Since March, we have been struggling to envision a “new normal” during a pandemic that has plunged the entire world into a sea of uncertainty. Employers and businesses arguably had to bear the brunt in creating the “new normal” given the COVID-19 pandemic’s significant impact on workplace dynamics and the employment relationship. For the last five months, employers have been forced to learn how COVID-19 spreads, understand new COVID-19-related employment and labor regulations, carefully consider the pandemic’s effect on existing laws, and create workplace procedures to maintain a safe and healthy environment for employees. As a result of the pandemic, many employers have entered unchartered territory, such as establishing telework arrangements, drafting infectious disease outbreak plans that address intricate sanitation procedures for their businesses, and implementing mass furloughs and layoffs.
Sadly, employers now have another issue to add to their growing list of COVID-19 woes: COVID-19-related lawsuits. Employers should prepare for a brewing storm of COVID-19-related employment litigation. As of August, more than 283 lawsuits directly related to labor and employment violations have been filed in state and federal courts. Currently, California leads the nation with 32 employment lawsuits already filed, with New Jersey, Florida, New York and Texas trailing closely behind.
Below is an overview of the prevailing trends in COVID-19-related labor and employment litigation over the past few months and proactive steps that employers should take to prevent their exposure to such lawsuits:
1. Wrongful Termination
Wrongful termination lawsuits comprise the majority of COVID-19-related employment litigation and are undoubtedly spurred by pandemic-related furloughs or reductions in force (RIFs). For the most part, these actions have been filed by former employees who allege that their employers used the COVID-19 pandemic and recession as a pretext for terminating the employee when the termination was in fact motivated by unlawful reasons such as an employee’s advanced age, disability, pregnancy, or whistleblowing. In recently filed complaints, employees also argue that they were terminated because their employers did not want to provide accommodations for a disabled employee or permit an employee to telework.
For example, in Aguilera v. Healthpointe Medical Group, Inc., filed in Los Angeles County on July 20, 2010, the Plaintiff claims that her employer began harassing her after she presented work restrictions due to a work-related injury. The plaintiff was laid off on March 27 due to the COVID-19 pandemic. In her complaint, the plaintiff alleges that the reason for her lay-off was pretextual, and accordingly sued her employer under California state law for unlawful discrimination, retaliation, and harassment based on her alleged disability and her request for workers’ compensation benefits.
To proactively prevent wrongful termination claims, employers should develop neutral criteria in selecting employees included in any furlough or RIF. For example, employers should consider whether employees with protected characteristics (i.e., age, ethnicity, gender, and disability) are disproportionately impacted by their furlough and lay-off decisions. In other words, employers should exercise extra caution when deciding to furlough, lay-off, or even terminate an employee during the pandemic. With respect to terminations, employees should carefully document reasons for a termination and maintain records of workplace complaints and investigations to demonstrate that a termination was lawful in the event that a wrongful termination claim is filed.
2. Discrimination
In a similar vein, terminated employees are also bringing claims under federal and state anti-discrimination laws in which they challenge the reason they were selected for an adverse employment action such as a furlough or layoff. Age and disability discrimination claims are common because older employees are at greater risk for developing a severe illness from COVID-19 and accommodating disabled employees have proven to be more difficult and costly during the COVID-19 crisis. Often, employers make the mistake of first selecting older, pregnant, and disabled employees in lay-off decisions and enacting policies where these employees are forced to telework. The Equal Employment Opportunity Commission (EEOC) has advised that employers should avoid blanket policies requiring “high risk” employees, such as older, disabled, or pregnant employees, to continue to telework while others return on-site. Therefore, employers should be careful when deciding who should return to the workplace to prevent age, pregnancy, and disability discrimination lawsuits.
Additionally, there has been an uptick in disability discrimination lawsuits that involve allegations related to forced leaves of absence and failures to accommodate, notably including denials of requests to work from home. Complaints in recently filed disability discrimination suits allege that the plaintiffs were either fired for requesting accommodation or were denied the accommodation. Accordingly, employers should be prepared to engage in the interactive process to address concerns of employees who have anxieties about returning to work, despite the additional burdens imposed by the pandemic.
3. Whistleblowing and Retaliation
The second most common type of COVID-19-related lawsuit involves actions alleging that employers failed to adequately protect employees from exposure to individuals with COVID-19 symptoms and other unsafe working conditions related to the pandemic. The Centers for Disease Control (CDC) and OSHA have released general employer guidance and safety recommendations for certain industries. Many of these lawsuits allege that employers were not adequately following these guidelines, such as failing to enforce adequate social distancing policies, preventing employees from frequently washing their hands, failing to provide personal protective equipment (PPE), failing to adequately sanitize the workplace, and neglecting to educate management and employees about CDC and OSHA recommended workplace health and safety protocol.
