Mandatory Vaccinations

by Cara Nicklas

One of the most common COVID-19-related question we are receiving is whether an employer may mandate its employees receive a COVID-19 vaccination.  The legal issues related to this question depend on different variables. Answers regarding the legality of mandatory vaccination policies seem to be evolving as the courts continue to address the issues.  Generally speaking, a private employer may require its employees receive certain vaccinations as a condition of employment as long as certain exceptions are allowed by the employer. These exceptions are religious exceptions under Title VII of the Civil Rights Act (Title VII) and medical exceptions under the American with Disabilities Act (ADA).

Whether public employers may mandate vaccinations and whether the President of the United States may use executive powers to mandate employer require its employees be vaccinated is even more uncertain.

Our attorneys will continue to monitor the legal aspects of the COVID-19 vaccine. We are available to assist employers with COVID-related policies and practices.  We are also available to assist employees who are navigating threats of losing a job due to vaccine mandates.

CARES Act Summary

by Cara Nicklas and Kyle McAllister

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief & Economic Security Act (CARES Act).  The Act is a sprawling piece of legislation that addresses a wide range of topics from healthcare and national defense to the tax code and student loans.  Rather than explaining all the technical contours of the Act, the purpose of this article is to focus on only the portions of the Act that might provide the most benefit to you and your business. 

Individual Assistance 

• Direct Payment Program – Under the direct payment program, individuals who reported adjusted gross income of $75,000 or less or couples filing jointly who reported adjusted gross income of $150,000 or less on their most recently filed tax return will receive a one-time payment of $1,200 per adult and $500 per child under 17 years old.  For each $100 of adjusted gross income that an individual or couple filing jointly reported over the established thresholds, the amount of the direct payment they receive will decrease by $5. 

• Federal Loan Modification – The federal loan modifications under the Act allow student loan borrowers to pause their monthly payments and interest until October 2020.  The Act also allows borrowers of federally backed family mortgages to pause their monthly payments and interest for up to 180 days.  

• Expanded Unemployment Benefits – The Act expands unemployment compensation benefits by expanding eligibility to workers who are not eligible for state unemployment benefits or have exhausted state unemployment benefits.   

• Penalty-Free Access to Retirement Plans – The Act allows individuals younger than 59 ½ who have experienced financial hardship due to the coronavirus to withdraw up to $100,000 from an IRA or other defined retirement plan without incurring the normal 10% withdrawal penalty.  It is important to note that there are additional restrictions regarding this distribution that change depending on what type of retirement account you are withdrawing the funds from.  If you have been negatively affected by the coronavirus and are considering making a withdrawal from a retirement account, we strongly advise you to discuss your situation with your attorney, accountant, and financial advisor. 

• Suspension of Minimum Required Distributions – Due to the precipitous drop of the stock market the past several weeks, the CARES Act includes a provision that waives the minimum required distributions from IRAs and certain defined contribution plans for 2020. 

Business Loans 

• Paycheck Protection Program (PPP) Loans – PPP loans will be administered through local lending institutions and backed by the federal Small Business Association.  The loans are intended to help businesses cover payroll and other operating expenses and will be available to businesses with less than 500 employees as well as individuals who are self-employed and work as independent contractors.  Of particular benefit to most small and mid-sized businesses is the loan forgiveness portion of the PPP.  This provision states that the portion of the loan that is spent on certain operating expenses within the first eight weeks after receiving the funds may be forgiven in full if certain requirements are met. 

• Economic Injury Disaster Loans (EIDLs) – Although the EIDL program was available to small businesses prior to the CARES Act, the Act expands the program by allowing for an emergency loan advance of up to $10,000, removing the personal guarantee requirement for loans of under $200,000, and expanding eligibility to independent contractors, sole proprietors, and non-profits.  Like Paycheck Protection Loans, the emergency loan advance of up to $10,000 may be entirely forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruptions, and mortgage or lease payments. 

• Interplay Between PPP Loans and EIDLs – It is important to note that a business may apply for both a PPP loan and an EIDL.  However, there are additional restrictions on businesses receiving both types of loans, including that there must be no duplication in the use of funds between the loans.  We strongly recommend talking with your attorney and accountant regarding these additional restrictions if you plan on applying for both a PPP loan and EIDL. 

