The National Labor Relations Board has issued a new rule that returns to pre-2019 union election standards. The primary impact is that workers will wait less time to vote on whether to unionize and employers will have less time respond to unionization efforts. The new rule will apply to representation petitions filed on or after December 26, 2023. One of the key revisions made by this new 2023 Rule is a requirement that elections are to be held prior to litigation being resolved. Previously, issues such as unlawful conduct and workers’ eligibility to vote were required to be litigated prior to an election being held. Another one of the key provisions is the elimination of a 20-day waiting period between approval of an election petition and the beginning of a vote. Instead, regional directors are now required to hold elections “at the earliest date practicable.” Employers are also now required to post the Notice of Petition for Election in conspicuous workplace locations within 2 business days after service of the Notice of Hearing. If employers regularly communicate with its employees electronically, the employer must also electronically distribute the notice within 2 business days. Previously employers had 5 days. Pre-election hearings must also commence within 8 calendar days from the service of the Notice of Hearing. Additionally, the 2023 Rule limits pre-election hearings to issues of whether representation is present. Issues such as the size and scope of a proposed unit or eligibility will be resolved after elections. In sum, under the 2023 Rule, employers must act quickly to protect their interests. Employers should contact their Polsinelli attorney immediately if they suspect a union campaign.

The National Labor Relations Board (the “Board”) issued its long-awaited decision regarding employer work rules that impacts both unionized and non-unionized workplaces. In Stericycle, the Board altered the standard for whether a seemingly neutral workplace rule is nevertheless unlawful. Now, for such a rule to be unlawful, the General Counsel must only prove that the rule has a “reasonable tendency” to chill employees from exercising their rights under the National Labor Relations Act. The new standard is a return to a more expansive interpretation of Section 7 Rights and erodes the balancing test that has been in place since the Board’s Boeing decision. The Board made clear that under the new standard employers may still rebut the General Counsel’s showing by proving that the rule advances a legitimate and substantial business interest. The employer must also demonstrate that they are unable to advance that same interest with a narrower rule. The Board also stated that the new workplace rule standard will be applied retroactively, meaning any workplace rules currently in place will be evaluated under this new standard. If an employer is engaged in a pending case regarding a workplace rule, that rule will also be evaluated under the new standard. The remedy in such a case will be to rescind the rule. Employers should contact their Polsinelli attorneys for assistance in reviewing their workplace rules and handbooks.

The General Counsel of the National Labor Relations Board (“NLRB”) set her sights on a new target with the latest memorandum: non-competition agreements. The memorandum, while not binding, lays out the General Counsel’s belief that the proffer, maintenance, and enforcement of agreements containing provisions prohibiting employees from competing with their former employer are unlawful because they have a tendency to chill employees’ rights under Section 7 of the National Labor Relations Act, which protects employees’ right to organize. Indeed, General Counsel Abruzzo states that “retaining employees or protecting special investments in training employees are unlikely to ever justify an overbroad non-compete provision.” Specifically, General Counsel Abruzzo provides that a non-compete provision in an employment or severance agreement is unlawful “when the provisions could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are qualified for based on their experience, aptitudes, and preferences as to type and location of work.” These provisions, General Counsel Abruzzo believes, interfere with employees’ ability to: Concertedly threaten to resign to secure better working conditions; Carry out concerted threats to resign or otherwise concertedly resign to secure improved working conditions; Concertedly seek or accept employment with a local competitor to obtain better working conditions; Solicit their co-workers to go work for a local competitor as part of a broader course of protected concerted activity; Seek employment, at least in part, to specifically engage in protected activity, including union organizing, with other workers at an employer’s workplace. The memorandum notes that non-compete provisions that only restrict an individual’s managerial or ownership interest in a competitor could be lawful. Furthermore, it is important to note while the National Labor Relations Act applies to all workforces, including non-union workforces, it does not apply to statutory supervisors or managers. Consult your Polsinelli attorney for assistance evaluating your non-competes against this new guidance as well as other recent developments such as the Federal Trade Commission’s pending proposal addressing non-competes.

