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COVID Lawsuit: New Colleague in the Workplace

The Workplace Policy Institute (WPI), out with its annual, state-of-the-workplace Labor Day Report, takes a close look at the legal upheaval from COVID

If your company is involved in a lawsuit, chances are you won’t ever see it bantered about in the company blog. Win or lose, lawsuits aren’t highlights to tell the world about. In fact, lawsuits can be downright bad for business.

This year, of course, things are mighty different. Along with social distancing, Plexiglas partitions, and people in jumpsuits disinfecting elevator buttons, COVID lawsuits have bulled their way into workplaces everywhere. Their numbers are mounting quickly, they’re the stuff of nightly news shows, and it looks like they’ll be staying around for quite a while.

Littler’s  Workplace Policy Institute (WPI) is out with its annual Labor Day Report, and in addition to its usual employment insights, it pays particular attention to this newest of workplace colleagues, COVID lawsuits.

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EXCERPTED FROM WPI LABOR DAY REPORT 2020

Part III – COVID-19 Employment Lawsuits
Numerous lawsuits stemming from COVID-19 have been filed in federal and state courts since March 2020.

By the end of August, at least 638 lawsuits directly related to labor and employment violations have been filed (including 72 class action suits).

California leads the nation with 115 employment lawsuits already filed, with Florida, New York, and New Jersey close behind.

These claims raise a number of allegations, including retaliation, breach of contract, discrimination, leaves of absence, wage and hour, and workplace safety concerns, among others.

Download 30-page Workplace Policy Institute (WPI) Labor Day Report 2020

Most Common Claims
Where workplace liability is concerned, there is no shortage of laws or regulations under which employers may face claims.

To date, while at least a dozen states have enacted laws to shield employers acting in good faith from liability for COVID-19 claims, they have largely been confined to claims of exposure to the virus—we have not seen significant legislation offering any type of protection for labor and employment claims in particular.

Nor has the federal government yet acted on proposals to limit COVID-related liability for employers and businesses, although proposals to do so have been introduced, and are discussed below.

The largest number of claims have been filed against healthcare industry employers.

Number of Lawsuits in Hardest-Hit Industries
Given the rapid (and at times haphazard) pace at which the federal government, states, and localities have enacted laws responding to COVID-19 and employment, there are several types of claims of which employers should be mindful.

The following is just a snapshot of some of these claims.

Wage & Hour
Timekeeping

If a non-exempt employee performs any work during a quarantine or similar period, the employer should ensure that the employee accurately tracks their working time and is paid for that time in accordance with all applicable federal, state, and local laws.

Non-exempt employees working from home during quarantine should be directed to comply fully with any and all company policies related to timekeeping, overtime approval, and meal and rest breaks.

Employers may be struggling with how to accurately keep track of an employee’s time when working from home or how to ensure that employees are appropriately taking meal and rest breaks.

Approximately 20 states have some form of meal or rest break requirements. Importantly, recent court decisions in Oregon and Washington State have held that employers have an affirmative duty to “ensure” that non-exempt employees receive and take all required meal and rest breaks.

To address this concern, employers can consider implementing a policy signed by employees requiring them to acknowledge they are expected to schedule and take meal and rest breaks and to accurately and thoroughly record time worked.

Business Expenses
As more and more employees are working from home due to the pandemic, many employees have incurred costs associated with working from home. Depending on the jurisdiction, an employer may be obligated to reimburse the employee for any costs associated with teleworking.

Federal law does not require specific “item-by-item” reimbursement of tools and services incidental to carrying on the employer’s business; however, the employer must reimburse the employee to the extent the incurrence of those expenses causes the employee’s wages to dip below minimum wage.

In addition, some states have laws or guidance addressing reimbursements and allowable deductions from wages.

Often, these laws will allow deductions only when authorized in writing by the employee or will restrict the employer’s right to take deductions that impact minimum wage.

Over half of states and some local jurisdictions have laws or guidance impacting reimbursements and deductions.

Some jurisdictions require employers to reimburse employees a reasonable percentage of the employee’s cell phone or internet use, even where working from home imposes no additional charge to the employee.

Employers should closely review the applicable reimbursement statutes that apply to them to ensure compliance.

Reporting Time Pay
If an employee is sent home from work due to illness or because the employer is implementing a mandatory furlough, certain jurisdictions may require reporting time pay to compensate the employee for reporting to work even if no work was performed or if the employee was sent home prior to working a full shift.

Jurisdictions that have some version of a reporting time pay law include, for example, California, Connecticut (for hospitality or retail only), District of Columbia, Hawaii, Massachusetts, New Hampshire, New Jersey, New York, Oregon, and Rhode Island.

