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On July 2, 2024, the Occupational Safety and Health Administration (OSHA) released the official text of its Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings proposed standard. OSHA has been developing this standard since 2021, which will likely be finalized later this year.

The standard includes general mandates for all covered employers, along with additional requirements when the heat index reaches 80 degrees and others when the temperature reaches or exceeds 90 degrees (the “high heat trigger”). Steps employers will be required to take, include:

General requirements to:

  • Develop and implement a work site heat injury and illness prevention plan
  • Identify heat hazards, including through a heat monitoring plan
  • Develop heat illness and emergency response procedures
  • Train employees and supervisors
  • Implement a heat injury and illness prevention plan
  • Follow recordkeeping requirements including maintaining monitoring data

Requirements at or above heat triggers to:

  • Provide drinking water to employees
  • Make outdoor and indoor break areas available
  • Ensure employees receive rest breaks
  • Implement outdoor and indoor work area controls
  • Develop an acclimatization plan for new or returning workers

The proposed federal standard’s regulatory triggers and requirements are similar to the outdoor and indoor heat illness prevention rules passed by the California Division of Occupational Safety and Health (Cal/OSHA) in July 2006 and June 2024, although the Cal/OSHA heat illness standards have more stringent requirements with slightly different temperature triggers. The Cal/OSHA rules also apply more employer-specific exemptions, which will require employers with operations in California to assess whether the federal standards apply even when they may be exempt under Cal/OSHA requirements.

The Office of Management and Budget (OMB) completed its formal review of the proposed federal standard on July 1, 2024 with the publication of the proposed rule expected in the Federal Register in the coming days. After publication, stakeholders and interested parties will have 120 days to submit comments. Once finalized, the standard will automatically take effect for states without an OSHA State Plan. States with approved OSHA State Plans that don’t already have sufficiently conservative rules will adopt the federal rule or develop their own equivalent standards – which will take time.

On June 13, 2024, the California Office of Environmental Health Hazard Assessment (OEHHA) opened a 15 day public comment period (expiring June 28) for interested parties to comment on the State’s proposed changes to regulations that require additional information in future warnings on consumer products that contain chemicals linked to cancer or birth defects.

As background, the California Safe Drinking Water and Toxic Enforcement Act of 1986 (aka “Proposition 65”) requires “clear and reasonable warnings” on consumer products or product packaging containing any of more than 900 chemicals the State has found to increase risks of cancer or birth defects. The State currently provides two generic “short-form” and “long-form” options for regulated parties to follow. These two options are sometimes known as the “safe harbor” options – i.e., if a regulated party utilizes one of these two options verbatim, they will be deemed to be in compliance with Proposition 65.

  • The short-form option focuses more on the type of risk outcome (cancer and/or birth defects).
  • The long-form option includes everything in the short-form option but also requires naming “at least one chemical” from the cancer and/or birth defects lists. If one chemical happens to be listed in both categories (e.g., lead), then listing that chemical only once would suffice. Not all regulated chemicals need to be listed.

OEHHA now seeks to amend the short-form warning requirements to make them look more like the long-form warning. OEHHA’s critique of the current short-form warning is: “. . . not requiring a specific chemical to be included in the short-form warning has led to its over-use, and many businesses are using the short-form warning prophylactically because it protects from potential litigation.” OEHHA further notes that short-form warnings were originally intended to be used on smaller products, where packaging did not allow for a full-fledged warning. However, they are now on products where a long-form warning would be more appropriate.

OEHHA’s proposed rulemaking in October 2023 amended the California Health and Safety Code to:

  • Identify a listed chemical (or two chemicals if the warning is being provided for both cancer and reproductive toxicity, unless the same chemical is listed for both);
  • Allow warnings to use additional signal words such as “CA WARNING” and “CALIFORNIA WARNING”;
  • Allow the new short-form warnings to be used for food products;
  • Require a long or short-form warning on a product / product packaging when it is delivered to a consumer (in addition to the warning on the internet and in a catalog before purchase); and
  • Provide a two-year phase-in for the new short-form warnings to be added.

