Category: COVID-19

US to Expand Vaccination Requirement for Foreign National Travelers to Include All Land Border Crossers from Canada and Mexico in January

Starting Jan. 22, 2022, the Biden administration will require foreign national travelers engaged in essential travel to be fully vaccinated when crossing U.S. land borders or ferry terminals. Essential travel includes travel for work or study in the United States, emergency response, and public health. The new rules apply to foreign nationals; U.S. citizens and permanent residents may still enter the United States regardless of their vaccination status but are subject to additional testing requirements.

The new rules for essential travelers are in line with those that took effect Nov. 8, 2021, when the Biden administration lifted travel restrictions to allow fully vaccinated travelers engaged in non-essential (leisure) travel to enter the United States.

While much cross-border traffic was shut down in the early days of the COVID-19 pandemic, essential travelers have been able to travel unimpeded via land borders or ferry terminals. Starting Jan. 22, 2022, however, all foreign national travelers crossing U.S. land borders or ferry terminals – traveling for essential and non-essential reasons – must be fully vaccinated for COVID-19 and provide related proof of vaccination. Any exceptions to the vaccination requirement available to travelers at U.S. land borders are expected to be limited, just as exceptions currently available for air travel have been limited. See CDC guidance for details.

©2021 Greenberg Traurig, LLP. All rights reserved.
For more on vaccine requirements, visit the NLR Coronavirus News section.

Given Deadlines Set by Sixth Circuit, ETS Likely Stayed Until At Least December 10, 2021

Earlier this month, the Occupational Safety and Health Administration (“OSHA”) issued its “COVID-19 Vaccination and Testing; Emergency Temporary Standard” (the “ETS”) requiring employers of 100 or more employees to implement policies requiring employee vaccination or enhanced safety measures for unvaccinated employees (including wearing face coverings and weekly COVID-19 testing). Our alert on the ETS is here. The ETS was subject to over 30 petitions for review in the federal circuit courts and was quickly stayed by the United States Court of Appeals for the Fifth Circuit.

Although the petitions for review were consolidated before the United States Court of Appeals for the Sixth Circuit, the Fifth Circuit’s stay remains in place. While OSHA has publically stated that it will comply with the stay, its position has been – and continues to be – that employers should prepare to comply with the ETS and that OSHA will succeed in litigation challenging the ETS. Yesterday, OSHA filed an emergency motion to immediately lift the stay.

With the stay in place, covered employers have been in the difficult position of trying to determine how much preparation to do to comply with the ETS’s requirements, many of which are scheduled to be effective on December 6, 2021. The question has been whether the stay will continue beyond the initial deadlines and, if not, whether deadlines will be extended to account for the period during which the ETS was stayed.

The deadlines set out in the Sixth Circuit’s Scheduling Order, which is available here, provide some insight into the timing of the requirements of the ETS.  The Scheduling Order sets the following briefing deadlines:

  • Tuesday, November 30, 2021 – motions to join OSHA’s emergency motion or to modify, revoke, or extend the stay.
  • Tuesday, December 7, 2021 – responses to motions regarding the stay.
  • Friday, December 10, 2021 – replies to responsive motions.

Given these deadlines, it is likely that the ETS will continue to be stayed until at least December 10th (past the December 6, 2021 deadline) while the Sixth Circuit considers briefing.  However, it is possible that, before December 10th, the Sixth Circuit lifts the stay. If the stay is lifted, the ETS requirements could become effective on the date of the court’s order or on a later date set by the Sixth Circuit.

While the briefing schedule does not provide definitive answers to employers on the potential deadlines for ETS compliance, it suggests that the ETS’s December 6, 2021, deadlines may be extended for at least a few days while the Sixth Circuit considers briefing.

© 2021 Bracewell LLP
For more on OSHA COVID-19 updates, visit the NLR Coronavirus News section.

Pandemic-Driven Amendments to Liquor Code Truly Novel

On Nov. 5, 2021, Governor Tom Wolf signed into law House Bill 425, which became effective immediately. Inspired by the restaurant industry’s struggle to recover from the pandemic and related shifts in operations, the bill presents new opportunities for licensees by eliminating a major hurdle for licensing premises under a licensee’s control. In addition, it loosens many other limitations in the Liquor Code regarding catering permits and other provisions.

