As published CEOWorld Magazine
As Fall approaches what was to be a welcomed Covid recovery season feels more like an endless New Year’s Eve hangover. Instead of following its 1918 Spanish Flu brethren and fading away inside 18 months, the new Covid “Delta” variant which is far more contagious and on the rise is digging in. In fact, to-date according to the CDC, deaths from Covid and the Delta variant combined are expected to top 750,000 in the U.S. by year end, with a spike in new infections across many states as you read this.
Before the recent Delta variant breakout, deaths were on the decline, and with nearly 60% of the population over 12yrs of age fully vaccinated, hope springs eternal.
But then, like a voracious lioness the Delta variant turned her hungry attention to where the real action was, the “unvaccinated” people, which have consequently accounted for nearly all of the spike in recent Covid infections, hospitalizations and deaths in recent weeks. Delta is also accountable for nearly all break-through infections among fully vaccinated people. However, there are few reports of any deaths from Covid if you are fully vaccinated. To make matters worse, the media meanwhile is not helping. Fear mongers and conspiracy clowns claiming the vaccine is from Mars or Russia or some guy named Vinnie in New Jersey sadly perpetuates the ambiguity, leaving the unvaccinated fence-sitters dangerously out in the open and vulnerable to illness or death, which begs the big question.
Should you force your people to get the jab or not?
For many business and non-business leaders there is no debate. Getting vaccinated is their open cry, or else Covid will painfully persist. For others the choice either way comes with a host of thoughtful and risky unknowns. Leaving some staff unvaccinated creates an unnecessary health risk they argue. At the same time many employees across the country have strong patriotic feelings deeply rooted in the founding principles of freedom in our country, and are not to be dismissed lightly over coffee. These folks don’t want to be told what to do, and don’t think it’s legal. One wrong move or insensitive over-reach could compel such employees to look elsewhere for work at a time when job openings are aplenty. CEO word on the street, meanwhile, is to get your arms around both sides of the issue before your gavel goes down. Here are the arguments.
Those who favor the jab
Fears of forcing a vaccination mandate are very real, especially for CEOs and business leaders. For starters, many spokespeople for the unvaccinated claim the mandate is against their Constitutional rights to force vaccination. However, that argument has already been largely put to bed. The first time was the 1905 Supreme Court ruling in Jacobson vs. Massachusetts that upheld a local small pox vaccination mandate in Cambridge Mass. against a 14th Amendment challenge.
More recently last month, after nearly 700 universities across the country mandated student vaccinations before this Fall 2021 semester begins, the Supreme Court refused to hear an emergency case brought by students at Indiana University who challenged the school’s forced vaccination requirement as unlawful because it did not allow for “voluntary and informed consent.” The Justices did not take the bait, however. Students have other school choices they said. Or students can use remote online learning, etc. But the message was clear. It would appear the Court is leaving little wiggle room for further debate on the matter.
On the business front, CEO Johnny Taylor at the HR firm SHRM said in a recent CNBC interview according to OSHA (Occupational Safety & Health Admin) “employers have an obligation to do their best to eliminate, if not significantly minimize known hazards and risks” in the workplace. Taylor says since employers control the “conditions” of employment he sees widespread mandates coming in the near future.
Meanwhile, CEO Bill McDermott of Service Now agrees. Companies have to prepare the workplace and make it safe for returning workers to come back, meaning you don’t want a situation whereby an unvaccinated person can unwittingly infect others and cause a costly outbreak at your company. Listen he says, “there’s a war for talent out there [right now]. The companies that are early adopters will win. And the ones that don’t will lose a lot of people.”
Delta Airlines, for the moment, feels a great deal more strongly about the mandate, especially for frontline staff. The company announced it will charge each unvaccinated employee an additional $200/month in healthcare premium fees, which they say is based on the estimated insurance cost to treat a hospitalized employee with Covid-19.
But many DO NOT favor a mandate
On August 23rd the FDA officially approved the first Covid-19 vaccine by Pfizer for ages 16 and older. An historic event many say, and providing for what others say is a green light for companies previously concerned about forcing employees to get an unapproved emergency vaccine to now mandate the jab.
Along with that President Biden after hailing the FDA’s approval is now a national loud speaker for getting the shot, asking America’s CEOs to take charge and help the country. “The FDA approval is the gold standard,” he said in public remarks. Besides he says, “Students, healthcare professionals, and our troops are typically required to receive vaccinations to prevent everything from polio to smallpox, measles, mumps [and] rubella.” So. Does the FDA and government green light make “mandating” the right move for CEOs and business owners now? There are certainly increasing calls for it.
