Brunini Law

Mississippi Environmental Quality Permit Board Summary of Meeting Held April 11, 2017

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The Mississippi Environmental Quality Permit Board (“Board”) convened its regular monthly meeting at 9:00 a.m. on April 11, 2017, at the offices of the Mississippi Department of Environmental Quality, in Jackson.  Mr. Mike Bograd, RPG, chaired the meeting.

The Board approved minutes from the March meeting and the non-controversial actions/ certifications completed by the staff since the March meeting.

Following a prepared agenda, items considered were as follows:

OFFICE OF POLLUTION CONTROL 

 The Staff recommended and Board approved issuance of Air Construction Permit (1280-00058) and Modification to Air Prevention of Significant Deterioration (PSD) Permit for Chevron Products Company, Pascagoula Refinery in Jackson County.

OFFICE OF GEOLOGY

In accordance with MDEQ staff recommendations, the Board approved the following surface mining bond releases:

Surface Mining Bond Releases:

 

Permittee County Permit Staff Recommendation
Memphis Stone & Gravel Company Panola P01-041 Final 30%
Century Construction and Realty, Inc. Lee P10-039TA Initial 80%
King Equipment & Dozer Service, Inc. Jasper P08-006 Final 20%
Rea’s Country Lane Construction, Inc. Chickasaw P06-013 Final 20%
Rea’s Country Lane Construction, Inc. Holmes P11-009 Initial 10%
Oddee Smith Construction, Inc. Lincoln P01-022 Final 90%
BASF Corporation Monroe P78-007 Final 48%
BASF Corporation Monroe P86-015 Initial 90%

 Surface Mining Application:

 The Board approved Birdsong Construction Company, Inc.’s Surface Mining Application with Storm Water Application for the addition of 48.75 acres to an existing permit for a 32.5 acre surface mine in Madison County, Permit No. P14-018A.  Per regulations, Notices were sent to landowners, and MDEQ received several letters of opposition.  Two visitors spoke on behalf of the landowners in opposition citing silting; road problems; traffic and safety issues; quality of life; dust and noise among other issues.  A representative of the Applicant appeared and disputed the claims of the opposition. Staff addressed questions and issues of the opposition, and then stated that the Application is complete, has met all requirements, and the Applicant is in compliance.  Based on this, MDEQ Staff recommended issuance of the Permit.

OTHER BUSINESS

Mr. Roy Furrh, MDEQ Legal Counsel reminded the Board that the deadline to file their 2016 Statement of Economic Interest is approaching.

The next Permit Board meeting will be held on May 9, 2017, at 9 a.m.

 

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Contradictory Federal Court Opinions LGBT Rights in the Workplace Sets Stage for Landmark Supreme Court Showdown

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Two federal court opinions, issued less than 10 days apart, have set the stage for a potential landmark showdown at our nation’s highest court.  The issue revolves around the proper interpretation of the term “sex” contained in Title VII of the Civil Rights Act of 1964—an interpretation that will greatly impact workplace discrimination rights and requirements for years to come.

On March 27, 2017, a three-judge panel of the U.S. Second Circuit Court of Appeals decided the case of Christiansen v. Omnicom Group, Inc.  In its decision, the 2nd Circuit revived a homosexual employee’s employment discrimination claims by ruling that the employee possessed viable Title VII claims based on the theory of “sex stereotyping.”  However, in its ruling, the 2nd Circuit also expressly stated that Title VII’s definition of “sex” did not cover a person’s sexual orientation.  This decision tracked historical rulings of other U.S. courts, in holding that the term “sex” within Title VII refers only to a person’s gender—meaning that discrimination had to be premised on whether a worker is male or female.

Nine days later, on April 4, 2017, the U.S. Seventh Circuit Court of Appeals became the first federal appellate court to buck this trend and rule that Title VII does extend workplace protections on the basis of their sexual orientation.  In deciding the case of Hively v. Ivy Tech, the 7th Circuit opted to expand the definition of “sex” under Title VII to include an individual’s “sexual orientation.”  With its 8-3 decision, the 7th Circuit effectively presents two avenues of recovery for individuals asserting claims on the basis of their sexual orientation.

