July, 2021 | Fraser Blog

COVID Updates — The Latest News for Employers

Despite hopes that the COVID-19 pandemic would be behind us by now, the emergence of the more transmissible Delta variant and consumer opposition to vaccination use are leading to resurgence of infections and infection rates. Those health events are, in turn, causing local, state and now the federal government, governmental agencies, and employers, to revisit, and, in some instances, reinstate, workplace health and safety policies. Just as COVID health risks have not disappeared, so, too, Employers who do not remain compliant with changing rules are, or may become, exposed to liability or penalty.

While cases in Michigan remain relatively low, and the state government has indicated that no changes in policies are imminent, it’s important for employers to stay on top of the latest COVID-related developments. If we’ve learned anything over the last 16 months, it’s that we need to expect (and prepare for) the unexpected.

Can an employer mandate that its employees be vaccinated?

In May, 2021, the U.S. Equal Employment Opportunity Commission (“EEOC”) confirmed advice we had provided (see, EEOC Issues New Guidance on Workplace Vaccine Policies – FraserTrebilcock Blog (fraserlawfirm.com) that an employer mandate is allowed with respect to COVID vaccines allowed under Emergency Use Authorization (“EUA”) by the FDA, subject to the limitations discussed in the next section. The EUA-authorized vaccines are those manufactured by Pfizer, Moderna and Johnson & Johnson. Additionally, the Department of Justice released a Memorandum of Opinion on July 6 indicating that federal law “does not prohibit public or private entities from imposing vaccination requirements for vaccines that are subject” to an EUA.

Many employers have already announced vaccine mandates in both the public and private sectors. President Biden announced on July 29 that all federal workers must be vaccinated for COVID-19 or be subject to strict testing measures. Some state (e.g., California) and municipal (e.g., New York City) governments have imposed similar requirements for their employees. In the private sector, beginning primarily with healthcare providers, but increasingly in non-healthcare, employers including Google, Morgan Stanley, Goldman Sachs and others are also requiring that employees be vaccinated.

What exceptions must be allowed if vaccines are mandated?

Employers may mandate vaccines as long as they comply with the reasonable accommodation provisions of the Americans with Disabilities Act (“ADA”), Title VII of the Civil Rights Act of 1964, and other equal employment opportunity law considerations, including accommodations for medical or religious reasons. For more on the EEOC’s guidance regarding vaccines and reasonable accommodations, please reference our prior analysis of these issues.

Can employers ask their employees about their personal vaccination status?

Yes, but once that question is answered, employers should avoid inquiring about further medical information or history. We also covered this issue in our discussion of EEOC vaccine guidance . While federal guidelines require employers to provide a safe working condition, there is a risk that such a question, or any follow-up questions that relate to employee health, could be interpreted as a prohibited disability inquiry under ADA.

Can businesses ask their customers or clients about their personal vaccination status?

Neither state nor federal law restrict private businesses from asking for or requiring proof of vaccination to enter a store, office or other physical location of a business. Despite social media “memes” and misinformation recently circulating suggesting the opposite, inquiring about a customer’s vaccination status is not a HIPAA violation or a violation of constitutional rights.

Can employers require masks of employees while working onsite?

Generally, and subject again to worker disability law protections, employers have the legal right to require mask wearing onsite. There may be instances where a worker could refuse to wear a mask, such as if it negatively impacts job performance or safety, or he or she has a disability preventing mask use or a sincerely held religious belief. Employees who have a disability that interferes with their ability to wear a face mask may request a “reasonable accommodation” under ADA. Ford Motor Company recently announced that employees must start wearing masks again at plants in Missouri and Florida.

As cases continue to surge, more jurisdictions may begin mandating that employees wear masks. On July 27, the U.S. Centers for Disease Control and Prevention (“CDC”) issued guidance encouraging vaccinated individuals to begin wearing masks indoors in locations where COVID-19 transmission is “substantial” or “high.” The CDC’s announcement is expressly not a mandate, but intended to serve as guidance. Governor Whitmer indicated shortly after the CDC’s recommendation came out that Michigan would not be implementing a mask mandate at this time.

