An Employee Has Requested a Religious Exemption to the Company Vaccine Mandate—What Now?

For those in the Sacramento area, you may have seen large “Destiny” signs overhanging State Route 65 north of Interstate 80. A news story last month suggested that this church is the place to go for COVID-19 vaccine exemption letters. Now that President Biden is planning to use the emergency powers of the Occupational Safety and Health Administration to mandate vaccination for an estimated 100 million employees, the issue is even more prominent.

Biden’s Path Out of the Pandemic: New COVID-19 Vaccine Mandates for Large Employers, Federal Contractors and Health Care Workers

Earlier, President Joe Biden announced vaccination requirements for the federal government workers but allowed them to “opt out” if they agreed to more stringent mitigation measures. He also implored private sector employers to encourage vaccination, and many employers began implementing mandatory vaccination plans or incentivizing employees to get vaccinated.

NY Court of Appeals Decision Highlights Growing Trend of Higher Courts Ruling Against COVID-Related Lease Defenses

Since the start of the COVID-19 health crisis, we have been approached by both landlord and tenant clients asking how COVID affects their leasehold obligations. While we have generally encouraged our clients to approach these matters in an honest and amicable manner with a focus on resolution, disputes have arisen between owners and occupiers. Legal resolution does not come quickly, as the legal process tends to delay final adjudication for several years. Some decisions have been rendered in interim proceedings (such as bankruptcies), but on the whole, there simply has not been enough time for COVID-related disputes to proceed through both the trial and appellate levels and provide guidance on how these lawsuits will be resolved.

A recent decision by a New York appeals court is perhaps one of the first to provide some clarity regarding how an appellate court will interpret how common COVID-related defenses will apply in a lease enforcement action. In The Gap, Inc., v. 170 Broadway Retail Owner, LLC, the tenant (The Gap) sued its landlord under theories of casualty, frustration of purpose, and impossibility, seeking to avoid its obligation to pay rent and terminate its lease in response to the COVID-19 pandemic. When the landlord filed a motion to dismiss the tenant’s complaint, the trial court denied the motion, finding that the tenant had stated a valid claim and providing implied approval that these arguments could be used by tenants to avoid their leasehold obligations.

On appeal, the appellate court unanimously overturned the trial court’s decision.  The judges first concluded that the casualty provision of the lease was not triggered by COVID-19 because no physical loss or damage had occurred. The court then addressed the tenant’s equitable arguments, finding that frustration of purpose did not apply because the tenant was not completely deprived of the benefits of its premises, and it was not impossible for tenant to perform its obligations under the lease such that the lease could be rescinded. The tenant was ordered to pay all back rent and continue paying rent in accordance with the lease going forward.

Although not binding in California, this decision is emblematic of the trend among courts reviewing the impact of COVID-19 on commercial leases. On the whole, most courts have concluded similarly to the New York appeals court, deciding that tenants must bear the risk of a pandemic absent some unique circumstances or lease terms that would vary this conclusion. This is true even in the business interruption insurance context, leaving tenants without many legal options for relief. Hopefully, the various governmental stimulus packages have supported these tenants’ business operations sufficiently to weather the worst of the pandemic and take advantage of what appears to be a booming economic recovery. For landlords, these decisions are welcome support for opposing any tenants who attempt to opportunistically rely on COVID to justify temporary or permanent relief from their leases.

Cal/OSHA Update: Masking in the Workplace

Cal/OSHA Has Come Full Circle to Align with CDC & CA Public Health Department

Continuing the yo-yo of back and forth revisions to the COVID-19 Emergency Temporary Standards (“ETS”), on June 11, 2021 Cal/OSHA submitted yet another draft of its proposed ETS to the Cal/OSHA Standards Board for review and approval.  While the draft contains a number of small changes to the earlier draft, the main revision deals with when masks – or face coverings – are required to be worn in the workplace.

If you have been following the news over the last few weeks, Cal/OSHA and the Standards Board have flipped-flopped back and forth regarding imposing a stricter mask requirement than the CDC and California’s Department of Public Health (CDPA).  But, finally, Cal/OSHA has come around and revised the ETS to align with public health guidance which says that fully vaccinated individuals do not need to wear masks.

