In the weeks and months following the start of the COVID-19 pandemic, many employers were faced with the need to quickly conduct substantial reductions in force.  In making these decisions, the question frequently arose around whether an employer had to provide 60 days advance notice of a plant closing or mass layoff under the Workers’ Adjustment and Retraining Notification (“WARN”) Act or whether COVID-19 constituted a natural disaster giving rise to the natural-disaster exception to the notice provision.  Two years later, we have an answer –at least in Texas, Mississippi and Louisiana.

On June 15, 2022, the Fifth Circuit Court of Appeals held that the COVID-19 pandemic is not a natural disaster under the WARN Act.  The WARN Act requires covered employers to give affected employees sixty days’ notice before conducting a plant closing or mass layoff.  One exception to the sixty day notice requirement is the natural-disaster exception.  When this exception applies, shorted notice or no notice is required.

In Easom v. U.S. Well Services, Inc., U.S. Well Services, Inc., an oil and gas producer, experienced a substantial loss of business beginning in March 2020.  This loss of business was caused by a combination of factors including a price conflict between Russia and Saudi Arabia and a precipitous drop in the price of oil resulting from the reduced demand for travel, oil and gas caused by the COVID-19 pandemic.

U.S. Well Services laid off a substantial number of its crews sufficient to qualify for WARN Act notification.  Rather than providing any period of advance notice, the company terminated the employees with no notice and told them:

Your termination of employment is due to unforeseeable business circumstances resulting from a lack of available customer work caused by the significant drop in oil prices and the unexpected adverse impact that the Coronavirus has caused.

The laid off employee filed suit alleging violations of WARN.  U.S. Well Service defended that it was not required to provide any advance notice under the natural-disaster exception.  The employee countered that COVID-19 was not a natural disaster and even if it was, it was not the direct cause of the layoffs.

The district court certified two questions for interlocutory appeal to the Fifth Circuit.  First, does COVID-19 qualify as a natural disaster under the WARN Act’s natural-disaster exception?.  Second, does the WARN Act’s natural-disaster exception incorporate but-for or proximate causation?  For the reasons explained by the Court, it held that the COVID-19 pandemic is not a natural disaster under the WARN Act and that the natural-disaster exception incorporates proximate causation.

And employer’s beware (and mass action attorneys rejoice), the statute of limitations for a WARN Act claim is at least two years.  Thus if there was a  plant closing or mass layoff caused by COVID-19 where the employer failed to provide 60 days advance notice of the employment action believed the pandemic was a natural disaster, there may still be time for employees to bring claims over those actions.

You can download Easom v. U.S. Well Services, Inc. here.

Many employers have implemented mandatory arbitration programs to resolve disputes with employees.  When sued by an employee, an employer with a mandatory arbitration provision occasionally delays seeking an order compelling the lawsuit into arbitration.  When a delay occurs, the party seeking to keep the case in court (usually the employee), may resist arbitration arguing that the employer waived its right to have the case decided in arbitration by delaying seeking to compel the case into arbitration.

Historically, to show that a party waived its right to arbitrate rather than litigate the dispute, the party opposing arbitration had to show that the party seeking arbitration waived its right to arbitrate by acting inconsistently with that right –usually through delay and proceeding in the court system.  Additionally, the opposing party also had to show that it was prejudiced by the inconsistent actions or delay.  Showing prejudice was very difficult.  So long as the party seeking arbitration had not sought rulings on dispositive issues or waited an unreasonably long period (often more than six months of engaging in litigation or right before trial), courts rarely found that a party was prejudiced by the delay in seeking arbitration.

Last month, the U.S. Supreme Court dispatched the prejudice element required to show waiver.  No longer is a party required to show that it was prejudiced by its adversary’s delay in seeking arbitration.  The prejudice requirement is an arbitration-specific procedural rule that is not authorized by the Federal Arbitration Act.  Thus, an employer who wants to preserve its contractual right to arbitrate its dispute with an employee should make that request timely and avoid acting inconsistently with the right to arbitrate.

You can read the entire Supreme Court opinion in Morgan v. Sundance, Inc. here.

