COVID-19 Workplace Litigation Trends

Maintained

by Melissa Camire, Richard R. Meneghello, and Kristen Nesbit, Fisher Phillips LLP

This practice note summarizes the various types of COVID-19 workplace cases that employees have filed against employers to date, along with an analysis of the frequency of these types of lawsuits to identify current litigation trends. The data we rely upon for this practice note comes directly from the Fisher Phillips COVID-19 Employment Litigation Tracker. This practice note also provides guidance and best practices for avoiding workplace litigation related to COVID-19 issues, and offers strategies for defending such lawsuits should employees file them.

Specifically, among other things, this practice note addresses the following:

For guidance on a wide variety of COVID-19 legal issues, see Coronavirus (COVID-19) Resource Kit.

For a resource kit focused on employees returning to work and broken up by key employment law topics, see Coronavirus (COVID-19) Resource Kit: Return to Work. For a practice note focused on legal considerations and guidelines for advising employers on returning the workforce to the physical workplace during the COVID-19 pandemic and post-availability of the COVID-19 vaccine, see COVID-19 Return-to-Work: Key Employer Considerations.

For tracking of key federal, state, and local COVID-19-related Labor & Employment legal developments, see Coronavirus (COVID-19) Federal and State Employment Law Tracker.

For tracking of key federal, state, and local non-coronavirus-related Labor & Employment legal developments, see Labor & Employment Key Legal Developments Tracker (Current).

For a presentation summarizing various key legal developments in the labor and employment practice area that occurred in 2020, including those related to COVID-19 litigation, see Labor & Employment Year in Review (2020): Training Presentation.

Overall Litigation Trends in Workplace COVID-19 Matters

Through November 4, 2022, employees and former employees had filed at least 6,542 workplace-related lawsuits against employers relating to COVID-19. We compiled this data from the Fisher Phillips COVID-19 Employment Litigation Tracker, which collects information on traditional employee vs. employer cases at both the federal and state level that resulted directly from the COVID-19 pandemic. Because of the inherent limitations in a national data collection process, the information contained herein should be considered a comprehensive, but not exhaustive, dataset.

There are five major trends that become apparent upon an initial examination of the data. The first two involve the location of the lawsuits, the third involves the type of lawsuits plaintiffs are filing, the fourth involves the industries targeted by these claims, and the fifth involves the size of the businesses facing such lawsuits.

State-by-State Summary of Workplace COVID-19 Matters

First, the states that generally see the most typical workplace-related litigation are largely seeing the most COVID-19-related workplace litigation, with some notable exceptions. Through November 4, 2022, plaintiffs have filed the highest number of federal and state lawsuits in the following states:

•California: 1,741 cases
•New Jersey: 641 cases
•New York: 479 cases
•Florida: 383 cases
•Ohio: 354 cases
•Texas: 296 cases
•Pennsylvania: 261 cases
•Illinois: 206 cases
•Michigan: 200 cases
•Connecticut: 135 cases

State-by-State Summary of Workplace COVID-19 Matters Adjusted for Population

However, when these figures are adjusted to account for cases by population, we see a slightly different story. Through April 18, 2022, plaintiffs have filed the highest number of federal and state lawsuits per million people in the following states:

•New Jersey: 1772. cases
•California: 44.16 cases
•District of Columbia: 38.26 cases
•Connecticut: 37.87 cases
•Ohio: 30.28 cases
•Oregon: 29.40 cases
•Kentucky: 27.98 cases
•New York: 24.62 cases
•New Mexico: 24.32 cases
•Iowa: 21.24 cases

Types of Workplace COVID-19 Cases

Third, the 13 types of cases employees and former employees are filing can be sorted into three categories commensurate with the number of cases and frequency of filing: (1) Highest Number of Claims, (2) Moderate Number of Claims, and (3) Lowest Number of Claims.