In response to a public hearing and public comments received in January 2024 on a prior iteration of its proposal, OEHHA now amends its October 2023 proposal by:

  • Increasing the time for implementation from two years to three years (from the date the regulation becomes effective);
  • Reverting to the original regulation text for most of the internet and catalog warning content (e.g., a warning is no longer required when the product is delivered); and
  • Including a new provision which would provide internet retailers a 60-day grace period, from when they receive a warning or written notice changing to the new warning content, to update their online short-form warnings during the three-year implementation period.

The public comment period for these recently proposed changes expires June 28, 2024.

Despite these proposed revisions, the new warning requirements will still require significant due diligence on the part of all parties in the chain of commerce to identify what chemicals are in their products as well as to negotiate commercial terms in contracts to allocate responsibilities (and liabilities) related to compliance with this new standard. These changes will pose significant hurdles for all parties, but particularly small and medium sized enterprises that may not have technical capabilities or staff to perform or police compliance.

Introduction

On April 19, 2024, the Environmental Protection Agency (EPA) announced a final rule adding perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) to the list of hazardous substances regulated under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as the “Superfund” statute. This designation, which had been expected for several years, will allow EPA to address PFOA and PFOS contamination using its authority under CERCLA. Given the ubiquity of those substances in the environment, the regulation of PFOA and PFOS is expected to increase the number of Superfund sites across the country, increase the cost of remediating those sites, and add complications to real estate and corporate transactions. This alert will provide some background on PFOA and PFOS, and highlight some of the consequences EPA’s action is likely to have in the near future.

About PFOA and PFOS (and other PFAS compounds)

PFOA and PFOS are two of the most common per- and polyfluorinated substances (referred to collectively as PFAS). They have been widely used since the 1940s in various industries for their water and oil repellant properties, and have been featured in products ranging from non-stick cookware and water-resistant fabrics to firefighting foams and industrial processes. While PFOA and PFOS are no longer being manufactured or used in the United States, some 12,000 other PFAS substances are still being produced and can be found in a range of everyday products including food packaging, clothing, cosmetics, and toilet paper.

PFAS compounds serve a range of useful purposes due to their strength and stability. However, those same characteristics cause them to be very persistent in the environment. And, given that they have not been regulated under U.S. environmental laws until very recently, they have been discharged to streams, emitted to the air, and disposed of in landfills – legally – since the 1940s. Recent investigations have detected PFOA and PFOS at many locations across the United States, with notable concentrations at airports, military bases, landfills, and manufacturing facilities where PFOA and PFOS-containing products were used or manufactured.

What does the rule do?

The rule comes after EPA concluded that PFOA and PFOS “may present a substantial danger to the public health or welfare or the environment.” Under Superfund, the EPA and third parties can now hold the owner or operator of any location where PFOA and PFOS remediation is necessary, and any party who disposed of or arranged for the disposal of PFOA and PFOS at such location, jointly and severally liable for all costs of remediating those substances. The rule’s implementation also gives rise to a requirement to report releases of PFOA and PFOS of more than 1 pound within a 24-hour period.

In sum, this action expands CERCLA’s strict liability regime (which has imposed billions of dollars of costs on businesses and property owners over the last 45 years) to cover two new chemicals that may be found at properties all over the country. While this is concerning, there are some bits of good news for some. First, EPA issued an enforcement discretion memorandum on April 19, 2024 indicating it will focus its enforcement efforts on potentially responsible parties (PRPs) who significantly contributed to the release of PFOA and PFOS, including parties that manufactured or used PFAS in the manufacturing process, federal facilities, and other industrial parties. As of now, EPA does not intend to pursue certain PRPs, including airports, farms, fire departments, community water systems, and publicly owned treatment works. And second, the rule does not change CERCLA’s liability framework, which provides liability protections in certain circumstances for parties that are not primarily responsible. Taking measures to ensure that your business qualifies for those defenses is thus more critical than ever.

