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Recently, Pillsbury attorneys Fred Lowell , Emily Erlingsson, Anita Mayo and Kathy Donovan published their client alert titled D.C. Circuit Upholds 44-Year-Old Ban, The answer is still “no” for individual federal contractors wishing to contribute to federal candidates and parties. The Alert discusses the U.S. Court of Appeals for the District of Columbia Circuit’s recent decision in Wagner, et al., v. Federal Election Commission, upholding the ban on individual federal contractor contributions to federal candidates and political parties. The same rationale should apply to corporate federal contractors. The Court of Appeals did not address the ban on federal contributions by corporate federal contractors or whether federal government contractors may make independent expenditures or contributions to Super PACs.

Additional Source: Federal Election Commission, Court of Appeals Issues Opinion in Wagner, et al. v. FEC

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On July 8, 2015, the Eighth Circuit Court of Appeals rejected petitioner Lion Oil Company’s appeal of EPA’s denial of this small El Dorado, Arkansas’ refinery’s petition that its exception from the Renewable Fuel Standard program be extended for another year (through 2013), citing disruption to a key supply pipeline and noting its “financial position has not improved.” Lion Oil Company previously received exemptions through 2012. The case is Lion Oil Company v. EPA.

By law, “small” refineries (those that process 75,000 or less of crude oil on a daily basis) were excepted from the RFS obligations for two years (until 2011), and this exception could be extended for additional periods if the refinery could demonstrate a “disproportionate economic hardship”. See, generally, 42 U.S.C. § 7545. EPA must coordinate its review of such petitions with the Department of Energy (DOE), which was directed to conduct a study to determine whether Lion Oil Company would face such hardships.

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Pillsbury attorneys Julia Judish and Osama Hamady recently published their client alert titled Second Circuit Develops “Primary Beneficiary” Test to Evaluate Unpaid Internships. The Alert discusses the Court of Appeals for the Second Circuit’s adoption of a “primary beneficiary” test for evaluating whether unpaid interns are employees for purposes of the Fair Labor Standards Act (FLSA). Rejecting a six-factor test that the U.S. Department of Labor has used for over forty-five years, the Second Circuit, in held “the proper question is whether the intern or the employer is the primary beneficiary of the relationship.” The Second Circuit’s decision in Glatt, et al., v. Fox Searchlight Pictures, Inc., et al., Case Nos.13-4478-cv, 13-4481-cv, decided on July 2, 2015, vacated a district court judgment that two interns on the movie Black Swan had been improperly classified as unpaid interns rather than employees. The Second Circuit also held that, under the “primary beneficiary” standard, “the question of an intern’s employment status is a highly individualized inquiry,” and therefore vacated the district court’s orders conditionally certifying a nationwide FLSA collective action and certifying a class of New York interns.

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Today, Pillsbury attorneys Jon Russo, Peter Hunt and Matthew Kane, and summer associate Royce Liu published their client alert titled SEC Proposes Broad Executive Compensation Clawback Rules in Connection with Accounting Restatements. The Alert discusses the SEC’s proposed recovery provisions that would apply on a no-fault basis to executive officers of virtually all exchange-listed companies who received incentive-based compensation during the 3 fiscal years preceding an accounting restatement to correct a material error. The Alert encourages issuers to consider how the proposed rules may affect their executive compensation policies and plans, clawback policies, employment agreements and indemnification arrangements.

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The Third Circuit Court of Appeals has unanimously affirmed the lower court’s ruling that the Chesapeake Bay “total maximum daily load” (TMDL), developed over many years to address pollution in Chesapeake Bay, was consistent with the Clean Water Act (CWA) and the U.S. Constitution’s division of powers between the states and the federal government. The case is American Farm Bureau Federation, et al., v. EPA, et al.

In 2010, EPA published the TMDL for nitrogen, phosphorus and sediment that can be released into Chesapeake Bay. The Bay’s watershed consists of 64,000 square miles and contains tens of thousands of lakes, rivers streams and creeks all flowing into the Bay. It has a surface area of 4500 square miles and almost 12,000 miles of shoreline, and it is estimated that by 2030, 20 million people will live in the watershed–by any measure, this TMDL–and the environmental problems it confronts–is very significant. Many trade associations, led by the American Farm Bureau Federation, have argued that all aspects of the Chesapeake Bay TMDL, which go beyond the tally of the allowable sum of pollutants that the Bay can safely absorb every day, exceeds the scope of EPA’s authority under the CWA. Moreover, they argue that EPA’s actions will have the effect of unlawfully intruding upon the states’ traditional role in regulating land use. However, this latter argument has not been successful with the states immediately involved with the TMDL–Virginia, West Virginia, Maryland, Delaware, Pennsylvania and the District of Columbia–that ceded authority to EPA to devise this plan, nor with the District Courts or the Court of Appeals.

