues, challenges, opportunities and recent developments in the Appalachian Basin and beyond relevant to producers and operators.
According to the U.S. Energy Information Administration’s May 2018 report, the Appalachian Marcellus and Utica shale plays account for more than 40 percent of U.S. natural gas output, compared to only three percent a decade ago. Since then, the Appalachian Basin has become recognized in the U.S. and around the world as a major source of natural gas and natural gas liquids.
The industry has been forging ahead amidst relatively low natural gas prices, infrastructure building, acreage rationalization and drilling plans that align with business expectations. The policy landscape continues to evolve with ever-changing federal and state environmental and safety regulations and tax structures along with a patchwork of local government requirements across the multi-state region.
Joseph K. Reinhart, shareholder and co-chair of Babst Calland’s Energy and Natural Resources Group, said, “This Report provides perspective on the challenges and opportunities of a shale gas industry in the Appalachian Basin that continues to enjoy a modest rebound. While more business-friendly policies and procedures are emanating from Washington, D.C., threats of trade wars are raising concerns about the U.S. energy industry’s ability to fully capitalize on planned exports to foreign markets.”
He added, “In a sustaining low price natural gas environment, operators in the Appalachian Basin continue to reduce operating costs and maximize capital and operating budgets by increasing efficiencies, employing new technologies and consolidating operations. As a result, drilling activity and production continue to be strong compared to a year or two ago. All indicators suggest continued growth prospects for Appalachian Basin shale despite the lingering obstacles facing the industry.”
The 84-page Report contains five sections, highlighted below, each addressing key challenges for oil and gas producers and midstream operators.
Business Outlook: Growth Prospects Continue
The U.S. Energy Information Administration predicts that U.S. energy consumption and production is most likely set for modest growth over the next 30 years. Henry Hub spot prices for natural gas rebounded modestly in 2017 and have tracked reasonably close in the first half of 2018. Given relatively-flat price projections, Appalachian operators’ ability to keep costs down, improve efficiency, and pursue attractive transactions remains critical. The energy industry turnaround is evidenced by the significant slowing of bankruptcy filings, from 70 in 2016 to just 24 in 2017.
Oil and Gas Regulations Continue to Evolve, Reform and Persist
Federal and state courts, legislatures and regulatory agencies are addressing various oil and gas issues and reforms. Pennsylvania’s Environmental Rights Amendment (ERA) poses a new and significant legal and novel constitutional issue for operators in the Commonwealth. Recent court challenges include a sharp rise in the total dollar amount of assessed penalties based on how PADEP calculates fines and civil penalties. West Virginia’s Governor Jim Justice issued a series of executive orders that seek broad regulatory reform.
Pipeline Outlook Positive, But More Public Pressure
The pipeline industry is continuing to experience increased scrutiny from regulators at all levels of government. Much of this scrutiny is being driven by public interest groups and environmental advocacy organizations becoming more active in the pipeline permitting process and resorting with greater frequency to litigation as a means of advancing policy initiatives that are not favorable to the energy industry. The Pipeline and Hazardous Materials Safety Administration (PHMSA) continued to make progress in finalizing the Gas Transmission and Gathering Final Rule with the intention to divide the content of the proposed rule into three separate final rules with the hope of issuing the rules by the end of 2019.
Local Government Regulation Continues to Spawn Debate and Legal Challenges
In Robinson Township, the Pennsylvania Supreme Court invalidated two sections of Pennsylvania’s updated Oil and Gas Act (Act 13) that limited the authority of local governments to regulate oil and gas operations. This was based on a reinvigorated interpretation and application of the Article I, Section 27 of the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (ERA). On June 1, 2018, the PA Supreme Court published its long-awaited Gorsline opinion. In a 4-3 decision, the majority reversed the Commonwealth Court’s decision affirming the granting of a conditional use approval for an unconventional natural gas well pad. West Virginia’s Lincoln and Fayette counties have enacted forms of “nuisance ordinances” that could potentially be used to target oil and gas related operations. As Ohio Courts heard and decided several cases regarding the extent of local authority to regulate oil and gas development, anti-fracking groups pursued an alternative route to regulation through local ballot initiatives.
