16Nuclear Powers Illinois

Mission StatementThe object for which the IllinoisManufacturers’ Association wasformed is to strengthen the eco-nomic, social, environmental andgovernmental conditions for manu-facturing and allied enterprises inthe state of Illinois, resulting in an enlarged business base andincreased employment.

ChairmanAndrew Faville

PresidentGregory W. Baise

EditorStefany J. Henson

The Illinois Manufacturer is publishedquarterly by the Illinois Manufac -turers’ Association. All rightsreserved. The title, The IllinoisManufacturer, is a trademark of theIllinois Manufacturers’ Association.

Copyright 2015© IllinoisManufacturers’ Association.Reproduction of all or any part isprohibited except by written permis-sion of the publisher. Published arti-cles do not necessarily reflect theviews of the magazine or its pub-lisher. Information in this publica-tion should not be substituted foradvice of competent legal counsel.

For address changes and adjust-ments, write to The IllinoisManufacturer. Presort standardpostage paid at Bloomington, IL.Postmaster: Send address changesto The Illinois Manufacturer, 220East Adams Street, Springfield, IL62701. Telephone: 217-522-1240.

If you have any questions, pleasecontact Stefany Henson, Editor andDirector of Publications at 217-522-1240, Ext. 3017, or email shenson@ima-net.org.

Spring 2015

Share your company newswith IMA . . . News information, press re leases and articles may besent to Stefany Henson, Editor and Director ofPublications, Illi nois Manu facturers’ Associa tion(IMA), 220 East Adams Street,Springfield, IL 62701, oremail: shenson@ima-net.org.

The Illinois Manufacturer is underwritten by Constellation — an Exelon Company

ColumnsPresident’s Report: You do not have to navigate the complex energy marketplace alone. Partner with Constellation, the IMA’s endorsed energy supplier ........................................................................... Page 4

Legislative Report: Long-time Springfield political observers correctly described the final days of session like watching a train wreck in progress ....... Page 6

Human Resources: Once an EEOC charge has been filed, there are two options for you to consider — by David B. Ritter & Adrienne Pietropaolo, Barnes & Thornburg LLP .............................................. Page 7

Legal Issues: The National Labor Relations Board is doing its darnedest to promote its mission of encouraging union organizing and fostering collective bargaining — by Mark A. Spognardi, Pautsch, Spognardi & Baiocchi Legal Group, LLP ....................................................................... Page 11

Training & Education: Today’s manufacturers must quickly adapt new technologies in order to remain competitive and create the sophisticated products needed in the modern world — by Diana Peters, Executive Director, Symbol Training Institute ............................................... Page 13

Energy & Environment: Tips for manufacturers on reducing industrial energy costs — by Constellation ............................................................... Page 15

Manufacturers & Technology: What you need to know now to protect your company from cyber attacks — by Chad Layton & Emily Acosta, Segal McCambridge Singer & Mahoney ........................................................ Page 21

Management Techniques: Have you considered cyber liability insurance? Why you should, from Manufacturer’s Insurance Services of Illinois — by Jerry Orpen, ARM ................................................................................ Page 23

IMA Member News ................................................................................. Page 25

New IMA Members: Welcome! .................................................................. Page 30

IMA Calendar of Events .......................................................................... Page 30

Guest Column on Organ Donationby Illinois Secretary of State Jesse White ................................................14

Illinois’ six state-of-the-art nuclear

facilities provide huge energy, economic

and environmental benefits to Illinois

families and businesses.

. . . it is important to be proactive intaking advantage oftoday’s low energyprices in light of themarket fundamentalsthat could push prices higher in the near future.

4

Manage volatile energy costs with Constellation

President’s ReportGREGORY W. BAISE

A ccording to the ISM-Chicago Business Barometer, the manufacturing industry has been a

driver of regional economic growth over the past year. One reason for this success is that

our industry has benefited from a competitive advantage due to low energy prices in the

U.S. However, this past winter has provided us with yet another example of how volatile energy

markets can be, and also reminds us how important it is to establish a comprehensive energy risk

management strategy. In our highly competitive industry, where success hinges on the cost of our

inputs, the truth is that manufacturers cannot afford to be complacent about actively managing

their energy budgets. With that in mind, I come to you with two pieces of good news this spring:

First, according to the EIA, record-setting natural gas production in the U.S. has pushed gas

and power prices to historically low levels. NYMEX natural gas prices in the forward market

are at all-time lows through 2020, while forward power prices in Illinois are within five percent

of record low levels. Energy buyers can take advantage of these prices right now to ‘lock-in’

low rates for their future energy needs, thereby reducing and stabilizing their energy costs for

years to come.

Secondly, you do not have to navigate the complex energy marketplace alone. Constellation,

our endorsed energy supplier, is here to help guide you through the price volatility in the market

and can develop an energy risk management strategy that is tailored to your needs.

It should come as no surprise that the discovery of shale gas and the development of fracking

technology have revolutionized the energy market in the United States. An abundant supply of

natural gas has pushed energy prices to record low levels. Data from the EIA show that U.S. natu-

ral gas production reached an all-time record in late-March 2015, led by production in the

Marcellus and Utica shale regions in Pennsylvania, Ohio and West Virginia. Companies are build-

ing expanded pipeline capacity to move natural gas into higher priced demand regions, and the

Midwest is a major destination for this excess supply. For gas and power customers in Illinois, this

should increase the reliability of gas supply and result in lower and less volatile energy prices.

On the other hand, energy prices are not likely to stay this low forever. As gas prices in the

producing regions fall closer to producer break-even points, production growth becomes increas-

ingly likely to slow. This is supported by declining natural gas rig counts, which have fallen by 38

percent across the country since November 2014, according to data from Baker Hughes. Gas

demand for power generation is also likely to increase this summer as the EIA projects close to 20

GW of coal-fired capacity is slated to retire this year due to EPA regulations. Therefore, it is

important to be proactive in taking advantage of today’s low energy prices in light of the market

fundamentals that could push prices higher in the near future.

With energy costs being one of the top three budget items for most manufacturers, our future

competitiveness is a function of our ability to take advantage of historically low gas and power

prices. We encourage our members to work with our preferred energy provider, Constellation, to

take an active role in developing an energy risk management strategy. Your bottom-line, the suc-

cess of our industry and the health of our nation’s economy depend on it. n

Gregory W. Baise is President and Chief Executive Officer of the Illinois Manufacturers’ Association. He may be reached at 630-368-5300, or viaemail at gbaise@ima-net.org.

Rather than workingon a compromise that involved budgetand structural reforms,Democrats drew a linein the sand indicatingthat they should notbe linked together.

Legislative Report

MARK DENZLER

6

Constellation — Providing tools to create a customized energy strategy for your company

A s I pen this column, I’m sitting in my office a block from the State Capitol on the cold and blus-tery last day of May listening to the House of Representatives and Senate go through a litany oflast minute legislation. Rushing to pass legislation and advisory resolutions before the clock

winds down is standard operating procedure for lawmakers before they adjourn for the summer.But 2015 is different. For the first time since 2007, when disgraced former Governor Rod

Blagojevich occupied the state’s top office, the Governor and General Assembly did not reachagreement on a spending plan for the state’s fiscal year that begins in July. While thousands of billsand amendments get filed every year on issues ranging from bobcat hunting to seafood labeling tounmanned drone regulation, the only thing that must get done is passage of a state budget.

Our elected officials have failed to meet this basic budgeting task before the scheduled dead-line of May 31. So, Governor Rauner and members of the General Assembly will be returning tothe State Capitol over the summer until they can reach an agreement.

Democrats did pass a $36 billion budget out of the General Assembly in the final week of ses-sion — over Republican opposition and before the deadline. However, they publicly admitted thattheir budget was unbalanced, even though it demonstrated their “priorities.” Governor Raunerrightfully pledged to veto their budget which contains a massive $3 billion hole at a time whenthe state already faces a $6 billion backlog of bills and the worst-funded pension system in theUnited States.

The Governor and lawmakers are working with slightly more $32 billion in revenue followingexpiration of the temporary income tax increase last December. Governor Rauner has expressed awillingness to add up to $3.5 billion in new revenue through an increased income tax or expan-sion of the sales tax on services in exchange for the passage of major structural reforms containedin his Turnaround Agenda.

Designed to address Illinois’ languishing economy, Governor Rauner’s comprehensive reformsinclude workers’ compensation reform, empowerment zones where local governments can deter-mine whether to allow Right to Work, property tax freeze, tax reform, term limits and redistrictingreform. The Illinois Manufacturers’ Association has long championed many of these reforms whichwill make our state more attractive for job creators and capital investment.

Rather than working on a compromise that involved budget and structural reforms, Democratsdrew a line in the sand indicating that they should not be linked together. Over the past threeweeks of session, a handful of committee hearings were held and subsequent votes were taken inan effort to show that the General Assembly does not support key reforms such as Right to Work,workers’ compensation, and balancing the court system. All of these structural reforms failed onpartisan roll call votes.

Long-time Springfield political observers correctly described the final days of session likewatching a train wreck in progress. It came to a head on the final day of session when GovernorRauner and each of the four legislative leaders held separate press events to take shots at theother party. Democrat leaders accused the Governor of being extreme and dismantling the middleclass. The toxic atmosphere around the State House culminated in a late afternoon press confer-ence in which the Governor accused House Speaker Michael J. Madigan and Senate PresidentJohn Cullerton of “running the state into a ditch.”

So, we’re now at a stalemate with a showdown between newly inaugurated RepublicanGovernor Bruce Rauner and two long-time Democrat stalwarts with firm control of their respec-tive chambers. Nobody knows how the story will end, but it’s going to be a long, hot summer inSpringfield. n

Long, hot summer at the Capitol

Mark Denzler is Vice President and Chief Operating Officer of the Illinois Manufacturers’ Association. Mark can be reached at 217-522-1240, extension 3008, or mdenzler@ima-net.org.

7

Human Resources

DAVID B. RITTER & ADRIENNE PIETROPAOLO

I n Part I of Handling an EEOCCharge, we discussed how todefend against an Equal

Employment Opportunity Com -mission (“EEOC”) charge before it iseven filed.1 Now, we will addresshow to handle an EEOC chargeonce it makes its way across yourdesk. This article will give you tipsto effectively respond to an EEOCcharge and limit what could be acostly pay out.EEOC’s role

As background, an employee hasa right to file a charge of discrimina-tion with the EEOC. The EEOCenforces the federal laws that makeit illegal to discriminate against a jobapplicant or an employee becauseof a person’s race, color, religion,sex, pregnancy, national origin, age,or genetic information. The EEOCalso accepts charges that a personwas retaliated against because theycomplained about discrimination,filed a charge of discrimination, orparticipated in an employment dis-crimination investigation or lawsuit.In 2014, the EEOC received 88,778charges nationally.2

Tips to effectively defend an EEOC charge

Once an EEOC Charge is filed,there are two options: mount adefense or put yourself in a positionto settle. Either way, you will needto address the charge, and here areseveral tips that can help you do so.Contact your attorney

Once a charge is filed, consultingwith an attorney is highly recom-mended. An attorney experienced in

this area will take an analytical andimpartial view of the charge andyour evidence, and can provideadvice as to which path makes themost sense. Some cases just need tobe settled and some cases are worththe fight. Having an objective reviewof these options can be invaluable.Consider mediation

Early on in the process, theEEOC will likely ask if the partieswant to mediate. In many cases, thefirst instinct is to fight the charge.However, sometimes mediation is aless costly and more practicalapproach. EEOC sponsored media-tion is free for both parties. Anemployer must understand thatgoing to mediation means it mayhave to write a check to a formeremployee. Going to mediation putsthe investigation on hold. Both sidesmust agree to mediation.

