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The Labor & Employment Blog provides employers with breaking news, insights, and legal analysis on the wide range of labor and employment issues facing employers and businesses.  While the Blog provides a general summary of regulation updates, it is not intended to be, and should not be relied upon as, legal advice.  The labor & employment attorneys at Chamberlain Hrdlicka stand ready to counsel employers on the issues they face.

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Supreme Court Issues Opinions on OSHA and CMS COVID-19 Vaccination Rules

On January 13, 2022, the U.S. Supreme Court issued two highly anticipated opinions on the COVID-19 vaccination rules mandated by the Department of Labor’s Occupational Safety and Health Administration (OSHA) and the Centers for Medicare and Medicaid Services (CMS). Challenges to those rules had opposite outcomes, as set out in the opinions. The Court stayed OSHA’s Emergency Temporary Standard for COVID-19 Vaccination and Testing (OSHA ETS), but allowed the CMS Omnibus COVID-19 Health Care Staff Vaccination Interim Final Rule (CMS Rule) to move forward.

Background

OSHA’s ETS

On November 5, 2021, OSHA issued the ETS requiring all employers with 100 or more employees to implement either a mandatory COVID-19 vaccination policy or a policy allowing employees to undergo weekly COVID-19 testing and face covering as an alternative to vaccination. The ETS included additional requirements for employers, such as maintaining a roster of employee vaccination status and providing required information to employees. The ETS also required employers to compensate employees for their time spent receiving the vaccine and recovering from side-effects the employee experiences as a result of taking the vaccine. The Fifth Circuit quickly stayed the ETS, and the various lawsuits challenging the ETS were consolidated and assigned to the Sixth Circuit for consideration. The Sixth Circuit dissolved the Fifth Circuit’s stay and nationwide injunction after finding an immediate stay of the ETS pending full review on the merits was inappropriate. In doing so, the Sixth Circuit concluded, “there is little likelihood of success for the challenges against OSHA’s bases for issuing the ETS.” The decision allowed OSHA to begin enforcement of the ETS while litigation in the Sixth Circuit over the constitutionality of the ETS would continue. In response to the Sixth Circuit’s ruling, OSHA announced a January 10, 2022 deadline for employers to comply with most requirements of the ETS. Employers who failed to comply faced hefty fines of up to $13,653 for a standard violation and up to $136,532 for a willful one. Businesses, states, and employer groups immediately challenged the Sixth Circuit’s decision in the Supreme Court, which heard oral argument on January 7, 2022. OSHA did not announce further extensions to its January 10, 2022 deadline, and the Supreme Court did not issue a ruling prior to the deadline forcing many employers to undertake actions to comply with the ETS.

CMS Rule

The CMS Rule required all providers that receive Medicare and Medicaid funds to implement mandatory vaccination policies for their employees, with exemptions for medical or religious reasons. Contrary to the OSHA ETS, the CMS Rule did not allow providers to offer employees the option of testing and face covering. The CMS Rule required providers to institute a plan for vaccinating staff and for ensuring initial vaccine doses were received by December 6. The CMS Rule was enjoined by federal district courts in Louisiana and Missouri, and CMS appealed to the Fifth and Eighth Circuits, respectively. Both courts denied CMS’s request to stay the injunctions, though the Fifth Circuit lifted the injunction for certain states, allowing implementation of the CMS Rule to move forward in twenty-five states. CMS appealed to the U.S. Supreme Court for a stay of the injunctions in the Fifth and Eighth Circuits. Texas filed an independent challenge to the CMS Rule, and a Texas federal district court enjoined the CMS Rule.

January 13th Opinions

OSHA’s ETS

The Supreme Court found the challengers to the ETS are likely to prevail on their claim that OSHA’s mandate exceeds its statutory authority to impose the mandate. As a result, the Supreme Court stayed the ETS pending resolution of the challenges that remain pending before the Sixth Circuit and any subsequent appeal of those decisions to the Supreme Court. The Supreme Court acknowledged the Occupational Safety and Health Act granted OSHA authority to regulate occupational hazards and the health and safety of employees. However, the Supreme Court took issue with OSHA including all employers in the scope of the ETS, calling it a “blunt instrument,” drawing no distinctions based on industry or exposure risk. The Supreme Court determined COVID-19 was a universal risk rather than a work-related risk in most workplaces, though it acknowledged OSHA could enact targeted regulations “[w]here the virus poses a special danger because of the particular features of an employee’s job or workplace.” For example, the Supreme Court noted OSHA could regulate “risks associated with working in particularly crowded or cramped environments.” But permitting OSHA to regulate “the hazards of daily life” would expand OSHA’s regulatory authority without clear congressional authorization.

