On December 7, 2021, the U.S. District Court for the Southern District of Georgia issued an order enjoining the COVID-19 vaccine mandate for federal contractors and subcontractors pursuant to Executive Order 14042 (Executive Order) from going into effect nationwide.  Although the Georgia court discussed the “tragic toll” the COVID-19 pandemic has wrought, the court ruled it was likely that the plaintiffs will succeed in their claim that President Biden exceeded his authority when issuing the Executive Order.

The court concluded that each of the four requirements for issuing a preliminary injunction were met: (1) a substantial likelihood of ultimate success on the merits; (2) an injunction is necessary to prevent irreparable injury; (3) the threatened injury outweighs the harm of the injunction; and (4) the injunction would not be adverse to the public interest.

The court reasoned that the plaintiffs were likely to succeed on the merits because the court was unconvinced the Procurement Act clearly authorized President Biden to issue the Executive Order.  The court reasoned that the Procurement Act allows the President wide ranging authority over administrative and management issues, but does not clearly authorize the President to issue a public health regulation like the Executive Order.

In addition, the court held that an injunction was necessary to prevent irreparable injury due to the costs to federal contractors in complying with the mandate.  The court further reasoned the Executive Order’s threatened injury outweighed any potential harm of the injunction because the injunction maintains the status quo, and federal contractors can choose to encourage employees to get vaccinated, leaving employees the choice whether to get the shot.  The court discussed how, if the injunction was denied, federal contractors would be required to make decisions that would “significantly alter their ability to perform federal contract work which is critical to their operations.”

Finally, the court found granting the injunction is in the public interest due to the “economic uncertainty” and “workplace strife” caused by the Executive Order, and granted the preliminary injunction enjoining enforcement nationwide.  The court’s order follows the decision from the U.S. District Court for the Eastern District of Kentucky granting a preliminary injunction to block enforcement of the Executive Order in Kentucky, Ohio, and Tennessee.  The Kentucky decision has been appealed, and we expect the federal government to appeal the Georgia decision.  However, federal contractors and subcontractors are not currently required to comply with the Executive Order’s requirement to have all covered employees fully vaccinated by January 18, 2022.

Ballard Spahr’s Labor & Employment Group counsels employers regarding the changing requirements and status of the COVID-19 vaccine mandates and workplace safety and compliance.

On the latest episode of our podcast, Business Better, we discuss the current array of federal COVID-19 vaccine mandates: their effectiveness and requirements, the scope of their coverage, and what employers should consider in responding to them. This recording took place on December 1st and does not capture changes which have taken place after this date.

Leading this discussion is Jessica Federico, an Associate in Ballard’s Denver office.  With Jessica are Brian Pedrow and Shannon Farmer, both of whom are Partners in Ballard’s Philadelphia office.  Jessica, Brian and Shannon all focus on representing employers in labor and employment litigation and investigations and counselling them on employment policies and practices.

The Biden Administration’s action plan to overcome the pandemic saw major setbacks this week as courts around the country halted the administration’s mandatory COVID-19 vaccination policies for federal contractors and subcontractors and health care workers.

Specifically, on September 24, 2021 the Biden Administration issued guidance to supplement a previously issued Executive Order, in effect requiring employees of covered contractors (including prime contractors or subcontractors) to be fully vaccinated by December 8, 2021. Three states—Kentucky, Ohio and Tennessee—sued the Biden Administration to enjoin the regulation. Judge Gregory Van Tatenhove, of the U.S. District Court for the Eastern District of Kentucky, granted the injunction, finding that although Congress used its power to delegate procurement authority to the President to promote economy and efficiency in federal contracting, the limits of this power were exceeded. Judge Tatenhove limited the injunction to only the three plaintiff states.

