Category: Legislation

What We Know And Don’t About The Federal Court Order Enjoining EO 14042

In news that will be of interest to every federal contractor, including large and small businesses, universities, banks, and the health care industry, Executive Order 14042 (along with the related Task Force Guidance and contract clauses) has been ENJOINED in the states of Kentucky, Ohio, and Tennessee. U.S. District Court Judge Gregory F. Van Tatenhove of the Eastern District of Kentucky issued an order on November 30, 2021 granting Plaintiffs’ (a group including the states of Tennessee, Kentucky, and Ohio) motion for a preliminary injunction.

The decision most certainly will be appealed. In the meantime, contractors with employees performing in Kentucky, Ohio, or Tennessee are not required to comply with the Executive Order or FAR/DFARS clauses. Obviously, this creates a conundrum for federal contractors and subcontractors looking for a uniform way to implement the EO rules.

Background

Plaintiffs Kentucky, Ohio, and Tennessee filed suit in the U.S. District Court for the Eastern District of Kentucky on November 4, 2021, and four days later filed for a Temporary Restraining Order and Preliminary Injunction (“TRO/PI”). The TRO/PI motion asked the Court to enjoin the Government’s enforcement of EO 14042. Plaintiffs challenged the EO on 10 separate grounds, including that it violated the Federal Property and Administrative Services Act (“FPASA”), the Competition in Contracting Act (“CICA”), the Administrative Procedures Act (“APA”), and the U.S. Constitution. The Court held a conference among the parties on November 9 and a hearing on November 18.

The District Court Decision

Regardless of whether one likes the outcome or not, Judge Van Tatenhove’s decision is thoughtfully reasoned and well written. It is methodical and well cited. In sum, Judge Van Tatenhove enjoined the EO not because of the process by which the Administration implemented the mandate (i.e. not due to the lack of a meaningful notice-and-comment period or the unprecedented dynamic nature of the FAR clause), but rather because he found the Administration never had the authority to implement a vaccine mandate in the first place. In other words, the Court issued the injunction because the President of the United States purportedly lacks the statutory or constitutional authority to regulate public health via a contract clause issued pursuant to a procurement statute.

The decision, however, readily concedes that the Court’s view is the beginning, not the end, of the story. “Once again,” the Judge explained, “the Court is asked to wrestle with important constitutional values implicated in the midst of a pandemic that lingers. These questions will not be finally resolved in the shadows. Instead, the consideration will continue with the benefit of full briefing and appellate review. But right now, the enforcement of the contract provisions in this case must be paused.”

The Practical Impact (and Scope) of Kentucky v. Biden

While the Court’s decision is significant, it does NOT apply to all federal contractors. It enjoins the Government “from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee.” Sadly, Judge Van Tatenhove does not explain this sentence. Does he mean to enjoin all federal contracts performed in those states, all federal contracts held by contractors operating in those states, or maybe even all federal contracts issued by agencies based in those states? It’s unclear. Adding to the confusion is his statement that the injunction “is properly limited to the parties before the Court” (i.e., the states of Kentucky, Tennessee, Ohio). Here again, we are left to guess what he means.

Subsequent to the Court’s decision, GSA took prompt steps to notify its contractors of the late breaking news. Here is GSA’s take on the scope of the injunction:

Update: On November 30, 2021, in response to a lawsuit filed in the United States District Court, Eastern District of Kentucky, a preliminary injunction was issued halting the Federal Government from enforcing the vaccine mandate for Federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee.

GSA implemented the vaccine mandate stemming from Executive Order 14042 through Class Deviation CD-2021-13. Pursuant to the preliminary injunction, GSA will not take any action to enforce FAR clause 52.223-99 Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors in all covered contracts or contract-like instruments being performed, in whole or in part, in Kentucky, Ohio and Tennessee.

While GSA’s formulation is a bit more useful than the Court’s in that it focuses on contracts “being performed . . . in” the three states, it still does not answer the key question regarding scope.

We think the most common sense interpretation of the scope of the injunction is that it applies to covered employees performing work in Kentucky, Tennessee, and Ohio. That being said, GSA’s interpretation seems to indicate the analysis should be performed at the contract level, rather than the employee level (i.e., if you have even one employee performing on a contract in one of those three states, then the entire contract is exempt from enforcement).

We hope to receive updated Guidance from the Task Force providing a definitive answer to this question in the near future. Until then, Federal contractors and subcontractors are stuck between the proverbial rock and a hard place – having to decide whether to continue marching ahead pursuant to the EO or navigate different rules in different states.

In reaching their own interpretive decision, contractors should keep in mind that the Court order does not prohibit compliance with the EO, it simply enjoins the Government from enforcing the EO. Before a contractor decides to continue rolling out its existing compliance approach as planned, however, it would be well advised to consider this: Now that the EO has been enjoined in Kentucky, Ohio, and Tennessee, one can make a credible (and likely correct) argument the EO requirements are no longer mandatory in those states (both vaccination and making/distancing). This transition from a mandatory to a voluntary rule creates at least two new hurdles for contractors.

  • First, continuing to comply with the FAR/DFARS clauses could create state liability where a state has a law against a vaccine mandate. For example, on November 12, 2021 Tennessee passed TN HB 9077/SB 9014, which prohibits private businesses, governmental entities, schools, and local education agencies from compelling an individual, or from taking adverse action against the individual to compel them, to provide proof of vaccination. Previously, the Executive Order, as a federal law, would have trumped the conflicting state law. Now, however, the unenforceable EO no longer reigns supreme. Accordingly, continuing to impose the EO on a Tennessee workforce creates state risk.
  • Second, continuing to comply with the FAR/DFARS clauses in Tennessee, Kentucky, or Ohio could create problems with a company’s collective bargaining obligations. When the vaccine requirement was a legal obligation, it probably was not required to be collectively bargained. Now that the requirement is no longer a legal obligation (at least in the three states covered by the Court order), imposing a vaccine mandate on union employees may have to be collectively bargained.

Accordingly, while marching ahead with an existing EO 14042 company-wide compliance plan may make great sense from an efficiency and consistency standpoint, it could create unintended risks in at least three states (and certainly in Tennessee).

What Should Contractors Do Now?

