A recent report from a Pennsylvania Department of Labor & Industry task force describes the economic impact of worker misclassification in Pennsylvania and makes several significant recommendations to the legislature.  These recommendations, if implemented, could dramatically impact how some Pennsylvania employers manage their workforce, particularly those employers in the construction industry.

The report was issued on March 1 by the “Joint Task Force on Misclassification of Employees.”  The Task Force looked at the frequency and extent to which workers in Pennsylvania are classified as “independent contractors” when the nature, type, and oversight of their work would suggest they should actually be classified as an “employee.”

In its report, the Task Force estimated that 49,266 Pennsylvania employers currently have at least one misclassified worker, and that 389,000 workers are misclassified annually in Pennsylvania.

The report makes several important recommendations to the legislature.  Most notable are the recommendations that relate to construction industry employers and Act 72.  Currently, Act 72, or the Construction Workplace Misclassification Act, prohibits employers from misclassifying workers as independent contractors and provides for a three-part test to determine whether a worker is an independent contractor.  The Task Force recommends that Act 72 be amended to include stiffer penalties for employers who misclassify workers, including enhancing the criminal penalties for “knowing” violations.  It also recommends giving the Department of Labor & Industry resources to hire additional investigative personnel and support staff, and, notably, to give L&I subpoena power to collect employer records as part of misclassification investigations.

The Task Force also recommends that L&I be given the authority to issue stop-work orders against companies or individuals found to have employed misclassified workers, and even to debar those companies who knowingly or repeatedly violate Act 72.  This would eliminate L&I’s obligation to petition the court for issuance of a stop-work order.  The Task Force also recommends imposing liability on a general contractor for subcontractor misclassifications if the general had clear evidence of a “knowing” misclassification violation.

Finally, the Task Force recommends that Act 72 be extended beyond the construction trades to cover other industries in Pennsylvania.  It also recommends that the legislature adopt the “ABC Test” as a baseline standard in Pennsylvania to delineate between an employee and independent contractor.

It is important to remember that these are only recommendations to the legislature, and it remains to be seen whether any of these proposals will ever become law.  But this report highlights a trend we have seen elsewhere – an increased emphasis on enforcement of worker classification laws and greater efforts to revise classification schemes that would make “employee” a worker’s default status unless the employer could prove otherwise.

With more aggressive enforcement of worker misclassification on the horizon, there’s no time like the present to take a close look at your workforce and to make any necessary adjustments to the ways in which workers are classified.

For any questions about these issues, contact any member of the McNees Labor & Employment group.

Historically, the Office of Federal Contract Compliance Programs (“OFCCP”) has not required federal contractors to submit proof that their written affirmative action plans were completed.  The only time that a contractor had to produce evidence of its plan was during an OFCCP audit.  As many federal contractors now know, that is about to change.

In December, OFCCP announced the creation of an online Contractor Portal.  Through the Contractor Portal, federal contractors (assuming jurisdictional thresholds are met) will be required to certify they have complied with affirmative action plan requirements.  Registration for the Contractor Portal opened on February 1, 2022.  Starting on March 31, 2022, contractors will be able to use the portal to certify compliance.  Existing contractors will have until June 30, 2022 to complete the certification process.

Even though the certification process begins in less than a month, there are lots of unanswered questions about the new requirement.  As federal contractors begin to contemplate registration and certification, here are a few things to consider:

  1. Do All Federal Contractors Have to Certify?

No.  First, only service and supply contractors (and subcontractors) are required to certify compliance.  Construction contractors do not have a certification requirement (yet).  Further, service and supply contractors only have written affirmative action plan requirements when certain thresholds are met.  Contractors with 50 or more employees and a contract of $50,000 or more have plan requirements (under Executive Order 11246 and Section 503 of the Rehabilitation Act).  Contractors with 50 or more employees and a contract of $150,000 or more have additional plan requirements under Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).  It is service and supply contractors who meet either of these jurisdictional thresholds that would have certification requirements.

  1. What Does “Certification” Mean?

No one knows, exactly.  OFCCP has released information on the Contractor Portal itself, including registration and user permissions.  It has not, however, identified exactly what the certification process will entail.  More information on certification is expected at the end of March, as the certification mechanism in the portal opens.  Regardless of form, a contractor can expect to certify (under penalty for providing false information) either: (1) it has a written plan for its current plan year; (2) it does not have such a plan; or (3) it does not believe it is subject to any plan requirements. Stay tuned for more information on this at the end of the month.

  1. How Often Is Certification Required?

Consistent with the obligation to prepare written affirmative action plans on an annual basis, OFCCP will require annual certification.  Contractors should add certification to their annual compliance checklist and complete it as part of its written plan process.

  1. I am Considering Becoming a Federal Contractor. When Would I Need to Certify?

New federal contractors have 120 days from the start of the contract to create their plans.  Under the certification requirement, a new contractor will have 90 days from the development of the plan to certify compliance.

