U.S. Markets open in 3 hrs 17 mins

Supreme Court's vaccine mandate ruling means businesses chart their own course

·9 min read

Now that the Supreme Court has blocked enforcement of a federal mandate requiring millions of workers to get the COVID-19 vaccine, businesses must weigh how to move forward.

Some companies are pressing ahead with a vaccine requirement. Others are putting such mandates on pause, and still others may be breathing a sigh of relief that they don't have to impose a policy that could turn off prospective hires in a tight job market.

“They’re all over the map,” says David Miller, a labor and employment attorney with Bryant Miller Olive in Miami.

Last week, the Supreme Court barred the Biden administration from enforcing a federal mandate that businesses with more than 100 employees require that their workforce get COVID-19 vaccinations or be tested weekly and wear masks.

►No returns: A worker shortage should ease in 2022 as COVID wanes. But many people have permanently stopped working

►'Spending more and getting less' How the pandemic, inflation take a financial toll on families

Supreme Court blocks COVID-19 vaccine mandates for businesses
Supreme Court blocks COVID-19 vaccine mandates for businesses

Vaccine mandate barred

The mandate, which was set to take effect on Feb. 9, would have affected an estimated 84 million workers.

Many companies already require that their employees get a vaccine – or undergo regular testing if they don't – and they're likely to keep those policies in place no matter what the nation's highest court says.

“Some companies may be pretty far down the road in investing resources,” says Scott Hecker, a labor and employment attorney at Seyfarth Shaw in Washington, D.C. “I don’t think they’re going to walk them back.”

Among U.S. workers, 36% say their company requires employees to be vaccinated, according to a Gallup survey conducted Nov. 29-Dec. 5. Another 43% say their employer encourages vaccination but doesn’t require it.

About 74% of Americans 18 and older are fully vaccinated, according to the Centers for Disease Control and Prevention.

►Save smarter, spend smarter: Get financial tips and advice in our Daily Money newsletter. Sign up here.

►Where's the barista? You may wait longer for your latte: Some Starbucks stores cut hours with staff shortages

Mandates remain at United Airlines, Carhartt, Citigroup

Citigroup is sticking to its vaccination mandate, which required all U.S. employees to be inoculated by Jan. 14.

The company says more than 99% of its roughly 65,000 U.S. employees have received the shots. Those who haven’t done so were placed on unpaid leave and will be let go by the end of the month if they aren’t eligible for an exemption or don’t take steps to comply.

United Airlines, meanwhile, required its workforce to be vaccinated by Sept. 27 and is not changing its policy.

"Our vaccine requirement is working and saving lives,'' United CEO Scott Kirby said in a message to employees earlier this month. "Since our vaccine policy went into effect, the hospitalization rate among our employees has been 100 (times) lower than the general population in the U.S. ... We’ve now gone eight straight weeks with zero COVID-related deaths among our vaccinated employees.''

Carhartt, a Dearborn, Michigan-based maker of rugged workwear for laborers, ranchers and others is also moving ahead with its vaccination mandate.

►Meet the new mobile home:Manufactured houses deliver the American dream amid tough housing market

“We put workplace safety at the top of our priority list and the Supreme Court’s recent ruling doesn’t impact that core value,” Carhartt CEO Mark Valade said in an email to employees that was shared on Twitter. “While we appreciate that there may be differing views, workplace safety is an area where we and the union that represents our associates cannot compromise.”

But the backlash Carhartt experienced from critics who said its policy runs counter to the sentiments of its largely blue-collar customer base highlights the tightrope many companies are walking.

“Pretty rich from a company sustained by the ranchers, farmers, laborers, etc. who make this country great and celebrate her values of freedom and liberty,” Molly McCann, a lawyer, tweeted in response to Carhartt's decision.

The National Association of Manufacturers, which represents 14,000 companies across the country, said the Supreme Court ruling doesn’t change the fact that getting vaccinated is the best defense against COVID-19 and central to keeping businesses and schools open and to preventing hospitals from being overwhelmed.

“We call on all Americans to make the choice to get vaccinated, get boosted when eligible and wear the appropriate mask in public places – so that we can save lives, protect our economy and get through this latest wave of infection,” said Jay Timmons, the group’s president and chief executive officer.

Imposing mandate was 'extra hurdle'

Meanwhile, businesses that were reluctant to impose mandates may be relieved that at least for now, they are off the hook, workforce experts and labor attorneys say.

“It's a very tight labor market right now where companies are struggling mightily to find enough workers,'' says Andy Challenger, senior vice president of Challenger, Gray & Christmas, an outplacement company. "For some of them, this mandate was an extra hurdle they’ll be glad is not in their way of hiring.’’

That may be particularly true for retail, restaurant and hotel companies which are among the businesses that have had the most difficulty finding staff during the pandemic.

