By mid-August, 2021, 39 AM Law 200 firms had issued the equivalent of vaccine requirements for employees returning to the office. With most firms requiring either full or partial return to the office environment in the fall, many are not only asking questions about liability issues but also wondering how best to protect their firms from any resulting fallout.

There is risk in requiring vaccines for employees, as well as risk in making no decision at all. Will the courts follow the lawyers making vaccine requirements or view them as unreasonable or akin to unlawful termination? Who is liable if a worker introduces COVID-19 to the workplace absent a mandate and others get sick? Is the firm properly covered in either scenario?

The Mandate Trend

Nine states are prohibiting COVID-19 vaccination mandates while other states, including New York, New Jersey, Washington and California, are either debating or implementing some form of COVID-19 vaccination mandates for state workers. With the endorsement of the state's two largest teachers unions, California has also implemented a first-in-the-nation requirement for all school staff to provide proof of COVID-19 vaccination or be tested weekly.

As go the states, likely so go the employers in the eyes of the courts, although employers could still find themselves on the hook for claims despite any state mandates. In the interim, there is strength in numbers as more firms begin requiring vaccinations for return to in-person work. If the U.S. Food and Drug Administration (FDA) begins approving the three COVID-19 vaccines currently authorized for emergency use in the United States, that momentum will likely build further. According to the Director of the National Institute for Allergies and Infectious Diseases Dr. Anthony Fauci, while he cannot predict when the FDA might issue vaccine approvals, he told NBC's "Meet the Press" on Aug. 8 he hoped those approvals might come within the month of August. If so, firms requiring vaccinations are likely on steady ground with momentum and with the courts.

To Jab or Not to Jab?

Firms that require vaccinations for employees to return to in-person work environments face a host of issues. From a risk management perspective, there is the possibility of wrongful termination claims from employees who are unable or unwilling to comply and who cannot fully work remote.

Firm managers should consult with their insurance agent or broker to ensure they have adequate coverage under their Employment Practices Liability Insurance (EPLI) policy. It is crucial that adequate coverage under the firm's EPLI policy be in place prior to the firm making any decision about vaccine mandates. Should the firm attempt to retroactively obtain adequate EPLI coverage after making a vaccine requirement decision, not only are they unlikely to be able to increase their claim limits, the firm runs the risk of any resulting EPLI claims being denied. In short, the firm could potentially be liable for any successful wrongful termination claims if they are lacking EPLI coverage or are under-insured.

Alternately, those firms that choose to forego vaccination requirements face a different risk management scenario. Should an employee with COVID-19 gain entry to the workplace and infect others, the law firm(s) in question may face significant workers' compensation claims for those who can trace their infections back to the workplace.

Protecting the Firm

At the moment, there is no significant case law to guide attorneys or risk management professionals on vaccine requirements for workers. What little guidance does exist came from early pandemic insurance claims for business interruption insurance. Early claims were denied, and later upheld by the courts since most business interruption insurance policies have exclusions to communicable diseases. However, later court decisions went in the opposite direction. Only future litigation of claims will determine the validity of vaccine requirements in the workplace.

Law firm employers need to ensure they have a minimum of $1 million in EPLI coverage, per incident, if they have five or more employees. For AM Law 200 firms and higher, a detailed review of the firm's EPLI policy and limits is strongly encouraged as claims for lost wages, severance and punitive damages could be considerable. Appropriate coverage and policy limits must be in place prior to any mandates instituted as a condition of employment. This is especially important if the firm does not offer alternative work arrangements such as full-time remote work opportunities.

Meanwhile, a simultaneous review of the firm's workers' compensation policy is equally important. While you may have adequate coverage for your employees under the employee benefits portion of your policy, firm leaders need to examine if the firm is adequately covered under the employer liability portion. Should work-related COVID-19 cases be identified where the firm did not require vaccinations or other "appropriate" workplace protections, the injured worker(s) may be able to sue the firm for damages beyond their workers' compensation benefits. Your workers' compensation employer liability coverage will cover the firm's legal defense and any monies awarded to the employee – within policy limits. This is separate and distinct from the firm's EPLI policy, hence the need to ensure the firm has adequate coverage before issuing any pandemic-related employment requirements.

What to Know

As Donald Rumsfeld once famously said, "there are known knowns … but there are also unknown unknowns." This is where we find ourselves as law firms consider a potential return – in full or part – to the law office this fall. Risk managers see the potential for claims on both sides of any firm mandate decisions. But it's those known knowns – that evaluating and ensuring the firm is adequately protected in all cases prior to any decision – that should help firm leaders rest a bit easier at night as fall approaches. John Randolph is assistant vice president of First Indemnity Insurance Group, working in the specialty insurance market for nearly a decade, and helps provide specialty insurance expertise for the legal community. He can be reached at [email protected].

The views herein are the author's own.