Face Coverings (Masks):

Section 3205(c)(6) of the ETS now reads as follows:

“(6) Face coverings.

(A) For all employees who are not fully vaccinated, employers shall provide face coverings and ensure they are worn indoors or in vehicles.

(B) Employers shall provide face coverings and ensure they are worn by employees when required by orders from the CDPA 

(C) Employers shall ensure that required face coverings are clean and undamaged, and that they are worn over the nose and mouth. Face shields are not a replacement for face coverings, although they may be worn together for additional protection.

(D) When employees are required to wear face coverings under this section or sections 3205.1 through 3205.4, the following exceptions apply:

  1. When an employee is alone in a room or vehicle.
  1. While eating or drinking at the workplace, provided employees are at least six feet apart and outside air supply to the area, if indoors, has been maximized to the extent feasible.
  1. Employees wearing respirators required by the employer and used in compliance with section 5144.
  1. Employees who cannot wear face coverings due to a medical or mental health condition or disability, or who are hearing-impaired or communicating with a hearing-impaired person.
  1. Specific tasks which cannot feasibly be performed with a face-covering. This exception is limited to the time period in which the tasks are actually being performed.

(E) Employees exempted from wearing face coverings due to a medical condition, mental health condition, or disability shall wear an effective non-restrictive alternative, such as a face shield with a drape at the bottom, if their condition or disability permits it.

(F) Any employee not wearing a face covering, pursuant to the exceptions in subsections (c)(6)(D)4 or 5, and not wearing a non-restrictive alternative when allowed by subsection (c)(6)(E), shall be at least six feet apart from all other persons unless the unmasked employee is either fully vaccinated or tested at least weekly for COVID-19 during paid time and at no costs to the employee. Employers may not use the provisions of subsection (c)(6)(F) as an alternative to face coverings when face coverings are otherwise required by this section.

(G) No employer shall prevent any employee from wearing a face covering when not required by this section, unless it would create a safety hazard, such as interfering with the safe operation of equipment.

(H) When face coverings are not required by this section or by sections 3205.1 through 3205.4, employers shall provide face coverings to employees upon request, regardless of vaccination status.

(I) Employers shall implement measures to communicate to non-employees the face coverings requirements on their premises.”

The amended ETS also change the definition of “Fully vaccinated” slightly to mean that “the employer has documented that the person received, at least 14 days prior, either the second dose in a two-dose COVID-19 vaccine series or a single-dose COVID-19 vaccine.  Vaccines must be FDA approved; have an emergency use authorization from the FDA; or, for persons fully vaccinated outside the United States, be listed for emergency use by the World Health Organization (WHO).” (§3205(b)(9)).

Thus, to comply with the ETS, employers will need to have some sort of documentation (e.g. an attestation by the employee or copy of a COVID-19 vaccination card) establishing the employee’s vaccination status.  As stated in our June 4, 2021 blog regarding the first set of revisions to the ETS (which were adopted by the Standards Board on June 3rd and then revoked by the Standards Board on June 9th), the EEOC’s updated COVID-19 FAQs provide that it is not an improper “disability-related inquiry” for an employer to inquire about or request documentation or other confirmation that an employee obtained the COVID-19 vaccine from a third-party in the community, such as a pharmacy, personal health care provider, or public. However, documentation or other confirmation of vaccination provided by the employee to the employer is medical information about the employee and must be kept confidential.

Some Other Revisions:

In its prior draft of the revised ETS, Cal/OSHA included a provision that required social distancing to continue in most workplace settings until July 31, 2021.  However, the most recent draft deletes this language and only requires social distancing under Section 3205(c)(6)(F) where an unvaccinated employee is unable to wear a face covering due to mental health, disability, or is hearing-impaired or communicating with someone who is hearing-impaired, or is performing a specific task that makes wearing a face covering unfeasible.  The ETS says in these cases, the person must be at least six feet apart from all other persons unless the unmasked employee is either fully vaccinated or tested at least weekly for COVID-19 during paid time and at no cost to the employee.

