FAQs: COVID-19 – General Labor and Employment Legal Concerns – March 30, 2020 Update

Alerts / March 30, 2020

BakerHostetler’s COVID-19 Labor and Employment Issues Task Force issued a set of frequently asked questions (FAQs) on March 18, 2020, regarding general legal issues concerning the COVID-19 pandemic. Below are new FAQs that reflect the guidance recently sought by employers related to this topic. The FAQs below do not address issues related to the Families First Coronavirus Response Act, since we have put together a separate FAQ specifically addressing that act. If you have any questions, please do not hesitate to contact BakerHostetler’s Labor and Employment Group. We stand ready to assist employers as they navigate this volatile environment.

Q: Am I still required to bargain with the union over workplace changes related to the COVID-19 pandemic?

A: This depends. Generally, an employer with a unionized workforce has a duty to bargain with the union over changes to wages, hours, and terms and condition of employment. However, there are situations where an employer may be permitted to act unilaterally without first bargaining with the union. Employers should evaluate and consider the following when determining whether unilateral action is permissible:

  1. First, employers should consult the contract itself and determine whether the contract permits the employer to take the desired action. For example, does the contract allow the employer to set schedules and determine the number of hours worked by employees? If so, the employer may be permitted to change the schedule to accommodate for COVID-19 issues without bargaining.
  2. Even if an employer’s right to make a change is not specifically provided for in the contract, employers may be permitted to act unilaterally if it is consistent with past practice. Employers lawfully may take unilateral actions where those actions are similar in kind and degree to what the employer did in the past. Employers need to consider the nature and degree of past changes and determine whether the current action meets the legal requirement of establishing a past practice.
  3. Does your contract have a force majeure clause? A force majeure clause typically relieves a party from its duty to fulfill certain obligations in extraordinary circumstances outside the control of the parties. Whether a force majeure clause is triggered will depend on the specifics of each situation and varies greatly for each employer.
  4. Is there a requirement to comply with the changes in the law? Some contracts have provisions that allow employers to make adjustments based on changes in the law or to comply with the law. Employers should continue to monitor whether federal, state or local laws have imposed such requirements.
  5. Are there exigent circumstances that require “prompt action”? Historically, the National Labor Relations Board (NLRB) has construed this exception narrowly, and employers should be aware of the heavy burden required to prove this exception. Typically, the NLRB has limited the exigent circumstance exception to extraordinary events that are unforeseen and have major economic effects that require the company to take immediate action. Whether this will apply to COVID-19 will depend greatly on the specifics of each circumstance.

Employers considering acting unilaterally should engage counsel to carefully evaluate whether the unilateral action is permissible, understanding that the employer likely will bear the burden of proving that its actions were permitted. Even if the action is permissible, employers should provide the union notice of the changes and recognize that they might still be required to bargain with the union over the effects of that change.

Q: What obligations to notify unions apply when laying off employees or reducing schedules?

A: In addition to Worker Adjustment and Retraining Notification (WARN) Act considerations, which have been outlined in previous FAQs, all employers should consult their collective bargaining agreements to see whether schedules need to be posted or notice needs to be given by a certain date (e.g., five days) before layoffs. Unions will be relying on these technical defaults to seek pay in lieu of notice.

Q: Will notice provisions still apply despite government mandates making it impossible to comply with the applicable notice provision in the collective bargaining agreement?

A: Unions are taking the position that the notice provisions supersede state orders. The doctrine of impossible performance should govern. Employers should consider the cost impact of what the union is seeking and weigh whether to arbitrate the matter if the union grieves that notice was required, notwithstanding the fact that layoffs were implemented on an immediate basis to comply with a local government order.

Q: In California, can an employee use California paid sick leave for a COVID-19-related quarantine or illness?

A: Yes. If the employee has California sick leave available, that leave may be used to compensate the employee for COVID-19-related absences for sickness, diagnosis, care, or treatment for the employee or the employee’s family member. Preventive care could include self-quarantine due to a potential exposure to COVID-19 if the quarantine is recommended by civil authorities.

Q: In California, may an employer require an employee who is quarantined to use his or her California paid sick leave?

No. Employers may not require an employee to use paid sick leave. Rather, it is the employee’s decision whether he or she wants to use such leave. However, an employer might have a policy that the employee is required to use California paid sick leave in a minimum of two-hour increments.

Q: Can emergency paid leave that we offer to employees before the Emergency Paid Sick Leave Act goes into effect count against the paid sick leave that employees receive under the new law?

A: No. The Department of Labor has stated that it will not permit employers to count prior leave against the leave required under the Emergency Paid Sick Leave Act.

