COVID-19 Employment Litigation Trends

May 21, 2020

We have been closely tracking the types of lawsuits being filed in the US since COVID-19 disrupted our daily lives, businesses and workplaces. Reports indicate that employment lawsuits are lagging behind consumer and business lawsuits, but it is safe to assume that employee lawsuits will pick up as workplaces and courts reopen.

The employment lawsuits we can expect to arise from COVID-19 include those we would see in any time of largescale layoffs and restructuring, as well as certain claims unique to the current pandemic.  The following claims are particularly relevant right now:

  • Employee safety and retaliation claims
  • Employee discrimination claims
  • Wage and hour claims
  • WARN Act claims

 

Employee Safety Claims

The Occupational Safety and Health Administration (OSHA) is empowered to identify and correct unsafe work practices and dangerous conditions. Recently, OSHA issued “Guidance on Preparing Workplaces for COVID-19,” establishing what employers can and should do to ensure their workplaces are safe. OSHA provides the caveat that its new guidance “is not a standard or regulation, and it creates no new legal obligations” but goes on to advise that “[i]t contains recommendations as well as descriptions of mandatory safety and health standards” and reminds employers that the Occupational Safety and Health Act of 1970 (the “Act”) “requires employers to provide their employees with a workplace free from recognized hazards likely to cause death or serious physical harm.”

OSHA has reported a significant increase in the amount of worker complaints it has been receiving related to employers’ failures to implement COVID-19 prevention measures. In fact, OSHA recently opened investigations into at least one Amazon warehouse after receiving complaints from workers about what they believed were dangerous working conditions. If found liable for OSHA violations, employers may face significant penalties.

Separately, employers will want to ensure that they are actively taking steps to avoid private retaliation lawsuits related to OSHA complaints. While employees cannot bring private claims against employers related to workplace safety under OSHA regulations, they can bring private actions for retaliation claiming that an employer took action against them for complaining about workplace safety.

One such lawsuit, Kristopher King v. Trader Joe’s East, Inc., was filed by an employee who claimed that he was retaliated against after forming a private Facebook group to discuss concerns about the health and safety of the employees interacting with the public. Another lawsuit (also in Kentucky) claims that a funeral home employer retaliated against an employee manager for attempting to implement measures at the company to comply with OSHA’s guidelines.

Here’s what you can do to avoid the risk of OSHA-related retaliation litigation:

  • Stay informed of OSHA and CDC guidance and implement best practices for a safe workplace.
    • As the pandemic continues, the requirements to maintain a safe workplace will likely evolve.  Make sure you are doing what you can to protect your workers from infection.
  • Train your managers to respond appropriately to workplace safety complaints
    • Many complaints are first brought to managers rather than to human resources or corporate management. This means that managers who are not typically trained to deal with workplace safety issues will need to be prepared to deal with these complaints for the first time. They should know how to respond in a way that is not perceived as retaliatory.
  • Ensure that employment decisions are not made arbitrarily
    • In some instances, an employee can establish a viable claim if he or she can show that a retaliatory motive played a “contributing factor” in an adverse employment decision. Accordingly, employers need to make sure their independent reasons for hourly reductions or termination are well documented and applied in a non-arbitrary manner.
  • Encourage employees to report health and safety concerns
    • Communicate with your employees about the steps you are actively taking to ensure workplace safety and urge employees to address any safety concerns with the company. Try to ensure that employees have multiple avenues to raise their concerns, so that they feel comfortable addressing the issue.
  • Never discipline or terminate because of a safety complaint
    • This should go without saying, but where an employee raises issues internally or externally about workplace safety, do not make adverse employment decisions on that basis.

 

Employee Discrimination Claims

As employers start reopening their workplaces, we expect to see an uptick in employee lawsuits claiming that employers discriminated against certain employees when making decisions about which employees could return to work. Even where employers want to be sympathetic to employees with childcare responsibilities and those at higher-risk of developing more dangerous COVID19-related symptoms, they should not implement back-to-work decisions with such factors in mind.  Instead, except as explained in the next paragraph, employers generally should use independent bases to make decisions about which positions to bring back, such as seniority, job performance or job classification.

With that said, employers should also be prepared to properly handle employees’ requests for accommodations related to COVID-19 concerns, especially when the employee is considered to be “high risk.” Under the Americans with Disabilities Act (ADA) and applicable state and local laws, employers must engage in the interactive process and provide a reasonable accommodation to qualifying employees where the accommodation would not cause undue hardship to the employer’s business. Failure to do so could lead to a claim under the ADA.

Employers should also review the multitude of information we have been providing about FMLA and FFCRA leave related to COVID-19 to avoid potential liability under those acts.

 

Wage and Hour Claims

It is anticipated that wage and hour lawsuits may increase as well. Claims may arise related to remote work by nonexempt employees and not being compensated for time spent doing non-work specific tasks involved with reopening (e.g., temperature checks, waiting for elevators). Additionally, employers who temporarily reduce exempt employees’ salaries need to determine whether those employees continue to be exempt under the Fair Labor Standards Act (FLSA) or instead must be paid overtime for any work in excess of 40 hours in a workweek. Claims brought under the FLSA and related state laws allow for significant liquidated damages, so employers should make sure to assess compliance under those laws with every workplace change they make related to employees’ hours, remote work and reopening.

 

WARN Act and Mini-Warn Act Claims

The federal Worker Adjustment and Retraining Notification Act (“WARN”) requires employers with 100 full-time employees or more to provide advance notice to employees and local government agencies of plant closings and mass layoffs and is enforced by private legal action brought in federal courts. Many states, including Illinois, have analogous state laws, known as “mini-WARN acts.” Under the federal WARN Act, employers must provide written notice at least 60 calendar days in advance of covered plant closings and mass layoffs. WARN violations are costly and can result in significant legal liability for employers, including back pay and benefits for each day of violation to each aggrieved employee up to 60 days, and $500 in civil penalties for each day an employer fails to provide notice to a unit of local government.

The Department of Labor recently issued answers to frequently asked questions related to the WARN Act and COVID-19. Specifically, the Department recommends that employers review the “unforeseeable business circumstances” exception to the 60-day notice requirement which “applies to plant closings and mass layoffs caused by business circumstances that were not reasonably foreseeable at the time that 60-day notice would have been required.” In relevant part, the Department provides that “an unanticipated and dramatic major economic downturn” or “[a] government ordered closing of an employment site that occurs without prior notice” might be considered a business circumstance that is not reasonably foreseeable.

But even when a business circumstance is not reasonably foreseeable, employers are required to give as much notice as is practicable and to include a brief statement of the reason for giving less than 60-days’ notice along with the other required elements of a WARN notice.

Just last week, a WARN Act class action claim was filed in the United States District of Nevada against a nationwide collection company. That lawsuit alleges that the defendant company had been experiencing business and employment related issues throughout 2019 and that the business circumstance exception did not apply to the company’s mass layoffs in late March 2020. Though the defendant company indicated that the mass layoffs were caused by the unforeseen impact of COVID-19, the plaintiffs allege that the layoffs were foreseeable and that their employer only used COVID-19 as pre-text for its failure to comply with the WARN Act.

Although COVID-19 likely will qualify as an “unforeseeable business circumstance,” employees and courts are likely to be weary of allowing employers to use COVID-19 as a blanket excuse for a failure to comply, as shown by the allegations in the foregoing case. 

Employers should make sure to review the federal WARN Act requirements and the requirements of your state’s mini-WARN act, to the extent there is one. And even where unforeseeable events necessitate mass layoffs or plant closures where full notice is impossible, notice must still be provided as soon as is practicable.

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