The latest version of the ETS also slightly revise the new obligation contained in the prior draft that employers must provide “respirators” (e.g. N95 masks) to unvaccinated employees to wear if they choose to do so.  In Section 3205(c)(7)(D) (“Personal protective equipment”) employers are required to provide respirators for voluntary use “upon request” by an unvaccinated employee who works indoors or in a vehicle with more than one person.  Therefore, employers may not be required to have a supply of N95 masks on hand, but merely purchase one if an unvaccinated employee requests one.

The revised ETS makes a few other minor revisions and a PDF of the full copy can be found here. The revised ETS continue to address various workplace health and safety issues related to COVID-19 and impose certain affirmative duties on employers to help prevent, and respond to, COVID-19 in the workplace. Therefore, all employers are encouraged to read the ETS and be sure they comply.

The current ETS (with all of its social distancing, masking, and other restrictions) remain in place. The Standards Board will review and vote on the revised ETS at its June 17, 2021 meeting.  If they vote in favor of adopting the revised ETS, then they will go to the Office of Administrative Law for approval before going into effect.  Given this process, the earliest the revised ETS will be in place is June 28, 2021.  However, Governor Newsom intimated in a June 11, 2021 interview that he may take some action to speed this process up – so stay tuned!

Revenue Cycle Impact On Healthcare M&A Transactions: Medicare Provider Agreement Assumption Choices Can Drive Transaction Structure

The past year in healthcare transactions has been one of the more interesting of my career, with the complete shutdown of certain industry segments for a period due to the COVID-19 public health emergency, modified business climate and reopenings, government stimulus payments through the CARES Act, Payroll Protection Program and Accelerated Payment Programs, ongoing tax changes (including potential for higher capital gain tax rates), high enterprise valuations and low borrowing costs. We view 2021 as an active market for acquisitions, including in healthcare. We note that increasingly we are seeing buying side activity from venture capital or private equity funds, where pro forma post-closing cash flow considerations are critical drivers of decisions.

Pfizer and BioNTech Claim Immunity from COVID-19 Vaccine Testing IP Claim

Pfizer and BioNTech recently asked the Southern District of California to dismiss a patent infringement claim from Allele Biotechnology related to Pfizer and BioNTech’s Covid-19 vaccine.

Allele holds a patent for a fluorescent protein called mNeonGreen, which causes some cells to glow when exposed to certain kinds of light.  Allele does not claim that mNeonGreen is used in the vaccine or was used by Pfizer and BioNTech to develop the vaccine, but rather that mNeonGreen is used in one of the clinical tests to detect the presence of antibodies in a patient that was given the Covid-19 vaccine.  A third party created a pseudo Covid-19 virus containing mNeonGreen, which then introduced to a sample of a patient’s blood cells.  If the patient has no antibodies to Covid-19, the pseudo virus will infect the blood cells and the cells will fluoresce, allowing the detection of the virus.  No fluorescence means that the cells were not infected with the virus, and that the patient therefore has antibodies to Covid-19.

Allele claims that mNeonGreen was used repeatedly throughout Pfizer and BioNTech’s vaccine trials and was referenced multiple times in their Emergency Use Application to the FDA.  At the same time, Allele filed suit against Regeneron, the maker of an experimental antibody cocktail found to be successful in treating Covid-19 (and was famously given to President Trump just days before Allele filed suit against Regeneron).  Allele claims that its product was infringed by both the antibody cocktail and the vaccine.

Pfizer and BioNTech argue that they fall within the safe harbor in 35 U.S.C. 271(e)(1), which allows the use of patented inventions for “uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs….”  Citing Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 671 (1990), Pfizer and BioNTech claim that they are permitted to “engage in otherwise infringing activities necessary to obtain regulatory approval,” including under their Emergency Use Application to the FDA.  Because Pfizer and BioNTech used mNeonGreen only in the context of clinical trials to asses the presence of Covid-19 antibodies, Pfizer and BioNTech argue that they fall within the safe harbor provision of the statute.

The hearing on Pfizer and BioNTech’s motion to dismiss is set for May 3.  Given the high stakes of the Covid-19 testing and vaccine market, it will certainly be closely watched.

