Return to the Office vs. Remote: What Can Employers Legally Enforce? [e321]

Full Podcast Transcript

NASIR: Yes, we’re talking about Goldman Sachs – the return to office for them. Why Goldman Sachs? Well, they are a huge company. We wanted to talk about tracking them through the COVID response going back all the way to 2020.

MATT: You’ll give up the ending to this podcast already, but…

NASIR: Well, yes, that’s true.

This is Legally Sound Smart Business where your hosts – Nasir Pasha and Matt Staub – cover business in the news and add their awesome legal twist. Legally Sound Smart Business is a podcast brought to you by Pasha Law PC – a law firm representing your business in California, Illinois, New York, and Texas. Here are your hosts, Nasir Pasha and Matt Staub.

NASIR: Welcome to Legally Sound Smart Business! Our episode locally here in Houston. Matt has joined me to talk about Goldman Sachs, right? Welcome to Houston!

MATT: Thanks! It’s good to be here. I always like these in person.

NASIR: I feel like I caught you off-guard.

MATT: That’s fine.

NASIR: Let’s start the podcast, by the way. We’re talking about Goldman Sachs – the return to office for them. Why Goldman Sachs? Well, they are a huge company. They have basically 40,000 employees worldwide. We wanted to talk about tracking them through the COVID response going back all the way to 2020 – February to March of that year – they started locking down through today where now they have more than 65 percent of their workforce back in the office.

MATT: You’ll give up the ending to this podcast already, but…

NASIR: That’s true. Well, we’re done, right?

MATT: Yes. The big reason is their CEO – David Solomon – was pretty well-documented and took a big stance in getting people back in the office quicker than most companies out there, particularly on Wall Street.

NASIR: Yes. In fact, depending upon who you ask, some would say he was actually leading that charge and a visionary in that respect. Others would say that he was being too aggressive.

Another interesting thing about Goldman Sachs is that, on one hand, they have been on lists of some of the best places to work. One of the reasons is they have huge high-compensation packages for a lot of their employees. On the other hand, they are also criticized for being unethical. You have people complaining about 100-hour workweeks and things like that. Goldman Sachs in its nature is in the forefront of a lot of different issues – employment issues, especially, but also regulatory and these kinds of things as well.

MATT: It’s not surprising that their CEO took this bold stance in getting people to go back to work quicker than some companies that haven’t come back to work – a good amount of them.

NASIR: Yes, and everyone has heard in the news. We’re talking about companies like Google and Facebook or Meta. I don’t think Meta are coming back.

MATT: A permanent option.

NASIR: There have been others like Spotify and so forth. Especially a lot of the tech companies, they have made a permanent shift. That is something that Goldman Sachs has definitely not done. Frankly, depending upon the company, the industry, what states you are in. I know we have talked plenty of times about when we are dealing with clients in California versus Texas. It’s just such a different paradigm.

That’s really shone itself during COVID because the conversations that you and I were having with California clients about the workforce and COVID was like, “What are some of the things that we can do to make it more comfortable for them to go home to work?” and all these things. In Texas, it was like, “When can we bring them back?” Literally, these conversations would be going on the first few weeks of the lockdown.

MATT: Yes, there are plenty of our clients in California that haven’t even considered bringing employees back at all. That’s today – the end of 2022.

NASIR: Let’s start. In 2020, this was around March or so, the US was just starting to receive these cases – specifically New York. The center of Goldman Sachs in New York City specifically. They were probably hit first most substantially. We all know the history. It started in Washington State and these kinds of things, but these were very early days. But where it started to really start impacting the healthcare system, New York was one of the first areas to get that hit.

New York employees started to work from home as early as March. That’s when the lockdown began. I don’t know if you remember that, but that was the time when they also came up with this concept of essential workers. Who was an essential worker? There were these federal standards. States had their own thing. Of course, this was all so very chaotic because it was the New York City local officials that were putting in these mandates versus on a federal level. Sometimes, the federal government would make a decision ahead of the state governments and vice versa, and then figuring out who to follow was always very complicated.

