News

On January 13, 2022, in a 6-3 opinion, the U.S. Supreme Court stayed the Occupational Safety & Health Administration’s (“OSHA”) Emergency Temporary Standard (the “ETS”) which requires employers with over 100 employees to implement a mandatory vaccination policy or require weekly testing of unvaccinated employees. Justices Gorsuch, Thomas, and Alito concurred, and Justices Breyer, Sotomayor, and Kagan dissented.

The majority held that the ETS’s challengers were likely to prevail on their claim that OSHA lacked authority to issue this mandate and that, consequently, the ETS should be stayed until the Sixth Circuit rules on the validity of the ETS. Specifically, the majority held that:

• To impose the stay, the ETS’s challengers had to show they were likely to succeed on the merits of their claim that OSHA lacked authority to impose the ETS and that equity justified interim relief until the ultimate validity of the ETS could be decided.
• The issue was whether the Occupational Health and Safety Act (the “Act”), and thereby Congress, plainly authorized the ETS. The majority held it does not.
• Under the Act, OSHA may impose an emergency temporary standard only where (1) “employees are exposed to grave danger from exposure to substances or agents determined to be toxic or physically harmful or from new hazards” and (2) the standard is “necessary to protect employees from such grave danger.”
• The Act empowers OSHA to regulate work-related dangers, not public health emergencies. Since COVID-19 can spread anywhere people gather, it is a general hazard, not an occupational hazard.
• According to the Court, while OSHA may have the authority to regulate occupation-specific risk related to COVID-19, the ETS’s breadth—applying to all employers with over 100 employees (approximately 84 million employees)—makes it more like a public health standard than an occupational standard.
• The fact that the Senate voted to disapprove of the ETS, coupled with the ETS’s unprecedented nature, were also telling signs that the ETS went beyond Congress’s authorization.
• And finally, the ETS’s benefits do not clearly outweigh the hardships faced by States and employers in implementing the ETS.
• The Court, therefore, held that the ETS’s challengers had satisfied their burden and granted the stay.

For now, employers do not have to comply with the ETS’s requirements. However, employers should continue monitoring this topic since the question of whether the ETS is valid has yet to be decided.

Carrington Coleman is proud to announce Bonnie Barksdale, Parker Graham, Ashley McMillan, and Andrea Perez have been elected partners in the firm effective January 1, 2022.

Bonnie Barksdale works with clients from the beginning of the transaction to its culmination and particularly enjoys working with clients over the course of time. Her clients include family investment groups, corporate entities, individuals, and religious and other non-profit groups. She has represented both buyers and sellers in the acquisition of distressed properties and handles default and foreclosures for institutional and individual lenders. For more information about Bonnie, please visit her bio.

Parker Graham practices business litigation and employment law. He has extensive experience handling emergency injunctive relief, especially involving non-competition and non-solicitation agreements. Parker also routinely advises clients on regulatory and compliance issues. For more information about Parker, please visit his bio.

Ashley McMillan focuses on individuals and families seeking personalized and quality representation with their estate plans. She walks clients through the sometimes-delicate issues that arise from estate planning and probate administration. Ashley also assists clients with estate and probate disputes. For more information about Ashley, please visit her bio.

Andrea Perez concentrates her practice in the fields of art law, business law, and intellectual property. Andrea represents both public and private company clients, as well as private equity firms and family businesses, with a variety of simple to complex corporate needs. She also works with galleries, museums, artists, auction houses, collectors, and art professionals to assist them with their unique art-related legal matters. For more information about Andrea, please visit her bio.

Noted Texas hospitality industry attorney John Gessner has joined Carrington, Coleman, Sloman & Blumenthal LLP as a partner.

“Clients have long relied on John’s leadership to help identify short- and long-term goals when they chart a path for growth,” said Carrington Coleman Managing Partner Monica Latin. “His experience and expertise are even more vital today to those in the hospitality industry as they address unprecedented challenges coming out of the pandemic.”

Mr. Gessner has a long track record of representing the Texas restaurant industry and is the immediate past chairman of the Texas Restaurant Association. He advises established and emerging brands in the areas of restaurant development; real estate and leasing; business operations and strategic planning; alcohol licensing; franchising; and formation and governance. He also has significant experience defending clients in employment and commercial litigation, as well as class actions. Mr. Gessner has represented clients before the EEOC, the Department of Labor, OSHA and alcoholic beverage regulatory agencies.

