Federal Court Expands Paid Leave Rights for Manufacturing Employees

A United States federal judge in Manhattan struck down four regulations issued by the United States Department of Labor (“DOL”) limiting paid leave entitlements under the Families First Coronavirus Response Act.  In his August 3, 2020 decision, Judge J. Paul Oetken found the DOL exceeded its authority (a) by determining that employees were not entitled to paid leave if the manufacturer determined no work was available, (b) broadly defining “health care provider” resulting in the exclusion of workers otherwise entitled to paid leave, (c) requiring a manufacturer’s consent before a worker could take intermittent leave, and (d) requiring workers to provide documentation prior to taking leave.  State of New York v. United States Department of Labor, Case No. 20-CV-3020 (S.D. N.Y. Aug. 3, 2020), available on Bloomberg Law.

Adopted by Congress and signed by the President in March 2020, the FFCRA gives manufacturing employees and others paid and unpaid leave for up to 12 weeks for designated circumstances related to COVID-19, including leave care for a child under the age of 18 whose school, place of care or child care is closed due to a COVID-19 reason.  The cost of paid leave is offset by a “dollar-for-dollar” credit on federal withholding and payroll taxes.  The law became effective April 1, 2020 and the DOL issued interim final regulations on April 6, 2020.  Because many states had already implemented mandatory “stay-at-home” orders when the law became effective, many manufacturers and others did not believe the paid leave entitlement was available to their workers.  The DOL’s regulations seemed to confirm this understanding, as the DOL took the position that workers were not entitled to paid leave if work was otherwise “not available.”

By invalidating that DOL’s interpretation, however, the Court’s decision potentially opens the door for manufacturing workers to claim retroactive paid leave.  In other words, the Court’s decision potentially means that workers were entitled to paid leave even if the manufacturer was closed because of a “stay-at-home” order or the individual was otherwise on a layoff.

Manufacturers may wish to confer with legal counsel to assess the impact of the court’s decision on past, current and future leave entitlements.

Is Your FCPA Corporate Compliance Program Up to Date? US DOJ Issues Revised Guidance

Below in an excerpt from an article authored by Robinson+Cole Manufacturing Industry team lawyers Edward J. Heath and Kevin Daly with Sasha Glassman, assistant general counsel for global materials manufacturing company Rogers Corporation, that was published on ACCDocket.com.

On June 1, 2020, the Criminal Division of the United States Department of Justice (DOJ) issued a revised version of its Guidelines for the Evaluation of Corporate Compliance Programs (Guidelines). The Guidelines, first issued in 2017 and updated in 2019, serve a critical function in federal law enforcement.

Federal prosecutors are instructed by various internal and external sources to evaluate the adequacy and effectiveness of a company’s compliance program as a part of determining whether to pursue criminal charges against that company and its personnel, as well as what kinds of resolutions of those charges may be appropriate.

The Guidelines instruct prosecutors on how to conduct that evaluation. In doing so, the Guidelines provide insight into what measures the DOJ believes are likely to deter and mitigate violations, and, in turn, may earn the company more positive treatment by prosecutors. In-house counsel and compliance officers undoubtedly will carefully consider these latest revisions and assess whether their companies’ compliance programs are up to date.

Although the Guidelines apply to all forms of compliance programs, one of the most important areas of consideration for companies doing business internationally is the US Foreign Corrupt Practices Act (FCPA).

The FCPA is the federal law that prohibits US companies from paying, offering, or promising anything of value to a foreign government official to obtain or retain business opportunities. The FCPA is a major enforcement priority for the DOJ and the US Securities and Exchange Commission (SEC), as the numbers demonstrate: In both 2018 and 2019, the federal government recovered more than US$2.9 billion through FCPA enforcement. Read the full article.

Virginia Issues First COVID-19 OSHA Standard

Thank you to my colleague, Jonathan Schaefer, for his contributions to this post. Jon focuses his practice on environmental compliance counseling, occupational health and safety, permitting, site remediation, and litigation related to federal and state regulatory programs.

