PHMSA Raises Random Drug Testing Rate to 50% for 2018

The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration announced December 8, 2017 that during calendar year 2018, the minimum random drug testing rate will be increased to 50%.

Operators of gas, hazardous liquid, and carbon dioxide pipelines and operators of liquefied natural gas facilities must randomly select and test a percentage of all covered employees for prohibited drug use. The minimum annual random drug testing rate was 25% of all covered employees for calendar year 2017.  However, the PHMSA regulations require the Administrator to raise the minimum annual random drug testing rate from 25% to 50% of all covered employees when the data obtained from the Management Information System reports (required to be filed by covered entities under PHMSA regulations) indicate the positive test rate is equal to or greater than 1%.  In calendar year 2016, the random drug test positive test rate was greater than 1%.  Therefore, the PHMSA minimum annual random drug testing rate shall be 50% of all covered employees for calendar year 2018.

Jackson Lewis P.C. © 2017
This post was written by Kathryn J. Russo of Jackson Lewis P.C.
Check out the National Law Review Labor and Employment page for more information.

Uber Hack – Don’t Tell Anyone!

It’s been revealed that Uber’s database has been hacked, with the personal information of more than 57 million users and drivers worldwide compromised. That’s a big number, but we are becoming increasingly numb to this kind of revelation, with all the cyber-leaks now making the news. What was the more astounding aspect of this particular incident is the fact it has taken Uber over a year to reveal the security breach – with the attack taking place in October 2016.

Uber says that the hackers were able to download files containing information including the names and driver’s licence numbers of 600,000 drivers in the US, as well as the names, email addresses and phone numbers of millions of users worldwide.

Although Uber has now taken steps to notify the drivers affected by the hack, it’s reported that at the time of the breach, the company paid the hackers USD100,000 to delete the stolen data, and not reveal the breach.

In a statement, Uber CEO Dara Khosrowshani admitted that he became aware of the “inappropriate access [of] user data stored on a third-party cloud-based service” late last year, and that steps were taken to secure the data, and shut down further unauthorised access. However, Mr Khosrowshani noted he has no excuse as to why the massive breach is only being made public now.

For their roles in the cover-up, Uber chief security officer Joe Sullivan and his deputy have been ousted, while Uber says it’s taking “several actions”, including consulting the former general counsel of the US’ National Security Agency to prevent a future data breach.

This post was written by Cameron Abbott & Allison Wallace of K & L Gates.,Copyright 2017
For more legal analysis, go to The National Law Review

Automotive Supplier Industry Experts Convene in Detroit and Share 2018 Outlook

The Original Equipment Suppliers Association (OESA) held its 19th Annual Conference this week in suburban Detroit under the theme:  “The Industry’s New Landscape.”  And while much of the day was devoted to autonomous vehicle developments and the potential negative impacts on the industry’s North American competitiveness that would result from substantial changes to NAFTA, the afternoon session included a robust discussion of today’s strong market in North America and the more guarded outlook for 2018 and beyond.

 During this session, Mike Jackson, Executive Director of Strategy and Research for the OESA moderated a panel called “Cycle Dynamics:  The Industry Outlook Panel,” comprised of a leading automotive forecaster, a leading Wall Street analyst and the lead economist for one of the world’s largest OEMs.  While the panel remained fairly optimistic about the near term, the longer term theme was that the automotive industry is cyclical and the next down cycle is SOMEWHERE OUT THERE …

The panelists included Dr. G. Mustafa Mohatarem, Chief Economist, General Motors; John Murphy, Managing Director, U.S. Autos Equity Research, Bank of America Merrill Lynch; and Michael Robinet, Managing Director, Automotive Advisory Services, IHS Markit.

Dr. Mohatarem began with a very optimistic evaluation of the global economy, referring to our current condition as a “global synchronous expansion.”  Not only is the U.S. economy strong, but China’s growth has exceeded recent expectations, the EU has experienced a mini-boom after dodging a debt crisis, India continues to grow steadily and Russia and Brazil’s recessions have ended.  He noted that the current U.S. production rate is 17.4 -17.5 million units for 2017, a healthy market if not quite as healthy as last year.  On the cautionary side, he noted a potentially more hawkish bent to Fed policy and a significant labor shortage that will continue to dog the U.S. automotive industry.  On the whole though, he noted: “this is a very favorable time for the global automotive industry.”