Fully participate in the investigation,but be careful

If mediation is not an option,then the next step is to participatein the EEOC’s investigation. A com-pany should take discriminationcharges seriously and assure that allresponses are timely and carefullygiven. Anything said to the EEOCinvestigator is an admission that canand will be used later in litigationby any competent plaintiff’s attor-ney. It is important that all respons-es be developed with input andguidance of legal counsel to assurethat privileged and confidentialinformation is not accidentallygiven to the investigator.

Investigators are overworked andhave many charges to review. If youcan provide the investigator with adetailed roadmap, well documentedand supporting the company’s deci-sions (see Part I), it will help the

Handling an EEOC Charge—Part IIOnce an EEOC charge has been filed, there are two options for you to consider

David B. Ritter is an employment attorney and partner in the law firm of Barnes & Thornburg LLP. Mr. Ritter works out of the Chicagooffice. He may be reached at 312-214-4862 or David.Ritter@BTLaw.com. Adrienne Pietropaolo is also an employment attorney at Barnes &Thornburg LLP and may be reached at 614-628-1404 or apietropaolo@BTLaw.com. Barnes & Thornburg LLP is an IMA member company.

see EEOC CHARGE page 8

Footnotes1. Part I was published in the Winter2015 Illinois Manufacturer2. Most states have similar laws andagencies and the tips and strategies inPart I and Part II can generally be usedin responding to charges filed with thesestate agencies.

8

investigator draw a conclusion thatshould be favorable to the company.

Although you should keep thelines of communication open withthe investigator and assist in obtain-ing requested information, a compa-ny does not have to comply withevery EEOC information request.Instead, it is important to limit thescope of the agency’s investigation toinformation that is relevant to theissue. For example, requests seekinginformation from different plants ordifferent departments within a plantmay not be relevant and should becarefully scrutinized before beinganswered. Experienced counsel canguide you in making these decisions.Give your position statement theattention it deserves

The company’s position state-ment is the key communication tothe EEOC and must be crafted care-fully. A proper position statementcan only be drafted after a compre-hensive investigation of the allega-tions has taken place. Once a posi-tion statement is filed, the companyis locked into the reasons for thecompany’s decision which is inquestion. Changing the reason foran employment decision later onlymakes the EEOC or a plaintiff’sattorney think the initial reason wasuntrue. This can severely underminethe company’s litigation position.Each position statement is uniqueand must address the specific allega-tions presented.

This is where the tips from ourfirst article (Part I) come in handy. Ifthe company has sufficient docu-mentation to support its rationale,then the position statement essential-ly writes itself. The company merelytells the story of why the employeewas disciplined or terminated usingthe documentation as a guide and asexhibits. However, if the positionstatement is vague, unsupported, orleads the EEOC to believe that thecompany is intentionally hidinginformation, a bad outcomebecomes more likely.

Most employee situations have“bad facts.” Addressing bad facts ina position statement is an “art form.”You must address the bad facts inyour position statement because theformer employee has certainly told

the EEOC about them. Failing toaddress the bad facts screams thatyou have no answer.

One case highlights the impor-tance of carefully crafting a positionstatement. In Kwan v. AndalexGroup, LLC, the district court grant-ed summary judgment in favor ofthe employer on all claims.However, the Second Circuitreversed this decision. After goingthrough the language in the employ-er’s EEOC position statement, thecourt found that although theemployer initially stated that achange in business focus made thecharging party’s skill set obsolete,there was language in the statementthat instead shifted the explanationthat the charging party’s poor per-formance and bad behavior werethe reasons for the termination.Because of the employer’s “inconsis-tent and contradictory explanationfor the plaintiff’s termination,” theemployer was forced to either settlethe case or face a jury trial. Had theposition statement centered aroundone supported reason for the termi-nation, instead of trying to changethe argument and giving the sensethat the employer was being deceit-ful, this summary judgment findingmay have been affirmed.Responding to a request for information

Oftentimes the EEOC will sendan employer a Request forInformation. This request seeks doc-uments or other information. Theserequests are many times a pre-print-ed form containing questions that donot pertain to the claims in theCharge or go far afield in terms ofasking for information. If your posi-tion statement is a comprehensiveand thorough document, many ofthe questions can be answered by“see Position Statement.” Theemployer should respond to theRequest in good faith answering thequestions it can and objecting toquestions that are irrelevant or over-broad. Counsel can help guide youin making that determination. If theEEOC truly wants that information,they will send a follow-up request.

Conciliation: Be Prepared toArgue, but Also Be Prepare to Settle

If the EEOC finds “reasonablecause” to believe a company hasbroken the law, it is required toconciliate the underlying bias claimsbefore deciding whether a lawsuit isappropriate. If the case proceeds to

conciliation, a company needs to beprepared for the possibility of settle-ment. Even if the company disagreeswith the charge or the “reasonablecause” finding, the EEOC isn’t look-ing for a company to come to theconciliation simply to try to changethe EEOC’s mind. Instead, the EEOCis typically looking for settlement tooccur. Therefore, whoever attendsthe conciliation for the companymust have settlement authority.

Many cases fail to resolve duringconciliation. It is important to docu-ment what occurred during the con-ciliation process. The parties shouldreduce their positions to writingafter meetings where the partiesattempted to reach a deal. This isimportant for several reasons. First,the EEOC investigator may not bethe person at the agency makingkey decisions. A written record canhelp lay out arguments for anotherperson without relying on the inves-tigator to accurately portray them. Inaddition, this documentation canhelp clear up later disputes duringlitigation about what the parties’positions were during the concilia-tion process. Relying on the recol-lections of what occurred during theconciliation process can pose riskssince recollections can fade orchange as time passes. Never, ever, ever retaliate

Once an EEOC charge is filed,many employers take it personally.There is a natural tendency to wantto confront or retaliate against theemployee who filed the charge. It isimportant to assure that there is noretaliatory action. This is not justagainst the charging party, but alsoagainst any potential witnesses. Anemployer and any employees hold-ing management or supervisorypositions should be very careful toassure that no retaliation takesplace. The EEOC handles a greatmany retaliation charges. Therehave been times when the underly-ing claim of discrimination is weak,but the employer retaliates and pro-vides the employee with a strongretaliation case.Conclusion

There are many tips on how todefend an EEOC charge, and thisarticle simply touches the tip of theiceberg. An employer’s best resourceis a person who has experiencedealing with EEOC charges, as thisperson will already know these andother strategies well. n

EEOC CHARGECont. from page 7

11

Legal Issues

MARK A. SPOGNARDI

T his year has seen a flurry ofactivity at the National LaborRelations Board which is doing

its darnedest to promote its missionof encouraging union organizingand fostering collective bargaining.This activity has many fronts. Sincethe beginning of the year, employ-ees have had the legal right to usetheir employer’s email systems forunion and protected activity ontheir non-working time. This allowsemployees to use the employer’semail systems to organize a union,or engage in concerted activity intheir own self-interest, during theirbreaks and lunch hours.

On April 14, the NLRB’s “expe-dited” representation case electionrules went into effect. These rulesdrastically shorten the timebetween the filing of a representa-tion petition and a secret ballotelection to determine union repre-sentation. These “quickie” electionrules drastically reduce the amountof time that an employer has torespond to a union organizingdrive, with the goal of making iteasier for employees to becomeunionized.

At the same time, the NLRB isseeking to empower service work-ers by piercing the franchise busi-ness model. The Board is seekingto change the “joint employer” doc-trine so that a franchisor and fran-chisee are deemed to be “jointemployers” for purposes of sub-stantive labor law and the remediesand consequences of labor lawobligations and violations. TheBoard has also stepped up effortsto provide effective remedies toillegal aliens who have been sub-jected to unfair labor practices.

NLRB continued scrutiny of work rulesMany employers have spent con-

siderable time examining and devel-oping their no-solicitation/no-distrib-ution policies, social media policies,and electronic communications poli-cies in light of NLRB case law andprevious memorandums of the NLRBGeneral Counsel (GC). Recently, theGC issued a memorandum analyzingthe Board’s recent decisions dealingwith other employer work rules, thatmay exist alone or as part of anemployee handbook. GC Memo -randum 15-04 (March 8, 2015).Employers are urged to have theirpolicies and work rules thoroughlyreviewed, in light of the GCMemorandum, to ensure that theydo not run afoul of the NationalLabor Relations Act (the “Act”). This

is because the maintenance andenforcement of unlawful rules couldhave unintended and costly conse-quences, such as causing backpayliability for an unlawful discharge, orthe setting aside of a union-freeelection victory, and the rerunningof the representation election.

Under Board law, the mere main-tenance of a work rule may violateSection 8(a)(1) of the National LaborRelations Act (the “Act”) if the rulehas a chilling effect on an employ-ee’s Section 7 rights (i.e., the right toengage in union activity or protect-ed, concerted activity). LutheranHeritage Village-Livonia, 343 NLRB646 (2004). In addition to explicitrules that prohibit Section 7 activity,a work rule can be found unlawful

2015 Spring cleaning: Dust off your work rules to avoid NLRB charges

Mark A. Spognardi is a founding partner of the law firm of Pautsch, Spognardi & Baiocchi Legal Group, LLP. The firm is a trusted advisorto large and small employers, both publically traded and closely held, trade and not-for-profit associations, and government entities. Itspractice areas include counseling, litigation, and appellate work in all aspects of labor relations and employment law, and related busi-ness and commercial matters. The Firm maintains offices in Chicago and Milwaukee. Mr. Spognardi can be reached at 312-291-8299 or atmas@psb-attorneys.com. Pautsch, Spognardi & Baiocchi Legal Group, LLP is an IMA member company.

see NLRB CHARGES page 12

12

if 1) employees would reasonablyconstrue the rule to prohibit Section7 activity; 2) the rule was promulgat-ed in response to union or protect-ed, concerted activity; or 3) the rulewas actually applied to restrict unionor protected, concerted activity.

Work rules regarding confidential information

Employers need to review theirconfidentiality rules to assure thatthey do not run afoul of the Act.Employees have a right underSection 7 of the Act to discuss wages,hours, and other terms and condi-tions of employment with employeesand third parties, such as union rep-resentatives and government agen-cies. A confidentiality rule that pro-hibits disclosure or discussion of suchmatters, or that could be reasonablyunderstood as prohibiting such dis-closure or discussions, violates theAct. Similarly, a broad rule whichprohibits discussion of “personnel” or“employee” information (such asemployee names, addresses), withoutfurther clarification would be foundto unlawfully restrict employee com-munications.

The GC notes that broad prohibi-tions against disclosure of “confiden-tial” information are lawful as longas they do not reference employeesor what would reasonably be con-sidered terms and conditions ofemployment. This is because anemployer has a substantial and legit-imate interest in maintaining the pri-vacy of certain business information.A confidentiality rule will also befound lawful if, given the context, ifit would not reasonably be read toprohibit activity protected by Section7 of the Act.