Highest Number of Claims

The three types of claims that employers have seen the most often when it comes to COVID-19 workplace claims involve standard employment discrimination allegations (2,047 cases), retaliation/whistleblower claims (1,169 cases), and remote work and life conflicts issues (1,155 cases). While some are predicated on federal or state statutes that most employers are already well familiar with, many are also filed under the authority of an entirely new statutory scheme.

Moderate Number of Claims

The next category of claims has not been as prevalent as the highest number category, but still presents significant challenges for employers. Vaccine (781 cases), wage and hour matters (480 cases), wrongful discharge allegations (328 cases), unsafe workplace allegations (170 cases), negligence/wrongful death (140 cases), and breach of contract (55 cases) still carry with them potentially high levels of liability.

Lowest Number of Claims

Finally, although employers have seen the lowest number of cases involving CARES Act / PPP / SBA Loans claims (41 cases), traditional labor (39 cases), non-competes / trade secrets (37 cases), ERISA/Benefits (30 cases), and WARN Act (28 cases), these are some of the more significant types of claims. CARES Act cases often involve substantial amounts of liability related to small business loans and the fees related to loan applications. WARN Act cases often involve a large-scale reduction in force or even closure of business operations, either of which could have a devastating impact on a business. It would not be surprising to see a significant rise in WARN and/or state mini-WARN cases over the next several months as group terminations continue to rise. And non-compete and trade secrets cases might involve the loss of critical information that could be very harmful to operations.

Industries Facing Largest Number of COVID-19 Cases

There are five types of industries facing over half of all COVID-19 litigation filed against employers through November 4, 2022. Far and away, employers in the healthcare industry (1,408 cases) are most likely to be targeted, as they are on the receiving end of 22% of all such claims. Following are government entities (679 cases, 10.6%), retail industry businesses (533 cases, 8.3%), manufacturing employers (503 cases, 7.8%), and hospitality industry employers (366 cases, 5.7%).

Other industries commonly targeted include education (365 cases), construction (278 cases), professional and technical services (258 cases), finance and insurance (239 cases), transportation (233 cases), and automotive (212 cases)

Size of Employers Facing COVID-19 Workplace Litigation

Through November 4, 2022, plaintiffs have filed the overwhelming number of COVID-19 employment cases against employers with 1-50 workers. Plaintiffs filed a full 24.4%—1,597 claims out of 6,542—against employers of that size.

Plaintiffs filed 1,278 of all COVID-19 claims (19.54%) against employers with 101 to 500 workers. Plaintiffs filed 828 of all COVID-19 employment claims (12.6%) against employers with 1,001 to 5,000 workers. Plaintiffs filed another 810 cases (12.4%) against those with 10,001 to 50,000 employees, and 555 cases (8.5%) against those between 51 to 100 employees.

Plaintiffs have filed to date just a smattering of claims against those employers with significant employee populations:

•100,000+ employees: 493 cases (7.5%)
•501 to 1,000 employees: 396 cases (6%)
•5,001 to 10,000 employees: 341 cases (5.2%)
•50,001 to 99,999 employees: 196 cases (3%)

Discrimination Claims (Highest Number of Claims – 2,047 Cases)

Despite the pandemic and the new normal, employers have not been immune from the typical workplace discrimination claims filed under standard federal and state statutes. Now, however, employers must grapple with new twists on these established types of claims. Two of the more interesting developments involve pregnancy discrimination claims and disability discrimination claims.

An Emerging Trend – Lawsuits by Pregnant Employees

COVID-19 presents a specific, elevated immune and respiratory risk to mother and child, and lawsuits filed across the country are showing a trend of litigation filed by pregnant employees. For example, a lawsuit filed in California state court, Haile v. Steitz & Der Manouel, Inc, Supreme Court of the State of California, County of Sacramento (May 28, 2020), alleges that an employer failed to reasonably accommodate a pregnant employee during the COVID-19 quarantine. In Haile, the employee alleged that the employer terminated her employment shortly after she requested accommodation due to the high-risk factors of exposure to COVID-19 as a pregnant woman.

