SEC Adopts Amendments to Whistleblower Program Rules

The Securities and Exchange Commission has voted to adopt numerous amendments to the rules governing its whistleblower program. See https://www.sec.gov/news/press-release/2020-219

The whistleblower program serves as a significant tool for the Commission to encourage individuals to come forward with information regarding suspected security fraud. As set forth in the SEC’s press release, “The amendments to the whistleblower rules are intended to provide greater transparency, efficiency and clarity, and to strengthen and bolster the program in several ways.”

Notably, the SEC Chairman Jay Clayton stated the “rule amendments will help us get more money into the hands of whistleblowers, and at a faster pace.” Chairman Clayton further stated, “Experience demonstrates this added clarity, efficiency and transparency will further incentivize whistleblowers, enhance the whistleblower award program and benefit investors and our markets.” Given the emphasis on incentivizing whistleblowers, employers may see an uptick in whistleblower activity.

The SEC’s press release contains a list of amendments, as well as a link to the Final Rule. Highlights taken from the SEC’s press release include:

  • Awards:
    • “For awards where the statutory maximum award amount for the covered action and any related actions is in the aggregate $5 million or less, the Commission is adding Exchange Act Rule 21F-6(c) to provide a presumption that the Commission will pay a meritorious claimant the statutory maximum amount where none of the negative award criteria specified in Rule 21F-6(b) are present, subject to certain limited exceptions.”
    • “For awards over $5 million, the Commission will continue to analyze the award factors identified in Rule 21F-6 and issue awards based on the application of those factors. Based on the historical application of the award factors, if none of the negative criteria specified in Rule 21F-6(b) are present, the award amount would be expected to be in the top third of the award range.”
  • Whistleblower Definition:
    • “In response to the Supreme Court’s decision in Digital Realty Trust, Inc. v. Somers, the Commission is modifying Rule 21F-2 to establish a uniform definition of “whistleblower” that will apply to all aspects of Exchange Act Section 21F—i.e., the award program, the heightened confidentiality requirements, and the employment anti-retaliation protections.”
      • “For purposes of retaliation protection, an individual is required to report information about possible securities laws violations to the Commission “in writing.” As required by the Supreme Court’s decision, to qualify for the retaliation protection under Section 21F, the individual must report to the Commission before experiencing the retaliation.”
      • “To be eligible for an award or to obtain heightened confidentiality protection, the additional existing requirement that a whistleblower submit information on Form TCR or through the Commission’s online tips portal remains in place, subject to the additional discretion of the Commission to grant waivers described below [in the Press Release].”
      • “Additionally, the Commission is issuing interpretive guidance defining the scope of retaliatory conduct prohibited by Section 21F(h)(1)(A), which includes any retaliatory activity by an employer against a whistleblower that a reasonable employee would find materially adverse.”
  • Frivolous Award Applications:
    • “To prevent repeat submitters from abusing the award application process, the rule permits the Commission to permanently bar any applicant from seeking an award after the Commission determines that the applicant has abused the process by submitting three frivolous award applications.”
    • “For the first three applications determined to be frivolous, the Office of the Whistleblower will notify a claimant of its assessment and give the claimant the opportunity to withdraw the application.”

For a more comprehensive list of amendments, as well as a link to the Final Rule, visit https://www.sec.gov/news/press-release/2020-219

Please contact a Jackson Lewis attorney, including attorneys in our Corporate Governance and Internal Investigations practice group, with questions regarding these amendments and the SEC whistleblower program.

SEC Announces Largest Whistleblower Award of 2020 – Over $27 Million

The Securities and Exchange Commission (the “SEC”) announced a whistleblower award of more than $27 million, representing the largest SEC whistleblower award of 2020.  This is the sixth largest award overall since the inception of the SEC whistleblower program in 2011.