New California COVID-19 Supplemental Paid Sick Leave Law

On March 19, 2021, Governor Newsom signed legislation ensuring new supplemental paid sick leave (SPSL) for eligible workers impacted by the COVID-19 pandemic. The bill, SB 95, provides up to 80 hours of paid leave for employees who are forced to miss work for qualifying reasons. The SPSL covers many more employers than previous legislation and allows workers to use the leave for more reasons. The law is codified in new California Labor Code sections 248.2 and 248.3, the text of which can be found here. The Labor Commissioner has also issued FAQs, found here, to help employers navigate their new obligations. Below are some of the key aspects of the new law and some of the items addressed in the FAQs.


 All employers, whether public or private with at least 25 employees are required to offer the SPSL. This represents a significant expansion of California’s previous pandemic-related sick leave law, which only applied to employers with more than 500 employees.

The new paid sick leave is available to all employees who cannot work or telework for qualifying reasons. Employees who may not be able to report in person to work, but who may still perform their job duties remotely, will not be eligible for SPSL. Covered employees are entitled to the new SPSL in addition to any paid sick leave that was provided under previous laws that expired on December 31, 2020. This means any employee who used paid sick leave under the federal Families First Coronavirus Response Act (FFCRA) in 2020 will be eligible for up to 80 hours of new SPSL under the California law.

Qualifying Reasons for Taking Leave

 In addition to reaching more employees, the SPSL is available for more qualifying reasons than were found in the FFCRA, including the need to care for family members and the need to miss work to be vaccinated or because of side effects associated with being vaccinated. Specifically, anyone who is unable to work or telework for the below reasons may take the leave:

  • The employee is subject to a quarantine or isolation period (as determined by federal, state, or local health agency guidelines) for reasons related to COVID-19;
  • The employee is caring for a family member who is subject to a quarantine or isolation period (as determined by federal, state, or local health agency guidelines) for reasons related to COVID-19;
  • The employee is attending a vaccine appointment or cannot work or telework due to vaccine-related

Notably, under the FAQs, it is not enough that an employee merely lives with someone who has tested positive, experiences symptoms, or has been exposed. Rather, the employee must be actually caring for a family member who meets the above criteria. In addition, it is not enough that the employee is subject to a general stay-at-home order. Rather, the inability to work or telework must be specific to the employee’s own situation.

Start and End Dates of New SPSL Law

SB-95 was signed into law on March 19 and takes effect March 29, 2021. Once it takes effect, however, the law will apply retroactively to January 1, 2021. This means that any employees who took unpaid leave for qualifying reasons between January 1, 2021 and March 28, 2021 will be entitled to request pay for the leave.

SB 95 also prohibits employers from requiring employees to first use any vacation, PTO, or standard California sick leave (24 hours per year) before enacting their right to the new SPSL. This means that employers will have to replenish any vacation/PTO or sick leave banks that were used earlier in 2021 for absences that would have qualified for the new SPSL.

The Labor Commissioner’s FAQs uses an example of an employee who missed work to get vaccinated in February 2021. Such an employee would be entitled to be paid for that missed time if it was previously unpaid, and would be entitled to have any vacation or standard sick leave used that day to be placed back in the employee’s available bank.

The new SPSL expires on September 30, 2021. However, any employees who have started their leave by that date will be entitled to the full available leave even if providing it extends the employee’s leave beyond September 30.

Amount of Leave Available

 Employees who the employer considers full-time, or who was scheduled to work an average of at least 40 hours per week in the two weeks preceding the leave, are eligible to take up to 80 hours of SPSL.

Part-time employees with routine schedules are entitled to take up to the total number of hours they are routinely scheduled to work over the previous two weeks. Part-time employees with variable schedules are entitled to 14 times the daily average hours they worked over the previous 6 months. If an employee with a varying schedule has worked for the employer for less than 6 months, the employee is eligible to receive 14 times the daily average hours worked over the course of the employee’s employment. Any employee with a varying schedule who has been employed less than 14 days is entitled to up to the total amount of hours they have worked to date.

Rate of Pay

 For each of hour of SPSL that a non-exempt employee is entitled to receive, the employee must be paid at the highest of the following amounts:

  • The employee’s regular rate of pay for the workweek in which the leave is taken;
  • A rate calculated by dividing the employee’s total wages, not including overtime premium, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment
  • State or local minimum wage

For exempt employees, employers must compensate SPSL in the same manner that the employer compensates other forms of paid leave time.

