Ken Yerkes, partner, Barnes & Thornburg, discusses how traditional labor law viewpoints have morphed with the downturn of unions and the effect of COVID-19.
OSHA’s Emergency Temporary Standard (ETS) requiring employers with 100-plus employees to have their employees either be fully vaccinated or subject to weekly COVID-19 testing has been a hot topic. The Supreme Court recently blocked the ETS. What is your response to the ruling, and what does this mean for employers?
While the ruling certainly provided a great deal of relief of to many employers, I was not terribly surprised by the decision. The Supreme Court made it all but clear that OSHA overstepped its authority when it issued the ETS. Significantly, the court did not limit its analysis to the unique standards governing an emergency temporary standard, but its ruling reaches beyond that. The court explained that OSHA’s rulemaking authority falls under the general umbrella of regulating workplace hazards, and in the court’s view, COVID-19 is not unique to the workplace.
The Supreme Court’s ruling reinstitutes a forceful stay and prevents OSHA from enforcing the ETS. Employers are no longer required to comply with the ETS requirements, including vaccination policies and weekly testing requirements. Employers who already undertook efforts to impose such requirements now have the option to pause or roll back those requirements.
Given the Supreme Court’s decision, how should employers move forward?
What I’ve told clients is that they need to think first about what is best for their organization—not from the standpoint of “What do we think we’ll have to do regarding whether the injunction is permanent or not,” but “What do we think we should do given our workforce and our point of view with respect to mandatory vaccinations?” I’ve had numerous employers tell me, “We’re going to do the right thing, whether or not the government tells us to.”
There are other employers that will say, “I’m going to be very thoughtful about what I do because I don’t know that I have leverage to mandate a vaccination” or “I don’t know if I’ll have a workforce if I try to mandate.” Factoring in opportunities for people to change jobs (even though they may face some of the same challenges with respect to vaccination), there are easily 20 percent to 30 percent of workers in the manufacturing, warehousing and logistics arenas that are unpersuadable. I would include healthcare workers in that as well. With respect to that cohort, you need to think about whether you have the ability, in the absence of a federal mandate, to push forward with an aggressive vaccination agenda. If not, you now can plan for a different approach than the ETS would otherwise require.
I’d also ask the question, “Are we going to treat management and hourly workers the same?” In companies where the hourly workforce has leverage because the employer can’t operate without them, or where there is a unionized workforce, an employer mandating vaccines or testing for its white collar or management employees but not for its hourly workers must ask itself “What signal does that send? If I’m only able to get my white collar managers vaccinated, but walk away from my hourly workforce, what am I accomplishing?”
Don’t view this as “What is the government going to tell me I have to do?” but rather “What do I think is the right thing to do for the company and for the health and safety of our employees?” Now that OSHA’s ETS has been blocked, you’re going to want to think about the types of policies and protocols needed to protect workers, not to be strictly compliant with the ETS. In other words, to ask yourself what are we currently doing in our COVID-19 safety plan and what changes, if any, are needed? These are the questions that need to be asked and the sort of spadework that can be done.
What is the status of the federal contractor mandate?
As with the other federal vaccine mandates, numerous lawsuits have been filed to attempt to block the Executive Order imposing a vaccine mandate on federal contractors. Several injunctions are currently in effect, and at least one of which is applied on a nationwide scale.
As the litigation advances, the challengers face a key distinction from the ETS mandate – one based on contract. The federal government historically has been given wide berth by courts in determining the conditions it can impose on private employers who want to do business with it. And the view is that, theoretically, an employer doing business as a federal contractor is doing so of its own accord. You either take the contract with the conditions that the federal government assigns, or you don’t.
Conversely, as it did with the OSHA ETS, would the Supreme Court reach a similar conclusion for the federal contractor mandate? If the federal government is limited in the terms it may impose for its contractors, would vaccine requirements designed to reach a public health goal be beyond its authority? It’s a different analysis and it has led to differing conclusions. If I’m a federal contractor subject to the mandate, I am clear that my contractors and I are going to have to comply, because without federal contracts, we’re not in business. So you have a way to get a little bit more traction if you’re a federal government employer with a mandate.
What are some other COVID-19 concerns for employers with unionized shops?