A case filed in New Jersey, Scarpitti v. Powerback Rehabilitation, Superior Court of New Jersey Burlington County – Law Division, BUR-L-001293-20 (June 30, 2020), also claims that an employer terminated a pregnant employee after she declined to work a shift that would require her to work directly with COVID-19 patients. Her employers were aware of her pregnancy and had a note from the doctor explaining how she should be allowed to refrain from treating COVID-19 patients. Also in New Jersey, an employer allegedly terminated a pregnant employee prior to her FMLA eligibility date to avoid accommodating her until that date. Pantaleon v. Corning Pharmaceutical Glass, Superior Court of New Jersey, Cumberland County, CUM-L-000411-20 (June 30, 2020). In yet another New Jersey case, a pregnant employee requested to be furloughed due to how many fellow employees were COVID-19 positive. Roman v. Jewish Home Assisted Living, Inc. Superior Court of New Jersey Law Division, Bergen County, BER-L-003419-20 (June 12, 2020). The employer denied the request, changed her position, and soon terminated her employment. In June 2020, a Texas lawsuit alleged that an employer terminated a pregnant employee after furlough when almost all other employees returned to their positions. Reiter v. Dejean & Kuglan Eye Associates, LLP, Cause No. 20-06-07399 (District Court of Montgomery County, Texas, June 23, 2020).

In all of these cases, the plaintiffs allegedly requested accommodations or a furlough due to a heightened risk of COVID-19-related complications due to their pregnancies. Also, in all cases, the employees claim that their employers eventually terminated them after they requested options for leave.

Given the frequency of these types of cases, employers should be taking steps to minimize the risk of pregnancy discrimination claims in their workplace.

For practical guidance on preventing and defending pregnancy discrimination claims, see Pregnancy Discrimination Act: Compliance Tips, Family Responsibilities Discrimination, and Pregnancy Discrimination Complaint Prevention and Response Checklist.

What Should Employers Do to Avoid Similar Claims

For many reasons, employers should be diligent in quickly responding to employees requesting time off due to a COVID-19-related issue, or otherwise requesting an accommodation due to COVID-19 or another underlying health condition, such as pregnancy.

For example, while employees are beginning to physically return to the workplace, requests to work from home should be treated as a possible request for a reasonable accommodation. All managers should know to direct such requests to the appropriate person in their company and avoid any shorthanded comments that may instigate a claim of discrimination. Having an individual within each business to whom requests can be directed can make sure that they are responded to in a timely and consistent manner.

Companies should also document any and all discussions regarding requests for leave or other accommodations. A paper trail can show that such requests were responded to and it can be extremely helpful in defending claims where the employee may allege that the company ignored or avoided their requests. Employers should also document the reasoning behind any decisions to terminate.

Remember, just because an employee asks about FMLA does not mean that the employer cannot legitimately terminate the employee for another reason or include the employee in a furlough, so long as the employment decision is unrelated to the request for leave. However, be aware that the company's own capability to explain why it terminated the employee is crucial. Once a charge of discrimination is filed, the employer is obligated to respond with legitimate, nondiscriminatory reasons for its employment decisions. Maintaining clear and detailed paperwork prior to a termination will at least place the employer in the best position to defend its decision if such a claim arises after a termination event.

Is COVID-19 a Disability under Discrimination Law? The Next Wave of Workplace Lawsuits May Answer This Question

With an increasing number of employees being diagnosed with COVID-19 and requiring a leave of absence to recover from the virus, the question arises whether having COVID-19 renders an employee "disabled" as defined under the ADA or other state and local anti-discrimination laws. Several cases have been filed which will help shape the contours of this debate.

New Jersey Case May Shed Light on Question

A lawsuit filed in New Jersey requests that the court answer this question in the affirmative and determine that an employee who was diagnosed with COVID-19 is disabled under the New Jersey Law Against Discrimination (LAD). In Tihara Worthy v. Wellington Estates LLC, Case No. OCN-L-19-20 (Superior Court of New Jersey, Ocean County), a former employee alleges that her employer wrongfully terminated her and blocked her from returning to work because of COVID-19, which she argues is a "disability." As many nonessential businesses reopen their doors, this lawsuit raises questions that many employers will likely be forced to grapple within the weeks and months to come.