Further, on November 5, 2021, the Biden Administration announced that many types of health care facilities and providers that receive Medicare or Medicaid funds must ensure that their staff, contractors, and volunteers are fully vaccinated by January 4, 2022. This emergency Interim Final Rule, issued by the Centers for Medicare and Medicare Services (CMS), was enjoined by two federal judges. Judge Matthew T. Schelp of the U.S. District Court for the Eastern District of Missouri ruled that a preliminary injunction was warranted because he believed that the plaintiffs’ argument that the CMS lacked authority to implement the requirement had merit, and because the CMS vaccine mandate was likely arbitrary or capricious. The opinion temporarily blocks application of the regulation in the ten states that brought the case, including: Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming. Similarly, Judge Terry Doughty, of the U.S. District Court for the Western District of Louisiana, deciding a challenge to the rule brought by fourteen other states, granted an injunction of the rule also, writing that there “is no question that mandating a vaccine to 10.3 million healthcare workers is something that should be done by Congress, not a government agency.” Judge Doughty’s ruling applies nationwide, except in the 10 states referenced where the CMS was already prevented from enforcing the rule.

The Biden administration has already appealed the rulings affecting the CMS rule, and is likely to appeal the ruling affecting the federal contractor rule, all which come at uncertain times as the country monitors the Omicron coronavirus variant. Ballard Spahr’s Labor & Employment Group is prepared to counsel impacted federal contractors, health systems and businesses about the status of these rules, and how to plan for the quickly approaching vaccination deadlines.

Many federal contractors already have an obligation to develop and maintain written Affirmative Action Plans. Now, the Office of Federal Contract Compliance Programs (OFCCP) has announced that those same companies will be required to use a new online platform, called the “Affirmative Action Plan Verification Interface,” available here, to annually certify that they are complying with that obligation.

The OFCCP announced a phased-in timeline for this portal. Contractors will be able to register with the portal beginning on February 1, 2022. Then, between March 31 and June 30, federal contractors will have to certify their compliance. If a company is ever audited for compliance, they will also be able to submit their affirmative action plans through the portal.

The OFCCP has already published an FAQ. It also indicated that a user guide and how-to videos are forthcoming.

The U.S. Department of Labor (“DOL”) published a Final Rule on Monday November 22, 2021 raising the minimum wage for federal contractor employees to $15 an hour. The Rule takes effect on January 30, 2022 and will apply to new or updated contracts with the U.S. Government. The higher wage will apply to existing contracts when parties exercise their option to extend contracts, which often occurs annually.

The DOL Rule implements President Biden’s April 27, 2021 Executive Order titled “Increasing the Minimum Wage for Federal Contractors,” which was signed on April 27, 2021. That Order reforms President Obama’s 2014 Executive Order 13658, “Establishing a Minimum Wage for Contractors,” which established a minimum hourly wage of $10.95 for employees of federal contractors, but it only applied to new or renewed contracts. In addition to raising the minimum wage to $15 an hour, President Biden’s Order extends the requirement to circumstances where federal agencies exercise options on existing contracts to purchase additional supplies or services.

The Rule also eliminates the tipped minimum wage for federal contractors by 2024. The tipped minimum wage currently allows employees to be paid less than the federal minimum wage if employees make up the difference through tips.

In practice, the Rule establishes that any employees of companies that are contracted with the U.S. government must be paid a minimum wage of $15 an hour. According to the DOL, approximately 327,300 employees will receive a wage increase as a result of the Rule.

DOL Secretary Walsh stated that the new $15 minimum wage is “a step in the right direction and it also ensures the federal government leads by example.”

On November 17, 2021, the EEOC, as it has done throughout the pandemic, updated its COVID-19 Technical Assistance manual. The additional questions and answers clarify that applicants and current and former employees are protected from relation for exercising EEO rights in connection with COVID-19. The guidance identifies particular examples of protected activity, which employees may engage in without fear of retaliation, including:

