Articles Posted in Employment Law

The confirmation of Justice Amy Coney Barrett to the United States Supreme Court, and the process that lead up to it set off a firestorm of controversies; Democrats accusing Republicans of rushing through a candidate right before an election, and Republicans accusing Democrats of politicizing the process of the confirmation for political gain.  Beyond the wrangling, however, an earnest discussion is to be had on fate of the Affordable Care Act (“ACA”) and whether Justice Barrett and of the Court upon which she sits will strike down this landmark legislation.  As discussed below, Justice Barrett’s seat on the Court may not make much of a difference.  Rather, the Court and further legislation are likely to produce additional uncertainty for the ACA and healthcare coverage generally in the near and even intermediate term.

The ACA has, without a doubt, been one of the most highly debated and contentious laws since it was enacted through a parliamentary procedural mechanism and simple majority vote in 2010.  It was designed to extend healthcare coverage to uninsured Americans, partly through premium subsidies and expansion of Medicaid coverage.  In 2012, the law faced its most consequential challenge, but at that time the Supreme Court held that the “individual mandate” penalty imposed by law for not obtaining coverage — a key element to funding the law — was a lawful tax within Congress’s powers rather than an overextension of Congress’ Commerce Clause authorities.  At that time, then Law Professor Barrett, expressed  opposition to this ruling, arguing that Chief Justice Roberts’ opinion was incorrect and that the penalty provision of the ACA is unconstitutional.  Notwithstanding this fact, however, Justice Barrett stated in her confirmation hearings that she was not hostile to the ACA, just the Constitutional interpretation that upheld its passage.  In the confirmation hearings, Democrat Senators shared stories of Americans who gained coverage under the ACA and stood to lose coverage if the Court struck it down.  The COVID-19 Pandemic was also leveraged to add further drama to these stories, but these demonstrations were more political theatre than legal arguments or interpretations.

Of greater legal relevance is the fact that the ACA faces a new challenge out of the United States Fifth Circuit Federal Court of Appeals, which arose after Congress eventually eliminated the individual mandate portion of the ACA.  In that case, the Fifth Circuit held, among other things, that the individual mandate was in fact an unconstitutional overreach of Congress’ Commerce Clause powers.  This challenge has once again elevated examination of these issues to the Supreme Court.  The issue, of course, is whether Justice Barrett’s confirmation to the Court will make a difference.  She could — based on her past positions and arguments — agree with the conservative majority and strike down the ACA (although the current argument before the Court differs slightly than in the 2012 challenge).  Justice Barrett (or other court members) might, however, choose to defer to earlier precedent upholding the ACA or examine this issue in a distinctly new way.

The COVID-19 pandemic brought all professional sports to a sudden and unprecedented stop; Major League Baseball (“MLB”) paused its season during spring training, the National Hockey League (“NHL”) paused shortly before its playoffs were set to begin, and the National Basketball Association (“NBA”) paused its season, notably just after a player was diagnosed with the virus. Since that time, management and unions for players within those leagues have engaged in extensive discussions about how to best resume their seasons. It has been a true test of labor laws and work collaboration necessitating decisive action in a time of great uncertainty, and some fared better than others.

Indeed, many leagues expedited their processes and had relatively smooth negotiations.  The NBA is planning to resume a portion of its regular season and then playoffs in a bubble in Orlando Florida starting July 30, though many key players may not return for the season.  The NHL has announced its plan to have a 24-team playoff in late May.  MLB, however, slow rolled the reopening process, with both Owners and the Players’ Union introducing and fouling off proposals on restarting the season without forming a consensus. Surprisingly, and disappointingly, most of the negotiation revolved largely not around safety issues, but around economics which many believe is an attempt by both sides to set the tone for contract bargaining next year.

