Seyfarth Policy Matters Newsletter - May 7, 2020

Capitol Hill Debate Over Liability Protection for Businesses Roars On. As the country attempts to “reopen”—and indeed is being encouraged to do so by the administration—from the grips of COVID-19 closures, employers across the country have requested liability protections from lawsuits borne out of the Pandemic. While Mitch McConnell and the Republicans have pledged to insist on such protections for businesses, Nancy Pelosi and the Democrats have also pledged to vigorously oppose such a shield. Indeed, Democratic Senator Richard Blumenthal recently stated that “[a]n absolute blanket shield from any and all legal accountability is going to be a non-starter.” In the center of this fight is an effort by Senator Cornyn to shield businesses from liability over coronavirus-related claims as long as they comply with government guidelines. The variations of what such legislation would actually look like are incalculable. Fortuitously, Seyfarth recently published an in-depth piece exploring the legal ramifications of compliance, or non-compliance, with such guidelines absent Congressional directive, and discussed various factors that federal liability legislation could address.

States Expand Workers' Compensation Benefits for Employees. The debate over liability and benefits related to COVID-19 is certainly not relegated to the halls of Congress — while Congress seeks to shield businesses and employers from liability, states aggressively seek to expand protection for employees. This week, New Jersey State Senators Stephen Sweeny and Robert Singer introduced a bipartisan bill, S2380, that would create a rebuttable presumption that the contraction of COVID-19 by an essential employee is work-related for purposes of the workers’ compensation system. The presumption would enable essential employees to more easily access employment benefits provided for work-related injuries and illnesses. The Illinois Workers’ Compensation Commission issued an emergency order back on April 16, which created a presumption that work is the cause of COVID-19 if contracted by any essential employee identified in Governor J.B. Pritzker’s March 20 stay-at-home order (which includes workers at grocery stores, laundries, banks and hardware stores, among other businesses). Last night, California Governor Gavin Newsom signed a similar executive order that will make it easier for essential workers who contract COVID-19 to obtain workers’ compensations benefits. In effect, these orders shift the burden of proof that typically falls on workers and instead requires companies or insurers to prove that the employees didn’t get sick at work.

Federal Employment Agencies Pump Out—Sometimes Misinterpreted—Guidance. The U.S. Equal Employment Opportunity Commission (EEOC) will delay the anticipated opening of the 2019 EEO-1 Component 1 data collection and the 2020 EEO-3 and EEO-5 data collections because of the public health emergency. Also this week, the EEOC removed guidance from its website merely hours after posting. The removed guidance provided that an employer may ask about an employee’s known medical conditions if “an employer has a reasonable belief . . . an employee will pose a direct threat to himself in the workplace” and “only a determination of direct threat to self (i.e., to his own health) justifies exclusion from the workplace of an employee because he has a preexisting, underlying condition.” The EEOC said “[t]he information was subsequently misinterpreted in press reports,” but did not elaborate on what part of the guidance had been misinterpreted. The EEOC’s sister agency, the Department of Labor, also recently issued guidance noting that employers choosing to opt in to "workshare programs" may not have to cover any of the program costs. States typically make employers cover half the costs of short-time compensation benefits, which partially offset hour reductions, but the guidance provides that states may "choose not to charge" employers for payments to partially employed workers that meet criteria for full federal reimbursement under the CARES Act. More guidance is expected, and we here at PMN will continue to monitor developments. 

As Realistic Chance for Payroll Tax Cut Dwindles, Trump Administration Continues to Push. In somewhat of a surprise to many on Capitol Hill and beyond, the Trump Administration’s goal of including a payroll tax cut in the next round of COVID-19 relief is being dismissed not exclusively by Democrats, but also by lawmakers in his own party. Indeed, when asked about the proposed tax cut, Republican Senate Majority Whip John Thune flatly told reporters “I’m not a particular fan of that.” The bipartisan opposition to a payroll tax cut has not deterred the President, who has continued to tweet about including a payroll tax cut in the next round of COVID-19 legislation.

California Authorities Struggle to Conduct Business in the Face of COVID-19. California’s bicameral legislature finds itself at odds on the constitutionality of remote voting. The Assembly concluded remote voting could violate the California Constitution; the Senate, based on the same legal advice, passed an emergency resolution that allows Senators to participate and vote remotely as long as a single member convenes the meeting in-person at the Capitol. In California’s “lower house,” the Assembly, remote testimony is encouraged during committee meetings, which will take place in three large hearing rooms, anyone entering the building will get their temperature taken, and members will need to limit themselves mostly to their offices, except for when they have committee obligations. While a number COVID-19 oversight hearings have been set, the California Legislature has also scheduled hearings on non-COVID measures. In order to safely accommodate these hearings, the Legislature has implemented a number of restrictions, such as preventing lobbyists from entering the Capitol. 

The Work of the California Judiciary has Been Similarly Strained. Courts in California are attempting to function remotely, on a limited basis, to the extent it is safe and feasible. California’s Judicial Council adopted rules to address the COVID-19 Pandemic shut downs, including extending the statute of limitations, suspending evictions and judicial foreclosures, and allowing greater discretion to hold trials remotely and perform depositions remotely. The Chief Justice of the California Supreme Court has issued an order providing a 30-day extension of time, bringing extensions of time to hold criminal trials during the Pandemic to a total of 90 days. As Seyfarth noted here, the Eastern District of California already faced a crisis of judicial resources, which is now compounded by the Pandemic. For a comprehensive review of the Pandemic’s effects on Civil Litigation, see Seyfarth's coverage here and here.

NYC Council Committee Holds Marathon Hearing on “Essential Employees Bill of Rights.” On Tuesday, the New York City (NYC) Council Committee on Civil Service and Labor held a seven-hour hearing on a previously discussed series of bills that are wide-ranging, nuanced, and, if passed, would further adversely impact many businesses in NYC by imposing an array of new burdens on employers. Seyfarth issued a helpful alert regarding these bills here. In short, these proposals would mandate pay increases for all hourly employees of essential businesses and require progressive discipline and “just cause” before terminating an employee. A Seyfarth representative who attended Tuesday’s committee hearing co-reported that the NYC Council members and witnesses raised many issues with the bills, including: (1) that businesses and nonprofits cannot possibly afford the premium pay mandate without local, state, or federal funding; (2) the just cause termination provision would interfere materially with employers' ability to manage their workforce and overwhelm them with litigation; and (3) that the premium pay bill may constitute minimum wage legislation that is outside the scope of the Council’s legislative authority. Importantly, there does appear to be some room to improve the legislation as even sponsoring council members seemed open to reasonable compromise. Stay tuned for further updates.

New York and California Governors Take Steps Towards Reopening Their States. On Monday, New York Governor Andrew M. Cuomo presented a soft blueprint for how the state’s economy might begin to restart. He laid out a set of four core factors to determine if a region can re-open. And even when a region is permitted to re-open, individual industries will re-open in four phases, based on priority. The four factors were heavily influenced by guidelines issued last month by the White House, which Seyfarth covered here, and the federal Centers for Disease Control and Prevention. In remarks at an event in Rochester, NY, Governor Cuomo reiterated that the entire state would remain locked down until May 15, when his stay-at-home order is scheduled to expire. On the opposite coast, Governor Newsom announced on Monday that California is prepared to move into the early phase of Stage Two of the state’s four-stage plan to reopen businesses. Consistent with his reopening theme, Governor Newsom made clear the reasoning underlying the decision to move into the next phase: “data says it can happen.”

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