On March 3, 2022, the President signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“Act”).  The new law amends the Federal Arbitration Act to prohibit the enforceability of mandatory, predispute arbitration agreements and class action waivers of sexual assault and sexual harassment disputes.  The passage of the law comes as a major victory for the #MeToo movement.  The amendment provides as follows:

  • Makes voidable, at the election of the plaintiff, any predispute mandatory, arbitration agreement or joint-action waiver of conduct constituting sexual assault or sexual harassment;
  • Requires courts, not arbitrators, to determine the validity and enforceability of an agreement to arbitrate regardless of any delegation clause contained in the arbitration agreement;
  • Defines Sexual Assault Dispute to include a dispute involving a nonconsensual sexual act or sexual contact, as such terms are defined in section
    2246 of title 18 or similar applicable Tribal or State law, including when the victim lacks capacity to consent.
  • Defines Sexual Harassment Dispute to mean a dispute relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law.
  • The law takes effect immediately and applies to any claims made after the effective date.
  • The law does not affect predispute arbitration and class action waivers outside the sexual assault/discrimination context, nor does it address waivers of jury trial that are enforceable in many states including Texas.

The new law raises questions that will have to be answered by the Courts such as what about disputes that include sexual assault/harassment claims along with other claims not covered by the Act?  Will courts sever out the sexual assault/harassment claims and retain jurisdiction while sending the other claims to arbitration?

Employers using mandatory arbitration or class action waivers with their workforce (or are considering doing so) should have their existing policies and arbitration agreements reviewed to determine whether they need to make any changes to account for the Act.

 

Enforcement of the Biden Administration’s three vaccine mandates (i.e., government contractor, CMS and large employer mandates) had been stayed or partially stayed by various federal courts.  The OSHA Emergency Temporary Standard (ETS) applicable to most employers having 100 or more employees was stayed by the Fifth Circuit Court of Appeals prohibiting enforcement of the rule.  However, on December 17, 2021, the Sixth Circuit Court of Appeals, the court chosen by lottery to hear the consolidated appeals challenging the ETS, dissolved the stay that the Fifth Circuit put in place.  Thus, employers with 100 or more employees that are not specifically exempted from the standard must now take steps to comply with the emergency rule.

With the stay dissolved, employers are now required to comply with the non-testing requirements by January 10, 2022 and the testing requirements by February 9, 2022.  For a more detailed review of the requirements, you can read more here.

Here is a copy of the Sixth Circuit’s lengthy opinion lifting the stay.

 

Some of the best lessons are those learned not through our own mistakes; but rather by the mistakes of others.  We get all the same knowledge without the pain associated with learning by our own mistakes.  Fifteen years ago, Radio Shack was blasted for communicating the layoff of over 400 workers to the employees by text message.  Communicating important employment actions like layoffs and terminations by mass e-mail and text seems impersonal and should be avoided if possible.

Last week, Better.com gave the HR world another lesson to avoid.  The CEO apparently invited 15 percent of his workforce (or 900 employees) to a Zoom meeting where he unceremoniously advised them that they were terminated immediately.

Here is a capture of the Zoom call

While I get the efficiency needed when necessity requires the communication of an employment action to a large number of the workers simultaneously, there must be a better method than the mass Zoom meeting used by Better.com.  Be better Better.com.

 

On November 4, 2021, OSHA issued its Emergency Temporary Standard (“ETS”) on mandatory COVID-19 vaccination and/or testing. The ETS requires that employers with more than 100 employees require most employees get vaccinated or undergo weekly COVID-19 testing and masking. OSHA’s ETS preempts any conflicting state or local laws.

  1. What does the ETS require?

The ETS requires employers with more than 100 employees to implement written policies that either require vaccinations or require weekly testing and masking. Employees are considered “fully vaccinated,” and therefore are exempt from the testing and masking requirement, two weeks following a final dose of a COVID-19 vaccine.

