First Wave of COVID Litigation Brought Against Employers

As the country reopens, we are starting to see the first wave of COVID litigation brought against employers.

As can be expected, many of the suits are safety-related, brought by and on behalf of employees who contracted COVID allegedly at work and fell ill or died from it. These suits accuse employers of not acting quickly enough or carefully enough to comply with public health recommendations and to keep workers safe. Although workers’ compensation is normally an employee’s exclusive remedy for work-related illness or injury, this bar is not absolute, and its limits will be tested over the coming months. For private employers, enforcement actions by the Occupational Safety and Health Administration (OSHA) are expected under the Occupational Safety and Health Act’s general duty clause, which requires them to provide workplaces “free from recognized hazards.”

We are also seeing the first enforcement actions by the U.S. Dept. of Labor and the first private lawsuits under the new Families First Coronavirus Response Act (FFCRA). The FFCRA was put in place so quickly that many employers did not have time to understand its requirements and comply with them fully. These actions either allege that employees were improperly denied leave or were retaliated against for taking leave.

What other litigation are we seeing or expecting to see?

A wave of short-notice layoffs has sparked suits under the federal Worker Adjustment and Retraining Notification Act (WARN) and state mini-WARN laws. WARN requires employers of 100 or more employees to provide 6o days’ notice of plant closings or mass layoffs. Most employers were not able to give that amount of notice to employees in response to COVID. Employers will be seeking to show that their plant closing or mass layoff was the result of “unforeseeable business circumstances,” an exception to WARN’s 60-day notice requirement, to avoid liability.

Wage and hour claims continue to be the area of most significant exposure for employers, and that is unlikely to change with COVID. The quick pivot many businesses had to make from work onsite to work at home may result in increased litigation. Tracking hours worked, avoiding off-the-clock work, ensuring breaks and meal periods are taken appropriately, and paying overtime all became more challenging when non-exempt employees started working from home. In the same vein, the move to telework may have caused some non-exempt employees to buy equipment or to use personal devices for work. Employers may need to reimburse some of those costs, if they push wages below the required minimum wage. States may have even greater requirements for paying business expenses of non-exempt employees. For those employers who had to let employees go, final pay rules may not have been followed to the letter.

Mass downsizing events generally also bring on a wave of civil rights lawsuits alleging that employers discriminated in deciding which workers to let go.

And, employers should expect suits under the Americans with Disabilities Act, brought by employees with conditions that make them susceptible to COVID and requesting extended leave and work from home as reasonable accommodations. Post-COVID, businesses may have a harder time arguing that work from home is not a reasonable accommodation.

One positive for employers is that our federal Congress has debated, and some states are passing laws creating safe harbors for employers against liability for COVID-related lawsuits. Utah recently passed such legislation, and other states may follow suit.

Employers Council will continue to monitor this litigation as it develops and report on developments and lessons learned.