Policy Matters Newsletter – December 21, 2020

Oh Happy Day!  Stimulus Is Finally (Almost) Live. The House and Senate are scheduled to vote today on a $900 billion pandemic relief package along with a $1.4 trillion measure to fund the government through September 30, 2021.  But even if both houses are able to pass a relief bill, it still must be signed by the President. While there has been more movement than we have seen in months, and there is a tangible relief bill the major provisions of which the parties have agreed to, we remain in wait for finality.

So, what is there to report on the stimulus front? Well, starting last week, news outlets began reporting that the negotiating parties were on the cusp of agreeing to an approximately $900 Billion stimulus package. Indeed, while this newsletter typically goes live on Friday, since we here at PMN have rode the roller coaster that is the stimulus negotiations, and this is the most optimistic we have felt since the CARES Act passed back in March, we delayed publication to today. Thankfully, Congressional leaders, after much hand-wringing, came to a heavily-negotiated agreement on an initial proposal on Sunday, with large compromises coming from all sides, a little how James Madison and the other founding fathers envisioned our democracy functioning. The actual language of the relief bill was released on Monday afternoon.

According to the Washington Post, “[p]eople briefed on the talks say the draft of the roughly $900 billion proposal includes $600 in payments for individuals, $300-per-week in supplemental unemployment insurance payments and aid for small businesses". The two biggest sticking points — a liability shield for corporations and monetary aid to state and local governments — were simply a bridge too far for the parties to agree on, and were dropped, to be visited again later. However, some of the targeted expenditures such as transportation and education will assist local government. On a more micro level, the legislation can be broken down as follows:

• $286 Billion in Direct Economic Relief: All workers receiving unemployment benefits would continue receive an additional $300 per week through March 14, 2021, extends the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs, provides for Economic Impact Payments of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each child dependent.
• $35 Billion for Transportation: $15 billion will go to the airline industry for payroll support, $1 billion for airline contractor payrolls, $14 billion for transit, $10 billion for state highways, $2 billion for airports and airport concessionaires, $2 billion for the private motorcoach, school bus, and ferry industries, and $1 billion for Amtrak
• $345 Billion for Small Businesses: $284 billion would be added to the Paycheck Protection Program (PPP), $20 billion for new EIDL Grants for businesses in low-income communities, $3.5 billion for continued SBA debt relief payments, $2 billion for enhancements to SBA lending and $15 billion in dedicated funding for live venues, independent movie theaters, and cultural institutions;
• $69 Billion for Vaccinating, Testing, and Tracing: The bill provides more than $22 billion to states, for testing, tracing and COVID mitigation programs, $2.5 billion will be granted to target underserved areas.
• Other Appropriations: $82 Billion for Education, $10 billion for child care, $25 billion in rent and utilities support, $26 billion in food aid, $10 Billion to USPS, $7 Billion for Broadband
• Other Provisions: An extension of a federal eviction moratorium through January 31, 2021, extends and expands the refundable Employee Retention Tax Credit, permits lower-income individuals to use their earned, income from tax year 2019 to determine the Earned Income Tax Credit, and the refundable portion of the Child Tax Credit

So what caused the holdup over the weekend? A last-minute dispute over the Federal Reserve’s emergency lending authority threatened to derail the agreement. Specifically, Sen. Pat Toomey (R-PA), wanted to permanently end economic support programs enacted at the central bank during the outset of the pandemic. But, later Saturday, Sen. Chuck Schumer (D-NY) and Sen. Toomey reached an agreement on language to curtail the Federal Reserve's special lending authorities. Specifically, The compromise will fold the $429 billion in unspent CARES Act funding for Federal Reserve’s credit lending into the $900 billion coronavirus relief bill, while also closing some credit lending facilities created by the CARES Act and preventing the Fed from erecting replica facilities in the future without congressional approval. While many believe the $900 Billion number is simply too low, the Biden transition has said that it anticipates another stimulus bill by March after the impact of the vaccination program is understood.