Work rules regarding behavior and conduct toward the company and supervisors

Employers should review theirrules governing employee behaviorand conduct towards the companyand its supervisors and management.Employees have a right under theAct to criticize or protest andemployer’s labor and human

resources policies and the employ-er’s treatment of employees. Absentsufficient clarification or context, theGeneral Counsel frowns upon rulesthat prohibit employees from engag-ing in “disrespectful,” “negative,”“inappropriate,” or “rude” conducttowards the employer or manage-ment. For instance, the Board founda rule unlawfully overbroad where itstated “Be respectful to the compa-ny, other employees, customers,partners, and competitors.” In con-trast, where the rule requires thatthe employee be respectful of cus-tomers, competitors, etc., but doesnot mention the company or itsmanagement or supervisors, employ-ees reasonably could not believethat the rule prohibits protected criti-cism of the employer. Thus, the fol-lowing rule was found lawful: “Norudeness or unprofessional behaviortoward a customer, or anyone incontact with” the company.Employers should ensure that thecontext and language of employeebehavior rule towards the companydoes not prohibit protected criticism.

Rules regulating conduct towards fellow employees

Employees have a right under theAct to debate and argue with eachother about unions, the company,and their terms and conditions ofemployment. While these discus-sions can become contentious andheated, the Supreme Court hasnoted that the communications donot lose their protection under theAct because they involve “intemper-ate, abusive, and inaccurate state-ments.” Thus, vague and overbroadrules, in the absence context or clar-ification, will be found unlawful. Forexample, “do not send ‘unwanted,offensive, or inappropriate’ emails”was found lawfully vague and over-broad. In contrast, a rule prohibiting“threatening, intimidating, coercing,or otherwise interfering with the jobperformance of fellow employees…”was found to be lawful.

Rules regarding employee interaction with third parties

While employers have a right tolawfully control who makes officialstatements to news media or gov-ernment agencies, on behalf of thecompany, an employer must be

careful that their work rules are notconstrued as prohibiting employeesfrom speaking to the media, govern-ment agencies, or third parties (suchas unions) on their own (theemployees’) behalf. This is becauseemployees have a Section 7 right tocommunicate with news organiza-tions, government agencies, andthird parties about their wages,hours, and other terms and condi-tions of employment.

Rules regarding use of companylogos, copyrights and trademarks

While employers have a clearinterest in protecting intellectualproperty, the Board will generallyfind unlawful a broad ban onemployees’ non-commercial use of aname, logo, or other mark to identi-fy an employer in a labor dispute.The Board takes the position thatemployees have a right to use thename and logo or other trademarkon picket signs, leaflets, and otherprotest material.

Rules restricting photography and recording

Employees have a Section 7 rightto photograph and make recordingsin furtherance of union and protect-ed, concerted activity, such asrecording health and safety viola-tions. Rules totally banning suchrecording, or the use or possessionof personal devices during non-working time, will be found over-broad and violative of Section 7.Rules regulating recording and pho-tography will be found lawful ifappropriately limited in terms ofscope, such as rules designed topreserve patient privacy, proprietaryprocesses, or business records.

Rules restricting employees from leaving work

Rules that regulate when employ-ees can leave work are unlawful ifthe employees reasonably wouldread them to forbid protected strikesand walkouts. If such a rule makesno mention of strikes, walkouts, orwork stoppages, the employees willreasonably understand that the rulepertains to leaving work unrelatedto protected, concerted activity orunion activity, and as such, the rulewill found to be lawful. Thus, while

NLRB CHARGESCont. from page 11

see NLRB CHARGES page 14

Constellation — Provides products and services to manage energy cost and risk over time

13

Diana Peters is Executive Director of Symbol Training Institute, www.symboltraining.edu, a for-profit vocational school opened in 2005. Symbolprovides hands on training for both incumbent and dislocated workers. Peters is a national advocate for narrowing the skill and gender gaps inmanufacturing, and she recently launched a nonprofit organization, Manufacturing NEXT, www.manufacturingnext.org to address these issues.

I n 2015 the Brookings Institutepublished a report citing thatmanufacturing makes up more

than half of the country’s advancedindustries sector, and this sector isviewed as central to the revitaliza-tion of the nation’s economy.Industries like manufacturing areseen as rescuers to the economybecause of their promises of highwages and significant growth poten-tial. In fact, the sector’s averageearnings increased nearly five timesas fast as earnings in other sectorssince 1975. The report furtherechoes a commonly heard trend thatwhile jobs are available in the sec-tor, there are not enough skilledworkers to fill them.

Today’s manufacturers mustquickly adapt new technologies inorder to remain competitive and cre-ate the sophisticated products need-ed in the modern world. The indus-try now relies on workers who canadeptly run and maintain highlytechnical equipment. Finding thoseskilled workers to fill new jobs andreplace outgoing workers remains aconfounding challenge for manymanufacturers.

The truth about the skills gap in manufacturing

According to 2012 data, therewere 600,000 unfilled jobs at U.S.manufacturers and 30,000 of thesein the state of Illinois. A recent sur-vey of manufacturers indicated that74 percent of them named the ‘lackof skilled workers’ as a significantchallenge.

While there are not enoughskilled workers to fill the job open-ings manufacturers have now, theimpending retirement of many BabyBoomers who work in manufacturingis about to create a perfect storm.Projections indicate that 2.7 millionBaby Boomers will retire from manu-

facturing jobs by 2025, and economicgrowth during that period will create700,000 additional manufacturingjobs. Focusing on a single manufac-turing field can illustrate the immensi-ty of the problem: 57 percent ofIllinois tool and dye makers are over49 years old, therefore nearing retire-ment age. Without an adequatepipeline of skilled workers to taketheir place, the industry will certainlyface a crisis in the years to come.

The impact of this situation on asingle manufacturer can be devas-tating, because some companies arefacing losing a large percentage oftheir workforce at one time.Unfilled jobs result in reduced pro-ductivity, burnout of overworked

staff, and other negative conse-quences. While some medium-sizedand large manufacturing companiesonce had the resources to trainincumbent workers and new hires,in-house training programs are cost-ly, and some were eliminated dur-ing the economic downturn.

Despite the data and case studies,some have questioned whether askills gap is to blame for unfilledpositions, or whether it is truly dueto other factors, namely, the lack ofdesire of potential workers to workin manufacturing, or the wages andbenefits offered. With all eyes on themanufacturing sector because of itspromise for the economy, manufac-

see TRAINING page 14

Training & Education

DIANA PETERS

Credentialed training for manufacturers plays vital role in revitalizing the econcomy

14

“walking off the job” is an unlawfulwork rule, a rule prohibiting “enter-ing or leaving company propertywithout permission” was consideredlawful.

Conflict of interest rulesSection 7 affords employees the

right to protest in front of the com-pany, to organize a boycott, or solic-it union support to improve theirterms and conditions of employ-ment. If the employer’s conflict ofinterest policy could reasonably beread to prohibit such activities, therule will be found unlawful.

However, where the rule makes itclear that it is designed to protectlegitimate, protectable business inter-ests, the rule will be found lawful.Thus, a rule which states thatemployees may not engage in “anyaction” that is “not in the best inter-est of the (employer) will be foundunlawful. However, a rule whichprohibited the giving or offering ofanything of value, such as “gifts” or“services” to any business that pro-vides service to the company, wasdeemed lawful.

Conclusion In light of the expected surge in

union organizing activity, springcleaning of the workplace is inorder. A good place to start thiscleaning is with a thorough review

of your employee handbook.Prudent employers will ensure thattheir handbook is not only legallycompliant with EEO, Wage & Hour,and other state and federal employ-ment laws, but also that it is a cleandocument under the law of theNational Labor Relations Act. This isbecause organized labor will aggres-sively file legal charges alleging vio-lations with as many legal agenciesas possible, seeking to wear theemployer down. Often times,employers have failed to adequatelyreview their policies towards with-standing scrutiny from the federalagency whose mission is to promotecollective bargaining, and whichprosecutes employers gratis onbehalf of unions and employees --the NLRB. n

NLRB CHARGESCont. from page 12

turers are working together acrosssectors more than ever to addresstheir challenges and begin to fill thepipeline with skilled workers.Certification training programsspecifically geared to the manufac-turing industry have emerged as apositive solution to this problem.

How credential based training is filling the gap

The Brookings report specificallyoutlined that advanced industrieslike manufacturing could benefitfrom “improving the availability ofskilled workers by developing smart,industry led, sector-specific, regionalskills initiatives. Overall, firms needto get much more involved in devel-oping the skills pipeline and the

public sector must become muchmore responsive to their needs.”(Brookings, 2015 p.9).

Recently the federal governmenthas made skills training programsfor pipeline careers like those inmanufacturing a priority by allocat-ing significant resources to them. Asa result, manufacturers can benefitfrom training programs for job can-didates that are either partially orfully subsidized. Individual job seek-ers, whether new to the market ordisplaced, can use a variety ofonline tools to explore career path-ways, identify jobs that use theirtransferable skills, and explore train-ing and credentials required or rec-ommended in their chosen fields.

Credential-based training can takemany forms. According to the U.S.Department of Labor, the range ofdifferent types of credentials includes:1. Educational diplomas, certificates

and degrees

2. Registered apprenticeship certificates

3. Occupational licenses (typicallyawarded by State governmentagencies)

4. Personnel certifications fromindustry or professional associations

5. Other skill certificates for specificskill sets or competencies withinone or more industries or occupations Whether a credential is valued

depends on factors including indus-try-recognition, stackability, portablil-ity and accreditation.

Attention to credential basedtraining reached a fever pitch in2011, when President Obamaannounced an initiative to credential500,000 manufacturing workers withindustry-recognized certificationsand cited The ManufacturingInstitute’s NAM-Endorsed Skills

TRAININGCont. from page 13

see TRAINING page 22

Women training for careers in manufacturingWhile women make up nearly half of the labor force, they make up just 24 percent of the manufacturing labor force. Today there

are more women in the Illinois workforce than ever before, yet they remain the largest segment of the population that is relativelyuntapped by manufacturers. The perception exists that there is a gender bias that excludes women from pursuing and succeeding inmanufacturing. There is a great need to combat manufacturing as a male-favored culture.

Providers of manufacturing skills training are engaging students in credential programs from non-traditional groups includingwomen. With the help of some government and philanthropically funded programs, training providers are removing barriers forwomen by providing supportive services like transportation and child care, peer-to-peer mentoring, and offering training programs atflexible times, allowing for women to earn a manufacturing credential while working at another job are caring for their families.

Nonprofit organizations have been established in Illinois to address the urgent need to close the gap between manufacturingemployers’ needs and workers’ skills. Women in Manufacturing, a national nonprofit organization formed in 2011, is working to com-bat antiquated perceptions of the industry and promote manufacturing as a viable career path for women. It unveiled a survey at its2014 conference in Schaumberg, Illinois which revealed that 82 percent of women in the field felt that manufacturing offers bothchallenging and interesting work for women. n

Energy & Environment

CONSTELLATION

H ow much of the energy youpay for each month is actuallyused to power your plant? It

could be less than half, with the restescaping through leaky air compres-sors, inefficient equipment and otherenergy hogs.