The National Labor Relations Board (the “Board”) issued another precedent-shifting decision, this time taking aim at provisions commonly included in severance agreements. In McLaren McComb, an employer now violates Section 8(a)(1) of the National Labor Relations Act (“the Act”) when it merely “proffers” a severance agreement that conditions severance benefits on the waiver or restriction of an employee’s exercise of his or her rights afforded by the Act, including broadly written provisions prohibiting the employee from disparaging the employer or disclosing the terms of the agreement. In its decision, the Board reasoned that a broad non-disparagement provision in a severance agreement is unlawful because “public statements by employees about the workplace are central to the exercise of employee rights under the Act.” Section 7 of the Act provides protections for employees who communicate with a wide variety of third parties (including on social media) regarding terms and conditions of employment, an ongoing labor dispute, and even former supervisors and coworkers. Thus, the Board reasoned, that conditioning receipt of severance benefits on acceptance of a non-disparagement provision has a chilling tendency on workers’ ability to communicate to improve the terms and conditions of their employment and, thus, constitutes a violation of the Act. The Board similarly reasoned that provisions that prohibit disclosure of the agreement’s terms “to any third person” are unlawful because of their chilling effect on the exercise of an employee’s Section 7 rights. While the Act applies to all employers – even those without a unionized workforce –employers still have opportunities to protect themselves. For example, the decision does not apply to employees who are excluded from the Act’s coverage, including supervisors. The ruling also does not grant employees carte blanche to say whatever they want. Rather, the Board placed limitations on its ruling, stating that “employee critique of employer policy pursuant to the clear right under the Act to publicize labor disputes is subject only to the requirement that employees’ communications not be so disloyal, reckless, or maliciously untrue.” Contact your Polsinelli attorney for assistance in navigating the decision’s potential impact on your agreements.

To ring in the 2023 new year, the Federal Trade Commission (“FTC”) has taken multiple actions targeting the use of non-compete agreements, all of which are consistent with President Biden’s July 2021 Executive Order on competition in the labor market. The FTC has proposed both a rule banning the use of non-compete agreements with employees and independent contractors, and it also took legal action under its existing authority against three companies for their use of non-competes. The FTC’s proposed rule would ban employers from entering into, maintaining, or enforcing non-compete clauses with their workers, including employees, independent contractors and unpaid workers. The FTC’s notice does not mince words about its effect, as the agency states its intention to “categorically ban employers from using non-compete clauses.” The rule defines a non-compete clause as “a contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.” Though the rule does not target non-solicitation or non-disclosure clauses, it proposes a functional test to determine whether a clause meets the definition, meaning that a non-disclosure or non-solicitation covenant that effectively bars an employee from seeking employment in their chosen industry could be considered a non-compete. Non-compete clauses that require the employee to pay liquidated damages to the employer in the event of competition are also prohibited. The rule would apply retroactively and require employers to rescind any existing non-compete contracts within 180 days after publication of the final rule. Employers would also be required to provide individualized notice to the employees within 45 days of rescinding the non-compete clause. Importantly, the rule would not apply in the context of a sale of a business or ownership interest of at least 25%. The FTC also brought an enforcement action against three different companies to invalidate their respective worker non-compete agreements pursuant to its broad authority under Section 5 of the FTC Act. In the respective legal actions, the FTC ordered the companies to cease enforcing their agreements and to notify all employees they were no longer bound by the agreements. This comes on the heels of the FTC’s major policy announcement that the agency would vigorously enforce Section 5’s prohibition on unfair methods of competition and that this enforcement effort would cover areas that may otherwise not be within the purview of other antitrust laws, such as the Sherman and Clayton Acts. If ultimately published as a final rule, employers can anticipate the non-compete ban will face immediate legal challenge on numerous grounds, as noted in FTC Commissioner Wilson’s lone dissent to the proposed rule. Given the importance of non-compete agreements to many employers’ efforts to protect their competitive information and relationships, employers should carefully monitor these developments. Now is the time to re-evaluate strategies for protecting competitive information by focusing on other avenues available by contract or under law that do not rely on non-competes. This includes careful examination and identification of protectable information (trade secrets), the measures in place to keep such information secret, and employees’ access to such information. Employers can contact their Polsinelli attorneys to assist with drafting comments to the proposed rule and guidance on auditing and re-tooling these strategies in the wake of these FTC developments.

On October 12, 2022, the U.S. Supreme Court heard oral arguments in a case that considers whether a supervisor who earned over $200,000 annually may still be eligible for overtime pay under the Fair Labor Standards Act (FLSA). The case centers on the interpretation of the regulatory scheme surrounding highly compensated employees and their exemption status under the FLSA. The Plaintiff in the case was a worker in a supervisory role on an oil rig and his compensation was based on a daily rate. The plaintiff argued that his daily rate of pay did not constitute a salary.  Prior to the Supreme Court, the Fifth Circuit en banc agreed with the Plaintiff and found that he was not paid a salary such that he was not an exempt employee under the FLSA. This case has implications for how employers will pay workers, and whether there is potential exposure for overtime claims, even for highly compensated employees. Polsinelli will continue to monitor and report on this case.