A frequent lecturer and author on hospitality-related topics, Mr. Gessner has been a regular participant in the Cornell University Hospitality Roundtable since 2005. He joins Carrington Coleman from Fox Rothschild LLP, where he served as co-chair of the law firm’s national hospitality practice. He also previously has served as general counsel to both national franchisees and franchisors, as well as restaurant development and management companies.

In addition to holding office with the Texas Restaurant Association, Mr. Gessner served as chairman of the association’s political action committee. He also has served on the board of directors and executive committee of the Greater Dallas Restaurant Association for more than a decade.

Also joining Carrington Coleman are associates Jordan Brownlow and Lara Albright Yost.

Ms. Brownlow’s practice focuses on employment issues including discrimination and retaliation, ERISA, benefits, compensation, and wage & hour claims, as well as training and counseling.

Ms. Yost joins the litigation and construction practices where she represents general contractors, subcontractors and developers in commercial and residential construction matters.

(Last updated December 6, 2021)

On November 6, 2021, the Fifth Circuit stayed the implementation of OSHA’s Emergency Temporary Standard (“ETS”) requiring employers with 100 or more employees to mandate vaccination or implement COVID testing and masking requirements. In response, OSHA stated it is suspending its enforcement of the ETS “pending future developments in the litigation.”

The case was consolidated with similar cases in the Sixth Circuit on November 16, 2021. Given upcoming deadlines in the case, it is unlikely that the Sixth Circuit will decide whether to lift the stay of the ETS before mid-December, which is after December 6th (the ETS’s deadline for implementation of a vaccination policy and tracking of vaccination status). However, the Court could conceivably act on the stay before January 4th (the ETS’s deadline for all employees to be vaccinated and/or subject to testing requirements).

The uncertainty about whether the ETS will go into effect has left many employers debating what to do now. If the ETS is upheld, employers – particularly large ones – will have significant logistical challenges to work through, possibly in a short amount of time, to be compliant. For this reason, employers might consider engaging in some preliminary planning, at least with respect to the ETS’s more significant requirements, to avoid a time crunch later.

Here are some issues for consideration in the planning process:

Employees’ vaccination status must be determined.

• How will employees be queried?
• How will that information be transmitted and stored?

Employers will have to choose between a mandatory vaccination policy or one that allows employees to opt out of vaccination if they test weekly.

• Which option is best for the employer?
• Who will pay for weekly testing (i.e., will the employer pay for the tests)?
• Will the employer require PCR or antigen tests?
• Where or how will employees get tested (i.e., will a particular lab or brand of test be required)?
• How will they submit their results?
• How will the employer monitor whether unvaccinated employees test weekly and what their results are?

Employers will have to implement certain protocols for removal of COVID positive employees from work as well as for reporting of work-related COVID-19 fatalities to OSHA within 8 hours and work-related COVID-19 in-patient hospitalizations within 24 hours.

• How will managers be trained on these sorts of obligations (so that they report what they know to the employer)?
• Who will make these reports on behalf of the employer?

We expect that the Sixth Circuit will rule on the ETS within the next few weeks, so please stay tuned for more information.

(Last updated September 10, 2021)

It’s been nearly two years since the COVID-19 pandemic shuttered businesses across the United States and abroad, causing a flurry of business interruption insurance claims along with it. With this critical anniversary approaching, insureds must be mindful of any applicable two-year statutory or contractual deadlines to file suit. Many states apply a two-year statute of limitations to some insurance-related claims, and policy provisions often attempt to shorten statutes of limitation that exceed two years.

The bottom line: the time is now for corporate insureds to carefully analyze COVID-19-related insurance claims (or potential claims) and determine a course of action.

To prudently advise its commercial policyholder clients, Carrington Coleman’s Insurance Practice Group has been closely tracking COVID-related insurance coverage litigation across the country. The landscape of decisions is varied, though many cases are still working their way through the courts. While policyholders have found some success, the majority of opinions thus far have favored insurers.

From the outset, insurers have argued that COVID-19 does not cause “direct physical loss or damage” to property, so coverage cannot be triggered. Accepting the insurer’s argument, the Northern District of Texas recently held that “physical loss” does not include “intangible or incorporeal” losses, and an insured that merely suffers “a detrimental economic impact unaccompanied by a distinct, demonstrable, physical alteration of the property” has not suffered a “physical loss.” Graileys, Inc. v. Sentinel Insurance Co., Ltd. (August 2021). Coronavirus, the court concluded, “does not cause physical damage to property, it causes people to get sick.” Because the insured had not pleaded that it suffered any physical loss, the court held the insurer properly denied the insured’s claim, granting the insurer’s motion to dismiss.