Litigation Trends
West Virginia continues to see private nuisance suits filed against both upstream and midstream companies. In the last few years, civil suit filings alleging property contamination and nuisance claims from unconventional natural gas development have diminished significantly in Pennsylvania. Articles related to claims of alleged health effects from unconventional natural gas development continue to be published in scientific journals and in the media in even greater numbers, resulting in increasing controversy and polarization.
Many of the current opportunities and challenges facing the industry are described in the pages of this Report. Babst Calland’s multidisciplinary team of energy attorneys have chronicled the legal and regulatory landscape to help inform the energy industry operating in the Appalachian Basin.
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Pittsburgh Business Times
(by Mark Mensheha)
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PGHTECH FUSE
Babst Calland announced the addition of William L. Godfrey as Director, Mobility, Automation and Safety. The Firm is expanding its capabilities to support the developing needs of companies with emerging technologies. It provides strategic leadership with business and legal advice for manufacturers, suppliers, start-ups, technology companies and government entities in the full-spectrum of transportation regulatory, safety, product quality, and automation matters, including those related to automated/autonomous driving systems.
“Will Godfrey’s expertise and creativity deepens our unique vision to deliver full-stack solutions to clients’ problems that integrate technical and engineering know-how with legal insight to expand business opportunities,” said Tim Goodman, Chair of Babst Calland’s Mobility, Transport and Safety Group, and former National Highway Traffic Safety Administration Assistant Chief Counsel for Enforcement and Federal Senior Executive.
A former General Motors vehicle engineer, production manager and senior U.S. federal regulatory chief at the National Highway Traffic Safety Administration (NHTSA)/U.S. Department of Transportation (DOT), Will Godfrey will assist clients in achieving their business goals and navigating obstacles by applying a current and detailed understanding of the federal government’s approach to transportation safety regulation (particularly motor vehicles), including its programs, processes, and personnel.
Godfrey spent nearly a decade at NHTSA/DOT, where he served in various leadership capacities. Among other things, as NHTSA’s Trends and Analysis Division Chief, he led the oversight, analysis, and investigation of more than 1,100 vehicle, equipment, tire, motorcycle, and child car seat manufacturers globally, including TREAD Act/Early Warning Reporting Program and the integration of new, data-driven techniques. As a senior policy advisor to the NHTSA Administrator, he led the agency’s comprehensive reorganization of the NHTSA Office of Defects Investigation (ODI).
“Will Godfrey is well-regarded and uniquely qualified to serve clients with emerging technologies as a senior technical and strategic advisor, integrated with our best in class legal and technical team,” said Donald C. Bluedorn II, Managing Shareholder of Babst Calland. “We’re thrilled to have him join us.”
Prior to his federal service, Godfrey worked at General Motors as a vehicle engineer and production manager for various vehicle and equipment platforms. Among other things, he led programs in quality control, research and development, production, distribution, licensing, sales and service.
Godfrey received his Bachelor of Science in Automotive Engineering and Technology from Southern Illinois University. He earned a certificate from the Graduate School USA, Washington D.C. in the Federal Senior Executive Leadership Development Program in Management.
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Pittsburgh Business Times
(by Patty Tascarella)
Lawyers Journal
(by Blaine A. Lucas and Amie L. Courtney)
In 2008, Pennsylvania enacted the current Right-to-Know Law with the intent to promote transparency between the public and state and local agencies by establishing that records held by state and local agencies are accessible to the public, unless subject to an exception.
One exception is receiving increased scrutiny due to proposals submitted to Amazon by Pittsburgh and Allegheny County, through a company created by the city and county – PGHQ2, LLC – for the location of the company’s second headquarters. The exception is for trade secrets and confidential proprietary information. Records subject to this exception must involve documents that have been protected, subject to secrecy, the release of which would affect the competitive position of the owner of such records.