The National Labor Relations Board has issued a proposed rule that would, once again, relax the burden to demonstrate joint employer liability. This action is a step toward reversing the Trump administration’s rule which provided that an employer only can be a joint employer of an unrelated entity if it exercised direct and immediate control over the unrelated entity’s employees. The proposed rule, which, based on the composition of the current Labor Board, will likely take effect, makes it easier to establish a joint employer relationship. For example, if companies share or co-determine essential job terms, joint employer status may be found, and both employers could be found liable for unfair labor practices.  It could also result in a non-employer (or an entity who believes it is not the employer) being required to engage in collective bargaining over non-employees.  The non-employer also could be subjected to picketing without violating the laws against secondary boycotts.  This would be the case even if an employer has indirect or unexercised control over the terms and conditions of a job. Employers may contact their Polsinelli attorney for assistance with the significant ramifications coming from the proposed rule.

This week, the National Labor Relations Board (NLRB) reversed a 2019 decision concerning union apparel bans in the workplace. This decision was the first of the Biden Administration era NLRB to shift precedent. In the split decision, the NLRB ruled that any attempt by an employer to restrict an employee’s ability to wear union clothing or insignia is “presumptively unlawful.” Now, employers may only restrict workers from wearing pro-union clothing or insignia if they are able to establish “special circumstances,” representing a heightened burden for employers to justify limitations on employees’ apparel. At issue was the employer’s apparel policy, which required employees to either wear black polos imprinted with the company’s logo or a black shirt with no logo. During a union organizing campaign, employees attempted to wear shirts bearing a union logo. The NLRB concluded that the employer’s policy implicitly prohibited employees from wearing pro-union apparel and insignia without the presence of special circumstances, as the employer had previously permitted production employees to wear different colored shirts or shirts with logos unrelated to the employer. Because no special circumstances were present to justify the policy, the NLRB ordered that the company rescind its policy prohibiting employees from wearing black shirts with pro-union insignia. This decision marks the first time the NLRB has issued a ruling that overturns or materially shifts Board precedent under the Biden Administration. Employers should be mindful of the changing landscape and are advised to contact their Polsinelli attorneys should they have questions on how such decisions impact them.

The National Labor Relations Board and The Department of Justice joined forces to sign a memorandum of understanding (“MOU”) between the two entities. The MOU follows President Biden’s Executive Order in 2021 aimed at increasing competition in the economy. The NLRB and DOJ plan to coordinate in order to ensure workers are able to freely exercise their rights and to protect competitive labor markets. According to the DOJ, this new partnership will allow the two agencies to “share information on potential violations of the antitrust and labor laws, collaborate on new policies and ensure that workers are protected from collusion and unlawful employer behavior.” The two agencies plan on greater coordination in information sharing, enforcement activity and training. Furthermore, the two agencies will now refer potential violations that they discover in their own investigations to each other. For employers, this continues the trend of the federal government stepping up their investigatory and enforcement actions. Employers should continue to consult with their Polsinelli attorney to ensure compliance with federal, state, and local laws.

On July 12, 2022, the EEOC revised its informal guidance regarding COVID-19 and related matters in the workplace. In doing so, the EEOC made several revisions concerning employer testing protocols, items to consider for vaccine mandates, among other revisions to FAQs. Most notably, the EEOC revised its guidance regarding viral screening of employees for COVID-19. The EEOC no longer considers viral screening (or testing) to automatically meet the business necessity standard under the ADA as it did at the outset of the pandemic. Rather, employers need to evaluate whether current pandemic and individual circumstances warrant testing to prevent workplace transmission. Those factors must lead to a decision that testing is a business necessity and not just a preferable policy. The EEOC guidance provides the following factors to consider in determining whether circumstances indicate testing would be a business necessity: The level of community transmission; The vaccination status of employees; The accuracy and speed of processing for different types of COVID-19 viral tests; The degree to which breakthrough infections are possible for employees who are “up to date” on vaccinations; The ease of transmissibility of the current variant(s); ·The possible severity of illness from the current variant; What types of contacts employees may have with others in the workplace or elsewhere that they are required to work (e.g., working with medically vulnerable individuals); and The potential impact on operations if an employee enters the workplace with COVID-19 may include. For questions or assistance in adjusting your COVID-19 practices to comply with the EEOC’s guidance, please contact your Polsinelli attorney.