On the other hand, some courts have sided with policyholders. A federal court in Missouri read the “direct physical loss or damage” language in favor of the insured in Studio 417, Inc. v. Cincinnati Ins. Co. (August 2020). In response to Cincinnati’s motion to dismiss, the policyholders argued that the policy required direct physical loss or damage, and that there could be “physical loss” even if there was no damage, i.e., a physical alteration of property. The court held that “loss” meant “deprivation.” Because the plaintiffs alleged that the virus had attached itself to property—an allegation sure to be hotly contested throughout the case—the court concluded the plaintiffs had adequately pleaded a direct physical loss.

Keep in mind that, as always, coverage will depend on the specific language of each policy and the circumstances of each loss. For example, many policies contain a “virus exclusion” that excludes coverage for losses caused by a “virus, bacteria or other microorganism that induces or is capable of inducing physical distress, illness or disease.” A federal court in Texas relied on such an exclusion to dismiss a group of policyholders’ COVID-related claims against their insurer in Diesel Barbershop, LLC v. State Farm Lloyds (August 2020).

Other policies instead include the word “virus” within a “pollution exclusion” that bars coverage for losses caused by pollutants or contaminants many times defined to include “smoke, vapor, fumes, acids, alkalis, chemicals, virus, waste, or hazardous substances.” A Nevada state court concluded that this exclusion could be reasonably interpreted to apply only to “instances of traditional environmental and industrial pollution and contamination,” as opposed to a virus like COVID-19. JGB Vegas Retail Lessee, LLC v. Starr Surplus Lines Ins. Co. (November 2020). So, the Nevada court denied the insurer’s motion to dismiss.

With statutes of limitation potentially expiring soon, Carrington Coleman’s Insurance Practice Group is ready to help its commercial policyholder clients navigate potential insurance claims for business interruption losses. Please contact us for an analysis of your claim today.

Lyndon Bittle		Marisa O’Sullivan		Brent Rubin
lbittle@ccsb.com		mosullivan@ccsb.com		brubin@ccsb.com
214.855.3096		214.855.3015		214.855.3123

Experienced business trial lawyer Brian Shaw and intellectual property litigator Dr. Chad Ray have joined Carrington, Coleman, Sloman & Blumenthal LLP as partners, further bolstering the firm’s considerable strengths in those practice areas.

“Brian and Chad are exceptionally talented, accomplished attorneys,” said Carrington Coleman Managing Partner Monica Latin. “They bring expertise that complements the firm’s existing practices to better serve the needs of our clients. We are pleased to welcome them to our firm.”

Mr. Shaw has successfully tried high-profile, high-stakes lawsuits and arbitrations involving partnership disputes, shareholder rights, business divorces, and litigation involving contracts, oil and gas, employment, insurance coverage, construction, probate, bankruptcy and other corporate matters. He has also served as lead counsel in state and federal appellate courts. His business litigation work earned recognition in the 2021 Texas Super Lawyers legal guide. He is a 2006 graduate of Baylor University School of Law and is a Texas Bar Foundation Fellow. He joins the firm from the Rogge Dunn Group, P.C.

As a trial attorney and registered patent lawyer, Dr. Ray focuses his practice on patent litigation involving pharmaceuticals, medical devices, biologics, electronics, chemicals, and automotive components at trial and before the U.S. Patent Trial and Appeal Board. He holds undergraduate and Ph.D. degrees in chemistry. Dr. Ray’s experience as a research scientist provided him broad technical expertise as he developed scientific instrumentation for the study of chemical and biological materials by repurposing the tools of nanotechnology. He earned his law degree in 2011 from the University of Michigan Law School. He joins Carrington from the Dallas office of Munck Wilson Mandala, LLP, and previously practiced at the Chicago office of Jenner & Block, LLP.

Also joining the Dallas-based law firm is litigation associate Tania Sethi whom Alex More, head of the Litigation Practice Group called “an excellent addition” for the firm. Ms. Sethi is an experienced litigation attorney and certified alternative dispute resolution (ADR) mediator. She earned her law degree from the Baylor University School of Law in 2017. She joins the firm from Clark Hill Strasburger.

(Last updated September 10, 2021)

Yesterday, President Biden announced his COVID-19 Action Plan (the “Plan”), containing broad and far-reaching provisions to combat the pandemic. The Plan includes vaccination and testing requirements for businesses with over 100 employees and provides numerous resources and benefits for small businesses and individuals.