House Bill 425 Amendments to Liquor Code

This bill presents a unique licensing strategy that comes in the form of a temporary pandemic-related law. The Pennsylvania Liquor Control Board (the “Board”) may now temporarily extend the licensed premises of a licensed club, catering club, restaurant, retail dispenser, hotel, limited distillery, distillery, brewery, or limited winery to include any outside serving area that is immediately adjacent to the existing licensed area or within one thousand feet of the main licensed premises (even if the area to be temporarily licensed and the main licensed building are separated by a thoroughfare).

For decades, the Pennsylvania Liquor Control Board has “licensed” only premises contiguous or connected to each other. This rule has confounded new license applicants for decades, and operators that controlled both sides of a private driveway or public alleyway could not utilize their license for both sides of the thoroughfare. Any questions as to how the Pennsylvania Liquor Control Board would interpret these new provisions ended with the release of the Nov. 15, 2021 Summary of Act 81 of 2021 (House Bill 425).

In the Summary, the Board confirmed that separate premises across a public thoroughfare and within 1,000 feet of the licensed premises did not have to have their own service facilities, and a server could take food and drinks out of the original licensed premises and across the street to the new proposed licensed premises and serve patrons there. This is a remarkable change in the law; however, these provisions of Act 81 are due to sunset Dec. 31, 2024, which may affect the amounts a licensee may invest in temporary structures on premises that are not immediately connected or contiguous to the licensed premises.

Pandemic-Driven Amendments to Liquor Code

Another change in the law relates to off-premises catering permits. Restaurant licensees, hotel licensees, and eating place retail dispenser licensees that want to sell liquor away from their licensed premises can apply for and obtain an off-premises catering permit to hold a catered function on otherwise unlicensed premises. A catered function is defined as “the furnishing of food prepared on the premises or brought onto the premises already prepared in conjunction with alcoholic beverages for the accommodation of a person or an identifiable group of people, not the general public, who made arrangements for the function at least thirty days in advance.”

The limit for these permits was previously capped at 52 per year. Act 81 now allows the Board to issue an unlimited number of permits for off-premises catered functions to licensees that qualify. Catering permits are also no longer limited to the five-hour time restriction that was previously mandated.

The next amendment to the law pursuant to this bill applies to what happens when a licensee goes out of business. Now, liquor and wine in the possession of a licensee at the time the licensed business closes permanently may be sold to another licensee qualified to sell such products. The licensee selling the products is required to advise the Board in writing of the name of the licensee buying them, identifying any product sold, and describing the liquor, including brand names, sizes, and numbers of containers sold.

More in the House Bill 425

Lastly, Act 81 provides for an additional year of safekeeping for the following class of licensees that was in safekeeping during the proclamation of the 2020 disaster emergency related to the pandemic: club, catering club, restaurant, eating place retail dispenser, hotel, importing distributor, and distributor. A licensee in one of those classes cannot be subject to a renewal, validation, or safekeeping fee that would be due during the additional year. But the licensee must file a renewal or validation that does come due. The additional year of safekeeping commences on the renewal or validation date of a license that occurs after Dec. 31, 2021. This means any extension of the safekeeping period due before Dec. 31, 2021, must be paid, but that license would qualify for the one-year extension from 2022 to 2023.

The novel coronavirus has forced many businesses to change the way they operate, so it is gratifying to see the Pennsylvania Legislature create more flexibility in the Pennsylvania Liquor Code, one of the more confusing and rigid sets of laws in the United States.

Article By Theodore J. Zeller III of Norris McLaughlin P.A.

©2021 Norris McLaughlin P.A., All Rights Reserved

CMS Removes All Nursing Home Visitation Restrictions as COVID-19 Cases Decrease

In order to continue addressing the impacts of COVID-19 on nursing home residents, the Centers for Medicare & Medicaid Services (CMS) recently issued a memo updating guidance for nursing home visitation. You can read the full memo here.