If you have any questions or concerns about your business’ COVID-19-related policies and procedures, please contact Dave Houston or your Fraser Trebilcock attorney.

This alert serves as a general summary, and does not constitute legal guidance. All statements made in this article should be verified by counsel retained specifically for that purpose. Please contact us with any specific questions.

Fraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.

Governor Whitmer Signs Law Regulating Delta-8 THC Manufacturing and Sales Starting October 11, 2021

House Bill 4517 is part of a package of legislation that will regulate the manufacturing, sale, and distribution of delta-8 THC products much like other legal marijuana products in Michigan

Governor Whitmer has signed a law allowing only regulated delta-8 THC products to be manufactured and sold in Michigan, effective October 11, 2021. The move to regulate, rather than ban, the delta-8 THC strand was supported by the cannabis industry.

Starting this fall it will be illegal for businesses in Michigan to sell delta-8 products without proper licensing from the Michigan Marijuana Regulatory Agency (“MMRA”). As we detailed in a previous blog, there are currently no standards for selling or distributing delta-8 THC products, which has led to a number of Michigan-based retailers like gas stations and convenience stores selling unregulated delta-8 items.

These products have not undergone the testing and tracking that is required for other legalized recreational marijuana products in Michigan, including those derived from the more common delta-9 THC strand.

The legislation categorizes all THC isomers of the cannabis plant as marijuana, giving the MMRA oversight capabilities. As of mid-July, the sale of delta-8 products is banned in 14 states (Alaska, Arizona, Arkansas, Colorado, Delaware, Idaho, Iowa, Kentucky, Mississippi, Montana, New York, Rhode Island, Vermont and Utah). Delta-8 status is currently under review in four additional states.

The differences between delta-8 and delta-9

Delta-8 THC is a synthetic substance derived from hemp with the only difference being the inclusion of a double bond. The science behind the two compounds is still being researched but the consensus is that due to the location of its double bond, delta-8 binds to the body’s cannabinoid receptors in a slightly different manner than delta-9 THC, resulting in less of a high.

However, there is little research and no reliable clinical trials on delta-8 THC. Delta-9 marijuana products are strictly regulated and subject to stringent testing standards, whereas delta-8 products have typically been produced using unregulated, chemically synthesized cannabinoids that can include additives and byproducts that have not been researched and could be harmful to some consumers.

Impact on businesses

Unlicensed commercial production or sale of delta-8 in Michigan will be punishable by fines starting October 11, 2021. Any retailer operating in Michigan must obtain a state license to sell or distribute delta-8 THC products, which includes mandatory tracking and testing. Only adults 21 and older can legally have or use the compound in the state. The MMRA created a flyer that provides further details.

The Michigan Cannabis Industry Association and the Michigan Cannabis Manufacturers Association both expressed support for the regulation of delta-8 rather than a full ban. The MCMA’s Board Chair Shelly Edgerton told MLive in a July 14 article that the law “takes a giant step toward enforcing the same strict high testing, health and safety guidelines for any product that mimics a cannabis high that is either inhaled or ingested followed by our state’s licensed growers and processors.”

We will continue to provide additional updates on additional developments regarding delta-8 THC, and other issues affecting the marijuana industry in Michigan. If you have any questions, please contact Paul Mallon or your Fraser Trebilcock attorney.

Paul C. Mallon, Jr. is Shareholder and Chair of Fraser Trebilcock’s cannabis law practice. You can reach him at pmallon@fraserlawfirm.com or (313) 965-9043.

Michigan Legislature Repeals Emergency Powers of Governor Act of 1945

On July 21, 2021, the Michigan legislature approved a petition to repeal the Emergency Powers of Governor Act of 1945, which was the statutory basis used by Governor Whitmer during the early days of the COVID-19 pandemic to institute sweeping health and safety restrictions.

Because the action taken by the legislature was pursuant to an “initiated law,” the repeal does not require Governor Whitmer’s approval, nor can she veto it.

Under Article II §9 of the Michigan Constitution, citizens can put an initiative on the ballot if they gather a certain number of signatures — at least eight percent of the total number of votes cast in the last gubernatorial race. Before an initiative reaches the ballot, the Michigan legislature can, as it did in this instance, pass the proposed law with a simple majority vote in each chamber, and such a measure approved in this manner cannot be vetoed.

