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Texas Business Court: The First Year (The Houston Lawyer)

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Beginning Feb. 6, it will be a violation of the Texas Health and Safety Code for a private employer to require its employees or contractors to be vaccinated against COVID-19 and any variants of the virus.

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The statute defines an “adverse action,” in relation to actions prohibited by the statute broadly to prohibit more than just ultimate employment actions (i.e., refusal to hire or termination).

Employers running afoul of this new law could be subject to a $50,000 penalty. The administrative penalty can be circumvented only if the adverse action can be remedied through hiring or reinstating the individual despite the law’s applying to a significantly broader range of potential actions.

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On Nov. 10, 2023, Gov. Greg Abbott signed into law Senate Bill 7, which amends the Health and Safety Code to prohibit a private employer from taking any “adverse action” against an employee, contractor or applicant because of the employee’s or contractor’s refusal to be vaccinated against COVID-19. The statute defines adverse action as “an action taken by an employer that a reasonable person would consider was for the purpose of punishing, alienating, or otherwise adversely affecting an employee, contractor, applicant for employment, or applicant for a contract position.” Importantly, this definition does not require the complained-of action to be what is generally thought of as an ultimate employment decision, such as refusal to hire or termination of employment, in order to constitute a violation of the statute.

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The statute does include a minimal carve-out for healthcare facilities, healthcare providers and physicians. Employers that qualify are permitted to require that unvaccinated employees wear protective medical equipment, such as face masks, without this being considered an adverse employment action. Nevertheless, such facilities are still not permitted to require employees or contractors to be vaccinated against COVID-19.

How and When Can a Texas Employer Avoid the Statutory Penalty?

If an employee, contractor or applicant believes a violation has occurred, they must file a complaint with the Texas Workforce Commission detailing the nature and description of the alleged adverse action. If after investigation the commission determines a violation has occurred, the statute provides for an administrative penalty of $50,000 for each violation unless the employer:

Hires the applicant or offers a contract to the applicant for a contract position.

Reinstates the employee or contractor, provides the employee or contractor with back pay from the date the employer took the adverse action, and makes reasonable efforts to reverse the effects of the adverse action, including reestablishing employee benefits for which the employee or contractor otherwise would have been eligible if the adverse action had not been taken.

Importantly – in what seems to be an oversight by the Legislature – the hefty $50,000 penalty cannot be avoided by the employer if the adverse action by the employer is something other than a refusal to hire, termination or suspension. By way of example, if an employer refuses to hire an applicant because the applicant is not vaccinated against COVID-19, the employer can avoid the administrative penalty if the applicant is then hired for the position when this violation is brought to light. However, as to a current employee, if an employer requires an employee who is unvaccinated against COVID-19 to work remotely or takes some other action “that a reasonable person would consider was for the purpose of punishing, alienating, or otherwise adversely affecting [the] employee,” whatever that action may be, and if it cannot be remedied by reinstatement, the employer has no remedy in the statutory language to avoid the $50,000 penalty.

In addition to the $50,000 penalty, the statute also affords the commission the right to require the employer to pay the reasonable costs of its investigation, regardless of whether the employer takes corrective action to avoid the penalty.

What Should Texas Employers Do in Response to the Enactment of This New Law?

Texas employers are advised to pull back their policies mandating COVID-19 vaccines for Texas employees and contractors. Employers should also carefully review their policies and actions taken with regard to the COVID-19 vaccine, including policies requiring remote work, separate work spaces or other similar requirements for those who are not vaccinated against COVID-19. It is unclear what may be interpreted as an adverse action in this context because the carve-out allowing healthcare facilities to require use of protective medical equipment could implicate masking or other protective requirements instituted by employers for those who are unvaccinated and exposed to COVID-19. Employers should work with their employment law counsel to tackle these ambiguities on a case-by-case basis.

Are There Future Expansions of This Legislation on the Horizon? There is currently some support for expanding the application of this prohibition beyond employees, contractors and applicants to any person entering an employer’s premises. H.B. 34, which sought to preclude vaccination status from impacting any person’s admission to any employer’s facilities, was introduced during the fourth special session of the 88th Legislature. Although H.B. 34 died because no action was taken prior to the end of the fourth special session, it, or something similar, will likely be introduced during the next legislative session. It is important for Texas employers to be aware that the Legislature may change or expand the prohibitions included in this act, and they are encouraged to reach out to BakerHostetler’s employment counsel before adopting any measures prohibiting or restricting unvaccinated employees’ and contractors’ employment or preventing customers from entering the employer’s premises.

A New Year, and a New Law You May Have Missed: Texas Employers No Longer Can Require COVID-19 Vaccinations

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