MATT: I think that’s an important distinction here with Goldman Sachs versus essential workers because Goldman Sachs aren’t providing healthcare services, for example. They are doing finance.

NASIR: At the same time, the definition of essential workers was so broad that even if, for example, you somehow supported an industry that was also essential – which, I think, Goldman Sachs does a lot of different things as financial services, but I think there was definitely a population within Goldman Sachs that were clearly essential workers but probably quite a big number that weren’t. Again, it was so broad that, if you wanted to work – whether an employer wanted to make you work or an employee wanted to work – you could figure out a way to become an essential employee.

MATT: Yes. Keep in mind – this is about the time when there was so much crazy stuff going on. People were trying to figure things out.

NASIR: Precisely.

In April of 2020, that’s when David Solomon basically almost alludes to this new norm of these virtual meetings. It’s interesting because that kind of tone slowly changes. I think at the beginning, he was pretty relatively amendable to bringing their workforce home, focusing on employee safety and things like that. In fact, I think we have a quick video on it.

”The Goldman I know is still the same Goldman. I believe it was only 900 people. When I was there, I knew almost everybody’s name, but the commitment to the employees was always extraordinary. Can you take a pledge that you won’t lay anybody off in the next three months?”

“I’ve been very, very clear to our people that, during this crisis, people’s jobs are safe. We’re incredibly focused, Jim, on our employees and our community. We’re trying to find ways to add support that we’re giving. We made an announcement earlier this week that we’re increasing the amount of emergency home leave to two weeks that people can take. People have parents or family members. They need emergency home leaves, so we’ve increased that. I’ve been personally focused on the fact that there are all sorts of people in our Goldman community that might need support. We have people that are security guards that work for us that work in the cafeteria and food service, that work in cleaning. These aren’t people that are Goldman employees, but they are part of the Goldman family and community, and we’re working with the vendors and the unions to make sure that, because of what’s going on, their incomes have been affected, and we’re making up the difference. We care deeply about our employees and we’re very, very focused on their safety, their security, and their well-being during this crisis.

MATT: That last part is very interesting because the tone completely changes. Even within the year.

NASIR: There you go. Goldman Sachs sends them home because, well, frankly, it’s mandated. But, also, I think the workers demanded it. There was so much uncertainty and so forth.

MATT: Right.

NASIR: You saw him. He was even mentioning how it’s not just Goldman Sachs employees that is required to operate the company. It’s all the support staff. It’s everything surrounding it. Everything from the janitorial staff of the building to providing food and supplies and so forth.

It was a very reasonable response. Everybody was on the same page with this. There may have been some minority grumblings of having to send employees home but, for the most part, people did it.

MATT: Yes, and I think this was the infancy phase. Obviously, no vaccine at this point or anything close to that. If you recall, there were even issues of being able to get masks and order masks.

NASIR: Any kind of protective equipment. There was this whole concept. Everyone was wearing bandanas – whether that was effective or not. Then, of course, the conversation whether masks were even doing anything in the first place. All these discussions were going on. Of course, we’re going to look back and it’s easy for us to retroactively look at this, but at the time, it was continuous chaos, and we’ll see how this goes.

But, in the very, very beginning, very simple legal issues come up, but applied to a complex situation. For example, what is the problem of keeping your employees in the workforce during this COVID pandemic. Obviously, if there is a mandate, that’s different, but like I said, we have found that a lot of employers – if they wanted to – can consider themselves, “Look, you guys are essential workers, so you have to come to work. If you don’t, then you’re fired,” and that happened, right? That’s definitely happened.

Employees were concerned. “Well, what about liability?” What if an employee comes in and they get sick because of COVID from something they contracted from the office. Now, of course, being able to prove that is a whole thing, but luckily there was some remedy for that in the sense that, if any employee gets hurt or injured in the workforce, there’s a remedy for it. Workers’ compensation – everyone is familiar with that – provided some kind of relief in theory.