  • Filing a charge, complaint, or lawsuit, regardless whether the underlying discrimination allegation is successful or timely. For example, employers may not retaliate against employees who file charges with the EEOC alleging that their supervisor unlawfully disclosed confidential medical information (such as a COVID-19 diagnosis), even if the EEOC later decides there is no merit to the underlying charges.  Moreover, a supervisor may not give a false negative job reference to punish a former employee for making an EEO complaint, or refuse to hire an applicant because of the applicant’s EEO complaint against a prior employer.
  • Reporting alleged EEO violations to a supervisor or answering questions during an employer investigation of the alleged harassment. For example, an Asian American employee who tells a manager or human resources official that a coworker made abusive comments accusing Asian people of spreading COVID-19 is protected from retaliation for reporting the harassment. Workplace discrimination laws also prohibit retaliation against employees for reporting harassing workplace comments about their religious reasons for not being vaccinated. Similarly, workplace discrimination laws prohibit retaliation against an employee for reporting sexually harassing comments made during a work video conference meeting.
  • Resisting harassment, intervening to protect coworkers from harassment, or refusing to follow orders that would result in discrimination. For example, workplace discrimination laws protect a supervisor who refuses to carry out management’s instruction not to hire certain applicants based on the sex-based presumption that they might use parental leave or have childcare needs, or to steer them to particular types of jobs.
  • Requesting accommodation of a disability (potentially including a pregnancy-related medical condition) or a religious belief, practice, or observance regardless of whether the request is granted or denied. For example, the EEO laws prohibit an employer from retaliating against an employee for requesting continued telework as a disability accommodation after a workplace reopens.  Similarly, requesting religious accommodation, such as modified protective gear that can be worn with religious garb, is protected activity.  Requests for accommodation are protected activity even if the individual is not legally entitled to accommodation, such as where the employee’s medical condition is not ultimately deemed a disability under the ADA, or where accommodation would pose an undue hardship.

The guidance also explains that interference with an individual’s exercise of their rights under the ADA is prohibited, and provides examples of prohibited interference, including the use of threats to discourage someone from seeking a reasonable accommodation or exerting pressure on an employee not to file a discrimination complaint.

This updated guidance from the EEOC comes on the heels of announcements from the EEOC, DOL and NLRB last week that they are partnering to protect workers from retaliation and interference with their rights.  This renewed focus on retaliation suggests that employers should be reviewing and updating their non-retaliation policies.

Ballard Spahr’s Labor & Employment Group has assisted employers across the nation in revising and updating workplace policies and in addressing accommodation requests, concerns, or complaints related to COVID-19. Through the COVID-19 Resource Center, our lawyers have kept our clients and friends informed on COVID-19 developments throughout the pandemic.

On Monday, November 15, after Congress passed a $1 trillion infrastructure bill, President Biden signed it into law. This law will pour billions into roads and bridges, transit, broadband services, airports, waterways and more. Although a majority of the provisions are related to physical structures and developments, several provisions relate to labor and employment:

  • Sec. 41101 mandates prevailing wages as determined by the Secretary of Labor in accordance with the Davis-Bacon Act for laborers and mechanics employed by contractors or subcontractors that work on a project assisted in whole or in part by funding made available under the relevant division, for example, the Energy Division.
  • Sec. 80604 ends the Employee Retention Tax Credit early. The ERTC was set to expire on Jan. 1, 2022, but the Act accelerates the end of the credit retroactive to October 1, 2021 (except for wages paid by a recovery startup business, for which the expiration date would remain unchanged).
  • Sec. 23022 imposes record keeping requirements on employers that participate in the commercial driver apprenticeship program.
  • Sec. 22427 establishes substance testing requirements for mechanical employees of railroads.
  • Sec. 60102(h)(1)(A)(iv)(I-IV) creates a prioritization process for awarding grants for broadband deployment. Groups that receive federal funds for performing broadband work must prioritize projects based on:
    • Whether it is in an area of persistent or high poverty;
    • The speed of the proposed broadband service;
    • How quickly the project can be completed; and
    • Entities that have “a demonstrated record of and plans to be in compliance with Federal labor and employment laws.”
  • Sec. 22213 amends the Amtrak Reform and Accountability Act of 1997 and places restrictions on Amtrak’s ability to contract out work within the classification of work performed by a union employees.

Unlike the Infrastructure Bill, President Biden’s social spending bill – the Build Back Better Act — remains stalled in the House. Although pared back from its original breadth, the bill still includes numerous labor and employment sections:

  • Sec. 2202 creates a federal paid family leave program. As currently drafted, eligible employees would receive 4 weeks of paid leave.
  • Secs. 21001-21003 augment funding for various federal agencies, including OSHA, the Wage and Hour Division, the NLRB and the EEOC.
  • Sec. 21004 increases potential civil penalties under OSHA and the FLSA. Similarly, Sec. 21006 increases available penalties under the NLRA, including adding personal liability for directors and officers in certain instances.
  • Sec. 136102 of the bill includes an extension and modification of the energy credit. Certain renewable energy projects would be eligible to receive five times the standard tax credit. Said projects must meet stated apprenticeship and prevailing wage requirements, which are provisions that unions continue to fight to keep in the bill.
  • Sec. 136401, regarding electric vehicles, has strong union support. The bill states that for new plug-in electric vehicles that are manufactured in the United States by unionized workers, consumers can qualify for a $4,500 tax credit. This is in addition to the existing $7,500 credit.

