The COVID-19 Vaccine Debate: How Employer Decisions Could Help Or Hurt Businesses for Years to Come

For executives helming organizations of all sizes amid what has been deemed a triple pandemic of COVID-19, economic recession and racism, the challenges and potential consequences of their leadership has perhaps never been greater.

The question of employee vaccinations is perhaps a juxtaposition of all three national crises. Companies with frontline workers are already grappling with the issue. Retail leaders are also weighing the outcomes of bringing corporate employees — many of whom remain remote — back to their offices in the weeks and months to come.

“It has been well documented how retail with a large female and racially diverse frontline has been impacted by COVID-19, forced home schooling and, on top of that, continued racial injustice,” explained Kyle Rudy, partner at New York-based executive placement firm Kirk Palmer Associates. “For [Black people, for example] opinions on vaccines may be filtered through a history of unfair and non-transparent medical trials in the past.”

Just this week, Dollar General became the first major retailer to offer financial incentives to employees who choose to get vaccinated — acknowledging that many hourly workers face a number of economic hurdles to getting inoculated, including factoring in travel time, gas mileage and child-care needs.

In general, corporate retail employees may not face the same level of financial hardship as their store-level counterparts, but leaders who are making the overarching decisions about whether to mandate employee vaccinations, according to Rudy, must take a big picture view of the entire, complex situation.

“Retailers, and other industries that have a larger population of customer-facing employees, must consider both the internal and external factors that impact all their decisions around the pandemic,” said Rudy. “In product and in marketing decisions, retailers often need to be customer-focused first, but when it comes to pandemic policies and vaccines, they need to be employee-focused first.”

He added, “Once those internal decisions are made, then they can see how they impact their external customer, but they cannot afford to make decisions in reverse order or they might risk a talent bleed.”

Sidestepping an Imbroglio

The underpinning of any question regarding the mandating of employee vaccinations is legality.

According to Dorit Reiss, a law professor at the University of California, Hastings who specializes in vaccine policies, companies are generally well within their legal right to mandate employee vaccinations — in the same way they can require things like hand-washing.

However, there are important caveats to note as well as broader complexities to consider for those who are tasked with making the call on vaccinations. For instance, unionized workers, Americans with certain disabilities and those with religious conflicts may be afforded some level of exemption from a mandate.

What’s more, noted Reiss, “A mandate is not always ‘Get the vaccine or you’re fired.’ It may be everybody else has to wear a [regular] face mask and [the employee who is refusing or unable to be vaccinated] may have to wear an N-95 mask or other PPE.”

Perhaps employers would be wise to consider milder alternatives — other than job termination — when it comes to enforcing a mandate for the COVID-19 vaccines in particular. Unlike the flu shot, which is required for many in the medical field, the COVID-19 vaccine has been granted an emergency use authorization — not the same authorization given to other vaccines on the market. (Both the Moderna and Pfizer-BioNTech vaccines have received emergency use authorization.)

Since such a vaccine has not yet faced scrutiny in a court of law, Reiss said it could be difficult to determine what outcomes an employer (or employee) could expect should litigation materialize.

And there are several scenarios that could lead employers and their employees down a legal path.

“If an employer, does not require its employees to receive a COVID-19 vaccine and an employee becomes ill with coronavirus, the employee could have a workers compensation claim,” said Reiss.

Conversely, if an employee receives the vaccine, as required by their employer, and experiences serious side effects, he or she may also have a workers compensation claim against the company.

For leaders, the potential for a new wave of legal challenges comes at a time when profitability is already under pressure and shareholders are looking for value. Add to that the ripple effects — from mandating or not mandating vaccina­tion — on employee retention and overall morale, and it could be cataclysmic situation, particularly for already-struggling retailers.

What Companies Are Saying

According to a report this week from The Conference Board, 58% of U.S. CEOs see COVID-19 as the main disruptor of business in 2021, but 45% say they see vaccine availability as having a major impact.

As it stands, challenges with vaccine availability and distribution could be among the key factors driving many retailers (and other organizations) to push back their return-to-work dates.

Multiple companies that FN spoke with this week signaled that they don’t anticipate having employees back at their main campuses until the summer, with Nordstrom indicating that it will keep corporate employees remote until “at least July” and Target confirming that employees will remain virtual until June.

Meanwhile, a spokesperson for New Balance told FN that the company will “continue to review COVID-19 vaccine guidance from the EEOC and OSHA as well as monitor rollout timelines.”

“We are also supporting communication efforts in our local communities that promote vaccine acceptance,” the company added.

As major pharmaceutical companies signaled their progress on vaccine development in the fall, big box chains like Walmart and Target quickly offered up their thousands of stores as vaccine distribution sites. Under Armour, meanwhile, made its Baltimore campus a distribution site with multiple news outlets reporting on the long lines at a vaccination clinic at its facility in Port Covington.

And, there are already early hints that retailers who have taken similar steps are hoping it’s a bridge to making it easier for their own workers to receive the vaccine.

“Through our longstanding partnership with CVS, more than 1,700 Target stores currently have a CVS pharmacy inside and administer flu shots every year,” Target said. “Once states determine final timing and prioritization for frontline and essential workers and the HHS allocates vaccines for the public, these CVS locations plan to offer the vaccine for our team members and guests. Like many companies, we’re building plans to roll this out safely, working with our benefits team to make the vaccine available and free-of-charge for our team members and listening to guidance from public health officials.”

What’s At Stake

While Rudy and Reiss come at the vaccine conversation from different backgrounds, they both share the same opinion when it comes to what they view as one of the most critical factors in leadership decision-making amid crisis: Two-way communication.

One key to retaining talent will be how leadership is able to listen to their employees, how authentically they communicate their decisions and policies, and how flexible they remain as new information and data arises both internally and externally,” explained Rudy. “Now more than ever, talent will follow modern leaders, and modern leaders consider talent needs first, and can flex with the changing times.”

With the pandemic already demonstrating an outsized negative impact on women as well as Black and Hispanic people in the U.S., Rudy said, regardless of where companies land in the vaccine debate, it’s important that companies don’t exacerbate existing racial and economic disparities.

From a legal standpoint, Reiss suggests leaders need not be shy about formalizing certain facets of their communication in such crucial times — considering the true life-or-death outcomes in play.

“For example, companies can ask employees who are claiming a religious exemption from the vaccine to explain in writing what the religious objection is,” said Reiss. “It’s surprising how often those letters will say things like ‘I’m scared of the vaccine and God told me not to take it.’”

Similarly, for medical exemptions, Reiss said it is appropriate for employers to require written communication from a medical doctor for employees who seek to claim an exemption.

In any event, it will require a delicate balance.

“Retailers sometimes like the term ‘friends and family’ as they promote their businesses,” said Rudy. “They now need to consider that each employee has real friends and family members who work in various companies. So they have firsthand knowledge of what other companies and industries are doing in response to the pandemic, and those comparisons will impact their opinion of their own employer.”

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