House-Passed Legislation Is Actually Taken Up, And Passed, By The Senate.  The Senate on December 3 passed by unanimous consent an amended version of H.R. 1044, bipartisan legislation aimed at fighting discrimination in the U.S. immigration system. The bill would:

• End country of origin discrimination by eliminating annual country-of-origin caps on green-card visas
• Forbid all employers with workforces consisting of more than 50 percent temporary visa workers from sponsoring any new temporary visa workers.
• Close the B-1 temporary business visitor visa loophole used by many employers to avoid H-1B visa caps.
• Levy new fees on all H-1B applications that would be dedicated to investigating fraud in the H-1B system.

The amended version of the legislation is markedly different from the version that passed the house in 2019, requiring reconciliation with the house version, and a signature from the president. We here at the PMN share the American Immigration Lawyers Association opinion that this piece of legislation is unlikely to actually complete the legislative journey before the 117th Congress sits. But, that such a significant piece of legislation affecting employers actually passed the Senate is notable.

The Senate also passed via unanimous consent the Whistleblower Act of 2019, which would clarify the scope of whistleblower protections available for employees of federal subcontractors. Like H.R. 1044, the bill would necessitate reconciliation with the House and a signature by the President, neither of which are likely to occur before the new Congress sits.

The COVID-19 Vaccine is Here! Can Employers Require It?  While there may be legitimate business reasons to not institute a mandatory vaccine program, at the very least the EEOC has eliminated some of the uncertainty by releasing helpful guidance on what employers can and cannot require when it comes to the vaccine, which Seyfarth summarized here. Even before we had the benefit of the guidance. Seyfarth issued a helpful analysis of the guidance here. Pre-COVID, regulatory guidance from the EEOC and OSHA already authorized mandatory vaccine programs, provided that medical and religious accommodations were honored and free from retaliation. With the presumptive public health case for a COVID-19 vaccine being at least as strong as historical vaccines (e.g., seasonal flu, H1N1), we anticipated that the historical guidance would hold for a COVID-19 vaccine. According to the EEOC, it stuck: according to the guidance, employers may require that employees receive the COVID-19 vaccine (once it is available) as a condition of returning to, or remaining in, the workplace, but must attempt to accommodate employees who, due to medical disabilities or sincerely-held religious beliefs, decline or refuse to receive the vaccine.

While the EEOC guidance provides that employers may require the vaccine, it is just that: guidance without the force of law — there is no controlling legal authority on the subject. As such, employers deciding to mandate the vaccine must remain vigilant. For example, in mandating the vaccine, employers must be sure to not run afoul of the NLRA, which would protect employees who engage in protected concerted activity protesting mandated vaccinations. Employers should of course try their level best to follow "guidance" from federal agencies, but they should not assume that following the guidance will shield them from liability. Hopefully legally binding legislation or regulations will exist by the time the vaccine is readily available for most employees.

It Isn’t Legislation, But Recent Amendment To FRCP 30(b)(6) Should Be Highlighted.   As astute readers of this newsletter are likely aware, Rule 30(b)(6) governs the deposition of an organization (e.g., a corporation or a partnership) and requires, generally, that the notice of such a deposition set out with reasonable particularity the matters of examination. Seyfarth has been closely following changes to this rule and indeed prepared and submitted comments to the Federal Advisory Committee on Civil Rules regarding needed reform to Rule 30(b)(6). The amended Rule 30(b)(6)—which became effective on December 1, 2020—now requires that, “[b]efore or promptly after the notice or subpoena is served, the serving party and the organization must confer in good faith about the matters for examination.” The purpose of the amendment is to refine the list of matters for examination so the organization may be better able to designate and prepare an appropriate witness or witnesses. In theory, this should narrow 30(b)(6) topics to the benefit of defendants who must produce a 30(b)(6) witness. While it is beyond our prescience to foretell how this change will play out in practice, here is our note of hope this amendment will make the process of deposing a corporation smoother.

Banning Non-Competes Has Become All The Rage, And D.C. Joins The Ranks.  The bill, which won unanimous support on its first D.C. Council vote Dec. 1, would bar employers from imposing non-compete agreements on anyone working for them other than doctors earning more than $250,000 per year. Should the mayor sign the bill, joining the unanimous city council in supporting the measure, D.C. would join Illinois, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island, Virginia, and Washington state in banning non-compete agreements for low-wage workers. If the proposal becomes law, the district would be adopting a policy that is stricter than the ban on non-competes already on the books in other jurisdictions. Employers should expect similar restriction across jurisdictions. And while a federal ban on non-competes in unlikely, President-elect Joe Biden has voiced support for a similar ban.