The EO 14042 COVID safety contracting landscape (like COVID itself) is changing every day. We are hopeful the Task Force will issue new Guidance soon to help contractors navigate the new hurdles created by the Kentucky decision. Until then, here are a few thoughts for consideration:

  • If you have no employees performing in Kentucky, Ohio, or Tennessee, the Order has no impact on you. The EO still applies to your contracts in other states just as it did prior to the Court’s decision.
  • If you have employees performing in Tennessee, take a close look at TN HB 9077/SB 9014 before making any decision regarding implementation of the EO.
  • If you have employees performing in Kentucky or Ohio and do not have collective bargaining agreements, you may want to continue enforcing the EO to avoid having different rules in different locations. But if you have collective bargaining agreements, make sure you connect with your L&E lawyer before charting a path forward.
  • Consider putting together a communication to your employees who no doubt soon will read a headline and have questions about the Order.
  • For contractors with employees performing in Kentucky, Tennessee, or Ohio, update your current compliance plan.
  • In the absence of further Task Force Guidance, consider staying in close communication with your contracting officer regarding your implementation approach, especially in the three states implicated by the Order.

Additionally, stay on the lookout for additional updates (including from us) on the other pending litigation challenging the EO.

What’s Next?

Speaking of the “other pending litigation,” the docket still is full of challenges to the EO. By our count, there are motions for preliminary injunction pending in cases with 24 additional states as plaintiffs:

 

 

 

 

 

 

 

The judges in these cases are not bound by the Kentucky decision – either on the merits or the scope of any resulting injunction. Meaning, should a judge in one of the remaining cases also strike the EO as contrary to law or the Constitution, that judge could choose to issue a nationwide injunction covering all contractors in all states (or, as the Kentucky judge chose, limit the application to the specific state(s) involved). Only time will tell. As of the publication of this Alert, three of those cases have hearings scheduled for December 3, 6, and 7. We expect decisions shortly thereafter.

Importantly, as the Kentucky decision explicitly recognizes, it’s unlikely any of these district courts will be the final arbiter of the legality of EO 14042. We think it’s only a matter of time until we get the rarely seen, yet always celebrated Supreme Court government contracts decision. Stay tuned.

For Those Wanting A Bit More Detail . . .

For those interested in the details of the Kentucky decision, here is a brief summary:

After analyzing and concluding that the plaintiffs had standing to pursue this matter on behalf of their agencies and businesses operating in their states (a contrary outcome to the U.S. District Court’s recent decision in Mississippi), Judge Van Tatenhove jumped right in to analyzing the myriad arguments raised by Plaintiff. Briefly, here is what he found:

  • FPASA. Plaintiffs argued that the President exceeded his authority under FPASA in issuing the EO. The Court agreed, reasoning that FPASA was intended to give the President procurement powers, not unlimited powers. “FPASA does not provide authority to ‘write a blank check for the President to fill in at his will. . . .” The Court found an insufficiently close nexus between the EO and the need for economy and efficiency in the procurement of goods and services, reasoning that similar logic could authorize a president to outlaw overweight contractor employees since the CDC has concluded that obesity worsens the outcomes of COVID-19. While recognizing the breadth of FPASA and how it historically has been used to promote far-reaching social labor policies (e.g., EO 11246), for this judge at least, the COVID-19 mandate was just a bridge too far.
  • CICA. CICA requires agencies to provide “full and open competition through the use of competitive procedures” in federal procurements. The Court found that the EO violates CICA. According to Judge Van Tatenhove, “contractors who ‘represent the best value to the government’ but choose not to follow the vaccine mandate would be precluded from effectively competing for government contracts.” It seems to us this reasoning does not hold up under close scrutiny. Couldn’t one say the same thing about contractors precluded from contracts where they “choose not to follow” the Trade Agreements Act, Section 889, Executive Order 11246, or any other number of gating procurement rules? In any event, the Court found the argument compelling at least “at this early stage in the litigation.”
  • Non-Delegation Doctrine. The non-delegation doctrine precludes Congress from transferring its legislative power to another branch. Plaintiffs argued that “mandating vaccination for millions of federal contractors and subcontractors is a decision that should be left to Congress (or, more appropriately, the States) and is a public health regulation as opposed to a measure aimed at providing an economical and efficient procurement system.” In evaluating Plaintiffs’ argument, the Court looked to the OSHA rule recently struck down by the Fifth Circuit. “It would be reasonable to assume that a vaccine mandate would be more appropriate in the context of an emergency standard promulgated by OSHA,” Judge Van Tatenhove noted, and then went on to note that even the OSHA ETS was struck down as a violation of the non-delegation doctrine. If the ETS couldn’t withstand a non-delegation challenge, “the Court has serious concerns about the FPASA, which is a procurement statute, being used to promulgate a vaccine mandate for all federal contractors and subcontractors.” The Court acknowledged “that only twice in American history, both in 1935, has the Supreme Court found Congressional delegation excessive.” Nonetheless, Judge Van Tatenhove seems to believe he has found the third. He mused, however, that “it may be useful for appellate courts to further develop the contours of the non-delegation doctrine, particularly in light of the pandemic.”
  • Tenth Amendment. As we all will remember from high school civics (if not from law school), the Tenth Amendment states that “powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The Court expressed a “serious concern that Defendants have stepped into an area traditionally reserved to the States,” and held the Tenth Amendment provides an additional reason to enjoin the EO.

In short, Judge Van Tatenhove clearly believes the Plaintiffs, in this case, are likely to prevail on multiple statutory and constitutional bases.

The decision then goes on to discuss whether the President (through his delegated officials) failed to follow applicable administrative procedures in issuing the EO and the subsequent FAR clause. Here, the President fared better than he did with Plaintiffs’ constitutional arguments. The Court concluded that the Administration, while perhaps “inartful and a bit clumsy” at times, “likely followed the procedures required by statute.” The Court also concluded that the Administration did not act arbitrarily or capriciously (as defined by the APA). “The Court finds, based on the limited record at this stage in the litigation, that Defendants have followed the appropriate procedural requirements in promulgating the vaccine mandate.” But this all is little solace to the Administration as it would have been much easier to overcome a procedural error than a constitutional one — let alone the “serious Constitutional concerns” identified by Judge Van Tatenhove.

*Sheppard Mullin partners Jonathan Aronie, Ryan Roberts, Anne Perry, and associates Nikki Snyder, Emily Theriault, and Dany Alvarado participated in drafting this Alert.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.

Article by the Government Contracts Practice Group with Sheppard, Mullin, Richter & Hampton LLP.

For more about federal court orders and federal contractors visit the NLR Government Contracts Maritime & Military Law type of law page.

Ontario’s Employment Laws: Several Significant Changes Coming Under Bill 27, the Working for Workers Act, 2021

On November 30, 2021, the Government of Ontario passed Bill 27, the Working for Workers Act, 2021. Bill 27 amends a number of statutes, including the Employment Standards Act and the Occupational Health and Safety Act.

According to the government, this legislation achieves a number of goals, including improving employees’ work-life balance, prohibiting noncompete agreements to increase competition in business and labour markets, facilitating the registration of internationally trained professionals, and implementing a licensing regime for temporary help agencies and recruiters.

