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Though the COVID-19 pandemic put in-person classes, business operations, and vacation plans on hold, there has been no pause of the duties of boards of directors to their respective companies. Board members should keep their fiduciary duties and the practical steps they can take to meet those duties top-of-mind as they guide their companies through the COVID-19 pandemic. We have highlighted board members’ duties and some practical tips boards of directors can take to meet their obligations to their companies during the pandemic.

Board Duties and the Business Judgment Rule: A Refresher

Under Delaware law-which most jurisdictions widely follow when it comes to directors’ duties-directors have a duty of care and duty of loyalty.

  • The duty of care requires directors to make informed and deliberative decisions based on all material information they have reasonably available to them.
  • The duty of loyalty requires directors to act (or decide not to act) in a disinterested and independent manner, with the honest belief that the action or inaction is in the best interests of the company and its shareholders. How will decisions made by board members be evaluated by courts if those decisions are challenged? Courts evaluating board decisions under Delaware law first look to the “business judgment rule,” which allows a rebuttable presumption that directors satisfied their fiduciary duties in making business decisions.
  • If the presumption is rebutted-such as in cases of related party transactions or lack of director independence-Delaware courts apply the more exacting “entire fairness” standard, which normally shifts the burden to directors to prove the fairness of a challenged corporate transaction or decision.
  • As part of the duty of care and duty of loyalty, directors have the duty of good faith, oversight and disclosure. They have to act in good faith, be diligent in overseeing the company, and disclose any conflicts of interest as well as anything that is in the best interest of the company to know.


Continue Reading Board of Directors’ Duties: One of the Few Things Not Put on Hold During the Pandemic

On July 20, 2020, the Wage and Hour Division of the US Department of Labor (DOL) published additional COVID-19 guidance in the form of a Q&A addressing Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Families First Coronavirus Relief Act (FFCRA) issues arising when employers and employees return to work.

A few days before, on July 17, the DOL published streamlined optional-use forms for employer and employee notification and certification obligations under the FMLA and separately asked the public to comment on the FMLA and its regulations in a Request for Information (RFI). The additional guidance and forms should help employers navigate FMLA leave and employee wage and hour issues during COVID-19. And employers now have the opportunity to share their thoughts on the FMLA and its implementing regulations with the DOL. We provide more insight into the DOL’s recent activity below.


Continue Reading New Q&As, New Streamlined Forms, and an RFI: the Department of Labor Publishes More COVID-19 Guidance and Seeks Public Comment on the FMLA

With a surge in COVID-19 cases in parts of the US (and some states taking or considering taking a step backwards into a prior reopening phase), employers are trying to figure out the best ways to keep the virus from spreading in their reopened worksites. We have answered some frequently asked questions below to help employers implement or modify their screening protocol to make it the best fit for their physical workspace, their budget, and their workforce.

1.  Can I check my employees’ temperatures before they enter the  workplace? If my employees have a fever, can I send them home (or tell them not to come to work)?

Yes, employers can check their employees’ temperatures before they enter the workplace. In fact, some states and localities require employers to do daily or weekly checks, so check your local requirements.

A temperature check is a medical examination under the ADA, and in ordinary times, employers generally cannot require employees to submit to a temperature check. However, given COVID-19’s rise to the level of pandemic, and the CDC and state and local health authorities’ acknowledgment of the community spread of COVID-19 and issuance of precautions, EEOC guidance allows employers to check employees’ temperatures before they enter the workplace. Temperature checks are only permitted while the virus is severe, so as the level of community spread diminishes in your locality make sure that temperature checks are still permitted before you administer them.

In addition, employers can send employees home (or tell them not to come to work) if they have a fever or any of the other symptoms of COVID-19. See EEOC guidance and CDC guidance, “Separate Sick Employees.” The CDC defines a fever as 100.4 F or 38 C or above. States may have different guidance regarding what qualifies as a “fever,” with some states defining a “fever” as a flat 100 F, and employers can set lower temperature thresholds if they prefer.


Continue Reading Employee Testing for COVID-19: What Works Now for Your Worksite?