From a technical perspective, if someone went to the workplace, got sick from something that they got in the office, in theory, workers’ comp could apply. I’m not sure we actually saw some practical applications to that because, again, being able to prove all that—

MATT: Obviously, that’s difficult.

NASIR: But those were the discussions we were having at the time. This was before any kind of protections of sick leave that came out months later.

MATT: Yes, I think that that in addition to basically the other question we would get all the time is “when can I bring my employees back in?” or “can I require them to come back in?” These were the big legal topics at this time.

NASIR: Yes. Again, to speak personally, we went home – at least in Texas – for two weeks. I remember very early – probably around the same time – it was like, “Look, if you want to work from home, you can work from home.” Then, no one did. Then, things started to get a little “scary” and you started hearing more on the news, but also you started hearing people getting it. It was like, “You know, let’s just go home.” People went home for two weeks. It was still optional, but then everybody started coming back. For us, I think it was maybe two months later that I was like, “Okay. Now, you have to come back.”

MATT: Yes. Like we were saying earlier, it was definitely different in Texas – and it still is – compared to California. Particularly the Bay Area, for example, they had required city shutdowns. It makes things a little bit different.

NASIR: And they still haven’t recovered from it, right?

MATT: Yes.

NASIR: They still have empty real estate – both in Manhattan and in Bay Area and in Houston. There is some obvious permanent change that still hasn’t adjusted.

MATT: Yes, we didn’t even talk about the commercial real estate side of things.

NASIR: Think about this. They go into lockdown around March and April. In September 2020, this was before vaccines were out. Vaccines were still in the beginning stages, but if you recall, there was a lull in the number of cases. It started to slow down a little bit.

The CEO announces this return-to-office plan where it’s on this rotational schedule. Before that, again, here in Texas, we were already coming back to work, but I think this was more controversial when you’re telling Goldman Sachs employees to come back to the city and to start working. It obviously made national news. Again, I think it was relatively progressive of an announcement at that time.

MATT: We were just mentioning, one of the big questions at the time was, “If I’m an employee and I don’t want to come back because I’m scared or whatever reason, do I have to come back?” For the most part, yes – unless there was some sort of religious exception, no religious discrimination, or if there was some disability issue. Other than those two exceptions, if the employer wants to force you back, you have to come back.

NASIR: Right. Again, there are some other small exceptions that probably don’t apply. For example, if you have some contractual agreement to work from home or something like that.

What gets touchy is – and this is still applicable today, not only in September 2020 but also in 2022 – if you are requesting someone to come back to work and they say, “Well, I have a certain health condition that may prohibit me from doing so,” therefore, it may be considered a disability, then you might have to enter into what’s called this interactive process. We have seen this come across. We have experienced this with employees.

What’s difficult from an employee’s perspective is whether or not a certain health condition that you are susceptible of based upon COVID, being able to not prove that but establish that as an actual disability is becoming a little bit more and more difficult because, as information comes along, there’s a lot of things that employers can point to.

Just because you are in X condition doesn’t mean you are disabled. Even if you are susceptible, have a certain health condition that you want to definitely not be exposed to COVID, there’s a dozen different ways that we can accommodate you. We can provide you PPE. You can get vaccinated. We can have you separated – having your own office and these kinds of things. That may or may not be acceptable as far as being a reasonable accommodation.

MATT: Yes. I recall, at the time, the big thing was when people were coming back to the office, social distancing. Like you said, all the PPEs. There was a whole laundry list.

NASIR: I forgot about social distancing – the six feet thing.

MATT: Six feet, yes.

NASIR: I still remember, for the longest time, in our bathrooms were “how to wash your hands properly” and it was there for two years, but these things came up very early in 2020 – like, February or March. I think about it. It’s such a funny sign in retrospect.

That was in September. Then, we hit 2021. This is where the CEO’s rhetoric starts to heat up a little bit – well, not heat up.

MATT: He’s planting the seed.