  1. How Will This Impact OFCCP Audit Activity?

This remains to be seen.  One thing is for sure – certification is not meant to replace compliance audits.  So, contractors should not expect to avoid closer scrutiny simply by certifying themselves as compliant.  Many commentators have predicted just the opposite.  There are a few reasons why this may be true.  First, by registering and certifying, each contractor is identifying itself as being under the jurisdictional authority of OFCCP.  For contractors that have flown under OFCCP’s radar to date, that is about to end.  Second, contractors that certify they have not complied with the plan requirements (or otherwise indicate they believe they are not subject to the plan requirements), should certainly not be surprised to find themselves on OFCCP’s scheduling list for audits.

With a June 30th deadline, existing federal contractors need not rush to register and certify.  The best approach may be to wait until after the end of March to initiate the process, when more information is available on what “certification” actually entails.  However, contractors should begin to contemplate compliance and prepare accordingly – including updating any outdated plans.

Many employers require their workers to sign arbitration agreements at the outset of employment, and it’s no wonder why.  These agreements allow employers to require arbitration of many employment-related disputes, rather than participate in lengthy, expensive lawsuits.

On February 10, 2022, the United States Senate passed a bill that will prohibit this practice with respect to claims of sexual assault or sexual harassment in the workplace.  The bill, known as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, was passed by the House of Representatives on February 7, and now heads to President Biden’s desk for signature. Prior to its passage in Congress, the President expressed support for the measure and he is expected to sign it into law.

The bill amends the Federal Arbitration Act for disputes involving sexual assault and sexual harassment in order to stop employers and businesses from forcing employees and customers out of the court system and into arbitration.  Under the law, employees who file claims of workplace sexual harassment or sexual assault are no longer bound by agreements compelling them to arbitrate.  Instead, they can choose whether to pursue their claims in court or arbitrate the matter under the arbitration agreement.  This option is available regardless of whether the claims are brought under federal, tribal, or state law.

As its name implies, the Act applies only to claims of sexual assault and sexual harassment. Employers will still be able to compel arbitration under agreements with employees for claims involving other forms of workplace harassment.  Employers can still enforce arbitration agreements as to claims of sex-based disparate treatment.

With the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 set to become law, employers and businesses that use arbitration agreements should take note and plan accordingly.  Those agreements no longer guarantee that sexual harassment and sexual assault claims can be forced into arbitration.

As explained in our previous post, on January 13, 2022, the United States Supreme Court blocked the OSHA vaccination or testing Emergency Temporary Standard (“ETS”) pending full consideration of the matter by the Sixth Circuit Court of Appeals.  In  response to the Supreme Court’s decision, OSHA is withdrawing the ETS, effective January 26, 2022.

Although OSHA is withdrawing the ETS as an “emergency temporary standard,” the ETS also serves as a proposed final rule, and OSHA made clear that its action does not affect the ETS’s status as such.  Therefore, it is possible that OSHA could issue a final vaccination or testing rule.  In response to the Supreme Court’s decision, OSHA could issue a narrower vaccine or test mandate limited to workplaces where the virus poses a special danger due to the nature of the work.

According to a statement on OSHA’s website, “[t]he agency is prioritizing its resources to focus on finalizing a permanent COVID-19 Healthcare Standard.”  A permanent COVID-19 standard for healthcare workers could be similar to the COVID-19 Healthcare ETS, which OSHA issued in June 2021 and which we summarized in a previous post.  The Healthcare ETS was in effect for six months until it expired and was withdrawn by OSHA in December 2021.  OSHA’s statement also “strongly encourages vaccination of workers against the continuing dangers posed by COVID-19 in the workplace.”

In the meantime, OSHA will enforce workplace safety issues related to COVID-19 under its existing authorities, including the COVID-19 National Emphasis Program and General Duty Clause.  The National Emphasis Program targets businesses in “high-hazard industries” whose employees have an increased risk of exposure to COVID-19.  Under the General Duty Clause, employers have a duty to furnish their employees “employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to [their] employees.”

For more information, or if you have any questions, please contact any member of the McNees Labor and Employment Group.

Yesterday, the United States Supreme Court issued hotly anticipated decisions on two federal government vaccine requirements in response to the ongoing COVID-19 pandemic.

In a 6-3 decision, the Court blocked the Emergency Temporary Standard (“ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) that required employees of larger employers (i.e., those with 100 or more employees) to provide proof of full COVID-19 vaccination status or submit to weekly testing.  In a separate 5-4 decision, the Court permitted an interim rule issued by the Centers for Medicare & Medicaid Services (“CMS”) that requires COVID-19 vaccination for workers in hospitals, nursing homes, and other healthcare facilities that receive Medicare and Medicaid funding.

I.     The OSHA ETS

A.  The Background and the Supreme Court’s Decision

Issued in November, the ETS was met with a flurry of swift legal challenges. The Fifth Circuit Court of Appeals issued a temporary stay of the ETS on November 12, finding that the ETS exceeded OSHA’s limited authority to establish emergency temporary standards. Shortly thereafter, the Sixth Circuit Court of Appeals was selected via lottery to hear the consolidated challenges to the ETS.  On December 17, a three-judge panel of the Sixth Circuit, in a 2-1 decision, dissolved the Fifth Circuit’s stay and allowed the ETS to take effect. OSHA then moved forward with implementing the ETS and set new compliance dates for January 10, 2022, and February 9, 2022, and challengers quickly filed applications for emergency relief with the Supreme Court.  The Supreme Court held oral argument on the emergency applications on January 7, 2022, and the Court handed down its ruling yesterday.