Governor Whitmer’s use of the Emergency Powers of Governor Act, which involved ordering lockdowns, mask mandates, and cancellation of youth sports, among other things, has been the subject of considerable controversy throughout the COVID-19 pandemic.

Petition organizers from a group called Unlock Michigan began collecting signatures for the repeal effort in the Spring of 2020, and turned in petitions with more than the required 340,000 signatures to the Michigan Secretary of state in October, 2020.

The Michigan legislature previously approved legislation (through the conventional legislative process) that would have repealed the law, but Governor Whitmer vetoed it.

Court challenges were also raised, and in October, 2020, the Michigan Supreme Court ruled that the use of the Emergency Powers of the Governor Act to institute COVID-19 health and safety measures was unconstitutional.

Subsequently, the Michigan Department of Health and Human Services issued orders pursuant to its authority under the Public Health Code which reinstated many of the same health and safety measures that were invalidated by the court’s ruling. However, Unlock Michigan recently launched a new petition drive to change the Public Health Code to limit any emergency orders issued by the Michigan Department of Health and Human Services to 28 days without legislative approval.

If you have any questions about these issues, please contact Jean Kordenbrock or your Fraser Trebilcock attorney.

Jean E. Kordenbrock is an experienced legal professional and entrepreneur across a broad range of legal areas, business, and a diverse clientele. She has the unique quality of being a skilled attorney while also leading her own teams where outcomes combine legal, political, and business expertise. Jean can be reached at (517) 377-0824 or jkordenbrock@fraserlawfirm.com.

Biden Executive Order To Examine Non-Compete Agreements

On July 9, 2021, President Biden issued an executive order aimed at “promoting competition in the American economy.” A press release that preceded the issuance of the executive order stated the White House’s intention to “[m]ake it easier to change jobs and help raise wages” by removing barriers that “impede economic mobility,” including banning or limiting non-compete agreements.

In the days since the executive order was issued, we have heard from a number of clients who are, understandably, uncertain about the status of their current non-compete agreements. In short, the executive order has no immediate effect on existing non-compete agreements. And nothing in the executive order legally prevents an employer from entering into a new agreement with an employee, provided no other law or regulation prohibits it. Non-compete agreements are not limited or banned under federal law—at least not yet.

However, the issuance of the executive order, plus actions being taken by many state legislatures, suggests that there is significant momentum building to take some form(s) of action against non-compete agreements, and employers should pay careful attention to ongoing developments in this area.

The Law of Employment Contracts

As a general proposition, contract law generally, and employment contract law specifically, is left to the states and, except where federal policy concerns exist – for example, regulation of union-management relations with implications for the national economy. So, for starters, this presidential direction to an administrative branch regulatory agency is an attempt to expand the reach of federal governance.

The Impact of the Executive Order

Section 5(g) of the executive order directs the Federal Trade Commission (“FTC”), in conjunction with other federal agencies, to “address agreements that may unduly limit workers’ ability to change jobs.” It also urges the FTC Chairperson to “consider working with the rest of the Commission to exercise the FTC’s statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete and other clauses or agreements.”

Accordingly, in plain terms, the effect of the order is to start a process whereby the FTC will pursue a rulemaking process that would ban or limit the use of noncompete agreements as a matter of federal law. It is unclear how broad or narrow the rulemaking will be until actual proposed rules are presented.

Also, there is significant uncertainty as to whether the FTC has authority to regulate non-compete agreements. Such an action would almost certainly call into question whether the executive branch was encroaching congressional lawmaking power, and/or unconstitutionally infringing on the rights of states to make laws governing contracts.

Possible Secondary Effects

Beyond the more straightforward and intended result of a possible ban, second-order effects may arise which, presumably, would be considered by the FTC in the rulemaking process. For instance, tax-exempt employers, such as hospitals, insurance companies, and universities, sometimes rely on non-compete agreements to establish a “substantial risk of forfeiture” under Internal Revenue Code § 457(f) to delay immediate taxation of deferred compensation amounts. While the 457(f) negative tax consequences would primarily fall on the shoulders of the executive, this could also affect the timing of the inclusion of the income for purposes of the 21% excise tax on excess executive remuneration paid by such employers under Code § 4960, which is payable by the employer.