NASIR: He’s planting the seed. Right! He basically says, “Look, we are not in a new normal. This work-from-home thing is a temporary thing.” Also, now we’re talking about this, vaccines are being rolled out, and it is supposed to be and hoping to be what’s going to basically stop this thing. We know now that that’s not exactly the case, but we’re definitely in a different COVID situation now than we were a year ago or two years ago. The hospitalization is incredibly down compared to what it was. That probably has a lot to do with vaccines and so many other things – variants and so forth. He’s planting that seed, for sure.

MATT: Yes, that was in February 2021. Then, in May, a few months later, he puts out this statement saying that employees need to make plans to return to office by June 14 – four months from when he planted that seed. Now, you have to come back.

NASIR: That’s not a bad notice time. It’s funny because we actually did a social media skit where an employer was asking for their employees to come back – not four months from now or whatever but the next day.

If you send your employees home, especially after we’re talking about a year or more that they’re working from home, it’s likely that people have moved away. People have gotten to different places, different states even, so asking them to come to the office is like, “Hey, Boss! I’m not even in New York anymore. I’m in Florida on the beach right now.” In that conversation, if they have to move back, then maybe they won’t.

MATT: Yes, one thing we haven’t mentioned yet from the legal side of things is employers should have put in place working from home plans – basically, a policy of what you can do and what you can’t do. It addresses what you were saying. You could still require them to basically not move, I suppose.

NASIR: In a certain state.

MATT: Yes, so that’s another consideration employers had to deal with and still have to deal with.

NASIR: I’ll tell you, it gets really complicated from a legal perspective. Let’s say you’re a New York-based company. All your employees are there. You institute work from home. Then, half of your workforce is now outside the state of New York. Now, all your employment policies from your pay policies and everything is geared towards New York. All of a sudden, you have to think about other states.

MATT: Yes, you have to think of different state labor laws.

NASIR: Sick pay. Everyone knows, frankly, we had clients whose employees would move to California and, all of a sudden, you are in a completely different scenario than you were in six months ago. The next thing that happened – when did they start requiring all employees to be fully vaccinated?

MATT: Let’s say, the beginning of September 2021.

NASIR: Okay. Again, they were asking people to make plans. Let’s see here. They started asking people to come back to work, but also to be fully vaccinated.

Goldman Sachs employees are expected to return to the office in Lower Manhattan by June 14. In a memo to the staff, the CEO says the firm will be one of the first major banks on Wall Street to bring back a large number of workers. It’s another big milestone as New York City works to reopen safely.

NASIR: That video was about bringing them back on June 14. Also, they’re saying, if they aren’t fully vaccinated, then you must work from home. This was, all of a sudden, the vaccine mandate question. It’s interesting because, in the beginning of 2020, we were talking about mandated testing – whether employers can test, right? I think our firm was very early to say, “Look, this is very doable. You can do this. There’s some precedent for it.” But it wasn’t until the EEOC and other government regulators made clear that we could do this that other employers started to do it.

Then, there was a question about vaccine mandates. We’re talking about nine months into the vaccine, can an employer mandate their employees to have a vaccine? Of course, again, I think our firm was pretty aggressive in saying that you could. There were some risks to it, depending on the state. For example, in Texas, they passed laws eventually that you can’t do that, but that was post. By that time, anyone who wanted to do a vaccinate mandate had implemented it. Anyone who didn’t, did not.

MATT: That’s what’s interesting. So aggressive about getting employees back in the office, but the vaccination status of the employees too factors in. I think they also had a policy that they still had to wear masks when they were in common areas and things like that. There still were some protections in place, but on the front, he is still getting all the employees back. He is still leading that charge.

NASIR: Yes, and that was pretty common. Any kind of return to work was coupled with “you’re coming back to work, but here are our new COVID policies.” You have to do this, you have to do that – whether it’s proof of vaccination or just PPE and these kinds of things.

What I think was still difficult still today for employers is that, when they bring back their workforce, especially if they have a substantial size workforce, it may be necessary to bring back certain departments and not others. Even Goldman Sachs, for example, a lot of their technology type employees – whether it’s IT or otherwise – were not required in the beginning to come back.