On July 2, 2020, the US Department of Labor’s Occupational Safety and Health Administration (OSHA) supplemented its prior COVID-19 guidance (Guidance on Preparing Workplaces for COVID-19 and Guidance on Returning to Work) with additional FAQ guidance covering topics such as best practices to prevent the spread of COVID-19 infection in the workplace, workplace testing, and worker training. Though the guidance is not a standard or regulation itself (and therefore creates no new legal obligations for employers), it provides practical answers to actual inquiries OSHA received from the public regarding COVID-19 and workplace safety, and refers to pertinent Centers for Disease Control and Prevention (CDC) guidance and applicable OSHA standards for employers to consider.

OSHA grouped the FAQs by topic for easy navigation. Several of the key FAQs for employers are summarized below.

General Information

What precautions can employers in non-healthcare workplaces take to protect workers from COVID-19?

Employers should assess worker exposure to hazards and risks and implement infection prevention measures to reasonably address them consistent with OSHA Standards. Such measures could include:

  • Promoting frequent and thorough handwashing or sanitizing with at least 60% alcohol hand sanitizer;
  • Encouraging workers to stay at home if sick;
  • Encouraging use of cloth face coverings;
  • Training employees on proper respiratory etiquette, social distancing, and other steps they can take to protect themselves;
  • Considering using stanchions, temporary barriers, shields, and spacing out workstations to help keep workers and others at the worksite at least 6 feet away from each other;
  • Cleaning and disinfecting frequently touched surfaces (e.g., door handles, sink handles, workstations, restroom stalls) as much as possible, but at least daily.

Employers subject to OSHA’s PPE standard must also provide and require the use of personal protective equipment (PPE) when needed, and must conduct job hazard assessments to determine the appropriate type and level of PPE required.

The US Department of Labor and US Department of Health and Human Services’ Guidance on Preparing Workplaces for COVID-19 and OSHA’s Prevent Worker Exposure to COVID-19 alert provide more information on steps all employers can take to reduce workers’ risk of exposure to SARS-CoV-2. Learn more about preventing the spread of COVID-19 from OSHA and CDC.

Cleaning and Disinfection

How should I clean and disinfect my workplace?

Employers should review the CDC’s updated information about cleaning and disinfecting public spaces, workplaces, businesses, schools, and homes.


Continue Reading OSHA Publishes New FAQ Guidance on COVID-19 in Response to Public Inquiry

Employers in the US are more than a little fearful of COVID-19 related class and collective action lawsuits coming their way, and with good reason. Since shelter-in-place orders were imposed in March, US employers have faced class action lawsuits for a variety of COVID-19 related reasons, including the alleged failure to implement proper workplace safety measures or provide appropriate paid sick leave. To keep workers safe from contracting the virus at work, many employers have allowed employees to continue to work from home indefinitely, which likely decreases the odds that an employer will be sued in class action litigation for failing to provide appropriate PPE in the workplace. However, managing employees working from home can create other issues worthy of class-action litigation, including reimbursing those employees for work-related expenses.

What can employers do to ensure they meet reimbursement requirements to steer clear of expense reimbursement class action lawsuits in the US? Go through the four considerations, below.

  1. Know the rules that apply in your jurisdiction

Several jurisdictions have specific rules regarding employee expense reimbursements, so you’ll need to check your local law. In California, an employer must reimburse an employee for all “necessary expenditures or losses incurred by the employee in direct consequence or discharge of his or her duties.” Cal. Lab. Code § 2802. Similarly, Illinois requires reimbursement of all “necessary expenditures or losses” an employee incurs within the scope of employment that are “directly related to services performed for the employer,” unless the employer has a written reimbursement expense policy and the employee fails to comply with that policy. 820 ILCS 115/9.5. And in the District of Columbia, employers must pay the cost of purchasing and maintaining any tools that the employer requires to perform the employer’s business. D.C. Mun. Reg. tit. 7, § 910.1. If you have operations in several jurisdictions, make sure that you know and follow each applicable jurisdiction’s rules.