Having resolved the question of the proprietary of an immediate stay of the ETS pending full review of the challengers’ petitions for review, this litigation now returns to the Sixth Circuit. And while a decision on the merits of the ETS is before the Sixth Circuit, the Supreme Court signaled its position in finding that the challengers to the ETS are likely to succeed on the merits of their claim.

CMS Rule

On the other hand, Supreme Court sided with CMS regarding its Rule for health care providers that receive Medicare and Medicaid funds, staying the lower court injunctions of the CMS Rule. However, the individual challenge brought by Texas was not before the Supreme Court. As such, the CMS Rule is currently in effect in every state except Texas. CMS has now appealed the Texas injunction, and, citing the Supreme Court’s ruling, requested a stay of the Texas litigation pending the appeal. The district court has not yet ruled. In the states where no injunction was in effect, the deadline for individuals to receive the first dose of the COVID-19 vaccine is January 27, 2022. In the states at issue in the Supreme Court’s ruling, the deadline for individuals to receive the first dose of the COVID-19 vaccine is February 14, 2022.

Next Steps for Employers

OSHA’s ETS

Many employers are feeling whiplash having to comply with OSHA’s ETS after the Supreme Court did not enact a stay prior to the January 10, 2022 deadline. Although, employers should keep in mind that the Supreme Court’s decision is not a final determination on the validity of OSHA’s ETS, shortly after the Supreme Court handed down its opinion, the Biden Administration issued a statement saying it is now up to states and individual employers to determine whether to require employees to get vaccinated. Additionally, non-healthcare employers who required vaccination instead of allowing a choice to test and mask, must be cognizant of state and local orders that may restrict employers’ ability to terminate employees who object to a mandatory vaccination policy. Employers should consult with their counsel to determine the appropriate next steps and whether, depending on their work environment, they should maintain or revise the policies that are in place.

CMS Rule

Employers who are subject to the CMS Rule should begin taking steps to meet the requirements of the Rule, including: 1) identifying the individuals at your facility to whom the CMS Rule applies (including employees, licensed practitioners, students, trainees, volunteers, and contracted staff); 2) establishing policies and procedures to implement staff vaccination, 3) establishing policies and procedures to provide exemptions and accommodations to exempt staff; and 4) tracking and documenting staff vaccinations. Employers should also stay apprised of CMS’s modified timelines for compliance for the states affected by the Court’s ruling, which will likely be identified in the coming days. Texas employers should contact their counsel for the possible implementation of the CMS Rule requirements.

  • AmyJo "AJ"  Foreman
    Associate

    AmyJo "AJ" Foreman is an associate in the litigation section. Her practice focuses primarily on commercial litigation, labor & employment, and appellate matters.

    AJ graduated from the University of Houston Law Center where she was ...

  • C. Larry  Carbo, III
    Shareholder

    Larry Carbo maintains a commercial litigation practice focusing on representation of companies in employment matters including misappropriation of trade secrets, enforcement and defense of non-competition agreements and ...

  • Diana Pérez Gomez
    Shareholder

    Diana Gomez is a talented trial attorney with extensive experience in civil lawsuits in state and federal courts. She focuses on complex labor and employment disputes by providing a full range of employment law services to her ...

  • Elizabeth A. Feeney
    Associate

    Elizabeth "Liz" Feeney is an associate in the Commercial Litigation section, focusing primarily on labor and employment matters. She graduated from the SMU Dedman School of Law and began her career at a mid-sized firm in Fort Worth ...

  • Julie R. Offerman
    Shareholder

    Julie is an experienced litigation attorney in Chamberlain’s Houston office. She has substantial experience defending employers nationwide in wage and hour class and collective action lawsuits, including matters involving ...

  • Kellen R. Scott
    Shareholder

    Mr. Scott maintains a general civil litigation practice in state and federal courts, with particular emphasis on employment law, governmental defense, and civil rights.

    His practice includes the defense of employers and ...

  • Leslie T. Tan
    Senior Counsel

    Leslie Tan is an experienced attorney specializing in labor and employment matters and complex civil litigation. Ms. Tan enjoys guiding employers through challenging situations, from counseling on daily operations to ...