Business Tax Relief 

The tax relief provided to businesses in the CARES Act includes employee retention credits, payroll tax deferral, and modifications to the IRS’s treatment of business interest deductions, net operating loss allocation, and alternative minimum tax credits.  Each of these tax relief programs is too complex to be adequately discussed in a brief summary, but our attorneys would be happy to discuss these changes with you and work with your accountant to determine how your business can benefit from the changes. 

Conclusion 

The CARES Act is a wide-ranging piece of legislation with many programs and provisions.  Certain aspects of the programs described above may be modified as the Act is implemented. Our attorneys will continue to monitor the development of the Act as implementation begins in the coming days and weeks and would be happy to provide ongoing legal advice regarding which programs may be most beneficial to you and your business. 

The Impact of Oklahoma's Medical Marijuana Law on the Workplace

by Cara Nicklas

Oklahoma voters recently passed a state question that legalizes medical marijuana. Oklahoma’s medical marijuana laws are codified in Title 63, Chapter 15, § 420A through § 426A, of the Oklahoma statutes. So, what is the impact of the medical marijuana law on the workplace? The short, precise and lawyerly answer is . . .  it depends.  It depends on many factors, known and unknown. Without settled case law in Oklahoma on many of the issues related to medical marijuana use by employees, employers are left to make judgment calls based on the particular facts in a given situation.

A reasonable interpretation of the Oklahoma statute suggests the impact on employers should be minimal. The law restricts an employer from discriminating based on an employee’s “status” as a medical marijuana license holder or solely on the “results” of a positive drug test by a medical marijuana license holder. The law does not restrict an employer from maintaining a safe and drug-free workplace just as employers have done since before the law passed. Employers may restrict any drug use, legal or illegal, during or before work hours, that would impair the employee’s ability to perform work or would cause a safety risk. A situation analogous to medical marijuana would be the use of pain medication. An employer may prohibit its employees from driving or operating dangerous equipment while under the influence of traditional prescription drugs or medical marijuana. An employer may also take action against a poorly performing employee who may be under the influence of legal or illegal drugs.

Marijuana is still illegal under federal law. Therefore, an employee may not bring marijuana-related discrimination claims under federal statutes, such as the Americans With Disabilities Act. It is uncertain whether claims for disability discrimination can be brought under state law.  Assuming a claim may be brought under the Oklahoma Anti-Discrimination Act, any request by an employee for a reasonable accommodation involving use of medical marijuana is fact-specific and would require the employer engage in the interactive process similar to the dialogue and deliberation an employer goes through when an employee depends on prescription drugs that violate an employer’s policies. Whatever reasonable accommodation an employer determines is necessary, it is not required that the employer accommodate an employee’s use of marijuana on the work-premises or during working hours. Additionally, an employer can legally take action against an employee if “failure to do so would cause an employer to imminently lose a monetary or licensing related benefit under Federal law or regulations.”  (See 63 O.S. § 425A)

Oklahoma employers already realize how vulnerable they are to discrimination claims.  The new medical marijuana law certainly does not minimize the risk of discrimination lawsuits. Nevertheless, the new law should not significantly increase that risk if employers continue to take action against employees that is focused on the employee’s work performance as opposed to the employee’s status. 

Restrictive Employment Covenants in Oklahoma

by Cara Nicklas

Restrictive employment covenants are becoming more commonplace.  Employers have an interest in protecting against the unfair competitive advantage employees gain by access to an employer’s customers, trade secrets, business decisions, etc.  Employees may betoo desperate for work and unequipped to negotiate such covenants, so they sign without much thought.  Both employer and employee should make sure they understand the restrictive employment covenant they sign and ensure it makes sense for their particular industry and situation.
 

Restrictive employment covenants are governed by state law rather than federal law.  Therefore, employers should exercise caution before using “free and easy” downloadable agreements from the internet.  They are not “one-size-fits-all” type of agreements.  Employees should carefully consider the impact of a proposed restrictive covenant when the employment relationship ends and should seek advice as to the enforceability of the particular provisions in order to understand the potential risks in signing an employment agreement.  
 

Restrictive employment covenants may include the following provisions:

1. A non-compete provision prohibits the employee from working for competitors during a specified period of time and within a defined geographical area.   General non-compete agreements are not permitted in Oklahoma.  A broadly worded contract that restrains a person from exercising a lawful profession, trade or business is void as a violation of Oklahoma public policy except as provided by Oklahoma statute.  In an agreement to purchase another’s business, which includes the goodwill of the business, the parties may agree that the seller will refrain from carrying on a similar business (bear in mind such provision can affect the tax consequences of the sale of a business).  Similarly, partners who dissolve a partnership may agree that none of them will carry on a similar business within a specified geographical area.
    