In addition, the Fair Labor Standards Act (FLSA) may apply. Though the FLSA does not require employers to reimburse their employees, under the FLSA “kickback” rule, employees cannot be required to directly pay business-related expenses or reimburse their employer for such expenses if doing so would cause the employee’s wage rate to fall below the required minimum wage or overtime compensation thresholds. See 29 C.F.R. § 531.35. Remote workers typically earn well-above the federal minimum wage ($7.25 per hour), so employers don’t need to be as concerned about business expenses causing those employees’ wages to dip below the federal minimum wage. However, employers should be on the lookout for these situations, which require more attention:

  • Where employees are subject to overtime for working more than 40 hours in a workweek;
  • Where a particular pay threshold (whether under federal or state law) must be met for the employee to meet an exemption from overtime (in which case the employee will become nonexempt and must be paid overtime for any work over 40 hours in a workweek); or
  • Where state or local minimum wages are higher (such as Chicago’s $14 per hour or California’s $12 per hour), making it more likely that an employee’s payment of business-related expenses would cause their wages to dip below the minimum wage.

A violation of the FLSA occurs in any workweek in which the cost of the business-related expenses borne by the employee cuts into the minimum or overtime wages required to be paid to the employee. Therefore, employers can more easily run afoul of the FLSA in these scenarios, especially if the business-related expenses paid in any given workweek happen to be hefty.


Continue Reading Want to Avoid Employee Reimbursement Class Actions for Remote Work? Take These Four Steps

On June 15, 2020, the US Supreme Court changed the face of federal workplace anti-discrimination laws. In Bostock v. Clayton County, the Court ruled that Title VII’s prohibition against job discrimination on the basis of “sex” includes sexual orientation and gender identity. Though Title VII of the Civil Rights Act of 1964 has long-prohibited employers from discriminating on the basis of color, national origin, race, religion, and sex, the question of whether sexual orientation and gender identity were included in the definition of “sex” went unsettled — until now.

“An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex,” Justice Neil Gorsuch wrote for the court in the 6-3 opinion. “Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” Justice Gorsuch and fellow conservative Chief Justice John Roberts joined liberal Justices Breyer, Ginsburg, Kagan, and Sotomayor in the majority.


Continue Reading Support for LGBTQ Rights, with a Signal for Religious Liberty: What Does Bostock Actually Mean for Employers?

On June 5, 2020, President Trump signed the Paycheck Protection Program Flexibility Act into law. The Flexibility Act amends the Paycheck Protection Program (PPP) provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in several important ways, including by giving borrowers more time to spend loan funds and still obtain forgiveness, increasing the amount of non-payroll costs that may be forgiven, and creating two new “safe harbors” that allow borrowers to achieve full forgiveness despite reductions in employee headcount or wages.

Congress enacted the PPP provisions largely to allow small businesses to meet their payroll obligations and avoid layoffs during the pandemic. To encourage businesses to keep their workforces and payrolls intact, the CARES Act provides that employers who do not reduce headcount or wages and salaries during certain measurement periods may qualify for forgiveness of their PPP balances. However, under the CARES Act as originally enacted, forgiveness is reduced or eliminated if employers lay off workers or reduce their wages.

One of the new “safe harbors” allows employers who have been unable to operate at the same level of business activity as a result of compliance with COVID-19 related federal safety guidelines and closure orders to obtain full forgiveness even though they have reduced employee headcount. But if employers can fit within the Flexibility Act’s new safe harbor, is it really “safe” for them to do so? We offer insight below.
Continue Reading Is it Safe to Rely on the PPP Flexibility Act Safe Harbor for Reduced Activity Levels?

On June 11 and June 17, 2020, the EEOC updated “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” its Q&A technical assistance guidance for COVID-19 related issues. The new guidance expands its previous guidance, answering additional questions on several topics, including COVID-19 antibody tests, “high risk” employees (which we blogged about here), accommodations for employee screenings, how to handle national origin discrimination, and whether an employer’s safety concerns permit the exclusion of pregnant or older people from the workplace. We have summarized the new Q&A below.