Numerous news outlets submitted requests to the city and county for a copy of the proposal. Those requests were all denied, but the state Office of Open Records reversed on appeal. The Office of Open Records found that the proposal was not a trade secret because the city and county were not engaged in any business or commerce that could be impacted by the release of the information. Additionally, the records were not confidential proprietary information because the information was submitted, not received, by the government, as required by the definition in the Right-to-Know Law. PGHQ2 submitted the proposal to Amazon, a factor dismissed by the Office of Open Records because the city and county claimed the proposal contained confidential proprietary information of the governmental agencies and because they found PGHQ2 to be an alter ego of the city and county. The city and county recently appealed the decisions to the Allegheny County Court of Common Pleas, and the requested records have not yet been released. However, based on the Office of Open Records decisions, the Amazon HQ2 proposal is not protected as a trade secret or confidential proprietary information due to the position of the city and county as a public entity.
Although public entities may have limited protections under the trade secret and confidential proprietary information exception, private third parties engaged in work with governmental bodies and agencies can use this exception to protect their information that, when turned over to a public entity, would otherwise become a public record. Private companies must take certain steps to avail themselves of the protections afforded to trade secrets and confidential proprietary information, and state and local agencies must take certain steps when receiving a record request for third-party records potentially protected by the exception.
The first step any private company must take to protect its information is to include a written statement with any records provided to a public agency, signed by a company representative, stating that the record contains confidential information. If such a statement is provided, then the public agency is required to notify the third-party when it receives a request for the information, allowing the third-party an opportunity to provide input on the potential release of the information.
Inclusion of such a statement requires the public entity to contact the third party prior to responding to the request, but it does not guarantee the protections of the trade secret and confidential proprietary information exception. Courts have analyzed the exception and have set out factors to determine whether information may be a trade secret. Those factors include: (1) the extent to which the information is known outside of the business; (2) the extent to which the information is known by employees and others in the business; (3) the extent of measures taken to guard the secrecy of the information; (4) the value of the information to the business and to competitors; (5) the amount of effort or money expended in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Confidential proprietary information is defined by the Right-to-Know Act as information received by an agency: (1) which is privileged or confidential; and (2) the disclosure of which would cause substantial harm to the competitive position of the person who submitted the information.
Third parties should have internal policies in place that will provide the public agency with evidence to support any conclusions that the records contain confidential information. Although state and local agencies may be limited in protecting records generated by themselves under the trade secret and confidential proprietary information exception, those same agencies must be aware of the steps they are required to take before releasing any potential third-party confidential information in their possession.
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Pittsburgh Business Times
(by Paul J. Gough)
Under the 2011 Act 13 that established the impact fee, stripper wells are exempt from the impact fee.
The collection of the shale impact fee — the hundreds of millions of dollars that go to local, county and state coffers due to Marcellus and Utica drilling — is itself being impacted by an estimated $6 million due to a legal spat between drillers and the Pennsylvania Public Utility Commission.
The issue is over so-called stripper wells, which are unconventional natural gas wells that fall under a threshold of less than 90,000 cubic feet per day. Under the 2011 Act 13 that established the impact fee, stripper wells are exempt from the impact fee. One driller, Snyder Bros. Inc., and the Pennsylvania Independent Oil & Gas Association (PIOGA) challenged in Commonwealth Court the PUC’s decision denying exemptions; they received a favorable ruling in 2017 but it is on appeal with the Pennsylvania Supreme Court.
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The PIOGA Press
(by Kevin J. Garber and Jean M. Mosites)
The Pennsylvania Environmental Hearing Board has issued several adjudications and opinions regarding challenges brought under Pennsylvania’s Environmental Rights Amendment (ERA) since the Pennsylvania Supreme Court decision in Pennsylvania Environmental Defense Foundation v. Commonwealth (PEDF) last June. PEDF set aside the long-standing three-part test in Payne v. Kassab used to analyze claims brought under the ERA and replaced it with a standard based on the text of the ERA and principles of Pennsylvania trust law. The PEDF decision addressed the allocation and use of royalties generated by leasing publicly owned oil and gas interests and did not provide a definitive test to be applied in the permitting context.
