Defending Employers Against Litigation Due to the Coronavirus
The coronavirus (COVID-19) pandemic presents several novel challenges for employers. As companies do their best to protect their employees and the public at large, they must also prepare for the prospect of litigation.
As the legal landscape continues to shift in response to the novel coronavirus (COVID-19) pandemic, employers in the United States are quickly finding themselves facing a new reality. Many companies are being forced to close their doors, and those that are allowed (or required) to remain open must figure out how to run their businesses amidst the most dangerous virus outbreak of our generation.
In addition to all of the various pre-existing laws that apply, Congress and state legislatures are rapidly passing new laws designed to protect employees and consumers. While these laws may be good for the economy as a whole, they present difficult legal challenges – and new legal risks – for employers that are doing their best just to stay afloat.
10 Types of Potential Claims in Coronavirus-Related Employer-Employee Litigation
Given the breadth of the legal issues that attend to doing business during the novel coronavirus (COVID-19) pandemic, companies of all sizes need to be cognizant of the risk of facing employment-related lawsuits. These lawsuits will come; and, when they do, companies that are prepared to respond will be in a much better position to mitigate any potential liability and protect their shareholders.
Here are 10 types of employment-related claims that have the potential to arise out of the COVID-19 outbreak:
1. Discrimination Claims
During and after the novel coronavirus (COVID-19) pandemic, employers are likely to face discrimination claims on a number of different fronts. This includes claims under the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and Title VII of the Civil Rights Act of 1964 related to:
- Which employees are asked not to report to work due to coronavirus-related concerns;
- Which employees are asked or permitted to work from home; and,
- Which employees have their hours reduced or have their jobs terminated.
2. Wage, Hour, Overtime, and Unemployment Claims
Wage and hour issues can lead to complex legal disputes even under ordinary circumstances. During the COVID-19 outbreak, companies are likely to face several different allegations related to ordinary and overtime pay. This is true in situations involving both union and non-union workers. Employers may also see unprecedented numbers of unemployment claims as a result of the pandemic, and they must be prepared to handle these claims effectively in order to avoid costly litigation.
3. Family and Medical Leave Act (FMLA) Claims
The Family and Medical Leave Act (FMLA) allows eligible employees to take job-protected leave to recover from a serious health condition or to care for a family member who has been diagnosed with a serious health condition. Employers can expect to face FMLA claims as a result of employee complaints during the novel coronavirus (COVID-19) pandemic, including claims under the expanded FMLA protections provided by the Families First Coronavirus Response Act (FFCRA).
4. Families First Coronavirus Response Act (FFCRA) Claims
President Trump signed the Families First Coronavirus Response Act into law on March 18, 2020. We prepared an in-depth summary of the FFCRA as it was making its way through Congress. As mentioned above, the FFCRA expands the FMLA’s protections significantly in response to the COVID-19 outbreak (including providing protections to employees at smaller companies and providing for paid leave). The FFCRA includes other sick leave provisions as well. Covered employers must begin complying with the FFCRA immediately in order to mitigate their risk of facing related litigation.
5. Workers’ Compensation Claims
Employees who claim to have contracted COVID-19 at work may seek to file for workers’ compensation benefits. While workers’ compensation provides “no-fault” coverage, employees must be able to demonstrate that they got sick at work—which will be difficult given COVID-19’s incubation period. However, employers will still be forced to defend against these claims, and they can expect to face litigation when employees feel that their claims have been improperly denied.
6. Coronavirus Exposure Claims
In addition to workers’ compensation litigation, employers may also face tort litigation involving allegations that they failed to adequately protect employees and their family members from the novel coronavirus. In these cases, employers will need to be able to demonstrate that they took reasonable and appropriate measures to protect their employees to the fullest extent possible.