For years, LGBT employees could only advance claims of workplace discrimination under a theory of “sex stereotyping” discrimination—that is, discrimination based on an employee’s failure to conform to an employer’s perceived gender roles.  In July 2015, the U.S. Equal Employment Opportunity Commission (EEOC) issued its first administrative ruling declaring that Title VII’s use of the word “sex” meant both gender and sexual orientation.  However, until now, no federal court had adopted or mirrored the EEOC’s guidance.

Now things are set to get interesting. The contradictory rulings will most likely be condensed and presented before the U.S. Supreme Court. This would be a landmark ruling for employees, LGBT advocates, and employers.  All of this brings further attention to the remaining uncertainty surrounding the 8-justice status of the Supreme Court, the on-going political fight over filling the late Justice Scalia’s seat, and the impending Democratic filibuster over President Donald Trump’s nominee, Neil Gorsuch.  Even if Gorsuch were confirmed, it remains to be seen how he would rule on this issue.

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Carmody, Singley, Cirilli, and Lawhorn Win Defense Verdict for Peco Foods, Inc.

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On March 15, 2017, a jury in the District Court for the Northern District of Mississippi returned a defense verdict in favor of Peco Foods, Inc. and against 55 plaintiffs. The underlying lawsuit involved nuisance and negligence-based claims brought by residents of the Egypt, Mississippi community related to Peco Foods’ contracts with two broiler chicken farms in the area. Specifically, the residents complained that the farms were a nuisance because they allegedly produced excessive odors, flies, and truck traffic. Plaintiffs also claimed that Peco Foods was negligent in contracting and continuing its contractual relationship with the farms. After a 13-day trial that involved 70 witnesses, the jury found that none of the 55 plaintiffs had established their claims against Peco Foods and returned a defense verdict. Judge Michael Mills presided over the trial. During closing argument, the Plaintiffs’ counsel asked the jury to award $11 million in monetary damages.

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Mississippi Commission on Environmental Quality Summary of Meeting Held February 23, 2017

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The Mississippi Commission on Environmental Quality convened at 9:00 a.m. on February 23, 2017, at the offices of the Mississippi Department of Environmental Quality in Jackson.  The Commission approved minutes from the previous meeting held on November 10, 2016.  Following a prepared agenda, items considered were as follows:

FY2018 Title V Fee Recommendation

Staff reported that a Public Hearing concerning the FY2018 Title V Permit Fee was held on December 21, 2016. No comments were received. The staff recommended and Commission approved to set the fee at $47.00 per ton of regulated air pollutants with a minimum fee of $250.00, which is the same as the previous year’s fee.

Mississippi State Oil and Gas Board Rule 68- Commission’s Consideration of Approval of Amendments and Revisions to Statewide Rule 68

Roy Furrh, MDEQ Legal Counsel, presented this matter before the Commission, stating that the Oil and Gas Board approved amendments and revisions to its Statewide Rule 68 on November 16, 2016, related to Disposal of Naturally Occurring Radioactive Materials Associated with the Exploration and Production of Oil and Gas as discussed in the December 20, 2016, correspondence from the Oil and Gas Board.  By statute and through case law, the amendments and revisions to the Rule 68 Disposal regulations must be approved by the Commission. Staff has previously briefed the Commission on this matter. The staff of the Oil and Gas Board has coordinated with staff of MDEQ on the amendments and revisions to Rule 68. Per MDEQ Staff recommendation, the Commission approved the amendments and revisions to Oil and Gas Board Rule 68.

Commission Designated Hearing Officer

Commission approved Doug Levanway, to serve as a hearing officer in future Commission evidentiary hearings, pursuant to Miss. Code Ann. Sections 49-17-31 and 49-17-33.

Commission Approval of Brownfield Consulting Firms

 Staff recommended, and the Commission approved, Tioga Environmental Consultants, Inc., of Memphis, Tennessee, as a Brownfield Consulting Firm.

