As a result of the COVID-19 pandemic, most businesses were faced with making difficult decisions regarding their workforce. The U.S. Bureau of Labor Statistics reported that, in April, the unemployment rate rose to 14.7 percent totaling 23.1 million unemployed. While the number of new unemployment claims appears to be dropping, for the week ending May 2, 2020, the number of initial unemployment claims made is still figured at 3.16 million.

As businesses prepare to reopen, many employers may find themselves grappling with employee refusals to return to work based on concerns over possible exposure to COVID-19 infection or because employees may be faring better under the unemployment benefits system.

Are Employees’ Health Concerns Protected?

Section 7 of the National Labor Relations Act (“NLRA”) gives employees the right to engage in “concerted activities” for “mutual aid or protection.” For activities or conduct by employees to be “concerted,” employees must act “with or on the authority of other employees.” This includes activities or conduct by a single employee designed to initiate or induce group action.

Even if the activity is “concerted,” it must also be shown to be “for mutual aid or protection” in order to be protected under the NLRA. “Mutual aid or protection” refers to the goal of the activity. In short, the activity must be shown to be for the purpose of improving the terms and conditions of employment of the employees as a group.

If the employee conduct or activity meets those conditions, it is protected. Disciplining or treating employees unfavorably for engaging in such activities constitutes an unfair labor practice.

If two or more employees refuse to comply with their employer’s work assignments or directive to return to work, based on an honestly-held belief that compliance with the assignments or directives would expose them to contagion, their refusal to comply would constitute protected activity. This is true even if the refusal and concern are expressed by a single employee on behalf of others and even if the employer disagrees with the employees’ assessment of the risk. So long as the employees’ concerns are reasonable and based on a good faith believe that the assignments or directives would expose them to infection, their refusal to perform would be protected activity under the NLRA.

As stated in a prior posting in our Labor and Employment Blog (see Concerted Activity or Mere Griping, July 11, 2019), the NLRA’s protection is not extended to activities of a purely personal nature that do not involve or envision group action.

Whistleblower Violations

Even if employees are not engaging in concerted activity, complaints made about safety issues in the workplace that are personal in nature may still raise questions of whistleblower liability.

Whistleblower protections exist under most employment laws. Employers generally defend against whistleblower claims by basing their employment actions on legitimate, nonretaliatory reasons. Employers may want to first ensure, however, that all required safety measures have been taken and the work environment is safe. Even with a valid defense, employers may still need to be prepared to address any employee concerns over safety measures.

Families First Coronavirus Response Act (“FFCRA”)

Under the newly enacted FFCRA, private employers with fewer than 500 employees are required to provide covered employees with expanded family and medical leave if they are unable to work (or telework) because of the need to care for a minor child whose school or place of childcare has been closed or whose childcare provider is unavailable due to a public health emergency.

Covered employers must also provide up to 80 hours of emergency paid sick leave if an employee is unable to work or telework because the employee:

1. Is subject to a federal, state or local quarantine or isolation order related to COVID-19;
2. Has been advised by a health care provider to self-quarantine related to COVID-19;
3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
4. Is caring for an individual subject to an order described in (1) or self-quarantining as described in (2);
5. Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
6. Is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

The FFCRA prohibits employees from being discharged, disciplined or discriminated against for taking (or seeking to take) emergency paid sick leave, filing a complaint or instituting a proceeding to enforce the FFCRA or testifying in such a proceeding. Similarly, employers are prohibited from interfering with, restraining or denying an employee’s right to take expanded family medical leave and cannot discriminate against an employee for opposing unlawful practices under the FFCRA, or interfere with proceedings initiated to enforce any rights under the Act.

Accordingly, if employees are refusing to work because of COVID-related reasons, employers may want to confirm that the employees are not entitled to emergency paid sick leave or expanded family medical leave or that the employees are not otherwise opposing unlawful practices under the FFCRA.