On June 24, 2022, the United States Supreme Court issued its long-anticipated ruling in Dobbs v. Jackson Women’s Health Organization. In Dobbs, the Supreme Court upheld Mississippi’s abortion restrictions making most abortion procedures illegal after 15 weeks of pregnancy, and, in the process, overturned Roe v. Wade and Planned Parenthood v. Casey, which established a federal constitutional right to abortion. By holding there is no constitutional right to an abortion in the United States Constitution, the Supreme Court has left to the states policy related to abortion. Although the Dobbs decision itself did not outlaw the procedure, several states have “trigger laws,” designed to go into effect upon Roe’s and Casey’s reversal, or pre-Roe laws that outlaw or limit abortions. Other states are expected to implement additional restrictions and bans in the coming months. This leaves employers to grapple with a patchwork of state laws addressing abortion and related issues. At the same time, several federal laws remain in place that impact employers addressing abortion-related issues in the workplace. Included in the issues that should be on employers’ minds are the following: Anti-discrimination laws Leave laws Speech issues Privacy Employee benefits Travel assistance / relocation policies Criminal liability Updating policies Join us on July 12 as we discuss the employment law and employee benefits issues that arise out of the Dobbs decision. You may RSVP to the Webinar via the link here. In the meantime, if you have any questions or would like to discuss how the Dobbs decision impacts your workforce and company, contact your Polsinelli attorney.

Earlier this week, the Supreme Court unanimously held in Morgan v. Sundance that litigants are no longer required to show prejudice when opposing a party’s delayed attempt to compel arbitration. Previously, an Eighth Circuit decision refused to find that the right to arbitrate a dispute was waived after months of ongoing litigation unless the party opposing arbitration could show their litigation position was prejudiced by the delay. Since the two parties had not yet litigated on the merits, the Eighth Circuit majority ruled that the plaintiff was not prejudiced by the delayed arbitration demand. The Supreme Court vacated the Eighth Circuit decision, reasoning that the Federal Arbitration Act does not authorize “special, arbitration-preferring procedural rules.” The Court explained that the analysis of whether a party has waived a contractual right typically does not examine whether the other party is prejudiced as a prerequisite to finding a waiver. The Court held that by requiring “that kind of proof before finding the waiver of an arbitration right, the Eighth Circuit applies a rule found nowhere else….” This is an important decision for employers because many employers use mandatory arbitration programs as a way to manage and mitigate the risk of employee claims, as arbitration facilitates class and collective action waivers, and in some cases can be less expensive than court litigation. As a result of the decision, employers should know that employees no longer have the burden of showing prejudice when challenging an arbitration agreement after litigation has already ensued. Delays in seeking to compel arbitration can alone doom an employer’s ability to arbitrate a dispute. This puts the onus on employers to promptly review their onboarding files and other agreements with employee-plaintiffs to identify applicable arbitration clauses, and act to compel arbitration of the dispute if arbitration is the desired forum. If employers delay in seeking to compel arbitration, individual and class action plaintiffs may be able to keep their claims in court. The decision settles inconsistencies among circuit court decisions on how to handle disputes when a defendant has delayed arbitration. It reminds the courts that it cannot impose arbitration-friendly legal requirements that are not backed by existing law. If you have questions or would like more detailed information, Polsinelli’s Labor & Employment team is here to assist.

Following the Supreme Court’s ruling earlier this month, the Occupational Safety and Health Administration (“OSHA”) is withdrawing the vaccination and testing emergency temporary standard (“ETS”). The withdrawal is effective upon publication in the Federal Register, January 26, 2022. State OSHA departments are not required to take any action. In its announcement, OSHA stated that it is only withdrawing the vax-or-test rule as an emergency temporary standard, but is not withdrawing the action as a proposed rule. OSHA is now working to finalize a permanent COVID-19 Health Standard. Such a rule will follow the more traditional notice and comment procedures. Employers should still be vigilant to ensure that their policies related to workplace safety and the vaccination of its employees are compliant with local and state orders and laws. Employers should consult their Polsinelli attorneys if they have any questions.

