Careers

Diversity, Equity & Inclusion

Experience

Innovation

Interactive Maps

Locations

About

Pages

Meet our team of innovators
Ask us how we do it

Professionals

Insights

Services

Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

Home | Thompson Hine LLP

Atlanta

Chicago

Cincinnati

Cleveland

Columbus

Dayton

New York

Washington, D.C.

The chemical industry is subject to complex and ever-evolving laws and regulations. New standards governing the production and use of chemicals are implemented every year worldwide, and existing laws and regulations are constantly changing to keep pace with new information and scientific advancements. Chemical Industry Regulatory Update provides a monthly digest of recent legislative and regulatory developments and related industry news.

contentpilot/introduction

Featured in this issue:

core/paragraph

core/list

Employment Issues to Consider as Businesses Get Ready to Re-Open After COVID-19

core/heading

<a href="https://www.thompsonhine.com/professionals/glowacki-megan">Megan S. Glowacki</a>, <a href="https://www.thompsonhine.com/professionals/spiller-keith">Keith P. Spiller</a>

After weeks (if not months) of state “stay-at-home” and “shelter-in-place” orders, social distancing mandates and telework, there may be light at the end of the tunnel for businesses looking to get back to work in their workplace. Although it remains to be seen when, and under what conditions, businesses will be able to resume regular operations, employers should start thinking now about how to do so in a manner that minimizes legal risk. Consideration should be given to requirements or recommendations issued by federal and state government officials, including the U.S. Department of Labor (DOL) and the CDC, which endorses a phased re-opening.

For businesses in most locations and industries, re-opening will not occur overnight and may involve gradual steps. In preparation, it is important for employers to have a plan in place that addresses a wide range of topics and that is tailored to the workforce and workspace. Thompson Hine is ready to help your business issue-spot key areas for employment concern.

The Physical Office Space and Returning Employees

Employee Health and Welfare

Employer Policies

FOR MORE INFORMATION

For more information, please contact your Thompson Hine Labor and Employment counsel to discuss any questions about re-opening your business.

Megan S. Glowacki 513.352.6503 <a href="mailto:Megan.Glowacki@ThompsonHine.com">Megan.Glowacki@ThompsonHine.com</a>

Keith P. Spiller 513.352.6722 <a href="mailto:Keith.Spiller@ThompsonHine.com">Keith.Spiller@ThompsonHine.com</a>

Post-COVID-19 Environmental Compliance Checklist

<a href="https://www.thompsonhine.com/professionals/friedman-heidi">Heidi B. (Goldstein) Friedman</a>

As companies across the country begin reopening or resuming normal operations following closures or restrictions implemented due to the COVID-19 pandemic, many will have questions about how these closures or operational reductions affect their environmental compliance requirements. We have developed a checklist companies can use to assess their environmental compliance status following the lifting or reduction of federal and state limitations and guidelines to help minimize the risk of future enforcement actions based on the state and federal guidance issued by environmental agencies to date.

Click&nbsp;<a href="https://admin.thompsonhine.com/wp-content/uploads/1139/doc/Post-COVID-19_Environmental_Compliance_Checklist.pdf" target="_blank" rel="noopener">here</a> to view or download the checklist.

From Employers to Homeschooling to Healthcare: Federal Government Provides Guidance Clarifying Data Privacy Requirements During COVID-19

<a href="https://www.thompsonhine.com/professionals/adabi-mona">Mona Adabi</a>, <a href="https://www.thompsonhine.com/professionals/brenneman-deborah">Deborah S. Brenneman</a>, <a href="https://www.thompsonhine.com/professionals/haper-cori">Cori R. Haper</a>, <a href="https://www.thompsonhine.com/professionals/stransky-steven">Steven G. Stransky</a>, <a href="https://www.thompsonhine.com/professionals/zych-thomas">Thomas F. Zych</a>