The primary concern is the bargaining obligation imposed by the National Labor Relations Act for the effects of an imposed rule or an action. And that bargaining obligation is being viewed quite expansively by the current National Labor Relations Board. The NLRB’s general counsel has issued a memoranda clearly communicating to the employment community that the board will expect employers to come to the table on a host of issues, from discipline, job security and safety to leave for obtaining the vaccination, costs of testing—a very hot topic—and procedures for testing the unvaccinated. It’s just a surface description of the types of issues that a union would likely raise. Bottom line: Employers have far less flexibility when dealing with a bargaining unit than with a non-organized workforce. You want to make sure that you follow the process to a T, or you will end up with an unfair labor practice charge for failing to appropriately deal or bargain with a union over COVID-19 issues.
As you look at COVID-19 concerns, you need to appropriately assess the risk as well as how far you can push, and what leverage you have over, the union. We talked about leverage earlier for all private employers, but there are other leverage points specific to union shops, including how strong it is, how likely it can lead, and your internal consistency and alignment as a management group on some of these key bargainable issues. You may recall that Tyson Foods, which ended up on the front page of the Wall Street Journal, is an example of a company that was able to successfully negotiate the implementation of its mandatory vaccine policy with its various unions. You do not want to get over your skis and act before you’ve met all of the appropriate standards under the NLRA.
You’ve had a long and distinctive career in traditional labor law. What is different now about union negotiations vs. when you began? And what is the same?
I started doing this back in the early ’80s and coming out of the ’70s there was a great deal of labor-management warfare, with strong ideological lines being drawn. Many of the most important, heavily unionized employers were in urban areas or in areas where unions had held sway over many years. There was a very us vs. them approach to negotiations and union-company relationships. Unions at that time had a greater percentage of the workforce and a lot more leverage than today. At one point, unions represented more than 20 percent of the workforce in some states. Today, on a national basis, private-sector unions represent only 6 percent of the workforce.
Today, the relationships between the unions and companies I work with are much better. The parties do not start off assuming there will be war, but rather looking for ways to find solutions and common areas where they can reach agreement. Certainly, wages and legacy benefits, such as pension and retiree health, remain strongly contested at the bargaining table. But the discussion is driven more by economics than ideology; and cost and capability, as opposed to moral obligation, which makes it a little easier for the parties to have a rational debate.
There are positives to take away from both eras, but on balance, the management-labor relations are more cooperative than they were in the past.
One other thing. Beginning in the ’80s, companies began moving out of those high-union-density areas and into more rural environments, particularly in the South. In doing so, they brought prosperity to communities that didn’t previously have it (as opposed to areas where they had always had it and just wanted more). Being more positively received also had an impact on the overall tone of employer-employee relationships as we progressed into the late ’90s and 21st century.
What regulations do you think employers will find most challenging going into 2022?
On the COVID-19 side, with the ETS sidelined and with Centers for Medicare & Medicaid Services regulations mandating healthcare workers to get vaccinated moving forward, you’re going to see the continuation of efforts to manage COVID-19 through the employment relationship. Now that the ETS is enjoined, government attempts to control coronavirus-related restrictions will continue in a patchwork fashion at the state and local level in 2022.
Another regulatory area of greater concern from an employer standpoint is the NLRB general counsel’s open solicitation of cases that can be prosecuted to change the prior board or boards’ rule of law.
The current NLRB has a more aggressive view of labor’s place at the table and is openly looking for ways to maintain its relevance into the immediate and long-term future. In other words, if only 6 percent of the total workforce is unionized, that means 94 percent is not represented by unions. How can the board: 1) make it possible for that 6 percent to have greater power and/or 2) create an environment where the other 94 percent receive greater attention from, and are accorded greater rights by the NLRB, than they’ve enjoyed in the past? One approach would be through actual rule-making that could create advantages for unions that have been disadvantaged by the slower and more cumbersome litigation model. This pivot would strike at the core of employers’ ability to manage its workforce in the way it has of late.
How do you view the ‘Great Resignation’ and why are employers having a hard time finding workers, particularly in the restaurant and logistics fields?
You’ve got a couple of things going on. Up until September 2021, you had generous unemployment compensation benefits that served as a disincentive for people to look aggressively for work. And while I think we’ll see a steady increase in job-hunting over time, many people have gotten out of the habit of work, particularly in fields such as restaurant and logistics where wages and benefits were low relative to other markets. These sectors have also become less attractive because the high-density contact with customers raises fears of COVID-19 infection and because they are now competing with sectors offering fully remote or hybrid remote work, which is particularly appealing to employees with kids.
We must put the right incentives in place to encourage people to return to the workforce, creating value for them and for employers at the same time. While wages are up and that’s been a positive, inflation has prevented what should be a net boondoggle for employees. Perhaps if inflation eases and there really is some meaningful impact of those wage increases, we’ll see people go back to work.