Amendments to the Employment Standards Act, 2000

Right to Disconnect from Work

The Working for Workers Act, 2021requires that employers with 25 or more employees at the beginning of the year implement a written “disconnect from work” policy regarding disconnecting from work during nonworking hours. Under the act, the term “disconnecting from work” is defined as “engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages, so as to be free from the performance of work.” Once an employer prepares or amends a policy, employers will have 30 days to share copies of this policy with employees. Employers must also provide new employees this policy within 30 days of being hired.

Once the act receives Royal Assent, employers will have six months from that date to develop their written policies. Following this initial year, employers will have to prepare their policies by no later than March 1 of each year.

The regulations that will be promulgated to establish the content of the policy have not yet been published. As such, it is not yet known what specific steps employers must take to prohibit after-hours work and whether they will be restricted in terms of which employees may or may not be permitted or required to perform after-hours work, in addition to other unsettled issues.

Prohibition of Noncompete Agreements

The act prohibits employers from including noncompete clauses in any agreement they form with an employee. If this provision is violated, the noncompete agreement will be void.

There are two exceptions to this rule.

  1. Employees in an executive role are excepted from this provision. An “executive” is an employee who holds the office of a chief executive position, including that of president, chief executive officer, and chief administrative officer.
  2. There is also an exception when there has been “a sale of a business or part of a business” (which includes a lease). If the purchaser and seller enter into a noncompete agreement, and the seller becomes an employee of the purchaser immediately after the sale, this prohibition will not apply.

Once Royal Assent is received, the noncompete prohibition is deemed to come into force on October 25, 2021.

With the passing the act, Ontario has become the first province to require “disconnect from work” policies and to prohibit noncompete agreements outright.

Licensing Requirements for Temporary Help Agencies

The act specifies that temporary help agencies and recruiters must now apply for a license. Anyone wishing to engage with a temporary help agency or recruiter must ensure that they are licensed, as knowingly doing business with an unlicensed agency or recruiter is prohibited under the act.

Temporary help agencies or recruiters may be refused a license and may have their licenses revoked or suspended for a number of reasons, including:

  • using recruiters that charge fees to foreign nationals;
  • providing “false or misleading information in an application”; and
  • situation in which the director of Employment Standards has reasonable grounds to believe that “the applicant will not carry on business with honesty and integrity and in accordance with the law.”

If applicants dispute the refusal, revocation, or suspension of their licenses, they can seek a review at the Ontario Labour Relations Board.

These amendments will come into force on a day to be proclaimed by the lieutenant governor.

Amendments to the Employment Protection for Foreign Nationals Act, 2009

Prohibition on the Collection of Recruitment Fees

To protect foreign nationals from predatory recruitment practices, the act prohibits employers and recruiters from knowingly using the services of recruiters that charge foreign nationals for their services.

A recruiter that charges a fee, and an employer or recruiter that violates this prohibition will be liable for repaying the fees charged to the foreign national.

These amendments will come into force on the day the Working for Workers Act, 2021 receives Royal Assent.

Amendments to the Fair Access to Regulated Professions And Compulsory Trades Act, 2006

Facilitating the Registration of Internationally Trained Professionals

To facilitate the registration of internationally trained professionals, the act specifies that Canadian experience will not be a qualification for registration in a regulated profession. Regulated professions may apply to be exempted from this rule “for the purposes of public health and safety in accordance with the regulations.” Regulated professions will also be required to develop accelerated registration processes to aid with emergency preparedness.

The fairness commissioner will also evaluate language proficiency requirements to ensure that any French or English testing does not contravene the regulations.

These amendments will come into force on the day the act receives Royal Assent.

Amendments to the Occupational Health and Safety Act

Mandating Washroom Access for Delivery Persons

Under the act, a new requirement is created that if a person requests washroom access in the course of delivering or picking up a package from a business. Business covered by the act must allow use of their washrooms.

Businesses will be exempt from this requirement if:

  • Sharing the washroom is unreasonable or impractical because of health and safety reasons;
  • The context makes sharing the washroom unreasonable or impractical; or
  • The delivery person would have to enter a dwelling to use the washroom.

These amendments will come into force on a day to be proclaimed by the lieutenant governor.

Amendments to the Workplace Safety and Insurance Act, 1997

Distribution of Surplus Insurance Fund

The act includes a provision that specifies that if there is a surplus in the Workplace Safety and Insurance Board’s insurance fund, this surplus may be distributed among eligible employers. The insurance board will have discretion to determine the timing and the amounts to be granted to eligible employers, based on factors such as adherence to the Workplace Safety and Insurance Act. Based on these factors, the insurance board will also be empowered to exclude any eligible employers from the distribution of surplus funds. Employers will not be able to appeal the funding decisions made by the insurance board in this respect.

These amendments will come into force on a day to be proclaimed by the lieutenant governor.

Amendments to the Ministry of Agriculture, Food and Rural Affairs Act

Increasing Information Gathering in Relation to “agriculture, food or rural affairs”

Under the act, the minister of Agriculture, Food and Rural Affairs is granted the authority to “collect information, including personal information, directly or indirectly” related to “agriculture, food or rural affairs” for the purposes of emergency response and public health. Personal information will not be collected, used, or disclosed in cases where other sources of information are available to fulfil the same purpose.

These amendments will come into force on the day the act receives Royal Assent.

Next Steps

Bill 27 passed its third reading on November 30, 2021. At the time of publication of this article, the legislation has not received Royal Assent, but it likely will shortly. Once Royal Assent is received, some amendments come into force immediately, while others follow different timelines. Employers may want to begin reviewing the new legislation, noting any important dates and features relevant to their organizations. In addition, employers may want to review their policies, practices, and contracts to ensure compliance.

Article By Michael Comartin and Gloria Ilunga of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For more labor and employment legal news, click here to visit the National Law Review.
© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Colorado Privacy Act: New Protections for Consumers in the Centennial State

On July 1, 2023, the Colorado Privacy Act (CPA) will go into effect as the third state law generally governing consumer data privacy and was the second enacted in 2021.  If you do business with consumers in Colorado, regardless of your location, you should begin familiarizing yourself with the requirements of the CPA now.  While the CPA is similar to the California Privacy Rights Act (CRPA) and Virginia’s Consumer Data Privacy Act (VCDPA), certain elements distinguish the Colorado law from its counterparts.  Unlike the California law, the CPA does not apply to personal data in the employee or business-to-business relationship.  This client alert provides a breakdown of the general requirements and obligations on businesses and key distinctions with other state data privacy laws.