Congress established the whistleblower program to incentivize whistleblowers to report specific, timely, and credible information about federal securities laws violations to the SEC.  Section 21F of the Securities Exchange Act of 1934 (the “Exchange Act”) entitled “Securities Whistleblower Incentives and Protection,” requires the SEC to pay awards to whistleblowers who provide the SEC with original information about violations of the federal securities laws.  See The Exchange Act at § 240.21F-1.  The award is subject to certain limitations and conditions and the SEC has discretion to increase or decrease the award percentage based on a number of factors in relation to the unique facts and circumstances of each case.  Id. at §§ 240.21F-1, F-6.  The award can range from 10% to 30% of the monetary sanctions the SEC and other authorities are able to collect.  Id. at §§ 240.21F-6.

According to the SEC’s Order Determining Whistleblower Award Claim issued on April 16, 2020 (https://www.sec.gov/rules/other/2020/34-88658.pdf), in determining the award percentage resulting in the award of over $27 million, the SEC determined the whistleblower:

  1. provided significant information that allowed the SEC to uncover hidden conduct, in part, occurring overseas;
  2. provided ongoing assistance and cooperation, including providing documents and investigative leads that advanced the investigation and saved the SEC significant time and resources;
  3. provided information that enabled the SEC to bring an action addressing misconduct that furthered the SEC’s law enforcement interests; and
  4. repeatedly and strenuously raised concerns internally.

The SEC determined that it did not need to reduce the award amount for unreasonable reporting delay because the whistleblower “repeatedly and tenaciously objected to and escalated” concerns about misconduct within the whistleblower’s organization.

Since the first award was issued to a whistleblower in 2012, the whistleblower program has awarded approximately $425 million to 79 individuals.  The largest award—$50 million—was awarded to a whistleblower on March 19, 2018.

CARES Act $2.2-Trillion Emergency Relief Fund Potential ‘Hotbed’ for Government Fraud, Abuse Investigations

With enactment of the CARES Act on March 27, Congress appropriated $2.2 trillion, the largest economic stimulus package in history, to combat COVID-19 and the serious economic damage it has wrought to all facets of the economy. Along with this mammoth government subsidy, however, comes the prospect of unprecedented fraud and abuse in sectors of the economy able to take advantage of the funding.

Businesses able to secure CARES Act relief should consider protecting themselves from the risk that experts believe will be a decade of government investigations. Management decisions being made today about where and how to spend needed government subsidies will be scrutinized later by government regulators and whistleblowers alike.

Observance of in-house compliance programs that companies previously designed and implemented can protect against the risk of a future investigation. As one former federal prosecutor noted, “[I]t’s just critical that those processes not be shunted to the side in the name of keeping the business going.”

The provisions of CARES Act subsidies most susceptible to regulatory oversight and inquiry of waste, fraud, and abuse include:

Small business relief: $350 billion has been made available to companies with no more than 500 employees that maintain payroll are entitled to up to eight (8) weeks of subsidies. Appropriated by Congress to prevent layoffs and closures while employees are home, these funds are available for payroll, mortgage interest, rent, or utilities and will be forgiven if administered correctly.

Large corporation relief: $500 billion is being set aside as loans, guarantees, and related investment for big business with $50 billion specifically earmarked for the airline industry. Loans may not exceed five (5) years, will not be forgiven, and are subject to oversight by the Treasury Department IG.

Hospitals and health care: $140 billion has been appropriated to support the U.S. health system, $100 billion of which will be made directly available to hospitals to fight COVID-19, subsidize costly acute treatments, and compensate hospitals for lost income from elective and routine medical services. Additional funds will be used to enhance PPE stockpiles, expand COVID-19 testing, and increase Medicare/Medicaid subsidies during the pandemic.

Unemployment/payroll tax relief: The CARES Act affords $250 billion to cover extended unemployment benefits up to four months, plus additional payments of $600 weekly beyond state program subsidies. Employers may delay payment of their portion of 2020 payroll taxes to 2021 and 2022.