  1. When does the ETS go into effect?

OSHA’s ETS goes into effect on or about November 5, 2021. Although the ETS is temporary and effective only for six months, it serves as a proposal for a permanent standard. The permanent standard, if adopted, must be finalized within six months after publication of the ETS. The compliance date for all provisions of the ETS, except COVID-19 testing for employees not fully vaccinated, is on or about December 5th. Employers must comply with COVID-19 testing requirements for employees not fully vaccinated by on or about January 5th.  Employer must implement their vaccine policies within 30 days of the effective date and employers have 60 days to establish a testing regime.

  1. How is the 100 employee standard determined?

In determining whether a company meets the 100-employee threshold, employers must include all employees across all U.S. locations, regardless of either the employees’ vaccination status or where the employees perform work. Exempt employees are also included to determine whether an employer meets the 100-employee threshold. Part-time workers count towards the 100-employee requirement, while independent contractors do not. Moreover, franchisor-franchisees, staffing agencies, and multi-employer worksites have specific rules regarding who constitutes an employee that must be counted towards the threshold. The ETS applies to any employer who has 100 employees at any time during the pendency of the ETS.

  1. Are any employees exempted from the ETS?

Yes, some employees of covered employers are exempt from the ETS. The ETS does not apply to either workplaces covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors or those  subject to the requirements of the Healthcare ETS.

The ETS further does not apply to employees who are entirely remote and do not report to an office or workplace with others present, employees while working from home, or employees who work exclusively outdoors. An employee works “exclusively outdoors” when that employee works outdoors for the duration of every workday except for de minimis use of indoor spaces (including use of multi-stall restrooms).   Also excepted from the vaccine requirement are those employees for whom: a vaccine is medically contraindicated or medical necessity requires a delay in vaccination.  The standard also excepts employees who are legally entitled to a reasonable accommodation for disabilities or sincerely held religious beliefs.

  1. What is a written policy under the ETS?

Employers must create a comprehensive written policy, regardless of whether the employer plans to require vaccines or mandate testing and masking. This policy should include any exclusions from the policy, paid time and sick leave for vaccination purposes, the information required to be provided to employees, any testing and masking requirements, and disciplinary actions for those employees who do not comply with the policy. If an employer has employees who are both vaccinated and unvaccinated, the employer must develop and include the relevant procedures for two sets of employees.

  1. What records must employers make and maintain?

The ETS requires employers to determine and make a record of each employee’s vaccination status. These records are confidential medical information. Acceptable proof of vaccination status includes: (a) the record of immunization from a health care provider or pharmacy; (b) a copy of the COVID-19 Vaccination Record Card; (c) a copy of medical records documenting the vaccination; (d) a copy of immunization records from a public health, state, or tribal immunization information system; or a copy of any other official documentation that contains the type of vaccine administered, date(s) of administration, and the name of the health care professional(s) or clinic site(s) administering the vaccine(s). When none of the above can be obtained, a signed, sworn and dated employee attestation is acceptable.

For unvaccinated employees, employers must keep a record of each test result provided by each employee. All records must be kept for the duration of the ETS as confidential medical records.

  1. What types of testing and facial coverings are acceptable under the ETS?

An acceptable COVID-19 test is one that is FDA approved, administered via the test’s authorized instructions, and is not self-administered and self-read unless observed by the employer or authorized telehealth proctor. FDA-approved tests include those with Emergency Use Authorization. The tests must be completed once every seven days, irrespective of the number of days worked by the employee. An employee must provide their employer with a test result no later than the 7th day following the date on which they last provided a result.

An acceptable face covering has two layers of breathable fabric tightly woven and without any holes or openings. The face covering must fit snugly and completely cover the nose and mouth.

  1. What pay must employers provide to employees under the ETS?

An employer must provide up to four hours of paid leave to each employee, during work hours, to receive each of their COVID-19 vaccinations. The paid time may not be offset by any other leave that the employee has accrued. Additionally, employers must provide reasonable time and paid sick leave to recover from any side effects of the vaccine. This paid sick leave may be in the form of accrued sick leave but, if an employee does not have any sick leave accrued, leave must be provided. Employers are not, however, required to reimburse employees for transportation costs in traveling to and from the vaccine site(s).