What does this mean for real estate transactions?

As of February 13, 2024, the American Society for Testing and Materials standard for Phase I environmental site assessments (Phase Is) is required to be used in order to satisfy the All Appropriate Inquiry aspect of certain defenses to liability under CERCLA. At the time the standard was issued, PFOA and PFOS were not designated as “hazardous substances” under CERCLA, and thus recent Phase Is did not need to address the potential presence of those chemicals. However, once EPA’s final rule is in effect (60 days after the rule is published in the Federal Register), environmental professionals completing Phase Is will need to consider whether PFOA and PFOS have been released (or were likely released) at the property when determining whether a Recognized Environmental Condition (REC) exists onsite. If a REC related to PFOA or PFOS contamination is identified in the Phase I, a subsurface investigation will likely be recommended as a next step in order to determine whether PFOA or PFOS is present onsite in excess of regulatory action levels. If PFOA or PFOS is found in that investigation, it could trigger reporting requirements, and possibly remediation, under CERCLA. Buyers and sellers of real estate therefore need to be aware that this issue will now arise more often in Phase I reports, complicating their transactions. Buyers will also need to re-double their efforts to ensure that they meticulously follow all of the detailed requirements necessary to preserve the “innocent purchaser” and “bona fide prospective purchaser” defenses available under CERCLA. Finally, in addition to PFOA and PFOS, buyers may wish to consider whether to proactively investigate the potential presence of certain PFAS chemicals not presently identified as “hazardous substances,” but subject to other monitoring requirements under the Safe Drinking Water Act or applicable state drinking water regulations.

What does this mean for corporate transactions?

No company wants to be surprised to learn that the business it just acquired is on the hook for millions of dollars’ worth of cleanup costs (not to mention the potential for personal injury claims and negative publicity). Companies acquiring other businesses or assets will therefore need to carefully investigate whether the target company may have previously generated, used, sold, or disposed of PFOA or PFOS, and ensure that it is doing all that it can to preserve CERCLA’s limited liability defenses. While a Phase I on the target company’s properties is a part of that review, it is by no means the end of it. Buyers should carefully assess the target company’s historic manufacturing processes (at currently and formerly owned or leased facilities), as well as its waste disposal practices and personal injury claims, to assess whether Superfund liability for PFOA/PFOS (or other PFAS compounds that may be regulated in the future) is a material risk. If it is, careful consideration will need to be made as to how to allocate responsibility for that risk, understanding that representations and warranties insurance policies that are commonly used today are unlikely to cover PFAS-related claims. There is no “rule of thumb” for how to deal with PFAS liabilities in a transaction, and every deal is different. Lawyers will need to be able to come up with creative solutions to this issue to get certain deals across the finish line.

What does this mean for new or existing Superfund sites?

Once the final rule is in effect, EPA will add PFOA and PFOS to its list of hazardous substances it uses for screening when determining whether to add a site to the Superfund Active site inventory for further assessment. If EPA deems that the site should be added to the Superfund Active site inventory, it will evaluate potential PFOA and PFOS contamination as part of its Preliminary Assessment, which is used to determine whether the site is listed on the National Priorities List, allowing EPA to identify PRPs who may have caused or contributed to PFOA and PFOS contamination at the site.

As for existing Superfund sites, PRPs can expect that EPA will begin requesting evaluations of PFOA and PFOS if EPA suspects either or both chemicals were released at the already-designated Superfund site. EPA could foreseeably request such sampling even at “closed” Superfund sites that remain subject to five-year reviews of the remedies implemented at those sites. EPA may request that the PRPs at existing sites conduct testing for PFOA and PFOS voluntarily, or EPA may complete a Preliminary Assessment itself and issue an order requiring the PRPs to undertake further investigation (and possibly remediation) for the chemicals. Note, however, that to the extent the PRPs are not the current owners or operators of the facility, EPA authority under CERCLA only reaches to any party who disposed of or arranged for the disposal of PFOA and PFOS at such locations. Many PRP groups were formed (and allocation for costs assigned) without determining whether such parties disposed of or arranged for the disposal of PFOA and PFOS at such locations and as such those parties should consider carefully their next steps. If PFOA or PFOS is found, the remediation of those compounds could significantly add to the time and cost necessary to complete the remediation and ultimate de-listing of the site. It will also lead PRPs to look for other responsible parties to pay for some of the cleanup costs, leading to new and expensive multi-party litigation.