The Owners, during this time, used the exigent circumstances to push for bargaining items they wanted in the past but were unable to get through.  The Owners’ wish-list for negotiations included curbing players’ salaries and revamping (and eliminating) many minor league teams.  At one point, the Owners proposed a reduction in games to 82 with accompanying salary proration.  They also took aim at the minor leagues – a dangerous position in that the minors are often the only way for baseball fans in smaller towns to watch live games of professional or amateur players and to grow the sport. Some even took aim at the lowest paid members of the baseball community.  For example, in the Washington Nationals’ minor league system, the lowest paid players are currently on stipends of $400 per week.  The team decided to cut pay there anyway by 25 percent, thinking this was the best way to save funds during the pandemic.  Major League players, led by Sean Doolittle, a reliever for the Nationals, announced he and other players would cover the reduction in the minor leaguers’ salaries.  This announcement caused the Nationals’ Owner to quickly reverse his decision.

Recently, the United States Equal Employment Opportunity Commission (EEOC) provided employers guidance as to how best manage vulnerable employees and how these employees should be accommodated in the wake of COVID-19.  The EEOC suggests that as part of every employers’ “re-opening” plans, employers should take great care to implement social distancing and other good safety measures in their workplace.  Greater protections may need to be implemented for immunocompromised and other vulnerable employees (those suffering from respiratory, heart diseases, diabetes, etc.) that may be at disproportionate risk of infection and serious illness if exposed to COVID-19.

In its guidance, the EEOC has stressed the need for an employee to inform his or her employer of the need for an accommodation if health risks are at play.  Furthermore, employees should be able to provide medical documentation and answer questions from employers regarding the need for an accommodation.  As in any instance of disability accommodation under the Americans with Disabilities Act (ADA), the employer must ultimately determine whether a vulnerable employee’s medical condition can be reasonably accommodated.

Furthermore, in its guidance the EEOC indicated that it is impermissible for an employer to prohibit an employee from working, even where the employer knows the employee is at higher risk for severe illness if exposed to COVID-19.  However, it will be permissible for employers to prohibit an employee from entering a workplace where the employee presents with COVID-19 symptoms and this poses a “direct threat” to coworkers.  The decision of whether a “direct threat” exists requires a highly individualized, objective assessment where employers will have to consider the duration of risk, the nature and severity of potential harm, the likelihood and imminence of such harm, and whether the employee “notwithstanding the risk [can] perform the essential functions of the job without threatening his/her health, with or without accommodation.”  An employee’s pre-existing medical condition will not constitute a direct threat if the threat can be reduced or eliminated through reasonable accommodation.  Such accommodations may include, but are not limited, to relocating or reassigning an employee, allowing an employee leave time or the option to work remotely.

The COVID-19 pandemic has led state and local governments to order businesses throughout their states closed in order to reduce the spread of the virus and its strain on healthcare systems.  The electric carmaker Tesla was one such business and, as has been widely covered in the news, recently sued Alameda County in California because it prohibited Tesla from reopening its factory.  Earlier this month Elon Musk, Tesla’s CEO, dramatically announced that Tesla’s factory in Alameda County would reopen and begin manufacturing again in defiance of the County’s order.  This position put Tesla directly at odds with the County in which it operates and offers an interesting intersection between employment, government and constitutional law.

Tesla’s decision was met with strong opposition and the threat of criminal prosecution from the County because it directly violated the County’s lockdown order.  Tesla’s chief argument was that the County’s decision violated Tesla’s rights under the constitution.  In particular, Tesla pointed out that Alameda County wrongfully declared its own county rules as superseding California’s state order to carry on with “critical infrastructure activities.”  According to Tesla, the County was thus not acting under existing authority of local health officials, but rather issuing policies that were more restrictive than the baseline policies outlined by Governor Gavin Newsom’s stay-at-home order.  Thus, Tesla claimed that the County was acting beyond the authority of the state.  Musk went so far as to threaten to shutter his California manufacturing facilities and relocate them to more business friendly states such as Texas and Nevada should Tesla not be allowed to reopen.