Mike Robinet summed up current supplier sentiment as follows:  suppliers see the demand and the market opportunities out there, but there will be a lot of disruptors that can derail them.  These disruptors include the impact of “ACES” (AutonomousConnectedElectrifiedand Shared), the emergence of “Super Tier 1’s” who may dominate the future landscape with their integration capabilities (leaving other suppliers behind potentially), shifting trade winds, indecision about U.S. regulatory policy including CAFÉ standards, and an acceleration of the planning cycle that creates execution risk.  He noted that the cadence of model changes has kept the supply base on its toes this year, as has the adjustment to the continuing decline in sedan sales (which was viewed by the panel as a continuing trend into the future).  Will the internal combustion engine disappear soon?  According to Robinet, 95% of the vehicles in North America will have an engine on board by 2025.  Places like China will see a faster adoption of EVs during this period, he noted, including as a result of government policies promoting them. He ended by cautioning suppliers not to focus too much on the “nirvana” of Level 5 autonomy, but rather to focus on the movement to Level 3 and 4 in the shorter term and try to find there place in those realms.

John Murphy, more bullish in recent times, conceded that he has “moderated his outlook a bit.”  Murphy noted that leasing is helping support current demand, but worries about the upcoming impacts on the used car market as those vehicles come off lease (which he referred to as a “tsunami” that will hit in 2018 and beyond).  He noted that vehicle pricing is also starting to moderate (unrelated to just mix), and that the CUV market is getting very crowded.  He described three “Big Bangs” that will shape the industry in the future:  The increase in the Efficiency of Travel (cost per mile), the impact of Autonomous Mobility On Demand on the ease and cost of travel, and the increase in Speed of Travel.  Only the latter will provide a material economic stimulus – the first two will provide only a marginal or moderate stimulus – but all three Big Bangs will significantly impact the automotive industry.   But, before these Big Bangs reach their full impact, Murphy sees a downturn within the next two years taking U.S. volume down below the 14 million unit level (compared to the miserable 9 million level reached during the Great Recession).  During the Q&A session that followed, Murphy noted that he expects EV penetration in the U.S. to reach 10% by 2025 (slightly more optimistic than Mike Robinet’s prediction).  He also noted his perception that we are not experiencing an auto technology valuation bubble despite the recent eye-popping valuations in this space (no irrational exuberance here!).

On the whole, the panel’s 2018 and beyond outlook is for an automotive supply industry in North America that continues to be good, with significant challenges and disruptors that must be overcome by those automotive suppliers who will flourish in the long term.

This post was written by Steven H. Hilfinger of Foley & Lardner LLP., © 2017

Tesla Bringing Supercharger Stations to Boston and Chicago

On September 11th, Tesla announced the opening of Supercharger stations in downtown Boston and Chicago, representing the first step in the company’s effort to expand its Supercharger network into urban areas. The company currently operates 951 Supercharger stations worldwide, primarily along major highways to provide quick recharging on long trips. By bringing the network of charging stations into city centers, Tesla hopes to service growing demand among urban dwellers without immediate access to home or workplace charging.

Unlike the Destination Charging connectors at hotels and restaurants meant to replicate the longer home-charging process, Superchargers quickly deliver 72 kilowatts of power to each car for short-term boosts, resulting in charging times around 45-50 minutes. The new stations will be installed near supermarkets, shopping centers, and downtown districts, making it easy for drivers to charge their car while running errands. The Boston Supercharger station will be located at 800 Boylston Street and include 8 charging stalls.

Tesla announced plans to double its national charging network to 10,000 stations by the end of 2017. The company is bringing urban Superchargers to New York, Philadelphia, Washington, Los Angeles, and Austin by the end of this year. The expansion accompanies Tesla’s release of the Model 3 this summer, which boasts a lower starting price of $35,000 that is expected to bring more buyers to the brand.

A spike in Tesla sales would fall in line with the trend of increased demand for electric vehicles (EV) across the country. The year 2016 saw EV sales in the United States increase by 37% over 2015. Total EV sales topped out at roughly 160,000, with five different models (Tesla Model S, Tesla Model X, Chevrolet Volt, Nissan Leaf, and Ford Fusion Energi) selling at least 10,000 units. These sales, coupled with the expanding ease of access to charging station’s like Tesla’s, bode well for continued innovation and growth in the electric auto sector.

This post was written by Thomas R. Burton, III of  Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved. ©1994-2017
For more legal analysis go to The National Law Review

Potential for more Trucking Accidents in California if New Federal Law Passes

A provision that is included in pending legislation in the U.S. House of Representatives may result in fewer truck drivers in California taking needed rest breaks while they are working. The bill would apply to truck drivers who drive into California from other states while exempting them from California’s mandatory rest break requirements. If this bill passes, truck drivers may be more fatigued and cause more accidents in both California and in the rest of the U.S.

The proposed law

A provision that is included in a House appropriations bill would exempt interstate truck drivers who drive into California from following the strict rest and meal break regulations in the state. Under California law, all workers, including truck drivers, must take one 30-minute meal break every five hours and one 10-minute rest break every four hours of work. Some other states, including Kentucky and Colorado, have similar rest and meal break laws on the books. Federal law only requires that truck drivers take one 30-minute break during the first eight hours of driving. Officials in California are concerned that reducing the amount of time that drivers spend resting may result in increased injury and accident rates in the state.