Our country wastes more energythan any other nation, includingChina. In 2013, the United States hadan energy efficiency of just 42 per-cent, meaning 58 percent of all theenergy we produce goes to waste.

The industrial sector, whichincludes manufacturing, agriculture,construction and mining, accountsfor nearly one third of all U.S. ener-gy usage. Manufacturing facilitiesalone are responsible for spending$200 billion every year to powerfacilities and waste nearly 30 percentof that energy. This all adds up to alot of unnecessary energy costs.

To make your manufacturingfacility more energy efficient andless expensive to run, here are sixways to reduce industrial energycosts on your production floor.1. Develop an energy

management teamOne of the primary reasons ener-

gy and cost-saving initiatives fail isbecause it’s unclear whose responsi-bility it is to manage the undertak-ing. Develop an energy managementteam by pulling a representativefrom each department. Bring inthose who already have an incentiveto keep costs low, or build in abonus that can be tied to theamount of energy the team saves.Together, they can work to monitorenergy usage throughout the facilityand implement ways to reducewaste.2. Conduct an energy audit

Energy audits can be performedin-house using an energy auditguidebook and assistance from facil-ity experts. However, we recom-

mend facilities seek professionalhelp from an energy specialist. Auseful energy audit will quantifyhow much energy each departmentis consuming and will help identifypeak consumption times throughoutthe year. It should also offer recom-mendations on which energy effi-ciency upgrades will bring the bestreturn on investment. 3. Strategically schedule

machinery useUsing the intelligence collected

from your facility energy audit, con-sider which machinery requires themost energy to run. If possible,schedule operation of thesemachines outside of peak hours.Peak hours can constitute up to 30percent of a manufacturing facilitiesmonthly utility bill.

4. Schedule Shut-Downs andStart-UpsScheduled production floor shut

downs where all machinery is pow-ered off for a length of time (duringthe weekend or off-shift periods)can substantially lower industrialenergy cost. To know when toschedule these shut downs, you’llneed visibility into peak operationalhours. Likewise, powering up allmachinery at once can create a largespike in your facilities energydemand. Production floors shouldstagger equipment start-up to reducethis spike. 5. Optimize Air Compressors

Industrial air compressors are toblame for huge amounts of energyconsumption and waste. Some are

Constellation is the preferred energy provider for IMA members. For more information, visit www.constellation.com/IMA. Or, you may contact Constellation’s Richard Cialabrini at 888-312-1563 or email Richard.cialabrini@exeloncorp.com. Author: Keith Poli, Constellation.

Six ways manufacturers can reduce industrial energy costs

see ENERGY COSTS page 24

15

T he State of Illinois has theopportunity to make positiveenergy policy decisions this

year that will affect the future of reli-able, affordable and low-carbonenergy in the state for decades tocome. Among those decisions iswhether to fully value nuclear ener-gy plants in the state, allowing themto remain in operation through theend of their useful lives. Currently,three of the state’s six plants are atrisk for premature closure. Read onto learn more about the issue andwhat you can do to ensure Illinoiscontinues to have a reliable, afford-able and clean energy supply. Background and benefits of nuclear energy

Illinois’ six state-of-the-art nuclearfacilities provide huge energy, eco-nomic and environmental benefits toIllinois families and businesses.These facilities inject nearly $9 bil-lion directly into the Illinois econo-my annually, and provide nearly28,000 direct and indirect jobs inIllinois, according to a study fromthe Nuclear Energy Institute. Theyalso contribute $290 million annuallyin state and local taxes, fundingschools, community services andstate agencies. Altogether, they arean integral part of their communitiesand the state’s economy.

Nuclear energy is also the mostreliable source of energy in Illinois.The state’s nuclear facilities set theworld standard for reliable opera-tions during all seasons and weatherconditions. Given that Illinoisans livein a state with extreme weather —from brutally hot summer days towicked winters — it’s critical thatthe state has nuclear power in itsenergy mix, meeting demand andkeeping the lights on. Perhaps noone understands the importance of areliable, predictable energy supply

16

NuclearPowersIllinois

By Constellation

more than those running the state’smanufacturing facilities.

The Illinois nuclear plants pro-duce enough round-the-clock elec-tricity to serve more than seven mil-lion Illinois residents. All told, theygenerate 48 percent — nearly half— of the state’s electricity supplyand 90 percent of Illinois’ carbon-free energy. The carbon-free powersupplied by nuclear energy is partic-ularly important given that by 2016,Illinois must comply with new car-bon emission rules set by the U.S.EPA, which require a 33 percentreduction by 2030.

Thanks in part to the state’snuclear fleet, Illinois is a netexporter of electricity, in much thesame way that it is a net exporter ofcorn, soybeans, machine tools andcoal. The ability to be a net exporterof electricity is a testament to theefficiency and low cost of these gen-erating resources.

Despite all of these clear benefits,outdated energy policies threatenthe continued operation of three ofIllinois’ nuclear facilities — theByron, Clinton and Quad Citiesplants.

Illinois is not alone in facing thisissue, and some nuclear plantsaround the country have alreadybegun to close due to market condi-tions similar to those in Illinois.Recently, the Vermont Yankee facili-ty and the Kewaunee facility inWisconsin closed, yet both of theseplants were operating efficiently andat reasonable cost. In the case of theVermont Yankee closure, Forbesreported that consumers in the sur-rounding area saw their electricityrates go up this winter by 37 per-cent in Massachusetts, and by 50percent in New Hampshire, in partdue to the plant’s closure. The clo-sure of the Kewaunee plant in

Wisconsin cost its host county 15percent of its jobs and 30 percent ofits tax revenue. The cause for clo-sure in each case was that their elec-tricity markets — like Illinois’ mar-kets — do not properly value thealways-on reliability, fuel diversity,carbon-free power and other impor-tant attributes of nuclear power.

Last year, recognizing the potentialcosts to Illinois if some of theseplants close, policymakers in Illinoisdirected four state agencies — theIllinois Commerce Commission,Illinois Power Agency, IllinoisEnvironmental Protection Agency,and the Illinois Department ofCommerce and Economic Oppor -tunity — to assess the potentialimpact of the early closure of Illinois’nuclear energy plants. The resultingreport, titled “Potential NuclearPower Plant Closings In Illinois:Impacts and Market-Based Solu tions,”was issued in January and found thatif the three most challenged facilitiesclose, it could have devastating costsfor the state, including:• $1.8 billion every year in lost

economic activity,• Nearly 8,000 highly skilled jobs lost,• Up to $500 million annually in

higher energy costs statewide,according to a PJM analysis,

• $1.1 billion per year due to

increases in carbon and otherpollutants, and

• Hundreds of millions of dollars toconstruct new transmission lines.The report succinctly states that,

“Illinois’ continued economic successdepends on maintaining low and sta-ble electricity prices — and thoselow and stable prices depend on thecontinued operation of all nucleargenerating stations located in Illinois.”

This analysis placed a compellingspotlight on the substantial econom-ic, environmental and reliability ben-efits of Illinois’ nuclear plants, andfurther established that the chal-lenges facing these plants are a mat-ter of immediate and statewide con-cern that must be addressed. Furtherhighlighting what’s at stake, PJM, theregional transmission grid operatorfor northern Illinois, came close toexperiencing rolling blackouts dur-ing 2014’s polar vortex and foundthat Illinois system would be “unreli-able” under all premature plant clo-sure scenarios.The solution: Illinois’s low carbonportfolio standard

The report recommended severalpotential market-based policy solu-tions for Illinois to consider in orderto avoid premature nuclear plant clo-sures and the negative impacts theywould have on the state and its resi-dents. Among those was a proposedLow Carbon Portfolio Standard.

Following that recommendation,legislation has been introduced inboth the Illinois House and Senate(House Bill 3293 and Senate Bill1585) that would create a LowCarbon Portfolio Standard (LCPS).This legislation would help preservethe state’s existing low carbon ener-gy sources, including nuclear energy.

Beginning in 2016, the LCPS

17

Constellation — 24/7 Access to billing and energy usage data

see NUCLEAR POWERS page 18

would require ComEd and Amerento obtain low carbon energy creditsto match an amount equal to 70 per-cent of the electricity flowing ontheir distribution systems. Low car-bon energy sources under this legis-lation include solar, wind, hydro,nuclear, tidal, wave and clean coal.Importantly, the legislation is tech-nology-neutral, which means allgenerators of zero or low carbonenergy would be able to compete inthe procurement process.

The legislation includes con-sumer protections such as a pricecap to limit the consumer impact toa 2.015 percent annual increaseover 2009 retail prices, or about $2per month for the average Illinoisresidential electricity customer (lessthan would occur if some of Illinois’nuclear plants were to close early).In addition, the legislation includesa separate customer rebate provi-sion that would provide a direct billcredit to customers in the eventwholesale prices exceed a specifiedlevel. This type of customer protec-tion does not exist under other

clean energy programs. The LCPS is also important for

the state given the EPA’s call forstate-level reductions in carbonemissions from existing powerplants. The closure of Illinois’nuclear facilities will result in signifi-cant increases in carbon and otherpollutants and will make it difficultfor Illinois to comply with these newrules. The LCPS in Illinois would act,at a minimum, as a bridge solutionthat would facilitate further policyactions that may be required forcompliance by the State of Illinois. Myth versus fact

The costs of allowing the threeat-risk plants to close early are fargreater than the costs of the LCPS.In fact, the costs are as much as 12times greater than the maximumcost of the legislation when consid-ering increased wholesale powerprices, transmission costs, adverseeconomic impacts and adverse envi-ronmental impacts.

Some have also incorrectlyargued that because the plants’ par-ent company, Exelon, as a whole isprofitable, legislation isn’t needed tokeep these plants open. Much like aretail business with multiple stores,every location has to make moneyon its own. No retail chain could

survive for longusing profitablestores to keepunprofitableones open, justas Exelon can-not operatePlant A at a losssimply becausePlant B is earn-ing a profit.

Other oppo-nents have saidthat Illinoisshould take noaction duringthis legislativesession due toproposedchanges at thefederal level thatcould supportnuclear facilities.While there isboth a regulato-ry proceedingand agency con-sideration ofenvironmentalrules at the fed-eral level that

could better recognize these nuclearfacilities’ superior reliability and theircarbon-free energy production, thefact is that such recognition does notcurrently exist and the resolution ofthose matters is far from certain.This uncertainty points back to, notaway from, action by the IllinoisGeneral Assembly. Federal actionalso does not solve for the underly-ing policy flaws in Illinois.

There are a variety of other mythsbeing pushed by opponents of thelegislation — all of which can beeasily discredited. When consideringall of the facts, it’s clear that this isan issue that impacts the entire stateand that Illinois cannot afford to loseany of its nuclear facilities. The LCPSis the best policy solution to helpprevent that possible outcome andwould also position the State ofIllinois to meet future energy andenvironmental goals. Take action: Say YES to the LCPS

While the LCPS has strong biparti-san support, it remains unclear if theGeneral Assembly will implementthis important policy. Legislators andGovernor Rauner need to hear fromtheir constituents, particularly thosein the business community, on thisimportant issue. Remaining competi-tive in our respective industriesrequires a reliable, affordable energysupply in Illinois.

Exelon launched the NuclearPowers Illinois campaign to educatepolicymakers and the public aboutthe current state of nuclear energy inIllinois and what is at stake if plantsclose early. There are several easyways to get involved and supportthe effort:1. Send a letter to your local state

legislators, as well as to Illinois’legislative leaders and the gover-nor in support of the legislation.

2. Sign the Change.org petition insupport of the LCPS.

3. Visit NuclearPowersIllinois.com tolearn more about the issue, getthe facts, find recent news cover-age, and sign up for emailupdates.

4. Follow Nuclear Powers Illinois onFacebook and Twitter.

5. Print out this short summary ofthe issues to help spread theword to your colleagues andemployees.For more information, visit

Constellation at energy.constella-tion.com/ima. n

18

NUCLEAR POWERSCont. from page 17

A pril was National Donate LifeMonth. I spent some timeattending events throughout

Illinois to encourage donation, andmany organizations are workingtogether to promote donor aware-ness throughout the state.

This year we are teaming upwith community colleges, hospitals,libraries and other interested institu-tions statewide to promote the life-saving importance of organ and tis-sue donation and to host donordrives.

In addition, we are making aconcerted effort this year to teamup with Illinois manufacturers inter-ested in hosting donor drives orallowing a speaker from my officeto give a presentation about dona-

tion. Last year we partnered withnearly 20 different Illinois manufac-turers throughout the state to pro-mote organ and tissue donation. Iwould like to increase this numberin 2015. Companies interested insetting up an event this year areencouraged to call my Organ andTissue Donor Department at 800-210-2106. We want to work withyou.

My goal as Illinois Secretary ofState is to encourage everyone tobecome a donor by joining theSecretary of State’s Organ andTissue Donor Registry. It takes verylittle time and one donor can saveor greatly improve up to 25 lives.The men and women who sign upfor this lifesaving program canpotentially improve the quality oflife for those in need of transplanta-tion.

Currently, there are more than5.7 million people registered tobecome organ/tissue donors inIllinois. However, more than 5,000

are on the waiting list and about300 people die each year waitingfor an organ transplant.

Television and radio commercialsaired in English and Spanishstatewide throughout the month ofApril. They were also shown onapproximately 400 movie screensacross the state.

Illinoisans can register withthe Secretary of State Organ/Tissue Donor Program by visit-ing LifeGoesOn.com, mailing in adonor registration card, callingour hotline at 800-210-2106 orvisiting their local DriverServices facility.

I urge everyone to take amoment to register to become anorgan and tissue donor. We can allhelp and potentially provide thoseon the waiting list with a secondchance at life. n

20

GUEST COLUMN BY Illinois Secretary of State

Jesse White

Manufacturers & Technology

CHAD LAYTON & EMILY ACOSTA

T he risk of a cyber securitybreach is significant, and hereto stay. All indications in the

legal community point towards esca-lating, and not decreasing risks. Theevidence is compelling that a breachcan significantly impact a companyin terms of lost reputation, cost, andlost business. It is therefore criticalthat a company take the appropriatesteps to evaluate and mitigate therelevant risks, and to develop anaction plan in the event of a breach.Addressing cyber security risks is notan event but, rather, an ongoingprocess that must be embraced at alllevels of a company. Fortunately,there are steps that a company can— and should — take to minimizethe potential for a security breach orsystem shut down.

This article is the first in a two-part series that will address what acompany needs to know concerningcyber security and cyber risks, andwill provide guidance for what acompany can do now, to lessen thelikelihood that a breach will occur.Part two, which will be published inthe summer edition of The IllinoisManufacturer, will address issuesthat a company should consider andsteps it should take in the event of acyber security breach.

Cyber Attacks in the NewsNo company is immune from a

potential cyber event, whether inad-vertent or intentional, at the handsof a third party. News of cyberattacks has, unfortunately, becomecommonplace, and such attackshave impacted organizations largeand small, including Sony, HomeDepot, Target, the National SecurityAgency, and others.

For example, in November, 2014,Sony was infiltrated by a cyberattack that cost the company anestimated $15 million dollars.1

Hackers obtained approximately 100terabytes2 of stolen data, includingsalary information, confidential con-tracts from ongoing projects, unre-leased motion picture films, damag-ing emails from Sony executives dis-cussing various celebrities, as wellas employee files and medicalrecords. The hack resulted in theunauthorized release and downloadof films, as well as an electronicstandstill for several weeks, duringwhich time employees were unableto use their computers, phones, oremail addresses.

In 2013, Target was breachedwhen hackers infiltrated the compa-ny’s security and payment system byinstalling malware that was designedto steal credit card information whena credit card was scanned at any oneof the company’s 1,797 U.S. stores.3

Additionally, many of the credit cardstrips (which contained cardholders’personal and account information)were sold to make counterfeit cards,4

resulting in a continued threat toTarget consumers’ credit. The breachcompromised up to 40 million creditcards and as many as 70 millionnames, email services, and phonenumbers, and is reported to havecost banks and credit unions morethan $200 million.5

More recently, in January of thisyear, hackers infiltrated Anthem,Inc., a health insurance company,and gained access to informationinvolving potentially 80 millionAmericans. Anthem failed to encryptlarge volumes of personal informa-tion which, according to someexperts, suggests that Anthem was

21

Chad Layton is a shareholder and Emily Acosta is an associate with the law firm of Segal McCambridge Singer & Mahoney in Chicago. Chad can bereached at 312-633-3533, clayton@smsm.com. Emily can be reached at 312-645-5634, eacosta@smsm.com. The firm is an IMA member company.

Protecting Your Company from CyberAttacks — What You Need to Know Now

see CYBER ATTACKS page 24

Certification System as a nationalsolution.

The Skills Certification Systemvetted credential programs in anattempt to simplify the system andensure the endorsed credential pro-grams were uniformly responsive tothe industry’s needs.

The credentialing partners in theSystem include:• ACT• The American Welding Society• The Manufacturing Skill Standards

Council• The National Institute of

Metalworking Skills• The Society of Manufacturing

Engineers• International Society of

Automation (ISA)• National Center for Construction

Education and Research (NCCER)• North American Die Casting

Association (NADCA)• Fabricators & Manufacturers

Association, International (FMA)• International Fluid Power Society

(IFPS)• Packaging Machinery

Manufacturing Institute (PMMI)• American Society for Quality

(ASQ)• American Society of

Transportation and Logistics(ASTL)

• Association for OperationsManagement (APICS)Credential-based training allows

manufacturers to employ both entry-level and incumbent workers whohave demonstrated the knowledgeand skills increasingly needed in thetechnology-intensive advanced man-

ufacturing jobs of the 21st century. Itprovides an objective measure onwhich employers can rate potentialemployees’ skills that are preciselytied to the technical requirements ofthe job opening. Stackability of cre-dentials can help employers betterdefine career paths for their employ-ees, which has been shown toreduce costly turnover and increaseemployee satisfaction. When manu-facturing employers hire creden-tialed candidates they can be confi-dent that they will maintain thequality production and efficientoperations. Despite these benefits,only seven percent of available man-ufacturing jobs identified a specificcertification requirement.

The realities of credential trainingand manufacturers

Regardless of their promise forhelping to solve the manufacturingskills gap, credential training is notyet being fully embraced by manu-facturing employers. This is due to avariety of factors including a stillfragmented credentialing system andsparse data on the return-on-invest-ment. But based on the increasedattention it is receiving from govern-ment, trade associations, and privatephilanthropy, and the progress incoordinating efforts across the sec-tors, it is becoming apparent thatcredential based training is here tostay. Siemens, a global manufacturerof electronics, has embraced creden-tial training and reports benefitsincluding work-ready technicalworkers and cost savings.

Incorporating credentials into recruitment and hiring practices

Manufacturers considering incor-porating credential training in theirhiring practices should start by

reviewing the Manufacturing SkillsCertification System. The system out-lines the basic skills required forentry-level work a wide variety ofmanufacturing settings. The skillscertifications address personal effec-tiveness competencies, foundationalacademic competencies (includingentry-level science, technology, engi-neering and math (STEM) skills),general workplace skills and indus-try-wide technical skills. The depic-tions of the career pathways andstackable credentials are available athttp://institute.nam.org/page/edu_workforce_skills_cert_implementation.

These certifications dovetail withthe Advanced ManufacturingCompetency Model framework,developed in collaboration with theEmployment and TrainingAdministration along with industry,education, and labor partners. Themodel is co-sponsored by theManufacturing Institute, the NationalCouncil for AdvancedManufacturing, and the Society ofManufacturing Engineers. The com-petency model is available withinthe CareerOneStop CompetencyModel Clearinghouse, at:www.careeronestop.org/competen-cymodel/pyramid.aspx?HG=Y.

Careful review of these toolsshould reveal which credentials makethe most sense for a particular jobopening. Next, manufacturers shouldget engaged with credential trainingproviders to help fill their pipelinefor skilled workers and to help train-ing providers to best meet the real-world needs of manufacturers. n

According to author Diana Peters, theSymbol Training Institute evolved outof Symbol Tool, Inc., a tool and diemachine shop established in 1985.Symbol provides hands on trainingfor both incumbent and dislocatedworkers on computer numerical con-trol (CNC) machines and QualityControl (QC) and has locations inSkokie and Addison. Symbol TrainingInstitute was the leader in the nationin NIMS credentials earned last year.Symbol is a dually accredited NIMStraining provider and testing sitealong with MSSC testing sites at bothlocations. Peters is a national advo-cate for narrowing the skill and gen-der gaps in manufacturing, and sherecently launched a nonprofit organi-zation, Manufacturing NEXT,www.manufacturingnext.org toaddress these issues. n

22

TRAININGCont. from page 14

www.ima-net.org

Visit the IMA Video Reference Library . . . valuable advice to help you run your company

23

Jerry Orpen, ARM is a Senior Vice President with Manufacturer’s Insurance Services of Illinois, located in Naperville. ManufacturersInsurance Services of Illinois, including MIS-360, is a benefits, risk analysis and key business resources affinity program of the IllinoisManufacturers’ Association. Visit www.mis-360.com, email info@mis-360.com or call 630-485-5882.

I t seems like every day there is anew computer-hacking incidenton the news. We have all heard

about the Target breach, Sony, theE-Bay and Home Depot breaches.We hear about them because theyinvolve huge corporations withfamiliar household names; and,because millions of unsuspectingcustomers had their personal infor-mation compromised. What we donot hear about, though, is thecountless number of similar inci-dents that occur on a daily basisand that businesses of all sizes arebeing targeted.

In fact, according to a survey pub-lished by Hartford InsuranceCompanies, about half of all small tomid-size companies have alreadyexperienced a data breach.Conversely, in that same survey, 70percent of small business owners(less than 50 employees) believedthat a data breach would be ‘unlike-ly’. Whereas these two findings seemto be contradictory, they point to thefact that these breaches are occurringregularly and that, despite this alarm-ing data, many businesses are choos-ing to ignore this significant andgrowing exposure.

Information published by thePonemon Institute, an independentcyber security research firm, foundthat the average cost and damage toa company resulting from a databreach is $3,500,000. To complicatematters further, the US District Court(New Jersey) recently held that theFederal Trade Commission can pro-ceed with a suit against a companyfor ‘lax security’ and failing to safe-guard consumer’s personal informa-tion. Granted, more litigation is sureto follow, but all signs are pointingto the need for companies to takethis matter very seriously. Failing totake a proactive approach to cyber

security can have a crippling effecton an organizations financial stabilityand public reputation.

