United States: Five On Friday – Five Recent Developments That We've Been Watching Closely

Last Updated: August 15 2017
Article by Sarah A. Altschuller

It's Friday and time for another overview of developments in the field of business and human rights that we've been monitoring.

This week's post includes: a decision by the Ontario Superior Court of Justice addressing a corporation's "duty of care" with regard to the employees of its suppliers; new IBA guidance for lawyers on integrating business and human rights considerations into their advice to clients; and a report evaluating corporate conflict minerals filings for calendar year 2016.

  • On July 5, the Ontario Superior Court of Justice dismissed a proposed class action lawsuit brought by plaintiffs injured in the 2013 Rana Plaza factory collapse in Bangladesh. Plaintiffs in the case, Das v. George Weston Ltd., argued that Loblaw, its parent company George Weston Ltd., its subsidiary Joe Fresh Apparel, and its auditing firm Bureau Veritas were "vicariously liable" for the negligence of their Bangladeshi suppliers. Ultimately, after an extensive analysis, the Court found that no legally cognizable duty of care existed between the Canadian companies and their Bangladesh suppliers. As a policy matter, the Court stated that it would "not be fair or just" to find that Loblaw's promulgation of CSR standards created a duty to address workplace conditions at a factory at which it had no direct control.
  • On July 17, the International Bar Association released the first two chapters of a new Handbook for Lawyers on Business and Human Rights. The chapters, which address "Mergers and Acquisitions (M&A) and Corporate Restructuring," and "Commercial Transactions," are intended to assist lawyers seeking to integrate business and human rights considerations into their advice to clients. The Handbook builds upon previously released business and human rights guidance documents for business lawyers and bar associations.
  • On July 24, Morningstar, Inc., the investment research firm, announced that it had acquired a 40% stake in Sustainalytics, one of the leading providers of environmental, social, and governance ("ESG") research and ratings. To many in the business community, the announcement reflected the growth of responsible investing and the extent to which consideration of ESG considerations has become more a part of traditional investment analysis and decision-making.
  • On July 25, Development International released its third annual benchmarking report with regard to corporate filings pursuant to the SEC's conflict minerals rule. The report, which evaluates corporate filings for calendar year 2016, found that overall corporate compliance with the SEC's rule and conformance with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Right Areas improved slightly in comparison to previous years. The report also noted that the number of total filers (1,153) decreased by 5.6% in comparison to the previous year.
  • On July 26, the Supreme Court of Canada issued its judgment in Clyde River (Hamlet) v. Petroleum Geo Services Inc., a case in which a Inuit community argued that Canada's National Energy Board ("NEB") had improperly authorized offshore seismic testing for oil and gas near Baffin Island. The Supreme Court held that the NEB's consultation process with the indigenous community was inadequate, citing the fact that basic questions from the community regarding the impacts of the seismic testing went unanswered. The Court also observed that only a small percentage of the relevant documentation was translated into Inuktuit, the local language, and that much of the documentation was provided in the form of a nearly 4,000 page "practically inaccessible document dump."

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After years of debate, the Massachusetts Legislature recently passed a comprehensive noncompete reform law, and Governor Baker signed the bill on August 10, 2018.

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