Articles, Alerts & Perspectives

The Legal Intelligencer

(by Molly E. Meacham)

It is a familiar scene to many employers. After searching for the right individual to fill an important position, a promising candidate emerges. The new employee will have top-level access to confidential information and customers, and their offer letter anticipates that the employee will sign restrictive covenants including noncompetition and nonsolicitation agreements as a condition of employment. Current operations are a bit chaotic—including some remote work—so the agreement isn’t provided prior to the first day of employment. The employee knows they will have to sign eventually, but the employer doesn’t press the issue and allows time for the new employee to review the terms. Is this a valid and enforceable restrictive covenant agreement?  According to the Pennsylvania Supreme Court’s June 16, decision in Rullex v. Tel-Stream, the answer is no.

A restrictive covenant such as a noncompetition or nonsolicitation agreement is a contract that must be supported by adequate consideration to be enforceable in Pennsylvania. Pennsylvania views starting a new job as sufficient consideration, provided that the agreement is executed at the start of the employment relationship. In Rullex, the subcontractor in question was aware that a non-competition agreement would be required as part of the relationship, in which the subcontractor would be performing cellphone tower work for a telecommunications company. Although the subcontractor was given a copy of the agreement on his first day of work, he was allowed to take time to review it and did not return a signed copy until at least two months later. The subcontractor later performed cellphone tower work for a competitor of the telecommunications company, resulting in a lawsuit seeking to prevent him from working with that competitor or any other competitors of the telecommunications company. …

The Legal Intelligencer

(by Gary Steinbauer)

Lawsuits pending before the U.S. Court of Appeals for the D.C. Circuit are likely to shape the U.S. Environmental Protection Agency’s (EPA’s) authority to regulate greenhouse gas (GHG) emissions from stationary sources under the Clean Air Act (CAA). These legal challenges involve two high-profile CAA deregulatory actions: The EPA’s Affordable Clean Energy rule (“Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations,” 84 Fed. Reg. 32520 (July 8, 2019)) (ACE Rule) and the EPA’s rule eliminating the transportation and storage segments from and rescinding methane requirements in the new source performance standards for the oil and gas industry (“Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review Rule,” 85 Fed. Reg. 57,018 (Sept. 14, 2020)) (policy Amendments rule) (collectively referred to as the rules). The rules repeal and replace Obama-era GHG emission regulations promulgated pursuant to Section 111 of the CAA, 42 U.S.C. Section 7411.

Section 111 of the CAA grants the EPA authority to establish national performance standards for categories of sources that cause or significantly contribute to “air pollution which may reasonably be anticipated to endanger public health or welfare.” Section 111 of the CAA establishes separate regulatory tracks for new, reconstructed and modified sources and existing sources that would otherwise qualify as regulated new sources. For new, reconstructed, or modified sources, the CAA requires the EPA to establish new source performance standards (NSPS), representing the “best system of emission reduction” (BSER), that apply directly to the particular source category. See 42 U.S.C. Section 7411(b). For existing sources, the EPA is to establish BSER-based emission guidelines that are to be applied through state-issued performance standards. …

Smart Business 

(by Sue Ostrowski featuring Carl Ronald)

When the economy started shutting down in March as a result of COVID-19 and employees began working remotely, keeping intellectual property and proprietary information safe didn’t top the list of companies’ concerns.

“Some businesses didn’t put procedures in place or have appropriate training classes because no one really thought the pandemic would extend as long as it has,” says Carl Ronald, shareholder at Babst Calland. “They didn’t instruct employees on how to identify important confidential information or safeguard certain proprietary documents when working from home.”

Smart Business spoke with Ronald about how to keep your company’s proprietary information safe when employees are working outside the office.

What approach should employers take to protect proprietary information?

There are different levels of confidentiality with different information, so I like to begin by identifying the information you have and classifying it accordingly. Some things are sensitive and you’d prefer them not to be disclosed, such as manufacturing schedules, production forecasts, or discounts for specific customers. But while those are things you don’t want your competitors to know, it isn’t going to be disastrous to the company if they are inadvertently disclosed.

Other information, such as a trade secret or the development of a new process that gives you a competitive advantage can devastate your business if it gets out. So, the first step is to identify the information you have and label it appropriately.