In response to the COVID-19 health emergency, businesses, schools, and even parents have collected and used personal information in an unprecedented manner. For example, many organizations have begun, for the first time, screening and recording the body temperatures of their employees, contractors, customers. Other organizations have started tracking the location and contacts of individuals who have tested positive for COVID-19 in order to minimize exposure to others. Even parents who have begun homeschooling or assisting with remote educational programs have starting using online platforms and tools that collect and retain personal information on their children. Given that the United States does not have comprehensive data privacy laws applicable to all sectors and activities, businesses and organizations may be subject to multiple federal and state data privacy and cybersecurity requirements when collecting personal information in these and other circumstances.

In order to assist with understanding the broad range of potentially applicable data privacy obligations during the COVID-19 pandemic, several federal agencies have begun issuing and updating guidance applicable to specific business, educational, and healthcare activities and functions. This guidance addresses, among other areas, the following: (i) collecting employee health records and disclosing COVID-19 exposure to co-workers, (ii) protecting children’s personal data in the online education context, and (iii) disclosing Protected Health Information (“PHI”) beyond contractual limitations to prevent the spread of the current pandemic. This guidance has been especially valuable to employers, educators, parents, health care organizations, and their service providers.

Employee Health Data and Confidentiality

On April 9, 2020, the U.S. Equal Employment Opportunity Commission (“EEOC”) updated its <a href="https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws" target="_self" rel="noopener">guidance</a> related to the types of personal information that organizations may collect on their employees during the COVID-19 health emergency, with a special emphasis placed on temperature taking and employee confidentiality. As background, the Americans with Disabilities Act (“ADA”) prohibits an employer from making “disability-related inquiries” and requiring “medical examinations” of employees, except under limited circumstances. According to the EEOC, measuring an employee’s body temperature is generally considered a medical examination for ADA purposes. In March of 2020, the <a href="https://www.eeoc.gov/facts/pandemic_flu.html">EEOC stated</a> that because of the severity of COVID-19, “employers may measure employees’ body temperature,” but that any medical information derived from the examination “would be subject to ADA confidentiality requirements.” The March guidance also addressed issues related to the types of questions employers could ask, and employment-related actions that employers could take against employees and job applicants.

In April, the EEOC updated its guidance to address new privacy-related issues and concerns related to COVID-19. In particular, the EEOC stated that the ADA requires that all “medical information about a particular employee be stored separately” from the individual’s personnel file (e.g., such as in an employee’s medical file) and subject to limited access restrictions. This medical information includes an employee’s self-disclosure that he or she has, or may have, COVID-19, or the employer’s notes or other documentation from questioning an employee about corresponding symptoms.

In addition, the EEOC recently gave a webinar where it addressed how employers could balance the need to maintain the confidentiality of an employee’s medical information and notify co-workers of possible exposure to COVID-19. Here, representatives from the EEOC stated that “[e]mployers should make every effort to limit the number of people who get to know the name of the employee” who has been diagnosed with COVID-19, but “exactly who in the organization needs to know the identity of the employee will really depend on each workplace and why a specific official needs this information.” For instance, a designated representative of the employer may interview an employee diagnosed with COVID-19 to identify the co-workers with whom he or she possibly had contact through the workplace, so that the employer can then properly notify those co-workers of the possible exposure. However, according to the EEOC, such third-party notification can be effectuated without disclosing the employee’s name. “For small employers,” according to the EEOC, “co-workers might be able to figure out who the employee is, but employers are still in that situation prohibited from confirming or revealing the employee’s identity.” The guidance is significant because the EEOC is not suggesting that employers refrain from notifying employees of the possible exposure to COVID-19 because co-workers “might be able to figure out” the identity of the diagnosed employee; but rather, the EEOC stresses the importance of employers maintaining the confidentiality of an employee’s name and underlying medical records when notifying co-workers of possible COVID-19 exposure. These notice and confidentiality obligations involve difficult and sensitive issues, especially in the context of smaller employment settings, and employers should exercise caution and diligence on how, and to whom, they disclose COVID-related health information.

Remote Learning and Children’s Online Privacy

On April 2, 2020, the Federal Trade Commission (“FTC”) published <a href="https://www.ftc.gov/news-events/blogs/business-blog/2020/04/coppa-guidance-ed-tech-companies-schools-during-coronavirus">guidance</a> related to the scope and applicability of the Children’s Online Privacy Protection Act (“COPPA”) in the remote learning context. The guidance is intended to assist both educators, their service providers, and parents and guardians who have now become homeschoolers or are assisting with remote education during the COVID-19 crisis. As background, COPPA applies to operators of commercial websites and online services, including some education technology platforms that are directed to children under 13 and that collect, use, or disclose personal information (e.g., first and last name; address; online contact information; a telephone number) from such children. COPPA also applies to operators of general audience websites or online services with actual knowledge that they are collecting, using, or disclosing personal information from children under 13.

Generally, organizations that are subject to COPPA must comply with several privacy-related disclosures and security measures, such as the following: posting online privacy policies describing their information practices; obtaining verifiable parental consent before collecting personal information online from children; providing parents and guardians with access to such personal information to review and/or have deleted; and, maintaining the confidentiality, security, and integrity of such information.

The FTC’s most recent guidance serves as a reminder that “schools can consent on behalf of parents to the collection of student personal information — but only if such information is used for a school-authorized educational purpose and for no other commercial purpose.” This third-party consent framework applies regardless of “whether the learning takes place in the classroom or at home at the direction of the school.”

Education technology service providers often provide online tools and platforms for schools, and thus collect and retain information on students (including children under the age of 13) when performing their services. In order to obtain consent from the school instead of from the parent, the FTC provides that these providers must provide the school the necessary COPPA-required notice of its data collection and use activities, and, as a best practice, should make the COPPA notice available to parents, and, where feasible, let parents review the personal information collected.

Because COPPA applies to the operators of commercial websites and services, it generally does not impose obligations directly on schools or homeschooling parents. Yet, according to the FTC, as schools and parents continue remote learning programs, “they should consult with their attorneys and information security specialists to review the privacy and security policies of the [education technology] services they use” and thoroughly assess “whether a particular site’s or service’s privacy and information practices are appropriate.”

U.S. Department of Health and Human Services

On April 2, 2020, the U.S. Department of Health and Human Services (“HHS”) announced a <a href="https://www.hhs.gov/sites/default/files/notification-enforcement-discretion-hipaa.pdf">“Notification of Enforcement Discretion”</a> addressing additional uses and disclosures of PHI in response to the COVID-19 health emergency. This enforcement discretion complements and supplements HHS’s previous notification issued in <a href="https://www.thompsonhine.com/publications/ocr-allows-flexible-telehealth-technology-use-during-covid-19-emergency">March</a>, which provided that HHS would not impose penalties for noncompliance with certain privacy and security requirements against certain health care providers “in connection with the good faith provision of telehealth” during the COVID-19 pandemic.

Under the current privacy and security regulations promulgated by HHS, “business associates” are generally only permitted to use and disclose PHI for public health and health oversight purposes if expressly permitted by the agreement executed between them and the covered entity (e.g., health care provider) to whom they are providing services. However, according to its April notification, HHS stated that it will not impose potential penalties for violations of certain provisions of the privacy and security regulations “against covered health care providers or their business associates for uses and disclosures of [PHI] by business associates for public health and health oversight activities during the COVID-19 nationwide public health emergency.”

However, according to HHS, such disclosures are only subject to its enforcement discretion if: (i) the business associate makes a “good faith” use or disclosure of the covered entity’s PHI for public health or health oversight activities consistent with certain federal requirements (e.g., disclosure of PHI to public health authorities to control the spread of COVID-19), and (ii) the business associate informs the covered entity within ten (10) calendar days after the use or disclosure occurs or commences. In addition, HHS makes clear that other federal data privacy and security regulations still apply to PHI, and business associates remain liable for complying with requirements to implement safeguards to maintain the confidentiality, integrity, and availability of electronic PHI.

Conclusion

As the COVID-19 pandemic continues to unfold, federal and state governments are trying to create the appropriate balance between privacy and business, education, and healthcare interests. The guidance they are providing will assist businesses, service providers, and even parents to navigate the complex data privacy framework within the United States.

For more information about recommended steps, please contact one of our Thompson Hine attorneys listed below:

Mona Adabi 202.263.4147 <a href="mailto:Mona.Adabi@ThompsonHine.com">Mona.Adabi@ThompsonHine.com</a>

Deborah S. Brenneman 513.352.6638 <a href="mailto:Debbie.Brenneman@ThompsonHine.com">Debbie.Brenneman@ThompsonHine.com</a>

Cori R. Haper 937.443.6856 <a href="mailto:Cori.Haper@ThompsonHine.com">Cori.Haper@ThompsonHine.com</a>

Steven G. Stransky 216.566.5646 <a href="mailto:Steve.Stransky@ThompsonHine.com">Steve.Stransky@ThompsonHine.com</a>

Thomas F. Zych 216.566.5605 <a href="mailto:Tom.Zych@ThompsonHine.com">Tom.Zych@ThompsonHine.com</a>

Main Street Lending Program: New Relief for Small to Mid-Sized Businesses

<a href="https://www.thompsonhine.com/professionals/brandt-katherine">Katherine D. Brandt</a>, <a href="https://www.thompsonhine.com/professionals/jones-tarnetta">Tarnetta Jones</a>, <a href="https://www.thompsonhine.com/professionals/off-emma">Emma Off</a>

On April 9, the Treasury Department and Federal Reserve released details about the new $600 billion Main Street Lending Program, which is designed to help shore up the economy. The program will be implemented using funds appropriated under the CARES Act and will permit small and medium-sized businesses to obtain financing through eligible lenders.

The Main Street Lending Program offers two new loan facilities: The Main Street New Loan Facility (MSNLF) for new term loans and the Main Street Expanded Loan Facility (MSELF) to increase the size of existing term loans originated before April 8, 2020. The MSNLF is geared toward smaller businesses, while the MSELF provides for larger loans. The goal of both facilities is to provide access to additional financing options to small and mid-sized companies that were in good financial standing before the COVID-19 crisis. Companies that took advantage of the Payroll Protection Program (PPP) may also receive Main Street loans, but companies may not access both the MSNLF and the MSELF. Unlike loans extended under the PPP, Main Street loans are not forgivable.

Who Is Eligible to Be a Borrower?

Companies with up to 10,000 employees or less than $2.5 billion in 2019 annual revenue that meet the additional requirements set forth below are eligible for loans under the Main Street Lending Program. Contrary to the terms of the PPP, affiliates of the potential borrower will not be considered in the eligibility determination and how applicants must count their employees. A minimum size requirement (for instance, over 500 employees) is not currently contemplated. To be eligible, a borrower:

Loan Features

The terms of all Main Street loans (under the MNSLF and MSELF) are:

Additionally, new loans extended under the MSNLF will be unsecured, while expanded loans extended under the MSELF will be secured by the same collateral securing the existing facility on a pro rata basis.

Loan Amount Limitations

Note that undrawn bank debt must be included in the calculation of debt and that EBITDA is likely to be a straight calculation without any add-backs.

Borrower Certifications

Borrowers will be required to certify the following under both the MSNLF and MSELF:

Considerations for Potential Borrowers

Further details on obtaining, completing and/or submitting applications for loans under the Main Street Lending Program have not been released. Main Street loans will be issued until September 30, 2020, unless the program is oversubscribed earlier or extended. The Federal Reserve is soliciting comments from various stakeholders regarding the program’s intended effectiveness and utility until April&nbsp;16, so there may be adjustments as a result of those comments. As loans under the Main Street Lending Program will likely be made on a first-come, first-served basis, businesses should consider starting a conversation now with their existing lenders, pending the release of further guidance. When applying, companies should be mindful of existing debt agreements, as well as provisions within their governance documents, shareholder agreements or other key contracts that may restrict their ability to borrow funds.

For more information, please contact:

Katherine D. Brandt 216.566.5760 212.344.5680 <a href="mailto:Katherine.Brandt@ThompsonHine.com">Katherine.Brandt@ThompsonHine.com</a>

Tarnetta Jones 212.908.3990 <a href="mailto:Tarnetta.Jones@ThompsonHine.com">Tarnetta.Jones@ThompsonHine.com</a>

Emma Off 513.352.6548 <a href="mailto:Emma.Off@ThompsonHine.com">Emma.Off@ThompsonHine.com </a>

Paycheck Protection Program: Borrowers Must Plan Now to Maximize Loan Forgiveness

<a href="https://www.thompsonhine.com/professionals/coleman-michael">Michael V. Coleman</a>, <a href="https://www.thompsonhine.com/professionals/debari-riccardo">Riccardo M. DeBari</a>, <a href="https://www.thompsonhine.com/professionals/lanciault-brian">Brian Lanciault</a>, <a href="https://www.thompsonhine.com/professionals/maffett-jennifer">Jennifer L. Maffett-Nickelman</a>

Through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress earmarked $349 billion, which has since been raised to a total of $660 billion, for small business loans to eligible businesses seeking assistance in meeting their payroll and operating costs during the COVID-19 pandemic. Because the amount forgiven depends on how funds are spent, businesses should plan now to use the funds in a manner that enhances the opportunity for forgiveness. These Paycheck Protection Program (PPP) loans are 100% guaranteed by the Small Business Administration (SBA) and, if certain criteria are met, may be entirely forgiven without federal tax consequences. To maximize forgiveness, borrowers should understand key provisions of the CARES Act and available SBA guidance and then carefully monitor their use of loan proceeds and maintain documentation to justify their requested forgiveness amount.

What are the limitations on PPP loan uses?

According to SBA rules published after the PPP was enacted, borrowers are permitted to use PPP loan proceeds only in the following manner: 75% or more of the loan amount must be used for “payroll costs”; with not more than 25% of the loan amount permitted to be used on interest payments on certain mortgages, rent, utilities, and interest payments on other debt obligations that existed before February 15, 2020. Although not in the text of the CARES Act, the SBA guidance makes it clear that the use limitations are required and not optional. We expect further guidance the week of April 27th on this point to help clarify some inconsistencies that can result in the application of these permitted use and forgiveness calculations.

PPP borrowers should be conscientious and careful with the use of every dollar of PPP funds received to help ensure compliance with the PPP rules and their certification delivered under penalty of perjury in connection with the loan application. Consequences for borrowers running afoul of this requirement (or of knowingly falsifying other certifications or figures included in the PPP loan process) could lead to severe civil and/or criminal consequences.

For clarity, “payroll costs” consist of:

A borrower’s “payroll costs” should include amounts to be withheld from employee compensation for federal tax purposes but exclude the employer’s share of federal payroll taxes. “Payroll costs” also do not include a business’s payments to independent contractors, compensation to employees who live outside the United States and qualified sick leave and family leave wages for which credits are allowed under the Families First Coronavirus Response Act (FFCRA).

For the other 25% of permissible PPP uses, interest payments on mortgages are limited to mortgage obligations owed by the borrower on mortgages that were in place before February 15, 2020. Similarly, rent and utilities must be obligations of the borrower arising out of rental arrangements or utility service agreements that existed before February 15, 2020.

How much of the loan is forgivable?

Pursuant to the CARES Act and SBA guidance, not all permissible loan uses are forgivable. PPP loans are forgivable up to an amount equal to certain costs incurred and payments made during the 8-week period that begins on the day the loan proceeds are disbursed. The SBA has clarified that the maximum amount of forgiveness will be equal to the amount of principal plus accrued interest. Therefore, a borrower that uses the entire loan proceeds as required during the 8-week period could have a minimal or no repayment obligation. As noted above, certain inconsistencies that currently exist in the available guidance affect the forgiveness calculation, and we expect that additional guidance forthcoming next week will address those.

Only the following costs and payments are counted for purposes of forgiveness:

Note that payments to service interest on pre-existing debt obligations is a permissible use, but not a forgivable use of PPP loan funds.

Borrowers also must contend with the PPP rules’ limitation—consistent with its prohibitions on PPP loan use—that a borrower’s forgivable amount must consist of at least 75% payroll costs and not more than 25% non-payroll costs. Again, as part of the application process, borrowers also certified that not more than 25% of the forgivable amount will consist of non-payroll costs. These limitations apply in the same manner to businesses, self-employed individuals, and independent contractors. We will be looking to the forthcoming guidance to provide additional clarity on the application of the 75/25% split rules to both the permitted use and forgiveness calculations.

Self-employed individuals and independent contractors may receive forgiveness in an amount equal to 8 weeks’ worth of their 2019 net profits as reported on IRS Form 1040, Schedule C. Interest payments on mortgage obligations, rent obligations, and utility payments may be included to the extent that they were deductible on Form 1040, Schedule C.

For amounts that are not forgiven, all borrowers will be required to repay those amounts amortized over the remainder of the 2-year maturity period after a 6-month deferral period ends. Interest is capped at 1% and the SBA’s 100% guaranty will continue to apply.

What other factors may impact a borrower’s forgiveness amount?

The CARES Act ties forgiveness to borrowers’ retaining certain employment and compensation levels. To that end, the PPP includes two other formulas that, if applicable, may further reduce a borrower’s forgiveness amount.

First, a “headcount” reduction will reduce the amount forgiven in proportion to any reduction in the borrower’s average monthly number of full-time equivalent employees (FTEEs) during the 8-week period as compared to a prior period. Which prior period? At its election, the borrower may choose either February 15, 2019 to June 30, 2019 or January 1, 2020 to February 29, 2020. To estimate this (and choose the better timeframe), a borrower should divide the average monthly number of FTEEs during the 8-week period by the average monthly FTEEs in each election period. If the result is 1 or greater, there will be no reduction. The borrower should choose the prior timeframe that yields a number closer to 1.

Second, certain “wage reductions” will also reduce the amount forgiven when compared to wages in a prior period. This formula assesses whether a borrower’s FTEEs received a “pay-cut” during the 8-week period compared to that employee’s rate of pay from the most recent full quarter—i.e., likely 1Q 2020. If so, the forgivable loan amount will be reduced by the amount the employee’s compensation level decreased more than 25%. This must be considered for each employee who did not receive more than $100,000 in annualized compensation in 2019. To estimate this, a borrower should calculate whether the pay rate for each such employee during the 8-week period will dip below 75% of the pay rate in the prior full quarter. If it has not, this reduction won’t apply.

The precise application of these two reductions is subject to further guidance from the SBA and the SBA has stated that it intends to issue specific guidance related to forgiveness. We will continue to monitor this and provide updates as appropriate.

How can borrowers comply with PPP requirements and position themselves for maximum and efficient forgiveness?

At some point after the 8-week period ends, borrowers may apply for forgiveness with their respective lender and lenders must provide a determination within 60 days. This is the crucial step for maximizing the value proposition offered by the PPP. In anticipation of this, borrowers can take several steps even before their loan is disbursed to ensure that they stay in compliance and maximize forgiveness in an efficient manner.

Chemical Industry Regulatory Update – May 2020

Services