Commission Approval of Environmental Covenant – Accelerated Companies, LLC Facility – Laurel, MS

 Note – This agenda item was for reporting purposes only.  Pursuant to the Commission’s delegation regulations (11 Miss. Admin. Code Pt. 1, R.1.1.Y.), the Executive Director of MDEQ approved the Environmental Covenant between the Commission and Accelerated Companies, LLC, regarding the remediation of property located at 3625 Industrial Boulevard, Laurel, MS. The accompanying Restrictive Use Agreed Order was also approved by the Executive Director. Environmental Site Assessments revealed a release of Diesel Range Petroleum compounds impacting shallow soils beneath the footprint of the building on-site and a release of Cadmium impacting groundwater in one shallow well at concentrations in excess of Target Remediation Goals. Therefore, remediation of the site is necessary. The staff of the MDEQ evaluated the proposed Environmental Covenant and believes that, with the conditions and restrictions contained within, the site will be in compliance with applicable state laws and standards and will be protective of the public health and the environment.

CERTIFICATIONS APPROVED

Asbestos:                      336 certifications

Lead Paint:                   104 certifications

Underground Storage Tanks:              17 certifications

EMERGENCY CLEAN-UP EXPENSES

There were 15 emergency expenditures since the last report.

ADMINISTRATIVE ORDERS APPROVED

Twenty (20) Administrative Orders and three (3) Amended Agreed Orders were issued by the Executive Director and approved by the Commission since the last report.

OTHER BUSINESS

Mr. Gary Rikard, Executive Director of the MDEQ updated the Commission on the status of MDEQ budget discussions before the Legislature.

 

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Mississippi Environmental Quality Permit Board Summary of Meeting Held February 14, 2017

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The Mississippi Environmental Quality Permit Board (“Board”) convened its regular monthly meeting at 9:00 a.m. on February 14, 2017, at the offices of the Mississippi Department of Environmental Quality in Jackson.  Mr. Mike Bograd, RPG, chaired the meeting.

The Board approved minutes from the January meeting and the non-controversial actions/ certifications completed by the staff since the January meeting.

Following a prepared agenda, items considered were as follows:

OFFICE OF POLLUTION CONTROL – No Items

OFFICE OF GEOLOGY

In accordance with MDEQ staff recommendations, the Board approved the following surface mining bond releases:

Surface Mining Bond Releases:

 

Permittee County Permit Staff Recommendation
All South Construction Company Neshoba P99-071A Initial 20%
Baldwin Sand & Gravel Panola P12-019 Initial 10%
W.E. Blain & Sons, Inc. Scott P91-046T Initial 50%
W.E. Blain & Sons, Inc. Scott P96-013 Initial 50%
Preston Dobbs Truck Service Monroe P10-010 Initial 90%
Tanner Construction Co., Inc. Jefferson Davis P96-016T No Additional
Tanner Construction Co., Inc. Lawrence P07-005A No Additional
Tanner Construction Co., Inc. Perry P08-019 No Additional
Walters Development, LLC* Jones P07-030 Additional 20%
*Note – a representative for Walters Development spoke on behalf of the company regarding the Bond Release and a separate permit application submitted to MDEQ.

Surface Mining Transfer:

The Board approved the permit transfer from Boyles Roofing and Sheet Metal, Inc., Permit P92-045T, to M&O Surface, Inc.

Surface Mining Name Change:

The Board approved a name change from Blain and Sons, Inc. to Blain Sand & Gravel, Permit P96-042AA.

OTHER BUSINESS

Renaissance at Colony Park, LLC, Madison County, Mississippi – Staff presented and the Board approved the proposed Findings of Fact and Conclusions of Law for consideration regarding the issuance of a Clean Water Act Section 401 Water Quality Certification (No. WQC 2015041) and Coverage under the Large Construction Storm Water General NPDES Permit (No. MSR 107191) to Renaissance at Colony Park, LLC, Madison County, Mississippi.

Mr. Roy Furrh, MDEQ Legal Counsel reminded the Board that the Evidentiary Hearing for Drying Facility Asset Holdings, LLC, has been scheduled for the March meeting.

