US Court of Appeals for the Fifth Circuit
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Federal Vaccine Mandates Are Back in Play (For Now)

The courts continue to move the vaccine mandate goalposts on employers as dozens of legal challenges work their way through the courts. The latest developments are major game changers for employers. As of today, the US Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS) vaccine-or-test rule is enforceable nationwide, and the US Centers for Medicare & Medicaid Services (CMS) Interim Final Rule (IFR) mandating vaccination, subject to exemptions, is enforceable in 25 states.

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Fifth Circuit Brings Enforcement Back into the Mix: The Latest Court Moves with the CMS Vaccination Mandate

A flurry of litigation in federal district and appellate courts has led to an even split between states in which the COVID-19 vaccine mandate issued by the US Centers for Medicare and Medicaid Services (CMS) may be implemented and states in which such implementation has been prevented. Additional appeals are expected shortly; however, the practical effect of these decisions on enforcement of the CMS mandate remains uncertain.

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Businesses Left in Limbo on COVID-19 Mandate

Following a US Court of Appeals for the Fifth Circuit decision to temporarily block the Occupational Safety and Health Administration’s (OSHA) new vaccine requirement rule, many employers have found themselves in a state of confusion. According to this article published in The Hill, businesses could face steep penalties if they willfully violate the rule, such as fines of more than $130,000. But even though the rule is temporarily blocked, McDermott Partner Michelle Strowhiro said businesses should continue preparing for important OSHA deadlines.

“I think it’s prudent for employers to proceed with planning assuming that the OSHA rule, at least in some form or fashion, will be implemented pending final resolution of the various court cases,” Strowhiro said.

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Federal Appeals Court Temporarily Blocks New OSHA Rule

On November 6, 2021, the US Court of Appeals for the Fifth Circuit temporarily blocked the Emergency Temporary Standard (ETS) issued on November 4, 2021, by the Occupational Safety and Health Administration (OSHA) requiring employers with 100 or more employees to implement COVID-19 vaccination policies. The ETS is stayed until further notice, halting its implementation temporarily. While the future of the ETS remains uncertain, employers may want to continue preparing for the ETS as if it is going to take effect while litigation continues.

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District Court Dismisses Shareholder Claim that Equity Award Share Withholding Triggers Section 16(b) Liability

A US District Court recently dismissed a claim that an insider’s election to satisfy an income tax obligation by having shares withheld from the delivery of an award constituted a non-exempt sale of shares back to the issuer for purposes of Section 16(b) of the Exchange Act, unless the share withholding was required, rather than merely permitted.

While an encouraging development, this decision is now on appeal to the US Court of Appeals for the Fifth Circuit and there are similar unresolved complaints in other jurisdictions. Until this matter is resolved, public companies should continue to consider what steps are appropriate to avoid Section 16 exposure and to review this situation with their executive officers.

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Understanding the Federal Court Injunction against the DOL’s Revised Overtime Rule and Determining What to Do Next

A federal district court judge in Texas issued an order granting a temporary injunction late Tuesday against the Department of Labor’s new overtime exemption rule that was scheduled to take effect December 1. This article contains some practical tips on what employers should do next.

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