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Petitioners Seek to Impose COVID-19 Workplace Mandates on Job Creators

| Tort Reform & Legal Climate

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Editor’s note: Interested in aligning with other North Carolina job creators to shape a top-10 business legal climate here in our state? Contact NC Chamber Legal Institute President Ray Starling to learn what you stand to gain from your engagement and support.

An effort is underway by petitioners in Wake County Superior Court to impose new enforceable workplace mandates on North Carolina employers, signaling another potential threat to the reestablishment of a top-10 business legal climate here in our state. The facts involve a petition for rulemaking initially filed with the N.C. Department of Labor (NCDOL) on Oct. 12, 2020, by a diverse group of petitioners urging the department to adopt a broad set of COVID-related workplace requirements for businesses, farms, and factories in North Carolina.

The substantial list of proposals includes requirements for North Carolina employers to prepare COVID-19 hazard assessments and response plans; furnish PPE, at no cost, to vendors, contractors, and other visitors, in addition to employees; establish COVID-19 training programs; update work practices and conditions, including provisions for teleworking; regularly clean and disinfect all work areas; and potentially modify work areas and air handling systems.

The hazard assessment process outlined in the petition would require participation from employees and, where applicable, unions. The development of preparation and response plans would also require employee involvement. Additional requirements are aimed specifically at agricultural employers and those responsible for housing migrant workers. The proposal urges enforcement against employers who do not comply with these requirements, including civil penalties of up to $100 per worker per day.

The petition also proposes a relatively novel provision, known as qui tam enforcement, which resembles the citizen suits available under federal environmental statutes. It would authorize individuals – including non-governmental organizations (NGOs) and labor unions – to file a suit to enforce the rule if NCDOL does not take enforcement action within 30 days of receiving notice of alleged violations. This provision might be referred to as a plaintiffs’ lawyer’s full employment clause.

Where the Matter Stands

After the October filing, the petition was denied by North Carolina’s then-Secretary of Labor, who supported the decision in part using an NCDOL rule requiring an economic impact estimate and an explanation of how the estimate was derived. Petitioners asserted that the proposed rule “would not have a substantial economic impact.”

By law, if the aggregate economic impact on all persons affected by a rule is projected to exceed $1 million in a 12-month period, an agency must prepare a fiscal note considering, among other things, the costs to the regulated employers. Preparation of a fiscal note can be an intensive, lengthy, and costly process in itself. In addition to the procedural matter, the former Secretary of Labor cited limitations on statutory authority and questioned whether NCDOL has sufficient authority for all the requirements the proposal seeks to impose.

On Dec. 9, 2020, petitioners filed a challenge to the denial of their petition in Wake County Superior Court. Petitioners also filed a complaint with the federal Occupational Safety and Health Administration (OSHA), alleging that the state OSHA program was deficient in addressing COVID risks.

On Jan. 29, 2021, OSHA issued updated guidance and recommendations to employers to reduce the risk of COVID transmission in the workplace. The guidance document addressed all of the same substantive components that the petitioners had asked for in a rule and described existing mandatory health and safety standards that might apply to the recommended measures.

However, OSHA’s guidance document explicitly stated that it was neither a standard nor a regulation and was advisory only. The NCDOL adopts federal OSHA standards verbatim, with some limited amendments, and NCDOL rules contain the same existing mandatory health and safety standards described in the OSHA guidance.

Moreover, just earlier this month, OSHA issued a National Emphasis Program aimed at more closely regulating “high hazard industries” where the risk of contracting COVID-19 may be more prevalent. On the same day, OSHA issued an Updated Interim Enforcement Response Plan that provides new instructions and guidance to OSHA staff regarding COVID-19 related complaints and illness reports. It is not clear how the challenge filed by petitioners in Wake County Superior Court will ultimately intertwine with the new federal emphasis, if at all, but it suffices to say there is much to watch in this space.

Why It Matters to You

In short, the petitioners’ proposals in this case would impose significant and unnecessary costs and administrative burdens on job creators at a time when North Carolina businesses should be focused on their recovery – and on fueling a complete relaunch of our statewide economy. To the extent that a new rule would require employers to make structural modifications to their facilities, it would be an expensive proposition indeed.

These costs and burdens would be particularly hard felt by agribusinesses and those companies that rely on labor-intensive production operations. Of course, the enforcement mechanisms, including qui tam, should concern all job creators who wish to provide a safe workplace for their employees without fear of unwarranted lawsuits from plaintiffs’ lawyers looking to make a quick profit in an uncertain environment.

The timing of this proposal comes relatively late in the pandemic, as vaccinations are increasing statewide and well after North Carolina businesses have demonstrated an ability to reopen safely and responsibly. By and large, employers have proven over the past year that they can be depended upon to put their workers’ safety first, even with the added challenge of COVID-19. And for those rare few who cannot, there are already pathways established by state law through which individuals can pursue legal remedies if they have reason to believe they have been exposed to an unsafe working environment.

At the CLI, we believe job creators deserve the trust and support of state leaders now more than ever, as they must be empowered to fully embrace new opportunities for recovery and growth. Now is the time for commonsense policies that support predictability for businesses and their workers and enable North Carolina to remain competitive with other states in the race for jobs. Now is not the time for sudden policy reversals in our courts that saddle job creators with additional uncertainty.

The case in Wake County Superior Court has yet to be calendared. There are certain to be motions filed by both parties, but the Superior Court sits as an appellate court in this matter and can move to resolution more expeditiously than a trial-type hearing. You can be sure we are keeping a close watch on this case here at the CLI. We stand ready to bring the collective resources of our supporters to bear if action is warranted.

Sincerely,

Ray Starling
President
NC Chamber Legal Institute