Staff presented and Board approved MDEQ’s Motion to Dismiss an evidentiary hearing request received from Austin D. (Dan) Check for consideration regarding the reissuance of Water Pollution Control Permit to Discharge Wastewater in Accordance with the National Pollutant Discharge Elimination System, Permit No. MS0020117, to the City of Meridian Publicly Owned Treatment Works, located in Lauderdale County, MS.

The next Permit Board meeting will be held on March 14, 2017, at 9 a.m.

 

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Mississippi Environmental Quality Permit Board Summary of Meeting Held January 11, 2017

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The Mississippi Environmental Quality Permit Board (“Board”) convened its regular monthly meeting at 9:00 a.m. on January 11, 2017, at the offices of the Mississippi Department of Environmental Quality in Jackson.  Mr. Mike Bograd, RPG, chaired the meeting.

The Board approved minutes from the December meeting and the non-controversial actions/ certifications completed by the staff since the December meeting.

Following a prepared agenda, items considered were as follows:

OFFICE OF POLLUTION CONTROL

The Board approved issuance of coverage under the AFO General Permit (MSG201911) and issuance of construction under the Storm Water Coverage (MSR107315) for A’s Farm, LLC, in Walthall County.  The application proposes ten poultry houses and construction activity on sixteen acres of disturbed land.  Staff stated that upon notification by the Applicant, one neighboring property owner submitted a letter of objection and a local church submitted a signed petition citing issues including health concerns and property values.  No one in opposition was present at the meeting.  Because the facility’s application is complete and the Applicant is in compliance, MDEQ staff recommended issuance of the Permit.

OFFICE OF GEOLOGY

In accordance with MDEQ staff recommendations, the Board approved the following surface mining bond release:

Surface Mining Bond Release:

 

Permittee County Permit Staff Recommendation
Bellew Sand and Gravel Forrest P97-026 Initial 90%
Boydstun Lumber Company Winston P87-021 Initial 90%
Boydstun Lumber Company Winston P94-027A Initial 50%
Green Brothers Gravel Company, Inc. Copiah P09-005A Final 20%
Golden Triangle Sand and Gravel Lowndes P89-013T Initial 90%
Golden Triangle Sand and Gravel Lowndes P98-041 Initial 90%
Hammett Gravel Company, Inc. Yazoo P06-029A Additional 20%
Joe McGee Construction Company, Inc. Madison P11-018A Initial 80%
Joe McGee Construction Company, Inc. DeSoto P13-003 Initial 10%
Birdsong Construction Company, Inc. Hinds P96-066 Initial 25%
Ralph Weldy Forrest P94-140A Initial 90%

Surface Mining Transfer of Acreage:

The Board approved the transfer of 120 acres in Holmes County from the adjacent mine owned by Baldwin Sand & Gravel (“Baldwin”) to Hammett Gravel Company, Permit P10-020AAA (“Hammett”) increasing Hammett’s permitted acreage from 83.5 acres to 203.5 acres and reducing Baldwin’s permitted acreage from 290 acres to 170 acres.

OTHER BUSINESS

 Staff presented and Board approved the proposed Findings of Fact and Conclusions of Law for consideration regarding the issuance and modification of Water Pollution Control Permit to Discharge Wastewater in Accordance with the National Pollutant Discharge Elimination System Permit No. MS0061751 to Mississippi Power Company, Kemper IGCC Facility (Plant Ratcliffe), Located in Kemper County, MS.

Mr. Roy Furrh, MDEQ Legal Counsel reminded the Permit Board members that they need to file their annual ethics statement.

Mr. Roy Furrh, thanked the Board for completing the forms recently required by the Department of Interior – Office of Surface Mining and Reclamation.

Mr. Furrh also reminded the Board that the Evidentiary Hearing for Drying Facility Asset Holdings, LLC, has been scheduled for the March meeting.

Mr. Furrh briefly discussed the suit between West Rankin Utility Authority and the City of Jackson and stated that oral arguments are today before the Rankin County Chancery Court.

The next Permit Board meeting will be held on February 14, 2017, at 9 a.m.

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Mississippi Environmental Quality Permit Board Summary of Meeting Held December 13, 2016

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The Mississippi Environmental Quality Permit Board (“Board”) convened its regular monthly meeting at 9:00 a.m. on December 13, 2016, at the offices of the Mississippi Department of Environmental Quality in Jackson.  Mr. Mike Bograd, RPG, chaired the meeting.

The Board approved minutes from the November meeting and the non-controversial actions/ certifications completed by the staff since the November meeting.

Following a prepared agenda, items considered were as follows:

OFFICE OF POLLUTION CONTROL

The Board approved issuance of coverage under the AFO General Permit (MSG201908) and issuance of construction under the Storm Water Coverage (MSR107275) for Tommie L. Landrum II Poultry in Jones County.  The application proposes six poultry houses and construction activity on twelve acres of disturbed land.  Staff stated that upon notification by the Applicant, eleven neighboring property owners submitted letters of objection citing issues including health concerns, the presence of gopher tortoises, and a stream running through the property.  Two individuals spoke in opposition and one read a letter from a third individual, who was unable to attend the meeting.  Board members posed questions to those in opposition as well as staff concerning notification issues; buffer area; doctor’s letter confirming health problems; disposal of litter and dead birds.  Because the facility’s application is complete and the Applicant is in compliance, MDEQ staff recommended issuance of the Permit.  After the vote, Mr. Roy Furrh, MDEQ General Counsel, advised those in opposition that they may request an Evidentiary Hearing on the matter.

OFFICE OF GEOLOGY

In accordance with MDEQ staff recommendations, the Board approved the following surface mining bond release:

Surface Mining Bond Release:

 

Permittee County Permit Staff Recommendation
T. L. Wallace Construction, Inc. Hinds PIS-017 Initial 90%
Baldwin Sand & Gravel Monroe P92-098AA Final 60%
T. L. Wallace Construction, Inc. Harrison P03-030 Initial 90%
T. L. Wallace Construction, Inc. Harrison P02-018 Final 10%
T. L. Wallace Construction, Inc. Marion P08-013 Final 10%
T. L. Wallace Construction, Inc. Marion P08-018 Final 10%
T. L. Wallace Construction, Inc. Marion P08-021 Final 10%

OTHER BUSINESS

Mr. Roy Furrh, MDEQ General Counsel, thanked the Board for completing the forms recently required by the Department of Interior – Office of Surface Mining and Reclamation

Mr. Furrh also reminded the Board that the Evidentiary Hearing for Drying Facility Asset Holdings, LLC has been scheduled for the March meeting.

The next Permit Board meeting will be held on January 10, 2017 at 9 a.m.

 

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Mississippi Commission on Environmental Quality Summary of Meeting Held November 10, 2016

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The Mississippi Commission on Environmental Quality convened at 9:00 a.m. on November 10, 2016, at the offices of the Mississippi Department of Environmental Quality in Jackson.  The Commission approved minutes from the previous meeting held on August 25, 2016.  Following a prepared agenda, items considered were as follows:

Titan International, Inc. and The City of Natchez – Natchez, Adams County

Note – This agenda item was for informational purposes only.

Staff reported that, pursuant to the Commission’s delegation regulations, the Executive Director of MDEQ approved the Environmental Covenant between the Commission and the City of Natchez regarding the remediation of property located at 89 Kelly Street, Natchez, MS.  The Restricted Use Agreed Order between the Commission, Titan International, Inc. and the City of Natchez was also approved by the Executive Director. Environmental Site Assessments have revealed a release of Trichloroethene and petroleum compounds impacting groundwater at concentrations in excess of Target Remediation Goals (TRGs). Therefore, remediation of the site is necessary.  Staff evaluated the Environmental Covenant and Restricted Use Agreed Order and believes that, with the conditions and restrictions contained within, the site will comply with applicable State laws and standards and will be protective of the public health and the environment.