These provisions, particularly as to paid family leave, will certainly be subject to intense political debate, and appear unlikely to pass in their current form. Ballard Spahr will continue to monitor these developments and provide updates.

As we previously reported here, the United States Judicial Panel on Multidistrict Litigation conducted a lottery to determine which of the thirteen federal appeals courts would hear the consolidated cases challenging the Occupational Health and Safety Administration’s (OSHA) Emergency Temporary Standard (ETS) on COVID-19 vaccination or masking/testing requirements for large employers. Drawing from a drum, the Sixth Circuit was selected. The Sixth Circuit, which covers Kentucky, Michigan, Ohio and Tennessee, is considered a conservative circuit. Democratic presidents Bill Clinton and Barack Obama appointed 5 of the Sixth Circuit’s active judges, while Republican presidents George W. Bush and Donald Trump appointed the remaining 11.

All of the challenges to the OSHA ETS will now be consolidated before a three-judge panel of Sixth Circuit judges in Cincinnati, Ohio. That panel, which has not yet been named, will have the opportunity to lift or retain the stay that the Fifth Circuit put in place on November 6, and reaffirmed on November 12. Regardless of the Sixth Circuit’s ruling, the United States Supreme Court is likely to have the final word on the ETS.

Although the ETS remains stayed, we recommend that covered employers continue to prepare to comply, as the stay could be lifted at any time, leaving employers little time to prepare.

On November 10, 2021, the National Labor Relations Board (NLRB or Board) issued a Memorandum outlining employers’ duty to bargain with unions over the implementation of the Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS).

The Memo provides that employers have bargaining obligations regarding aspects of the ETS that affect terms and conditions of employment, to the extent the ETS provides employers with choices regarding implementation. The Memo states that the ETS clearly affects terms and conditions of employment – including the potential to affect the continued employment of employees who become subject to it – and gives employers discretion in implementing certain requirements.  For example, the ETS allows employers to choose between a mandatory vaccine policy and a vaccine-or-test policy.

The Memo states employers are relieved of their duty to bargain where a specific change in terms and conditions of employment is statutorily mandated.  However, employers may not act unilaterally so long as there is some discretion in implementing a mandate.

According to the Board, even where employers do not have discretion to comply with a mandate and, therefore, there is no decisional bargaining obligation, employers nonetheless are obligated to bargain over the effects of the decision.  For example, the Memo cites a decision wherein the Board held an employer failed to bargain with employees over the effects of a federal regulation prohibiting the consumption of food where specific chemicals were present.

Finally, the Memo states, when bargaining over effects, whether an employer may implement a mandatory regulation prior to valid impasse or agreement will depend on the facts of any given situation.

Notably, the Memo does not refer to the application of the “contract coverage” standard in relation to employers’ duty to bargain over implementation of the ETS.  The “contract coverage” standard was adopted in MV Transportation, Inc., 368 NLRB No. 66 (2019), and provides that unilateral action is permitted if it falls within the compass or scope of certain contractual language in the bargaining agreement.  This may be because the Board has shown an interest in revisiting the MV Transportation case, as reflected in the Board’s earlier Memorandum GC 21-04, wherein General Counsel Jennifer A. Abruzzo included MV Transportation on the list of issues requiring centralized review by the Board.  If overturned, it seems likely the Board would return to the more restrictive “clear and unmistakable waiver” standard.

The Biden Administration has announced vaccine mandates for certain federal contractors and subcontractors, employees of large, private employers, and certain health care workers, all of which are slated to take effect January 4, 2022, with some steps required no later than December 5, 2021.

With the deadlines quickly approaching, review the full Alert from Ballard’s Labor and Employment Group here.