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Sticking Points: Employers Caught in Vaccine Catch-22Lock Icon

5 min read

Workers are choosing between COVID shots and being fired, protesters are digging in, and businesses are caught between federal vaccine mandates and a state law that will require ways to let Arkansans sidestep the needle and stay on the payroll.

Companies like Tyson Foods of Springdale are requiring vaccines on their own, and reporting success. Others like Lexicon Inc. of Little Rock are grumbling about additional hurdles to hiring and retention in a brutal labor market. All are anxious for the confusion to clear.

“It’s a huge mess,” labor lawyer Stuart Jackson of Wright Lindsey Jennings of Little Rock said. Lexicon CEO Patrick Schueck had a different adjective. A “total mess,” he called it.

President Joe Biden ordered federal employees to be vaccinated, leading to an ongoing scramble for shots at the Little Rock airport, and told the Occupational Safety & Health Administration to require employee vaccination or weekly testing requirements nationwide for companies with 100 or more employees.

Then there is the competing state law, Act 1115, which becomes effective in mid-January. Gov. Asa Hutchinson opposed it as cumbersome for business but let it become law without signing it.

Arkansas lawmakers approved Act 1115 last month, setting standards that allow workers to opt out of vaccines if they are tested weekly or can prove they have COVID-19 antibodies. While champions of the law spoke against federal overreach and called today’s mandates unprecedented, schools and the military have required long lists of vaccines for decades, including inoculations for polio and measles.

No Mandate at Lexicon

Lexicon is encouraging employees to get the vaccine, but going no farther. “Given the difficult labor market, we are not in a position to mandate vaccinations,” Schueck said.

The new OSHA rules could come down any day; the new state law becomes effective Jan. 13. January also looms as the deadline for enforcing vaccine mandates on health workers at facilities serving Medicare and Medicaid patients.

“Under the Arkansas law, you have to give workers an option of a weekly test or a chance to prove that they’re naturally immune,” Jackson said, noting that even the method of proving immunity remains up in the air.

“Federal rules typically preempt state rules when they conflict, but this will be an interesting situation going forward with the OSHA rule.”

The mandate for all employers with more than 100 workers will face immediate legal challenges, Jackson predicted, “and it probably faces a pretty steep hill to be found enforceable.” When past lawsuits have challenged OSHA temporary standards, “more than half of them were found invalid,” he said.

All of the uncertainty haunts businesses working to lift the economy from the trough of the pandemic.

“This issue is a perfect example of how conflicting or yet-to-be-determined federal versus state rules create uncertainty in our economy,” said Jay Chesshir, president and CEO of the Little Rock Regional Chamber.

“When recently approved Arkansas Act 1115 becomes effective in January, current federal contractors located in the state will be in non-compliance [with state law] if the company continues to comply with federal regulations,” Chesshir said.

The U.S. Chamber of Commerce and large employers nationwide fear that workers determined to avoid the vaccine will simply move to jobs not covered by mandates, potentially adding to supply chain disruptions and a rough holiday season for retailers. Relatively small but significant numbers of workers have protested the mandates, and firings of high-profile people like Washington State University football coach Nick Rolovich have made headlines. Yet thousands of government employees, police officers, firefighters and defense industry workers nationwide have been denied exemption requests, and case law has generally upheld the rights of companies to impose health requirements for employment, including vaccines.

The rules for health care workers are likely to stand, Jackson said.

Their employers are unlikely to risk losing Medicare or Medicaid revenue by bucking the rules. “If you work in a nursing home or hospital, you’ll probably have to be vaccinated. And there’s not likely to be a weekly testing option or any natural-immunity-type exception.”

Awaiting Guidance

Several Arkansas business leaders wouldn’t talk about the catch-22; others grumbled about additional burdens to hiring and retention in a fierce labor market.

“Adding to the confusion and complexity, companies continue to await further guidance regarding President Biden’s COVID mandate through OSHA,” said Chesshir of the Regional Chamber.

“Companies of all types, sizes and industry sectors are trying to comply with rules and regulations that seemingly conflict. Uncertainty is never a good answer to keeping our economy moving forward.”

Schueck, the Little Rock steel fabricator and erector, said compliance burdens should not be growing at a “point in the United States where tradesmen and women are needed” at every turn. “I think we need to figure out a way for people to work rather than give them reasons not to work.”

Clinton National Airport announced an employee vaccine mandate last week after receiving guidance that it falls under rules for federal employees. If workers are not vaccinated by Dec. 8, they face dismissal. The airport receives federal money through lease contracts with the Federal Aviation Administration and the Transportation Security Administration. As of Tuesday, 104 of the airport’s 147 workers had gotten a shot.

Tyson Touts Success

Also last week, just short of today’s deadline for mandatory vaccinations, poultry and meat industry leader Tyson Foods said 96% of its employees had been vaccinated. Only half its 120,000 workers were vaccinated before the mandate was announced Aug. 3. CEO Donnie King praised the workforce, and while standing firm on plans to fire unvaccinated workers, he added that Tyson would welcome back dismissed employees who decide later to be vaccinated.

Schueck, who has about 2,400 total employees, said many serious questions remain unanswered. “Will subcontractors and suppliers on federal projects be held to the same federal requirements? Will the 100 employees be counted on a companywide basis or per location? What are the penalties? With all these unanswered questions, I cannot begin to wrap my head around the difficulties.” For now, businesses aren’t even certain if they or their employees will be have to pay for any weekly tests.

“Hopefully, many of our questions will be answered by the federal requirements, and any conflicts with state laws will be quickly resolved by the courts. I’ve also been advised to stay away from federal work if possible,” Schueck said.

Jackson is telling his legal clients to first figure out if the federal requirements apply to their businesses.

If not, executives should determine whether they want to impose any vaccination requirements at all. If so, they will need contingency plans for testing vaccine resisters under the Arkansas law.

“If you have fewer than 100 employees, you’re not getting Medicaid or Medicare money and you’re not a federal contractor, then really all that’s going to apply to you is the Arkansas law, and you will need mechanisms to do weekly testing, and a protocol for determining how employees will prove having antibodies in their bloodstreams. Testing is going to be a big issue.”

The best advice is for employers to get shots into as many employees as possible, Jackson said. “If you get 100% of your workers vaccinated, you’ve solved the issue.”

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