Commission Rescind Brownfield Agreement and Accompanying Environmental Covenant – Wal-Mart Real Estate Business Trust – Pascagoula, Jackson County

A motion to approve a postponement of this matter until the next commission meeting was made, seconded and approved unanimously.

Delegation of Commission’s Authority to Executive Director

Staff requested and the Commission delegated its authority, to apply for, receive, and expend any federal or state funds or contributions, gifts, devices, bequests, or funds from any other sources to the Executive Director.

Adoption of amendments to 11 Mississippi Administrative Code, Part 2, Chapter 1, “Air Emission Regulations for the Prevention, Abatement, and Control of Air Contaminants” and a Revision to the Mississippi State Implementation Plan for the Control of Air Pollution

Staff recommended and the Commission approved amendments to 11 Miss. Admin. Code, Pt. 2, Ch. 1.  These amendments involve:

  1. Amendments to Rule 1.10 and an associated Revision to the State Implementation Plan for Control of Air Pollution (SIP Revision) regarding startups, shutdowns, and/or malfunctions of air emissions equipment in order to comply with federal requirements of the U.S. Environmental Protection Agency. This action is a response to a USEPA SIP Call to address a Finding of Substantial Inadequacy with the existing SIP provisions for Upsets, Startups, and Shutdowns. The amendments and associated SIP Revision are intended to address state regulation inconsistencies with recent changes to USEPA policies for startup, shutdown, and malfunction events.
  2. Amendments to Rules 1.6.C. and 1.8.A to update the state adoption, by reference, of recent amendments to Federal New Source Performance Standards (NSPS) in 40 CFR Part 60, Federal National Emission Standards for Hazardous Air Pollutants (NESHAP) in 40 CFR Parts 61 and 63, and Federal Consolidated Air Rules (CAR) in 40 CFR Part 65. This action will update the federal delegation to the state.
  3. Deletion of Rule 1.14, “Provisions for the Clean Air Interstate Rule” (CAIR) since the federal provisions referenced in Rule 1.14. have been revoked and are no longer in effect.

A public hearing was held on September 16, 2016 following a 30-day public comment period. Commenters requested additional time to submit comments and the comment period was extended until October 6, 2016. Several comments were received. A copy of the public hearing transcript including all comments submitted was provided to the Commission.

FY 2018 Title V Fee Recommendation -Approval to Proceed to Public Notice of Hearing

Staff provided the Commission a copy of the draft report containing the Title V Advisory Council’s Title V fee recommendation for the upcoming fee year. Staff requested approval to hold a public hearing to receive comments regarding the proposed fee and to proceed with public notice of the hearing. After the public hearing has been held, the public comment period has ended, and comments have been reviewed, staff will bring the fee recommendation back before the Commission for final action.  Commission approved Staff’s request to proceed to Public Notice of Hearing.

 CERTIFICATIONS APPROVED

Asbestos:                    386 certifications

Lead Paint:                 144 certifications

Underground Storage Tanks:            38 certifications

EMERGENCY CLEAN-UP EXPENSES

There were 20 emergency expenditures since the last report.

ADMINISTRATIVE ORDERS APPROVED

Twenty six (26) administrative orders were issued by the Executive Director and approved by the Commission since the last report.

OTHER BUSINESS

Mr. Roy Furrh, MDEQ General Counsel, advised the Board that key employees at MDEQ had recently filed forms with the Department of Interior – Office of Surface Mining and Reclamation and that members of the Commission would also have to complete similar forms.

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BREAKING – U.S. FEDERAL JUDGE ISSUES NATIONWIDE ORDER TEMPORARILY BLOCKING DEPARTMENT OF LABOR’S PROPOSED OVERTIME RULE CHANGE

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Late Tuesday afternoon (November 22, 2016), a federal judge in Texas entered a nationwide preliminary injunction blocking implementation of a highly controversial rule that was set to take effect in less than 10 days (on December 1, 2016).  The judge’s injunction temporarily prevents the U.S. Department of Labor (DOL) from enforcing its controversial Proposed New Overtime Rule that would significantly expand overtime eligibility for millions for public and private sector employees.