7. Employee Data Disclosure Claims
Employers that ask employees to work from home during the novel coronavirus (COVID-19) pandemic must ensure that they have adequate controls in place to protect their employees’ personally identifying information (PII) and health data outside of the normal work environment. Companies cannot ignore data security threats during the pandemic, even in circumstances in which they must quickly transition their employees to working remotely.
8. Insider Trading and Other Securities Fraud Claims
Publicly-traded companies and their executives may also be at risk for facing insider trading and other securities fraud claims in relation to the sale of company shares during the COVID-19 outbreak. This includes claims from employee-investors in addition to claims from other investors and regulatory authorities.
9. Employee Retirement Income Security Act (ERISA) Claims
Employers that provide pensions and managed 401(k) plans must ensure that adequate measures are implemented to protect employees’ retirement savings during the novel coronavirus pandemic. In addition to facing employee lawsuits under ERISA, companies accused of wrongdoing under the statute can potentially face criminal ERISA investigations as well.
10. OSHA Enforcement
Finally, employers may be at risk for liability under the Occupational Safety and Health Act of 1970 (OSHA). This includes, but is not limited to, the provision that requires employers to provide a workplace, “free from recognized hazards that are causing or likely to cause death or serious physical harm.” While OSHA does not provide a private right of action for employees, employers can face federal enforcement action; and, as discussed above, exposing employees to the novel coronavirus can give rise to various other claims in private civil litigation.
Preparing to Defending Against Coronavirus-Related Employment Lawsuits
With these risks in mind, what can – and should – companies be doing to mitigate their risk of liability in employment-related litigation? Here are our thoughts:
- Companies must be prepared to respond to complaints and claims promptly. First, even with everything else that is going on, companies need to be prepared to respond to their employees’ complaints and claims promptly. All litigation threats should be taken seriously; and, as and when appropriate, employers should seek to achieve amicable results without the need to build a complete litigation defense strategy.
- Clear and thorough documentation will be critical. In employment-related litigation, effective documentation can be the difference between resolving a dispute before it begins and facing protracted administrative or civil litigation. When making decisions that impact employees (i.e. decisions regarding reductions in force or work-at-home policies), companies must clearly and thoroughly document the justifications for any disparate treatment—even when this disparate treatment clearly complies with the law.
- Indemnification and other third-party liability issues will be critical, too. There are many, many moving parts during the novel coronavirus pandemic. When faced with litigation, companies must carefully evaluate whether they have grounds for pursuing indemnification or otherwise shifting liability to third parties. For example, if an employee contracted COVID-19 at work, could your facility’s property management company or cleaning company be liable? If an employee’s PII is exposed, could one of your company’s information technology (IT) service providers be to blame?
- Effective litigation management will take on heightened importance. For companies facing a high volume of employee claims, effectively litigation management will be critical. These companies will need to work with an outside law firm that has the lawyers and resources required to manage the pre-litigation and litigation stages of multiple cases simultaneously while also giving each individual case the strategic focus it demands.
- Decisions regarding litigation strategy will need to address multiple considerations. During the novel coronavirus (COVID-19) pandemic, companies will also need to make decisions that examine factors beyond individual litigation matters themselves. How could possible outcomes in one case impact similar cases? Does an issue that has been raised warrant reconsideration of the company’s pertinent policies and procedures? Is there a point at which employee lawsuits could threaten the company’s solvency; and, if so, when and how must this be addressed? Novel times call for a novel approach, and employers need to rely on sound legal advice to ensure that they are prepared.
Speak with a Federal Employment Litigation Defense Attorney at Oberheiden P.C.
Oberheiden P.C. is a federal compliance and defense law firm that is actively representing corporate clients nationwide during the novel coronavirus (COVID-19) pandemic. If your company is facing employment-related litigation – or if you are seeking to get ahead in order to mitigate the risk of employee lawsuits – we can help, and we encourage you to get in touch. To speak with a senior attorney on our federal compliance and defense team in confidence, call 888-680-1745 or request a free consultation online now.
Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.