Recipients of CARES Act funds outlined above need to be cognizant of the robust oversight and compliance authority with which Congress has empowered different legislative entities. Such mechanisms of executive oversight include:

  • Bipartisan Congressional Oversight Commission;
  • Pandemic Response Accountability Committee (comprised of nine (9) Inspector Generals (IGs) across various government agencies);
  • Special IG for pandemic recovery, SIGPR; and
  • House Speaker seeks administration to appoint a temporary select congressional committee to oversee the beginning stages of the bailout.

Risks attendant to the receipt of bailout funds and their honest, prudent use and administration are linked to the government’s interest of ensuring the money is spent properly. Evident from the myriad of critical government funding opportunities available to employers to address this crisis, likewise, is significant temptation for employee abuse, self-dealing, false claims, and outright theft.

Documenting today’s decision to apply for funding, including the facts and government guidance relied upon, is imperative. Looking to the future, companies should expect the government to scrutinize a company’s decision to accept bailout funds and how those funds were utilized.

Please contact a Jackson Lewis attorney with any questions or concerns about the CARES Act.

FBI Issues Warnings Regarding COVID-19 Fraud Schemes

The Special Agent in Charge of the Boston office of the FBI, Joseph Bonavolonta, has issued an advisory aimed at alerting and keeping individuals and companies safe in the midst of the COVID-19 pandemic. His memo reported on emerging schemes and frauds being perpetrated by criminals looking to capitalize on the current crisis.

The FBI previously issued an alert to warn government and healthcare industry buyers of rapidly emerging fraud trends related to procurement of personal protective equipment (PPE), medical equipment such as ventilators, and other supplies or equipment in short supply during this time of crisis. https://www.fbi.gov/news/pressrel/press-releases/fbi-warns-of-advance-fee-and-bec-schemes-related-to-procurement-of-ppe-and-other-suppl i es-during-covid-19-pandemic

The latest advisory indicated that law enforcement was seeing an increase in other types of healthcare fraud scams. Apparently, taking advantage of the current stress on the supply chain, fraudsters — acting as vendors — have been promising to sell and deliver equipment they do not have access to in order to capitalize on the urgent need. According to the FBI, suspicious indicators of such fraud may include unusual payment terms (i.e., supplier asking for up-front payments or proof of payment), last-minute price changes, last-minute excuses for delay in shipment (i.e., claims that the equipment was seized at port or stuck in customs), and unexplained source of bulk supply.

Scammers also are utilizing several fraudulent methods to extract personal identifiable information from unsuspecting persons, including robocalls, social media sites, door-to-door promotions, telemarketers, and phishing and malware distributions through digital devices. One approach being used is to pay kickbacks to marketers to obtain personal identifiable information such as Medicare, Medicaid, and private health care insurance identifiers. Once this information is obtained, the subject uses it to submit fraudulent claims to Medicare, Medicaid, and private healthcare insurers for laboratory tests, durable medical equipment, and prescription medications that were never provided.

One specific scam uncovered involved the offering of genetic tests to individuals, to include cancer genomic testing (used to aid in the diagnoses of cancer), and pharmacogenetic testing (used to determine how an individual’s body will react to certain medications). The purported genetic tests are fraudulent or not run at all, and the results were either fictitious or not provided to the patient. The FBI previously released a public service announcement relating to certain healthcare fraud schemes the agency had observed: https://www.fbi.gov/news/pressrel/press-releases/fbi-warns-of-emerging-health-care-fraud-schemes-related-to-covid-19-pandemic

In another piece of cautionary advice, the FBI indicated that the posting of personal health information on social media about receiving a COVID-19 test could make people susceptible to fraud schemes. Individuals may then be contacted by persons claiming to be medical professionals who purportedly are informing them of their positive COVID-19 test results. The caller will request healthcare insurance beneficiary identifiers or credit card numbers under a ruse that they will submit a prescription or mail medication. Of course, the goal is only to obtain personal identifiable information.