Some employers in those industries are reluctant to impose mandates that may make it harder to hire or hold onto workers who do not want to get a vaccine, says Andreas Deptolla, CEO of ThrivePass, which provides benefits administration services for businesses. But those front-line workers face greater health risks if they're unvaccinated.

"We continue to strongly encourage all partners to get fully vaccinated and boosted,’’ John Culver, Starbucks’ chief operating officer told employees in a message.
"We continue to strongly encourage all partners to get fully vaccinated and boosted,’’ John Culver, Starbucks’ chief operating officer told employees in a message.

Starbucks did not put a vaccine mandate in place but it encouraged its 228,000 workers in the U.S. to get fully vaccinated by Feb. 9, the date the federal mandate was to go into effect or start undergoing weekly testing. It also said that workers had to note their vaccination status by Jan. 10.

Now, in the wake of the Supreme Court's decision, the company has lifted those deadlines.

“We respect the Court’s ruling and will comply,’’ John Culver, Starbucks’ chief operating officer, wrote in a message to employees on Tuesday.

However, though the federal mandate can’t currently be enforced, Culver said “we continue to believe strongly in its spirit and intent and we continue to strongly encourage all partners to get fully vaccinated and boosted.’’

Starbucks will also continue paying workers for the time they spend going to get the shots, recovering from any side effects, or isolating if they are exposed to the virus.

Lacking staff to deal with vaccinations, testing

For some businesses, a mandate would be costly.

Mehtab Bhogal, co-CEO of Forever Floral, which sells handcrafted, artificial floral bouquets online, says he doesn’t have the HR staff to deal with the vaccination or testing of his 130 employees.

“It will eat up time, and time is money,” he says, figuring the tasks will consume 150 to 200 hours for his chief operating officer and production manager.

Bhogal says he’s already struggling to attract and hold onto employees because of the worker shortages, and a mandate would intensify those strains. He notes the company is based in Ogden, Utah, a conservative stronghold that tends to view such mandates skeptically.

“I assume I’ll lose 30% of my workforce” if he imposes a vaccine requirement, Bhogal says. “Once you factor in the constrained labor pool, political situation, and our growth rate, it would make hiring even harder than it already is.”

Struggling with worker shortages

Neema Hospitality, which owns 12 hotel franchises in Maryland, Pennsylvania and West Virginia, also has no plans to require vaccination, says company President Sandeep Thakrar.

The company, he says, is already struggling to add housekeepers, front desk clerks and others to a workforce of about 150.

“We are strongly encouraging everyone to get vaccinated and boosted but not mandating it,” Thakrar says. About 70% of Neema’s staff is inoculated, he estimates.

Other companies, particularly in the finance and professional service sectors, are taking the opposite path, imposing vaccine mandates in order to entice employees working remotely to come back on site.

“There’s a big desire to try to get employees back to the office,” Deptolla of ThrivePass says. “You have a talent war ... Employees can just say, ‘I don’t want to do that.’”

Demonstrators protest on the Roosevelt Bridge against the federal COVID-19 vaccine mandate on Nov. 26, 2021, in Stuart, Fla. The protest was in support of health care workers who will face unemployment because of the mandate.
Demonstrators protest on the Roosevelt Bridge against the federal COVID-19 vaccine mandate on Nov. 26, 2021, in Stuart, Fla. The protest was in support of health care workers who will face unemployment because of the mandate.

Vaccination rules may vary by region

State and local policies may also affect whether workplaces can mandate the vaccine.

In Florida, for instance, companies that impose vaccination requirements may be at least partly thwarted by a state law that provides exceptions. Workers can evade the requirement by wearing masks. And businesses can’t make workers show proof of vaccination, Miller says.

Roughly a dozen states, mostly in the South, have banned or limited employer vaccination mandates.

Republican governors see vaccines as an important tool against COVID and continue to encourage Americans to get vaccinated but also believe that workers who decline to get the shots should not lose their jobs over a personal medical decision, said Joanna Rodriguez, spokeswoman for the Republican Governors Association.

“At the end of the day, the decision was what a lot of governors wanted,” Rodriguez said of the Supreme Court ruling. “They wanted state rights to be protected, first and foremost, and secondly, for people to be able to make their personal medical decision without the federal government taking away their jobs.”

Conversely, roughly 20 states have some kind of vaccination requirement for health care workers. Illinois, meanwhile, has adopted the broader federal mandate while New York City has imposed a vaccination requirement for all employees who perform in-person work or interact with the public.

Ultimately, businesses in states with Democratic leadership that have or are likely to pass mandates will be more likely to set up vaccination and testing protocols, says Deptolla. Companies in Republican-leaning states, however, in which there’s more opposition to the directives are more likely to steer clear of them.

Contributing: Michael Collins

You can follow Charisse Jones and Paul Davidson on Twitter @charissejones and @PDavidsonusat, and subscribe to our free Daily Money newsletter here for personal finance tips and business news every Monday through Friday morning.

This article originally appeared on USA TODAY: Supreme Court vaccine mandate ruling means businesses chart own course