By Angela Phillips, the CEO of the Ohio-based Phillips Manufacturing & Tower Company, which includes Shelby Welded Tube, first published in RealClearPolicy
The Biden administration has finally published its anticipated ultimatum threatening companies like mine with severe fines and penalties for not firing any employee who declines to be vaccinated against or submit to invasive weekly testing for COVID-19. The new rule promulgated by the U.S. Labor Department’s Occupational Safety and Health Administration (OSHA) under the guise of workplace safety may well bankrupt the business my father founded. So, as the CEO of the Phillips Manufacturing & Tower Company, I am joining with The Buckeye Institute to challenge OSHA’s vaccine mandate in court. Here’s why.
Phillips is a 54-year-old company based in Shelby, Ohio, that manufactures specialty welded steel tubing for automotive, appliance, and construction industries. OSHA’s emergency rule applies to companies with 100 or more employees — at our Shelby Welded Tube facility, we employ 104 people. As a family-owned business I take the health of my workers seriously — they are my neighbors and my friends. When I heard of the mandate, we conducted a survey of our workers to see what the impacts would be. It revealed that 28 Phillips employees are fully vaccinated, while antibody testing conducted at company expense found that another 16 employees have tested positive for COVID-19 antibodies and likely possess natural immunity. At least 47 employees have indicated that they have not and will not be vaccinated. Seventeen of those 47 unvaccinated workers said that they would quit or be fired before complying with the vaccine or testing mandate. Those are 17 skilled workers that Phillips cannot afford to lose.
Perhaps the Biden administration remains unaware of the labor shortage currently plaguing the U.S. labor market generally and industrial manufacturing especially. Like many companies, Phillips is already understaffed, with seven job openings we have been unable to fill. Employees already work overtime to keep pace with customer demand, working 10-hour shifts, six days a week on average. Firing 17 veteran members of the Phillips team certainly won’t help.
Accounting estimates that it will cost Phillips close to $1 million in additional overtime, and recruiting and training new employees to replace those lost to the mandate — assuming the company can find them. And that also assumes that Phillips will continue to meet existing customer orders using extra overtime for remaining employees. No easy task and not a safe assumption.
If a short-handed Phillips cannot meet contractual production requirements due to the mandate-fueled labor shortage, then Phillips could lose customers and face significant penalties. Many Phillips customers are outside of the U.S. — primarily in Mexico — and may flock to foreign competitors or companies with fewer than 100 workers that are not subject to the mandate or the shortages it creates. And one Phillips contract, for example, imposes a $25,000 penalty for each hour that the customer is without the promised product. Such obligations and penalties help protect supply chains across the industry, but those obligations — and supply chains — may soon be broken and customers may soon go elsewhere thanks to the administration’s callous new rule.
Complying with OSHA’s vaccine mandate and testing requirements risks catastrophic financial consequences. It also means firing qualified, well-trained, hardworking employees who rely on their jobs at Phillips Manufacturing & Tower Company to feed their families and pay their mortgages — for no reason other than to avoid draconian federal fines. Indeed, these employees may very well have the natural immunity that we tested for, which studies show to be more robust and longer lasting than vaccinated immunity. OSHA has no authority to require Phillips or any other company to make such a Hobson’s choice.
OSHA’s vaccine-or-testing ultimatum is unlike any other occupational health and safety regulation inasmuch as it tries to regulate an employee’s individual decision not to receive an injection. And it does not regulate commercial activity inasmuch as employees subject to the mandate do not even pay for the vaccines.
As Biden administration officials have publicly admitted, the vaccine mandate is a brazen attempt to coerce private companies into enforcing a vaccine requirement that Washington lacks the legal authority to require. Phillips is one company unwilling to do the administration’s dirty work.