The board has addressed the obligations imposed by the ERA in Friends of Lackawanna v. DEP and Keystone Sanitary Landfill, (FOL), Center for Coalfield Justice and Sierra Club v. DEP, (CCJ) and Center for Coalfield Justice and Sierra Club v. DEP. The most recent opinion, issued on May 11 in the Delaware Riverkeeper case, reflects a continuation of the analysis provided by these earlier decisions.
Delaware Riverkeeper Network v. DEP
In The Delaware Riverkeeper, et. al. v. DEP and R.E. Gas Development, LLC the board upheld well permits and renewals issued by the Department of Environmental Protection in an appeal based in part on the ERA. Two citizens groups, the Delaware Riverkeeper and the Clean Air Council, along with several residents of Middlesex Township (collectively, Delaware Riverkeeper), appealed unconventional gas well permits and subsequent renewals issued to R.E. Gas Development, LLC (Rex). Among other arguments, Delaware Riverkeeper argued that the department violated its constitutional obligations under the ERA.
The department reviewed whether the permit applications complied with Act 13 and other relevant statutes and regulations, considered objections from a group of concerned citizens, Mars Parent Group, and held a Section 3251(a) conference with Mars Parent Group and Rex. Rex agreed to take several actions to address the objections, and the department issued the permits on September 12, 2014, with special conditions to address the public concerns. After Rex applied to renew the permits in August 2015, the department became aware of potential abandoned wells near the proposed wellsite and requested additional information from Rex. Rex provided a report summarizing its investigation of abandoned wells, and the department renewed the permits.
Analysis
Writing for the board, Judge Steven Beckman reiterated the standard for analyzing ERA challenges to permit actions set out in CCJ and FOL. According to these precedents, the board must first determine whether the department considered the environmental effects of its permitting action and, second, whether the department correctly concluded that its action will not result in unreasonable degradation, diminution, depletion or deterioration of the environment. Finally, the board must determine whether the department satisfied its trustee duties of prudence, loyalty and impartiality toward the beneficiaries of the natural resources affected by the permitting decision.
The Delaware Riverkeeper argued the department’s review of Rex’s application fell short of this standard of review because the department did not properly consider the environmental effects of drilling authorized by the permits. The board disagreed and also clarified that the:
discussion in CCJ was not intended to suggest that there was some minimum requirement under Article 1, Section 27 governing the amount of review time that must be undertaken by the Department and the amount of information that must be considered by the Department. The Department’s consideration of the environmental effect of its permitting actions is, we believe, intended to be a flexible standard based on the nature of the activity and the potential impact of the activity on the environmental interests protected under Article 1, Section 27.
The board stated that “[t]he fact that the consideration did not involve a full blown risk assessment and was not as extensive as Delaware Riverkeeper believes was necessary does not, in our opinion, violate the requirements of Article 1, Section 27.”
Finally, the board addressed the department’s trustee duties under the ERA, finding the department’s pre-action analysis to be consistent with its duties of prudence and impartiality. The board stated:
Our understanding of the trustee responsibility does not require the Department to deny permits to any and all activity that will negatively impact the public natural resources and/or the people who use those resources. To hold otherwise would essentially prevent any permitting activity since it is nigh impossible to have development without some environmental impact.
The Delaware Riverkeeper also argued the department breached its duty of impartiality by “treating this wellsite as if it were no different than any other wellsite” because it failed to consider the children in proximity to the wellsite and the local air quality that was already degraded. The board found the department did not violate its duty of impartiality because it considered the interests of various beneficiaries of the public natural resources near the proposed site.
Siri Lawson v. DEP and Hydro Transport LLC
On May 17, the board dismissed an appeal of a brine spreading plan approval as moot. Lawson v. DEP, EHB Dkt. No. 2017-051 B (May 17, 2018). Siri Lawson, a township resident, appealed the department’s approval of Hydro Transport LLC’s plan to spread brine from conventional oil and gas operations for dust control and stabilization on dirt roads in Sugar Grove and Farmington townships in Warren County. Among her arguments, Lawson claimed the department violated the ERA when it failed to impose adequate operating requirements to protect the waters or the air of the Commonwealth. Both Lawson and Hydro Transport filed motions for summary judgment, including arguments related to the applicability of and obligations under the ERA.