As technology becomes increas-ingly important for successful busi-ness operations, the value of astrong cyber liability insurance poli-cy will only continue to grow aswell. The continued rise in theamount of information stored andtransferred electronically has result-ed in a remarkable increase in thepotential exposures facing business-es. In an age where a stolen laptopor hacked account can instantlycompromise the personal data ofthousands of customers, or an ill-advised post on a social media sitecan be read by hundreds in a mat-ter of minutes, protecting yourselffrom cyber liability is just as impor-tant as some of the more traditional

exposures businesses account for intheir general commercial liabilitypolicies.

Why Cyber Liability Insurance?A traditional business liability

policy is unlikely to protect againstmost cyber exposures. Standardcommercial policies are written toinsure against injury or physical lossand will do little, if anything, toshield you from electronic damagesand the associated costs they mayincur. Exposures are vast, rangingfrom the content you put on yourwebsite to stored customer data.Awareness of the potential cyber lia-bilities your company faces is essen-tial to managing risk through propercoverage.

Management Techniques

JERRY ORPEN, ARM

Cyber liability insurance — Often overlooked, but very necessary

see INSURANCE page 29

poorly designed, while others areimproperly maintained. Altogether,air compressors account for up to$3.2 billion in wasted energy costsannually in the U.S.

In fact, just one leak can costyour business $500 or more peryear. If you have multiple leaks,your air compressors are practicallysiphoning money right out of youroperations budget. 6. Conduct an HVAC system audit

HVAC systems are responsible formaintaining air quality and comfort

on a production floor. They’re alsoresponsible for nearly 52 percent ofa building’s total energy consump-tion. Many variables dictate howefficiently an HVAC system per-forms, including system design,method of operation and mainte-nance.

To ensure your facility is gettingthe most from its HVAC system, con-duct an HVAC audit. Based on thefindings, take the time to conductmaintenance or consider upgradingthe system.

Here are three ways to makeyour HVAC system more efficient: • Install a programmable thermo-

stat (which can reduce consump-tion by as much as 15 percent)

• Invest in a demand-controlledventilation (DCV) system, whichregulates outdoor air intakebased on a facility’s concentrationof carbon dioxide due to thenumber of staff inside.

• In some cases, the simple repairand insulation of ducting isenough to reduce HVAC energyconsumption by 30-percent. Constellation, the Illinois

Manufacturers’ Association’sendorsed energy supplier, workswith commercial and industrial com-panies of all sizes to help themidentify opportunities to reduce con-sumption and lower costs. n

ENERGY COSTSCont. from page 15

simply too lax when it came tocyber security. The investigationreveals that it took Anthem sixweeks or more to discover thebreach, which allowed hackers toobtain highly sensitive personalinformation including names, socialsecurity numbers, dates of birth, e-mail addresses and more.6 Thefinancial impact of the hack remainsto be seen.7

This is just a small sample ofnotable data breaches, the frequencyof which is growing. What is evenmore compelling is that these com-panies are responsible corporate citi-zens, and their cyber events aptlyreflect that no business is immunefrom the emerging risks of corporatecyber terrorism.

The Poneman Reports: How CyberAttacks Impact Business

In 2013, the Ponemon Institutepublished its report of an independ-ent study that evaluated more than3,500 IT security practitioners in eightcountries, including the UnitedStates.8 The 2013 report highlightsexactly why preventing cyber attacksmust be a key area of concern for allbusinesses. For example, the 2013Ponemon report states that, while theseverity and frequency of databreaches has increased, many com-panies lack the proper funding, tools,and personnel to identify and lessenthe likelihood of such breaches.

The 2013 Ponemon report high-

lights all of the areas that can beimpacted by a data breach includinga loss of reputation, time and pro-ductivity, as well as lost customers’loyalty. The financial impact of adata breach includes the cost ofevaluation and notification; out-of-pocket expenses to prevent damageto the victims of a breach; the pay-ment of regulatory fines; lost rev-enues; the costs of outside counseland consultants; as well as litigationexpenses, if a lawsuit is filed. The2013 report further indicates that, inthe United States, it takes a companyan average of 92 days to recoverfrom a non-malicious breach, andalmost 125 days to recover from amalicious or intentional breach. Forthose companies that have experi-enced a breach, the most significantpost-breach change was the devel-opment and implementation of anincident response plan as well as anincident response team.

More recently, in May of 2014,the Ponemon Institute released itsninth annual Cost of Data BreachStudy: Global Analysis.9 This studyevaluated 314 companies from 10different countries, including theUnited States. The 2014 Ponemonreport indicates that, while signifi-cant data breaches do result fromhuman error or system glitches,most attacks resulted from maliciousor criminal attacks. According to the2014 Ponemon report, some of thenotable factors that impact the costof a loss include the timeliness of abreach notification, the engagementof consultants, whether or not athird party was involved in thebreach, as well as whether or not

the breach involved a lost or stolendevice containing proprietary infor-mation. Not surprisingly, researchshows that those companies thathave developed an incidentresponse plan and that have astrong security posture will incurlower costs in the event of a breach.Of the countries that were evaluat-ed, organizations located in theUnited States sustained the largestnumber of breached records.

The 2014 report further revealsthat, in the United States, the aver-age cost of a non-malicious databreach is $195 per record, and theaverage cost of a malicious or crimi-nal attack is $246 per record. In theUnited States, companies are (for themost part) legally required to notifyvictims of a data breach, and theaverage notification cost exceeds$500,000. The average cost of busi-ness lost by a U.S. company follow-ing a breach exceeded a staggering$3.3 million. The report establishesthat the potential risks of the loss ofreputation, diminished goodwill, aswell as abnormal customer turnoverare clear and present.

The Current Regulatory LandscapeTo date, there is no comprehensive

federal law regulating a company’sresponsibilities or duties with respectto cyber security. Rather, the currentlegal framework is a complex web offederal and state regulations that gov-ern certain aspects of cyber security.In light of potentially applicable feder-al, state, and other regulations, fullcompliance involves not only knowl-edge of current laws but also an

CYBER ATTACKSCont. from page 21

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see CYBER ATTACKS page 28

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Constellation — Visit www.constellation.com/IMAAD2

Philippi-Hagenbuch, Inc.’sDanette Swank honored in 3rd STEP Awards for Excellencein Manufacturing

The Manufacturing Instituteawarded Danette Swank, president,Philippi-Hagenbuch, Inc., with theWomen in Manufacturing STEP(Science, Technology, Engineeringand Production) Award onThursday, March 26, 2015.

“Being an honoree at the 3rdannual STEP Ahead Awards wassuch a wonderful experience” saidDanette Swank. “To be in the midstof 129 other female manufacturingprofessionals was very inspiring. Itopened my eyes to the ways I canhelp others in my community andthe industries I’m involved in to beaware of the many solid careerpaths manufacturing can take some-one. I am truly grateful for thisopportunity and honor.”

“These 130 women are the facesof exciting careers in manufactur-ing,” said Jennifer McNelly, presi-dent, The Manufacturing Institute.“We chose to honor these womenbecause they each made significantachievements in manufacturingthrough positive impact on theircompany and the industry as awhole. “The STEP Awards are partof the larger STEP Ahead initiative,launched to examine and promotethe role of women in the manufac-turing industry through recognition,research, and leadership for attract-ing, advancing, and retaining strongfemale talent.

A recent survey from Deloitteand The Manufacturing Institutefound that 80 percent of Americanmanufacturing companies have amoderate to severe shortage ofavailable, qualified workers, whichis echoed by Swank.

On March 26, The ManufacturingInstitute recognized 130 recipients ofthe STEP Awards at a reception inWashington, D.C. The STEP Awardsprogram highlighted each Honoree’sstory, including their leadership andaccomplishments in manufacturing.

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Union Pacific plans to invest$119 million in its Illinois rail infrastructure Investments enhance communitysafety and railroad efficiency

Union Pacific plans to invest $119million in 2015 to improve Illinois’transportation infrastructure. Thecompany’s multi-million dollar pri-vate investment will enhanceemployee, community and customersafety and increase rail operatingefficiency. Freight railroads likeUnion Pacific operate on track builtand maintained without taxpayerfunds. Union Pacific’s private invest-ments sustain jobs and ensure thecompany meets growing demand forproducts used in the resurgentAmerican economy.

Union Pacific’s planned invest-ment covers a range of initiatives:nearly $105 million to maintain rail-road track, $5 million to enhancesignal systems and $9 million tomaintain or replace bridges in thestate.

This year’s planned $119 millioncapital expenditure in Illinois is partof an ongoing investment strategy.From 2010 to 2014 Union Pacificinvested more than $840 millionstrengthening Illinois’ transportationinfrastructure.

Union Pacific plans to spend $4.2billion across its network this year,following investments totaling morethan $31 billion from 2005-2014.These investments contributed to a38 percent decrease in derailmentsover the last 10 years.

One of America’s most recog-nized companies, Union PacificRailroad connects 23 states in the

western two-thirds of the country byrail, providing a critical link in theglobal supply chain. From 2005-2014, Union Pacific invested morethan $31 billion in its network andoperations to support America’stransportation infrastructure. UnionPacific is an IMA member company.

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Tyson Foods strives to eliminatehuman antibiotics from broilerchicken flocks by 2017Forms working groups to addressantibiotic use in cattle, hog andturkey production

Tyson Foods, Inc., is striving toeliminate the use of human antibi-otics from its U.S. broiler chickenflocks by the end of September2017. Tyson Foods has alreadystopped using all antibiotics in its 35broiler hatcheries, requires a veteri-nary prescription for antibiotics usedon broiler farms and has reducedhuman antibiotics used to treat broil-er chickens by more than 80 percentsince 2011.

“Antibiotic resistant infections area global health concern,” saidDonnie Smith, president and CEO ofTyson Foods. “We’re confident ourmeat and poultry products are safe,but want to do our part to responsi-bly reduce human antibiotics on thefarm so these medicines can contin-ue working when they’re needed totreat illness.”

“Given the progress we’vealready made reducing antibiotics inour broilers, we believe it’s realisticto shoot for zero by the end of our2017 fiscal year. But we won’t jeop-ardize animal well-being just to get

Member News

Greg Baise, IMA president & CEO (left),recently testified before the Senate

Judiciary Committee on the need forreform of the Illinois workers’ compensa-

tion system. Baise noted that Illinoishas the 7th highest cost of workers’

compensation in the United States andis a major detriment to job creation andcapital investment. Also testifying were

Keith Hermann, executive director of theIllinois Self-Insurers’ Association

(middle) and Steve Hoekstra of Hoekstra Trucking (right)

26

The Illinois Manufacturer is underwritten by Constellation — An Exelon Company

Member News

there. We’ll use the best availabletreatments to keep our chickenshealthy, under veterinary supervi-sion,” Smith said.

Tyson Foods plans to work withfood industry, government, veteri-nary, public health and academiccommunities, and provide funding,to accelerate research into diseaseprevention and antibiotic alternativeson the farm. The company is alsogetting input from its Animal Well-Being Advisory Panel, which ismade up of independent advisors.