Finally, callers posing as physicians may offer telemedicine COVID-19 consultations or COVID-19 tests for individuals who have valid coverage through Medicare or a private healthcare insurer. Frequently, the individuals have no symptoms. Individuals are asked to provide their personal identifiable information, including health insurance identifiers. Those who succumb to this fraud scheme may have their Medicare or private healthcare insurance billed for various medical services that were never provided.

The White Collar and Government Enforcement practice group at Jackson Lewis P.C. is available to advise businesses, employers, and individuals who may have been victimized by a fraud, or who become aware of such unlawful schemes.

The Role of Company Directors During COVID-19

The COVID-19 pandemic has had a dramatic impact on the management of organizations, including throwing managers at all levels into an “all-hands-on-deck” reactive mode.  In large measure, the immediate focus of management-level employees has been on business continuity, particularly moving the organization to a work from home workforce, workforce management including reductions in force by way of layoff or furlough programs, and client/customer relations efforts aimed at maintaining the company’s lines of revenue.  As this pandemic continues to impact directly or indirectly companies of various sizes and industries, we anticipate that the board of directors of both publicly traded and privately held organizations will increasingly consider and seek to assess their governance role in addressing, managing through, and disclosing the impact of the pandemic on the company’s ongoing operations, financial results, and general sustainability.  Similar to times of other major crisis, we recommend that company boards remain vigilant and take an active role in the oversight of these organizations during this perilous time.

In the midst of this crisis, the U.S. Securities and Exchange Commission (“SEC”) has emphasized the importance of a company’s disclosure obligations.  Addressing the issue of disclosure, the SEC Division of Corporation Finance issued a CF Disclosure Guidance which states:

The Division encourages timely reporting while recognizing that it may be difficult to assess or predict with precision the broad effects of COVID-19 on industries or individual companies.  We also recognize that the actual impact will depend on many factors beyond a company’s control and knowledge.  Nevertheless, the effects COVID-19 has had on a company, what management expects its future impact will be, how management is responding to evolving events, and how it is planning for COVID-19-related uncertainties can be material to investment and voting decisions.

The Guidance includes a series of questions aimed at assessing the effects of COVID-19 on a company.  These questions, excerpted below, provide a helpful roadmap for questions board members can utilize so as to engage with management about the company’s position and thereby fulfill their governance responsibilities:

  • How has COVID-19 impacted your financial condition and results of operations?  In light of changing trends and the overall economic outlook, how do you expect COVID-19 to impact your future operating results and near-and-long-term financial condition?  Do you expect that COVID-19 will impact future operations differently than how it affected the current period?
  • How has COVID-19 impacted your capital and financial resources, including your overall liquidity position and outlook?
  • If a material liquidity deficiency has been identified, what course of action has the company taken or proposed to take to remedy the deficiency?
  • How do you expect COVID-19 to affect assets on your balance sheet and your ability to timely account for those assets?
  • Do you anticipate any material impairments (e.g., with respect to goodwill, intangible assets, long-lived assets, right of use assets, investment securities), increases in allowances for credit losses, restructuring charges, other expenses, or changes in accounting judgments that have had or are reasonably likely to have a material impact on your financial statements?
  • Have COVID-19-related circumstances such as remote work arrangements adversely affected your ability to maintain operations, including financial reporting systems, internal control over financial reporting and disclosure controls and procedures?  If so, what changes in your controls have occurred during the current period that materially affect or are reasonably likely to materially affect your internal control over financial reporting?  What challenges do you anticipate in your ability to maintain these systems and controls?
  • Have you experienced challenges in implementing your business continuity plans or do you foresee requiring material expenditures to do so?  Do you face any material resource constraints in implementing these plans?
  • Do you expect COVID-19 to materially affect the demand for your products or services?
  • Do you anticipate a material adverse impact of COVID-19 on your supply chain or the methods used to distribute your products or services? Do you expect the anticipated impact of COVID-19 to materially change the relationship between costs and revenues?
  • Will your operations be materially impacted by any constraints or other impacts on your human capital resources and productivity?
  • Are travel restrictions and border closures expected to have a material impact on your ability to operate and achieve your business goals?

