What’s Next for Conflict Minerals Rules After D.C. Circuit Decision?

On April 14, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) issued its long-anticipated ruling in the industry challenge to the Securities and Exchange Commission’s (SEC) conflict minerals rules, and – as we forecast in a previous blog post – free speech issues proved to be critical to the Court’s decision. In fact, the First Amendment challenge to the rules’ requirement that companies self-identify as “not conflict-free” was the only issue on which the Court sided with the industry challengers, as it rejected the various other challenges the National Association of Manufacturers (NAM) and other industry groups had lodged to the breadth of, and burdens imposed by, the SEC’s conflict minerals rules. A copy of the Court’s full decision is available here.

What’s Next for Conflict Minerals Rules After D.C. Circuit Decision?The Court’s decision leaves intact the underlying framework of the conflict minerals disclosure and reporting regime, but prohibits the SEC from requiring companies to identify themselves – or their products – as “not found to be ‘DRC conflict-free’” in the conflict minerals reports required under the SEC’s rules. This result raises a natural question for companies affected by the rules – namely, what does this ruling mean for our conflict minerals reporting obligations, both near-term and long-term? Continue reading this entry

OESA Sees Sunny Skies for Auto Industry

The Original Equipment Suppliers Association (OESA) recently released its 2013 Annual Report which includes an interesting and positive “State of the Industry.” Modest growth is projected for both 2014 and 2015, pushing expected annual North American Production levels over 17 million units. This is especially positive because OESA also notes that the “break-even point of the supply base is 12.7 million units.” Thus, the supply chain in North America should continue to be profitable and positive, even if it were to contract 25%.

OESA Sees Sunny Skies for Auto IndustryOESA also noted that its Automotive Supplier Sentiment Index has been positive and maintaining favorable momentum from 2013 into the first quarter of 2014. After generally increasing throughout 2013, the Index eased down slightly heading into 2014. However, it is still positive. OESA sees it staying that way “[w]ith a sustainable North American market and a stabilizing European market, supplier sentiment is likely to remain in positive territory.” Continue reading this entry

Sustainability Reporting Standards for the Automotive Industry

The following post is provided by our guest author, Karen Lutz from TRC Environmental Corporation. Karen can be reached at klutz@trcsolutions.com.

The Sustainability Accounting Standards Board (SASB), a non-profit organization incorporated in 2011, was formed to provide investors and the general public with decision-useful information to assess sustainability issues of U.S. publicly traded companies. SASB defines sustainability as those “environmental, social and governance (ESG) factors that have the potential to affect long-term value creation and/or are in the public’s interest.”

Sustainability Reporting Standards for the Automotive IndustrySASB uses the U.S. Supreme Court definition of material information: ‘Information presenting a substantial likelihood that the disclosure of the omitted fact would have been viewed by the “reasonable investor” as having significantly altered the “total mix” of information made available.’ This definition applies to both financial and non-financial material risks and opportunities. SASB’s intent, therefore, is to provide a mechanism to determine how well a company manages all forms of capital in a resource constrained world through comparison and disclosure of material non-financial data. Continue reading this entry

Making Your Termination Decision Count (Don’t Sleep On This One…)

The success or failure of an employer’s defenses in employment litigation often turns on what motivated a termination decision. My consistently low productivity numbers on the assembly line or my complaint about harassment? My taking of leave or requesting of accommodation, or the ongoing business struggles making it necessary to cut costs? As a consequence, the timing of a challenged decision and decision-maker identity become key issues; if the decision occurs prior to protected activity and/or is made by someone with no knowledge of that activity, logically it could not have factored into the termination decision. These are the kinds of critical facts automotive companies would want to have to defeat discrimination or retaliation claims.

Making Your Termination Decision Count (Don’t Sleep On This One…)A serious problem occurs however, as illustrated by a recent case, when a termination decision prior to protected activity does not actually count as a termination decision, and then the actual act of termination occurs on the non-insulated side of protected activity. In the decision, the former employer argued it initiated the termination process for an employee repeatedly caught sleeping at her production line position and later diagnosed as narcoleptic, before she put the company on potential notice of a need to engage in the interactive process. The employer initially prevailed based on the fact that a human resource manager had recommended termination prior to the employer receiving notice that medical circumstances might be causing the employee’s narcoleptic bouts. Continue reading this entry

OSHA Turns Its Sights on Auto Suppliers

In a continuation of the Administration’s amped up regulatory enforcement agenda, OSHA recently announced that it will target auto suppliers. In its Regional Emphasis Program For Safety Hazards in the Auto Parts Supplier Industry, OSHA identified hazards that it believes are particularly prevalent in the industry. According to OSHA, workers in the auto supplier industry are particularly exposed to “caught-in, crushing, struck-by and electrical hazards due to the machinery utilized in making these parts,” resulting in serious injuries, including amputations and deaths. As a result, OSHA is instituting an outreach and enforcement program covering all auto suppliers in the Southeast.

OSHA Turns Its Sights on Auto SuppliersAfter sending out an “outreach” letter to “stakeholders” (employers, employees, unions, and trade associations) which identifies the hazards and offers assistance, OSHA will inspect all auto supplier establishments in the region with ten or more employees. OSHA also promises that the inspections will be “comprehensive.” The program will be evaluated by October 30th of each year and its effectiveness will be measured by such factors as the hazards identified and number of citations issued. Continue reading this entry