The question becomes, if you are going to have certain classes of people that are coming back and not coming back, by creating those classes, are you discriminating against certain individuals? On top of that, not only could you be discriminating in certain classes.

But if certain individuals ask for an exception – like, “Hey, I can’t find a babysitter for my kids for whatever reason. Do you mind if I work from home?” “Okay. You can work from home.” Someone else asks for the same exception. If you say no, what’s the difference between the two? Now, are you discriminating based upon some kind of protected class? Not only have we seen that but also you can understand how it’s very easy for an employer to fall into that trap.

MATT: It’s definitely a legal theory. Employment attorneys are aggressive on the plaintiff side. It’s something they pushed. We’re going along this little up and down here. The beginning of 2022.

NASIR: This was Omicron? Or was this Delta? I think it was Omicron, right?

MATT: I can’t recall.

NASIR: Delta was the one prior. Go ahead. Sorry.

MATT: Yes, the company encouraged all employees to work from home. Basically, January 2, they encouraged all employees to work from home until January 18. This was one of the spikes or the variants. You know, a couple-week period, but now they’re back at home, then he brought everyone back into the office.

NASIR: Yes, I thought that was actually odd for Goldman Sachs to do because it’s actually inconsistent with how most employers handled it for those that were back at work. In other words, “Yes, there was a surge. Be a little more careful out there but get a vaccine and you’ll be fine.” That was for the most part. For Goldman Sachs to actually send people home for a couple of weeks, I thought that was actually, again, relatively progressive. In other words, there may be some criticism of Goldman Sachs to bring back people early, but they were also very early to bring them home, and also early to push them back home during the surge.

MATT: Yes, that’s one thing you’d say about them, for sure. They definitely were on the progressive side, leading the charge on all that stuff.

NASIR: Actually, I think we have a video on that. Let’s take a quick look.

“This morning, Goldman Sachs is joining a list of Wall Street firms telling workers to stay home due to the surge in COVID cases. The investment bank sent a memo on Sunday asking employees who can work remotely to do so until the 18th of January. Goldman Sachs says its offices will remain open with safety protocols in place. Last week, JPMorgan Chase gave employees the option to work from home for the first two weeks of January. Citigroup also told workers who can do their jobs remotely to stay home.”

NASIR: It looks like there was a few other investment banks and banks that sent people home as well. Then, on February 1…

MATT: February 1 was a date they said to return to the office.

NASIR: Oh. That’s after? Got it.

They said to return, but then it wasn’t until August 30 of that year – not too long ago – where they have pretty much moved on. Let’s hear.

“In the meantime, they’ve returned to office, getting real for Goldman Sachs employees. The New York Post reporting that the bank is dropping all COVID protocols and requiring employees to be back in the office five days a week after Labor Day. Now, the Post obtaining a memo from the bank which said that it will no longer require vaccines, COVID testing, or masking, but for those who work in the bank’s New York City headquarters, they will still have to abide by the city’s vaccine mandate to enter the building or have an exception. Dave, we talk about this return to office so often here. After Labor Day, five days a week might be a little tough to swallow for some of those employees – although I would make the argument that it’s been a long time coming there.

NASIR: Yes. Look, we’re two years later. It wasn’t that long after where just the rhetoric around bringing back people to work, other employers have really, really softened the requirements as far as mask requirements, vaccine mandates, even on a federal level. We’re still technically under a public health emergency.

Especially if you’re in healthcare, on the legal side, we pay attention to this quite a bit because all these rules came into place when the public health emergency was declared, and all these rules are set to go away once it expires. It gets renewed every three months or so.

Right now, it’s supposed to be expiring in the beginning of next year. Even though they say this every time, they expect not to renew it, but they have to give us 60-day notice. I wouldn’t be surprised if we hit another surge towards the holidays and so forth – whether that changes anything and extends it for another 60 days. But Goldman Sachs and many other employers – not only are they bringing them back. No vaccine requirements. No mask requirements. No testing requirements.