The full list of questions, which the Division describes as non-exhaustive, can be found here.  Please contact a Jackson Lewis attorney for assistance with board governance questions or issues.

AG Barr: Prosecutors, BOP Should Consider COVID-19 Crisis in Determining Bail, Early Release

Several current and former federal officials recently sent letters to the President and the Attorney General urging action to protect persons in custody or facing arrest and detention during the COVID-19 crisis. In response, Attorney General Barr has issued separate directives to all U.S. Attorneys and DOJ Department Heads and to the Director of the Bureau of Prisons (BOP). This guidance comes as justice systems across the United States are dealing with an increasing rate of infection among incarcerated individuals and facility staff, and a flood of petitions seeking early release or reconsideration of orders denying bail.

In his memorandum to DOJ officials on litigating pretrial detention issues during the current health crisis, Barr stressed the “paramount obligation” of federal law enforcement to protect the public from violent offenders, including gang members and child predators, and urged prosecutors to consider the pandemic as a factor in bail determinations. The advisory directs that detention should not be considered “to the same degree we would under normal circumstances – specifically, for those defendants who have not committed serious crimes and who present little risk of flight (but no threat to the public) and who are clearly vulnerable to COVID-19 under CDC Guidelines.” In support, Barr states that each time a new person is added to a jail, it brings the risk of infection to facility personnel and those already incarcerated, as well as serious risk to the health of individuals who may be vulnerable to the virus based on age or a preexisting medical condition.

In a separate memorandum to the Director of the BOP, the Attorney General noted the “significant levels of infection at several of our facilities,” which requires prompt action to address the growing crisis. Acting based on new authority granted to him under the recently enacted CARES Act to address “emergency conditions,” Barr directed BOP to review all inmates, beginning with those at facilities most affected by the spread of COVID-19, to identify those deemed suitable for home confinement and to “immediately process them for transfer,” following a 14-day quarantine at a BOP facility, or at the residence to which the inmate is being transferred. Barr cautioned BOP that, in making these determinations, it “not inadvertently contribute to the spread of COVID-19 by transferring inmates from our facilities.” As he did in the guidance to the U.S. Attorneys, Barr reminded the BOP that it not only has a responsibility to protect those in custody, but an obligation to protect the public and the law enforcement community. He stated that “this pandemic has dramatically increased the already substantial risks facing the men and women who keep us safe,” noting that it is “impossible to engage in social distancing, hand washing, and other recommended steps in the middle of arresting a violent criminal.”

The White Collar and Government Enforcement practice group at Jackson Lewis has attorneys who are former federal and state prosecutors, and experienced criminal law practitioners. The services that we provide include guiding clients through criminal and regulatory investigations, defense of complex criminal cases, sentencing advocacy, pardon petitions, motions for compassionate release, and efforts to seal or expunge criminal records.

Investigating Complaints Containing Second-Hand Information in the COVID-19 Era

As the country faces a wave of COVID-19 closure orders, individuals are being encouraged to report violations.  Hypothetically, these reports could originate from just about anyone – employees, employees’ family members, customers, neighbors, the general public.  Given the wide range of potential complainants, these reports may not always be based on first-hand observations.

When investigating complaints based upon second-hand information, investigators should obtain as much information as possible regarding how the complainant acquired the information and should attempt to verify the details through witness interviews or with relevant documentation. When interviewing the complainant, investigators should let the complainant share the story, in his or her own words, with the least amount of prompting possible. The investigator should do so by asking open-ended questions. For example:

  • What are the incidents that led to this complaint?
  • Who was involved in the alleged incidents? Who are the witnesses? Who else knows about the incidents?
  • Where did the incidents occur?
  • When did the incidents occur and how often?
  • Why is the complainant reporting the incidents?

Similar to an investigation of allegations from a supposed “first-hand” source, after the initial inquiry, investigators should identify the steps necessary to test the accuracy of the allegations and assess the complainant’s credibility, as well as the credibility of any second-hand information provided.