Employers with non-exempt employees in these jurisdictions should consult applicable law to assess when and how much reporting pay is owed.

 Compensable Work Time
Employers can expect disputes and litigation over the compensability of new pandemic-related activities, such as temperature checks and other health screening activities. The question of compensability for pre-shift activities is a complex area of law, and the compensability of these particular activities has not been extensively considered previously.

 

The result of these litigation tests will depend heavily on state law, in particular the manner in which the jurisdiction follows federal Portal-to-Portal Act.

Those states with wage and hour statutes that track federal law, and those without state wage and hour statutes, may be more likely to deem such pre-shift activities as non-compensable.

Generally, employers should carefully consider state requirements before implementing home health checks or screenings, as there is a risk that such activity can begin the workday.

In addition, the DOL’s Wage and Hour Division in a recent Field Assistance Bulletin reaffirmed that employers are required to pay their non-exempt employees for all hours worked, “including work not requested but allowed and work performed at home.

If the employer knows or has reason to believe that an employee is performing work, the time must be counted as hours worked.”

According to the DOL, employers still have an obligation to exercise “reasonable diligence” in tracking the hours their teleworking employees work.

Downsizing and Reductions in Force
Employers that have been forced to downsize their workforces in the wake of the pandemic should also be mindful of the federal Worker Adjustment and Retraining Notification (WARN) Act.

The WARN Act generally requires that employers that are closing a plant or laying off a significant number of workers for an extended period, are required to provide 60 days’ notice to workers, as well as to the state. State law analogues of WARN (so-called “mini-WARNs”) often impose similar if not more burdensome requirements.

While WARN provides certain exceptions to these notice requirements (most notably, when a plant closure or mass layoff is the result of business circumstances that were not reasonably foreseeable at the time notice was required), the applicability of these exemptions with respect to COVID-19 remains unclear.

Despite the unpredictability and uncertainty of the pandemic and its duration, and of the ever-changing governmental and societal responses to the pandemic extended restrictions on travel, business and social activities) all of which impact business in unforeseeable ways, plaintiffs may challenge businesses for invoking the “unforeseeable business circumstances” exception to give shortened WARN notice or to extend layoffs beyond six months.

In addition, WARN includes certain “lookback” provisions that may trigger a notice requirement, even retroactively, where an employer is not letting everyone go at the same time. And while some states have modified their state WARN laws to be more forgiving of COVID-related job losses, others are proceeding apace with WARN expansions contemplated prior to the pandemic.

As employers prepare to reopen businesses, or return employees from furlough, they should be mindful of WARN Act obligations.

This is especially true where federal funding to maintain jobs (such as under the Paycheck Protection Program may be running out, and employers are facing the unwelcome prospect of having to let workers go, potentially triggering WARN notice requirements.

While legislation introduced in the U.S Senate would exclude COVID-related closures and layoffs from notice requirements under WARN, the fate of this effort is not at all clear. Employers contemplating uncertainty as to whether and how they will maintain their employee numbers are advised to consult with counsel sooner, rather than later.

Employers should also consider whether they may be subject to a state or local ordinance creating a “right to recall” for employees subject to a reduction in force as the result of the pandemic. Currently, some localities in California, including San Francisco, Los Angeles, and Long Beach, are creating (or have already created) these types of laws with a private right of action for employees to sue if they are not reinstated to their position following a pandemic reduction-in-force.

Discrimination Claims
Americans with Disabilities Act (ADA)
Historically, claims of discrimination have increased as unemployment has gone up. In the 15-year period prior to the pandemic, the highest level of unemployment in the United States occurred in 2009 and 2010.

Notably, and perhaps unsurprisingly, the highest number of discrimination charges filed with the U.S. Equal Employment Opportunity Commission (EEOC) also occurred in fiscal years 2010 and 2011. Given the unprecedented levels of COVID-related unemployment, we see no reason to think that this historical trend will not continue.

Employers should be aware of the ADA’s requirements governing what medical information employers can seek from employees and how and when to “reasonably accommodate” employees with disabilities.

Based on the EEOC’s current view, it is unclear whether COVID-19 is or could be a disability under the ADA.

Regardless, in relying on the findings of the CDC and others public health authorities, the EEOC has determined that “an employer may bar an employee with the disease from entering the workplace” because the COVID 19 pandemic meets the “direct threat” standard under the ADA, that is, “a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.”

Download 30-page Workplace Policy Institute Labor Day Report 2020

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