May 28, 2020

Rise in Employment Law Claims: Knowing the Risks and the Long-Term Legal Implications Anticipated from the COVID-19 Pandemic

Eric W. Iskra, Ellen J. Vance

The COVID-19 pandemic hit employers hard and fast—it caused employers to deal with loss of revenue, tough decisions about workforce and pay issues, and new laws and other guidelines that had to be analyzed and implemented quickly, with little time for planning or preparation. As states begin the process for what is hoped to be an eventual return to some sort of "new" normal, employers must be ready to recognize the risks, mitigate those risks, and be prepared to defend the actions and decisions they made in response to the COVID-19 pandemic. In the course of the next several months (and perhaps over the next several years), we anticipate employers will be faced with several types of employment lawsuits stemming from the COVID-19 pandemic.

Where are employers facing the most risk?

1. Families First Coronavirus Response Act ("FFCRA")

In mid-March, Congress passed the FFCRA, which requires certain employers to provide paid sick leave or expanded family and medical leave to employees for several COVID-19-related issues. Specifically, under the paid sick leave provision of the FFCRA, an employee qualifies for paid sick leave if the employee is unable to work (or unable to telework) and the employee fits within any of the following qualifying reasons:

  1. Is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. Has been advised by a health care provider to self-quarantine related to COVID-19;
  3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
  4. Is caring for an individual subject to an order described in (a) or self-quarantine as described in (b);
  5. Is caring for a child whose school or place of care is closed (or childcare provider is unavailable) for reasons related to COVID-19; or
  6. Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Under the expanded family and medical leave provision of the FFCRA, an employee qualifies for additional leave if the employee is caring for a child whose school or place of care is closed (or childcare provider is unavailable) for reasons related to COVID-19.

As with any new employment law, it is likely that employers will face lawsuits alleging they failed to meet their obligations under the FFCRA, particularly in regard to the issues of determining eligibility of their workers for paid leave and paying leave in the required manner and at the required rate.

Additionally, even if an employer administers paid leave under the FFCRA in an accurate manner, it is likely employers will face lawsuits alleging they retaliated against employees who requested and/or took paid leave.

2. OSHA and Other Safety Claims

As states begin to allow businesses to reopen, several state and local governmental bodies have developed guidelines and protocols that all employers are required to follow, with many additional requirements for some industry-specific businesses. These guidelines and protocols often are very detailed and onerous on employers. In addition to state and local guidelines and protocols, the CDC, OSHA, and other entities likewise have distributed materials regarding safety measures that employers should be taking in light of the ongoing COVID-19 pandemic. Many of the guidelines and protocols have changed over time as the medical community has learned more about the COVID-19 virus and the ways in which the virus can be spread.

It is very likely employers will see an increase in state and local government enforcement actions and OSHA enforcement actions in situations where the employer is not following the numerous required safety guidelines and protocols that are applicable to its business and/or in situations where an employee makes a complaint alleging the employer is not doing enough to protect employee safety. Likewise, in situations where an employee contracts COVID-19 and believes they were exposed to the virus at work, employers likely will be faced with workers' compensation claims, and perhaps even deliberate intent type claims in some situations.

3. Wage and Hour Claims

Under the Fair Labor Standards Act and state law equivalents, employers are required to pay non-exempt, hourly employees a set minimum wage for every hour worked, as well as overtime pay for any hours worked in excess of 40 per week.

During the course of the COVID-19 pandemic, many states have required that employers allow employees to work from home to the maximum extent possible. As employers took steps to allow employees to work from home, they were left with little means to track employees' work hours and little ability to monitor whether employees were sticking to their regular work schedules. Such inability to track hours might lead to costly wage payment claims and perhaps even class actions alleging that employees were shorted for hours worked from home.

Additionally, the move to telework may have forced some employees to buy equipment or personal devices for work. The FLSA requires businesses to reimburse employees when expenses push them below minimum wage. Accordingly, some employers may be responsible for some of these costs.

Finally, as employees are allowed to return to physical work, many employers are following federal, state, and local guidelines requesting or requiring employers to implement new safety measures (such as temperature checks, cleaning of personal protective equipment, and responding to questionnaires about medical conditions). Employers need to be aware that they are responsible for paying employees for time spent under their control and these new safety procedures might be alleged to fit within such responsibility. As a best practice, employers should plan on paying employees for the additional time spent by the employees in complying with any new safety measures implemented by the employer.

4. Lawsuits Related to Layoff, Furlough, and Separation

Under the federal Work Adjustment Retraining Notification Act ("WARN Act"), employers with 100 or more employees are required to give at least 60 days' notice before closing or laying off a certain number of employees. If an employer misses this window, it may have to provide employees with back pay, plus penalties.

In situations where employers were forced into making mass reductions in force due to a sudden loss of business related to the COVID-19 pandemic, we anticipate employees may allege a violation of the WARN Act. Fortunately for employers, not all sudden layoffs violate the WARN Act. For example, under the WARN Act, a business that shuts down due to "unforeseeable" business circumstances is not liable, and the COVID-19 pandemic may fit within this exception. Additionally, generally, a WARN Notice is not required for a temporary layoff that is expected to be less than six months, thereby providing many employers an additional WARN claim defense.

Additionally, we anticipate employers will be faced with disparate treatment discrimination and retaliation lawsuits in regard to any layoff, furlough, or separation decisions made due to the COVID-19 pandemic should an individual feel that they were selected for layoff or separation based upon a protected characteristic and/or based upon a protected complaint made in the workplace. Likewise, employers should anticipate being faced with disparate impact discrimination lawsuits if the adverse employment decision disproportionately impacted a protected class, even if the employer did not intentionally discriminate.

5. Disability Discrimination Claims

As employees are being asked to transition back to in-person work, some employees may be reluctant to return due to a fear of contracting COVID-19, particularly if the employee has a medical condition that makes them more susceptible to COVID-19. If an employer requires the employees to return to work, the employer may be faced with a failure to accommodate the disability discrimination claim.

Under the Americans with Disabilities Act, and state law equivalents, an employee with a serious health condition has the right to request a "reasonable accommodation" allowing them to perform the essential functions of the job. We anticipate many employees who were allowed to work from home during the height of the COVID-19 pandemic might request to continue to be allowed to do so as a reasonable accommodation for the employee's disability. Depending on the circumstances, which will need to be accessed on a case-by-case basis, it is possible an employer will need to allow an employee that fits within a disability protected class to continue to work from home, even after the majority of the workforce returns to in-person work.

Employers also should be on the lookout for newly enacted state or local laws that provide extra protections to employees who fit within a class that makes them more susceptible to COVID-19 or risk running afoul of such new legal requirements.

What are employers to do?

This is a complex and ever-changing environment. It is important for employers to understand employment litigation trends in order to best plan to mitigate problems. It is critical to make sure the right policies and procedures are in place (updated accommodation procedures, compliant wage and hour protocols, a fully vetted layoff process, a robust return to work playbook, and so on). Although there is no way to completely eliminate the risk of litigation, complying with best practices now will certainly pay off in the long run.

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Eric W. Iskra

Spilman

Mr. Iskra’s practice encompasses trial work and litigation, with an emphasis on labor and employment, employment class action, wage and hour class/collective action, and other high-stakes litigation. He is Chair of the Labor and Employment Practice Group at Spilman. Mr. Iskra is also on the firm’s Management Committee and is in charge of client relations.

Ellen J. Vance

Spilman

Ms. Vance’s primary areas of practice at Spilman are labor and employment law and litigation.