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Today, Pillsbury attorneys Julia Judish, John Scalia and Paula Weber published their client alert titled The U.S. Department of Labor Moves to More Than Double Minimum Salary Levels. The Alert discusses the U.S. Department of Labor’s (DOL) long-awaited Notice of Proposed Rulemaking to amend the Fair Labor Standards Act regulations implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales and computer employees (known as the “white collar” or “EAP” exemptions). The proposed rule would more than double the minimum salary level required to meet the executive, administrative, or professional exemption to $50,440 annually with automatic increases every year. The DOL estimates that 21.4 million currently exempt EAP employees would become eligible for overtime payments if the proposed rule goes into effect.

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On July 2, 2015, in the case of Gate Guard Services, L.P., v. Perez, Secretary of Labor, the U.S. Court of Appeals for the Fifth Circuit held that the Department of Labor’s (DOL) prosecution of a Fair Labor Standards Act (FLSA) case was so egregious, in both the investigation, processing and, finally, in the defense of its actions in court, that the DOL was ordered to pay Gate Guard’s attorney’s fees–which may be as much as $1 million.

The DOL cited Gate Guard, a small company which contracts with oil companies to provide them with gate attendants at remote drilling sites, with mischaracterizing their employees’ employment status as independent contractors. The initial demand from the DOL was $6 million in back wages and unpaid overtime, and the matter was eventually litigated when Gate Guard sought a declaratory ruling, and attorney’s fees, that it was in compliance with the FLSA.

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Confined spaces refers to such spaces as manholes, crawl spaces, and tanks, and other spaces that are not designed for continuous occupancy and are often difficult to exit in the event of an emergency. These spaces can present life-threatening hazards including exposure to toxic substances, electrocution, explosions and asphyxiation. These hazards can be safeguarded against if addressed prior to entering the confined space to perform work. OSHA has added a new subpart to its regulations to provide protection for construction workers working in confined spaces, replacing its one training requirement for confined space work with a comprehensive standard that includes a permit program that was designed to protect workers from exposure to many hazards associated with work in confined spaces. OSHA’s Final Rule, 80 Fed. Reg. 25366 (May 4, 2015) (codified at 29 C.F.R. Part 1926), incorporates several provisions to address construction-specific hazards, accounts for advancements in technology, and improves enforceability of the requirements. The Final Rule is effective on August 3.

Additional Sources: OSHA, Confined Spaces; OSHA FactSheet re Confined Spaces in Construction: Crawl Spaces and Attics; U.S. Department of Labor, Frequently Asked Questions re OSHA’s New Standard for Construction Work in Confined Spaces

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In the case of Michigan, et al., v. EPA, decided June 29, 2015, the U.S. Supreme Court, in a 5 to 4 ruling, held that EPA, when deciding whether it was appropriate and necessary to regulate Hazardous Air Pollutants (HAP), such as mercury and other toxic pollutants emitted from electric utility power plants, must consider the costs of compliance “at this stage” of the rulemaking proceedings.

In its 2012 rulemaking, EPA excluded any consideration of costs when deciding it was “appropriate”–as required by the Clean Air Act (CAA), 42 U.S.C. § 7412(n)(1)(A)–to impose the requirements of these new rules on these utilities. In the 1990 amendment to the CAA, EPA was directed by Congress to develop National Emission Standards for Hazardous Air Pollutants, but it also established a “unique procedure” to determine the applicability of the HAP program to fossil-fueled power plants. EPA was accordingly directed to perform a study of the hazards to public health reasonably anticipated to occur as a result of emissions by power plants of HAP pollutants after the imposition of the requirements of the law. This study was completed in 1998. However, EPA also determined that it was free to interpret the term “appropriate” so as to allow the agency to ignore the consideration of costs when it made the initial decision to regulate.

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On June 30, 2015, the U.S. Court of Appeals for the Fifth Circuit affirmed the trial court’s decision to grant Kurt Mix, a former BP engineer, a new trial after it was discovered that the jurors had been exposed to extrinsic evidence bearing on the general prosecution of BP employees in the wake of the Deepwater Horizon oil spill. The case is United States of America v. Mix.

Mix was involved in efforts to calculate the amount of oil flowing from the Macondo well, the site of the Deepwater Horizon accident, and developing plans to staunch the flow of oil into the Gulf of Mexico. He was charged with obstruction of justice for deleting text messages between himself and his supervisor related to, the Government alleges, the flow rates. Mix was acquitted on one charge and convicted on the other charge. His counsel, without the permission of the court, contracted the jurors to “obtain feedback about the defense’s failed trial strategy”, and they learned that the forewoman of the jury reported to some of her fellow jurors that she overheard a conversation in a courthouse elevator that other BP employees were being prosecuted in the wake of the spill.

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