January 27, 2021

Volume XI, Number 27

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Coronavirus: Workplace Considerations Related to Global Supply Shortages and Employee Travel

The coronavirus has significantly impacted supply chains across the globe, and while companies experiencing production limitations due to reduced inventories are turning to their supply agreements for remedies, these same companies may also face important labor and employment considerations as a result of this viral outbreak. Particularly, major disruptions in supply chains resulting from coronavirus may require employers to temporarily lay off employees in sequences not contemplated by the collective bargaining agreement in order to retain skill sets necessary to continue operations not impacted by the supply chain shortage. Additionally, companies may face employee travel concerns related to coronavirus. Where coronavirus is causing either of these concerns, companies must carefully consider their legal options.

If a company employs a unionized labor force and is anticipating a layoff due to supply chain shortages, it should look to the collective bargaining agreement first for options to implement the layoff. Depending on the contents of the collective bargaining agreement, the company has different options for relief.

  • If the collective bargaining agreement contains a force majeure provision[1], such provision may permit an employer to take unilateral measures that would otherwise require bargaining.

  • If the collective bargaining agreement does not contain a force majeure provision, the National Labor Relations Board's narrow "economic exigency exception"[2] may provide relief.

  • Notably, employers contemplating layoffs must also evaluate their obligations to provide notice to its employees (unionized and non-unionized) under the Worker Adjustment and Retraining Notification (WARN) Act.

Companies and company employees may also face concerns over employee travel and the threat of coronavirus. Where this is of concern, a company will want to give thought to the following:

  • following State Department advisories regarding travel;

  • offering and/or implementing alternatives to travel when appropriate; and,

  • quarantine periods for employees returning from travel.

If your company is facing either of these coronavirus-related concerns, immediate action is likely in order. 

For more information on how the coronavirus is impacting global supply chains, please see our previous advisory: Coronavirus and Global Supply: Contractual Protections Can Be a Remedy to the Symptoms from Unhealthy Supply Chains


[1] Such provisions commonly relieve the parties from performing their contractual obligations when certain circumstances beyond their control (Act of God) make performance inadvisable, commercially impractical, illegal or impossible.

[2] See RBE Electronics of S.D., Inc., 320 NLRB 80 (1995) (providing an exception where unforeseen extraordinary events cause major economic effects on the company and such events require the company to take immediate action)

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© 2020 Varnum LLPNational Law Review, Volume X, Number 58
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About this Author

Ethan Beswick Business Attorney Varnum Law Firm
Associate

Ethan Beswick is an associate attorney with a business and corporate service practice and additional experience in tax, real estate and aircraft matters. He provides general business and transactional work and has experience in mergers and acquisitions, business transactions, financing, contracts, and day-to-day business issues.

Ethan also works regularly with business tax, international tax, and other tax related issues, and assists clients with real estate sales and acquisitions, commercial leasing matters, and real estate financing transactions.

 An instrument-rated...

616-336-6931
David E. Khorey, Labor Employment Attorney, Varnum, Workplace Confidentiality Matters Lawyer
Partner

Dave’s “client-centered” practice involves a variety of labor and employment issues. He provides practical and confidential ongoing advice and consulting on a number of sensitive and complex labor and employment matters, from problem employee situations to multi-facility collective bargaining negotiations. His representative clients include diverse industries (such as automotive, printing, transportation and hospitals) throughout the nation.  

Dave has also served as chair of the firm.

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616-336-6618
Maureen Rouse-Ayoub Labor Employment Attorney
Counsel

Maureen represents clients in all areas of labor and employment. She advises clients on labor management relations including union election proceedings, collective bargaining and contract enforcement in arbitration and before the National Labor Relations Board. Maureen defends employment-related claims including discrimination, sexual harassment, wrongful discharge, Whistleblowers' and Fair Labor Standards Act violations in federal and state courts, administrative proceedings and arbitration hearings. She counsels clients on drafting, implementation and enforcement of workplace policies....

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Stephanie R. Setterington, labor and employment attorney, Varnum
Partner

Stephanie advises employers on a wide variety of labor and employment matters, with an emphasis on employment litigation defense, and the identification and development of best practices in the area of human resources. She has worked extensively as labor and employment counsel for publicly-traded and privately-held companies that vary from single-site businesses to multi-state or global entities. She works with each client to ensure compliance with labor and employment-related legal requirements, develop effective human resource operations, and achieve the successful...

616/336-6466
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