Seyfarth Policy Matters Newsletter - April 17, 2020

President Trump Promises to “Open[ ] Up America Again.” Last night, the Administration held a press conference to unveil its plan to re-open the American economy. Specifically, the Administration issued guidance for states to re-open their respective marketplaces. The guidance suggests three phases for re-opening, each of which entails easing restrictions in areas with low transmission of the coronavirus and high health care delivery capacities, while maintaining restrictions in harder-hit locations until they improve. President Trump reminded the country that “this is a gradual process” with no deadline for reopening the economy. In an about-face from President Trump’s position earlier this week, the guidance leaves important decisions such as when to reopen to the governors. While the guidelines chart a general path forward by enumerating a lessening of restrictions as cases and symptoms decline, with useful practical examples, less clear is the criteria which will be used to evaluate these threshold questions and, particularly in the absence of widespread diagnostic testing, how progress will be accurately measured. Seyfarth has prepared a comprehensive summary of the guidance, as well as strategies for developing a return to work plan.

CARES Act Funds Now Dissipated while Banks Pump out Billions in Funds. The Small Business Administration formally posted yesterday that the Paycheck Protection Act Program (PPP) had run out of money and no further applications could be considered. Republicans and Democrats agreed that more stimulus money is required as the Paycheck Protection Program funds quickly dwindled. While the PPP is the attention-grabbing stimulus program in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the stimulus also boosted the SBA’s Economic Injury Disaster Loan program, or EIDL, which is also set to run out of money imminently. As we noted here, the parties continue to clash over an additional stimulus package, even as business and banks implore Congress to pass additional stimulus. We expect a push for not just additional funding, but also additional worker protections related to hazard/premium pay, and beyond. Regardless of this contentious backdrop of uncertainty, Congress announced it will extend recess until at least May 4, without passing much-needed additional stimulus. Mitch McConnell announced he will continue to whip support for an additional $250 billion in stimulus. Note that with the both the House and Senate out of session, unanimous consent is needed to pass anything—meaning in plain terms any one Senator or Member of Congress can block whatever may be up for consideration. Given members’ insistence they will adhere to the recommendation of health officials, even the May 4 return date remains uncertain. All COVID-19 updates, including updates concerning the stimulus in the CARES Act, can be located in Seyfarth’s handy COVID-19 Resource Center.

COVID-19 Forces Intellectual Property Agencies to Alter Rules. While the vast majority of attention to the CARES Act relates to the stimulus packages, the Act also granted temporary authorization to the Director of the United States Patent and Trademark Office (USPTO) to “toll, waive, adjust, or modify” any patent or trademark-related deadlines. As Seyfarth detailed here, here, and here, the USPTO has taken the position that the COVID-19 pandemic constitutes an “extraordinary situation” warranting suspension of certain rules relating to trademark filings, namely, waiver of certain fees associated with the revival of abandoned or cancelled marks. It seems clear that COVID-19 has interrupted business and trademark use for a large number of trademark registrants. Industries such as hospitality, food service, retail, travel, tourism, and others will be especially affected. 

EEOC Issued Additional COVID-19 Technical Assistance. Today, the EEOC issued updated guidance on COVID-19 as it relates to the ADA, the Rehabilitation Act, and other EEO Laws. The guidance seeks to provide employers information regarding subjects such as disability-related inquiries, medical exams, confidentiality of medical information, hiring and onboarding, reasonable accommodation, and furloughs and layoffs. Most importantly, however, the EEOC reminds employers that it will continue enforce employment non-discrimination laws despite the Pandemic.

COVID Relief for Main Street Businesses. Late last week, the Federal Reserve Board (“Fed”) announced it will purchase up to $600 billion in loans using funds appropriated to it under CARES Act to support lending to small and medium-sized businesses impacted by COVID-19. The program, established under authority granted to the Fed under section 13(3) of the Federal Reserve Act, will cease participations on September 30, 2020, unless extended by the Treasury Department. Lenders will be required to retain a 5 percent share of the new loans or upsized tranche of an existing loan, as applicable, and will sell the remaining 95 percent to the Main Street Program. Guidance for banks is expected from the Federal Reserve later this week.  Employers interested in securing a loan under this program should run, not walk, to inquire—if the PPP was any kind of harbinger, the Main Street fund will likely dissipate quickly.