Reed Smith’s environmental attorneys have been monitoring PFAS developments at the state and federal level for many years. We have experience advising corporate, real estate, and manufacturing clients on how to manage risks associated with these compounds in both litigation and transactional contexts. Please reach out to any of the attorneys identified below if you would like more information.

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On January 31, 2024, EPA published a press release announcing the impending publication of two proposed rules relating to PFAS and the Resource Conservation and Recovery Act (RCRA): (1) “Definition of Hazardous Waste Applicable to Corrective Action from Solid Waste Management Units” and (2) “Listing of Specific PFAS as Hazardous Constituents.”  

Definition of Hazardous Waste Applicable to Corrective Action from Solid Waste Management Units

Regarding the first proposed rule, EPA intends to revise the scope of the definition of Hazardous Waste under RCRA by broadening the definition to include emerging contaminants of concern, like PFAS. This would allow EPA and authorized states to expressly require cleanup of these constituents. While EPA has not published a proposed rule as of the date of this post, EPA anticipates a 30-day public comment period from the date of publication. 

The prepublication version of this rule includes the following significant changes:

  • Revise the definition of hazardous waste to cover releases not only of substances listed or identified as hazardous waste in the regulations but of any substance that meets the statutory definition of hazardous waste, including providing notice of EPA’s interpretation that this applies to permitted and interim status facilities.
  • Include a conforming definitional amendment to the requirements for permitting solid waste management units under Section 270.14(d).
  • Add RCRA sections 3004(u) and (v) and 3008(h) to the statutory authorities identified in Section 261.1(b)(2), which provides the statutory definitions of solid and hazardous waste govern the scope of EPA’s authority under certain sections of RCRA.

EPA further notes that the rule would be applicable in all states on the effective date, however, some states may require updating their regulatory programs and obtaining EPA approval prior to administering the changes. 

Listing of Specific PFAS as Hazardous Constituents

Regarding the second proposed rule, EPA intends to identify multiple PFAS compounds as hazardous constituents included in facility assessments and for potential investigation and corrective action processes at hazardous waste treatment, storage, and disposal facilities. EPA anticipates a 60-day public comment period. 

The prepublication version of this rule includes the following significant changes:

  • Add to the definition of hazardous constituents nine PFAS substances, including their salts and structural isomers: (1) perfluorooctanoic acid (PFOA), (2) perfluorooctanesulfonic acid (PFOS), (3) perfluorobutanesulfonic acid (PFBS), (4) hexafluoropropylene oxide-dimer acid (HFPO-DA or GenX), (5) perfluorononanoic acid (PFNA), (6) perfluorohexanesulfonic acid (PFHxS), (7) perfluorodecanoic acid (PFDA), (8) perfluorohexanoic acid (PFHxA), and (9) perfluorobutanoic acid (PFBA).

EPA identified over 1,700 facilities that could be required to take additional corrective action to address PFAS constituents under RCRA. EPA further indicated it would continue evaluating whether to add PFAS substances, including these nine, to the definition of hazardous waste. EPA stated that it expected to use the findings of this rulemaking in any future rulemaking regarding regulation of these PFAS (e.g., hazardous waste designation). As part of this effort, EPA summarized and discussed certain data that it relied on to evaluate toxicity and health assessments for the nine PFAS substances. Additionally, like its companion rule, this rule would be applicable in all states on the effective date and states would need to update their programs prior to enforcing the new rules. 