According to the Truck Safety Coalition, the legislators are attempting to preempt state labor laws that mandate additional meal and rest breaks beyond those that are required under federal law. While the law would apply to interstate drivers who drive into the state, some experts are also concerned that drivers who only drive within the state but who work for interstate trucking companies may fall into a legal loophole. They believe that their companies would likely pressure the drivers to only take the minimally required breaks under federal law instead of following the state’s requirements. The provision was introduced by two California Republicans, including Rep. David Valadao and Rep. Jeff Denham. Denham has received more than $60,000 in contributions to his campaigns from trucking organizations.

Drowsy driving truck accident statistics

In California, 15,000 large truck crashes happened in 2016. The California Highway Patrol reports that 8,989 of those collisions happened in Los Angeles. Nationally, the Federal Motor Carrier Safety Administration reports that 87,000 injury crashes happened in 2015, and 4,311 trucks and buses were involved in fatal accidents. The FMCSA reports that 55 fatal truck accidents in 2015 were caused by drowsy or fatigued truck drivers and another 71 were caused by driver inattention with unknown causes.

If the proposed law passes in the House and Senate and is signed into law by Trump, many truck drivers may not have to take the rest breaks that they currently have to take. Truck drivers drive for exhaustingly long shifts, and not being able to pull off of the road more frequently may lead them to become exhausted. In Dec. 2016, the AAA Foundation for Traffic Safety found that the crash risk for drivers spikes for every hour of sleep that they lose. Truck drivers who do not get sufficient sleep and who are also not able to take enough rest breaks may have greatly increased risks. For all drivers, AAA found that the risk of accidents doubles for people who get between five and six hours of sleep each night. When they only get four to five hours of sleep, their risks are four times higher of crash involvement than people who are more rested.

Pressures on truck drivers

Truck drivers report that they are under tremendous pressure by their companies to get their loads delivered on time, according to ABC News. When drivers are pressured to make their deliveries under tight deadlines, they may end up driving while they are fatigued. This pressure may compound the potential problems of having fewer rest breaks under the proposed federal law. If that law passes, it is likely that all interstate companies will force their workers to only follow the federal rules rather than pulling off the road more frequently or whenever they feel tired.

Drowsy driving can have serious or even fatal consequences for drivers and those who are traveling on the roads around them. Enacting federal legislation to preempt California’s meal and rest break requirements could lead to many more injuries and deaths in the state each year. Californians may want to lobby their representatives and senators about this provision in order to protect the general safety of everyone in the state.

This post was written by Steven M. Sweat.
For more legal analysis go to the National Law Review.

Brexit Poses Issues For Airports, Airlines

The United Kingdom’s split from the European Union could leave the nation and United States without a trade agreement to manage the aviation industry. The aviation industry currently operates between the two nations under the Open Skies agreement signed by the U.S. and the EU in 2007. However, the U.K. will no longer be covered under the agreement once it leaves the bloc and, while it is still an EU member, cannot negotiate a new agreement either.

Open Skies agreements are bilateral air service agreements (ASAs) the U.S. government negotiates with other countries to provide rights for airlines to offer international passenger and cargo services. Agreements cover a number of significant matters including rights to fly over and land in territories, regulatory requirements, competition, commercial opportunities, customs and duties, and landing charges.

The situation is creating uncertainty and legal challenges in one of the most important components of international trade. Forty percent of the EU’s air traffic to the U.S. departs from U.K. airports and nearly 48,000 flights left the U.S. bound for the U.K. in 2016 alone. Commercial arrangements in the aviation industry including for airlines, air freight companies, airports and all related businesses depend on the Open Skies agreements as a basis for their contractual arrangements. Some U.S. airlines are already seeking to renegotiate deals with U.K. airports to ensure that break clauses and other mechanisms are inserted to deal with any uncertainty following Brexit, which under Article 50 has a deadline of March 30, 2019. Post-Brexit flight bookings may also need some form of provision to deal with contractual rights to hedge against major changes in the event that the Open Skies agreement is terminated for the U.K.

Michael O’Leary, CEO of Ryanair, Europe’s largest airline, told reporters on Aug. 2 that without some understanding of what a future agreement will look like airlines won’t be able to plan their 2019 flight schedules.

“There is going to be a serious disruption unless the British government can negotiate an agreement by around this time next year,” Ryanair said.