Early in the pandemic, CMS implemented visitation restrictions to mitigate the risk of visitors introducing COVID-19 to nursing homes. Now, CMS is updating its guidance and allowing visitation for residents at all times. CMS explained its decision to allow visitation is based upon data which shows approximately 86% of residents and 74% of staff are fully vaccinated, and the number of new COVID-19 cases each week in nursing homes has dramatically decreased.

Under the new guidance, nursing homes cannot limit the frequency and length of visits for residents, the number of visitors, or require advance scheduling of visits as mandated under the previous guidance. However, CMS is still directing nursing homes to follow infection-control policies and procedures. Visitors who have tested positive for COVID-19, have symptoms of COVID-19, or currently meet the criteria for quarantine, should not enter the facility. Nursing homes should still screen all visitors before entry.

Although not required, CMS is encouraging nursing homes in counties with substantial or high levels of community transmission to offer testing to visitors, if feasible. Nursing homes should also educate and encourage visitors to become vaccinated. Visitors should still wear face coverings and social distance at all times while in the nursing home. Nursing homes should stay diligent in their infection-control efforts.

Article By Sydney N. Pahren and Timothy Cahill of Dinsmore & Shohl LLP

© 2021 Dinsmore & Shohl LLP. All rights reserved.

More Circuits Added to the OSHA ETS Lottery

Lawsuits challenging the COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) were filed in three additional U.S. Circuit Courts of Appeals on Wednesday, November 10, 2021. Labor unions filed lawsuits in the U.S. Circuit Court of Appeals for the Second, Fourth, and Ninth Circuits. As a result, there are now ETS-related lawsuits pending in the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Eleventh, and D.C. Circuit Courts.

According to federal rules, the legal challenges to the OSHA ETS will be consolidated and heard by a single U.S. Circuit Court of Appeals. The Judicial Panel on Multidistrict Litigation will conduct a lottery, expected on November 16, to select which U.S. Circuit Court of Appeals will hear the consolidated litigation. The court to hear the litigation will be drawn “from a drum containing an entry for each circuit wherein a constituent petition for review is pending.” Each court only gets one entry, despite the number of petitions pending before each court. Until the Judicial Panel selects the U.S. Circuit Court of Appeals to hear the litigation via the lottery, all the U.S. Circuit Courts of Appeals can proceed with rulings, as the Fifth Circuit did this past weekend.

The labor unions’ move may be a move reflective of an intent by some to increase the odds that the OSHA ETS is upheld. The First, Second, and Fourth circuits all have a majority of Democratic-appointed judges. But it is difficult to predict the future of the OSHA ETS as the panel of judges to hear the case is also selected randomly.

© Polsinelli PC, Polsinelli LLP in California
For more updates on COVID-19, visit the NLR Coronavirus News section.

Tennessee Enacts Law Restricting Enforcement of Vaccine Mandates

On November 10, 2021, Tennessee Governor Bill Lee announced that he would sign legislation that addresses various COVID-19–related issues, including vaccine mandates and mask mandates. The law is effective immediately. There are several major issues for employers regarding COVID-19 prevention measures addressed in the new law. Below is an overview of the law’s key points.

Vaccine Mandates

The law does not prohibit private employers from adopting vaccine mandates. It seeks, in an indirect manner, to restrict employers from mandating vaccines… The law focuses on prohibiting employers from requiring proof of vaccination status. The express language of the new law is as follows: “A private business, governmental entity, school, or local education agency 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.”

It would appear that the law potentially creates a perverse “don’t ask/don’t tell” incentive for both employers and employees. If an employee openly objects to receiving a vaccine, an employer can still ask why—to determine if there is a bona fide Title VII religious or Americans with Disabilities Act (ADA) accommodation issue—but the employer would appear to be able to discharge or discipline the employee for the employee’s objection (absent accommodation issues). What a Tennessee employer cannot to do is ask employees for proof of vaccination status and then take an adverse action if the employees fail or refuse to provide proof of their vaccination status. By contrast, an employee might have an incentive to keep quiet and not answer (or lie) if asked about vaccination status.

Mask Mandates

An earlier version of the legislation sought to prohibit mask mandates entirely. The version that has become law limits the prohibition on mask mandates to government employers: “An employer that is a governmental entity shall not require an employee to wear a face covering as a term or condition of employment, or take an adverse action against an employee for failing to wear a face covering, unless severe conditions exist at the time the requirement is adopted and the requirement is in effect for not more than fourteen (14) days.” (Emphasis added.)