Tyson Foods, Inc., with headquar-ters in Springdale, Arkansas, is one ofthe world’s largest producers of chick-en, beef, pork and prepared foodsthat include leading brands such asTyson®, Jimmy Dean®, HillshireFarm®, Sara Lee® frozen desserts,Ball Park®, Wright®, Aidells® andState Fair®. The company was found-ed in 1935 by John W. Tyson, whosefamily has continued to lead the busi-ness with his son, Don Tyson, guid-ing the company for many years andgrandson, John H. Tyson, serving asthe current chairman of the board ofdirectors. Tyson Foods, Inc., is anIMA member company.

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North American Corporation tailors manufacturing offeringswith “Three Legged Stool”

Quality. Throughput. Up time.Direct materials cost. These are thecore performance indicators in anydurable manufacturing environment.For years, Fortune 500 manufactur-ers have relied on North Americanfor facility supplies, marketing sup-ply chain services and packagingsupplies and equipment, deliveringmission critical needs that keepthem operating 24/7, 365 days ayear. What we have learned over thepast 90 years is that customers want

ease of doing business and we havemet those needs by supplying con-sumables, equipment and servicewith one quick phone call.

The new and exciting “ThreeLegged Stool” approach gives theconsumer the option to meet alltheir supply chain needs with easeand flexibility. The approach is agame changer in the manufacturingsegment, where North AmericanCorporation can assist in keepingproduction lines up and running,lower inventory levels, customizecost savings solutions and offer reli-able packaging equipment. We pro-vide expertise that goes Beyond theProduct to our customers to identifyimprovement opportunities, bothprocess efficiencies and cost-savings,specific to their situation. We thenimplement strategies and supplyprograms that drive bottom-lineresults. Each of our programs isunique to the clients we service, willyou be the next to benefit?

To learn more about NorthAmerican Corporation, please visitus at www.na.com or contact HollyFalcaro at 847-832-4407. NorthAmerican Corporation is an IMAmember company.

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Governor Rauner appoints SylviaWetzel to the Illinois WorkforceInvestment Board

Governor Bruce Rauner recentlyannounced appointments to severalboards. Upon the recommendationof the Illinois Manufacturers’Association, Governor Raunerappointed Sylvia Wetzel of BisonGear and Engineering to the IllinoisWorkforce Investment Board. Shebrings 35 years of experience inmarketing and business develop-ment to the position.

Wetzel is currently the VicePresident of Human Capital andCorporate Wellness at Bison Gearand Engineering. She works todevelop the company’s workforcethrough education and policy at hercompany and by advocating formanufacturing careers with the gen-eral public. Prior to that she was the

Executive Director of Eastgate ManorAssisted/Supportive Living, and trans-formed the organization in 90 daysby turning losses into profits. Shehas also worked for AT&T NetworkSystems. Wetzel is a graduate ofJudson College, earning her bache-lor’s degree in business managementand leadership. She lives in Elgin.

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Midwest EnvironmentalCompliance Conference —Sponsorship opportunitiesChicago Marriott O’Hare —October 29-30, 2015

The Midwest EnvironmentalCompliance Conference (MECC)takes a fresh, regional approach tothe increasingly difficult task of envi-ronmental compliance, permitting,enforcement, and other critical envi-ronmental issues that impactMidwest facilities and institutions.The MECC is proudly hosted by allsix state manufacturing associations,including the Illinois Manufacturers’Association, and supported byRegion 5 EPA, and includes the par-ticipation of all six state environ-mental agencies.

This conference experience anddialogue is designed for regulatedentities and those charged with theimportant task of environmentalcompliance.

MECC focuses on regional issues— recognizing that environmentalmedia simply do not respect statelines. Sessions focus on major devel-opments in federal and state permit-ting, compliance, rulemaking, stan-

Advertiser IndexConstellation .............19 & bc

College of Lake County ..........9

Heritage-Crystal

Clean, LLC ....................ifc

McGladrey ...........................5

MIS-360 ...........................ibc

PNC Financial Services .......15

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dards, decisive case law, andenforcement priorities in Air, Water,and Hazardous Waste.

MECC is partnering with sixstatewide manufacturing associa-tions, corporate sponsors, environ-mental service providers, and, ofcourse, federal and state environ-mental regulatory agencies. Ourapproach brings together a diverseMidwestern crowd to address keycompliance issues with a fresh,regional perspective.

You are invited to join MECCnow as a key sponsor to takeadvantage of every stage of theirpromotional strategy.

For more information and detailson sponsorship opportunities avail-able, contact Roger Walker, 573-415-7699, rwalker@rawalkerassociates.com, orDeirdre (DK) Hirner, 217-414-8138,dkhirner@gmail.com.

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Diageo again named one of“Best Places To Work In Illinois”

Diageo, a global leader in bever-age alcohol, has been selected asone of the 2015 Best Places to Workin Illinois. Nearly a decade old, thisprestigious statewide survey andaward program was designed toidentify and honor the best places ofemployment across the state ofIllinois, benefiting the state’s econo-my, workforce and businesses. Thisis the second year in a row thatDiageo has been recognized as aBest Place to Work in Illinois.

Diageo’s Plainfield location ishome to the company’s largest bot-tling facility in North America, andthe region’s brand technical facilitywhich helps to turn new liquid andpackaging ideas into commercialproducts. The site is also the pri-mary manufacturing location forDiageo’s range of Smirnoff brands. Ithas played a key role in the Illinoiscommunity for many years and seena number of expansions andupgrades since its opening in 1966,including a recently-completed $120million enhancement.

“We’re in the celebration busi-ness, and we firmly believe ourworkplace should reflect that,” saidMark Laven, VP Operations atDiageo’s Plainfield site. “To be rec-

ognized for the second year in arow as a Best Place to Work is anhonor we don’t take lightly. Weremain committed to our employeesand to supporting a culture that isengaging, nurturing and inspiring.”

Diageo offers its employees arange of benefits, including recogni-tion and rewards for effort and per-formance; product and brand give-aways; educational activities aboutthe company’s collection of world-leading brands; and events support-ing a range of community, environ-mental and well-being initiatives.

In the last year alone, the site hassupported its annual United Wayand Toys for Tots programs, a site-wide weight-loss and fitness chal-lenge, and an Earth Day environ-mental competition, among otherinitiatives. Plainfield employees alsoband together to raise funds for theMovember movement, the AmericanCancer Society, and the PlainfieldHarvest, a 5K race with proceedsgoing to local charities. Diageo’sPlainfield facility has a number ofemployees with over 35 years ofservice, whose contributions are rec-ognized at celebrations with thesite’s senior management.

Diageo has been named one ofthe Best Places to Work in Illinois inthe large employer category.

IMA member Diageo is a globalleader in beverage alcohol with anoutstanding collection of brandsacross spirits, beer and wine cate-gories. For more information aboutDiageo, visit us at www.diageo.com.Visit Diageo’s global responsibledrinking resource,www.DRINKiQ.com, for information,initiatives, and ways to share bestpractices.

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Record Turnout for IMA’s 2015 Business Day 

More than four hundred businessleaders converged in Springfield thisMay to take advantage of a fresh,new political dynamic under theState House dome created by theelection of Republican GovernorBruce Rauner. For the first time inmore than a decade, Democrats donot control both the executive andlegislative branches of government

forcing both sides of the politicalaisle to work together on the chal-lenges facing Illinois.

Governor Bruce Rauner attendedand spoke at the opening receptionfor the IMA Board of Directors onTuesday night outlining key tenetsof his Turnaround Agenda includingworkers’ compensation reform,empowerment zones, infrastructure,and local property tax freezes.Manufacturers were charged by theGovernor with the task of talking tolocal lawmakers and urging theirsupport for these major reforms.

During the lunch program, manu-facturers heard from two competingvoices at the Capitol. SenatePresident John Cullerton (D-Chicago) kicked off the luncheon bynoting that the Governor and law-makers need to first focus on pass-ing a balanced budget. He statedthat several components of theGovernor’s budget including pen-sion reform will not pass theGeneral Assembly and survive courtscrutiny before the start of the state’sfiscal year on July 1. SenatorCullerton also spoke about nearly$700 million in reduced medicalcosts for state employees that arecurrently contained in the budgetbut are still subject to ongoing unionnegotiations.

House Republican Leader JimDurkin (R-Burr Ridge) spoke afterlunch and thanked employers forinvesting and remaining in Illinoisduring challenging times. TheRepublican caucus is working inpartnership with the IMA and otherbusiness groups to help get thestate’s economy back on track.

In the afternoon, House SpeakerMichael J. Madigan (D-Chicago) metwith IMA leaders. He outlinedreforms of workers’ compensationthat passed in 2011 and indicatedthat he is keeping an open mind onfuture changes including a primarycausation standard.

Senate Republican LeaderChristine Radogno (R-Lemont) host-ed manufacturing leaders in theafternoon and stressed that her cau-cus is prepared to make the toughvotes necessary to balance the state’sbudget.

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Member News

awareness of proposed legislation. At the inception of his adminis-

tration, President Obama initiated acyberspace policy review, whichinvolved a comprehensive, adminis-tration wide evaluation of cybersecurity issues. More recently, inJanuary of this year, the ObamaAdministration sent three legislativeproposals to Congress that wouldcreate a single federal breach notifi-cation standard (and potentially pre-empt the notification laws from 47states as well as the District ofColumbia).10 The proposal seeks toencourage the sharing of informa-tion concerning cyber threatsbetween the private sector and thefederal government, and to enhancelaw enforcement’s ability to investi-gate and prosecute cyber crimes.

The vast majority of states havecybersecurity breach notificationlaws11 that require, in many cases,private or government entities tonotify individuals of security breachesthat involve personally identifiableinformation.12 For example, in Illinois,the Personal Information ProtectionAct (PIPA)13 requires private entitiesto disclose each and every breach ofa computer system that contains theunencrypted personal information ofan Illinois resident, even if the com-promised business is not located inIllinois. Notifications must be madeas expediently as possible, and with-out unreasonable delay following dis-covery or notification of the breach.

Other states have enacted similarnotification statutes. There are cur-rently only three states (Alabama,New Mexico and South Dakota) thathave not enacted security breachlaws. Given the current state of thelaw, it is critical that a companyunderstand the notification statutesin all states in which it conductsbusiness. Under the law, a singlebreach can potentially trigger legalobligations in a particular state, aswell as beyond that state’s borders.

Critical Steps a Company Can — and Should — Take Now

The data indicates that the risk ofa cyber attack is one that simply

cannot be ignored. The question,then, is what steps can a companyproactively take in order to mini-mize the risk of such an attack?

The necessary pre-breach actionplan for every company mustaddress several critical areas includ-ing technology, employee training,and other key business areas. Onthe technology side, a companymust ensure that it has a sufficientfirewall in place, and that it con-ducts regular penetration testing ofthat firewall. Moreover, malware oranti-virus software must be updatedas necessary, over time. It is impera-tive that companies vigorously moni-tor for and incorporate availablesoftware updates from vendors. Acompany should also equip employ-ees with the ability to encrypt sensi-tive documents and information, orprovide other technological meansby which to securely transfer sensi-tive information. A company’s ITdepartment should, as necessary andappropriate, update company per-sonnel regarding security threats,and provide strategies for minimiz-ing the risk posed by such threats.

