News & Events

New Tennessee COVID Legislation Has Significant Impact on Employers

After days of intense discussions, and multiple amendments, in the wee hours of Saturday, October 30, 2021, the Tennessee legislature passed House Bill No. 9077/Senate Bill No. 9014. This new law will have a significant impact on Tennessee employers with respect to various COVID-19 pandemic protocols.

The law will go into effect immediately once signed by Governor Lee, although some or all aspects of the law may be subject to judicial challenges. We are still reviewing the law and many questions remain unanswered, including how it will interact with possibly conflicting federal vaccine mandates. Butler Snow will continue to provide updates and analysis as the situation develops, but, in the meantime, here is our initial synopsis of the issues addressed by the new law.

Vaccines

The new law appears to at least partially prohibit the enactment of so-called “vaccine passport” laws as applicable to Tennessee businesses, stating that a “governmental entity” shall not “mandate that a…person receive a COVID-19 vaccine” or mandate that a private business require proof of vaccination as a condition to enter the business’s premise or receive the business’s products or services.

The law also appears to prohibit workforce vaccine mandates by both private and public employers in Tennessee, stating that such employers “shall not compel or otherwise take 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.” Adverse action is defined to include discrimination against a person by denying the person employment, or discharging, threatening, or otherwise discriminating against an employee in any manner that affects the employee’s employment, including compensation, terms, conditions, locations, rights, immunities, promotions, or privileges.”

As stated, this section of the law appears to prohibit public and private employers of all sizes from requiring employees to be vaccinated (which would necessarily entail compelling employees to present proof of vaccination) as a condition of employment. What is less clear is whether employers can inquire about, or insist on disclosure of, vaccine status for other reasons, such as to determine workplace vaccination rates, or to conduct contact tracing and enforce quarantine periods for vaccinated versus unvaccinated employees.

The law does contain an exemption for federal contractors subject to the recent Executive Order 14042 (which requires covered federal contractors to ensure employees are vaccinated by December 8, 2021); however, an employer must request an exemption by submitting a notice in writing to the Tennessee comptroller of the treasury. It is less clear how the law would impact businesses which ultimately may be covered by an upcoming OSHA Emergency Temporary Standard (“ETS”), which will require employers with 100 or more employees to require employees to be vaccinated for COVID-19 or submit to weekly testing.

Also, in an exception seemingly directed to home businesses or remote work situations, individuals are not prohibited from requiring proof of vaccination as a condition of entering a private residence.

The new Tennessee law does not prohibit, require, or really address, the concept of mandatory COVID-19 testing by employers, nor does it speak to who would be responsible for covering the costs of such testing.

Quarantine Authority

The new law states that “the commissioner of health has the sole authority to determine quarantine guidelines” for a person who tests positive for COVID-19. The law further states that “the quarantine of a person must be lifted if the person receives a negative antigen detection test result or a negative molecular diagnostic test result at any time during the quarantine period.” This section was intended to remove authority from county health departments that operate independently from the state health department, which had been following their own guidelines, not the department of health’s guidelines.

The impact of this section on employers is unclear; for instance, it is unclear whether this section impacts an employer’s ability to maintain a quarantine protocol pursuant to CDC guidelines if such guidelines are more strict than those issued by the Tennessee commissioner of health. Also, the law only speaks to quarantine for individuals who have “tested positive for COVID-19” as opposed to individuals who have been in close conduct with an individual confirmed to have COVID-19.

Mature Minor Doctrine

The new law will prevent a healthcare provider to provide a minor with a Covid-19 vaccine without first obtaining written consent from the minor’s parent or legal guardian. There is an exception in cases when in the provider’s independent professional judgment, or suspects the minor may be subjected to abuse, or a dependent and a neglected child.

Immunity Extended

The law extends the protections of the 2020 Covid Liability Business Protection Act, which was set to expire on July 1, 2021, to July 1, 2022. This law purports to limit liability for businesses (including employers) in situations of alleged on-premises COVID-19 transmission or other liability arising out of Covid-19 as defined in the act. As a reminder, this Act did not preclude any worker’s compensation suits.