Unemployment Benefits

The law allows employees discharged for refusing to be vaccinated to receive unemployment benefits—and it is retroactive.

Medicare and Medicaid Vaccine Requirements

The law excludes from its coverage healthcare providers that are subject to Medicare or Medicaid vaccine requirements.  On November 5, 2021, the Centers for Medicare & Medicaid Services published their interim final vaccine mandate rules.

Exemptions

The new law allows employers, private businesses, schools, and state and local governmental entities to apply to the state comptroller for exemption from the requirements of the statute if compliance would result in a loss of federal funding. This exemption process would allow employers that are federal contractors to seek exemption.

Federal Emergency Temporary Standard

The law may set up a potential showdown between the Tennessee Occupational Safety and Health Administration (TOSHA) and the federal Occupational Safety and Health Administration (OSHA) over the implementation and enforcement of OSHA’s recently issued COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS) for large employers (100 or more employees). The Tennessee law’s prohibition on compelling employees to provide proof of vaccination status is in direct conflict with the federal ETS (which requires employers to determine the vaccination status of each employee, including requiring each vaccinated employee to provide “acceptable proof of vaccination status”).

State OSHA plans, such as Tennessee’s, have 30 days to adopt the federal standard. However, the Tennessee law includes a provision that prohibits any state funds from being allocated to implement or enforce any “federal law, executive order, rule, or regulation that mandates the administration of a COVID-19 countermeasure” (including vaccines, testing, and masking). TOSHA receives funding from both the state government and the federal government. It is unclear whether TOSHA will be eligible to seek an exemption as described above. While the language of the exemption provision would appear to apply to TOSHA, the statements of proponents of the Tennessee law during the special session of the Tennessee General Assembly during which the legislation was approved made it clear that their efforts were aimed at curbing the impact of the federal ETS in Tennessee.

On Monday, November 8, 2021, TOSHA issued the following statement:  “Tennessee OSHA is currently reviewing the latest OSHA Emergency Temporary Standard regarding vaccines in the workplace.  As the agency did with the prior ETS, staff will review the OSHA standards and then determine how Tennessee will move forward. This process could take multiple weeks to complete.”

Key Takeaways

Business groups were strongly opposed to this new law, and that opposition contributed to the legislative shift away from an outright ban on vaccine mandates and to the narrowing of the anti-mask provision. There are still questions to be answered regarding this new law, including whether it will be challenged in court, what the process for requesting an exemption will look like, and whether Tennessee will adopt the federal COVID-19 Vaccination and Testing ETS.

This article was written by William Rutchow of Ogletree Deakins Law firm. For more information regarding vaccine mandate challenges, please see here.

CMS Requires COVID-19 Vaccine for Health Care Workers at all Facilities Participating in Medicare and Medicaid

On Nov. 4, 2021, the Centers for Medicare and Medicaid (CMS) released a new Interim Final Rule (IFR) regarding staff vaccination at facilities that participate in the Medicare and Medicaid programs. The IFR requires covered employers to ensure that staff receive their first dose no later than Dec. 5, 2021 and achieve full vaccination no later than Jan. 4, 2022.

The vaccine rule that was also released on Nov. 4, 2021 by the Occupational Safety and Health Administration (OSHA) does not apply to employees of health care entities who are covered under the CMS IFR. However, employees of health care providers who are not subject to the CMS IFR may be subject to the OSHA vaccine rule if the facility has more than 100 employees. For more information on the OSHA vaccine rule, please click here.

Justification for the Rule

CMS cited a number of reasons for the IFR, including the risk unvaccinated staff pose to patients, reports of individuals foregoing health care due to concerns of contracting COVID-19 from health facility staff, disrupted health care operations due to infected staff, and low vaccination rates among health care staff.

Scope of Coverage

The requirements of the IFR apply to health care facilities that participate in Medicare and Medicaid and that are subject to Conditions or Requirements of Participation, including but not limited to:

  • Ambulatory surgical centers;
  • Hospices;
  • Hospitals, such as acute care hospitals, psychiatric hospitals, hospital swing beds, long-term care hospitals, and children’s hospitals;
  • Long-term care facilities;
  • Home health agencies;
  • Comprehensive outpatient rehabilitation facilities;
  • Critical access hospitals;
  • Home infusion therapy suppliers; and
  • Rural health clinics/federally qualified health centers.