Covered Businesses and Applicability

Covered Controllers. The CPA applies to any business, called a “controller” under the statute, who “alone, or jointly with others, determines the purposes for and means of processing personal data,” and “conducts business in Colorado or produces or delivers commercial products or services that are intentionally targeted to residents of Colorado” and:

  • Controls or processes the personal data of 100,000 consumers or more during a calendar year; or
  • Derives revenue or receives a discount on the price of goods or services from the sale of personal data and processes or controls the personal data of 25,000 consumers or more.

There are a number of exemptions to the applicability provision that should be considered as part of the analysis of applicability.  First, the definition of consumers does not include “individual[s] acting in a commercial or employment context, as a job applicant, or as a beneficiary of someone acting in an employment context.” Second, the Act does not apply to certain types of personal data, as defined by the type of data, such as patient data, or as defined by the statute by which the collection and use of the data is regulated such as Gramm-Leach-Bliley.  Third, the Act does not apply to certain types of businesses, such as air carriers, public utilities (as defined by Colorado Law), or those subject to Gramm-Leach-Bliley. Notably, there is no revenue threshold requirement, meaning an applicability analysis begins by looking at the number of records processed.

Covered Individual.  To reiterate, the CPA does not apply to employee data, which, like the VCDPA means a consumer is a Colorado resident acting only in an individual or household context.

Personal Data. The CPA defines personal data as “information that is linked or reasonably linkable to an identified or identifiable individual,” but does not include “de-identified data or publicly available information,” including data “that a controller has a reasonable basis to believe the consumer has lawfully made available to the general public.”  This definition is similar to the VCDPA.

Controller and Processor Obligations

If the CPA is applicable to a controller then they, and their processors (a person that processes personal data on behalf of a controller) must adhere to a set of obligations.  The CPA sets out an analysis for determining whether a person is acting as a controller or a processor.

Obligations and Duties of Controllers

Under the Act, controllers must:

  • Implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk;
  • Comply with the duty of transparency by providing notice of the sale of personal data and the ability to opt out and by providing “a reasonably accessible, clear, and meaningful privacy notice” that includes:
    • Categories of personal data collected/processed;
    • Purpose(s) of processing;
    • How consumers may exercise rights and appeal controller’s response to consumer’s request;
    • Categories of personal data shared; and
    • Categories of third parties personal data is shared with;
  • Respond to the consumer’s exercise of their rights;
  • Comply with the duty of purpose specification;
  • Comply with the duty of data minimization;
  • Comply with the duty to avoid secondary use;
  • Comply with the duty of care that is appropriate to the volume, scope, and nature of the personal data processed.
  • Comply with the duty to avoid unlawful discrimination;
  • Process sensitive data only with the consent of the consumer. Sensitive data is “(a) personal data revealing racial or ethnic origin, religious beliefs, a mental or physical health condition or diagnosis, sex life or sexual orientation, or citizenship or citizenship status; (b) genetic or biometric data that may be processed for the purpose of uniquely identifying an individual; or (c) personal data from a known child;”
  • Perform data protection assessments before beginning processing activities that present a heightened risk of harm to a consumer – certain situations of targeted advertising or profiling, selling personal data, and processing sensitive data are activities that present a heightened risk of harm; and
  • Engage processors only under a written contract, which shall include the type of personal data processed and other requirements under the CPA.

Obligations of Processors

Under the Act, processors must:

  • Assist controllers in meeting their obligations under the CPA;
  • Adhere to instructions of controller and assist controller in meeting those obligations, including security of processing and data breach notification;
  • Ensure a duty of confidentiality for each person processing personal data; and
  • Engage subcontractors pursuant to a written contract and only after providing the controller an opportunity to object.

Rights of Consumers

Like the VCDPA and CPRA, the CPA includes a suite of rights which consumers may request with respect to their personal data:

  • Right of access;
  • Right to correction;
  • Right to delete;
  • Right to data portability;
  • Right to opt out, including specifically  of targeted advertising or the sale of personal data; and
  • Right to appeal, including the right to contact the attorney general if the appeal is denied.

Within forty-five days of receipt of a request, a controller must respond by (a) taking action on the request, (b) extending the time for taking action up to an additional forty-five days, or (c) by not taking action and providing the instructions for an appeal.  Information provided under a first request within a 12 month period must be at no charge to the consumer.  Controller’s may implement processes to authenticate the identity of consumers requesting rights.

Enforcement of the CPA

There is no private right of action under the CPA with enforcement authority delegated to both the Colorado attorney general and district attorneys.  The CPA doubles the cure period granted to controllers provided under the VCDPA and CPRA to 60 days; however, the entitlement to a cure period will sunset on January 1, 2025.  Under the CPA a violation is a deceptive trade practice under the Colorado Consumer Protection Act, such that while the CPA does not specify a penalty amount, the Colorado Consumer Protection Act specifies a penalty of up to $20,000 per violation.

What’s Next

If the CPA is the first data protection legislation applicable to your organization, the time to transition your team– IT, marketing, legal – is now.  Delays in implementation are likely and could be costly.

 

This article was written by Lucy Tyson, Brittney E. Justice and Matthew G. Nielson of Bracewell law firm. For more articles regarding privacy legislation, please click here.

Given Deadlines Set by Sixth Circuit, ETS Likely Stayed Until At Least December 10, 2021

Earlier this month, the Occupational Safety and Health Administration (“OSHA”) issued its “COVID-19 Vaccination and Testing; Emergency Temporary Standard” (the “ETS”) requiring employers of 100 or more employees to implement policies requiring employee vaccination or enhanced safety measures for unvaccinated employees (including wearing face coverings and weekly COVID-19 testing). Our alert on the ETS is here. The ETS was subject to over 30 petitions for review in the federal circuit courts and was quickly stayed by the United States Court of Appeals for the Fifth Circuit.

Although the petitions for review were consolidated before the United States Court of Appeals for the Sixth Circuit, the Fifth Circuit’s stay remains in place. While OSHA has publically stated that it will comply with the stay, its position has been – and continues to be – that employers should prepare to comply with the ETS and that OSHA will succeed in litigation challenging the ETS. Yesterday, OSHA filed an emergency motion to immediately lift the stay.

With the stay in place, covered employers have been in the difficult position of trying to determine how much preparation to do to comply with the ETS’s requirements, many of which are scheduled to be effective on December 6, 2021. The question has been whether the stay will continue beyond the initial deadlines and, if not, whether deadlines will be extended to account for the period during which the ETS was stayed.