Under no circumstances, however, must an employer pay a covered employee more than $511 per day for SPSL or $5,110 in the aggregate. Employees who earn more than that may be able to utilize other forms of paid leave, such as vacation or standard paid sick leave, to supplement the difference.

Employees Must Request the Leave

 Employees must request the new SPSL, either orally or in writing, to receive it. However, employers are required to conspicuously display a poster, found here, notifying employees of their right to SPSL.

Employer Right to Offset Other Leave Provided

 Under the new law, if an employer provides an employee with other paid leave in 2021 that is payable for the qualifying reasons that SPSL is payable, the employer may count those hours toward meeting its SPSL obligations. The employer may only do so, however, if it pays the other leave in at least the same amount that the employee would otherwise be entitled to under the new law.

For example, while federal COVID-19 leave under the FFCRA expired at the end of 2020, employers are able to voluntarily offer FFCRA leave—and take advantage of its tax credit provisions—through September 30, 2021. Employers who choose to continue offering FFCRA leave will simultaneously satisfy their new California SPSL obligations as long as the employee receives the same amount of pay he or she would get under the SPSL law. California employers would be wise to continue offering the FFCRA leave in lieu of the new California SPSL, because only the former affords employers the right to seek tax reimbursements for the payments.

Employers may also offset any qualifying pandemic-related paid leave made available to employees pursuant to local laws.

Record-Keeping and Paystubs

 The new SPSL law also requires to list the amount of leave available as a separate line item on employee paystubs. Because the SPSL is in addition to regular paid sick leave, the two items

must be separately listed on an employee’s paystub. For example, if an employee has 80 hours of SPSL available and 16 hours of regular paid sick leave available, the employee’s wage statement must separately reflect both totals rather than merely list 96 total hours of available sick leave. Like records pertaining to regular paid sick leave, employers must maintain records pertaining to employees’ used and available SPSL for a three-year period.

California employers with any questions about their rights and obligations under the new California Supplemental Paid Sick Leave Law should reach out to the Weintraub Tobin Labor & Employment team.

FFCRA Tax Credits for Paid Sick Leave and Emergency Family Leave Extended Through September 2021

The American Rescue Plan Act of 2021 (“ARPA”) was signed by President Biden on March 11, 2021.  Part 5 of the ARPA provides for additional credits to employers whose choose to grant paid sick leave and emergency family leave to eligible employees under the FFCRA.

To be clear, the ARPA does not require employers provide FFCRA leave to employees. That mandate expired on December 31, 2020.  However, the continuation of certain tax credits for employers who voluntarily provide FFCRA leave has been extended from March 31, 2021 until the end of September, 2021.

Additionally, the ARPA made some other changes to expand employee eligibility (reasons) for taking FFCRA leave, reset the cap on the total amount of paid sick leave an employee can take, and increased the cap on wages paid for emergency family leave. Below is a summary of some of the main changes made by the ARPA.

A Summary Of Cares Act Provider Relief Efforts

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the federal government allocated $175 billion in payments to be distributed to health care providers through the Provider Relief Fund (PRF) for expenses related to health care or lost revenue due to COVID-19. These distributions are grants, not loans, and do not need to be repaid so long as recipient providers comply with the applicable terms and conditions.

Read full publication on AHLA website.

Updated CDC Guidance: Fully Vaccinated Individuals Need Not Quarantine After COVID-19 Exposure

The CDC’s guidelines state that individuals should quarantine for 14 days after contact with someone with COVID-19, which can be reduced to 10 days if no symptoms developed after exposure.  Now that vaccines are becoming more widely available, employers are asking whether the quarantine period can be shortened or eliminated for their workers who have received the vaccine.

The CDC has stated that the quarantine period can be eliminated entirely for a fully vaccinated individual who meets all criteria – but the guidance is conditioned on the individual meeting all three criteria:

The criteria for allowing a vaccinated individual to skip quarantine – and continue working – after exposure to a COVID-19 case, are: