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OSHA’s Planned Covid Vaccine Rule Has Firms Asking, What’s Next?

Sept. 10, 2021, 10:14 PM

Large employers that have been reluctant to require their workers to get vaccinated against Covid-19 will soon face a mandate to do so following a potentially game-changing announcement from the White House.

President Joe Biden said Thursday that the Occupational Safety and Health Administration will develop an emergency temporary regulation ordering companies with 100 or more employees to require staff to be vaccinated or tested weekly. The rule will also call for workers to get paid time off so they can get inoculated and recover from any ill effects from doing so.

“This will be welcome news to many employers who have been on the fence on whether to mandate the vaccine to employees,” said Daniel Schwartz, an attorney at Shipman & Goodwin LLP. “A federal rule would provide more employers with support for their decision. This will change the equation from whether employers should do a mandatory vaccination policy to thinking about how they will implement one.”

Nevertheless, the Biden administration’s innovative move to boost lagging vaccination rates in the face of soaring cases of coronavirus infection raises a host of questions for employers and workers alike.

1. How long will it take for the rule to come out?

OSHA has the authority to skip the multi-year rulemaking process and put out emergency regulations that last for six months. But the agency still needs to write the rule and craft a preamble that explains the standard, why it’s necessary, how much it costs, and how it would be enforced. The rule then goes to the White House for review. OSHA will likely give employers time to comply after the new standard is published, perhaps 30 or 45 days.

Although a White House fact sheet released Thursday indicated OSHA was already at work on the rule, a source briefed on the process said the agency only received one week’s notice that the directive was being planned. Details were still unknown to even senior department sources hours before Biden’s announcement. This suggests any progress towards a draft can’t be far along.

Getting the rule written, reviewed, and published will take at least a few weeks, and maybe a month or more, said David Michaels, OSHA chief during the Obama administration who’s now a professor at the George Washington University School of Public Health.

OSHA’s first stab at a Covid-19 emergency standard stalled at several stages—first when Labor Secretary Marty Walsh ordered changes to reflect updated science, and again when the White House regulatory review office held onto the rule for more than six weeks as it solicited final input during dozens of stakeholder meetings. It ultimately took the agency nearly five months to issue a rule that was dramatically scaled back to apply only to the health-care sector, after initially being intended for the entire economy.

But there are different forces in play this time that could propel an expedited process. The White House Office of Information and Regulatory Affairs, which must sign off on significant rules before they’re released, “operates on executive order and the president can do whatever he wants with executive orders,” said Jordan Barab, a senior OSHA official throughout the Obama administration. “If they want to speed that along they can certainly do it.”

2. Does OSHA have the capacity to enforce it?

There’s one federal or state OSHA inspector for every 83,000 workers, according to an AFL-CIO report. The emergency rule could cover more than 80 million workers, suggesting that policing employer compliance will be a monumental effort for an understaffed agency.

Since OSHA doesn’t have the manpower to randomly inspect most workplaces and look for violations, the agency must get creative and strategic with its enforcement efforts. That will likely mean publicizing large fines, targeting specific industries, and relying on whistleblowers.

“The question is whether workers in an organization will report their company for noncompliance,” said Karen Elliott, an employment lawyer at the management-side firm Eckert Seamans Cherin & Mellott LLC. “That’s anybody’s guess.”

OSHA could hit employers with willful violations for failure to comply, which carry a fine of nearly $14,000. It’s unclear how they’ll count those violations—whether it will be a violation per workplace, per worker, per day, or some combination of those factors.

3. What will employers need to do to comply?

Companies are reeling after Biden’s announcement and most are confused about whether they are covered, said Karla Grossenbacher, an attorney at Seyfarth Shaw LLP.

Employers will need to get a handle on which of their employees are unvaccinated and decide whether they’ll require those workers to vaccinate or test regularly. Surveying employees and having them attest to the truthfulness of their vaccination status will likely be a compliance strategy for the emergency rule, said Doug Kauffman, a lawyer at Balch & Bingham LLP.

“So for an employer, if I had a survey for workers, make sure there’s an attestation component in it, and maybe if someone doesn’t respond to the survey, assume they’re not vaccinated,” Kauffman said.

Companies that impose vaccine mandates will have to comply with other legal requirements, such as accommodations for disabilities or religious objections.

It’s an open question whether federal labor law would require employers to bargain with unions before implementing vaccine or testing mandates as a result of the emergency rule, said Jerry Hunter, a former general counsel at the National Labor Relations Board. But the regulation will likely provide for at least notice and probably consultation with the employees’ bargaining representative, said Hunter, an attorney with Bryan Cave Leighton Paisner LLP.

4. Will the rule hold up against a court challenge?

Constitutional challenges to imposing vaccine mandates are likely to fail.

The U.S. Supreme Court blessed government power to require inoculation in a 1905 decision called Jacobson v. Massachusetts. That precedent was cited by a federal appeals court that upheld the vaccine mandate at Indiana University in a ruling that the Supreme Court declined to review, signaling that Jacobson is still good law.

“Supreme Court precedent is powerful on the side of allowing laws as a justified exercise of police power that are intended to protect from harming other people,” said James Brudney, a professor at Fordham Law School who teaches labor and employment law.

Yet the rule could be vulnerable to a legal attack based on workplace safety law. OSHA has lost five of the six court battles it’s fought over emergency regulations, said Jon Hyman, an attorney at Wickens Herzer Panza. Courts look at whether an emergency standard is necessary to protect workers from a “grave danger,” though no law or regulation defines what level of hazard reaches that level.

“Clearly it’ll be challenged and it’s very likely it won’t survive,” said James Sullivan, an attorney at Cozen & O’Connor P.C. and former chair of the Occupational Safety and Health Review Commission.

But Dane Steffenson, a former senior attorney at the DOL litigating occupational safety cases, predicted fears of a lawsuit may compel the agency to steer the regulation in a far more limited direction than what the president envisions. “I’m sure OSHA is really looking at the request from the White House and as they did with the healthcare ETS looking at where they feel they have to narrow it in order to support it,” said Steffenson, now a solo practitioner.

To contact the reporters on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com; Fatima Hussein in Washington at fhussein@bloombergindustry.com; Erin Mulvaney in Washington at emulvaney@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

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