Second, businesses should train employees on the different categories of information and make sure they are treating each properly. Make sure everyone understands the importance of keeping information safe and reiterate basic steps to create barriers to access, such as not sharing passwords and using privacy screens when laptops are used in public.Third, identify employees who have access to confidential information and make sure they are bound by confidentiality agreements. …

The Legal Intelligencer

(by John McCreary)

This is the third installment of the author’s episodic examination of the employment law implications of the legalization of medical marijuana. The first installment appeared in The Legal Intelligencer’s Feb. 9, 2017, online edition—shortly after Pennsylvania’s Medical Marijuana Act (MMA) became effective—and described some of the ambiguities of and practical difficulties with the MMA’s employment provisions. This was followed by an article in the March 21, 2019, edition of The Legal surveying how jurisprudence from other jurisdictions had addressed some of the issues identified in the first article. There now have been a few Pennsylvania decisions on the subject, which along with the courts elsewhere are slowly creating a body of law defining rights and obligations under the medical marijuana laws. From review of these recent cases we can conclude that the courts are sympathetic to medical marijuana patients, but to this point they have yet to squarely address the significant job safety issues likely to be encountered  in the workplace, issues recognized in the Pennsylvania MMA as well as in  the analogous legislation  from other states.

Pennsylvania cases

Two Pennsylvania decisions of note provide insight into the approach of the commonwealth’s courts to the issues raised by the use of medical marijuana.

Palmiter v. Commonwealth Health Systems, No. 19-CV-1315 (Lackawanna Cty. 2019) found an implied cause of action to enforce the MMA’s antidiscrimination provision. That section of the MMA creates a protected class of employees “certified to use medical marijuana,” who are protected against employment discrimination because of such “status” as a certified user. See 35 Pa.C.S.A. Section 10231.2103(b)(1). But uniquely among the commonwealth’s employee-protective laws, the MMA does not provide statutory remedies, nor does it explicitly confer jurisdiction on the courts to address violations. …

The PIOGA Press

(by Julie Domike, Michael Winek, Gina Falaschi and Gary Steinbauer)

On August 13, the U.S. Environmental Protection issued two prepublication final rules related to the New Source Performance Standards for the Crude Oil and Natural Gas Industry at 40 C.F.R. Part 60, Subparts OOOO and OOOOa (NSPS). The two rules―the “policy amendments” and “technical amendments”―arise from EPA’s review of the NSPS pursuant to President Trump’s 2017 Executive Order 13782, “Promoting Energy Independence and Economic Growth,” which directs the agency to review existing regulations that potentially “burden the development or use of domestically produced energy resources” and to revise or rescind regulatory requirements if appropriate. The rules become effective 60 days after publication in the Federal Register.

 Policy amendments

The agency’s policy amendments revise NSPS Subpart OOOO (promulgated in 2012), regulating volatile organic compound (VOC) emissions from certain new, reconstructed, and modified sources in the oil and natural gas industry, and NSPS Subpart OOOOa (promulgated in 2016), regulating VOC and methane emissions from specified new, reconstructed, and modified sources in the oil and gas industry.[1] This rule provides that:

(1) The transmission and storage segments are no longer included in any source category regulated by the NSPS. These excluded emissions sources include transmission compressor stations, pneumatic controllers and underground storage vessels. To regulate a source category under the NSPS, the agency must first make a finding that the emissions of air pollutants from that source cause or contribute significantly to air pollution. These segments were not included in the original NSPS, and no such finding was made when these segments were added to the NSPS in the 2012 and 2016 final rules, making the regulation of the segments improper under the Clean Air Act (CAA). …

The Legal Intelligencer

(by Blaine Lucas and Anna Skipper)

Most lawsuits settle before disposition by the courts. Any settlement agreement is just that, an agreement between the parties, which to be enforceable must possess all the elements of a valid contract—offer, acceptance, and consideration or a meeting of the minds. In Pennsylvania, when one of the parties to a settlement agreement is a public entity, additional considerations come into play, most notably the Sunshine Act, 65 Pa. C.S. Sections 701-716.

Enacted by the General Assembly to facilitate more transparent means of governmental decision-making, the Sunshine Act has existed in some form since 1974, and places restraints upon a local agency’s ability to enter into contracts, including settlement agreements. Specifically, the Sunshine Act requires that all “official action,” including final decisions on the creation of liability by contract or the adjudication of rights, duties and responsibilities, must be taken at a duly advertised meeting open to the public. On the other hand, the Sunshine Act permits “deliberations” in six enumerated categories to take place in private “executive session.” One permissible reason to deliberate in private is to consult with the agency’s attorney regarding information or strategy in connection with litigation or with issues on which identifiable complaints are expected to be filed. However, any official action arising out of deliberations in executive session still must be taken at an open meeting. Thus, even if  settlement of a lawsuit is discussed in executive session, it still must be voted upon at a public meeting subject to all of the Sunshine Act’s requirements.