Tihara Worthy alleges that she was employed by Wellington Estates as a Certified Medical Assistant from May 2018 until she was terminated on May 16, 2020. According to Worthy, she learned on April 19 that she tested positive for COVID-19, immediately notified her employer, and began a leave of absence.

A few weeks later, on May 11, Worthy alleges that she tested negative for COVID-19 and was cleared to return to work on May 16. Worthy claims that before she could return to work, the company terminated her employment and told her that she was not welcome back because she contracted COVID-19 and "could have gotten everyone sick."

The complaint alleges a violation of the LAD based on disability or perceived disability, as well as a claim of common law wrongful termination in violation of public policy based upon an enacted statute prohibiting employers from terminating employees who take time off from work because of COVID-19. Worthy seeks, among other things, reinstatement of employment and all benefits, back pay, front pay, compensatory damages, punitive damages, and attorney's fees.

Is COVID-19 a Disability?

COVID-19 is a virus that causes a range of mild symptoms to severe illness in those who are infected. See CDC Frequently Asked Questions. Although COVID-19 can be deadly in certain cases, individuals who contract the virus often experience symptoms for a limited period and, once the symptoms dissipate, no longer test positive for the virus.

The ADA defines "disability" as a physical or mental impairment that substantially limits one or more major life activities. The EEOC has not yet opined on whether COVID-19 is a disability under the ADA. During a March 27, 2020, webinar called "Ask the EEOC," the agency declined to answer the question of whether COVID-19 constitutes a disability under the ADA, stating that it is "unclear" whether the virus is or could be a disability given that it is a new virus that medical experts are still learning about. See Ask the EEOC.

For additional guidance on the ADA and its interaction with COVID-19, see Pandemic Flu/Influenza/Coronavirus (COVID-19): Key Employment Law Issues, Prevention, and Response and Americans with Disabilities Act: Guidance for Employers.

Other jurisdictions with more expansive disability protections have taken a more definitive stance. For example, the New York City Commission on Human Rights has stated that it "considers actual or perceived infection with COVID-19 to be protected as a disability under the New York City Human Rights Law." Accordingly, employers in New York City cannot harass or discriminate against an employee based on their COVID-19 infection status, and employees with the virus may be entitled to reasonable accommodations in the workplace.

With respect to Worthy's lawsuit, the LAD defines a disability as a "physical or sensory disability, infirmity, malformation, or disfigurement which is caused by bodily injury, birth defect, or illness . . . resulting from anatomical, psychological, physiological, or neurological conditions which prevents the typical exercise of any bodily or mental functions or is demonstrable, medically or psychologically, by accepted clinical or laboratory diagnostic techniques." N.J.S.A. 10:5-5-q. It specifically includes AIDS or HIV infection in the definition.

While courts often interpret the LAD broadly, it remains unclear whether COVID-19 meets the statute's definition of a disability. Only if COVID-19 falls under the definition of a disability can an employee who contracted the virus have a viable discrimination claim under the LAD. If not, an employee infected with COVID-19 does not have a cognizable discrimination claim, and any time the employee took off from work because they were recovering from the virus would not be considered a job protected leave under the LAD. Under the latter scenario, an employer would not violate the LAD if they did not permit an employee who contracted COVID-19 to return to work.

New York Lawsuit Overcomes First Hurdle

Meanwhile, in neighboring New York, another lawsuit has passed initial muster by a court and might also help shed light on this issue. Velez v. Girraphic LLC, U.S. District Court for Southern District of New York (Case No. 20 Civ. 5644 (JPC)). On July 21, 2020, Anthony Velez filed a lawsuit against his former employer, Girraphic LLC, in the Southern District of New York after he was allegedly terminated—the company argued he resigned—after missing several days of work in February and March of 2020 due to a respiratory infection. Velez says the condition may have been caused by COVID-19, but also says he was unable to obtain a COVID-19 test at that time.

