Regulatory Update for Logistics Professionals and Manufacturers

Fred Thimmel, with Bryant Products, Inc., presented an update on current and pending legislation at the recent Fall meeting of the Conveyor Equipment Manufacturers Association (CEMA). A summary of the key regulatory activities of interest to managers in logistics and manufacturing follows:

Sexual Discrimination

HR. 2692, S.1284 Employment Non-Discrimination Act of 2001 - Prohibits employment discrimination on the basis of sexual orientation by covered entities (including employment agencies, labor organizations, and training programs). Prohibits related retaliation and coercion for employees seeking remedies against discrimination. It does not require benefits for dome4stic partners and it exempts religious groups, members of the armed forces from all of its provisions. ENDA would apply to all employers with more than 15 employees and would make it an unlawful employment practice for an employer to discriminate against an individual (including hiring, discharging or terms and condition of employment) because of sexual orientation.

Status: No recent activity

S.77 Paycheck Fairness Act - Amends the Fair Labor Standards Act of 1938 (FLSA) to revise remedies for and enforcement of prohibitions against sex discrimination in the payment of wages It prohibits related retaliation and coercion for employees seeking remedies against their employers discrimination. It increases penalties for non-compliance and authorizes the government to seek compensatory7 and punitive damages on behalf of affected employees. It also requires the EEOC to better train their staff to execute the provisions of the act and the Labor Department to increase wage and benefits information gathering to monitor compliance.

Status: No recent activity

Medical / Employee Benefits

S. 889, S.6, HR 2315, S1052, HR 2563 - Managed Care Improvement – Patients Bill of Rights - A collection of bills, which like the original initiatives, seeks to protect patients from care limitations imposed by managed care and insurance providers. It assumes that consumers – employees are not afforded sufficient protection and access to emergency care, maternity and prenatal services, specialists’ services, prescription drugs, plan information, and pediatric care.

--Allow employees to sue their employers for the medical malpractice of providers covered under company health plans for injury, malpractice and wrongful death but caps damage awards

Allow employees to sue insurers for medical malpractice and wrongful death

In addition to standard damage and punitive awards, would also allow employees to collect for lost wages and of the economic damages

Offers incentives to insurers to make it easier for the self employed to obtain medical coverage

Works on the assumption that health insurers are denying necessary services and establishes over 300 federal mandates for such things as access to specialists, second opinions, doctors of choice and emergency care – essentially creates federal guidelines for health care administration

Promotes patient choice and sets up grievance procedures for patient claims against insurers

Gives patients more rights in selecting primary care and specialists

Provides small employers greater access to Health Care Coverage

Status

The debate rages on over this bill. It has yet to reach conference between the two chambers. There are amendments to cap liability claims, make medical insurance less expensive by expanding the allowance for MSA’s and allow plans to offer higher deductibles. There are also amendments that would offer malpractice claim caps for physicians, which would, by extension, lower insurance costs. No action last 12 months.

HR 4600 Now HR 5 –l HEALTH ACT of 2003 – Places limits on plaintiff compensation in Health Care suits. Requires a suit to be brought within three years of the date of injury or one year after the claimant discovers or should have discovered the injury, whichever occurs first. Allows the plaintiff full compensation for actual economic losses but limits punitive or non-economic damages to 250,000. In order to collect punitive damages, the plaintiff must prove that the defendant was clearly guilty of malicious intent to injure or a deliberate failure to avoid unnecessary injury. IN an effort to block forum shopping in States that may be more plaintiff beneficial, this bill preempts State law unless such laws imposes greater protections for health care providers and organizations against liability, loss, or damages.

In a separate resolution, but not a component of the bill, Congress express the sense that a health insurer should be liable for damages for harm caused when it makes a decision as to what care and procedures are appropriate.

Status: Passed the House on 3/12/03. Will now be sent to the Senate.

S.1611 To provide for the establishment of a commission to conduct a study concerning the overtime regulations of the Department of Labor. The Commission shall conduct a thorough study of, and develop recommendations on, issues relating to the modernization of the overtime provisions of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) in order to promote clarity and compliance. In conducting such study the Commission shall--

1- review the categories and number of workers not eligible for overtime pay under current regulations under the Fair Labor Standards Act of 1938 and identify how many workers and employers might be affected by proposed changes to such regulations;

2- determine if the proposed regulation relating to overtime is sufficiently clear to be easily understood by employers and workers;

3- assess the paperwork burden that employers would have in order to assure that each individual worker, claimed to be exempt from such overtime requirements, actually is exempt under such regulation;

4- assess the extent to which it will be clear to the individual worker as to his or her overtime pay protection under the proposed regulation

Status: Introduced into the Health education and Welfare Committee on September 11, 2003.

Torte Reform

H.R. 2341 seeks to curb both frivolous class-action suits and forum shopping, where trial lawyers shop for state/local courts that favor local attorneys over out-of-state companies. Seeks to limit the percentage lawyers can take in a settlement and speed of the notice process in class action lawsuits. The NAM notified all House members that H.R. 2341 could be considered a Key Manufacturing vote.

Status: The House yesterday approved the legislation by a vote of 233-190. It was passed on to the Senate and into the Judiciary committee in July of 2002.

HR. 1639 Common Sense Medical Malpractice Reform Act of 2001 –

1- Establishes an alternative dispute resolution (ADR) procedure for all health care liability actions, except an action for damages arising from a vaccine-related injury or death.

2- Establishes ceilings for non-economic and punitive damages, and contingency fees.

3- Declares that any ADR used to resolve a health care liability action or claim shall contain provisions for a statute of limitations, non-economic damages, joint and several liability, punitive damages, periodic payments, and limitations on contingent fees.

Status: Held up in House committee since April of 2001.

Commerce

HR 2436, 2460, 2511, 2587, S 517 – Restructuring of Electricity and Natural Gas Distribution- In essence, this group of bills seeks to allow free market pricing of power to consumers and industry. They also remove federal regulations barring consolidation of suppliers within the industry and strengthen consumer protections against price gouging or strategies that subsidize discounts to large consumers by penalizing smaller users. It also requires utilities to attend regional conferences to co-ordinate the effects of consolidation and power generation and grid sharing.

The meat of the bill’s provisions is:

- A holding company in a holding company system that includes a transmitting utility or an electric utility company acquire authorization of the Federal Energy Regulatory Commission (FERC) prior to purchasing acquiring, merging or consolidating, with certain utilities

- Empower FERC to approve or revoke market-based rates

- Authorize FERC to require unregulated transmitting utilities to provide open access transmission

There are hundreds of amendments from pork barrel provisions for specific projects to environmental initiatives, development of alternative generation means such as wind-power, global climate change studies to sanctions against Iraq.

Status: Many of the provisions passed the Senate in April of 2002 and are being debated in various House Committees. No recent action.

HR 463 Investment in America Act– seeks to make permanent the R&D credit. It would increase the rate at which companies can claim incremental credits and both simplify the claims process and extend the eligibility of claiming R&D credits to a greater range of companies.

Status: passed several sub-committees and now sent to the House Ways and Means Committee – usually a certain precursor to House Passage.

Chinese Currency Valuation – by some estimates, the Chinese yuan is undervalued by 40% providing Chinese exports a strong pricing advantage against goods manufactured here and in other countries. This undervaluation is cited as one of the reasons manufacturing here in the United States is hemorrhaging jobs. The Bush administration is pushing the Chinese to end this practice and revalue the currency to promote fair

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