Today, the United States Supreme Court issued two much-anticipated opinions concerning the Occupational Safety and Health Administration’s Emergency Temporary Standard on vaccination and testing (“OSHA ETS”) and the CMS Medicare and Medicaid Programs Omnibus COVID-19 Health Care Staff Vaccination Interim Final Rule (“CMS Vaccine Mandate”). I.  In a 6-3 ruling, the Supreme Court stayed the OSHA ETS from taking effect pending resolution of the case in the U.S. Court of Appeals for the Sixth Circuit. In the per curiam opinion, the Supreme Court stated that the challengers to the OSHA ETS “are likely to succeed on the merits of their claim that the Secretary of Labor lacked authority to impose the mandate.” The Supreme Court further held that the OSHA ETS is not authorized by the Occupational Safety and Health Act. The Court noted that Occupational Safety and Health Administration had never adopted a broad public health regulation before. The “lack of historical precedent” and the broad authority to implement the regulation was a “telling indication” that the OSHA ETS is beyond the agency’s authority. For now, the OSHA ETS is stayed pending resolution of the case in the United States Circuit Court for the Sixth Circuit. As such, this case will now return to the Sixth Circuit where the court will hear the case on its merits, and not just for preliminary relief. Bottom Line: At this time, employers do not need to require their workforce to be vaccinated or to get tested in compliance with the OSHA ETS. II.  In a 5-4 ruling, the Supreme Court stayed temporary injunctions of the CMS Vaccine Mandate issued by the U.S. District Courts for the Eastern District of Missouri and the Western District of Louisiana. In stark contrast to the ruling concerning the OSHA ETS, the Supreme Court opined that the CMS Vaccine Mandate fell within the authorities that Congress conferred upon the Secretary of Health and Human Services. The Supreme Court further held that the CMS Vaccine Mandate was not arbitrary and capricious. Now that the temporary injunctions issued by the U.S. District Courts for the Eastern District of Missouri and the Western District of Louisiana have been stayed, covered employers in all states should take steps, or continue to take steps, to comply with the CMS Vaccine Mandate. Bottom Line: Employers subject to the CMS mandate must comply. CMS released guidance to State Survey Agency Directors concerning the CMS Vaccine Mandate (“Guidance”) in late December 2021 in an effort to help companies comply. Under the Guidance, by January 27, 2022, facilities must have: Policies and procedures in place to ensure that all facility staff, regardless of clinical responsibility or patient or resident contact are vaccinated for COVID-19; and 100% of staff have received at least one dose of COVID-19 vaccine, or have a pending request for, or have been granted qualifying exemption, or identified as having a temporary delay as recommended by the CDC. A facility that is above 80% and has a plan to achieve a 100% staff vaccination rate by February 28, 2022 would not be subject to additional enforcement action. Facilities that do not meet these parameters could be subject to additional enforcement actions depending on the severity of the deficiency and the type of facility (e.g., plans of correction, civil monetary penalties, denial of payment, termination, etc.). By February 28, 2022, covered facilities must have: Policies and procedures in place to ensure that all facility staff, regardless of clinical responsibility or patient or resident contact are vaccinated for COVID-19; and 100% of staff have received the necessary doses to complete the vaccine series (i.e., one dose of a single-dose vaccine or all doses of a multiple-dose vaccine series), or have been granted a qualifying exemption, or identified as having a temporary delay as recommended by the CDC, A facility that is above 90% and has a plan to achieve a 100% staff vaccination rate within 30 days would not be subject to additional enforcement action. Facilities that do not meet these parameters could be subject to additional enforcement actions depending on the severity of the deficiency and the type of facility (e.g., plans of correction, civil monetary penalties, denial of payment, termination, etc.). Finally, facilities failing to maintain compliance with the 100% standard by March 28, 2022 may be subject to enforcement action. Polsinelli attorneys will continue to monitor and report on the OSHA ETS and CMS Vaccine Mandate and will host a webinar regarding the current state of all vaccination mandates next Wednesday, January 19 from 12:00 pm to 1:30 pm CT. Please register to attend here. In the meantime, your Polsinelli attorney can assist with questions you have regarding current vaccine mandates.

A divided panel of the United States Court of Appeals for the Sixth Circuit lifted the stay on the Occupational Safety and Health Association’s Emergency Temporary Standard (“OSHA ETS”) late Friday night (December 17, 2021). The Sixth Circuit had previously been selected at random to hear the consolidated OSHA ETS litigation. As a result of the Sixth Circuit’s ruling, OSHA announced that it would exercise enforcement discretion with respect to the compliance dates of the OSHA ETS.  To provide employers with sufficient time to come into compliance: OSHA will not issue citations for noncompliance with any requirements of the OSHA ETS before January 10, 2022; and OSHA will not issue citations for noncompliance with testing requirements before February 9, 2022. These “extensions” are conditioned on an employer exercising reasonable, good faith efforts to come into compliance with the OSHA ETS. Ultimately, the Sixth Circuit found that the petitioners (Republican-led states, businesses, religious groups, and individuals) were unable to establish a likelihood of success on the merits. In doing so, the Sixth Circuit considered and analyzed a myriad of statutory and constitutional arguments. Two out of the three judges on the panel determined that the petitioners would be unlikely to be successful on their constitutional arguments that OSHA violated the commerce clause or the non-delegation doctrine. Under the Occupational Safety and Health Act, OSHA is required to show that health effects may constitute a “grave danger” in order to warrant an emergency temporary standard. The Sixth Circuit held that the determination as to what constitutes “grave danger” should be left, in the first instance, to the agency. The Sixth Circuit expressly disagreed with, and in effect overruled, the United States Court of Appeals for the Fifth Circuit by holding that OSHA was not required to make findings of exposure in all covered workplaces. The Sixth Circuit held that to require so would mean that no hazard could ever rise to the level of “grave danger.” Ultimately, the Sixth Circuit found that OSHA had shown that COVID-19 is a danger and relied on proper science in issuing the ETS. The Sixth Circuit further held that simply because OSHA did not issue the ETS at the beginning of the pandemic did not mean the agency did not consider COVID-19 an emergency worth addressing. The Sixth Circuit’s decision was appealed this morning to the Supreme Court; however, this appeal does not alter the decision unless and until the Supreme Court rules.  Polsinelli attorneys will continue to monitor further OSHA ETS developments.  In the meantime, employers should resume (or continue) preparations to comply with the ETS requirements. For a summary of the OSHA ETS and its requirements, visit here.