Further, employee concerns about their employer’s compliance with public health orders and CDC and OSHA guidelines have unsurprisingly resulted in retaliation and whistleblowing lawsuits. These actions allege that employees were fired for making reports to OSHA, making internal complaints to management, and discussing their concerns about workplace safety with coworkers. Currently, there are both single-plaintiff and putative class actions that have been filed across the nation. In addition, employers already are encountering workers’ compensation claims that allege workers contracted COVID-19 on the job.
To prevent claims related to workplace safety and related whistleblowing lawsuits, employers should immediately develop COVID-19 workplace safety protocols that address their response to handling positive COVID-19 cases in the workplace, conducting daily temperature checks, and reporting mechanisms for employee concerns. Employers should also assign a few managers or employees to a “COVID-19 Task Force” that would implement and monitor workplace safety protocol, such as physical distancing, frequent sanitization, and hygiene practices among employees. In addition, employers should consider distributing a COVID-19 manual that discusses CDC suggested guidelines that employees should follow in the workplace.
Most important, employers should communicate with fearful employees about their anxieties and be open to employee feedback about their response to COVID-19. Open communication, compassion, and a little leeway go a long way toward avoiding costly employment and labor disputes during a global health crisis.
Lastly, it is important for employers to monitor public health developments. Employers should regularly check to see if there are updates or changes to CDC or OSHA guidelines and state, local, and health orders, especially since they appear to be changing on an almost weekly basis. Given the rapid pace of public health and legal developments, employers should be adaptable in their workplace health and safety policies.
4. FFCRA, Paid Sick Leave, and FMLA Violations
In March, Congress passed the Families First Coronavirus Response Act (FFCRA), which requires employers with fewer than 500 workers to provide their employees with paid sick leave and expanded family leave for specified reasons related to COVID-19 such as contracting COVID-19, caring for a child whose school has closed, or providing care to a family member infected with COVID-19.
Although the FFCRA has only been in effect since April 1, there is already a deluge of lawsuits alleging FFCRA violations. For example, in Faraji v. Coastal Pain & Spinal Diagnostics Medical Group, Inc., et al., a case recently filed in San Diego County on June 11, 2020, the plaintiff alleged that she was fired for requesting to take leave to care for her school-aged daughter whose school was shut down due to COVID-19. In particular, employees around the country are filing lawsuits alleging that employers failed to comply with their obligations under FFCRA by denying the requested leave, miscalculating an employee’s pay during the leave, requesting improper documentation, or firing employees for making the leave requests.
To reduce exposure to these claims, employers should become familiar with their obligations under FFCRA and provide employees protected paid leave as appropriate. In addition, employers should carefully evaluate the risks of taking any adverse employment actions against employees who requested or took applicable leave.
5. Wage and Hour Actions
Now that many employees have transitioned to working remotely, employers unfortunately can no longer rely on traditional mechanisms used to track employee hours, breaks, and meal periods. Consequently, employers are now vulnerable to claims alleging that they failed to provide and pay for all required meal periods, rest breaks, and overtime for remote and on-site employees. To reduce the risk of wage and hour claims, employers should be proactive in establishing supervisory procedures to monitor the number of hours their employees work, including regular check-ins with employees about their breaks and meal periods and utilizing tracking tools that would ensure teleworking employees are properly compensated for all hours worked.
6. WARN and “mini-WARN” Litigation for Large Employers
Under the federal Worker Adjustment and Retraining Notification Act (WARN) Act, large employers may be required to provide 60 days’ notice to workers when they are laid off for an extended period, or when the employer closes its business. In addition, multiple states, including California, have enacted similar “mini-WARN” acts that also require large employers to provide employees with at least 60 days’ notice before a mass layoff, a plant closure, or a major relocation. A notice of less than 60 days may result in claims for backpay and penalties.
As employers downsize their workforces and conduct layoffs during the COVID-19 pandemic, large employers should keep the WARN act requirements in mind (including those imposed by “mini-WARNs” in their respective states) and the implication of other laws, such as the obligation to provide final pay. While the WARN act provides certain exceptions to these notice requirements, the applicability of these exemptions with respect to COVID-19 remains unclear. For instance, there is a “natural disaster” exemption to WARN notice requirements. This exemption permits employers to give notice after a natural disaster event, such as a flood, earthquake, drought, storm, tidal wave, or similar effects of nature. Currently, no case law addresses whether a pandemic such as COVID-19 would qualify as a “natural disaster” under WARN, and very few cases discuss the “natural disaster” exception generally. This uncertainty is a potential source for WARN litigation. As of now, there are several lawsuits alleging layoffs without required WARN notices.
Practical Takeaways
Unfortunately, the unprecedented nature of the current global pandemic has resulted in a flood of COVID-19-related employment actions. Accordingly, employers must take proactive steps to avoid exposure to the common COVID-19 pitfalls described above, such as monitoring and reviewing COVID-19 legal developments, revising company policies, and ensuring compliance with applicable state and federal laws. It is imperative that employers are aware of these COVID-19-related litigation trends and consult counsel before making personnel decisions that could land them in stormy waters.