It is important to keep in mind that the sufficiency of the investigation process may play a role in whether an organization faces potential liability from the alleged misconduct.  An employer may face criticism for:

  1. Ignoring a complaint simply because it is based on second-hand information
  2. Delaying an investigation until it receives first-hand information
  3. Failing to interview the complainant and other relevant witnesses
  4. Allowing the investigation to drag on unnecessarily
  5. Failing to take appropriate corrective action

The duty to investigate allegations of misconduct arises from the receipt of a complaint, not from whether the complaint is based on first- or second-hand information. Ultimately, the knowledge obtained by the employer during its investigation is what matters in determining whether misconduct is occurring, not necessarily how the person reporting the suspected misconduct came to possess that information.

Beware! Internet Scammers Out to Capitalize on COVID-19 Scare

Law enforcement is alerting businesses and the public that during the ongoing COVID-19 federal and state emergencies and stay-at-home orders to be extremely vigilant about email and internet scams being perpetrated by wrongdoers trying to capitalize on the scare.

According to the FBI:

“Scammers are leveraging the COVID-19 pandemic to steal your money, your personal information, or both. Don’t let them … protect yourself and do your research before clicking on links purporting to provide information on the virus.”

These warnings are especially pertinent when solicitations from charities, other non-profits, or crowdfunding campaigns may not actually be who or what they claim to be. Similarly, e-commerce shopping where furnishing personal information to receive products or other benefits may prove perilous.

Authorities also have identified fraudsters posing as the Centers for Disease Control and Prevention (CDC) and other health organizations purporting to possess important health information about the virus. Some domains are actually offering the public fake cures and vaccines, as well as phony COVID-19 testing kits. The concern here is that these websites are hackers imbedding links within the messages that contain malware designed to steal personal information or lock the victim’s computer until the “ransom” is paid.

Following passage of the $2 trillion COVID-19 stimulus bill, the Coronavirus Aid, Relief, and Economic Security Act (CARES), scammers are already soliciting the public by emails asking to confirm personal information to receive an economic stimulus check from the government. Authorities are warning the public to distrust these directives, believing they are sophisticated phishing schemes designed to invade computes, hard drives, and mail servers.

The FBI has reiterated:

“While talk of economic stimulus checks has been in the news cycle, government agencies are not sending unsolicited emails seeking your private information in order to send you money.”

In this difficult period of hospital/ICU overutilization and dangerously low inventories of PPE and other medical equipment, the healthcare industry must be especially wary of vendor fraud when it comes to the purchase and payment for essential hospital equipment. Hospitals are urged not to do business with vendors or product brokers unknown to them. Vendors offering unusual payment terms, last-minute price changes, excuses about shipment delays, or the source of the product are telltale signs of fraud.

Employers, employees, and the general public are encouraged to report suspicious activity of healthcare and related vendor fraud to the FBI at: tios.fbi.gov; ic3.gov, or disaster@leo.gov.

If your institution or company is the victim of a teleconference hijacking, or any cyber-crime, the White Collar & Government Enforcement practice group at Jackson Lewis is available to provide guidance and assistance, and to interface with law enforcement as necessary.

FBI Warns of Teleconferencing and Online Classroom Hijacking During COVID-19 Pandemic

As large numbers of people turn to video-teleconferencing (VTC) platforms to stay connected in the wake of the COVID-19 crisis, reports of VTC hijacking (also called “zoom-bombing”) are emerging nationwide. The FBI has received multiple reports of conferences being disrupted by pornographic and/or hate images and threatening language.

For example, two schools in Massachusetts reported the following incidents:

  • A Massachusetts-based high school reported that while a teacher was conducting an online class using the teleconferencing software Zoom, an unidentified individual(s) dialed into the classroom. This individual yelled a profanity and then shouted the teacher’s home address in the middle of instruction.
  • A second Massachusetts-based school reported a Zoom meeting being accessed by an unidentified individual. In this incident, the individual was visible on the video camera and displayed swastika tattoos.