The May 17 decision, however, dismissed the appeal as moot without addressing the legal merits of the appeal because the approval had expired at the end of 2017. The board found that there was no effective relief it could grant and that this type of approval was not capable of repetition. In its motion to dismiss, the department repudiated its authority to issue brine spreading approvals to haulers such as Hydro Trans – port. The board declined to reach or opine on the department’s authority under the Solid Waste Management Act or otherwise.
What’s next?
In Delaware Riverkeeper, the board followed the ERA analytical approach taken in CCJ and FOL, examining the record to evaluate both the department’s consideration of the effect of the permitted activity on public natural resources, as well as the actual or potential adverse effects of the permitted activity on the environment. Consistent with board decisions issued before PEDF, as well as the 2013 Pennsylvania Supreme Court decision in Robinson Township v. Commonwealth, the board’s opinion reaffirms that the ERA “should not be read as preventing all impacts to the environment nor does it call for a stagnant landscape.”
Several other ERA questions remain pending before the board.
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Pittsburgh Business Times
(by Patty Tascarella)
Pittsburgh’s seventh-largest law firm, best known for its energy and environmental practices, is preparing for a potential surge in work linked to advancements with autonomous vehicles.
Babst Calland is building a foundation through its mobility, transportation and safety practice, capitalizing on emerging technologies and synergies between its downtown headquarters and fast-growing office in Washington, D.C.
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The Legal Intelligencer
(by Sean R. Keegan)
The U.S. Supreme Court’s recent decision in Epic Systems v. Lewis is a win for employers who have included or wish to include class action waivers in arbitration agreements that employees are required to sign as a condition of employment. On May 21, the Supreme Court rejected the existing position of the National Labor Relations Board (NLRB), which had held that arbitration agreements waiving the right to pursue class or collective actions violated federal labor law. The Supreme Court overturned the NLRB and held that the Federal Arbitration Act (FAA) requires such mandatory arbitration agreements to be enforced according to their terms. Following this decision, individual arbitration provisions may preclude employees from pursuing class or collective actions to resolve employment disputes.
The Supreme Court held that Congress has instructed in the Federal Arbitration Act that arbitration agreements providing for individualized proceedings must be enforced, and neither the Federal Arbitration Act’s saving clause nor the National Labor Relations Act suggests otherwise. Prior to Epic Systems, the NLRB had interpreted Section 7 of the National Labor Relations Act to encompass the right to bring a class or collective action, as it gives employees the right to organize, bargain collectively and engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. Consequently, the NLRB’s position was that an employment agreement that required employees to resolve their workplace disputes (such as wage and hour and discrimination claims) by arbitration on an individual basis was an unfair labor practice under Section 8 of the National Labor Relations Act.
Before the Epic Systems decision there was a split in the circuit courts. Some circuits agreed with the NLRB’s interpretation or thought themselves obliged to defer to it under Chevron, while others, including the Fifth Circuit, disagreed with the interpretation. To clear the confusion, the Supreme Court granted certiorari in three consolidated cases—the U.S. Court of Appeals for the Seventh Circuit’s Epic Systems, the U.S. Court of Appeals for Ninth Circuit’s Ernst & Young v. Morris and the U.S. Court of Appeals for the Fifth Circuit’s NLRB v. Murphy Oil USA.
The employment agreements in each of the three consolidated cases required the employees to arbitrate their work-related disputes on an individual basis. The Supreme Court, noting that the three cases differed in factual detail but not in substance of the legal question presented, specifically examined the facts in Ernst & Young. The employment agreement at issue in Ernst & Young provided that a junior accountant and Ernst & Young were required to arbitrate any disputes between them and specified individualized arbitration “with claims pertaining to different employees to be heard in separate proceedings.”