While the Plan outlines a myriad of mandates and initiatives, many questions remain about the precise nature of certain obligations, when they will take effect, and who will have financial responsibility for them. Consequently, we will continue to provide updates as further details become available.

Private Employers: Vaccinations, Testing and Paid Time Off

Employers with 100 or more employees must ensure their workforce is fully vaccinated or require unvaccinated workers to produce a negative COVID-19 test result on at least a weekly basis. President Biden has tasked the Department of Labor’s Occupational Health and Safety Administration (“OSHA”) with developing a formal rule to require this. Because the formal rulemaking process can take months to years, OSHA will issue an Emergency Temporary Standard (“ETS”) in the meantime; an ETS takes effect immediately and helps expedite the formal rulemaking process. It is unclear whether employers will be responsible for making COVID-19 tests available and/or paying for them. The Plan does address discounted testing, discussed below.

The Plan also tasks OSHA with developing a formal rule requiring employers with more than 100 employees to provide paid time off for vaccinations and recovering from vaccination-related illness. OSHA will issue an ETS containing this requirement as well. The Plan does not state whether the federal government will reimburse employers for providing this time off through tax credits (as was the case under the Families First Coronavirus Protection Act).

Federal Workers/Federal Contractors: Vaccination Mandate

President Biden has signed Executive Orders requiring all federal executive branch employees and all employees of entities that do business with the federal government to be fully vaccinated.

Health Care Workers at Medicare/Medicaid Participating Hospitals/Health Care Settings

The Plan provides for the Centers for Medicare & Medicaid Services to require COVID-19 vaccinations for workers in most health care settings that receive Medicare and Medicaid reimbursements.

COVID-19 Testing: Increased Availability, Reduced Costs

• Expansion of Easy-to-Use Testing Production: The Plan seeks to ensure a broad, sustained, and industrial capacity for COVID-19 test manufacturing through the federal government’s use of the Defense Production Act and its procurement of nearly $2 billion in rapid point-of-care and over-the-counter home test kits.
• Increased Affordability of At-Home Tests: Top retailers that sell at-home, rapid COVID-19 tests – Walmart, Amazon, and Kroger – will offer to sell them at cost for the next three months, beginning September 10, 2021. The Plan also requires Medicaid make at-home tests free for beneficiaries.
• Expansion of Free, Pharmacy Testing: The Administration will expand the number of retail pharmacy sites where anyone can get tested for free through the HHS free testing program.

Financial Relief for Small Businesses

• COVID-19 Economic Injury Disaster Loan Program: This program (which is already in existence) offers low-interest, fixed-rate, long-term loans from the Small Business Administration (“SBA”). Currently, $150 billion in loanable funds are still available in this program. The Plan provides for the SBA to increase the maximum amount that can be borrowed from $500,000 to $2,000,000. The funding can be used to hire and retain employees, purchase inventory and equipment and pay off higher-interest debt. The SBA is to ensure that small businesses do not have to begin repayment for two years. The Plan also calls for the SBA to make it easier for small businesses with multiple locations in hard-hit sectors (such as restaurants, hotels, and gyms) to access these loans (although the Plan provides no details on how this will be accomplished). To further assist small businesses, the SBA will soon offer a 30-day exclusive window of access during which time only small businesses seeking loans of $500,000 or less will receive awards.
• Streamlining Paycheck Protection Program Loan Forgiveness Process: The Plan will simplify the forgiveness process for Paycheck Protection Program loans by having the SBA send a pre-completed application form to the borrower who can then review, sign, and submit to the SBA; the SBA will then work with the lender to complete the forgiveness process.

Other Topics of Interest

• Schools: The Plan calls for governors to require vaccinations for teachers and school staff. The Plan also calls on schools to set up regular testing of teachers, staff, and students in accordance with CDC guidance. Current CDC guidance recommends that screening testing be offered to students who have not been fully vaccinated when community transmission is at moderate, substantial, or high levels; and screening testing should be offered to all teachers and staff who have not been fully vaccinated at any level of community transmission.
• Easy Access to Vaccinations/Booster Shots: When booster shots are approved by the FDA, individuals may visit vaccines.gov to locate vaccination sites, to determine what vaccines are offered at each site, and, for many sites, to see what appointments are available.
• Large Entertainment Venues: The Plan requests large entertainment venues such as sports arenas, large concert halls, and other places where large numbers gather to require patrons to be vaccinated or show a negative COVID-19 test for entry.

President Biden’s Action Plan can be found at https://www.whitehouse.gov/covidplan.

Questions? Please contact:

Christie Newkirk
cnewkirk@ccsb.com
214.855.3020