Today, the Sixth Circuit Court of Appeals, based out of Cincinnati, was selected via lottery by the Judicial Panel on Multidistrict Litigation to hear legal challenges to the OSHA ETS. The OSHA ETS was formally issued on November 5, 2021. For more information on the OSHA ETS, check out Polsinelli’s blog posts discussing its impacts on employers with more than 100 employees here. A three-judge panel from the Sixth Circuit will now be randomly assigned to hear the legal challenges to the OSHA ETS. A majority of the judges currently presiding in the Sixth Circuit were appointed by Republican presidents. It is almost assured that the Biden Administration and OSHA will ask the Sixth Circuit Panel to review and repeal the Fifth Circuit Court of Appeals’ stay of the OSHA ETS. In a decision this past Friday, November 12, 2021, the Fifth Circuit reaffirmed its earlier order halting enforcement of the OSHA ETS, noting that the OSHA ETS “threatens to substantially burden the liberty interests of reluctant individual recipients to put a choice between their job(s) and their jab(s).” Just yesterday, in compliance with the Fifth Circuit’s order halting enforcement of the ETS, OSHA issued a statement that it was suspending “activities related to the implementation and enforcement of the ETS” but provided that OSHA “remains confident in its authority to protect workers in emergencies…” and that it is suspending its activities “pending future developments in the litigation.” Polsinelli attorneys will continue to monitor and report on legal challenges to the OSHA ETS.  In the meantime, your Polsinelli attorney can assist with questions you have regarding current vaccine mandates.

Lawsuits challenging the COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) were filed in three additional U.S. Circuit Courts of Appeals on Wednesday, November 10, 2021. Labor unions filed lawsuits in the U.S. Circuit Court of Appeals for the Second, Fourth, and Ninth Circuits. As a result, there are now ETS-related lawsuits pending in the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Eleventh, and D.C. Circuit Courts. According to federal rules, the legal challenges to the OSHA ETS will be consolidated and heard by a single U.S. Circuit Court of Appeals. The Judicial Panel on Multidistrict Litigation will conduct a lottery, expected on November 16, to select which U.S. Circuit Court of Appeals will hear the consolidated litigation. The court to hear the litigation will be drawn “from a drum containing an entry for each circuit wherein a constituent petition for review is pending.” Each court only gets one entry, despite the number of petitions pending before each court. Until the Judicial Panel selects the U.S. Circuit Court of Appeals to hear the litigation via the lottery, all the U.S. Circuit Courts of Appeals can proceed with rulings, as the Fifth Circuit did this past weekend. The labor unions’ move may be a move reflective of an intent by some to increase the odds that the OSHA ETS is upheld. The First, Second, and Fourth circuits all have a majority of Democratic-appointed judges. But it is difficult to predict the future of the OSHA ETS as the panel of judges to hear the case is also selected randomly. Polsinelli attorneys will continue to monitor and report on challenges to the ETS.