The Court found that the applicants seeking a stay were likely to prevail on their argument that the ETS exceeded OSHA’s statutory authority and was otherwise unlawful.  The Court began its analysis noting that the ETS would have required most employees working for large employers to get vaccinated or test weekly at their expense, and this was “no everyday exercise of federal power”. The Court went on to conclude the Occupational Safety and Health Act (the “Act”) did not clearly authorize OSHA to issue such a vast public health requirement.

OSHA’s authority under the Act is limited to regulating workplace safety.  Because COVID-19 can and does spread in many settings, the Court found that it was a universal risk – not an occupational hazard in most workplaces.  The Court explained that “[p]ermitting OSHA to regulate the hazards of daily life—simply because most Americans have jobs and face those same risks while on the clock—would significantly expand OSHA’s regulatory authority without clear congressional authorization.”

The Court clarified that OSHA has the authority to regulate occupation-specific risks related to COVID-19 “[w]here the virus poses a special danger because of the particular features of an employee’s job or workplace.”  However, OSHA’s “indiscriminate approach” with the ETS exceeded its statutory authority.

Justice Gorsuch wrote a separate concurring opinion, which was joined by Justices Thomas and Alito.  In his concurring opinion, Justice Gorsuch discussed the major questions doctrine, separation of powers, and Constitutional issues and concluded that the power to respond to the pandemic rests with the States and Congress, not OSHA.

In their dissenting opinion, Justices Breyer, Sotomayor, and Kagan noted the toll COVID-19 has taken on the citizenry, particularly its workers, and its transmission in confined indoor spaces.  After asserting that the virus poses a “grave danger” to employees and that the ETS is necessary to address the dangers, the dissenting Justices maintained that the Occupational Safety and Health Act grants OSHA the authority to issue the ETS.

B.  What’s Next?

The Court granted the emergency stay applications pending the disposition of the matters before the Sixth Circuit and the applicants’ petitions for writs of certiorari if such writs are timely sought.  In other words, the stay will remain in place, even if the Sixth Circuit formally rejected the challenges, unless and until the Supreme Court either denied subsequent petitions for writs of certiorari by the challengers, the challengers failed to petition for writ of certiorari after an adverse decision by the Sixth Circuit (which would be very unlikely), or the Court ultimately issued a final decision after a final decision by Sixth Circuit.  Practically speaking, unless the Supreme Court dramatically reverses itself later in the proceedings (which seems extremely unlikely), the ETS is and will remain blocked.

In response to the Supreme Court’s decision, the Secretary of Labor issued a statement indicating that: “OSHA will be evaluating all options to ensure workers are protected from this deadly virus.” The question remains whether OSHA will attempt to issue a narrower rulemaking that might survive judicial scrutiny under the guide rails provided by the Court.  Measures that are unique to the workplace (such as mask requirements) or a vaccine or test mandate limited to workplaces where the virus poses a special danger due to the nature of the work, could arguably pass muster. However, the rulemaking process takes time, and it is unlikely that OSHA could issue a more narrow rule in the near term. In the meantime, the Secretary of Labor also made clear that OSHA will “do everything in its existing authority to hold businesses accountable for protecting workers, including under the Covid-19 National Emphasis Program and General Duty Clause.”

II.     The CMS Vaccine Rule

A.  The Background and the Supreme Court’s Decision

In November, CMS issued an interim final rule requiring certain health care facilities participating in federal Medicare and Medicaid programs to mandate that their covered staff are fully vaccinated against COVID-19.  The CMS vaccine mandate applies to 15 different kinds of healthcare facilities and provides employee exemptions for medical and religious reasons.

As with the ETS, legal challenges were filed to the interim rule in various federal courts, and multiple federal courts ultimately issued preliminary injunctions blocking the rule’s enforcement.  In November, a Louisiana federal court issued an injunction prohibiting the rule’s enforcement nationwide. However, in mid-December, the Fifth Circuit Court of Appeals issued a decision upholding the injunction only in the 25 states that were party to the underlying litigation (Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia and Wyoming). The interim rule was enforceable in Pennsylvania and the remaining 24 states and U.S. territories. As with the ETS, these challenges quickly made their way to the Supreme Court.

In a 5-4 per curiam decision, the Court stayed the existing preliminary injunctions and allowed the CMS vaccine mandate rule to take effect.  (Chief Justice Roberts and Justice Kavanaugh joined the three dissenting Justices in the ETS decision to form the 5-4 majority here.)  The Court found that CMS had the statutory authority to issue the interim rule and its vaccine mandate, citing the long list of conditions that CMS previously has established for healthcare providers to participate in the federally funded Medicare and Medicaid programs.

The Court focused on CMS’s core function of ensuring that “the healthcare providers who care for Medicare and Medicaid patients protect their patients’ health and safety.”  The Court also cited federal statutory language that gave the Secretary of Health and Human Services the authority to promulgate such conditions.

Because the vaccine mandate for healthcare workers was designed to facilitate and protect the health and safety of patients, the Court found that this rule was consistent with the language of the statute and with prior conditions established by CMS for participation in the Medicare and Medicaid programs, including requirements for healthcare workers.