Despite the arbitration provisions, the junior accountant sued Ernst & Young in federal court for violations of the Fair Labor Standards Act and California law. The junior accountant sought to litigate the federal claim on behalf of a nationwide class under the Fair Labor Standards Act’s collective action provision. The district court granted Ernst & Young’s motion to compel arbitration, but the Ninth Circuit reversed the district court’s decision holding that the Federal Arbitration Act’s saving clause removed the obligation to enforce arbitration agreements if it violates some other federal law. Consistent with the NLRB’s position, the Ninth Circuit concluded that an agreement requiring individualized arbitration proceedings violates the National Labor Relations Act by barring employees from engaging in the concerted activity or pursuing claims as a class or collective action.
Accordingly, the issue before the Supreme Court was whether the Federal Arbitration Act’s mandate to enforce arbitration agreements according to their terms was displaced by Section 7 of the National Labor Relations Act. The Supreme Court, in an opinion by Justice Neil Gorsuch, rejected the NLRB’s approach that had been adopted by the Ninth Circuit (and the Seventh Circuit) and held that in the Federal Arbitration Act, Congress has clearly instructed federal courts to enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.
According to the court, the Federal Arbitration Act’s saving clause, which allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract,” recognizes only defenses that apply to “any” contract. The employees failed to suggest their arbitration agreements were extracted in a way that would render any contract unenforceable, such as an act of fraud or duress, and instead relied on Section 7 of the National Labor Relations Act which only targeted individualized arbitration. The court held that the saving clause offers no refuge for defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue, and “this means the saving clause does not save defenses that target arbitration either by name or by more subtle methods, such as by interfering with fundamental attributes of arbitration.”
The Supreme Court also held that the National Labor Relations Act does not reflect a clearly expressed and manifest congressional intention to displace the Federal Arbitration Act and to outlaw class and collective action waiver. According to the court, the National Labor Relations Act does not express approval or disapproval of arbitration, and it does not even hint at a wish to displace the Federal Arbitration Act.
Federal courts are already starting to apply the holding of Epic Systems. Three days after the Supreme Court’s opinion was issued, a judge in the Eastern District of Michigan applied the ruling to split a proposed class action and send one of the two plaintiffs into arbitration. Judge Nancy Edmunds held that following Epic Systems, “courts must enforce arbitration agreements providing for individualized proceedings like the one at issue in this case,” and the class waiver in question was enforceable in Williams v. Dearborn Motors 1, No. 17-12724 (E.D. Mich. May 24, 2018).
As a result of the Supreme Court’s decision, employers now know that individual arbitration provisions that require an employee to waive their right to collective and class actions are facially permissible, subject to other considerations such as the particular language of the agreement and the defenses that apply to any contract. Employers that use such a provision are more likely to be able to resolve disputes individually outside of court, even if the situation affects many employees, effectively preventing its non-union workers from banding together in disputes over pay and conditions in the workplace.
Although facially the decision appears to protect employers from costly litigation and uphold their expectations, it remains to be seen whether individualized arbitration will offer a net benefit to employers. The decision may protect employers from the costs of litigation, but arbitration has its own costs and an increase in demand for the services of arbitrators may cause a related increase in arbitration costs. Employers that use an individual arbitration provision can avoid expensive class action suits in state or federal court, but a wave of related individual arbitration claims may bring its own challenges, including inconsistent results.
Even considering Epic Systems, not all employers will want to include individual arbitration provisions in their employment agreements going forward. Employers that include such provisions may subject themselves to multiple one-on-one arbitrations rather than one collective action. Based on their company size, employers will have to consider whether the costs of one-on-one arbitrations versus a single collective action makes financial sense. In addition, prospective employees may exercise their right to seek employment elsewhere if they find individual arbitration provisions an unacceptable condition of employment. Epic Systems holds that these class action waivers are an option, but individual employers will still have to determine whether such a waiver is the best choice for their business.
Sean R. Keegan is an associate in the litigation and employment and labor services groups of Babst Calland Clements & Zomnir. Contact him at 412-773-8721 or skeegan@babstcalland.com.
*Reprinted with permission from the 6/7/18 issue of The Legal Intelligencer. © 2018 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
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