Velez states that in January 2020, he had suggested the company make additional efforts to prevent the spread of the virus and alleges that as a result, his relationship with his supervisor "began to sour" because his supervisor considered Velez's concerns to be a sign of weakness and indicated he was not dedicated to his work. Velez became ill in February and alleges his request for medical leave in February and March was a request for a reasonable accommodation for a disability. He states his supervisor was angry with him for being ill and away from the office as well as for certain efforts he made to inform others about the seriousness of COVID-19. Velez further alleges he met with his supervisor and human resources in early March, was sent home "while the company decided what to do about his employment over the weekend," that it was clear he was going to lose his job, and that he thus emailed some colleagues "goodbye." Lastly, he states the company accepted this as his resignation and that the company emailed him regarding acts of misconduct, which he alleges are pretextual.

Velez brought suit alleging claims of (among other things) intentional discrimination, failure to accommodate, and retaliation under the New York City Human Rights Law (NYCHRL).

The court determined Velez alleged sufficient facts to state a claim for intentional discrimination because he alleged he had a disability in the form of a serious respiratory virus that may have been COVID-19, and that the company knew he had a disability, was angry with him for being ill and missing work, and terminated him for taking leave. The court held that although the company offered its own version of the facts—arguing Velez was insubordinate and performed poorly—Velez's allegations must be taken as true for the purposes of deciding the motion to dismiss.

Moreover, the court rejected the company's argument that COVID-19 should not be considered a disability for "public policy" reasons. The employer failed to show that treating COVID-19 as a disability would be at odds with the text of the NYCHRL, as the law provides an expansive definition of "disability" to include a "physical . . . impairment," defined as "an impairment of any system of the body." The New York City Human Rights website supports the court's position: "underlying conditions that public health authorities have thus far identified as increasing complications from COVID-19 generally qualify as disabilities under the NYCHRL." Thus, the argument that COVID-19 or COVID-19-like illnesses are not "disabilities" under the NYCHRL is unlikely to succeed in front of a judge.

The court further held that, at this early stage, the employee's version of the facts regarding whether the company denied him a reasonable accommodation and retaliated against him for requesting one must be taken as true. The company's attempt to set forth a different version of the facts—by arguing it did not have the opportunity to engage in a discussion with Velez regarding an appropriate accommodation and that Velez was fired for cause—was once again not enough to succeed on a motion to dismiss.

Finally, the company argued that Velez's accommodation claims should fail because the virus was not yet a concern in the city at the time the facts of the case arose and because the governor had not yet declared a state of emergency. The court wholly rejected this argument, stating the prevalence of the virus and timing of the state of emergency are irrelevant. It reasoned that Velez admitted his respiratory disease may not have been COVID-19.

Other Protections for Employees Who Take Time Off Because They Have COVID-19

Regardless of whether an individual infected with COVID-19 is considered to have a disability, job protections may exist to the extent that the infected employee took time off from work. For example, the Emergency Paid Sick Leave Act under the federal Families First Coronavirus Response Act provides eligible employees with up to 80 hours paid sick leave for COVID-19-related reasons. Many states and localities have also passed leave laws for those impacted by COVID-19.

New Jersey, for instance, enacted a new law that provides job protection for time taken off from work in connection with infectious disease, such as COVID-19, during the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103. NJ Assembly Bill 3848. Specifically, the law prohibits employers from terminating or refusing to reinstate an employee if the employee requests or takes time off from work based on a recommendation from a medical professional because the employee has, or is likely to have, an infectious disease that may infect others in the workplace. Additionally, job protected leave may also be available to employees infected with COVID-19 under the New Jersey Earned Sick Leave Law.

What Should Employers Do?

As different jurisdictions will have a different take on whether COVID-19 constitutes a disability, you must review any state and local guidance issued in your area to understand whether government agencies and/or the courts are likely to deem COVID-19 infection a disability under the law. Regardless of whether COVID-19 is considered a disability, there are many leave laws which may provide employees infected with the virus with job protected time off.