As individuals continue the transition to online lessons and meetings, the FBI recommends exercising due diligence and caution in your cybersecurity efforts. The following steps can be taken to mitigate teleconference hijacking threats:

  • Do not make meetings or classrooms public. In Zoom, there are two options to make a meeting private: require a meeting password or use the waiting room feature and control the admittance of guests.
  • Do not share a link to a teleconference or classroom on an unrestricted publicly available social media post. Provide the link directly to specific people.
  • Manage screensharing options. In Zoom, change screensharing to “Host Only.”
  • Ensure users are using the updated version of remote access/meeting applications. In January 2020, Zoom updated their software. In their security update, the teleconference software provider added passwords by default for meetings and disabled the ability to randomly scan for meetings to join.
  • Lastly, ensure that your organization’s telework policy or guide addresses requirements for physical and information security.

If your institution or company is the victim of a teleconference hijacking, or any cyber-crime, the White Collar & Government Enforcement practice group at Jackson Lewis is available to provide guidance and assistance, and to interface with law enforcement as necessary.

Maintaining Standard Procedures Related to Employee Complaints Amid COVID-19

Amid an everchanging legal landscape resulting from the spread of COVID-19, employers must remain mindful of properly responding to and addressing complaints expressed by employees.

In response to the spread of COVID-19, many states have ordered non-essential businesses to close.  States are encouraging employers to allow employees to work remotely wherever possible.  Some employees with preexisting health conditions are expressing concern about continuing to work with coworkers.

States have begun encouraging employees to report to authorities employers that may violate new laws or the closure orders generally applicable to non-essential businesses.  Yesterday, we reported on a New Jersey state hotline being overwhelmed by callers accusing businesses of not abiding by new rules.  Ohio’s Governor and Lieutenant Governor have told the public:  “If you believe a business is in violation of the rules, call your health department or local law enforcement.”  https://thehill.com/policy/healthcare/public-global-health/489327-ohio-governor-urges-public-to-call-law-enforcement.

This all sets the stage for potential protected activity that employers should recognize and be prepared to address consistent with standard procedures.  Here are some key points to consider:

  • Understand the laws and rules concerning COVID-19 in any jurisdiction in which your business operates.  Jackson Lewis has an entire team dedicated to advising employers on these laws and rules, which vary by jurisdiction.  https://www.jacksonlewis.com/practice/coronaviruscovid-19
  • Where non-essential businesses have been ordered to close, understand what businesses are essential and what businesses are not.  While it varies by jurisdiction, a general list of essential businesses includes healthcare, agriculture, grocery stores, pharmacies, financial institutions, utilities, gas stations, and those businesses that support these essential businesses.
  • If your business is an essential business, prepare a brief document describing (1) your business, (2) its general customer base, (3) its role as an essential business or a business that supports essential businesses, and (4) why the business must stay open consistent with an applicable jurisdiction’s rules and laws.
  • If your business remains open as an essential business, explain to employees why it remains open as an essential business.
  • Wherever possible, enable employees to safely and securely work from home, attending group meetings through virtual meeting rooms and teleconferences.
  • Follow standard procedures concerning employee complaints:
    • If an employee complains about a business remaining open:  (1) explore the basis for the complaint with the employee; (2) explain in a reasonable manner why the business must remain open as an essential business; (3) explore options to enable the employee to continue working; and (4) focus any employment decisions on the employee’s performance of essential job functions, with or without a reasonable accommodation.
    • If an employee expresses concern about or refuses to come to the office due to a pre-existing health condition or other disability, despite the business and the employee’s role being essential, explore the underlying basis for the employee’s position and attempt to reach a reasonable accommodation.  This will help to avoid failure to accommodate claims.
  • All adverse employment actions should be assessed using legitimate, nondiscriminatory, and non-retaliatory business justifications.

These are trying times that are presenting unprecedented challenges to businesses.  Employers must adapt to the changes, but also remain vigilant in following reasonable standards for addressing conflicts between and complaints from employees.

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