If an employee chooses to get vaccinated outside of working hours, an employer is not obligated to grant paid time to the employee for the time spent receiving the vaccine. However, employers must still allow the employee reasonable time and paid sick leave to recover from any side effects that the employee experiences during scheduled work time. Employers are not required by the ETS to pay for the costs associated with testing employees who elect not to be vaccinated although state law or other agreements could require employment reimbursement of those costs.

  1. What information must be provided to employees under the ETS?

An employer must provide all employees, in a language and at a literacy level the employee understands, information on: (a) the requirements of the ETS and any employer policies and procedures established to implement those requirements, including specifics about vaccination availability and non-vaccinated employee requirements; (b) COVID-19 vaccine efficacy, safety, and the benefits of being vaccinated; (c) OSHA’s prohibition against retaliation; and (d) the potential for criminal penalties for knowingly providing false information.

  1. What are an employer’s obligations when an employee tests positive for COVID-19?

If an employee tests positive for or is diagnosed by a licensed healthcare provider with COVID-19, the employer must immediately remove the employee from the workplace. The employee may not be permitted to return to work until: (a) the employee receives a negative COVID-19 nucleic acid amplification test result upon confirmatory testing; (b) the employee meets the return-to-work criteria in the CDC’s “Isolation Guidance;” or (c) the employee receives a recommendation to return to work from a licensed healthcare provider.

Following a positive COVID-19 test or diagnosis, the testing requirements of the ETS are suspended for the employee for 90 days.

You can review the ETS here.

On October 12, 2021, Texas Governor Greg Abbott issued an Executive order prohibiting businesses and employers from requiring employees and consumers who object to getting a COVID-19 vaccine for reasons of personal conscience, religious belief or medical reasons (including prior recovery from COVID-19) to be vaccinated.  The order states as follows:

No entity in Texas can compel receipt of a COVID-19 vaccine by any individual, including an employee or a consumer, who objects to such
vaccination for any reason of personal conscience, based on a religious belief, or for medical reasons, including prior recovery from COVID-19. I hereby suspend all relevant statutes to the extent necessary to enforce this prohibition.

This state Executive Order conflicts with President Biden’s Executive Order that applies to federal contractors to the extent it expands the reasons an employee can refuse to take the vaccine to include reasons of personal conscience and prior recovery for COVID-19.  In that regard, the Governor’s Executive Order is likely preempted and inapplicable but we will need to see what legal challenges are made to the state Executive Order.

A copy of the Executive Order can be accessed here.

 

Last week President Biden announced that he was directing OSHA to develop and publish an emergency temporary standard requiring employers with 100 or more employees to require employees to get a COVID-19 vaccination or undergo weekly testing.  According to the White House, this standard would apply to 80 million private sector employees.  Ohio employment lawyer Jon Hyman wrote an interesting analysis on why OSHA’s standard is unlikely to pass legal scrutiny.

Assuming that the standard passes legal muster, there are main significant practical problems with a covered employer’s ability to comply.  Assume that 30 percent of the 80 million workers the White House estimates will be covered by the standard refuse to be vaccinated and/or are granted a religious or disability related exemption.  That is 24 million workers that will be required to test weekly to work.

There are currently long wait times for COVID-19 testing.  And, the pre-mandate demand for testing is limited to those having symptoms or needing a test because had close contact with someone testing positive.  These are not ongoing, recurrent testing but merely one-time tests to confirm or rule out a COVID-19 testing and there are still lengthy wait times for such testing.  There is insufficient testing capacity to test 24 million workers weekly.  Similarly, what about employees that work in remote locations?  Oil field service workers routinely work seven days on and seven days off in remote locations.  These work locations make it difficult, if not impossible for the workers to access testing locations.  Employers will be placed in the position of placing employees who cannot get tested on leave of absence jeopardizing the employer’s ability to operate its business or violate the OSHA standard and run the risk of stiff fines.  And employees, who have objections to vaccination and are unable to get weekly tested, are likely to be placed on unpaid leave placing burdens on the worker and his or her family.