While Federal OSHA has issued numerous COVID-related guidance documents, it has declined to issue an enforceable COVID standard. Instead, OSHA continues to reference numerous other statutory and regulatory standards that potentially apply to what OSHA may determine are COVID-related deficiencies in the workplace.

Recently, the Commonwealth of Virginia took matters into its own hands and passed the first COVID-19 OSHA standard that codifies, and in some cases exceeds, guidance from OSHA and the Center for Disease Control. Virginia is a “state-plan” state, meaning it has been approved by OSHA to develop and implement its own worker safety and health program. Virginia’s actions may be a signal to the many other “state-plan” states to do the same.

Virginia’s COVID-19 standard gives much of what is found in OSHA’s guidance documents the force of law. It requires all employers to, among other things:

  • Assess the workplace for COVID-19 hazards and classify tasks according to the risk of exposure,
  • Develop and implement policies and procedures for employees to report COVID-19 symptoms,
  • Develop and implement policies for employees with a known or suspected case of COVID-19 to return to work,
  • Ensure that employees observe physical distancing,
  • Clean and disinfect certain workplace areas;
  • Control or close access to common areas, such as breakrooms or lunchrooms.

The standard makes it clear that cloth face coverings do not qualify as PPE, but it does require them in certain instances, such as when employees are unable to physically distance or when an employee is in a customer-facing job.

Employers with job tasks that are classified as “very high” or “high,” or employers with “medium” risk job tasks and 11 or more employees must also develop and implement a written infectious disease preparedness and response plan within 60 days of the effective date of the standard.

The emergency temporary standard, which goes into effect on July 27, 2020, will expire after 6 months.

Recent State-Court Decision Manufactures Raised Eyebrows

On July 10, 2020, a New York State Supreme Court Judge issued a surprising decision finding that not only did a private arbitration agreement not bar a plaintiff’s court complaint, but that a company policy amended the parties’ previously executed employment agreement.  The decision, Newton v. LVMH Moet Hennessy Louis Vuitton Inc., Index No. 154178/2019 (Sup. Ct. New York County, July 10, 2020), has not been posted on publicly available websites but can be obtained through legal research services.  The judge’s legal analysis raised numerous issues for manufacturers.

The company employed Newton as a vice president.  In 2014, Newton signed a formal employment agreement setting forth standard employment terms and incorporating a separate arbitration agreement governing all disputes concerning Newton’s employment.  If Newton initiated an arbitration, the company agreed to pay all fees for the arbitrator and any filing files.  In November 2018, the company issued a new sexual harassment and discrimination policy stating, among other things, that an individual complaining of harassment or discrimination could file a complaint in state court as one of several methods to redress her claim.  In April 2019, Newton filed her lawsuit in state court alleging hostile environment sexual harassment, discrimination and retaliation.  Relying on the employment agreement which included a binding arbitration agreement, the company move to stay the action and compel arbitration.

The Court rejected the motion.  First, relying on a state law which expressly invalidated agreements to arbitrate sexual harassment and discrimination claims, the court ruled that the agreement to arbitrate became void by operation of law.  In doing so, the court rejected the argument that the Federal Arbitration Act (which expressly authorizes enforcement of arbitration agreements between employees and employers) superseded the state law.  Secondly, and perhaps more surprisingly, the court ruled that the company’s adoption of its policy operated to amend the written agreement between the parties.

Frequent readers will note that I have long written about the enforceability of arbitration agreements and the issues associated with them.  See, among other posts, “Protecting a Manufacturer’s Competitive Advantage” (Oct. 10, 2019); “Manufacturers Revisit Mandatory Arbitration Agreements” (July 24, 2019).

The court’s decision raises significant issues about the enforceability of any manufacturer’s employment agreement.  Usually, an employment (or any other) agreement cannot be unilaterally changed by one party.  Usually, the law recognizes that the modification of a written agreement requires both parties to agree.  But by holding that a company’s unilaterally adopted policy operated to modify previously negotiated and executed agreements, the court manufactured an unprecedented change in the law.  (We can ignore for a moment that the company likely adopted the policy because state law required it to do so.  See New York Adopts New Tools to Fight Gender-Based Harassment” (Apr. 27, 2018).)

While the Newton decision likely will be appealed, for the time being, ever manufacturer may wish to consider the impact of its changing policy on pre-existing agreements.

Testing Issues Twist Manufacturers

The Novel Coronavirus, the speed by which science continues to discover new aspects of the disease and the response of the United States government to these developments has tested manufacturers.  One aspect of this testing concerns, well, testing.

The Americans with Disabilities Act has long banned manufacturers from requiring medical evaluations unless both “job-related” and consistent with “business necessity,” high standards.  When the pandemic hit the United States and the President declared a national emergency, the EEOC had to reconsider its position.  As part of the effort to “stop the spread” of the Coronavirus, in March 2020, the EEOC announced that manufacturers could require employees to submit to body temperature monitoring, a “medical evaluation” justified by the crisis.  See “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws” (Number A.3.) (March 17, 2020).  As COVID-19 testing (testing to detect the presence of the virus) became more widely available, the EEOC updated its guidance again to permit manufacturers to require employees to submit to a COVID-19 test as a condition of permitting the employee to work.  See Id. (Number A.6.) (April 23, 2020).  Manufacturers were warned of their obligation to make sure the administered test was both accurate and reliable, and that the test could only detect the presence of the disease as of the date of the test itself.

Many viewed the EEOC’s position as signaling a willingness to allow broad employee testing when it became available to help manufacturers continue operating.

But the use of antibody testing proved to present more complicated issues.  Antibodies, many believed, were a sign that employees already had the disease, overcame it and were likely immune to reinfection for a period.  But on May 23, 2020, the CDC issued Interim Guidelines which cautioned that antibody testing could present many “false positive” results and warned, “test results do not indicate with certainty the presence or absence of current or previous infection with SARS-CoV-2.”  (The CDC subsequently issued additional guidance further explaining issues associated with “false positive” results on June 25, 2020, guidance which is available here.)

This led the EEOC, on June 17, 2020, to update its guidance holding that, in contrast to COVID-19 tests and temperature screening, manufacturers could not require antibody testing as a condition of employment.  See “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws” (Number A.7.) (June 17, 2020).

Manufacturers seeking to protect their workers may wish to carefully monitor the EEOC Guidance in this area and confer with qualified legal counsel.  Rapid developments in testing will challenge us all in the months to come.

Trump Proclamation Curtails the Ability of Manufacturers to Bring Workers in From Outside USA

This week we are pleased to have a guest post from Jennifer L. Shanley, a member of Robinson+Cole’s Immigration Group. Her preparation of temporary and permanent immigration petitions allow manufacturing, chemical, pharmaceutical, and biotechnology companies, including some Fortune 100 companies, to retain key business people, scientists, researchers, and other professionals.

President Trump signed a proclamation temporarily suspending the entry of certain H-1B, L-1, H-2B and J-1 foreign national workers and their dependents who are currently outside of the U.S. and do not have a valid visa or other valid travel document. The order will take effect on June 24, 2020 and will be in effect through December 31, 2020, though it could be extended, if the president determines it is necessary.

By way of background, foreign nationals can work in the U.S. in a variety of work authorized categories, some of the most prominent being H-1B and L-1. Those in H-1B status are working for an employer in a specialty occupation; those working pursuant to L-1 status are intracompany transferees who worked for the U.S. company’s related entity abroad in either a managerial or executive role or one that requires specialized knowledge and are working for a U.S. employer in that same capacity. Other significant categories include the J-1, which is an exchange visitor status to participate in an intern, trainee, teacher, camp counselor, au pair, or summer work travel program and the H-2B program allows for temporary nonagricultural labor or services. Continue Reading

OSHA Issues FAQs on Masks in the Workplace

Yesterday, OSHA issued guidance aimed at educating workers and employers on how to properly use face coverings at work during the COVID-19 pandemic. Structured as a series of frequently asked questions with answers, the guidance is the latest word from OSHA on measures workplaces can and should take to protect against the spread of COVID-19.

The FAQs begin with a description of the differences between cloth face coverings, surgical masks, and respirators. OSHA makes it clear that cloth face coverings are not considered PPE and will not protect the wearer from airborne infectious agents. Surgical masks may protect against splashes and sprays, and they may be considered PPE when used for that purpose. Respirators, which may be necessary to protect workers performing certain jobs, contain proper filtering material and must be properly fitted and used by the wearer.

Because cloth face coverings are not considered PPE, OSHA’s existing PPE standards do not require that employers provide them to workers. However, relying on CDC recommendations, “OSHA generally recommends that employers encourage workers to wear face coverings at work.” Cloth face coverings may be appropriate, depending on the work environment and particular job functions, and the use of cloth face coverings may conserve PPE, such as surgical masks, for healthcare settings in which they are needed the most.

There may be instances where cloth face coverings are not appropriate, however, such as when a job function might exacerbate the hazard (e.g., the face covering could become contaminated with chemicals or infectious material). In those cases, employers may need to consider PPE, such as surgical masks or face shields. Employers should also consider whether they need to provide masks with clear windows in cases where an employee or members of the public may need to lip-read to communicate.

OSHA makes it clear that face coverings do not eliminate the need for social distancing in the workplace.

Notably, the FAQs state that the General Duty Clause requires employers to furnish a workplace that is free from recognized hazardous that may cause death or serious physical harm. “Control measures may include a combination of engineering and administrative controls, safe work practices like social distancing, and PPE.”

Manufacturing:  Back to Business (Part Two)

This is the second of two posts dedicated to reopening plans for manufacturers.  In the first post on May 26, I addressed the first two questions which every manufacturer may wish to ask as it forms its reopening plans.  Manufacturing;  Back to Business (Part One) (May 26, 2020).  Here, I address the next four questions.

Which Groups of Workers Will be Brought Back to Work?

A particularly complex question, determining which workers will be brought back may present one of the biggest challenges.  How the decision will be communicated to workers?  Many employees may have moved physical locations for personal, safety or family reasons.  Some workers may need advance notice to relocate, resign from other temporary or volunteer positions taken while on leave or otherwise prepare for the return to work safely.

Next, the question focuses on “who” and “how many.”  Many states limit the number of employees or customers which can be on site at any one time.  Additionally, some manufacturers may wish to “stagger” work by departments, floors or areas so that if one becomes infected, the others can continue to operate.  Keep in mind that the basic pre-COVID-19 labor and employment considerations continue to apply – employment decisions should be based on legitimate, non-discriminatory and objective reasons.

Also consider employees are not “homogenous.”  Everyone must deal with her or his own personal challenges.  Some may have underlying medical conditions or be of certain age making them or a close family member more susceptible to serious risk if infected with COVID-19.  While EEO laws do not permit employers to make decisions based on an employee’s vulnerability, the employee may elect to delay a return to work because of these issues.  Manufacturers may wish to consider how it will address these issues before they arise.

Manufacturers may also need to update wage notices or other policies to address new wage rates, work schedules or other training or leave obligations and entitlements.

What Safety Precautions Should Manufacturers Take to Make Sure Returning Workers are COVID-19 Free?

As workers return to work, manufacturers may need to ensure those workers are COVID-19 free.  Among other steps, business may wish to require employees complete a questionnaire identifying symptoms or behaviors likely to reveal infection.  Other steps, like requiring employees to take their own temperatures before coming to work, may likewise be desired.  Some manufacturers may be considering COVID-19 antibody or other tests.  The reliability of such tests could be debatable, so the wisdom of such an approach requires consideration.  Manufacturers must remember that responses to questionnaires, temperature or other test results likely amount to “medical records” which must be keep in restricted “need to know” access files.

