Category Archives: Governance, Risk & Compliance

Monitoring Food Safety from Farm to Fork

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Food Production Safety

BALTIMORE—The Food and Drug Administration is increasingly harnessing data-driven, risk-based targeting to examine food processors and suppliers under the Food Safety Modernization Act. At this week’s Food Safety Summit, the FDA’s Roberta Wagner, director of compliance at the Center for Food Safety and Applied Nutrition, emphasized the risk-based, preventative public health focus of FSMA.

While it has long collected extensive data, the agency is now expanding and streamlining analysis from inspections to systematically identify chronic bad actors. FSMA regulations and reporting are revolutionizing many of the FDA’s challenges, but so is technology. According to Wagner, whole genome sequencing in particular has tremendous potential to change how authorities and professionals throughout the food chain look at pathogens. WGS offers rapid identification of the sources of foodborne pathogens that cause illness, and can help identify these pathogens as resident or transient. In other words, by sequencing pathogens (and sharing them in Genome Trakr, a coordinated state and federal database), scientists can track where contamination occurs during or after production.

At the same session, Jorge Hernandez, senior vice president of food safety and quality assurance at US Foods, also highlighted the importance of thorough risk evaluation and data-driven analysis for food companies.

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He encouraged a farm to fork approach to managing food safety and quality assurance risks, examining data as far back as possible so that companies just face the burden of maintaining safety, not combating or passing on contamination. Developing standards or suppliers that rest on a foundation of data and testing is the first step, but then companies must also be ready to check for compliance and implement change.

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The primary components of the food chain are standard: producers, processors, suppliers/distributors and operators. Between each, however, comes the opportunity for monitoring and verification checks that should serve as control points, Hernandez said. These controls must be integrated into every link in the chain, and food companies must constantly evaluate what systems are necessary to ensure success downstream.

Alabama Court Dismisses EEOC Dreadlocks Policy Challenge

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Employing reasoning adopted by a number of other courts, the U.S. District Court for the Southern District of Alabama recently dismissed the EEOC’s claim that an employer’s policy prohibiting employees from wearing dreadlocks violated Title VII – the case of EEOC v. Catastrophe Management Solutions. In its ruling, the Court confirmed that “employers’ grooming policies are outside the purview of Title VII,” and it further rejected the EEOC’s argument that the definition of race under Title VII should be read expansively to encompass more than immutable physical characteristics unique to a particular group.

Case Background

The case arose after Chastity Jones, an African-American applicant received an offer of employment from the defendant. At the time of the job offer, the employer had a grooming policy, which provided in part that “hairstyles should reflect a business/professional image” and prohibited “excessive hairstyles or unusual colors.” The employer interpreted the policy as prohibiting the wearing of dreadlocks, and thus conditioned its offer on Jones cutting off her dreadlocks. When Jones declined to do so, defendant withdrew the offer of employment. The EEOC filed suit, alleging that application of the policy to prohibit dreadlocks violated Title VII and that defendant intentionally discriminated on the basis of race. The employer moved to dismiss for failure to state a claim upon which relief can be granted.

EEOC’s Arguments

The EEOC argued that the employer had refused to hire Jones because she was black and that a policy that prohibits dreadlocks is racially discriminatory on its face because dreadlocks were determinant of racial identity. The EEOC also urged the Court to adopt an expansive definition of race under Title VII that would encompass “both physical and cultural characteristics, even when those cultural characteristics are not unique to a particular group.”

As an apparent fallback position, the EEOC argued that dismissal was inappropriate because it should be allowed to present expert testimony on three factual predicates:  1) “that Blacks are primary wearers of dreadlocks”; 2) that dreadlocks are “a reasonable and natural method of managing the physiological construct of Black hair”; and 3) that dreadlocks have a “socio-cultural racial significance” for blacks.

The Court’s Ruling

The Court rejected the EEOC’s arguments and dismissed the EEOC’s complaint. First, the Court identified a number of decisions addressing policies that restricted hairstyles and finding that such policies were non-discriminatory. Agreeing with these decisions, the Court held that a “hairstyle, even one more closely associated with a particular ethnic group, is a mutable characteristic.”  The Court also rejected the EEOC’s arguments regarding “socio-cultural racial significance,” noting that culture and race are different concepts and that “Title VII does not protect against discrimination based on traits, even a trait that has socio-cultural racial significance.”

Implications for Employers

This decision further reinforces an employer’s right to establish and enforce grooming policies and describes some parameters on the application of those policies. In addition, when facing EEOC charges which attempt to expand race discrimination under Title VII beyond immutable characteristics, the decision provides support for a defense that mutable characteristics, including traits that have purported “socio-cultural racial significance,” may not be protected as a matter of law.

This blog was previously published by Seyfarth Shaw LLP.

New Climate Change Report Highlights Risk Management Strategies

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Global Warming

This week, a new report from the United Nations’ Intergovernmental Panel on Climate Change summarized the ways climate change is already impacting individuals and ecosystems worldwide and strongly cautioned that conditions are getting worse. Focusing on impacts, adaptation and vulnerability, the panel’s latest work offers insight on economic loss and prospective supply chain interruptions that should be of particular note for risk managers—and repeatedly highlights principles of the discipline as critical approaches going forward.

Key risks the report identified with high confidence, span sectors and regions include:

i. Risk of death, injury, ill-health, or disrupted livelihoods in low-lying coastal zones and small island developing states and other small islands, due to storm surges, coastal flooding, and sea-level rise.

ii. Risk of severe ill-health and disrupted livelihoods for large urban populations due to inland flooding in some regions.

iii. Systemic risks due to extreme weather events leading to breakdown of infrastructure networks and critical services such as electricity, water supply, and health and emergency services.

iv. Risk of mortality and morbidity during periods of extreme heat, particularly for vulnerable urban populations and those working outdoors in urban or rural areas.

v. Risk of food insecurity and the breakdown of food systems linked to warming, drought, flooding, and precipitation variability and extremes, particularly for poorer populations in urban and rural settings.

vi. Risk of loss of rural livelihoods and income due to insufficient access to drinking and irrigation water and reduced agricultural productivity, particularly for farmers and pastoralists with minimal capital in semi-arid regions.

vii. Risk of loss of marine and coastal ecosystems, biodiversity, and the ecosystem goods, functions, and services they provide for coastal livelihoods, especially for fishing communities in the tropics and the Arctic.

viii. Risk of loss of terrestrial and inland water ecosystems, biodiversity, and the ecosystem goods, functions, and services they provide for livelihoods.

The report highlights more sector-specific risks, and one table even highlight the panel’s perception of the role of risk management in the future of climate change policy and planning:

IPCC Chart

On the whole, the report lays out many familiar risk management approaches and how they can be best applied to evaluating the risks of climate change and how to mitigate them. Perhaps the environment is warming to risk-informed decision-making as well.

Sanction Award Issued Against EEOC for Spoliation

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In a case we previously blogged about, EEOC v. Womble Carlyle Sandridge & Rice, LLP, (E.D.N.C. Mar. 24, 2014), Magistrate Judge L. Patrick Auld held the EEOC liable for spoliation sanctions based on the “negligence, if not gross negligence” exhibited by the charging party it brought suit on behalf of – one Ms. Charlesetta Jennings (Ms. Jennings).  When served with the bill of costs by Womble Carlyle, the EEOC objected to the amount as unreasonable.  In his decision, Judge Auld rejected the EEOC’s argument and ordered the EEOC responsible for $22,900 as the reasonable costs incurred by Womble Carlyle.

Background

The EEOC filed suit on behalf of Ms. Jennings in 2013 alleging that Womble Carlyle failed to accommodate her disability and subsequently terminated her employment because of the disability in violation of the Americans With Disabilities Act (ADA).  As the EEOC sought back pay on behalf of Ms. Jennings, Womble Carlyle served document demands and interrogatories designed to determine whether she properly mitigated her damages by seeking alternative employment. While being deposed in September 2013, Ms. Jennings testified that she had previously maintained a detailed log chronicling her efforts to obtain alternative employment while she was receiving unemployment insurance benefits; however, once these benefits ended in February 2013, she shredded the log. Further, she testified that she discarded additional material regarding her efforts to obtain employment in June of 2013 – which was after the EEOC had already filed its lawsuit on behalf of Ms. Jennings in January 2013.

Based on Ms. Jennings’ destruction of these documents, Womble Carlyle sought sanctions for spoliation of evidence, which the Court granted and ordered the EEOC to reimburse Womble Carlyle its costs and fees associated with having to bring the spoliation motion.  As a result, Womble Carlyle submitted a Statement of Expenses totaling $29,651.  The EEOC contested the $29,651 amount as unreasonable on several grounds, including its position that Womble Carlyle attorneys “duplicated their efforts” during discovery and that it should not have to pay for the time spent by one attorney reviewing the work of another, where both attorneys are experienced litigators.

The Court’s Decision

As the EEOC objected to the number of hours spent by Womble Carlyle attorneys in relation to the spoliation motion, Judge Auld held it was up to Womble Carlyle to “document the need to have devoted the amount of time for which it seeks compensation” through the submission of “reliable billing records, and…exercise of billing judgment” to deduct time “not properly shown to have been incurred in pursuit of the matter at issue or that is otherwise not reasonable in amount of necessarily incurred.”

Judge Auld rejected the EEOC’s contention that Womble Carlyle attorneys unnecessarily duplicated their efforts in drafting discovery and that it should not be forced to pay for the time spent by one attorney reviewing the work of another attorney “where both attorneys are experienced litigators.”  In doing so, Judge Auld held that after his review, the billing records of Womble Carlyle’s attorneys were reasonable given the nature of the sanction motion and were not duplicative.

Additionally, Judge Auld rejected the EEOC’s request that the Court should reduce by two-thirds the amount of costs since the Court only awarded monetary sanctions and did not grant the other two forms of relief requested by Womble Carlyle: dismissal of the back pay claim, and an adverse inference jury instruction (which the court reserved judgment on until trial).  Judge Auld held that “the fact that the undersigned Magistrate Judge declined to recommend one form of sanction…should not reduce the amount of the recommended sanction of reasonable expenses.”

Judge Auld, however, did reduce Womble Carlyle’s cost application by $6,600 because it failed to demonstrate why it spent 12 more hours on an 11 page reply brief with six exhibits than it spent on an 18-page opening brief with 16 exhibits.  Additionally, Judge Auld reduced the cost award by $151 based on certain block billing entries which were insufficient to meet Womble Carlyle’s burden to support its fee request.  As a result, Judge Auld held the EEOC liable for a total of $22,900 of Womble Carlyle’s costs and fees associated with the spoliation motion.

Implications for Employers

As this case demonstrates, decisions made regarding the preservation of evidence issues at the beginning of, and even leading up to, litigation can have very serious implications, whether in the form of sanctions, an adverse inference at trial or even outright dismissal.  This decision (and Judge Auld’s prior decision) should be added to employers’ defense toolkits, as the preservation of documents and information is a two-way street that employees (and the EEOC) must also follow once litigation is reasonably foreseeable – or proceed at their own peril.

This blog was previously published by Seyfarth Shaw LLP.