In late July, Airlines for America, the nation’s largest aviation trade group, issued a formal statement calling for the airline industry to be dealt with immediately and separately from Brexit negotiations. On Aug. 1, Reuters reported that British Transport Secretary Chris Grayling met with White House and airline officials to assure them that an agreement would be in place when the U.K. exits the EU. The Federal Aviation Administration’s chief Michael Huerta has also recently explained the seriousness of the U.K.’s situation with regards to aviation safety. Along with the other EU member states, the U.K. is currently part of the European Aviation Safety Agency (EASA), which is responsible for all aspects of civil aviation safety in the EU. Speaking at the UK’s Aviation Club, Huerta pointed out that the U.K. currently benefits from the being part of EASA and that when it leaves the EU it will need to be replaced or there would be the very real possibility of an “interruption of service.”

Faced with uncertainty of legal rights and concerns about ongoing aviation safety regulation, it is important that U.S. airlines as well as U.S. logistics and freight companies monitor the situation and plan for potential disruption. Some comfort can be taken from British Government assurances that open skies agreements and regulations will be in place when the U.K. exits the EU, however, individual commercial agreements should be reviewed to minimize risk of disruption. For instance, U.S. airlines have agreements with U.K. airports for a range of services including landing rights and leases for office outlets. All these agreements may need to be reviewed sooner rather than later so that both parties have contingencies in place to avoid any disruption as much as possible.

This post was written by G. Thomas Lee and David B. Hamilton of Womble Carlyle Sandridge & Rice, PLLC.
Get more Brexit Analysis at the National Law Review.

Parties Discuss Privacy Issues in Advance of FTC, NHTSA Workshop on Connected Cars

Automated vehicle technology is accelerating, and regulators are racing to keep up.  On June 28, 2017, the Federal Trade Commission and the National Highway Traffic Safety Administration (“NHTSA”) will hold a workshop to examine the consumer privacy and security issues posed by automated and connected vehicles.  The workshop comes several months after the Department of Transportation and NHTSA promulgated a Notice of Proposed Rulemaking (“NPRM”) that would require all new passenger vehicles to be capable of vehicle-to-vehicle (“V2V”) communications by the early 2020s.

The FTC and NHTSA have raised several questions to be addressed at the workshop, including:

  • What data do vehicles with wireless interfaces collect, store, and transmit, and how is that data used and shared?

  • What are vehicle manufacturers’ privacy and security policies and how are those policies communicated to consumers?

  • What choices are consumers given about how their data is collected, stored, and used?

  • What are the roles of the FTC, NHTSA, and other federal agencies with regard to the privacy and security issues raised by connected vehicles?

  • What self-regulatory standards apply to privacy and security issues relating to connected vehicles?

Car manufacturers, tech organizations, privacy organizations, and other parties filed comments in advance of the workshop, responding to these questions and more:

  • The Association of Global Automakers, a group that includes Aston Martin, Ferrari, Honda, Toyota, and others, said that V2V and vehicle-to-infrastructure (“V2I”) communications do not present a significant privacy risk to individuals because they do not collect or store PII or information that can be linked to a particular vehicle. The organization stated that the method of communicating between cars—dedicated short range communications (“DSRC”)—“already has layers of security established into its design.”  The group did acknowledge that privacy and security issues “may be exacerbated” by wireless-enabled aftermarket products connected to on-board diagnostics ports, and said that developers and third parties should therefore take appropriate steps to design and manufacture secure products.

  • CTIA praised the safety benefits that connected vehicle technologies could provide, highlighting how 5G network speed, capacity, and location can improve autonomous vehicle safety and efficiency. The wireless group spoke to both its sector’s experience in addressing data privacy and security across the Internet of Things, and urged the agencies to refrain from imposing vehicle-specific privacy or security regulations which “could be redundant to or conflict with existing privacy and data security protections enforced by the FTC and the Department of Homeland Security.”  CTIA instead said the agencies should promote and expand industry-led initiatives like the NIST Cybersecurity Framework and self-regulatory principles like the auto industry privacy principles.

  • In contrast, EPIC said that “meaningful oversight and enforcement mechanisms” would be necessary to protect consumer privacy. In its discussion of federal policies, the organization stated that enforcement would “require[] a private right of action against companies who misuse and fail to secure personal information.”  The organization also opposed the NPRM’s proposal to create a new Federal Motor Vehicle Safety Standard (“FMVSS”) which would preempt state regulations, arguing that historically, while the federal government has enacted privacy laws, more robust privacy legislation has been implemented at the state level.

  • The Future of Privacy Forum, which runs a Connected Cars Working Group whose members include Fiat Chrysler, Ford, General Motors, Hyundai, Lyft, Toyota, and Uber, urged the agencies to focus on transparency around consumer data use, including the provision of resources that are publicly available, accessible before purchase, and reviewable throughout the life of a vehicle as well as the incorporation of consumer privacy controls when appropriate. The group urged the agencies to encourage industry self-regulatory efforts, saying that they can be enforceable when companies publicly commit.