In New Jersey, the state at issue in Worthy's lawsuit, if an employee provides medical documentation to support a COVID-19-related leave of absence, the company must provide leave for the period recommended by the employee's healthcare provider. Importantly, once the employee is cleared to return to work and is no longer at risk of infecting others with the virus, the company should permit the employee to return to work without any changes in the terms and conditions of employment.

To the extent the company is considering terminating an employee who is on, or has recently returned from, a COVID-19-related absence, the company cannot base its decision in whole or in part on the fact that the employee was infected with COVID-19 or took a leave of absence because they were infected. Before deciding to terminate, the company should consult with its employment counsel to assess the risks involved with such a decision, including potential fines. The company must understand the web of potential federal, state, and local leave entitlements to properly provide leave to employees with COVID-19.

Reasonable Accommodation Claims

Another avenue by which workers are bringing pandemic-related disability claims is through the theory of failure to accommodate under the ADA or a state law equivalent. An example of such a case is Pantani v. Instapage, Inc., San Francisco County Superior Court.

Summary of Allegations

The lawsuit filed by Jonathan Pantani against his former employer, Instapage revolves around Pantani's allegations that Instapage failed to accommodate him after he suffered an anxiety attack related to COVID-19.

Toward the end of November 2020, Pantani requested three accommodations that were allegedly suggested by his treating medical health professional: (1) extended time off around Thanksgiving, (2) time off work to meet with a therapist, and (3) "set" working hours with limited responsibilities during non-working hours and on weekends. Pantani alleges his requests for accommodation were not properly considered and that his employer ultimately terminated him for requesting the accommodations. Pantani further alleges that Instapage advised him he was being terminated because of his "lack of alignment" and "general unhappiness at work."

While the outcome and veracity of the allegations are unknown, Pantani's allegations of his employer failing to accommodate a mental health condition and terminating him on account of his condition are fairly common. These types of cases are a reminder that you need to identify those employees who have physical or mental conditions that could trigger protection under the ADA. Anxiety and mental distress created by COVID-19 fears clearly may trigger obligations under the ADA.

What Can You Do?

You may be able to avoid these types of claims by doing several things. First, you need to be able to quickly recognize that the ADA may provide protection to certain employees. Once the ADA issue is flagged, you will need to engage in a dialogue with the employee—an interactive process—and determine what reasonable accommodations can be provided to the employee and make a record of the same.

In those instances when you are hesitant to provide the requested accommodation, you should document why it is an undue burden to provide the accommodation and attempt to offer alternative reasonable accommodations. For example, for an employee who is unable to work on the worksite but the essential functions of the job require being on site, you may offer a temporary leave of absence even if there is no other statutory obligation to do so.

Finally, to avoid allegations that any terminations you carry out were a result of either the employee's mental or physical condition or in retaliation for seeking accommodations, you need to be able to articulate a legitimate, nondiscriminatory basis for the termination. Highly subjective reasons (e.g., bad attitude) for a termination make that hurdle higher to get over.

Remote Work/Employee Leave Issues (Highest Number of Claims – 1,155 Cases)

Far and away, the type of COVID-19 workplace claim that plaintiffs have filed the most often relates to employee leave and remote work requests. Faced with ramping up compliance to deal with an entirely new statutory paid leave structure, employers can easily be caught flat-footed and on the receiving end of a lawsuit.

For guidance on the Families First Coronavirus Response Act and other COVID-19 topics, see Pandemic Flu/Influenza/Coronavirus (COVID-19): Key Employment Law Issues, Prevention, and Response.

Families First Coronavirus Response Act (FFCRA) Lawsuits

One of the very first COVID-19 workplace lawsuits filed at the outset of the pandemic is quite emblematic of the types of employee leave claims that have been filed across the country. The lawsuit, filed in federal court in Pennsylvania on April 16, 2020, provides some insight into what employers can expect from what will very likely be part of the "new normal" in employment litigation. The main allegation in these claims: that employers have wrongfully denied employees Families First Coronavirus Response Act (FFCRA) paid leave benefits or terminated them in retaliation for requesting such benefits.