The deadlines set out in the Sixth Circuit’s Scheduling Order, which is available here, provide some insight into the timing of the requirements of the ETS.  The Scheduling Order sets the following briefing deadlines:

  • Tuesday, November 30, 2021 – motions to join OSHA’s emergency motion or to modify, revoke, or extend the stay.
  • Tuesday, December 7, 2021 – responses to motions regarding the stay.
  • Friday, December 10, 2021 – replies to responsive motions.

Given these deadlines, it is likely that the ETS will continue to be stayed until at least December 10th (past the December 6, 2021 deadline) while the Sixth Circuit considers briefing.  However, it is possible that, before December 10th, the Sixth Circuit lifts the stay. If the stay is lifted, the ETS requirements could become effective on the date of the court’s order or on a later date set by the Sixth Circuit.

While the briefing schedule does not provide definitive answers to employers on the potential deadlines for ETS compliance, it suggests that the ETS’s December 6, 2021, deadlines may be extended for at least a few days while the Sixth Circuit considers briefing.

© 2021 Bracewell LLP
For more on OSHA COVID-19 updates, visit the NLR Coronavirus News section.

Biden Signs Largest Climate and Resiliency Infrastructure Bill in U.S. History

Today President Biden signed H.R. 3684, the “Infrastructure Investment and Jobs Act” (IIJA), into law after months of negotiations on both the bill itself and the still pending “Build Back Better Act”. These two measures encapsulate the Biden Administration’s legislative priorities, many of which were rolled out during the campaign. The U.S. Senate passed the IIJA on August 10 by a vote of 69-30. Last week, on November 5, the House of Representatives passed the measure by a vote of 228-206. The months long negotiations resulted in bipartisan support for the IIJA in both the House and Senate.

Broadly, the IIJA:

Provides Funding: The funds provided are appropriated dollars, allowing Executive Branch agencies to distribute funds without further legislative action. The funds provided are for both new and existing federal programs for surface transportation, energy infrastructure, transportation safety, transit, broadband, ports and waterways, airports, drinking water and wastewater. ​

Expedites Permitting: There are several new programs created to support transmission development and streamline the permitting of new energy infrastructure, such as electric transmission

Provides New Authorities and Creates New Programs: Various federal agencies are required to develop new programs and processes, all aimed at deploying clean energy or improving cybersecurity​.

The IIJA represents a monumental investment in all types of infrastructure. However, most significantly, it will provide the largest federal investment since the New Deal in the Nation’s infrastructure and in developing the tools to curb carbon emissions and harden infrastructure to increase resiliency against the current global challenge of climate change. The Department of Energy and other federal agencies will receive $65 billion for power and grid related programs, including grid infrastructure, resiliency investments, clean energy demonstration projects and cybersecurity. An additional $7.5 billion will be available for alternative fueling infrastructure for grants to build public fueling systems, including electric and hydrogen fuels, establish alternative fuel corridors, and find ways to recycle used electric vehicle batteries to be reused as energy storage devices.

In July, our team shared the details of the bill passed by the Senate Energy and Natural Resources Committee. As signed into law, this earlier summary still accurately reflects the details of the funding that will be provided.

Implementation and Timing of Funding: Agencies will now be tasked with standing-up new or expanding existing programs to award federal funds to eligible infrastructure projects. Agency offices will work over the coming weeks to establish grant program parameters, develop, and publish solicitations for applications, set timelines for awards and oversee implementation of awarded funds.

The IIJA included deadlines for some agency actions, requiring that programs be established in 60, 90, or 180 days. Note that many of the agency offices, particularly within the Department of Energy, remain functioning without political appointees. For instance, the Office of Electricity, which will be responsible for issuing $3 billion in grants through the Smart Grid Investment Matching Grant Program, is operating under an Acting Assistant Secretary until the Senate confirms the Biden Administration’s nominee for that post. There are no legal or political impediments to getting funding programs up and running without a political appointee heading any federal office, but political influence on the pace and timing for the process may be limited.

Certain programs will automatically send funds to states through existing formula funding programs. Formula grant programs are non-competitive awards based on a predetermined formula. These programs are sometimes referred to as state-administered programs and are found throughout the federal government. Examples include the Environmental Protection Agency’s Clean and Drinking Water State Revolving Loan program, and the Department of Transportation’s Formula Funds for Rural Areas, and Buses and Bus Facilities formula grants programs. Once the states have received their federal allocations they will then make those funds available through their existing award structure, which may be competitive or formula-based.

How Your Organization Can Apply for Federal Funding Opportunities: As agencies establish parameters for new programs or develop solicitations for existing programs, it is important to engage with the agencies in this process to ensure your project will meet agency program criteria for a funding award, and to ensure solicitations are designed to support your infrastructure projects. Our professionals have had significant success in assisting clients through these processes, and successfully assisted clients in the development of grant applications for awards under both Democratic and Republican Administrations. Contact any of our professionals to learn more about what grant programs your organization may be eligible for, how to engage with the agencies, as well as apply and partner with the federal government to ensure funding is awarded for your project.

What’s Next, Human Infrastructure: The IIJA represents only the provisions in the Biden agenda that were able to earn bipartisan support. The remainder of the President’s priorities are encapsulated in a Budget Reconciliation bill, H.R. 5376, the “Build Back Better Act”, (BBBA) developed by House and Senate Democrats and requiring only a 50-vote threshold in the Senate.

For months, the Build Back Better Act and IIJA and were linked in the legislative process by President Biden and House Speaker Nancy Pelosi (D-CA) who demanded that one not pass without the other. This approach resulted in a rift between the Democratic Party’s moderate and progressive members. While the final outcome for the IIJA resulted in bipartisan votes in both the House and Senate, passage only came after a deal was struck between moderates and progressives within the Democratic Caucus to decouple the IIJA and the “Build Back Better Act”.

House Speaker Nancy Pelosi has publicly said that the “Build Back Better Act” will be brought to the House Floor during the week of November 15. Senate Leadership has made no such promise for timely action. In addition, some House Democrats and some Senators have announced they want to see the details of budget scoring – what individual provisions will cost – from the Congressional Budget Office (CBO) and the Joint Tax Committee – before proceeding. Some limited data has begun to be released by the CBO but not any numbers covering many of the most complex and controversial programs. The schedule may be accelerated if Democrats and Republicans cannot come to an agreement to increase the debt ceiling, a must-pass measure that may need to be included in the Budget Reconciliation process. As negotiations continue, the content of the legislation passed by the House is expected to be altered significantly during Senate consideration. Should that be the case, the House will vote a second time on the measure as amended by the Senate.

