Adams and Reese Legislative Update – 12-01-2021

The Tennessee General Assembly went into a Special Session in October with a very broad call to consider COVID-19 issues and some other issues that were related to the pandemic. The legislature has had several Special Sessions over the past two years. Historically, a Special Session is called by the Governor to address very limited issues such as the Special Session that was called to approve the Ford incentives for the West Tennessee Mega Site Development. However, the “COVID-19 Special Session” was not called by the Governor, who withstood pressure for several months to call a Special Session to address COVID-19-related issues. Instead, the COVID-19 Special Session was called by two-thirds of the voting members of both the Senate and the House, which is allowed under the Constitution. As a result, the call was not restricted and was very broad in that it addressed numerous COVID-19 issues and other issues that were indirectly related to the pandemic. Instead of having three or four major bills considered, there were over 100 bills introduced. Many of these bills were very anti-business and encroached on the rights of private property owners. 

The Special Session was spearheaded by several legislators who were opposed to the actions of some private businesses enacting policies related to requiring masks be worn and vaccine requirements. As one may imagine, there was not one set of rules for companies throughout the state. Different companies had different policies based on the nature of the industry, the level of COVID-19 in the community, etc. Basically, out of the 100 bills, only 8-10 bills were given serious consideration. Those bills were primarily sponsored by Lt. Governor McNally and House Speaker Sexton. The original draft of these bills would have been a huge imposition on private businesses and private property owners. As drafted, a business could not require an employee to show proof of receiving a COVID-19 vaccine or require an employee to wear a mask. In addition, the original legislation would have even prevented private homeowners from directing someone entering their home (e.g., service delivery or home health care) to wear a mask. The legislation was obviously drafted quickly without the input of the business community. The final legislation that passed was put together within 24 hours of the legislature going into session and was basically amended in total secrecy and passed at 1:00 am on a Saturday. As a result, the legislation that passed and was signed by Governor Lee will be the subject of many court challenges that are currently taking place. Furthermore, as the local media has been reporting, it has been disclosed that the Governor’s own legal counsel had advised the Governor and the legislature that much of the legislation that was passed was not legally enforceable.

The following are some quick points on some of the issues that are now faced by the business community:

1. Vaccines. Employers are subject to broad language. The law states that employers cannot have “adverse action” against employees based on vaccination status. Employers cannot compel proof of vaccination status from employees, which, as a practical matter, essentially outlaws the vaccine mandates. One of the key issues with the law is the definition of “adverse action.” On its face, it could mean any sort of discrimination based on vaccination status. This now has to be reconciled with the federal directives, which requires employers with 100 or more employees to get employee vaccination status. This is in direct conflict with the law recently enacted in Tennessee. The OSHA ETS directive has been suspended due to the fact that several states have filed lawsuits in different U.S. federal courts and those cases are now being consolidated in the U. S. Sixth Circuit Court of Appeals.
2. Masks. Private employers who require masks be worn and require unvaccinated employees to wear masks while not requiring the same for vaccinated employees, would be considered an adverse action.  Some companies have basically established an honor system when it comes to declaring whether or not someone was vaccinated. If someone was vaccinated, a mask was not required. If someone was unvaccinated, they were asked to wear a mask, especially in an area where there are a lot of people working. Based on the law that was passed, it seems if an employer requires unvaccinated employees to wear a mask, the employer must require all employees to wear a mask, even though some have been vaccinated. 
3. Testing. The state law says nothing about testing; however, OSHA ETS provides for testing. Again, there is the issue of what an “adverse action” is and what constitutes discrimination. If a Tennessee business chooses to only test unvaccinated employees, this would likely be interpreted as taking an adverse action against unvaccinated employees. There is also the issue regarding the cost of testing and it is likely the business will be obligated to provide the test.
4. Private Right of Action. Under the new state law there is now a private right of action for employees who have been subject to an adverse action. This is retroactive and very dangerous. Employees who file these lawsuits can recover attorney’s fees, which incentivizes attorneys to take these cases. To allow for a direct cause of action by employees against employers was a harsh penalty to be placed on private businesses by the legislature. There are certainly other options, one of which is using a minor civil penalty, which would have been more practical. Also, please note there has already been legislation introduced by Representative Brandon Ogles from Williamson County, Tennessee, that would not only allow for a direct cause of action against an employer but also make it a “Class D Felony” if an employer takes any type of adverse action against an employee for being unvaccinated.This legislation will be considered during the next legislative session.
5. Comptroller’s Office. Exemptions from the Comptroller’s office will only last one year. These exemptions are for any entity that receives federal funding and the state law would jeopardize that federal law by failing to comply with federal mandated masking or vaccine policies. Most major universities and hospitals fall under this exemption and there are hundreds of millions of dollars that go directly to these entities. Requests for exemptions have already been filed. This probably applies to private companies who have federal contracts and are receiving funds from the federal government pursuant to a federal contract. Furthermore, it will probably end up applying to any type of public organization such as police departments, fire departments, etc., who receive any type of federal funding. This creates another level of bureaucratic red tape in regard to a private company protecting itself and making sure it is not in violation of a federal vaccine/masking policy. This will require filing for an exemption with the Comptroller’s office. 

There are other issues considered by the legislature that are not addressed in this update such as restricting the discretion of District Attorney Generals in regard to prosecuting certain cases, making the election of the local school boards now partisan elections, and removing masking authority by local public schools, etc. There were many issues addressed by the legislature within 24-48 hours of going into Special Session which was done without any input from most organizations, including the business community in Tennessee. The Tennessee Trucking Association followed the Tennessee Chamber of Commerce, the National Federal of Independent Businesses and other pro-business organizations in strongly objecting to the final legislation that passed and expressed concern that the business community was not given an opportunity to offer any input as the legislation was being drafted and adopted. If the legislature had recessed on Friday night and then returned on Monday to take up the legislation, it probably would not have passed since the business community was so opposed to many parts of the legislation. 

I am sure we will have to defend against similar efforts that will be directed against the business community during the 2022 regular legislative session. We will keep you updated on any new developments.