What Workplace Precautions Should Manufacturers Take to Make Sure Employees and Customers Stay COVID-19 Free?

Every day scientists are learning more about the COVID-19 disease and the most effective ways to prevent its spread.  The precise steps required by manufacturers to protect employees and customers likely will be outdated quickly.  Manufacturers may wish to monitor safety guidelines issued by OSHA, the CDC and state authorities.  Manufacturers also may wish to review general liability and other policies, many of which will exclude damages caused by a pandemic.

How Should Manufacturers Plan for the COVID-19 Resurgence?

Even while manufacturers reopen or expand beyond essential operations, leaders may wish to do so with an eye on the Fall of 2020 and Winter of 2021 when many expect the COVID-19 pandemic to return.  So-called “critical” or “essential” workers already challenged by “round one” may be particularly stressed.  Manufacturers may wish to consider how to prepare for that resurgence by providing more flexibility for those with critical skills during the summer months.  Additional leaves or other employee recognition programs could help combat “battle fatigue” and prepare for the “next wave.”

By asking and answering these six critical questions, manufacturers can create a strong foundation supporting their business in the months ahead.

Manufacturing:  Back to Business (Part One)

The disruption created by the COVID-19 pandemic stressed the entire manufacturing sector.  For the most part, manufacturers responded to those challenges quickly and responsibly.  Now that every state has begun reopening, the manufacturing sector will once again be called on to lead.  Manufacturers which respond well to those challenges will thrive in the months ahead.

Six Essential Questions

Every manufacturer should answer six essential questions.  How manufacturers answer those questions will depend on the needs of each business, local conditions on the ground, and the response of employees and customers.

In this first of two posts on planning for the return to business, I will focus on the first two of the critical six questions which manufacturers may wish to ask themselves as part of their plan to return to business.

Does the Manufacturer Have a Reopening Plan

“Poor planning ensures poor performance.”  To successfully manage the reopening process, every business may wish to create a written reopening plan.  One way to create such a plan is to form a committee.  Members of the committee can include one or more business leaders (who know the customer base), human resources leaders (who understand the workforce), facilities or site leaders (who understand the each physical location where the business operates), information technology leaders (who understand the systems required and their limitations, for example with respect to disinfecting them), and security and safety leaders (who understand physical security and occupational health and safety concerns).  Using her or his own expertise, each team member can review every aspect of the plan – identifying and addressing plan “gaps.”  While in writing, the plan must be flexible.  Task one leader to monitor government, OSHA, CDC and state guidance and alert the team to developments requiring plan modifications.

Can the Manufacturer Reopen?

Whether an essential business or not, each state government controls the timing and extent of reopening.  Failure to comply with government requirements may result in the loss of a business license and a complex, time-consuming, appeal process.  In some cases, if the business has been operating as an essential business, state-specific “Sector Guidance” may impose dramatic new restrictions which the business previously did not have to meet.  Further, if the business can reopen or expand under the state’s rules, some thought should be given to whether it should reopen.  It may make little sense to “open up” the business if customers and employees remain wary of engaging on a broad basis.  For some, waiting until public confidence returns could be the better strategy.

In the next post, I will focus on the next four questions which every manufacturer may wish to ask as part of its reopening plan.

OSHA Updates COVID-19 Guidance, Faces Lawsuit by AFL-CIO

As the country slowly begins the reopening process, OSHA has issued two new guidance documents—an Updated Interim Enforcement Response Plan for COVID-19 and Revised Enforcement Guidance for Recording Cases of COVID-19. Both documents go into effect on May 26, 2020, and both replace prior guidance documents adopted by OSHA on these topics.

Updated Interim Enforcement Guidance

Perhaps not surprisingly, as non-essential business have started to reopen, OSHA is fielding additional COVID-19 related complaints.

As more states are taking steps to reopen their economies and workers are returning to their  workplaces, OSHA is receiving complaints from affected workers in non-essential businesses.