Masking

While the new law does address mandatory face coverings (masking) in the workplace and elsewhere, the final version of the law impacts only public employers. Earlier versions of the bill contained broad prohibitions on mask mandates which would have covered all employers in Tennessee. Those provisions were stripped out of the bill, reportedly following objections from the business community including the Tennessee Chamber of Commerce, the Tennessee Business Roundtable, the Tennessee Hospital Association as well as other business groups and employers.

The final version of the law does prohibit mask mandates by employers who are “governmental entities.” Under the bill, governmental entities include state departments, agencies, or political subdivisions such as cities, towns, counties, and municipalities. It does not include:

  • schools or LEAs,
  • airport authorities,
  • Medicare or Medicaid certified providers,
  • entities operating on federally owned or managed property,
  • assisted-care living facilities, homes for the aged, nursing homes, or residential hospices, or
  • certain healthcare providers defined by the statute.

While otherwise potentially classifying as governmental entities, correctional facilities are also exempted from the masking restrictions of the law.

The new law states that governmental entities cannot require an employee to mask as a term or condition of employment and may not take adverse employment action against an employee for failing to wear a face covering. The new law does provide an exception to this restriction, allowing mask mandates for a maximum of 14 days if “severe conditions exist.” Severe conditions are specifically limited to times the governor has declared a state of emergency for COVID-19 and a county has an average rolling 14-day infection rate of at least 1,000 new known infections for every 100,000 residents of the county. The 14-day mask mandate may be extended for additional 14-day periods as long as severe conditions continue to exist, but may not be renewed when such conditions no longer exist.

These masking restrictions do not apply to industry-required masks, meaning masks required by certain jobs regardless of COVID-19 risk and exposure protocols.

The law also limits a public school’s ability to require masks on school property. While not specific to schools as employers, presumably this limitation would apply to school employees to the same extent as anyone else on school property.

Private Cause of Action

The law provides for a private cause of action against alleged violations of the vaccine or masking sections. This private cause of action also covers any violations of the mature minor section of the bill. This cause of action includes the ability for individual plaintiffs (or, presumably, a class of similarly-situated plaintiffs) to sue to obtain injunctive relief as well as to recover compensatory damages and attorneys fees. Earlier versions of this bill reportedly included provisions permitting recovery of punitive damages, which is not permitted under the final law. Nevertheless, the ability of plaintiffs to recover their attorneys fees provides a significant incentive for lawsuits.

Unemployment benefits

Although the section addressing unemployment benefits is relatively short, it holds significant changes for both private and governmental employers and their employees. Prior to this law, in Tennessee, with few and specific exceptions, employees are generally disqualified from receiving unemployment benefits if they leave their employment voluntarily. The Department of Labor, however, testified that its current practice during the pandemic had been to allow individuals that were covid related terminations to receive benefits. This bill specifically codifies that exception. The bill states that disqualification from benefits does not apply to employees who left employment because the employer required its employees to receive the COVID-19 vaccine and the employee failed or refused to receive it. The bill also goes a step further for employers who have had a vaccine requirement in place up until now. Employees who previously left work and were denied unemployment benefits on grounds that they left for failing or refusing to receive a vaccine are now entitled to retroactive payment of those benefits, assuming they are other otherwise eligible. The bill does not specify any specific look back period or timeline for this retroactive eligibility. For employers who required vaccines before such a requirement was prohibited by state law, where employees left or were terminated based on a refusal to be vaccinated, this could provide grounds for a backlog of unemployment claims.

Bottom Line

All Tennessee employers, both public and private, large and small, and particularly those in the process of gathering vaccine status or enacting full or partial vaccine mandates for their workforces, should pay close attention to this new law. Employers are encouraged to seek the help of experienced employment law counsel to determine how these new rules and prohibitions may apply to your business.