Tennessee Law Restricts Employer Vaccine Mandates

Background

On October 30, 2021, the Third Extraordinary Session of the Tennessee General Assembly passed Senate Bill No. 14 regarding COVID-19. The bill passed after President Joseph R. Biden’s announcement that the Occupational Safety and Health Administration ("OSHA") was directed to develop an Emergency Temporary Standard ("ETS") requiring employers with 100 or more employees to ensure their workforce was either vaccinated against COVID-19 or submitted to weekly COVID-19 testing. Just five days after Tennessee’s Senate Bill No. 14 passed, on November 4, 2021, OSHA issued the “vaccine or test” ETS. The ETS was immediately challenged in the courts. On November 12, 2021, the Fifth Circuit stayed the OSHA ETS pending judicial review. The Fifth Circuit ordered “that OSHA take no steps to implement or enforce the Mandate until further court order”.[1] That same day, Governor Bill Lee signed Tennessee Senate Bill No. 14 into law.

Court challenges continued until the Sixth Circuit won the multidistrict lottery and was selected to hear the many pending OSHA ETS challenges. On December 17, 2021, the Sixth Circuit dissolved the Fifth Circuit’s stay and allowed the OSHA ETS to move forward. This decision was immediately brought before the Supreme Court of the United States. On January 13, 2022, the Supreme Court re-issued the stay of the OSHA ETS.

While court challenges continue, Tennessee employers may have been unsure of how to proceed. As of January 13, 2022, with the OSHA ETS stayed and Tennessee’s COVID-19 law in effect, employers are bound by Tennessee’s law, discussed below.

Employers should be aware that if the ETS is ultimately upheld, it likely preempts any state law which is contrary to its provisions. As we note below, while employers are advised to update their policies and procedures to comply with this law, it may be wise to keep those policies separate from a main company handbook, in order to easier affect revisions or changes should they be necessary in the future.

Vaccine Mandates

Tennessee’s COVID-19 law addresses vaccine mandates and mask requirements by governmental agencies, schools, and private businesses. Relevant to employers, the law requires: “A private business […] shall not compel or otherwise take an adverse action against a person to compel the person to provide proof of vaccination if the person objects to receiving a COVID-19 vaccine for any reason.” Tenn. Code Ann. § 14-2-102(a). “Adverse action” is defined as “discriminat[ion] against a person by denying the person employment, privileges, credit, insurance, access, products, services, or other benefits; or [to d]ischarge, threaten, or otherwise discriminate against an employee in any manner that affects the employee’s employment, including compensation, terms, conditions, locations, rights, immunities, promotions, or privileges[.]” Tenn. Code Ann. § 14-2-101(1).

Tennessee employers are thus prohibited from taking adverse action – which likely includes any employment action – against employees who object to receiving a COVID-19 vaccine. This is true whether the reason is medical, as addressed by the Americans with Disabilities Act, religious, as addressed by Title VII, or for any other reason. This section may be read to include any action required of unvaccinated employees that is not required of vaccinated employees, for example, regular COVID-19 testing. This section has not been tested and the law is to be “construed broadly” “to safeguard liberty.” Tenn. Code Ann. § 14-1-103.

Further, as “person” is defined to mean “individual,” this provision likely applies to applicants for employment, employees, customers, and visitors. Tenn. Code Ann. § 14-1-101(14).

Unemployment Benefits

Tennessee’s Employment Security Law provides that if a claimant left employment “voluntarily without good cause connected with the claimant’s work,” unemployment benefits are not available. Tenn. Code Ann. § 50-7-303(a)(1)(A)(i). During the COVID-19 pandemic, this provision left employers uncertain of whether employees who left employment due to COVID-19 precautions, COVID-19 related workplace changes, or various requirements were entitled to unemployment benefits.

Tennessee’s COVID-19 law clarifies that this disqualification does not apply to a claimant who left employment because the employer “required its employees to receive a COVID-19 vaccine and the claimant failed or refused to receive a COVID-19 vaccine.” Tenn. Code Ann. § 14-3-101(a). Under the law, unemployment benefits will not be denied or reduced. Tenn. Code Ann. § 14-3-101(b). Further, the law applies retroactively, entitling a claimant to retroactive payments of unemployment benefits if the claimant was previously denied benefits for this reason. Tenn. Code Ann. § 14-3-101(c).

Exception for Employers with Federal Funding

The law provides one exception to its terms. If an employer would lose federal funding by compliance with section two (prohibiting vaccine mandates), the employer may submit notice in writing to the Comptroller of the Treasury. Tenn. Code Ann. § 14-6-102(a). Following notice, the Comptroller will provide written notice of the exception. Tenn. Code Ann. § 14-6-102(b). The exception is available for one year and must be renewed. Id. An employer must notify the Comptroller within fourteen days if the conditions justifying the exemption no longer exist.

Likewise, Medicare and Medicaid providers, healthcare providers subject to Medicare or Medicaid rules and penalties, and assisted-care living facilities are not “private businesses” under this law. Tenn. Code Ann. § 14-1-101(15).

Remedies

An employee harmed by an employer’s violation has the right to bring a private right of action for injunctive relief, compensatory damages, and reasonable attorneys’ fees. Tenn. Code Ann. § 14-6-103.

Liability

Under the law, there is no claim against any person – including legal entities, corporations, limited liability companies, and partnerships – for loss, damage, injury, or death arising from COVID-19 unless the claimant proves “by clear and convincing evidence” that the person proximately caused the loss, damage, injury, or death by “an act or omission constituting gross negligence or willful misconduct.” Tenn. Code Ann. § 14-5-101(a). Any claim raised will require a statement that the claimant or counsel has consulted a physician who believes the damage was based on an act or omission of the defendant. Tenn. Code Ann. § 14-5-101(b)(2).

This Chapter applies unless a complaint, or notice of a claim, was provided prior to August 3, 2020. Tenn. Code Ann. § 14-5-101(d). The Chapter terminates on July 1, 2022 but continues to apply to damages arising before July 1, 2022. Tenn. Code Ann. § 14-5-102.

Effective Date and Termination

Tennessee’s COVID-19 law took effect upon becoming a law and applies to acts occurring on or after the effective date.

The law terminates on July 1, 2023, with the exception of Chapter 5 (liability). Tenn. Code Ann. § 14-6-104.

It is important for employers to update employee handbooks, policies, and procedures to be consistent with the Tennessee COVID-19 law. If you have questions regarding the impact of these or other employment laws, please reach out to the Gordon & Rees Employment Law practice group and let us know how we can help you.