Twenty-six states have filed suit to challenge the emergency temporary standard regarding COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) on November 4, 2021, and published in the Federal Register on November 5, 2021. Federal courts have previously held that OSHA rules are ripe for challenge when the rule is published in the Federal Register. Within hours of publication in the Federal Register, the legality of the OSHA ETS is pending in the 5th, 6th, 8th, and 11th U.S. Circuit Court of Appeals. A coalition including Missouri, Arizona, Nebraska, Montana, Arkansas, Iowa, North Dakota, South Dakota, Alaska, New Hampshire, Wyoming, and five additional private entities (the “Coalition”) filed suit in the 8th U.S. Circuit Court of Appeals arguing that the power to compel vaccinations rests not with the federal government, but with the states. The Coalition argues that OSHA’s ETS goes beyond workplace safety and into public health policy, which the states assert exceeds OSHA’s statutory authority. Lawsuits filed by Texas, Louisiana, Mississippi, South Carolina, and Utah in the 5th U.S. Circuit Court of Appeals, Florida, Alabama, and Georgia in the 11th U.S. Circuit Court of Appeals, and Kentucky, Idaho, Kansas, Ohio, Oklahoma, Tennessee, and West Virginia filed in the 6th U.S. Circuit Court of Appeals similarly challenge the legality of the OSHA ETS. Kentucky, Ohio and Tennessee also filed suit challenging the Biden Administration’s mandate requiring federal contractors to be vaccinated. The lawsuit sets forth similar bases to challenge the federal contractor mandate, alleging that the police power to enforce vaccines rests with the states, not the federal government. Likewise, the states assert that the federal contractor mandate exceeds the President’s statutory authority. Polsinelli will continue to monitor these lawsuits. Contact your Polsinelli attorney if you have any questions regarding the mandates at issue and/or the impact of the lawsuits on your business.

Today, November 4, 2021, the Occupational Safety and Health Administration (OSHA) issued the emergency temporary standard regarding COVID-19 Vaccination and Testing (the “ETS”) previously unveiled in President Biden’s COVID-19 Action Plan.  Employers with a total of 100 or more employees firm- or corporate-wide at any time the ETS is in place are bound by the requirements established in the ETS. The ETS does not cover workplaces that are subject to the Safer Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors or in settings subject to the OSHA Healthcare ETS. The ETS explicitly preempts state and local laws. The ETS establishes minimum vaccination, vaccination verification, face covering, and testing requirements to address COVID-19 in the workplace. The key requirements of the ETS are: Develop a policy for vaccination – Covered employers must develop, implement, and enforce a mandatory COVID-19 vaccination policy. Employers may elect to implement a policy allowing employees to not be vaccinated, but instead be tested weekly for COVID-19 and to wear a face covering at work. Support employees choosing to get vaccinated – Employers must provide employees reasonable time, up to four (4) hours of paid time, to get vaccinated (this applies to both doses). The ETS also requires reasonable time and paid sick leave for employees to recover from any side effects they may experience from the vaccine. Unvaccinated employees must be tested – Employers must ensure that each employee who is not fully vaccinated is tested at least weekly for COVID-19 (if the employee is in the workplace once a week) or within seven (7) days before returning to work (if away from the workplace for a week or longer). Employers are not required to pay for any costs associated with testing. However, employers may be required to pay for testing under other laws, regulations, or agreements. Employees must notify their employer of a positive test – Employers must require their employees to notify them promptly after receiving a positive COVID-19 test result or diagnosis. Employers must immediately remove any employee who tests positive or is diagnosed with COVID-19, regardless of vaccination status. Employers must require employees who test positive or are diagnosed with COVID-19 to remain out of the workplace until they have met the criteria for returning to work. The ETS does not require employers to pay employees who are removed from work due to testing positive or being diagnosed with COVID-19. Face coverings – Employers must require employees who are not fully vaccinated to wear a face covering when indoors or when operating a vehicle with another person. Any employee who elects to wear a face covering must be allowed to do so. Provide information to employees – Employers must provide information at a readily understandable level to their employees concerning:  the requirements of the ETS and workplace policies and procedures established to implement the ETS, the CDC document “Key Things to Know About COVID-19 Vaccines”, information about protections against retaliation and discrimination, and information about laws that impose criminal penalties for knowingly supplying false statements or documents. A more in-depth analysis of the ETS is available, please email polsinellimarketing@polsinelli.com for more details. For additional CMS information read our latest blog post, CMS Mandates Vaccines for Staff of Medicare and Medicaid Providers and Suppliers. Join us for our upcoming webinar, in which we will discuss federal and state-specific vaccine mandates, exemptions and paths for navigation and implementation: Managing Vaccine Mandates and Exemptions. Tuesday, November 16 | 11:00 AM - 12:15 PM CT Click here to register.