While the IFR does not directly apply to physician offices, which are not regulated by CMS Conditions or Requirements of Participation, physicians may nevertheless be required to vaccinate as a result of their relationships with other health care entities. For example, the IFR requires hospitals to implement policies and procedures to ensure “individuals who provide care, treatment, or other services under contract or by other arrangement” are fully vaccinated.

Covered Personnel

The IFR requires vaccinations for staff who routinely perform care for patients and clients inside and outside of the facility, such as home health, home infusion therapy, hospice, and therapy staff. CMS’s vaccination requirement also extends to all staff who interact with other staff, patients, residents, or clients, at any location, and not just those who enter facilities. However, staff who provide services 100% remotely—that is, staff who never come into contact with other staff, patients, residents, or clients—are not subject to the IFR vaccination requirements. Additionally, providers and suppliers are not required to ensure IFR vaccination compliance of one-off vendors, volunteers, or professionals, such as (a) those who provide infrequent ad hoc non-health care services (e.g. annual elevator inspectors), (b) those who perform exclusively off-site services (e.g. accounting services), or (c) delivery and repair personnel.

Definition of Full Vaccination

CMS considers “full vaccination” as 14 days after receipt of either a single-dose vaccine (such as the Johnson & Johnson vaccine) or 14 days after the second dose of a two-dose primary vaccination series (such as the Pfizer or Moderna vaccines). At this time, CMS is not requiring the additional (third) dose of mRNA vaccine for moderately/severely immunosuppressed persons or the “booster dose” in order for staff to be considered “fully vaccinated.” Additionally, CMS considers individuals receiving heterologous vaccines—doses of different vaccines—as satisfying the “fully vaccinated” definition so long as they have received any combination of two doses. In order to gauge compliance, CMS is requiring that providers and suppliers track and securely document the vaccination status of each staff member as well as vaccine exemption requests and outcome. The IFR does not specify that weekly testing, masking, and social distancing are an alternative to vaccination, meaning employers must ensure all employees are either (1) fully vaccinated or (2) exempted under a permissible exemption.

Exemptions

The IFR explicitly provides that employers must continue to comply with anti-discrimination laws and civil rights protections which allow employees to request and receive exemption from vaccination due to a disability, medical condition, or sincerely held religious belief or practice. Exemptions should be provided to staff with recognized medical conditions for which a vaccine is contraindicated as a reasonable accommodation under the Americans with Disabilities Act. For exemptions for a sincerely held religious belief or practice, CMS encourages health care entities to refer to the Equal Employment Opportunity Commission’s Compliance Manual on Religious Discrimination. Despite the ability to provide an exemption, CMS states that exemptions may be provided to staff only to the extent required by law, and that requests for exemption should not be provided to those who seek solely to evade vaccination. CMS also notes at length that the Food and Drug Administration considers approved vaccines safe. Accordingly, CMS will likely be unwilling to excuse provider and supplier noncompliance due to employees refusing vaccination based on fears about safety.

Penalties

Although the IFR does not identify specific penalties for non-compliance, CMS is expected to use enforcement tools such as civil money penalties, denial of payment for new admissions, or termination of the Medicare/Medicaid provider agreement. CMS will utilize State Survey Agencies to review compliance with the IFR through standard recertification surveys and complaint surveys. Noncompliance with the IFR will be addressed through established classification channels of “Immediate Jeopardy,” “Condition,” or “Standard” deficiencies.

Preemption

While CMS recognizes that some states and localities have established laws to prevent mandatory compliance with vaccine mandates, CMS ultimately considers the Supremacy Clause of the United States Constitution as preempting inconsistent state and local laws as applied to Medicare- and Medicaid-certified providers and suppliers.

© 2021 Dinsmore & Shohl LLP. All rights reserved.
For more updates on COVID-19, visit the NLR Coronavirus News section.