In its complaint, Tesla made three overarching arguments.  First, it argued that the County’s order violated the Fourteenth Amendment’s right to due process as the order failed to give reasonable notice in addressing forbidden conduct and expressly prohibiting and subjecting to criminal prosecution that which was permitted under the California Governor’s orders.  Second, Tesla alleged that the County’s order violates the Fourteenth Amendment’s Equal Protection Clause as the County discriminated against “identically situated parties without any rational basis.”  The equal protection argument is grounded in the fact that manufacturers, who are considered “essential” businesses throughout California, are permitted to operate in neighboring counties while Tesla’s facility was forced to close.  Third, continuing on constitutional grounds, Tesla alleged that the County violated the California Constitution when it enforced laws that directly conflict with the laws of California.

The unique challenge presented by the Coronavirus (“Covid-19”) pandemic has resulted in a flurry of legislative responses from the federal and state governments to mitigate the disruptive effects the pandemic will have on individuals and businesses.  Part of the federal effort is the Coronavirus Aid, Relief and Economic Security Act (“Act”), which was signed into law on March 27, 2020.

This new law allocates billions of federal dollars for small and large businesses to alleviate the strain Covid-19 has caused as they confront the present crisis.  Notably, the Act provides a paycheck protection program, employee retention tax credit incentives for employers, offers deferred payroll taxes and also offers direct lending for businesses.  Given the magnitude of the law, it is quite possible that this will be the final, significant federal measure for some time though there is talk of a stimulus plan to follow.  The effectiveness of the Act is yet to be determined, and as of this writing many major banks are still working on implementation logistics.  The most notable aspects of the Act’s protections for businesses are listed below.

Paycheck Protection

The Coronavirus (COVID-19) remains a challenge for the world and, in particular, the greater New York metropolitan area.  The spread of the virus has required businesses to shut down or reduce their services in unprecedented numbers, which has led the Federal and State governments to scramble to find ways to respond to the pandemic and mitigate the economic fallout.  Below is a short sampling of the employment-law related responses of the Federal government, and the states of New York and Connecticut to this hardship.  Many of these legal changes are productive, well-reasoned and a fine example of our government working to deal with these unexpected and difficult developments.

The below changes are all accommodations relating to employee rights.  This coming week, indeed in the next few days, a stimulus package relating to businesses is likely to be announced.  These business accommodations will be reported in a subsequent blog as they become effective.

The Federal Government COVID–19 Response

The Coronavirus (COVID-19) has directly affected governments, businesses, and individuals since it originated in China only a few months ago.  Challenges  will likely become more prevalent in the weeks to come.  We write briefly here to discuss best practices for employers and to identify employee rights in this time of concern.

Generally, employers are required to maintain safe workplaces, which includes a workplace free from contagions.  Employers can meet this requirement in a variety of ways, including, but not limited to, imposing quarantines on employees who have returned from high risk countries, educating employees on prevention, and permitting work from home or sick leave for affected employees.

There is no one size fits all option for dealing with these concerns and employers should be flexible in their approach.  The absence of one employee as a matter of extra caution may be a work challenge, but the potential for the absence of several if the virus is transmitted in the office is likely to be more significant.  This principle, of course, applies for almost all instances when an employee is sick -and has served as the basis for many to adopt unlimited sick leave policies which have become more popular in recent years.

The global law firm, Jones Day, is currently embroiled in a gender and discrimination class action lawsuit brought by former associates against the firm.  The former associates, all of whom are women, allege various instances of discrimination which the firm vigorously denies.  It is alleged in the suit that Jones Day maintained a discriminatory parental leave policy, a gendered pay scale system, and altered female associates’ profile photographs on its website to make them look more attractive.

One of the more novel issues presented in the case is whether, in employment discrimination cases, members of the class should be permitted to join the suit anonymously to prevent public backlash, retaliatory conduct, and reputational harm.

Currently, federal law generally requires plaintiffs in an action to file publicly, which means they must disclose their identities.  This remains the case even in sexual harassment or retaliation cases, because the available legal justifications for filing under a pseudonym are limited to severe cases of physical danger, reputational or psychological harm.  As Jones Day was quick to point this out in its opposition to a Plaintiff’s anonymity request, allowing a plaintiff to proceed under a pseudonym is a “rare dispensation” and must outweigh the fairness to the opposing party.