It is also important to ensure thatemployees are properly trained, andthat your company develops andmaintains a culture of cyber aware-ness. For example, do your employ-ees use adequate passwords on per-sonal electronic devices that providean appropriate degree of security?Do you have an employment policyfor dealing with lost or misplaceddevices, and are your employeesaware (and reminded of) that policy?Are employees aware of the types oftricks that potential hackers use, andwhat an employee should do if heor she suspects a hack, or are signsof potential hacks simply ignored?

Employees should be required toacknowledge, in writing, his or herunderstanding of your company’scommitment to preserving confiden-tial information and the employee’sobligation to maintain confidentiali-ty. If your company utilizes a “BringYour Own Device” or “BYOD” pro-gram, it is important to developcompany policies concerningemployee use of such devices.

A company should also evaluatethe language in its business con-tracts, its own insurance coverage,as well as the insurance coverage of

those companies with which it con-ducts business, in order to ensurethat it is adequately protected in theevent of a cyber security breach. Acompany should also evaluate thesufficiency of cyber security protec-tion utilized by current and futurebusiness partners.

A company should also developan emergency response plan, andimplement a team for handlingbreaches. Such a plan must includethe identification of outside vendorsthat may be required in the event ofa breach, as well as a plan forrestoring business operations assoon as possible. It is also importantthat your company’s general counselis involved in this area, and thatyour company develops a pre-breach as well as a post-breachprocess to protect communicationsand information with the attorney-client privilege and, when possible,the attorney work product doctrine.Indeed, effective risk managementstarts with proof that a company’srisk management system is, to theextent possible, state of the art.

ConclusionUnder the law, a company is not

required to guarantee that a securitybreach will never occur, but a com-pany must take steps to adopt andimplement reasonable business prac-tices. In light of changes to the rele-vant laws and regulations, as well asthe evolution of technology andhacking techniques, what constitutesa reasonable business practice haschanged, and will continue tochange, over time. For this reason, itis critically important that a companydevelop, implement and update itscyber security policies and proce-dures on an ongoing basis. n

References1. Sony FY 2014 Q3 Financial

Statements, (www.sony.net/SonyInfo/IR/library/er.html)(Released March 17, 2015); SonyPictures Hack Has Cost theCompany Only $15 Million So Far,Steven Musil (Feb. 4, 2015),(www.cnet.com/news/sony-pic-tures-hack-to-cost-the-company-only-15-million/).

2. For context, the entire printed col-lection of the United States Libraryof Congress would only fill 10 ter-

CYBER ATTACKSCont. from page 24

28

Constellation — Over 10 years as the IMA’s endorsed energy supplier

see CYBER ATTACKS page 29

Possible exposures covered by atypical cyber liability policy mayinclude:• Data breaches — Increased gov-

ernment regulations have placedmore responsibility on companiesto protect clients’ personal infor-mation. In the event of a breach,notification of the affected partiesis now required by law. This willadd to costs that will also includesecurity fixes, identity theft pro-tection for the affected and pro-tection from possible legal action.While companies operatingonline are at a heightened risk,even companies that don’t trans-mit personal data over the inter-net, but still store it in electronicform, could be susceptible tobreaches through data lost tounauthorized employee access orhardware theft.

• Intellectual property rights —Your company’s online presence,whether it be through a corpo-rate website, blogs or socialmedia, opens you up to some ofthe same exposures faced bypublishers. This can include libel,copyright or trademark infringe-ment and defamation, amongother things.

• Damages to a third-party sys-tem — If an email sent fromyour server has a virus that crash-es the system of a customer, orthe software your company dis-tributes fails, resulting in a lossfor a third party, you could beheld liable for the damages.

• System failure — A natural dis-aster, malicious activity or firecould all cause physical damagesthat could result in data or codeloss. While the physical damagesto your system hardware wouldbe covered under your existingbusiness liability policy, data orcode loss due to the incidentwould not be.

• Cyber extortion — Hackers canhijack websites, networks andstored data, denying access toyou or your customers. Theyoften demand money to restoreyour systems to working order.This can cause a temporary lossof revenue plus generate costsassociated with paying the hack-er’s demands or rebuilding ifdamage is done.

• Business interruption — Ifyour primary business operationsrequire the use of computer sys-tems, a disaster that cripples yourability to transmit data couldcause you, or a third party thatdepends on your services, to losepotential revenue. From a serverfailure to a data breach, such an

incident can affect your day-to-day operations. Time andresources that normally wouldhave gone elsewhere will need tobe directed towards the problem,which could result in further loss-es. This is especially important asdenial of service attacks by hack-ers have been on the rise. Suchattacks block access to certainwebsites by either rerouting traf-fic to a different site or overload-ing an organizations server.It is important to discuss your

cyber security needs with your man-agement team, IT specialist andinsurance vendor. As mentioned ear-lier, 85 percent of small companiesdo not think they will be the targetof an attack; but yet, almost half ofall small to mid-size companies havealready experienced a breach. Thefacts bear-out that this is a very realthreat to business owners and thetime to prepare is before an attack.Please contact your localManufacturer’s Insurance Service ofIllinois representative for a helpfullist of Best Practices in regards tostoring/handling information and toreceive your no-obligation CyberLiability proposal. n

INSURANCECont. from page 23

abytes. (www.deadline.com/2014/12/sony-hack-timeline-any-pascal-the-interview-north-korea-1201325501/#).

3. See Missed Alarms and 40 MillionStolen Credit Card Numbers: HowTarget Blew It, Bloomberg Business,Michael Riley (Mar. 13, 2014)(www.bloomberg.com/bw/arti-cles/2014-03-13/target-missed-alarms-in-epic-hack-of-credit-card-data).

4. Here’s What Happened To YourTarget Data That Was Hacked,Business Insider, Natasha Bertrand(Oct. 20, 2014) (www.businessin-sider.com/heres-what-happened-to-your-target-data-that-was-hacked-2014-10).

5. Target Hack Cost Banks and CreditUnions More than $200 Million,

The Verge, Rich McCormick (Feb.18, 2014) (www.theverge.com/2014/2/18/5424062/target-hack-cost-200-million-dollars-for-banks-and-credit-unions).

6. See Hiltzik, Michael of TheEconomy Hub. Anthem is WarningConsumers About its Huge DataBreach. Here’s a Translation, pub-lished in the L.A Times (March 6,2015).

7. Security Firm Finds Link BetweenChina and Anthem Hack, TheWashington Post, Ellen Nakashima(Feb. 27, 2015) (www.washington-post.com/blogs/the-switch/wp/2015/02/27/security-firm-finds-link-between-china-and-anthem-hack).

8. Ponemon Institute Research Report,The Post Breach Boom, PonemonInstitute (February 2013).

9. Ponemon Institute Research Report,2014 Cost of Data Breach Study:Global Analysis, Ponemon Institute(May 2014).

10. See Securing Cyberspace –President Obama Announces NewCybersecurity Legislative Proposaland Other Cybersecurity Efforts, TheWhite House Press Release(January 13, 2015) (www.white-house.gov/the-press-office/2015/01/13/securing-cyber-space-president-obama-announces-new-cybersecurity-legislat).

11. See Greenburg, Pam, SecurityBreach Notification Laws (January12, 2015), (www.ncsl.org/research/telecommunications-and-information-technology/security-breach-notification-laws.aspx).

12. The Senate is currently consideringpassing a uniform federal cyberse-curity breach law that would pre-empt these laws in an effort toreduce costs and enhance con-sumer protection. (See www.com-merce.senate.gov/public/index.cfm?p=Hearings (tran-scripts of March 19, 2015 hearing)).

13. 815 ILCS 530/1 et seq.

CYBER ATTACKSCont. from page 28

29

AMERICAN CONTROL ELECTRONICSSouth Beloit

BREAKTHROUGH TECHNOLOGIESEvanston

BROTHER INTERNATIONALCORPORATION

Bridgewater, NJ

CEF INDUSTRIES, LLCAddison

DELPHI EXPRESS, INC.Chicago

DEVRY, INC.Oakbrook Terrace

DUPONT NUTRITION & HEALTHGibson City

EYChicago

FLEX-N-GATE PLASTICSDanville

FLEX-O-GLASS, INC.Chicago

FREEDMAN SEATING COMPANYChicago

FRITO-LAYPlano, TX

G & D INTEGRATEDMorton

HANLEY INDUSTRIES, INC.Alton

HIGHLAND MACHINEHighland

HOFFER PLASTICS CORPORATIONSouth Elgin

THE HORTON GROUPOrland Park

ILLINOIS PRESS ASSOCIATIONSpringfield

INDUSTRIAL PHARMACEUTICALRESOURCES, INC.

Bartlett

INTERDYN BMIChicago

JOHNSON & QUIN, INC.Niles

LAKE REGION MEDICALWheeling

LUVO, INC.Schaumburg

MID-STATES SCREW CORPORATIONRockford

NESTLE USA/BEVERAGE DIVISIONJacksonville

NOVARTIS PHARMACEUTICALS CORPORATION

Deerfield

NRG ENERGY, INC.Princeton, NJ

PAL HEALTH TECHNOLOGIES, INC.Pekin

PALTECH ENTERPRISES, INC.Belvidere

PEORIA DISPOSAL COMPANYPeoria

SWEBCO MANUFACTURING, INC.Machesney Park

TERRASOURCE GLOBALBelleville

TH FOODS, INC.Loves Park

TRI-PART SCREW PRODUCTSMachesney Park

US SILICA COMPANYOttawa

VONCO PRODUCTS, INC.Lake Villa

New IMA members

30

July 7-8, 2015Walmart “Made in the USA” Open Call and U.S. Manufacturing SummitWalmart corporate offices, Bentonville, Arkansas.For more information, visithttp://news.walmart.com/events/2015-us-manufacturing-summit

August 1-3, 2015MEDICAL FAIR CHENNAI – Chennai, IndiaMedical Fair Chennai is India’s premier hospitalequipment expo. This trade show will provideIllinois companies with an opportunity to show-case their products and services to professionalsfrom around the globe. For more information visithttp://www.medicall.in/

August 11-13, 2015AQUATECH 2015 — New Delhi, India India’s leading water technology event, Aquatech2015 will showcase the latest products and inno-vations. For more information visit www.aquatech-trade.com/india/Pages/homepage.aspx

September 1-4, 2015AUSTRALIAN INTERNATIONAL MINING EXHIBITION (AIMEX) — Sydney, Australia As Australia is Illinois’ fifth largest export market,this Australian Mining Exhibition offers an excellentenvironment for Illinois companies to develop poten-tial partnerships and business opportunities. Formore information visit http://www.aimex.com.au/

September 17, 2015IMA Breakfast Briefing: WorkersCompensation Negotiation StrategiesMon Ami Gabi Restaurant, Oak Brook, 8:00-10:30am — presented by Bryce Downey & Lenkov LLC

October 29-30, 2015Midwest Environmental ComplianceConference with EPA Region 5 RegulatorsChicago Marriott O’Hare — For more information,visit http://mecconference.com

December 4, 2015IMA Annual Luncheon, Chicago

2015 Calendar of events

Welcome to the IMA

Visit http://www.ima-net.org/calendar-of-events for information, pricing, registration, etc., related to all IMA events. For more information on IMA events, contact Kimberly McNamara at kmcnamara@ima-net.org, 800-875-4462, ext. 9371

The Illinois Manufacturer is underwritten by Constellation — An Exelon Company