Immigration and Compliance Briefing: Fall Travel & COVID-19 Policy Update

On October 25, 2021, the Biden Administration issued a Presidential Proclamation to lift the travel bans which currently restrict entry into the U.S. directly from specific geographic areas (for a full list of restricted countries, see our prior client alert here), to be effective November 8, 2021. Instead of banning entry from specific locations abroad, the U.S. will utilize vaccine status-based restrictions for incoming travelers entering the country as noncitizen nonimmigrants (i.e., temporary visa holders or visa-free travelers). Once the new rules go into effect, most travelers will be required to provide proof of being fully vaccinated for COVID-19 prior to boarding an airplane, regardless of recent travel history (“fully vaccinated” refers to individuals who received the final dose of the COVID-19 vaccine more than 14 days prior).

Currently, the list of acceptable vaccines approved/authorized by the U.S. Food and Drug Administration (FDA) and World Health Organization (WHO), are as follows:

  • Pfizer-BioNTech

  • Moderna

  • Johnson & Johnson

  • Oxford-AstraZeneca/Covishield

  • Sinopharm

  • Sinovac

  • Mixed doses comprising of any two authorized/approved vaccines

As additional vaccines receive authorization/approval by either the FDA or WHO, it is anticipated that they will be added to the list of acceptable vaccines. In addition, the U.S. Centers for Disease Control will implement contact-tracing protocols. Mask mandates for airlines and airports, as well as the pre-travel negative COVID-19 test requirements, will remain in place until at least mid-January.

Exceptions include, but are not limited to, the following types of noncitizen nonimmigrants:

  • Certain noncitizen nonimmigrants traveling in an official capacity (i.e., foreign government officials and their family, individuals entering pursuant to a NATO visa classification, or individuals traveling pursuant to the United Nations Headquarters Agreement)

  • Children under the age of eighteen (18) years

  • Individuals participating in COVID-19 clinical trials*

  • Individuals unable to receive the vaccine due to a medical contraindication, as determined by the CDC

  • Individuals unable to receive the vaccine due to unavailability in their country of residence who are seeking to enter the U.S. on a nonimmigrant visa except B-1/B-2

  • Members of the U.S. Armed Forces

  • Sea crew members

  • Individuals whose entry is in the national interest

  • Individuals granted exceptions for humanitarian or emergency reasons

*The CDC will determine the qualifying criteria for individuals seeking to enter under this exception.

In addition to the restrictions above, all unvaccinated travelers traveling to the U.S. must show proof of a negative COVID-19 test taken within one day of travel. This requirement includes unvaccinated U.S. citizens and Lawful Permanent Residents (“green card” holders).

Vaccinated U.S. citizens and Green Card holders must show proof of a negative COVID-19 test within three days of travel.

Finally, additional measures may be required for certain types of travelers, including self-quarantine and vaccination within sixty (60) days of entry.

This policy will remain in place for an initial period of sixty (60) days and may be renewed on a monthly basis after that.

U.S. Land Border Updates

The Department of Homeland Security (DHS) announced that it will lift travel restrictions for land and ferry border crossings from Canada and Mexico in two phases, beginning November 8, 2021. Instead of keeping the land borders closed to nonessential travel, the Biden administration will implement the same policy as for air travel. Beginning November 8, nonessential travel will be permitted for fully vaccinated individuals, as described above. Nonessential travel will continue to be permitted regardless of vaccination status. However, beginning in early January 2022, all individuals entering the U.S. via the land border or ferry will be required to be fully vaccinated. This decision will permit nonessential travel via the land border between Canada and Mexico for the first time since March 21, 2020.

Vaccine Requirement for Individuals Seeking Permanent Immigrant Status

Effective October 1, 2021, applicants for immigrant status (i.e., a “green card”) in the U.S. who are subject to submitting Form I-693, Report of Medical Examination and Vaccination Record must be fully vaccinated as described above against COVID-19, before a civil surgeon designated by the Immigration Service can complete and sign the Form I-693 medical exam.

Waivers may be granted in certain circumstances, including where the COVID-19 vaccine is:

  • Not age appropriate;

  • Contraindicated due to a medical condition;

  • Not routinely available where the civil surgeon practices; or

  • Limited in supply and would cause significant delay for the applicant to receive the vaccination.