The Tea Leaves

We believe that if any regulation is attempted, it will be months or years in coming. We also believe that in the event regulation is initiated, it is likely to be directed at lower-compensated work and situations where workers do not possess proprietary skills or confidential information learned or obtained at the workplace.

We have counselled that non-compete agreements used by our clients should be well-founded in protecting the legitimate competitive interest of the enterprise, and should be limited to circumstances where that interest is present and properly described in the agreement or covenant. This advice remains pertinent, and review of those policies may be considered.

We will continue to keep you informed of relevant developments. If you have any questions, please contact Dave Houston or your Fraser Trebilcock attorney.

NCAA Issues Interim Policy Allowing Student-Athletes to Monetize Their Name, Image and Likeness

The NCAA recently announced an interim policy that allows student-athletes from all three divisions to monetize their name, image and likeness (often referred to as “NIL”). The new policy went into effect on July 1, 2021.

The NCAA’s new interim policy was enacted on the cusp of laws in a number of states, such as Alabama, Florida, Georgia, Mississippi, New Mexico and Texas, taking effect which allow NCAA athletes to monetize their NIL.

It also follows a June 21 Supreme Court ruling that NCAA restrictions on “education-related benefits,” such as tutoring or scholarships, for college athletes violate antitrust law.

In a concurring opinion in the case, Justice Brett M. Kavanaugh wrote, “Traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated.”

The NCAA guidance allows students to engage in NIL activities so long as they are “consistent with the law of the state where the school is located” and allows students in states without NIL laws to participate without breaking NCAA rules.

Michigan’s new law allowing college athletes to earn money from their NIL goes into effect December 31, 2022, pursuant to legislation signed by Governor Whitmer in December 2020.

What is Allowed Under the NCAA Interim Policy

Prospective student-athletes may engage in the same types of NIL opportunities available to current student-athletes under the interim NIL policy without impacting their NCAA eligibility. However, the NCAA warns prospective student-athletes to consult their state high school athletics association regarding questions pertaining to high school eligibility.
Student-athletes may use a “professional services provider” for their NIL activities.
A “professional services provider” includes, but is not limited to, an agent, tax advisor, marketing consultant, attorney, brand management company or anyone who is employed or associated with such persons.
Student-athletes may enter into NIL agreements with boosters provided the activity is in accordance with state laws and school policy, is not an impermissible inducement and it does not constitute pay-for-play.
International student-athletes may benefit from NIL activities.

What is Not Allowed Under the NCAA Interim Policy

Making NIL compensation contingent on enrollment at a particular institution
Allowing compensation for athletic participation or achievement
Permitting compensation for work not performed

Higher-Education Institution Responsibilities

In issuing the interim policy, the NCAA highlighted a number of obligations imposed on, and issues to be aware of by, higher-education institutions in connection with the policy.

Schools are obligated to apply, and report potential violations of, NCAA rules that remain applicable, including prohibitions on pay-for-play and improper inducements.
While the NCAA does not prohibit schools from arranging NIL opportunities for student-athletes, it cautions schools not to use NIL transactions to compensate for athletic participation or achievement or as an improper inducement. The NCAA also points out that involvement in arranging NIL opportunities may also raise other issues—including potential application of state NIL laws, claims for contractual non-performance, Title IX issues, and employment issues.
Schools are not permitted to provide compensation in exchange for the use of a student-athlete’s NIL.
While the NCAA interim policy does not require student-athletes to report NIL activities to their schools, state laws, conference rules and institutional policies may impose reporting requirements.
The responsibility to certify student-athlete eligibility remains with the school.

The interim policy will remain in place until federal legislation or new NCAA rules are adopted. If you have any questions about these issues and how they affect your higher-education institution, please contact Ryan Kauffman.

Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters. You can contact him at rkauffman@fraserlawfirm.com or 517.377.0881.