Justices Thomas and Alito authored separate dissenting opinions, which were joined by Justices Gorsuch and Barrett.  The dissenting Justices rejected the conclusion that CMS had the statutory authority to issue a vaccine mandate, finding no express language in the relevant statutory language granting such authority.  Justice Alito also focused on the delays in issuing the vaccine mandate and described CMS’s actions to be an “extraordinary departure from ordinary principles of administrative procedure.”

B.  What’s Next?

As a result of the Court’s decision, Medicare and Medicaid-certified facilities regulated under the Medicare health and safety standards, known as Conditions of Participation, will need to establish plans and procedures to ensure that their staff and contractors who provide care, treatment, or other services are fully vaccinated unless they are entitled to a religious or medical exemption. CMS has not yet indicated whether a new timeline for compliance will be issued for the 25 states that had been covered by the prior injunctions.

On December 28, 2021, CMS updated its guidance concerning implementation of the vaccine mandate.  The guidance requires all covered facilities to develop a policy and process for tracking staff vaccinations and ensure that covered staff receive at least the first dose of the vaccine by January 27, 2022, unless the staff member has a pending request for, or has been granted a qualifying exemption to accommodate a disability or sincerely held religious belief.  Covered staff must then be fully vaccinated by February 28, 2022. CMS defines “fully vaccinated” as having completed the primary series of the vaccination – one dose of J&J or both doses of Moderna or Pfizer-BioNTech – even if the 14-day waiting period has not yet been completed. Staff at all health care facilities covered by the mandate cannot provide any patient care, treatment, or other “services” within the covered facility unless they comply with the mandate.

The interim rule applies to staff working at nearly all CMS-certified facilities that participate in the Medicare and Medicaid programs including employees, licensed practitioners, students, trainees, and volunteers. It does not, however, apply to staff who provide 100% of their services remotely and do not have any contact with patients or other staff. It further does not apply to visitors, Assisted Living Facilities, group homes, Home and Community-based Services, schools who receive Medicaid funding, or EMS providers as they are not subject to the health and safety standards of CMS.

Companies performing construction at covered facilities or providing other non-health care services may additionally be excluded if they are considered infrequent, or “one off” vendors. CMS surveyors will look at the frequency that such non-health care contractors enter or visit facilities to determine whether they fall within the ad-hoc or “one off” exception.

Enforcement of the interim rule will begin January 27, 2022, through state survey agencies, accrediting organizations and CMS-contracted surveyors checking for compliance as part of initial certifications, recertifications or reaccreditations, and in response to complaints.

For more information, contact any member of the McNees Labor & Employment Group.

Allegheny County recently enacted an ordinance requiring paid sick leave for covered employees (joining the cities of Pittsburgh and Philadelphia, which already have paid sick leave ordinances on the books).  The ordinance took effect on December 15, and requires certain employees be given 40 hours of annual paid leave for a variety of reasons, including their own illnesses or to provide care when businesses and schools may be closed for public health reasons.  It also has a strict anti-retaliation provision.  We’ve summarized these and other highlights of the new ordinance below.

Covered Employers and Eligible Employees

The ordinance requires employers with 26 or more employees (excluding independent contractors and seasonal employees) to provide paid sick leave.  When determining coverage, all employees must be counted, but only employees who perform work within the geographic boundaries of Allegheny County for at least 35 hours in a 12-month period of time will receive the paid sick leave benefit.

Significantly, the ordinance will not apply to any municipality within Allegheny County, such as the City of Pittsburgh, that has enacted a paid sick time law, so long as the local law is not less stringent than Allegheny County’s new ordinance.

Accrual and Permitted Uses

A covered employee will accrue 1 hour of paid sick leave for every 35 hours worked within Allegheny County, up to an annual accrual and usage cap of 40 hours.  Paid leave began accruing on December 15, 2021.  For new hires, paid leave will begin to accrue on the first day of employment, and employees may use sick leave on the 90th calendar day after their hire date.

The ordinance permits employees to use paid sick leave for the following reasons:

  • Diagnosis, care, or treatment of an employee’s mental or physical illness, injury, or health condition, including preventive medical care;
  • Diagnosis, care, or treatment of a family member’s mental or physical illness, injury, or health condition, including preventive medical care;
  • Closure of an employee’s place of business or the need to care for a child whose school or place of care has been closed because of a public health emergency; or
  • The need to care for a family member when health authorities or a health care provider have determined the family member’s exposure to a communicable disease creates a risk to others, whether or not the family member has contracted the disease.

Notably, the ordinance broadly defines “family member” to include domestic partners, in-laws, parents of domestic partners, grandparents, grandchildren, and those individuals whom an employee may have previously been given permission by the employer to care for using sick time.

Usage and Carryover

Covered employers must allow all accrued sick time to be carried over, subject to the usage cap of 40 hours, unless the employer provides a lump sum of 40 hours at the beginning of the calendar year.  If the employer provides less than 40 hours at the beginning of the calendar year, the employee may carry over unused sick time provided that the total available time does not exceed 40 hours.

An employer is not required to payout this leave upon separation regardless of the reason for termination.  But, if an employee is rehired within six months, all previously accrued but unused leave must be reinstated for immediate usage – unless the employer paid out all such leave upon termination.

Employers can generally require reasonable advance notice up to 7 days before scheduled leaves (unless such notice is not possible, in which case good faith effort is sufficient).