2. A non-solicitation provision bars the employee from soliciting the business of the employer’s customers.  The Oklahoma Legislature created a third statutory exception to the general prohibition against contracts in restraint of trade.  An agreement prohibiting a former employee from directly soliciting the sale of goods and services from the “established customers of the former employer” is not a contract in restraint of trade and may be enforced in Oklahoma.  Courts will likely enforce such agreements only if the agreement includes a reasonable length of time as opposed to a permanent ban.  Courts will be left to define terms such as “established customers” but employers are clearly permitted to prohibit direct solicitations of its “established customers” by former employees.   
    
3. A nonrecruitment provision or anti-raiding provision bars the employee from recruiting the employer’s employees and contractors for a subsequent or concurrent employer.  Effective November 1, 2013, the Oklahoma Legislature expanded the exception to the prohibition against restrictive employments contracts by authorizing employers or businesses to prohibit its employees or independent contractors from soliciting its employees or independent contractors to work for their new employer/business.
    
4. A confidentiality/nondisclosure provision prohibits the disclosure of the employer’s confidential and proprietary information.  Oklahoma law permits confidentiality/non-disclosure agreements.  Such provisions are common in employment agreements but often poorly written.   A written agreement specifying an employee’s obligations regarding the employer’s confidential and proprietary information should 1) clearly define what is “confidential” and “proprietary” so the employee understands what information is protected, 2) state the duration of the obligation, and 3) identify the specific prohibitions on disclosure or use of confidential and proprietary information.   Vague provisions are difficult to enforce.

Employment Law Basics for the Small Business Owner

by Cara Nicklas

Small business owners sometimes assume the onerous employment laws apply only to the big corporations.  This misconception is fed by the reality that more wrongful discharge cases have historically been filed against larger employers with deep pockets rather than the small businesses.  However, as our society grows increasingly more litigious, small businesses are becoming more prone to lawsuits and should take precautions.

Generally, Oklahoma is an “at-will employment” state.  That means an employer may discharge an employee for good cause, for no cause or even for cause that is morally wrong, without being liable.  However, this general rule has been engulfed by exceptions.  Those exceptions include many statutory causes of action such as Title VII of the Civil Rights Act of 1964, Fair Labor Standards Act, Family Medical Leave Act, Americans With Disabilities Act, and Age Discrimination in Employment Act, to name just a few.   Each law’s applicability depends on the size of the employer, ranging from a minimum of 2 to 50 employees.

Besides the various statutory causes of action that constitute exceptions to the at-will employment doctrine, Oklahoma has recognized another common law exception.  The public policy tort claim (also referred to as the Burk tort claim, named after the Oklahoma Supreme Court case of Burk v. Kmart Corporation) permits a former employee to sue an employer if the employee believes he or she was discharged for 1) refusing to act in violation of an established and well-defined Oklahoma public policy, or 2) performing an act consistent with a clear and compelling Oklahoma public policy.  Small businesses, with as few as one employee, may be sued under this theory.  This claim is becoming widely used by terminated employees.

Oklahoma Courts’ expansion of the public policy tort claim makes it difficult to completely protect oneself against such claims.   A discharged employee may simply claim to have complained to a supervisor about a suspected violation of an Oklahoma law, i.e., public policy, and allege his or her discharge resulted from the complaint.  The case becomes a question of whether the former employee or the supervisor is telling the truth.  Resolution of this allegation, which may be completely false, requires an expensive, protracted jury trial that most small businesses cannot afford.

For a small business owner to be placed in the most favorable position, the employer should consider the following:

• Develop a written, but not overly detailed, employee handbook. Do NOT include policies you do not intend to enforce.

• Ensure your hiring process is fair. Spend time at the front end thoroughly vetting your new employees. Conduct a background check, including a verification of prior employment, before hiring. This will save time and money in the long run.

• Do NOT ignore or dismiss employee complaints, even if informal or based on hearsay. Thoroughly document your handling of complaints.

• Seek legal advice before disciplining or terminating an employee. Making sure you properly handle an employee termination may save you the considerable expense of a lawsuit.

• Consider the purchase of insurance to defend against employment related claims.