The CARES Act

Volume: 19 | Issue: 14
March 31, 2020
On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). This Act is aimed at keeping American workers paid and employed, aiding workers, families and businesses, and supporting America’s health care system in the fight against the coronavirus. From a labor and employment perspective, there are a few things about which employers should be aware.
Public Health Emergency FMLA Change
The CARES Act made a few changes to the new Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act enacted as part of the Families First Coronavirus Response Act (FFCRA). The most notable change is to address the eligibility of rehired employees for public health emergency FMLA.
Under this change, a rehired employee is eligible for public health emergency FMLA leave if he/she was laid off no earlier than March 1, 2020, had worked for the employer for not less than 30 of the last 60 calendar days prior to the layoff, and was rehired by the employer.
Direct Loans Impact NLRA Rights
The CARES Act contains the Coronavirus Economic Stabilization Act of 2020, which allows mid-sized businesses and nonprofits (between 500 and 10,000 employees) to obtain direct loans to enable them to retain employees. In order to obtain a direct loan under Section 4003 of the CARES Act, however, an employer must make a variety of certifications, or promises, including the following:
  • The Company will not abrogate existing collective bargaining agreements for the term of the loan and 2 years after completing repayment of the loan; and
  • The Company will remain neutral in any union organizing effort for the term of the loan.
It is important for employers to understand that these two certification requirements may constitute a waiver of your rights under the National Labor Relations Act (NLRA) and may impact employees’ rights as well. For example, requiring an employer to remain neutral during a union organizing campaign could mean (depending upon how “neutral” is interpreted) that a company cannot educate its employees as to the company’s views about unions or predict the precise effects unionization will have on the company. In addition to restricting an employer’s rights, this deprives employees of information they need to make an informed choice while exercising their right to choose or reject union representation. Indeed, the General Counsel for the National Labor Relations Board has determined that some neutrality agreements constitute unlawful union assistance and interference with employees’ NLRA rights.
If you are considering a loan under the Coronavirus Economic Stabilization Act of 2020, please contact a KZA attorney to discuss these certification requirements so that you understand their potential scope.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.

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