Retaliation and Recordkeeping

The ordinance strictly prohibits any type of retaliation against an employee who exercises their rights under the law.  The ordinance creates a rebuttable presumption of retaliation for adverse employment actions taken within 90 days of using leave.

Similarly, in the event of a dispute relating to an employee’s use or entitlement to paid sick leave, if an employer did not maintain adequate documentation of the hours worked and paid sick time used, the employer is presumed to have violated the ordinance absent clear and convincing evidence to the contrary.

Existing Policies and Notice Requirements

An employer’s existing paid time off policy or collective bargaining agreement may satisfy the ordinance’s requirements if the policy or agreement allows employees to accrue and use leave on terms at least equivalent to the paid leave in the ordinance.  Even so, employers must still provide notice to employees of their paid sick entitlements and other rights under the ordinance.

Next Steps for Employers

While the enforcing agency will not levy any fines or penalties for violations in the first year, employers who may be covered by Allegheny County’s paid sick leave ordinance should review their existing policies and collective bargaining agreements to determine whether they meet the requirements of the ordinance.  Employers also should ensure that Human Resources and management-level employees are aware of the employer’s obligations under the ordinance and provide any necessary training.

For more information, or for assistance with policy drafting and training, please contact any member of the McNees Labor and Employment Group.

On December 17, 2021, a divided three-judge panel of the U.S. Court of Appeals for the Sixth Circuit dissolved the stay of the Occupational Safety and Health Administration’s (“OSHA”) COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) that had previously been issued by the U.S. Court of Appeals for the Fifth Circuit.  We summarized the Fifth Circuit’s opinion explaining its decision to impose the stay in a previous post.

Last month, the Sixth Circuit – one of 12 different federal Circuit Courts of Appeals in which lawsuits challenging the ETS were filed – was selected to hear the consolidated cases and ultimately decide whether the ETS is a valid exercise of OSHA’s authority.  After the cases were consolidated in the Sixth Circuit, OSHA moved to dissolve the stay previously issued by the Fifth Circuit.  On December 17, the Sixth Circuit granted OSHA’s motion.

The Sixth Circuit Opinions

The Sixth Circuit’s decision produced three opinions.  Judge Jane Branstetter Stranch, an Obama appointee, authored the majority opinion, and Judge Julia Smith Gibbons, a George W. Bush appointee, issued a concurrence.  Judge Joan Larsen, a Trump appointee, dissented from the court’s decision. The full opinion is found here.

The opinion by Judge Stranch addresses each of the many reasons that the Fifth Circuit Court of Appeals had offered in support of the stay.  Judge Stranch wrote that OSHA clearly has the power under the Occupational Safety and Health Act to regulate viruses, including those that simultaneously exist in and out of the workplace.  She also concluded that OSHA had met its burden to show that the ETS was necessary to protect employees from the grave danger posed by COVID-19 in the workplace.  The opinion also refuted the Fifth Circuit’s position that the ETS should be stayed because it is both overinclusive and underinclusive, noting that an agency is not required to act with “pinpoint precision” in issuing the ETS to alleviate a grave danger, even if it cannot eliminate the danger altogether.  Finally, Judge Stranch rejected the constitutional challenges to OSHA’s authority under the Commerce Clause and the non-delegation doctrine.

Judge Gibbons joined Judge Stranch’s opinion and issued a one-page concurrence noting the limited role of the judiciary in the dispute over the ETS.  Judge Gibbons wrote: “Reasonable minds may disagree on OSHA’s approach to the pandemic, but we do not substitute our judgment for that of OSHA, which has been tasked by Congress with policy-making responsibilities. . . .  Our only responsibility is to determine whether OSHA has likely acted within the bounds of its statutory authority and the Constitution.”

In her dissent, Judge Larsen argued that Congress had narrowly circumscribed OSHA’s authority to issue emergency standards and that OSHA must show that the ETS is “essential” or “indispensable” to alleviate the grave danger posed by COVID-19.  Judge Larsen questioned whether OSHA has adequately proven that all unvaccinated workers, regardless of age, face a grave danger from COVID-19 in the workplace. The dissent also asserted that OSHA failed to meet its burden to show that the nationwide vaccine-or-testing mandate was necessary, given that other, more narrowly-tailored means were available to achieve the same ends.

Finally, Judge Larsen would have also kept the stay in place under the major questions doctrine.  In Alabama Association of Realtors v. Department of Health and Human Services, the United States Supreme Court recently struck down the CDC’s eviction moratorium in counties experiencing high levels of COVID-19 transmission.  The Supreme Court invoked the major questions doctrine, writing that, in order to have delegated such broad authority concerning an issue of “vast economic and political significance” to the CDC, Congress would have had to use “exceedingly clear language.”  Judge Larsen’s dissent noted that OSHA’s vaccine-or-test mandate similarly has “vast economic and political significance” and that the major questions doctrine should apply.  “[OSHA] asks for maximum authority and maximum discretion; [it] wants to issue a rule of national import, covering two-thirds of American workers, and [it] wants to do it without clear congressional authorization, without even public notice and comment, and with a capacious understanding of necessity.  Such a combination of authority and discretion is unprecedented, and [OSHA] is unlikely to show that [OSHA] has been granted it.”