Occupational Safety and Health Administration (“OSHA”)

The United States Department of Labor (“DOL”) has reminded businesses that employees cannot be retaliated against (terminated or disciplined, etc.) for raising health concerns about the workplace during the coronavirus pandemic. OSHA enforces numerous industry-specific whistleblower statutes under its whistleblower protection program, which could be implicated in the current situation.

Other Legal Considerations Regarding Medical Leaves and Disabilities

Employees’ personal concerns about being exposed to COVID-19 at work may also raise leave and accommodation issues under other employment laws, including the Family Medical Leave Act and the Americans with Disabilities Act.

Family Medical Leave Act (“FMLA”)

The FMLA provides eligible employees with up to 12 workweeks of unpaid leave for various qualifying reasons, including when an employee’s serious health condition renders him/her unable to perform his/her job. Eligible employees are also entitled to FMLA leave when they need to take time off to care for their spouse, child or parent who has a serious health condition. A serious health condition is defined as an illness, injury, impairment or physical or mental condition that involves inpatient care requiring an overnight stay at a hospital or medical facility, or more than three consecutive, full calendar days of incapacity and continuing treatment within 30 days.

By this definition, FMLA leave is generally not available for short-term conditions or common ailments with very brief treatment and recovery periods. However, short-term conditions, such as flu or COVID-19, could constitute a serious health condition if complications arise that meet the definition of a serious health condition.

Accordingly, employees may be entitled to FMLA leave based on their own serious health condition or the need to care for a family member with a serious health condition, including complications from COVID-19.

Americans with Disabilities Act (“ADA”)

Under the ADA, employers who are on notice that an employee who is a qualified individual with a disability requires a reasonable accommodation to perform his/her essential job functions must engage in the interactive process and provide the employee with a reasonable accommodation unless doing so causes the company an undue hardship.

Because some disabled employees may be at higher risk for contracting the coronavirus based on their underlying medical conditions, the Equal Employment Opportunity Commission recommends that upon the employee’s request, an employer considers whether reasonable accommodations are available that will allow that employee to stay out of the workplace or enhance social distancing and other protections at work. If an employee is unable to telework, then one possible accommodation is to provide the employee an unpaid leave of absence, while also making clear that the employee’s position is not necessarily guaranteed if the business reopens and the employee is unable to return to work. Employees who cannot perform their essential job functions may need to be transferred to a vacant alternate position.

Other medical conditions, such as PTSD, depression or heart conditions, also could be triggered or exacerbated by the current stressful situation caused by the COVID-19 pandemic and require accommodation. Once on notice that an employee’s refusal to return to work is disability-related and the employee requires a reasonable accommodation, employers and employees must engage in the interactive process under the ADA.

In addition to requiring that disabled employees receive reasonable accommodations, the ADA also prohibits discrimination and harassment against disabled employees and against employees who are not necessarily disabled, but who have a relationship with or are associated with a disabled individual. The ADA does not require such employees to be accommodated, but additional considerations may need to be made under other federal and state laws. Employers may also want to ensure that disabled employees and employees associated with a disabled individual are not being subjected to disability-related inquiries or disparate decision-making in reopening.

Having to Compete with Unemployment Insurance Benefits

Minimum wage and part-time employees who have filed claims for unemployment, may find themselves faring better under the additional benefits afforded to them under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and state unemployment laws. As a result, employers may face challenges in recalling those employees back to work.

While eligibility for unemployment insurance varies by state, under most states’ unemployment systems, employees who fail to actively seek work or refuse an offer or referral to work are disqualified from receiving benefits. The requirement to actively seek work, however, is generally being temporarily suspended or waived in determining eligibility for receiving unemployment benefits under the CARES Act.