Article By: Tracy Nagelbush Tolk and Tiffany Ganthier from Van Ness Feldman LLP

© 2021 Van Ness Feldman LLP

More Circuits Added to the OSHA ETS Lottery

Lawsuits challenging the COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) were filed in three additional U.S. Circuit Courts of Appeals on Wednesday, November 10, 2021. Labor unions filed lawsuits in the U.S. Circuit Court of Appeals for the Second, Fourth, and Ninth Circuits. As a result, there are now ETS-related lawsuits pending in the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Eleventh, and D.C. Circuit Courts.

According to federal rules, the legal challenges to the OSHA ETS will be consolidated and heard by a single U.S. Circuit Court of Appeals. The Judicial Panel on Multidistrict Litigation will conduct a lottery, expected on November 16, to select which U.S. Circuit Court of Appeals will hear the consolidated litigation. The court to hear the litigation will be drawn “from a drum containing an entry for each circuit wherein a constituent petition for review is pending.” Each court only gets one entry, despite the number of petitions pending before each court. Until the Judicial Panel selects the U.S. Circuit Court of Appeals to hear the litigation via the lottery, all the U.S. Circuit Courts of Appeals can proceed with rulings, as the Fifth Circuit did this past weekend.

The labor unions’ move may be a move reflective of an intent by some to increase the odds that the OSHA ETS is upheld. The First, Second, and Fourth circuits all have a majority of Democratic-appointed judges. But it is difficult to predict the future of the OSHA ETS as the panel of judges to hear the case is also selected randomly.

© Polsinelli PC, Polsinelli LLP in California
For more updates on COVID-19, visit the NLR Coronavirus News section.

Don’t Use “Build Back Better” to Sabotage the False Claims Act

Congress is on the verge of setting a dangerous precedent.  As part of the Build Back Better Act, it has added two provisions equivalent to a “get out of jail free card” for Big Banks that violate federal law when they hand out billions in federal mortgage-related benefits.   The two provisions create exemptions to False Claims Act liability by creating blanket immunity from liability when banks fail to exercise due diligence, violate FHA housing regulations, or even directly violate federal laws such as the Truth in Lending Act.

It is obvious why banks want to have their federally sponsored mortgage practices immunized from exposure to the False Claims Act (“FCA”).  The FCA works remarkably well and is widely recognized as “the most powerful tool the American people have to protect the government from fraud.”   The law has directly recovered over $64.450 billion in sanctions from fraudsters since Congress modernized it in 1986.  During the debates on the massive trillion-dollar infrastructure laws enacted or debated this year, corporate lobbyists have been extremely active in successfully preventing Congress from adding any new anti-fraud measures to protect taxpayers from fraud.  As part of these efforts, they targeted the False Claims Act as enemy #1 and already have blocked one key amendment needed to close some weaknesses in that law.

With the Build Back Better Act, these corporate lobbyists have taken their opposition to effective anti-fraud laws to a higher level.  Instead of trying to repeal the FCA, they are simply exempting Big Banks from liability under that law in two new programs.  It is obvious why the Big Banks want the exemption from FCA liability.  As a result of illegal or irresponsible lending and foreclosure practices, such as those that fueled the 2008 financial collapse, banks have had to pay billions in sanctions to the United States.

Two words explain why the FCA is “the most powerful tool” protecting taxpayers from fraud:  Whistleblowers and sanctions.  If you accept federal taxpayer monies, you are required to spend that money according to your contractual agreement or the law.  The FCA’s first secret weapon is whistleblowers.  The law encourages whistleblowers, known as qui tam “relators,” to report violations of the FCA.  Whistleblowers disclosures trigger the overwhelming majority of FCA cases, and the law incentivizes employees to risk their careers to serve the public interest. The second secret weapon is how you prove liability.  Second, when an institution accepts federal monies (such as banks that operate various federally sponsored loan programs), liability can attach if the institution acts in “deliberate ignorance of the truth” when spending federal dollars.  Similarly, if payments are made with “reckless disregard of the truth,” liability can attach.  In other words, corporations (including banks) that accept federal money must ensure that these monies are spent as required by law, regulation, or contract.  Safeguards must be in place to prevent fraud.  If a bank does not have adequate compliance programs to protect against fraud, it cannot plead ignorance when the law is broken and taxpayers are ripped off.

These two key elements of the False Claims Act are precisely what the banking lobby is attempting to undermine through the Build Back Better Act.  The tactics employed by the Big Banks are somewhat devious.  They are doing an end-run around the False Claims Act by exempting themselves from having to engage in any due diligence when spending billions in federal dollars.  The banks are seeking to add language to the Build Back Better Act that will immunize themselves from liability under the False Claims Act when they make payments in “reckless disregard” to the legality of those payments.  The immunities they are seeking legalize “deliberate ignorance” in the use of taxpayer money, in complete defiance of the False Claims Act. Thus, whistleblowers who report these frauds will be stripped of protections they have under the False Claims Act, and the federal government will have no effective way to recover damages from these frauds.

What language in the Build Back Better Act creates an exemption to False Claims Act liability?

Two highly technical provisions are deeply buried within the 2135 pages of the Build Back Better Act’s legislative text. The provisions are sections 40201 and 40202 of the Build Back Better Act.  These two sections establish helpful programs that will provide needed financial support to first-generation homebuyers.  Section 40201(d)(5) would provide $10 billion in down payment assistance. Section 40202(f) would give an interest rate reduction on new FHA 20-year mortgage products to first-time homeowners with a potential value of $60 billion.  But the banking lobby has corrupted these otherwise well-meaning programs. The exemptions obtained by the banks are incubators for massive fraud.  It permits the Big Banks to escape any liability when they abuse the generosity of taxpayers and dole out billions to unqualified individuals.

How do the exemptions work?  To qualify for these taxpayer-financed benefits, an applicant simply has to “attest” that they are first-time/first-generation homebuyers.  That would be the end of the inquiry a bank would need to approve making a payment from the billions allocated in these two programs. Anyone could simply stroll into a bank and “attest” to being such a first-time homebuyer and would thereafter qualify for the federal benefits.  The banks would not be required to do any diligence of their own to confirm the borrower’s eligibility.  Willful ignorance would be legalized.  Reckless disregard in the handling of taxpayer monies would be permitted under this law.  Safeguards, such as requiring banks to adhere to the Truth in Lending Act, which requires verification of a borrower’s statements, would not apply.

Under Sections 40201(d)(5) and 40202(f), banks will not be held liable once they are lied to, even if the bank has reason to know that the borrower is not eligible for the federal payout.  Banks can spend taxpayer money even if the information on an applicant’s loan application directly contradicts the borrower’s attestation that they are a first-time homeowner.  Given the lack of any compliance standards, the temptation to engage in fraud in these programs will be overwhelming.