For now, the OSHA ETS is not subject to any court stay and OSHA can move forward.  However, several parties challenging the ETS have already gone to the U.S. Supreme Court and filed emergency applications for a stay of the ETS pending further judicial review.  The applications were addressed to Justice Brett Kavanaugh, who is the “Circuit Justice” for the Sixth Circuit.  He may rule on the applications himself or refer them to the full Court. Such applications are handled by the Court “on paper”, without oral argument.

In the meantime, OSHA has published the following statement on its website concerning the deadlines for businesses to comply with the ETS:

OSHA is gratified the U.S. Court of Appeals for the Sixth Circuit dissolved the Fifth Circuit’s stay of the Vaccination and Testing Emergency Temporary Standard. OSHA can now once again implement this vital workplace health standard, which will protect the health of workers by mitigating the spread of the unprecedented virus in the workplace.

To account for any uncertainty created by the stay, OSHA is exercising enforcement discretion with respect to the compliance dates of the ETS. To provide employers with sufficient time to come into compliance, OSHA will not issue citations for noncompliance with any requirements of the ETS before January 10 and will not issue citations for noncompliance with the standard’s testing requirements before February 9, so long as an employer is exercising reasonable, good faith efforts to come into compliance with the standard. OSHA will work closely with the regulated community to provide compliance assistance.

What Should Employers Do Now?

Pending a ruling on the emergency applications to the Supreme Court, covered employers (those with 100 or more employees) should move forward with plans to comply with the ETS.  The next steps would include:

  1. Decide how your business will choose to comply with the ETS. Covered employers must either require employees to become fully vaccinated for COVID-19 or adopt a policy that requires any unvaccinated employees to submit to weekly COVID-19 testing and wear a face covering when working indoors. Employers may also choose to require vaccinations for certain groups of employees (i.e., those in customer-facing positions) while granting the testing option to other groups.  Also, consider whether certain groups of employees – such as those who work exclusively outdoors – are exempt from the requirements of the ETS.
  2. Issue a communication to employees informing them that the stay of the ETS has been lifted and that the company is moving forward with plans to comply at this time. This communication would also inform employees of how the company plans to comply with the ETS (i.e., require employees to become fully vaccinated, or submit to weekly testing and wear a face covering); the general requirements of the ETS; and the compliance deadlines.
  3. Direct employees to provide the company with acceptable proof of vaccination status (such as a copy of their COVID-19 Vaccination Record Card), if they haven’t already done so. Employers must also establish an appropriate process for the maintenance of vaccine records – which must be maintained as confidential medical records – and this should normally be coordinated through human resources.
  4. Prepare to provide support for vaccination by January 10, 2022. The ETS requires covered employers to provide a reasonable amount of time, including up to 4 hours of paid time off, for employees to get each vaccine dose during work hours.  The 4-hour paid time off requirement cannot be offset by other leave that employees have accrued, such as sick leave or PTO.  In addition, employees must be allowed “reasonable time and paid sick leave” to recover from side effects experienced following vaccination.  If the employee has accrued paid sick leave or PTO available, the employer may require the employee to exhaust such accrued sick leave or PTO for time off to recover from side effects.  These paid time off provisions apply only to the primary doses of the vaccine and are not required for booster shots.
  5. Draft your company’s COVID-19 Vaccination or Testing Policy so that it can be issued prior to January 10, 2022. Assuming that a testing option will be available to employees, the employer must decide whether unvaccinated employees will be required to pay for the cost of testing, and how the company will obtain the necessary test results.  While the ETS permits employers to pass these costs along to unvaccinated employees, the administration is also moving forward to require health insurers to cover the cost of testing.  Over-the-counter antigen tests are permitted for purposes of compliance so long as their administration is observed by either an authorized telehealth proctor or the employer.
  6. Establish a procedure for employees to request exemptions from the vaccine (if mandated), testing, and/or face covering requirements because of a disability or sincerely held religious belief.

Our original blog article summarizing the ETS can be found here.

At workplaces where the employees are represented by a union, employers may have a duty to bargain with the union over both discretionary and nondiscretionary requirements of the ETS.  In that regard, the General Counsel’s Office of the National Labor Relations Board recently issued Operations-Management Memorandum 22-03 setting forth the General Counsel’s position on employers’ bargaining obligations under the ETS.  The General Counsel’s position is that employers covered by the ETS have decisional bargaining obligations over aspects of the ETS that give employers choices (or discretion) regarding implementation.  To the extent elements of the ETS do not give employers discretion, employers may still have a duty to bargain over the effects.

The McNees Labor and Employment Group will continue to keep you apprised of any further developments in the litigation.  We are available to assist you in preparing to comply with the ETS if the stay is not promptly reinstated.

Last week, we shared that a federal district court in Kentucky issued a preliminary injunction blocking the federal government’s COVID-19 vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee. See Commonwealth of Kentucky v. Biden, No. 3:21-cv-00055 (E.D. Ky. Nov. 30, 2021).