Similarly, there are many unanswered questions raised by the President’s announcement that will likely have to wait until the publication of the standard such as: who will pay for the testing?  Is time spent traveling to/from and waiting to be tested compensable for non-exempt employees?  What records must the employer maintain to show compliance with the standard?  What tests are acceptable (i.e., are the rapid, over the counter tests acceptable?

Hopefully OSHA will answer all of these questions and provide clarity on what is require of employers so that they can continue to operate their business while not subjecting themselves to substantial penalties.

Yesterday, President Biden announced that he is directing the Occupational Health and Safety Administration (“OSHA”) to engage in emergency temporary rule making and issue a standard requiring employers with more than 100 employees to cause their employees to either be fully vaccinated against COVID-19 or test negative for COVID-19 on a weekly basis.  The President’s directive also instructs OSHA to require private employers pay employees for the time it takes to get vaccinated.  Penalties for failing to comply with the anticipated standard could subject employers to fines of up to $14,000 per violation.

The President also issued, or intends to issue, Executive Orders requiring all Executive Branch employees; employees of federal contractors, and all health care employees serving Medicare and Medicaid become vaccinated.  Interestingly, the President’s Executive Orders do not cover large union-covered employees like U.S. Postal Service employees (estimated 469,934 career employees and 136,174 non-career employees) and teachers (3.2M public school teachers).  It is unclear if these workers will be covered by the contemplated OSHA emergency standard.

The President’s remarks leave many unanswered questions such as who must pay for the weekly testing (i.e., insurance plans, employers or the unvaccinated employees) and whether such time spent traveling to/from testing, waiting to be tested and the testing itself is compensable for non-exempt employees.

Until OSHA issues the text of the proposed rule, it is unclear whether it will face legal challenges in Court and what specific obligations will be placed on employers.

Employers are overcoming their reluctance to require that employees become vaccinated against the COVD-19 virus as a condition of employment.  Microsoft, Google, Tyson Foods and many health care providers have announced they will require their employees who work on-site to obtain and provide proof that they have received a COVID-19 vaccination.

At least two federal courts and the U.S. Department of Justice’s Office of Legal Counsel have upheld employers’ rights to require vaccines as a condition of employment.  In Texas, absent a bona fide religious objection or a disability or pregnancy-related condition, employers can mandate that their non-union employees become vaccinated and prove that they have done so as a condition of employment.

Before embarking on a mandatory vaccination requirement, an employer should consider whether it will face any negative consequences from imposing vaccination requirements for employees.  Employers who are already having difficulty recruiting and maintaining talent may find that a mandatory vaccine requirement only exacerbates the problem.  Amazon has expressed just such a concern.  And, there may be key employees that have strong objections to receiving the vaccination and may refuse to comply with the employer’s mandate which could result in the key employee having to be discipline or taking his or her talents to a competitor.

Once the employer has determined it will make its vaccination requirement mandatory, clear and effective communication to the workforce is important.  The communication should state why the company has elected to impose a mandatory requirement (i.e., for the general health and safety of the workforce).  If there are conditions or limitations on the vaccination requirement (i.e., only for on-site work or access to company property), those conditions or limitations should be detailed in the communication.  This communication should also advise employees on how they will confirm their vaccination status to the employer and what the employer will do with the information it receives.  Keep in mind, the EEOC guidance states that inquiring into an employee’s vaccination status is not a medical inquiry but the information obtained by the employer on the vaccination status is confidential medical information that must be treated as such.  The communication should also identify how and to whom requests for exemption from or accommodation to the vaccine requirement can be directed.

Employees should be given a reasonable amount of time for compliance.  With the widespread availability of the various vaccines 30 days or more should be sufficient.  A short time period is more reasonable if the employer is providing employees with time off (paid or unpaid) to get vaccinated.

Finally, like any work rule, employees should be told about the consequences for failing to comply with the requirement within the requested time period.  Consequences might include discipline up to and including termination (or some lesser form of discipline such as unpaid suspension until the employee complies) or a requirement that the unvaccinated employees wear masks and undergo frequent testing.  Employer should also ensure that they are consistent in their treatment of employees who fail to comply with the new rule.

And of course, employers should work closely with their labor and employment counsel in formulating and implementing a mandatory vaccination requirement.