Conclusion The pending proposed rules represent a continued push by EPA to regulate PFAS compounds, striving to meet the goals outlined in its PFAS Strategic Roadmap announced on October 18, 2021 setting forth proposed actions EPA planned to take through 2024. Clearly, EPA is anticipating increased activity involving remediation of PFAS under RCRA in the next few years. Additionally, EPA plans to utilize these rules, and other PFAS-related rulemakings, to further regulate PFAS. Reed Smith is actively tracking PFAS developments with the EPA and across all markets. 

The Washington Department of Labor and Industries (L&I) adopted CR-103, creating a new Part B to chapter 296-67 WAC, on December 27, 2023.  Specifically applicable to petroleum refineries, Part B includes and updates existing PSM requirements as well as introduces several new requirements, some of which are expected to be onerous for refiners to implement.

The rule is similar to Cal/OSHA’s Refinery PSM Regulation, which was amended in 2019 and is one of the most protective in the country.

The final rule includes the following new requirements:

  • PSM Program. Employers must develop and maintain a written plan to provide for employee collaboration throughout all PSM processes. The refinery manager must be designated as the person with authority and responsibility for compliance with the PSM requirements.
  • Damage Mechanism Reviews (DMRs). A DMR must be completed for each existing and new process for which a damage mechanism exists. Where no DMR is performed, the rationale for determining that no damage mechanisms exist must be documented. The employer must complete no less than 50 percent of initial DMRs within three years and all remaining DMRs within five years of the effective date.
  • Hierarchy of Hazard Controls Analysis (HCA). HCAs must be updated and revalidated as standalone analyses for PSM processes at least once every five years.
  • Process Hazard Analysis (PHA). PHAs must take into account the results of any DMRs and HCAs.
  • Human Factors Program (HFP). A written HFP must be implemented within 18 months following the effective date. Employers must assess human factors in existing operating and maintenance procedures and revise them accordingly—50 percent must be completed within three years of the effective date and 100 percent within five years.  Human factors include environmental, organizational and job factors, and human and individual characteristics, such as fatigue.
  • Management Of Organizational Changes (MOOC). The employer must develop, implement and maintain written procedures to manage organizational changes, such as a reduction in staff levels or a change in shift duration. A MOOC must be done for every change with a duration exceeding 90 calendar days.
  • Root cause analysis (RCA). Employers must implement procedures for promptly investigating and reporting any incident that results in, or could have reasonably resulted in, a process safety incident. RCAs must determine the initiating and underlying causes of the incident and identify management system failures, including organizational and safety culture deficiencies.
  • Process Safety Culture Assessment (PSCA). Employers must perform a PSCA and produce a written report within 18 months of the effective date and at least every five years thereafter.

CR-103 is effective December 27, 2024, with rolling implementation dates for individual elements thereafter. For implementation deadlines applicable to specific CR-103 requirements, refer to L&I’s Implementation Dates Chart.

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The Occupational Safety and Health Administration (“OSHA”) has recently submitted to the White House Office of Management and Budget (“OMB”) a final rule to update its Hazard Communication Standard (“HazCom”), which regulates the classification and labeling of hazardous chemicals in the workplace. The rule aims to align the HazCom with the latest version of the Globally Harmonized System of Classification and Labeling of Chemicals (“GHS”), which is an international framework for consistent chemical hazard communication. The rule introduces some significant changes and challenges particularly for chemical companies and especially those exporting to the European Union (“EU”).

One of the most controversial aspects of the rule is the requirement to include on warning labels “any hazards” posed by a chemical. This includes potential hazards of the chemical not only in its current form but possible downstream combinations and reactions as well. This may require companies to craft safety sheets and warning labels for chemicals not already subject to work-safety rules. The change also places a burden on companies to gather and evaluate data on the potential hazards of their chemicals in various scenarios and contexts, which could be costly, time-consuming, and uncertain. Effected companies will need to keep alert of changed hazard warnings, labeling requirements, and shifts in protection for confidential business information, such as trade secrets and proprietary formulas.