    © 1998-2021 Wiggin and Dana LLP

For more articles on COVID-19 Immigration, visit the NLR Immigration section.

How COVID-19 is Impacting Global Supply Chains & How Companies Can Cope

Despite the positive impacts of ongoing safety measures and the development of effective vaccines, global supply chains are continuing to face unprecedented logistical challenges because of the COVID-19 pandemic. Since the emergence of the coronavirus in early 2020, supply chains across the world drastically slowed down for a variety of reasons, including but not limited to disrupted shipping lanes, labor and material shortages and fluctuating demand. Every sector of the economy is affected to some degree, most notably the automotive, tech and medical supply industries.

Global markets face many unknowns as the supply chain returns to normal. The impacts of COVID-19 are far reaching, and it is difficult to determine precisely how long the disruptions will last. Further, late deliveries or no supplies of materials or labor presents a number of legal implications, and many companies affected by the disruptions are looking for guidance on how to proceed.

How Has COVID-19 Impacted the Global Supply Chain? 

According to the Bureau of Labor Statistics (BLS), 4.3 million U.S. workers left their jobs as of August 2021. This 3 percent decrease in the U.S. work force is especially impacting the supply of truckers and warehouse workers which particularly impacts the supply chain. As variants of COVID-19 continue to spread throughout the globe, vaccine mandates and required coronavirus testing leaves employers scrambling to stay compliant amidst being short staffed. These actions are also occurring after a year-long closure of major manufacturers all over the world.

Even with President Biden’s Executive Order 14005, which aims to strengthen domestic supply chains, issues with cybersecurity and labor resignations continue to cause bottlenecks at U.S. ports. Without the necessary workforce to transport goods across the U.S., some ports are facing an 80 percent increase in congestion. As the global supply chain grows more chaotic, President Biden met with officials last Wednesday to discuss the nationwide supply chain bottlenecks, announcing that the Port of Los Angeles will begin operating 24 hours a day, seven days a week to help deal with the bottlenecks. Additionally, major retailers such as Walmart and Target committed to increasing shipping operations during off-hours, with logistics companies FedEx & UPS making a similar pledge.

“In my 40 years of living and working in Southern California, I have never seen container ships off the coast of Malibu, and yet there they are, because there is no more room for them in the parking lots that are the ports of LA and Long Beach,” said Brad Hughes, Member of the Transportation & Logistics Practice at Clark Hill PLC.

How Long Will COVID-19 Supply Chain Disruptions Last? 

It remains to be seen precisely how long the effects of COVID-19 will be felt on supply chains. In many cases, the answer is industry-specific since different industries rely on the global supply chain in different ways. However, in general, it does appear that the problem is unlikely to be resolved before the end of 2021.

“Unfortunately, the supply chain problem is not likely to be resolved before Christmas,” said Mark Andrews, Senior Counsel and member of the Transportation & Logistics Practice at Clark Hill PLC. “There are many grinches involved, from port bottlenecks, driver and truck shortages, to high freight costs and tariffs. These are compounding problems that need simultaneous attention but will take different times to resolve.”

Industries reliant on highly specific, specialized goods, such as semiconductors or rare earth metals, face a particularly long return to normal. Over 60 percent of businesses in the manufacturing industry reported domestic supplier shortages, followed closely by construction companies at just under 60 percent.

“While many project with cautious optimism a mid-2022 chip supply recovery, we do anticipate other supply chain woes well into late-2022,” said Scott Hill, Executive Partner and member of the Corporate Practice Team at Varnum LLP. “Supplies of raw materials such as resin, aluminum, and steel have become unreliable in this volatile market. Long lead times and increased prices for raw materials, especially in the auto space, are projected which will cause significant disruption when a full restart is demanded. Those who have the ability to order materials now will be better positioned to sell to the market.”

How Can Companies Handle COVID-19 Supply Chain Disruptions? 

The supply chain disruptions brought on by the COVID-19 pandemic have wide reaching legal implications, specifically the web of state and federal laws surrounding transportation.

“I would identify uniformity of federal and state transportation law as a badly needed element of ‘legal infrastructure’ to reduce transportation costs and delays,” Mr. Andrews said. “Examples include driver hours, worker classification and up-supply-chain liability for ‘negligent selection’ of motor carriers involved in traffic accidents.”