Permitting banks to escape liability under the False Claims Act opens the door to paying billions of dollars in benefits to unqualified persons.  Such payments rip off the taxpayers and severely hurt all honest first-generation homebuyers denied benefits.  For every fraudster who benefits from this program, an honest homebuyer will be left in the cold due to the reckless disregard of the banks.

Congress should never use a back-door procedure to undermine the False Claim Act, as it sets a dangerous precedent.  It is a devious way to undermine America’s “most effective” anti-fraud law.  Instead of undermining the False Claims Act by granting immunities to Big Banks, Congress should be strengthening anti-fraud laws to protect the taxpayers and ensure that the trillions of dollars spent on COVID-19 relief programs and infrastructure improvement are lawfully spent in the public interest.

Copyright Kohn, Kohn & Colapinto, LLP 2021. All Rights Reserved.
For more articles about banking and finance, visit the NLR Financial, Securities & Banking section.

H.R. 3684: Infrastructure Investment and Jobs Act

On November 5, the U.S. House of Representatives approved a $1.2 trillion infrastructure spending bill that will make historic investments in core infrastructure priorities including roads and bridges, rail, transit, ports, airports, the electric grid, and broadband.

The legislation, titled the Infrastructure Investment and Jobs Act (“IIJA”), will have major implications for states and municipalities of all sizes, as well as the entities involved in responding to governments’ needs for hard and cyber infrastructure.

Improvements to roadways, ports and mass transit are the focus of the legislation and the majority of the funding is targeted at these traditional hard infrastructure projects. U.S. Senator Rob Portman (R-OH) has championed the massive infrastructure bill and pushed for its passage.

This weekend, Senator Portman noted the massive impact the IIJA will have on Ohio, highlighting the bill’s bridge investment program which will award competitive grants to certain governmental entities to improve the condition of bridges. “This additional federal funding means we are one step closer to a solution for the Brent Spence Bridge,” Portman said.

The Brent Spence Bridge, which connects Cincinnati, Ohio with Covington, Kentucky has one of the busiest trucking routes in the nation. Questions about its safety and long shutdowns for repair have long concerned area residents as well as the business owners responsible for the more than $400 billion of freight which passes over the bridge every year.

While hard infrastructure priorities like bridge maintenance, port modernization, freight rail, and highway improvements account for a majority of the new spending appropriated by the bill (which totals $550 billion over five years), a sizable portion is dedicated to the expansion of broadband networks and the improvement of cybersecurity.

The new cybersecurity grant program and record-setting investments in broadband development could be game changing for state and local leaders wishing to modernize and protect their communities in these ways.

The U.S. Senate approved the IIJA in August 2020. Friday’s vote means the infrastructure bill will now move to the desk of President Joe Biden, who has indicated a bill signing ceremony will happen soon. Answers to questions about the billions of dollars in new infrastructure grants and programming are below.

Question: How will the money be distributed? 

Answer: The IIJA contains formulaic allocations of funds as well as earmarks and competitive grants. Some categories and sub-categories contain both non-competitive and competitive grants.

  • NON-COMPETITIVE FUNDING ALLOCATION PROCESSES
    • Formulas dictated by the bill are based on criteria like state population, or, potentially for specific items, users (ex: transit funds potentially determined by ridership)
    • Once the money is directed to the states, the local bureaucrats are able to make the important decisions about which projects deserve the funding.
    • States can also decide to allocate some of the funding to the county or city governments within their state
  • EARMARKS AND COMPETITIVE GRANT PROCESSES
    • Earmarks override state plans for how infrastructure funds should be spent. “Earmarks come out of the money that the state was going to get anyway.”
    • Localities must compete for Competitive Grants via an application process. The U.S. Department of Transportation’s Discretionary Grant Process is officially outlined on their website.
    • Generally, the award of competitive grants can be influenced by advocates who confer with decisionmakers in the Executive Branch about the merits of certain proposals.

Question: Which projects will qualify for funding?

Answer: The bill details specific funding streams for the specific projects included in its provisions. Categories of projects included in the $550 billion in new spending are below.

  • Roads, Bridges, & Major Projects: $110B — Funds new, dedicated grant program to replace and repair bridges and increases funding for the major project competitive grant programs. Preserves the 90/10 split of federal highway aid to states.
  • Passenger and Freight Rail: $66B — Provides targeted funding for the Amtrak National Network for new service and dedicated funding to address repair backlogs. Increases funding for freight rail and safety.
  • Safety and Research: $11B — Addresses highway, pedestrian, pipeline, and other safety areas (highway safety accounts for the bulk of this funding).
  • Public Transit: $39.2B — Funds nation’s transit system repair backlog, which includes buses, rail cars, transit stations, track, signals, and power systems. This allocation also includes money to create new bus routes and increase accessibility to public transit for those with physical mobility challenges.
  • Broadband: $65B — Funds grants to states for broadband deployment and other efforts to address access issues in rural areas and low-income communities. Expands eligible private activity bond projects to include broadband infrastructure.
  • Airports: $25B — Increases Airport Improvement grant amounts for runways, gates, & taxiways and authorizes a new Airport Terminal Improvement program.
  • Ports and Waterways: $17.4B — Provides funding for waterway and coastal infrastructure, inland waterway improvements, port infrastructure, and land ports of entry through the Army Corps, DOT, Coast Guard, the GSA, and DHS.
  • Water Infrastructure: $54B — Provides a $15 billion for lead service line replacement and $10 billion to address PFAS in water, in addition to other items.
  • Power and Grid: $65B — Funds grid reliability and resiliency projects and support for a Grid Development Authority; critical minerals and supply chains for clean energy technology; key technologies like carbon capture, hydrogen, direct air capture, and energy efficiency; and energy demonstration projects from the bipartisan Energy Act of 2020.
  • Resiliency: $46B — Funds cybersecurity projects to address critical infrastructure needs, flood mitigation, wildfire, drought, coastal resiliency, waste management, ecosystem restoration, and weatherization.
  • Low-Carbon and Zero-Emission School Buses & Ferries: $7.5B — Funds and authorizes the adoption of low-carbon and zero-emission school buses, including through hydrogen, propane, LNG, compressed natural gas, biofuel, and electric technologies. Provides support for a pilot program for low emission ferries and rural ferry systems.
  • Electric Vehicle Charging: $7.5B — Funds alternative fuel corridors and a national build out of electric vehicle charging infrastructure. The federal funding will have a particular focus on rural and/or disadvantaged communities.
  • Reconnecting Communities: $1B — Provides dedicated funding for planning, design, demolition, and reconstruction of street grids, parks, or other infrastructure (funding is especially targeted at infrastructure which is deteriorating due to age).
  • Addressing Legacy Pollution: $21B — Funds to clean up brownfield and superfund sites, reclaim abandoned mine lands, and plug orphan oil and gas wells, improving public health and creating good-paying jobs.