Disability-Related Inquiries and Medical Exams

A.7. CDC said in its Interim Guidelines that antibody test results “should not be used to make decisions about returning persons to the workplace.” In light of this CDC guidance, under the ADA may an employer require antibody testing before permitting employees to re-enter the workplace?

No. An antibody test constitutes a medical examination under the ADA. In light of CDC’s Interim Guidelines that antibody test results “should not be used to make decisions about returning persons to the workplace,” an antibody test at this time does not meet the ADA’s “job related and consistent with business necessity” standard for medical examinations or inquiries for current employees. Therefore, requiring antibody testing before allowing employees to re-enter the workplace is not allowed under the ADA. Please note that an antibody test is different from a test to determine if someone has an active case of COVID-19 (i.e., a viral test). The EEOC has already stated that COVID-19 viral tests are permissible under the ADA.

The EEOC will continue to closely monitor CDC’s recommendations, and could update this discussion in response to changes in CDC’s recommendations.


Continue Reading More on the Return to Work: the EEOC Issues New COVID-19 Related Guidance

Even though vacation plans may be hampered by face coverings and social distancing this summer, US employers are still likely to see requests for time off from employees who want to step away from sheltering-in-place and visit reopening regions. But while employers may agree that their employees should take a break from work, they shouldn’t agree to putting other employees or customers at higher risk of catching COVID-19 when a traveling employee returns.

What can US employers do-without crossing the line-to keep tabs on vacationing US employees? We address some common questions in the following Q&A.

Q.  Can I ask my employees about their travel plans when they request vacation time? Or can I ask them where they went when they return from vacation?

A.  Yes, you can ask employees requesting vacation time to disclose their travel plans (or ask employees where they traveled once they return). The key is to make sure the information you’re requesting is in accordance with business necessity and that you are asking for the information in a non-discriminatory manner.

Business necessity: Employers have a general duty under Section 5(a)(1) of the Occupational Safety and Health Act to ensure that the workplace is free from recognizable hazards likely to cause death or serious physical harm. Keeping the workplace and employees free from cases of COVID-19 provides the business justification employers need to ask where employees are going during their time off. If your workforce is still working remotely, you have a business justification to make sure your employee travels with a company laptop or other necessary equipment should the employee become stranded or be required to quarantine upon return. Employees may want to know why you’re asking about their personal vacation plans; be prepared to explain why you’re asking.


Continue Reading What the Traveler Saw: Handling Employee Vacation Requests During COVID-19

On May 20, 2020, Chicago passed the “COVID-19 Anti-Retaliation Ordinance,” making it illegal for employers with employees in the City of Chicago to retaliate against employees who stay home: to follow public health orders related to COVID-19, to quarantine because of COVID-19 symptoms, or to care for an individual ill with COVID-19. Enacted as an amendment to Chicago’s Minimum Wage and Paid Sick Leave Ordinance, the Anti-Retaliation Ordinance prohibits employers from terminating, demoting, or taking other adverse action against employees who are unable to work for reasons related to COVID-19.

What do I need to know?

Under the Ordinance, an employer cannot terminate, demote, or take any other adverse action against an employee for obeying an order issued by Mayor Lightfoot, Governor Pritzker, or the Chicago Department of Public Health (or, in the case of subsections (2) through (4) below, a treating healthcare provider) requiring the employee to:

  1. Stay at home to minimize the transmission of COVID-19;
  2. Remain at home while experiencing COVID-19 symptoms or while being sick with COVID-19;
  3. Obey a quarantine order issued to the employee (to keep an employee who has come into contact with an infected person separate from others);
  4. Obey an isolation order issued to the employee (to separate an employee with COVID-19 from others); or
  5. Obey an order issued by the Commissioner of Health regarding the duties of hospitals and other congregate facilities.

In addition, an employer cannot take adverse action against an employee for caring for an individual subject to subsections (1) through (3) above.

The Ordinance became effective on May 20, 2020, and will expire (unless City Council intervenes) when the Commissioner of Public Health makes a written determination “that the threat to public health posed by COVID-19 has diminished to the point that [the] ordinance can safely be repealed.”


Continue Reading Chicago Employers: Allow Your Employees to Obey COVID-19 Public Health Orders, or Else