Recently, the Pennsylvania Commonwealth Court considered the fate of a settlement agreement that was agreed upon by a public agency in executive session, but never voted upon at a public meeting. …

RMMLF Mineral Law Newsletter

(By Joseph K. Reinhart, Sean M. McGovern and Casey J. Snyder)

In a June 25, 2020, press release and live press conference, Pennsylvania Attorney General Josh Shapiro announced the findings and recommendations of Pennsylvania’s 43rd Statewide Investigating Grand Jury report on the inquiry into the unconventional oil and gas industry. See Office of Att’y Gen., Commw. of Pa., “Report 1 of the Forty-Third Statewide Investigating Grand Jury.” As a result of the two-year investigation, the grand jury’s report outlined its opinion that the Pennsylvania Department of Environmental Protection (PADEP) and the Pennsylvania Department of Health (PADOH) failed to oversee the hydraulic fracturing industry and fulfill their responsibilities to protect Pennsylvanians from the impact of the industry’s operations.

The opinions in the report relied on testimony from Pennsylvania residents about environmental and health impacts from unconventional operations, in addition to testimony of witnesses who worked for PADEP and PADOH. The grand jury’s supervising judge permitted the report to be shared with the Secretaries of PADEP and PADOH, allowing them, or their designees, to respond to the allegation in the report.

The report concluded that PADEP was unprepared for the introduction and expansion of the unconventional oil and gas industry and failed to adequately regulate the industry, train its staff, communicate information within the agency, adequately test water samples, adequately inspect operators, notify landowners near fracking operations of environmental issues, take adequate enforcement action (including failing to refer cases to the state attorney general), or listen to the public. Despite acknowledging PADOH’s efforts under the current gubernatorial administration, the grand jury found that PADOH failed to sufficiently recognize or respond to the public health consequences of fracking, create a collective public outreach or education response to health complaints, or work with PADEP to gather data about health impacts. …

RMMLF Mineral Law Newsletter

(By Joseph K. Reinhart, Sean M. McGovern, Daniel P. Hido and Gina N. Falaschi)

As previously reported, the Pennsylvania Department of Environmental Protection (PADEP) continues its rulemaking to limit carbon dioxide (CO2) emissions from fossil fuel-fired electric power generators consistent with the Regional Greenhouse Gas Initiative (RGGI) Model Rule and Governor Tom Wolf’s October 3, 2019, Executive Order No. 2019-07, 49 Pa. Bull. 6376 (Oct. 26, 2019). See Vol. XXXVII, No. 2 (2020); Vol. XXXVII, No. 1 (2020); Vol. XXXVI, No. 4 (2019) of this Newsletter. PADEP’s efforts, however, have met significant resistance in recent months.

On June 22, 2020, Governor Wolf amended his original executive order to extend PADEP’s deadline to present the rulemaking to the Environmental Quality Board (EQB), the independent body responsible for adopting proposed PADEP regulations, from July 31, 2020, until September 15, 2020. See Exec. Order No. 2019-07, as amended, 50 Pa. Bull. 3406 (July 11, 2020). This extension provides PADEP with additional time to conduct further outreach needed due to disruption caused by the COVID-19 global pandemic and to respond to advisory committee and community feedback.

Advisory Committee Activities

Several advisory committees have recently voted against presenting PADEP’s draft rulemaking to the EQB. First, PADEP presented its preliminary draft proposed rulemaking to establish a CO2 budget trading program to the Air Quality Technical Advisory Committee (AQTAC) on February 13, 2020, and held a virtual special joint informational meeting with AQTAC and the Citizens Advisory Council (CAC) on April 23, 2020, to present further information on the program. …

Washington, DC

EmTech Law Blog

(by Gina Falaschi)

The State of California has taken another leap to support electric vehicle owners and manufacturers.  On August 27th, the California Public Utilities Commission formally approved a plan from investor-owned utility Southern California Edison (SCE) to fund approximately 37,800 electric vehicle charging ports within its service territory.  Under the program, known as Charge Ready 2, SCE will install and maintain the charging infrastructure, while program participants will own, operate and maintain qualified charging stations.  SCE will also provide rebates to lower the cost of program participation, including an expanded rebate program to support EV charging ports in new multifamily dwellings under construction.

Of the $436-million-dollar budget, $417.5 million will fund the charging infrastructure for Level 1, Level 2, and direct current fast chargers, while the remaining funds will be used for marketing, education, outreach, and evaluation programs.  The utility, which provides power to 15 million people across 50,000-square miles of Southern California, has committed to install 50% of these chargers in disadvantaged communities that are often disproportionately impacted by air pollution.

This program expands the Charge Ready Pilot program, which began three years ago, and joins SCE’s Charge Ready Transport, which aims to provide charging to support 8,490 medium- and heavy-duty electric vehicles over the next five years.

The Charge Ready 2 program will benefit current owners of electric vehicles by increasing charging options and possibly enhancing the market for used electric vehicles, making electric vehicles a more affordable option for more consumers.  The program will also encourage the purchase of new electric vehicles, which will benefit not only consumers wanting to own an EV, but also manufacturers who must meet their required percentage of zero emission vehicle sales. …

Pittsburgh, PA – Cabot Oil & Gas Corporation, in cooperation with Marcellus Drilling News and Natural Gas Now hosted a Think About Energy Briefing webinar on Wednesday August 26, 2020.

Today’s webinar featured Patrick Henderson of the Marcellus Shale Coalition, Kathryn Klaber of the Klaber Group and Joseph Reinhart of Babst Calland.

The webinar provided attendees with a look back at the environmental and regulatory progress that has occurred since the shale industry started in earnest over a decade ago. Panelists discussed the numerous legislative, regulatory and best management practices that have evolved through cooperation and respect for the communities and environment in which the industry operates.

George Stark, Director, External Affairs, Cabot Oil & Gas Corporation, moderated today’s discussion. “We are fortunate to have panelists who have been involved in the shale industry for more than a decade in the Commonwealth. In each of their respective roles, they all had one common goal – how can we get this done the right way. The industry has made tremendous strides over the past decade and this would not have happened without the expertise of panelists like we have today,” said Stark.

Patrick Henderson, Director of Regulatory Affairs for the Marcellus Shale Coalition, focused on the environmental improvements in Pennsylvania and their impact on the quality of life.

“We’ve made terrific progress over the past decade in Pennsylvania, and because of safe and responsible natural gas development, our environment is better protected and our air quality is dramatically improved,” said Henderson. “Pennsylvania has among the highest of environmental standards for ensuring that natural gas is developed safely and responsibly, and our state Department of environmental Protections own data demonstrates that natural gas operators have among the highest environmental compliance rates of any industry in the Commonwealth.”

Henderson highlighted the shale industry’s commitment to getting it right from an environmental perspective. …

Smart Business 

(by Sue Ostrowski with Justine Kasznica)

As Pittsburgh and the surrounding region continue to attract and grow companies that support the space industry, a space collaborative is gaining ground to bring stakeholders together.

“If we do things right, Pittsburgh is well-positioned to be recognized as a center for research and commercialization of space-related technologies and innovation,” says Justine Kasznica, an attorney at Babst Calland.

Smart Business spoke with Kasznica about the growing number of local companies and regional stakeholders supporting space exploration.

How did the space collaborative begin?

In 2019, Astrobotic Technology Inc., a Pittsburgh-based space robotics company building lunar delivery capabilities, made national news when it was awarded an $80 million NASA grant for a mission to develop a lunar lander to deliver payload to the lunar surface. This year, Astrobotic was awarded an additional $200 million NASA grant for an historic mission to deliver a NASA rover to drill for water ice on the South Pole of the Moon. A group of individuals representing industry, academia, local and state government, as well as regional economic development organizations — all passionate about space — saw this as a unique opportunity to coalesce a broader network of existing regional assets to establish a space industry group in Pittsburgh.

What role have other institutions played in bringing Pittsburgh to the forefront of space-related industries?

Pittsburgh has been involved in space history since the Apollo era, having manufactured much of the steel and glass hardware, as well as communications technology, for the Apollo 11 mission. Today, the region’s advanced manufacturing capabilities and world-class expertise in artificial intelligence, robotics, and space transport and logistics can propel Pittsburgh to an even more dominant seat at the table. …