OSHA will continue to focus its efforts on COVID-19 related cases, and it will also continue to prioritize higher risk workplaces, such as hospitals and healthcare facilities. In this guidance, OSHA states that it will also focus enforcement attention on workplaces with high numbers of complaints or known cases of COVID-19. But its inspection policies will differ based on whether the employer is located in a geographic area with elevated community transmission or resurgence.

In high-risk workplaces, or in areas experiencing elevated COVID-19 cases, the updated guidance notes that fatalities and imminent danger exposures will be prioritized for inspection. Complaints alleging unprotected exposures to COVID-19 for workers in high risk workplaces will be prioritized for on-site or remote inspection. Similar complaints for lower risk workplaces, on the other hand, may only result in on-site inspection if the employer does not provide a satisfactory response to a remote investigation.

During an inspection, employers may be asked to provide OSHA with a written pandemic plan, which is recommended by the CDC, or other applicable written plans; procedures for hazard assessment; PPE protocols related to COVID-19; employee training records related to prevention of COVID-19; among other things.

This updated guidance will replace OSHA’s Interim Enforcement Response Plan adopted on April 13, 2020.

Revised Enforcement Guidance for Recording Cases of COVID-19

OSHA also updated its guidance for recordkeeping related to COVID-19. As we previously reported, employers must record cases of COVID-19 if:

  1. The case is a confirmed case of COVID-19, as defined by the Centers for Disease Control and Prevention (CDC);
  2. The case is work-related, as defined by 29 CFR 1904.5; and
  3. The case involves one or more of the general recording criteria set  forth in 29 CFR 1904.7 (e.g., medical treatment beyond first-aid, days away from work).

In its updated guidance, OSHA provided more information on what it will consider in determining whether a case of COVID-19 is “work-related.” OSHA will consider the reasonableness of an employer’s investigation, evidence available to the employer, and evidence that COVID-19 was contracted at work.

The guidance gives examples of types of evidence that may weigh in favor of or against work-relatedness:

  • COVID-19 illnesses are likely work-related when several cases develop among workers who work closely together and there is no alternative explanation.
  • An employee’s COVID-19 illness is likely work-related if it is contracted shortly after lengthy, close exposure to a particular customer or coworker who has a confirmed case of COVID-19 and there is no alternative explanation.
  • An employee’s COVID-19 illness is likely work-related if his job duties include having frequent, close exposure to the general public in a locality with ongoing community transmission and there is no alternative explanation.
  • An employee’s COVID-19 illness is likely not work-related if she is the only worker to contract COVID-19 in her vicinity and her job duties do not include having frequent contact with the general public, regardless of the rate of community spread.
  • An employee’s COVID-19 illness is likely not work-related if he, outside the workplace, closely and frequently associates with someone (e.g., a family member, significant other, or close friend) who (1) has COVID-19; (2) is not a coworker, and (3) exposes the employee during the period in which the individual is likely infectious.

This updated guidance will replace OSHA’s previous Enforcement Guidance for Recording Cases of COVID-19 adopted on April 10, 2020.

AFL-CIO Lawsuit

All of this guidance, however, is not enough for the AFL-CIO. Earlier this week, the AFL-CIO filed an emergency petition against OSHA demanding that OSHA enact an emergency temporary standard (ETS) within 30 days to address the COVID-19 pandemic. According to the AFL-CIO, OSHA has statutory authority to issue an ETS when employees are exposed to “grave danger” and an ETS is necessary to protect them from this danger.

We submit that in the face of a global health emergency causing more deaths in less time than any other workplace crisis OSHA has faced in its fifty-year existence, OSHA’s refusal to issue an ETS constitutes an abuse of agency discretion so blatant and of such magnitude as to amount to a clear abdication of statutory responsibility.

In re: American Federation of Labor and Congress of Industrial Organizations, D.C. Cir., No. 19-1158, May 18, 2020 (internal quotations omitted).