Article By Katherine M. Caprez of Roetzel & Andress LPA

For more legislative and legal news, read more from the National Law Review.

©2021 Roetzel & Andress

Agencies and Regulators Focus on AML Compliance for Cryptocurrency Industry

This year, regulators, supported by a slate of new legislation, have focused more of their efforts on AML violations and compliance deficiencies than ever before. As we have written about in the “AML Enforcement Continues to Trend in 2021” advisory, money laundering provisions in the National Defense Authorization Act for fiscal year 2021 (the NDAA) expanded the number of businesses required to report suspicious transactions, provided new tools to law enforcement to subpoena foreign banks, expanded the AML whistleblower program, and increased fines and penalties for companies who violate anti-money laundering provisions. The NDAA, consistent with Treasury regulations, also categorized cryptocurrencies as the same as fiat currencies for purposes of AML compliance.

In addition, as discussed in the “Businesses Must Prepare for Expansive AML Reporting of Beneficial Ownership Interests” advisory, the NDAA imposed new obligations on corporations, limited liability companies, and similar entities to report beneficial ownership information. Although the extent of that reporting has not yet been defined, the notice of proposed rulemaking issued by FinCEN raises serious concerns that the Treasury Department may require businesses to report beneficial ownership information for corporate affiliates, parents and subsidiaries; as well as to detail the entity’s relationship to the beneficial owner. Shortly after passage of the NDAA, Treasury Secretary Janet Yellen stressed that the Act “couldn’t have come at a better time,” and pledged to prioritize its implementation.

Money laundering in the cryptocurrency space has attracted increased attention from regulators and the IRS may soon have an additional tool at its disposal if H.R. 3684 (the bipartisan infrastructure bill) is signed into law. That bill includes AML provisions that would require stringent reporting of cryptocurrency transactions by brokers. If enacted, the IRS will be able to use these reports to identify large transfers of cryptocurrency assets, conduct money laundering investigations, and secure additional taxable income. Who qualifies as a “broker,” however, is still up for debate but some fear the term may be interpreted to encompass cryptocurrency miners, wallet providers and other software developers. According to some cryptocurrency experts, such an expansive reporting regime would prove unworkable for the industry. In response, an anonymous source from the Treasury Department told Bloomberg News that Treasury was already working on guidance to limit the scope of the term.

In addition to these legislative developments, regulators are already staking their claims over jurisdiction to conduct AML investigations in the cryptocurrency area. This month, SEC Chair Gary Gensler, in arguing that the SEC had broad authority over cryptocurrency, claimed that cryptocurrency was being used to “skirt our laws,” and likened the cryptocurrency space to “the Wild West . . . rife with fraud, scams, and abuse” — a sweeping allegation that received much backlash from not only cryptocurrency groups, but other regulators as well. CFTC Commissioner Brian Quintez, for example, tweeted in response: “Just so we’re all clear here, the SEC has no authority over pure commodities . . . [including] crypto assets.” Despite this disagreement, both regulatory agencies have collected millions of dollars in penalties from companies alleged to have violated AML laws or BSA reporting requirements. Just last week, a cryptocurrency exchange reached a $100 million settlement with FinCEN and the CFTC, stemming from allegations that the exchange did not conduct adequate due diligence and failed to report suspicious transactions.

With so many governmental entities focused on combatting money laundering, companies in the cryptocurrency space must stay abreast of these fast-moving developments. The combination of increased reporting obligations, additional law enforcement tools, and heightened penalties make it essential for cryptocurrency firms to institute strong compliance programs, update their AML manuals and policies, conduct regular self-assessments, and adequately train their employees. Companies should also expect additional regulations to be issued and new legislation to be enacted in the coming year. Stay tuned.

©2021 Katten Muchin Rosenman LLP

New Jersey’s Safe Passing Law Aims to Protect Cyclists and Pedestrians on the Road

The COVID-19 pandemic may have halted or reduced travel for many in New Jersey, but the end of the year also came with a surprising and sobering statistic: the number of fatal accidents involving cars in New Jersey rose in 2020 despite the pandemic.

Last year, 587 fatal accidents were reported across the state, up from 558 in 2019. Fatal accidents involving pedestrians have also risen, and so have fatal accidents involving cyclists. Eighteen cyclists lost their lives on New Jersey roads last year, up from only twelve the year before.

In response to these alarming numbers—and the long-term work of certain local bike safety advocacy groups—the New Jersey state legislature recently passed a bipartisan bill to increase the safety of New Jersey’s bikers and pedestrians. This bill, now known as the New Jersey Safe Passing Law, was signed into law by New Jersey Governor Phil Murphy on Thursday, August 5th.

The New Jersey Safe Passing Law

Under the New Jersey Safe Passing Law, drivers who are passing cyclists or pedestrians must move over one lane if it’s safe to do so. If moving over one lane isn’t possible or safe, drivers must allow four feet of space between their vehicle and the pedestrian or cyclist until they’ve safely passed them. In the event that it isn’t possible to safely allow four feet of space, the driver is required to slow their vehicle to 25 miles per hour.

In addition to cyclists and pedestrians, the bill also covers New Jersey residents with mobility issues who are riding electric scooters or in wheelchairs. Drivers who fail to follow the new law may face fines of $100, while drivers who cause bodily injury by failing to comply may face a fine of up to $500 and have two motor vehicle points added to their driving record.

Struck by a car while cycling? Here are a few next steps

While the Safe Passing Law is certainly a significant step toward making the road a safer place for cyclists, negligent drivers can still present a danger on the road.

If you’ve been injured by a vehicle on the road while biking, you may be wondering what recourse you have for paying medical bills and recovering damages.

Once you’ve carefully documented the accident, spoken to any police dispatched to the scene, and gotten any needed medical attention, the following steps can help ensure you receive the proper compensation and help:

  1. Contact an attorney. Having an experienced attorney on your side can be crucial if you need to pursue damages from the party at fault or need help making an insurance claim.
  2. Since New Jersey is a “no fault” insurance state, medical bills should be covered through your own health insurance or through the Personal Injury Protection benefits included in your auto insurance (P.I.P. benefits may be applicable even if you’re injured while riding a bike).
  3. Depending on the specifics of your auto insurance policy, you may also be entitled to pursue additional damages for pain and suffering or non-economic loss. A skilled attorney can guide you through your options for pursuing damages and help to ensure that you receive what you’re entitled to.
COPYRIGHT © 2021, STARK & STARK

Article By Domenic B. Sanginiti, Jr of Stark & Stark

For more articles on state legislation changes, visit the NLR Public Services, Infrastructure, Transportation section.