This was a few months ago. But now, in October, they’re at 65 percent to where they were. Actually, no, I should say 65 percent are in the office. The rest are still working from home. That’s termed as majority, but that seems low to me.

MATT: I believe it was 65 percent were back in, but previously, pre-pandemic, they were at 75 percent that were in the office. They’re pretty close.

NASIR: That’s not too bad. I’m sure there’s some change that’s acceptable. Interesting enough, I saw a clip of Goldman Sachs’ CEO. It was still in 2020, but he was saying how we were already in a spot where we were transitioning to telecommuting. I’m sure that 10-percen gap may represent a permanent change – certain departments that don’t need to be in the office.

MATT: It could be like we talked about earlier – people that moved and there’s no physical office for them to go into. That’s probably a decent amount of that 10 percent.

NASIR: For me, one of the reasons I wanted to talk about this is there are plenty of clients and employers in general that are still reluctant to bring their employees back – not because they don’t want to but because they feel like the employees may push back or they may have legal repercussions from it. But I do think that, for employers that want to make that decision, it’s getting easier.

Even though there is this thought to say, “Look, you can get done with the same things that you wanted to do before over a Zoom meeting or a phone call or over emails,” I’ll tell you, it’s completely different.

This is stating the obvious, but some of the things I always mention are that, when you have a meeting, especially in a conference room and you’re with different people versus a Zoom meeting, what you don’t have in a Zoom meeting that you have in person are those little, small two- to five-minute coffee breaks or bathroom breaks where you banter about different things.

How many times does business get done or decisions get made on those interactions and not the formal interactions? You can’t replicate that.

MATT: No. Another thing too, people in person, you can’t just stop by someone else’s office and ask them a question. You have to call if they’re available.

NASIR: They can ignore you.

MATT: Yes.

NASIR: It’s true. It’s completely different, especially when you’re trying to build a team atmosphere. At the same time, there’s plenty of teams that don’t do that and are working and functioning quite well. You and I were just talking about yesterday how different cultures in the workplace are different.

In Europe and Asia, it’s not uncommon for workers to literally sleep at the office, but if you saw someone sleeping in an office in the US, in most offices, they would be like, “Why are you slacking off?” and not “I’m taking a 20-minute power nap so I can be more efficient.” It’s the same thing. There are different things that work for different workplaces, but at least from a legal perspective, I feel like employers should feel a lot more comfortable in bringing their employees back than I think they did a year ago.

MATT: Yes, definitely. That’s what you’ve seen happen as well. It’s definitely a lot more prevalent when you see that. Even at my office, for example, I’ve basically been in pretty much the whole time – absent a couple of months back in 2020. But now, you can even start to see the parking lot fill up. That’s how you know people are coming in.

NASIR: Well, I think I would say the same thing, but our parking garage is under construction because it had some issues. We’ve always had little parking here, but nonetheless, it’s always been pretty busy here.

I think that’s our episode. That’s the story of Goldman Sachs from a work-from-home perspective. I thought they were a good gauge.

MATT: Yes, quite the story arc. A lot of ups and downs. Ultimately, what do you think? Do you think he made the right call for the most part?

NASIR: Actually, doing this story, I found it interesting because even though he was still reacting to the current climate, he was still going to make adjustments, and even though it was clear from his perspective – and I don’t know if it’s true – working from home was not a good solution for his company. He had to figure out a way to bring them back in a way that was still acceptable and palatable. At 65 percent, he pretty much did it.

MATT: Yes. At the end of the day, he pretty much accomplished what he wanted to set out and do.

NASIR: I wonder if that two-week hiatus at the beginning of this year actually helped that because it showed that he was being reasonable.

MATT: Yes, I think that’s a fair assessment.

NASIR: Very good. Well, thank you for coming into Houston just for this podcast episode. I’m going to leave and have a good day.

MATT: I’ll see you later.

NASIR: All right. Thank you, guys!

MATT: Keep it sound and keep it smart.

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