Policy Matters Newsletter - November 2021 # 2

Seyfarth Shaw LLP

The Two Relevant Policy Matters Are Really Big -- But Head Into The Weekend In A Holding Pattern. Below is a brief dabble into the history of a great American tradition. More importantly, though, the magnitude of the two main policy matters in the Labor and Employment universe -- the so-called vaccine mandate and the Build Back Better Act (BBB) -- leave little room for discussion of other policy matters. After a brief detour, below is an update on those hefty pieces of public policy.

Gobble, Gobble. The Thanksgiving national holiday celebrates the Pilgrims’ first successful corn harvest (yes, the origin story is vague and controversial), which was largely a result of Native Americans teaching the fledgling colony how to cultivate the new land. Upon the bounty, then Governor William Bradford invited a group of the colony’s Native American allies to a celebratory feast that ultimately became known as Thanksgiving. Who knew that season four centuries ago would spawn an American cultural phenomena of overindulging in caloric content -- whether for good or for bad.

In 1863, in the midst of the Civil War, President Abraham Lincoln proclaimed a national Thanksgiving Day to be held each November. President Lincoln’s proclamation was almost prophetic in its similarities to the current divisions cutting the Nation. As we did almost a-century-and-a-half ago, here is our note of hope that our readers can set aside the divide, and celebrate every Americans’ love of food and football next Thursday. Happy Thanksgiving.

BIF Is Now Official Law! Will BBB Come Right Behind? As President Biden joyfully declared, last week was finally infrastructure week. The infrastructure package does not hoist any hefty obligation on employers, but rather constitutes a massive infusion of appropriations into the country’s hard- and soft infrastructure. Specifically, the measure allocates $110 billion for roads, bridges and major infrastructure projects ($40 billion specifically for bridge repair); $11 billion for transportation safety; $39 billion to modernize public transit; $66 billion in passenger and freight rail; $65 billion investment in improving the nation's broadband infrastructure; $17 billion in port infrastructure and $25 billion for airports; $7.5 billion for zero- and low-emission buses and ferries and $7.5 billion to building a nationwide network of plug-in electric vehicle chargers; $65 billion to rebuild the electric grid; and $55 billion to upgrade water infrastructure. Lawmakers funded the measures largely through repurposing unused COVID-19 relief funds.

Unlike the BIF, though, the proposed reconciliation package, or the Build Back Better Act (BBB), would heighten employer obligations. Perhaps most concerning are provisions in HR 5376, passed by the House today, that would drastically increase penalties for unfair labor practice (Section 21004) under the NLRA, for violations of the Occupational Safety and Health Act of 1970, and for violations of the FLSA. Those provisions, however, face a steeply uphill battle in the Senate. First, those provisions would have to get past the Parliamentarian through a challenge under the Byrd Rule. Should those provisions survive a Byrd Rule challenge -- a questionable proposition -- they would still have to sneak past moderates Joe Manchin and Kyrsten Sinema, who have not publicly opposed the penalties, but have poo- pooed similar provisions in the past.  Notably, though it was taken out, then put back in, then taken out again, a four-week paid family program remains in the House bill. That program faces the same Senatorial hurdles the added penalties provisions face.

Vaccine Or Test ETS: Where We Have Been And Where We Going (Hint: SCOTUS). As every reader of this newsletter is well aware, on November 5, 2021, OSHA issued an ETS requiring all employers with more than 100 employees to implement a policy on vaccination, ensuring their employees are either fully vaccinated or show proof of a weekly negative COVID-19 test starting January 4, 2022. A week after it dropped, the ETS was immediately stayed by the Fifth Circuit Court of Appeals in a blistering opinion, taking the federal agency to task.  Because similar petitions challenging the ETS’s legality were pending in nearly all U.S. Courts of Appeals, the Judicial Panel on Multidistrict Litigation held a lottery on Tuesday, November 16, 2021, that determined which circuit would hear the challenge. It was the Sixth Circuit that came out of the lottery and will hear the challenge. This is not the result the government, unions, and like-minded entities were hoping for (the Sixth circuit has a 2-1 Republican appointed Judge majority), and OSHA will now attempt to convince the Court that the ETS is necessary to protect workers from a grave danger. Those seeking to overturn the ETS will argue that the Court’s sister circuit got the decision right, citing the Fifth Circuit’s stay opinion. The 6th Circuit will have to first have to address the 5th Circuit’s stay before even considering the legality of the ETS itself.  There are some 30 cases being consolidated in the 6th circuit, likely more, so even this initial step is likely to take a good bit of time. Ultimately, though, this issue will likely go to SCOTUS.