Yesterday, a federal district court in Georgia issued a preliminary injunction blocking this same vaccine mandate from taking effect nationwide.  See State of Georgia v. Biden, No. 1:21-cv-163 (S.D. Ga. Dec. 7, 2021). As with the Commonwealth of Kentucky decision, the Court in State of Georgia found that the plaintiffs (Georgia, six other states, and various agencies within those states) and intervenors (Associated Builders and Contractors, Inc. and one of its chapters) were likely to succeed on their claim that President Biden exceeded the authorization given to him by Congress through the Federal Property and Administrative Services Act when issuing Executive Order 14042.  After finding that all other requirements for the issuance of a preliminary injunction were met, the Court issued an injunction blocking enforcement of the vaccine mandate for federal contractors and subcontractors in all covered contracts in any state or territory during the pendency of the action or until further order of the Court.

With yesterday’s ruling, each of the Biden Administration’s COVID-19 vaccine mandates for private employers is blocked nationwide.  The OSHA Emergency Temporary Standard requiring vaccination or weekly testing for private employers with 100 or more employees has been stayed, with the Sixth Circuit selected to hear the consolidated challenges to it.  Last week, two different federal district courts issued injunctions that blocked the Centers for Medicare & Medicaid Services (CMS) from enforcing its vaccine mandate for certain healthcare workers.  In response to these decisions, CMS stated that it had suspended activities related to the implementation and enforcement of this rule pending future developments in the litigation.

The ongoing legal challenges to these vaccine mandates will continue to work their way through the courts, with the ultimate outcomes uncertain. We will continue to monitor for further developments and will provide updates as events dictate. For more information on COVID-19 vaccine requirements or the related legal challenges, contact any member of the McNees Labor & Employment Group.

On November 30, 2021, a federal district court in Kentucky issued a preliminary injunction pausing enforcement of the federal government’s COVID-19 vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee. See Commonwealth of Kentucky, et al. v. Biden, No. 3:21-cv-00055 (E.D. KY, Nov. 30, 2021). The decision largely focused on whether President Biden exceeded his authority when he issued Executive Order 14042, which mandated compliance with guidance issued by the Safer Federal Workforce Task Force regarding COVID-19 safeguards for federal contractors and subcontractors. The Court held that he did.

The authority to manage federal procurement is delegated to the President through the Federal Property and Administrative Services Act (FPASA). Using FPASA, President Biden promulgated Executive Order 14042 and directed that the Task Force issue its guidance mandating COVID-19 vaccinations for those who contract with the federal government. However, the Court noted that the delegation is not a blank check for the President to “fill in at his will” and instead that there must exist a close nexus between the Order and the objectives of FPASA – increasing economy and efficiency in procurement. Here, the Court made clear that it believes the link is tenuous at best.

The Court likened the vaccine mandate for federal contractors to a refusal to contract with contractors who employ individuals over a certain BMI, or with businesses who work in crowded indoor office spaces. All are related to decreasing risk related to COVID-19, but they are actually public health regulations, not efforts focused on increasing economy and efficiency in procurement. Accordingly, the Court rejected the government’s position that a close nexus exists between economy and efficiency in procurement and the vaccine mandate.

The Court also noted other potential issues in the government’s case, including that the vaccine mandate may exclude certain contractors from bidding on jobs in violation of the Competition in Contract Act, that mandating vaccination is a decision that should be left to Congress (or, more appropriately, the States) that it violated the nondelegation doctrine, and that the mandate may have intruded into an area reserved for the States by the Tenth Amendment.

Holding that the plaintiffs are likely to succeed on their case, and that contractors in the relevant states would be irreparably harmed without an injunction, the Court enjoined the federal government from enforcing its vaccine mandate. However, the Court declined to issue a nationwide injunction and instead focused on the three states who brought the suit.

The Commonwealth of Kentucky case will proceed, and an appeal is likely. Upon appeal, the District Court’s decision would be heard by the Sixth Circuit Court of Appeals. As noted in our November 17, 2021 blog article, the Sixth Circuit also was selected by lottery to hear the Multidistrict Litigation regarding the legal challenges to the OSHA Emergency Temporary Standard for larger private-sector employers.

For now, covered contractors in Pennsylvania and all states other than Ohio, Kentucky and Tennessee should continue with their plans to comply with EO 14042 and the Task Force Guidance, which currently has a January 4, 2022 deadline for employees of covered federal contractors and subcontractors to be vaccinated. However, challenges to this vaccine mandate will continue to work their way through the courts for the near future.  We will continue to monitor for further developments and will provide updates as events dictate. For more information on COVID-19 vaccine requirements or the related legal challenges, contact any member of the McNees Labor & Employment Group.

On November 5, 2021, the Occupational Safety and Health Administration (“OSHA”) published its much-anticipated COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) requiring, among other things, that most employees of companies with 100 or more employees submit to weekly COVID-19 testing and wear a face covering while at work indoors. We summarized the ETS in a previous post.

Almost immediately after it was published, the ETS sparked a wave of lawsuits challenging OSHA’s authority to issue such a sweeping mandate without engaging in notice and comment rulemaking.  In fact, through November 15, 2021, lawsuits were pending in 12 different federal Circuit Courts of Appeals across the country.