Dozens of City, State and Federal employees across every job sector are now required to be vaccinated within the next 60 days. And dozens of companies in the U.S. with millions of workers on the payroll were quick to follow suit. Many already implemented mandatory vaccinations making the choice clear for staffers before returning to the office. Does that put the writing on the wall? If in fact, according to Barron’s nearly 30% of Dow Jones listed companies now have a vaccine mandate clear the deck to follow?
Well, no. Keep in mind there’s always two sides to every American coin, and CEO Scott Sheffield at Pioneer Natural Resources, a $7 Billion Texas-based oil and gas company operating in the state’s Permian Basin, is taking the other side.
“We’re not making it [the vaccine] mandatory” he says; “we think people should still have that right to make that decision.” And he’s not alone.
Labor Unions are fighting back too
Part of the reluctance to mandate from many business leaders is their union membership.
Generally speaking, union employers are not allowed to unilaterally make changes to working conditions. That is in part why we have labor unions and their collective bargaining agreements. However, while many state governors like Illinois governor JB Pritzker are mandating that all state employees under their control get vaccinated asap, including healthcare workers, educators, and the police and fireman, some notable union leaders in the state are pushing back.
“This has literally lit a bomb underneath the membership,” said Chicago Police Union President John Catanzara. “We’re in America… we don’t want to be forced to do anything, period,” he said in an August interview on the PBS Newshour.
Similarly, in Los Angeles, Fire Dept Capt. Cristian Granucci blasted the vaccine mandate sending a clear message to his fellow members “this is a fight for freedom of choice, free will,” It’s not about politics he barked out loud in an online video rant.
So, what’s a business leader or CEO to do? It’s clearly a tug of war between the Vaccinated & the Unvaccinated. And unfortunately given off-setting remarks like these the choice to mandate or not is a hard pill to swallow either way.
Enter the Hybrid Solution
If 30% of Dow Jones listed companies have a mandate, that means 70% don’t. What are they doing about it?
While those in favor of mandating the vaccine are profoundly convinced of the benefits, both sides do realize the risks inherent to the decision. They know some employees may leave the job. There’s a near record 10 million job openings in the U.S. right now, and many businesses are desperately raising wages to attract and keep them from jumping ship. This is not the time to rustle the crew, rather come up with a compromise, even if it’s temporary. In other words, instead of mandating the shot, some businesses are offering a hybrid solution and using incentives, meaning for now the choice to vaccinate is yours, but all unvaccinated people must work remotely or test negative every day before coming to work and wear PPE.
A temporary fix? Indeed, but still.
The Decision is yours
Whichever side you land on as you can see there is no shortage of opinion. From the evidence business leaders appear to be on solid legal ground to mandate the jab and as an obligation/condition to providing a safe workplace for all, according to OSHA. But is it worth the potential loss of labor? CEO Jay Timmons of the National Association of Manufacturers (NAM) which represents manufacturers in all 50 sectors across the USA thinks so; “In the end, it’s better to have live employees than sick or dead ones,” he said. The key is to communicate, educate and incentivize your employees to get the jab he emphasizes.
Still, if unions and deep patriot voices are calling for your head if you mandate, it’s best to bring everybody together beforehand. While the results of vaccine incentives vs sanctions in the fight against Covid remain unknown for now as an advisor our firm argues for an urgent and thoughtful analysis of the issues shared by all stakeholders internally and externally with skin in the game. We recommend you gather your HR, Legal, Finance and Operations managers together to find common ground. Try to separate the health issues from the political ones. Then ask yourself, what are the full consequences of operating as a hybrid company vs a fully vaccinated one? Are my employees, customers and suppliers’ views all fairly considered here? Then develop a plan to become a permanent Covid-free workplace. And do it quickly, before flu season hits this winter and things get worse.
Lastly, despite our differences we’re all in this crisis together, and the sooner we all can get vaccinated the less death and harm will come to us. The evidence is clear. Getting vaccinated saves lives. And while forcing a mandate to save lives seems to cross the line for many, until that point of view changes, the risks will prevail. Remember, strong leaders take strong decisive action when times get tough. And now is one of those times. Make sense?
If you need more guidance on how best to protect your employees and customers from the Corona virus, please check the CDC/OSHA guidance pages for more details https://www.osha.gov/coronavirus/safework, and good luck, we’re all going to need it this winter.
About the author: Rick Andrade is an investment banker at Janas Associates in Pasadena, Ca, where he helps CEOs and business owners buy, sell, and finance middle-market companies. Rick earned his BA and MBA from UCLA, along with his Series 7, 63, & 79 FINRA securities licenses. He is also a CA Real Estate Broker, a volunteer SBA/SCORE instructor, and blogs at www.RickAndrade.com on issues important to business owners.
RJA@JanasCorp.com. Please note this article is for informational purposes only and should not be considered in any way an offer to buy or sell a security. Securities are offered through JCC Capital Markets LLC, Member FINRA/SIPC.