“Peace Is Not The Absence Of Conflict, But The Ability To Cope With It”: States And Feds Pass Dueling COVID-19 Edicts.  Employer concerns with how to “cope” with conflicting edicts from local, state, and the federal government are increasing exponentially. Nowhere are these conflicts more clear than in -- you guessed it -- the COVID-19 vaccine space. Florida Governor Ron DeSantis has been crystal clear that he intends to punish businesses who require vaccines -- the intrigue is pulsing.  Yesterday, Governor Ron DeSantis of Florida signed legislation that punishes businesses for requiring inoculation against COVID-19 without delineated exemptions or alternatives. Under the new law, private employers can impose a vaccine mandate, but must allow employees to opt out of the requirement for a cornucopia of reasons. The maximum penalties for terminating an employee based on an impermissible vaccine mandate are hefty: $10,000 per violation for an employer with less than 100 employees; and $50,000 if more than 100 employees.

It’s not just Florida -- Texas Governor Greg Abbott’s issued an order purporting to preclude Texas businesses from requiring the COVID-19 vaccination. The Governor has also pledged to convert this order into legislation upon the next legislative session in Texas. Arkansas recently enacted a measure that would require employers to allow workers to opt out of COVID-19 vaccine requirements if they’re tested weekly or can prove they have antibodies for the virus. And California just decided to pause its effort to establish workplace vaccine mandates following the ETS.

But, as we noted here, the ETS expressly asserts that it preempts “and invalidate[s] any State or local requirements that ban or limit an employer’s authority to require vaccination, face covering, or testing.” So, for example, the ETS would likely preempt the legislation in Arkansas and Governor Abbott’s executive order, both banning vaccine mandates.  However, with the ETS stayed, the hope that federal law will preempt the contrary state laws is in doubt.  However, the government contractor Executive Order (14042), requiring employees of federal contractors be vaccinated, is still in place and the Florida lawsuit challenging that Executive Order seems to be lagging.  For federal contractors, the Executive Order asserts that it does preempt contrary state law.

Athletes Still In The NLRB News.  Following the NLRB General Counsel’s memorandum in which she took the position that college athletes are employees under the National Labor Relations Act, a new advocacy group called the College Basketball Players Association filed an unfair labor practice charge against the NCAA alleging that it violated and is continuing to violate the law by misclassifying players as “student-athletes,” which the NLRB GC’s memorandum indicated is a violation of the law. Seyfarth recorded a podcast recently breaking down the implications of the NLRB GC’s memorandum and will continue to observe developments on this front.  If normal NLRB casehandling timing applies, the case is likely to make it before the Biden NLRB in the next year or so, assuming the NLRB finds merit to the ULP charge in light of the GC’s memorandum.

NY DOL Interest In…Cannabis?  Medical and recreational marijuana is now legal in New York State, and the New York Department of Labor recently published FAQs addressing occupational cannabis issues under the law. The NY DOL generally takes the position that drug testing for marijuana is prohibited unless specifically required by federal or other state laws, as in the case of commercial motor vehicle drivers. The NY DOL has found that current testing technology is not capable of demonstrating impairment because of the amount of time marijuana stays in a person’s system. An employer may only take disciplinary action against an employee if he or she manifests specific articulable symptoms of impairment that (1) decrease or lessen the performance of their duties or tasks, or (2) interfere with an employer’s obligation to provide a safe and healthy workplace, free from recognized hazards, as required by state and federal occupational safety and health laws. Seyfarth has reported on this in the past and will continue to monitor further developments.

Non-Tipped Work By Tip Credit Employees. The U.S. Department of Labor recently issued a final rule limiting use of the FLSA’s tip credit for tipped employees who sometimes perform non-tipped work. Specifically, the final rules reinstate a weekly 20% limitation on non-tipped work and adds a thirty-minute daily limit as well. The rule will take effect on December 28, 2021, and employers in the restaurant and hospitality industries should take special care to ensure they are in compliance with the rule by the time it is implemented.  Seyfarth has reported on this rule already and will continue to keep employers updated.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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