The Multi-Circuit Lottery

When lawsuits are filed in multiple Circuit Courts challenging the same agency action, the lawsuits will be consolidated before one Court of Appeals, to be selected in a “lottery” conducted by the U.S. Judicial Panel on Multidistrict Litigation (“JPML”).  The JPML held the lottery in the ETS cases on November 16, 2021.  And the winner is . . . the U.S. Court of Appeals for the Sixth Circuit, which will hear the consolidated cases and ultimately decide whether the ETS is a valid exercise of OSHA’s authority.

Before the multi-circuit lottery was held, however, one of the circuits wherein challenges were filed – the Fifth Circuit – issued a temporary stay of the ETS. On November 12, 2021, the Fifth Circuit issued an opinion, which serves as a strong critique of the ETS and lays out several reasons why that Court believed the challenges are likely to succeed, any one of which would be sufficient reason for the Sixth Circuit to vacate the ETS.

The Fifth Circuit Opinion

First, the Fifth Circuit observed that OSHA’s authority to establish emergency temporary standards under 29 U.S.C. § 655(c) – which it may do without going through notice-and-comment rulemaking – is an “extraordinary power” that is to be “delicately exercised” in limited situations.  In issuing the ETS, however, OSHA acted with a “one-size-fits-all sledgehammer,” rather than a “delicately handled scalpel,” and failed to account for differences in workplaces and workers that bear on workers’ susceptibility to the grave danger that the ETS purports to address.

Second, to be lawfully enacted, an emergency temporary standard must: (1) address “substances or agents determined to be toxic or physically harmful” or “new hazards” in the workplace; (2) show that workers are exposed to such “substances,” “agents,” or “new hazards” in the workplace; (3) show that said exposure places workers in “grave danger”; and (4) be “necessary” to protect workers from such grave danger.  The Fifth Circuit concluded that the ETS did not satisfy these requirements.

Next, the Fifth Circuit found that OSHA had failed to show that the ETS was necessary to protect workers from a grave danger.  The court observed that the ETS is the “rare government pronouncement” that is both overinclusive – it applies to employers and employees in all industries and workplaces without accounting for the differences in risks faced by employees in different settings – and underinclusive – it purports to protect workers of companies with 100 or more employees, but not workers of companies with less than 100 employees.

Finally, the Fifth Circuit concluded that the ETS raises “serious constitutional concerns”.  The court stated that the ETS likely exceeds the federal government’s authority under the Commerce Clause because it regulates “noneconomic inactivity” – a person’s choice to remain unvaccinated or forgo regular testing – that falls squarely within the states’ police power.  In addition, the Court cautioned that “concerns over separation of powers principles cast doubt over the [ETS’s] assertion of virtually unlimited power to control individual conduct under the guise of a workplace regulation.”

In the wake of the Fifth Circuit’s opinion, OSHA published the following statement on its website:

On November 12, 2021, the U.S. Court of Appeals for the Fifth Circuit granted a motion to stay OSHA’s COVID-19 Vaccination and Testing Emergency Temporary Standard, published on November 5, 2021 (86 Fed. Reg. 61402) (“ETS”). The court ordered that OSHA “take no steps to implement or enforce” the ETS “until further court order.” While OSHA remains confident in its authority to protect workers in emergencies, OSHA has suspended activities related to the implementation and enforcement of the ETS pending future developments in the litigation.

What Next?

Now that the cases have been consolidated by the JPML, OSHA is likely to request that the Sixth Circuit lift the Fifth Circuit’s stay. The make-up of the Sixth Circuit Court of Appeals leans conservative, but the matter will be decided by a panel of three judges that is yet to be determined. While the fate of the ETS remains uncertain, it currently appears that OSHA will have an uphill fight at both the Sixth Circuit and, eventually, the Supreme Court.

Since planning for compliance with the ETS is burdensome – and the requirements may never actually become effective – it would be reasonable for employers to pause any plans intended solely to comply with the ETS until the Sixth Circuit rules on whether the stay will continue.  To be sure, the December 6, 2021, deadline to implement the requirements of the ETS (other than weekly COVID-19 testing for unvaccinated employees) is quickly approaching. However, we expect that employers should have clarity on whether the stay will remain in place before Thanksgiving. If the stay is lifted, employers would still have time before December 6, 2021, to take steps to implement the ETS, including preparing their policies and employee communications and creating or updating records indicating the vaccination status of their employees.

It should be noted that federal government contractors covered under Executive Order 14042 and related guidance issued by the Safer Federal Workforce Task Force, which we summarized in a previous post, and healthcare facilities covered under the CMS Rule should continue to plan for compliance with those separate requirements, at least for now. While there are also legal challenges to these separate vaccine mandates pending in the courts, many of the legal arguments differ based upon the underlying authority relied upon by the government when issuing the specific requirement. It is certainly possible that the ETS could be overturned, while EO 14042 and/or the CMS Rule could be upheld.

Meanwhile, COVID-19 new case rates are rising in Pennsylvania and across the northeast and upper mid-west. Employers should continue to consider reasonable measures to reduce the spread of COVID-19 in the workplace. There is no one-size-fits-all approach. Employer requirements on vaccination, testing, masking, and other mitigation measures vary widely. Pending further developments relating to the judicial review of the ETS, most employers continue to have flexibility to do what is deemed best for their business and their employees.

We will continue to keep you posted on developments with the ETS.  As always, please reach out to the McNees Labor and Employment Group with questions about the ETS or other vaccine requirements.