Reversing Course on PPE? The CDC apparently started a policy trend when it recommended using face coverings, despite previous recommendations to the contrary. On April 7, Los Angeles Mayor Eric Garcetti issued an Emergency Order requiring all employees, third-party workers, and visitors to wear non-medical grade face coverings over their noses and mouths. Businesses subject to the Order retain the discretion to refuse admission or service to any customer or visitor who fails to comply with the face covering requirement, as Seyfarth explained in more detail here. Right on the heels of the California order, New Jersey Governor Phil Murphy signed Executive Order 122, which requires, as Seyfarth explained here, that all essential businesses authorized to maintain some degree of in-person operations must require workers and customers to wear cloth face coverings while on the premises. The Order further specifies that most businesses must provide, at their expense, face coverings and gloves for their employees. On April 13, New York Governor Andrew Cuomo signed an Executive Order directing employers to provide essential workers with cloth or surgical face masks and requires employees to wear those masks when directly interacting with the public. While New York’s announcement closely followed similar state-wide orders, as Seyfarth noted here, New York’s Order is much more limited and differs in important respects. This week, U.S. Secretary of Education Betsy DeVos announced that career and technical education programs can donate or loan PPE purchased with federal funds. Seyfarth has detailed the FDA’s guidance on PPP here and here.

Mass Layoffs Due to COVID-19 May Be Excepted from Onerous N.J. WARN Act. On April 9, Senator Joseph Cryan (D) introduced S. 2353, proposing amendments to NJ WARN in response to the ongoing COVID-19 pandemic. These amendments (if passed) will modify the amendments in S.3170, recently signed into law, as detailed here. The new amendments would exclude COVID-19 related layoffs from coverage under the severance provisions of NJ WARN, and would also add a new national emergency/natural disaster mass layoff exclusion going forward. As Seyfarth noted, the amendments would also change the effective date of the January 21, 2020 amendment to 90 days after the date that the Governor of New Jersey lifts the State of Emergency announced in Executive Order 103. For a more comprehensive summary of the NJ WARN Act, visit Seyfarth’s detailed analysis of the same here.
 
Despite the Administration’s Views on Federalism, States Band Together to Prepare for a Future Return to Work. Speaking on a conference call this past Sunday, the governors of New York, New Jersey, Connecticut, Pennsylvania, Delaware and Rhode Island agreed that it was essential to work together in developing plans to reopen businesses, schools and public transportation after weeks on lockdown. Cuomo declined to discuss a date, but said "we're not talking about the next two weeks to three weeks. We're talking about months. We're talking about a phased reopening.” Cuomo likened the reopening of the economy to slowly turning a valve, while keeping an eye on the “meter” of the infection rate. His analogy mirrored the opinion of Dr. Robert Redfield, director of CDC. California Governor Gavin Newsom announced a similar pact between California Oregon and Washington. Both Governor Newsom and Cuomo have announced a guiding theme of these agreements is to let science, not politics, determine when to lift social and business restrictions. The announcements came as President Donald Trump asserted—despite the serious constitutional implications—on Monday afternoon that he, not the governors, would decide when stay-at-home orders could be lifted. The President also—again, not without controversy—announced he would be starting his own “task force” for re-opening the economy. Based on Thursday's media reports, this new initiative has gotten off to a rocky start, with business executives warning the government should focus on testing prior to re-opening the economy.

Virginia Legislature Passed More Employment-Related Obligations. As we here at PMN previously noted here, for the first time in a long time, Virginia democrats have scored a hat trick: control of the House of Delegates, the State Senate, and the Governor’s Office. This political dynamic has resulted in the Commonwealth passing a dizzying array of pro-employee legislation, as Seyfarth detailed here. This past Saturday, Governor Ralph Northam signed a bill outlawing discrimination in the workplace against individuals because of sexual orientation, making Virginia only the 21st state to pass anti-discrimination protections for the lesbian, gay, bisexual, transgender and queer community.