In September 2016, two separate lawsuits were filed in U.S. District Court in the Eastern District of Texas challenging the legality of the DOL’s proposed changes.  The lawsuits—one filed by a group of 21 states and the other filed by a conglomerate of over 50 nationwide business groups and trade organizations—both sought to temporarily enjoin and permanently strike the DOL’s Proposed Rule from taking effect.  The federal court later consolidated the two suits into one case.

In granting the preliminary injunction on Tuesday, U.S. District Judge Amos Mazzant ruled that the states and businesses were able to show ”a likelihood of success in their challenge” of the Proposed Rule, as well as a likelihood of “irreparable harm” if the Proposed Rule went into effect on December 1st.  In contrast, Judge Mazzant felt that the DOL failed to show it would be harmed if implementation of the Proposed Rule were delayed.

In their lawsuits, as well as during oral argument on their requests for the preliminary injunction, the states and businesses argued that the DOL’s rule would force many state and local governments, as well as private businesses, to increase their employment costs substantially.  If enacted, the Proposed Rule would double the minimum salary threshold—from the current $23,660 to the proposed $47,476—required for an employee to qualify for the Fair Labor Standards Act’s (FLSA) white collar exemptions.  To this end, the states and businesses contested the DOL’s policy behind the change to the Proposed Rule by arguing that the federal agency relied too heavily on the “salary level” earned by an employee and not enough on the kind of work an employee performs.  The states and businesses argued that such a policy disregarded the original text of the FLSA.

In initially siding with the states and businesses, Judge Mazzant held that the DOL wasn’t entitled to deference in creating the Proposed Rule, and that Congress intended the exemption to apply based on the tasks an employee actually performs.  The judge recognized that the DOL has “significant leeway” to establish the types of duties that might qualify an employee for the white collar exemptions, but that nothing in the text of the FLSA indicated Congress’s intention for the DOL to define employee classifications with respect to a minimum salary level.  Judge Mazzant ultimately opined that the DOL’s enactment of the Proposed Rule appeared to exceed its delegated authority and as a result, ignored Congress’s intent behind the FLSA.

In issuing the preliminary injunction, Judge Mazzant also agreed that the states and businesses would suffer irreparable harm being forced to comply with the new costs associated with the Proposed Rule—harm which could not be redressed or undone if the Court later decided in their favor in permanently striking the Proposed Rule. “Due to the approaching effective date of the final rule, the court’s ability to render a meaningful decision on the merits is in jeopardy,” Judge Mazzant said. “A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity.”

Representatives of the states and business groups who initiated the legal challenge were quick to praise the Court’s decision.  “Businesses and state and local governments across the country can breathe a sigh of relief now that this rule has been halted,” said Nevada Attorney General Adam Paul Laxalt.

Representatives for the DOL have yet to comment, so it remains to be seen if the federal government will simply allow the injunction to remain in place pending final resolution of the consolidated lawsuits.  Alternatively, the DOL could choose to pursue a countermanding order on appeal.  (However, since any appeal would be heard by the Fifth Circuit, the success of such an appeal is far from a certainty.)  Lurking above all of these legal maneuvers is the recent election of President Donald Trump, who has yet to publicly announce his intentions for the Proposed Rule.

So, while it still remains possible the Proposed Rule could ultimately take effect (either in full or in some modified form), the Court’s ruling on Tuesday is certainly a welcome reprieve for U.S. employers—at least for the time being.

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“Paid Sick Leave” for Employees of Certain Federal Contractors & Subcontractors

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By: Chris Fontan & Kyle Williams

In October 2016, the U.S. Department of Labor (“DOL”) published regulations implementing Executive Order 13706 (“the Order”).  Initially signed in September 2015, the Order—entitled Establishing Paid Sick Leave for Federal Contractors—requires some federal contractors and subcontractors to provide certain employees with up to seven (7) days of paid sick leave annually.  Historically, the federal government has not established regulations (covering either private employers or federal contractors) mandating the provision of paid leave time for employees.   While it only impacts federal contractors and subcontractors, the DOL’s regulations will drastically alter this historical policy, as the DOL estimates that anywhere from 600,000 – 1.2 million employees will be impacted by the Final Rule.