With there being no signs of the supply chain disruptions ending anytime soon, companies can take steps to manage their supply chain operations. Potential solutions include moving from a sole-source supply chain to a multi-source supply chain, according to Varnum’s Mr. Hill.

“Since the onset of the pandemic, we have worked closely with our clients to optimize their supply chain, whether they were operating under sole-source or multi-sourcing strategies. As you may imagine, multi-sourcing and on-shoring to the extent possible has been particularly important with bottlenecks in the chain across the globe,” he said.

Another consideration for companies experiencing supply chain disruptions is handling claims of delayed delivery, specifically for those in the automotive supplier industry. Mr. Hill said his clients are working daily to remedy automotive industry supply chain issues to ensure expectations are met.

“Many of our clients are in the automotive supplier space and the semiconductor shortage continues to warrant attention and necessitates daily if not hourly conversations up and down the chain to reflect good faith efforts to deliver under the terms of supply agreements,” he said.

Currently, federal agencies and the Biden Administration are responding to supply chain issues, specifically through President Biden’s executive order. The order addresses many of the issues facing supply chains right now, including directing heads of federal agencies to conduct a one-year review on supply chain vulnerabilities.

Conclusion

Even though many of the challenges presented by the supply chain disruptions are ongoing, the announcement from the Biden Administration that ports and retailers are committing to increasing operations to deal with supply chain issues may help ease some of the strain. Additionally, companies can expect more regulatory actions to come later in the year from other agencies.

“Federal agencies are actively undertaking a range of actions in response to recent executive orders and other presidential direction on the nation’s supply chain issues,” said Anthony Campau, Counsel and Director of Government Regulation for Clark Hill.

“Some of those measures are already public, but more detail will likely become visible this fall when the Office of Information and Regulatory Affairs (OIRA) releases the Fall 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions, which will list all regulatory actions currently under development at federal agencies. That publication should offer a helpful window into planned regulatory responses to the nation’s supply chain woes,” he said.

Copyright ©2021 National Law Forum, LLC

For more articles on supply chain, visit the NLR Antitrust & Trade Regulation section.

United States to Open Borders with Canada and Mexico for Vaccinated Nationals Beginning November

The United States will open its northern and southern land borders to fully vaccinated foreign nationals sometime in November 2021. When this happens, it will be the first time since March 2020 that these individuals will be able to enter the United States from Canada and Mexico for “non-essential” purposes, such as tourism, shopping, and family gatherings.

The reopening is expected to occur in two phases. During the first phase, fully vaccinated foreign nationals will be able to enter for non-essential purposes. Unvaccinated individuals will still be able to enter for essential purposes, including for work. During the second phase, scheduled to go into effect in early January 2022, all foreign nationals, whether entering for essential purposes or not, will have to be fully vaccinated. The expectation is that there will be limited exceptions, for example for children.

The “essential travel” restrictions applied only to land and sea borders. Foreign nationals have been able to fly into the United States from Canada or Mexico if they met the COVID-19 testing requirements. In November, however, new COVID-19 vaccination and testing requirements will be in place for all air travel. All foreign nationals seeking to enter the United States from anywhere, with limited exceptions, will have to be fully vaccinated, as well as show proof of a negative COVID-19 test taken within three days of departure. Unvaccinated U.S. citizens and legal permanent residents will need to provide evidence of a negative COVID-19 test taken within 24 hours of boarding a flight to the United States and undergo testing upon arrival.

The United States is a little late to the border game. Canada reopened its border to fully vaccinated Americans on August 9, 2021, and to other fully vaccinated foreign nationals on September 7, 2021. It is still not clear exactly when the new U.S. rules will become effective. The United States already announced that the 14-day travel restrictions on China, Iran, the UK and Ireland, the 26 Schengen Zone countries, Brazil, South Africa, and India are scheduled to be lifted sometime in “early” November. The northern and southern border restrictions will be lifted at the same time. We are still awaiting official guidance on documentation requirements and the implementation date.

Jackson Lewis P.C. © 2021

Article By Sheila T. Minihane of Jackson Lewis P.C.

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