On the one year anniversary of the Supreme Court’s decision in Bostock v. Clayton County, the EEOC has issued new guidance to clarify whether employers can segregate workplace restrooms by gender or sex. While not law, this guidance instructs employers how the EEOC will handle sex discrimination charges under its purview. In Bostock, the Court held that the “because of sex” language in Title VII extends protections to sexual orientation and transgender status. However, in the majority opinion, Justice Gorsuch made clear that the Court was not taking a position on the use of “private spaces” and left unresolved the question of whether employers could segregate restrooms by gender or sex. The EEOC’s guidance seeks to clarify confusion stemming from the Bostock decision. The new guidance directs employers that they must allow employees to use the bathroom, locker room, and/or shower that corresponds with their gender identity. Employers may not use anxiety, confusion, or discomfort on behalf of other coworkers as grounds to justify discriminatory policies. If an employer has unisex or single-use facilities, then the individuals can continue to use those as they currently do.  The EEOC has also created a consolidated webpage for resources addressing sexual orientation and gender identity. Interestingly, the guidance was not issued by the full Commission. Rather, the guidance was issued by the Chair of the EEOC and is considered non-binding guidance at the moment. However, employers should expect that the guidance will likely become binding in July 2022 when President Biden will be able to nominate a Democrat to the Commission, thus tilting the ideological majority of the Commission. The new majority may even expand upon Chair Burrows’ guidance. Employers should consult their Polsinelli attorneys for assistance in interpreting and implementing the EEOC guidance.

As expected, this week, the Biden administration has formally withdrawn a Trump administration rule that was set to change the standard applicable to independent contractors. Whether a worker is an independent contractor or an employee has long been determined by the “economic realities” of the relationship. Several factors are considered in this analysis: the nature and degree of the employer’s control and the permanency of the worker’s relationship with the employer; the worker’s investment in facilities, equipment or helpers; the amount of skill; the worker’s opportunities for profit or loss; the extent of the integration of the worker’s services into the employer’s business. The Trump administration’s proposed rule would have elevated two of the factors of the “economic realities” above the others by deeming the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss as “probative.” This would have been a marked departure from past practice as previously, none of the factors were dispositive or more probative. The Biden administration’s Department of Labor noted that the Trump administration rule had not been used by any court or any wage and hour agency. The Department further questioned whether the rule was fully aligned with the Fair Labor Standards Act’s text and purpose or case law describing the economic realities test. In withdrawing the rule promulgated under the Trump administration, the Department of Labor specifically said it “is not creating a new test, but is instead leaving in place the current economic realities test, which allows for determinations that some workers are independent contractors.” While not issuing a new test in this repeal, it is widely expected that the Biden Administration will eventually issue a new rule for evaluating independent contractor status. Secretary of Labor Marty Walsh recently has gone as far as to say “in a lot of cases, gig workers should be classified as employees.” Employers should continue to be cognizant of and comply with any applicable state and local laws regarding worker classification, which may not be identical to the economic realities test. Employers should consult with their Polsinelli attorney if they have any questions and should stay tuned to future blog postings with updates on future rule changes.

Employers now have a clearer picture of how to determine whether a worker is classified as an employee or independent contractor under the Fair Labor Standards Act (FLSA) thanks to a new final rule from the U.S. Department of Labor (DOL), effective March 8, 2021. This test is significant for employers because under the FLSA, independent contractors are not eligible for minimum wage or overtime compensation. Many state courts and agencies have already adopted tests similar to this “economic reality” test codified by the DOL’s new rule. The “economic reality” test is a multi-factor test that has been used by the DOL in the past to determine whether a worker is an employee or independent contractor. This final rule is similar to the initial rule proposed by the DOL last September. Ultimately, the key question is whether the worker is dependent on the employer, indicating the worker is an employee, or is in business for the worker’s benefit, indicating the worker is an independent contractor. This final rule “sharpens” the economic reality test by enumerating five factors to determine whether a worker is considered an employee under the FLSA: The nature and degree of the worker’s control over the work (e.g., the worker’s ability to set a schedule, select projects and work for others). The worker’s opportunity for profit or loss (e.g., through the exercise of personal initiative, skill or business acumen, and through investments or capital expenditures). The amount of skill required for the work (e.g., whether the work requires a specialized skill or the worker depends on the employer for training). The degree of permanence of the working relationship between the worker and the potential employer (e.g., whether the work is definite or indefinite in duration). Whether the work is part of an integrated unit of production (or is segregable from the employer’s production process). The first two factors are given the most weight. If both of these “core factors” indicate the same classification, then there is a “substantial likelihood” that the resulting classification is correct. However, if the application of the first two factors leads to different conclusions, the remaining three factors should be considered, as well. With this additional guidance, employers have more information to help structure their relationships with workers and define which workers qualify as independent contractors, though it may not necessitate many immediate practical changes.  Employers should continue to be cognizant of and comply with any state and local laws regarding worker classification, which may not be identical to the DOL’s rule. It is also possible that the Biden administration will affect changes to this new rule or its implementation.  Please contact your Polsinelli attorney if you have any questions about the new final rule.