As the DOL makes clear in its unemployment insurance guidance, even though employees presently do not have to actively seek work to qualify for CARES Act benefits, that requirement may change as businesses reopen, and the duty to accept an offer or referral of suitable work is not being waived. Thus, employees being recalled for work may not simply elect to remain on unemployment, absent some other qualifying reason for continuing to receive unemployment benefits. Employers may also contest employees’ claims for unemployment if suitable work is being offered. States such as Ohio, Missouri, Iowa and Alabama even require or facilitate reporting by employers as part of their unemployment system.

The DOL and some states have further advised that employees who quit a job in order to access unemployment could be engaging in unemployment insurance fraud. Employees cannot lawfully make false statements or withhold information on their applications about their true reason for seeking benefits. Doing so could subject employees to civil and criminal action.

Reduction of Loan Forgiveness Amount Under the Paycheck Protection Program (“PPP”)

The PPP is a CARES Act loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The Small Business Administration (“SBA”) will forgive PPP loans if employees are kept on the payroll for eight weeks and the money is used for eligible payroll expenses (e.g., at least 75 percent of the forgiven amount must have been used for payroll), rent, mortgage interest or utility expenses. To date, more than 4.2 million American businesses have received PPP funds guaranteed by the SBA.

Many businesses who have received PPP funds are struggling to get their previously-furloughed or laid-off employees back to work, which could reduce the employer/borrower’s forgiveness amount. In many instances, such employees can receive greater amounts of weekly unemployment benefits compared to their regular wages and they are thus refusing employers’ offers to come back to work.

Hearing this overwhelming concern from businesses, the SBA and U.S. Treasury clarified on May 3, 2020 that they will grant an exception for employers who have their offers of rehire turned down by employees. The SBA is excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the loan forgiveness reduction calculation. A forthcoming Interim Final Rule is expected to specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. Thus, employers who are recipients of PPP funds may want to consider documenting their written offers of rehire, and any employees’ rejections of such offers, to take advantage of this exception and in an effort to avoid a reduction in the amount of the loan that is forgiven.

Takeaways

Employers confronted with employees’ refusal to return to work may want to consider the following takeaways:

• Analyzing whether an employee’s conduct is protected concerted activity and contacting counsel in formulating a response, as taking adverse actions against protected employees is rife with risk
• Implementing appropriate safety measures in the workplace, training employees and documenting such efforts
• Maintaining open communication with employees, which may help clarify an employee’s true concerns (e.g., does the employee have underlying health issues, have someone at home who is high risk, have health issues that are being triggered, etc.) and determine the appropriate response
• Considering whether an employee is entitled to any form of protected leave or other accommodation
• Employers who are recipients of PPP funds may want to document their written offers of rehire, and any employees’ rejections of such offers, in an effort to avoid an unintended reduction in the amount of the PPP loan that is forgiven.

Footnotes:

1. See Bureau of Labor Statistics, U.S. Department of Labor, News Release, Employment Situation Summary–April 2020, dated May 8, 2020.
2. See U.S. Department of Labor, Employment and Training Administration, Unemployment Insurance Weekly Claims Report, May, 2020.
3. See U.S. Department of Labor News Release, U.S. Department of Labor Reminds Employers That They Cannot Retaliate Against Workers Reporting Unsafe Conditions During Coronavirus Pandemic, dated April 8, 2020, available at https://www.dol.gov/newsroom/releases/osha/osha20200408.
4. See Wage and Hour Division posted FAQs on COVID-19 and the FMLA, available here: https://www.dol.gov/agencies/whd/fmla/pandemic.
5. See Equal Employment Opportunity Commission, What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws, available at https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws.
6. See U.S. Department of Labor, Unemployment Insurance Relief During COVID-19 Outbreak, available at https://www.dol.gov/coronavirus/unemployment-insurance; and Unemployment Insurance Program Letter 23-20, available at https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=4621.
7. See Paycheck Protection Program Reports (Round 1 and Round 2), available here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program.
8. See Paycheck Protection Program Loans Frequently Asked Questions (FAQs) as of May 6, 2020, available here: https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2006%2020.pdf.