President Trump’s DOL Is Racing To Finalize Proposed Rule On Independent Contractors.  As we noted here, The Trump team has pledged to finalize a number of conservative policy preferences through executive action, and the DOL is not immune from the rush. In late September, the DOL issued proposed new interpretations, defining employee versus independent contractor under the FLSA. The interpretations, if finalized, would provide clearer guidance for companies and, in many cases, could minimize the chances that courts apply the FLSA definition of employee to workers who seemingly should be treated as contractors. The DOL is seeking to finalize the rule by Christmas, with an effective date 60 days later. A late February implementation date would spare the Biden administration from inheriting a rule that has already taken effect. Subsequently, the Biden DOL leaders will have to weigh how long to halt the regulation before ultimately dropping it, whether to solicit public input on that decision, and how quickly a new, more worker-protective rule could be crafted to take its place. There is historical precedent for the first option happening, i.e., the Trump administration suspended a key Obama-era rule called Small Area Fair Market Rents. Additionally, if there are legal challenges brought under the Administrative Procedures Act challenging the rule, it is possible the DOL under Biden may decide not to defend the rule or find another avenue to rescind it.

Major Changes Potentially Coming to HIPAA.  As Seyfarth explained here, on December 10, the Office of Civil Rights issued a Notice of Proposed Rulemaking (NPRM) outlining its plan for major changes to the HIPAA Privacy Rules, which governs the way that most individual protected health information (PHI) can be used in the United States. By way of highlight, the NPRM would, inter alia: shorten response times for requests to access a patients’ own PHI; facilitate patient requests to share electronic health records between providers; lower the standard for disclosures of PHI to avert a threat to health and safety to “serious and reasonably foreseeable.” The NPRM is open for public comment for 60 days. Since the deadline for the comment period and any final rulemaking would be beyond the inauguration date for the Biden Administration, it is unknown whether the Biden Administration will continue this push towards loosening rules or reflect the priorities found in the NPRM.

Cal/OSHA Issued The Most Restrictive COVID-19 ETS Yet — Now Come The Legal Challenges.  As we noted here, long on Nancy Pelosi’s wish list has been a nationwide emergency temporary standard (“ETS”), as set forth in the House-passed HEROES Act. While the HEORES Act has languished since its passage months ago, late last month, California joined a handful of states when the California Office of Administrative Law adopted Cal/OSHA’s ETS. Shortly after the ETS became effective, Cal/OSHA issued Frequently Asked Questions and template documents and the Department of Industrial Relations issued other helpful information and resources.  Seyfarth summarized the ETS and its consequences here. As Seyfarth explains, concerns about the ETS are numerous. The most consistent criticism is that the ETS is redundant of already existing state and local requirements, as well as Cal/OSHA’s Injury Illness Prevention Program (“IIPP”) standard, which the Division has been using throughout the pandemic to enforce COVID-19 safety and health at workplaces throughout.

These legitimate concerns about the hefty regulation were enough for the National Retail Federation and the National Federation of Independent Business to file a lawsuit in California state court asking a judge to vacate the rule and, in the interim, immediately prevent the state from enforcing the standard while the court considers the case. The trade associations maintain that the ETS imposes potentially existential costs on employers. The case in San Francisco Superior Court, Nat’l Retail Fed’n v. Cal. Dep’t of Indus. Relations, is aimed in particular at the rule’s provisions for paid leave for workers suspected of having been in contact with a coronavirus-infected person.

 

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The Policy Matters newsletter is a publication of Seyfarth's Government Relations & Policy Practice and is authored by Leon Rodriguez, Scott Mallery, and Samuel Sroka. Leon Rodriguez is a Partner in Seyfarth's Washington, DC office and chairs the firm's Government Relations & Policy Practice Group (GRPG); Scott Mallery is Counsel in Seyfarth's Sacramento, CA office; Larry Lorber is Counsel in Seyfarth's Washington, DC office; and Samuel Sroka, J.D. is a Proposal Manager in Seyfarth’s New York City office.