Another challenge for international chemical companies is the compatibility of the rule with the EU’s chemical regulations, which are more stringent and progressive than in the United States. Even with the changes, the final rule is still behind the international GHS, especially regarding chemicals and products that have been tested on animals, like cosmetics.

This creates a dilemma for companies who want to comply with both OSHA and EU regulations and may force consideration of separate labels for different jurisdictions. However, separate labels also create confusion and mistrust among consumers and regulators, who may wonder why a product has different hazard warnings in different markets.

The proposed final rule also calls for changes that would reduce labeling on small-containers. Under the rule, containers less than or equal to 100 milliliters would now only need to include the product identifier, pictograms, signal word, and then the chemical manufacturer’s name and phone number—the full list of hazard statements and precautionary statements would be omitted. Additionally, for containers with a three-milliliter capacity, the container would only need to bear the product identifier if the manufacturer can “demonstrate that a label would interfere with a normal use of the container.” The final rule was submitted for OMB approval on October 11th, 2023 and is expected to be finalized early next year.

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On September 30, 2023, California Governor Gavin Newsom signed SB-553 into law. SB-553 is the nation’s first workplace violence prevention law.  The law adds a new section 6401.9 to the California Labor Code, which will be implemented by Cal/OSHA.  The new law requires that employers an effective plan aimed at preventing workplace violence in place by July 1, 2024.  The plan may be incorporated into an existing Injury, Illness, and Prevention Plan and does not apply to workers teleworking form a location of the employee’s choice or employers already regulated by existing standards for the healthcare industry.

The workplace violence prevention plan must be in writing, be available to employees, and include the following:

  • Names or job titles of the persons responsible for implementing the plan
  • Methods the employer will use to implement the plan
  • Procedures to obtain the active involvement of employees and authorized employee representatives in developing and implementing the plan
  • Methods the employer will use to coordinate implementation of the plan with other employers, when applicable
  • Procedures for the employer to accept and respond to reports of workplace violence, and to prohibit retaliation against an employee who makes such a report
  • Procedures to ensure that supervisory and nonsupervisory employees comply with the plan
  • Procedures to communicate with employees regarding workplace violence matters and how their reported matter will be investigated
  • Means to alert employees of the presence, location, and nature of workplace violence emergencies
  • Evacuation or sheltering plans
  • Procedures for identifying workplace violence hazards
  • Procedures to investigate and correct past incidents

In addition to the workplace violence prevention plan, employers must keep a log of all workplace incidents. The log must include the following:

  • The date, time, and location of the incident
  • The workplace violence type(s) involved in the incident (as defined in the statute)
  • A detailed description of the incident
  • Details regarding who committed the violence, including whether the perpetrator was a client or customer, family or friend of a client or customer, stranger with criminal intent, coworker, supervisor or manager, partner or spouse, parent or relative, or other perpetrator
  • A description of the circumstances at the time of the incident, including, but not limited to, whether the employee was completing usual job duties, working in poorly lit areas, etc.
  • The type of incident, including, but not limited to, whether it involved any of the following:
    • Physical attack without a weapon, including, but not limited to, biting, choking, grabbing, hair pulling, kicking, punching, slapping, pushing, pulling, scratching, or spitting
    • A threat of physical force
    • Sexual assault or threat
    • An animal attack
  • The consequences of the incident, including, but not limited to whether law enforcement was contacted, and actions taken to protect employees from a continued threat.

Employers should ensure that the log does not include personal identifying information for any persons involved. All records including the workplace incident log, training records, workplace violence investigations, and records of workplace violence hazard identification, evaluation, and correction, all must be maintained for 5 years.

Training must be provided to employees, including on the employer’s plan, the rule’s requirements and definitions, how to report incidents, workplace violence hazards specific to jobs and associated corrective measures, the violent incident log, and opportunity for Q&A.

California Code of Civil Procedure section 527.8 was also amended to allow employers to seek restraining orders to prevent workplace violence where necessary.