Contracts Subject to the Order & Regulations

According to the DOL, the coverage of contracts and employees under the Order is “nearly identical” to coverage under the regulations mandating a minimum wage for certain federal contractors.  (The required minimum wage rate for covered federal contractors is adjusted each year by the DOL.  For 2017, the required minimum wage for covered federal contracts is $10.20.)

The Order and its regulations apply to four (4) types of contracts:

  • Procurement contracts for construction covered by the Davis-Bacon Act;
  • Service contracts covered by the Service Contract Act;
  • Concessions contracts; and
  • Contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

Of these covered contracts, the Order applies to (1) new contracts, (2) replacements for expiring contracts, and (3) subcontracts of any covered contract issued on or after January 1, 2017.  For the Order to apply, the new/replacement contract must include a clause setting forth the Order’s requirements.  If the contract does include this required clause, the governmental agency can withhold funds due under the contract if a contractor or subcontractor fails to abide by the Order’s requirements. (Additionally, contractors are required to include a clause outlining the Order’s requirements in all new subcontracts issue.)

Employees Covered by the Order & Regulations

The Order only applies to individuals engaged in performing work directly related to the subject matter of the contract, or “in connection with” a covered contract.  Importantly, employees that spend less than twenty percent (20%) of their working hours performing work in connection with a contract (such as providing administrative or other support services) are not covered by the Order.

Leave Required Under the Order & Regulations

Under the Order and its regulations, there are a couple of methods by which covered contractors can grant and track the required paid sick leave.  Employees that are covered are entitled to one hour of paid sick leave for every thirty (30) hours worked (actually worked – not total hours paid) on or in connection with a covered contract.  As an alternative, contractors have the option to provide covered employees with at least fifty-six (56) hours of paid sick leave at the beginning of each accrual year, rather than allowing employees to accrue leave based on hours worked.   Under this option, contractors who already provide employees with paid sick leave (for the same types of absences described in the Order) can take credit for the amount of leave provided—they are only required to provide employees with the difference between the amount already provided and the mandated fifty-six (56) hours.

The Order & its regulations set forth rules concerning a covered employee’s ability to “carry over” any accrued, but unused paid sick leave from one year to the next.  Also, if an employee is rehired by the same contractor within 12 months of a job separation, the contractor must reinstate that employee’s accrued, unused paid sick leave balance (unless the employee is paid for that leave at the time of separation).  Covered contractors are also required to notify covered employees of the amount of paid sick leave they have accrued—either at the end of each pay period or each month, whichever interval is shorter.  This notification must be provided in writing.

Covered Absences under the Order

The Order requires contractors to allow covered employees to use their paid sick leave (in increments as small as one hour) for any absence resulting from:

  • Physical or mental illness, injury, or medical condition of the employee;
  • Obtaining diagnosis, care, or preventive care from a health care provider by the employee;
  • Caring for the employee’s child, parent, spouse, domestic partner, or “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship”; or
  • Domestic violence, sexual assault, or stalking.

When employees use their paid sick leave, contractors must provide them with the same regular pay and benefits they would have received if they had not used the leave, except that employees do not earn additional paid sick leave during their absence.

Under the Order, an employee is required to request paid sick leave “as soon as is practicable,” either orally or in writing.  If a contractor denies an employee’s request, it must communicate the denial in writing with an explanation as to why the request was denied. A contractor can only require an employee to document or verify absences of three or more consecutive days, and the contractor must inform the employee of the requirement to provide documentation before he or she returns to work. If the absence is healthcare-related, the contractor can require the certification to be made by a healthcare provider. If the absence is related to domestic violence, sexual assault, or stalking, the documentation or verification can come directly from the employee.

If you feel that your organization may be impacted by these new regulations, you should contact your labor & employment counsel for implementation advice.

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