Q: Do employees who are laid off or on temporary furlough and apply for unemployment insurance benefits still have to wait the normal one-week waiting period required by many states before receiving benefits?

A: Most likely no. Many states have waived the one-week waiting period due to COVID-19. Employers and employees should check their state’s unemployment insurance benefits website to confirm.

Q: We are hiring employees during the outbreak – what measures can we take to protect our workforce?

A: The Equal Employment Opportunity Commission (EEOC) has confirmed that employers may screen applicants for symptoms of COVID-19 after making a conditional job offer, as long as they do so for all entering employees in the same job category. Employers also may take an applicant’s temperature as part of a preemployment medical exam after they have made a conditional offer of employment. Additionally, the EEOC has stated that employers may delay the start date of an applicant who has COVID-19 or symptoms associated with it. According to current Centers for Disease Control and Prevention guidance, an individual who has COVID-19 or associated symptoms should not be in the workplace. In fact, the EEOC also has said that employers may withdraw a job offer when they need the applicant to start immediately but the individual has COVID-19 or symptoms of it.

Q: Can employees refuse to come to work if they are designated as “essential” or as an asset of “critical infrastructure”?

A: This is a very fact-dependent question. For example, an employee cannot refuse to work because he or she disagrees with being designated as essential or an asset of critical infrastructure. On the other hand, if the employee refuses to work because he or she is afraid of contracting the COVID-19 virus, the answer is much more complex. Under the Occupational Safety and Health Administration (OSHA), an employee can decline a work assignment if he or she reasonably believes that there is a risk of serious injury or death. Whether this requirement is satisfied will depend on myriad factors, which may include the number of COVID-19 cases reported in the geographic area, whether anyone who has tested positive for the virus visited or worked at the facility in the prior weeks, the extent to which the employer can sanitize or otherwise protect the workplace from the COVID-19 virus or the employee individually with personal protective equipment, etc. State law also will be relevant in this regard, as many states have protections that exceed OSHA’s requirements.

An employee also might be concerned about having an underlying medical condition and how that might impact his or her body’s response to contracting COVID-19. In such an instance, the employee might be seeking a medical accommodation, which might need to be accommodated under the Americans with Disabilities Act or state disability laws. Employers should analyze each situation on a case-by-case basis and seek legal counsel for guidance.

Q: My company is doing layoffs because of the unexpected and sudden business downturn. We’re concerned about our employees and want to do what we can for them. If we pay them severance, will that interfere with their ability to receive unemployment benefits?

A: That all depends on the state. In some jurisdictions, severance payments don’t count as wages. In others (including New York), severance will reduce benefits or act as a disqualifier if it’s paid within the first 30 days but not thereafter. In other states (Pennsylvania, for example), severance affects unemployment only if it’s paid out in a lump sum that is a percentage of the “average” wage in the state. Yet other state statutes provide that severance affects unemployment, but make an exception for payments that are made in exchange for a release of claims or according to an employment contract. In most if not all states, you can give laid-off employees a severance package without it having an effect on unemployment benefits, but a close look and analysis of each state’s unemployment law must be undertaken.

Q: Can I reduce the salary of overtime-exempt employees during the period of the downturn?

A: Yes. An employer can choose to reduce the salaries of its overtime-exempt employees prospectively because of business conditions.

To protect the overtime exemption, the new salary should be unrelated to the quantity or quality of work performed, and it should be set for at least a month to avoid its being perceived as a short-term, day-to-day or week-to-week reduction. An employer should be careful that the reduced salary still exceeds the minimum threshold, which is $684 per week under the federal law and varies from state to state. To protect against potential allegations of discriminatory or retaliatory treatment, reductions should be made based on objective, performance-based criteria as much as possible. Thus, it is a best practice to issue to each affected employee a letter explaining the timing and basis of the reduction and staying mindful of any advance notice requirements your state has when changing an employee’s rate of pay.

Q: Prior to the COVID-19 pandemic, I had business before the NLRB. Is this business now on hold?

A: Maybe. As to any representation elections, on March 19, 2020, the board announced that “due to extraordinary circumstances,” it was suspending all representation elections, including mail ballot elections, at least and until April 3, 2020. Of course, the suspension may be extended or revised.

As to other matters before the NLRB, the agency implemented its telework program and has closed several regional offices, though it has announced that the regional offices will continue to process unfair labor practice investigations. For information regarding a specific matter, we recommend contacting in writing the board agent handling the matter.

Authorship Credit: Jay Krupin, Nancy Inesta, Todd Dawson, Nate Schacht, Mike Parente, Amy Traub and Annette Winters

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