Stephanie Jones v. Eastern Airlines

In Stephanie Jones v. Eastern Airlines, No. 2:20-cv-01927 (E.D. Pa. April 16, 2020), an airline's former Director of Revenue Management filed claims against her former employer and two executives alleging that she was illegally fired for requesting time off to care for her child under the FFCRA. This lawsuit not only shines a spotlight on the kinds of actions that may lead to litigation under this new statute but also serves as a warning to all employers about the flood of new employment claims being filed.

The Allegations

According to her lawsuit, Stephanie Jones began working at Eastern Airlines (Eastern) as the Director of Revenue Management in October 2019. In mid-March 2020, Jones alleges that she started contacting various members of management at Eastern to request that she be allowed to continue working from home. She wanted this flexibility, and alterations to her work schedule, to help with her 11-year-old son, who was unable to attend school due to COVID-19 issues. According to her lawsuit, Jones made at least eight inquiries regarding her requests to continue working from home and for two hours per day of "flex time." She says she reached out to at least four members of the Eastern management team in making these inquiries.

On March 24, 2020, Jones alleges she "formally requested" paid leave under the FFCRA. She alleges that her March 24 request resulted in Eastern's acting Chief Human Resource official responding via email with "open hostility," including stating that "the new laws are there as a safety net for employees, not as a hammer to force management into making decisions which may not be in the best interest of the company or yourself."

On March 27, 2020, Eastern terminated Jones's employment during a phone call in which she alleges she was told it was "in the best interest of the parties to part ways" and that there appeared to be a "conflict between" Jones and others at the company. Within three weeks of being terminated, Jones filed a six-count FFCRA lawsuit in the Eastern District of Pennsylvania federal court, alleging both FFCRA interference and retaliation.

Understanding FFCRA Interference and Retaliation Lawsuits

A review of the claims in Stephanie Jones v. Eastern Airlines can help you forecast the kinds of lawsuits that employees may soon file and either help you proactively avoid them from being filed or put you in the best position to defend any that land on your desk. Here are four things you need to know:

1These claims can come swiftly. As opposed to some of the more common federal employment law claims, FFCRA claims do not require aggrieved plaintiffs to exhaust administrative remedies before filing a private lawsuit. Because there is no required administrative process, companies might find themselves in federal court within days of an adverse employment action that can be connected to an FFCRA benefit request. While employees who believe they have been wrongfully denied benefits under the FFCRA can seek assistance from the Wage and Hour Division of the Department of Labor—especially after the Labor Department's initial 30-day grace period expired and the agency indicated it will seek enforcement where appropriate—they can also file a lawsuit directly against their employer.
2Smaller employers are not immune. Under the Family and Medical Leave Act (FMLA), only employers who employ 50 or more employees are subject to lawsuits for interference or retaliation involving extended family medical leave. The FFCRA, however, applies to all private employers with fewer than 500 employers. Small employers who are unaccustomed to dealing with FMLA leave should familiarize themselves with their obligations under the FFCRA or risk legal claims.
3Available remedies will make FFCRA claims costly. As enacted, the FFCRA allows employees pursuing a private action against their employers to seek remedies allowed under the Fair Labor Standards Act (FLSA). This means employees can seek to recover liquidated damages (an amount equal to what is owed in lost wages) for willful violations and attorney's fees.
And as Jones's case highlights, she is seeking liquidated damages—including interest. She maintains that the statute requires the employer to prove its actions were in good faith compliance with the FFCRA and that it had objectively reasonable grounds to think its conduct did not violate the statute to avoid such an award.
4Individual managers may be sued under the FFCRA. In addition to naming her former employer as a defendant, Jones named two individual managers as well: the company's Human Resources Consultant and the Chief Executive Officer.
Because the Emergency Family and Medical Leave and Emergency Paid Sick Leave Act provisions of the FFCRA adopt the enforcement mechanisms of the FMLA and the FLSA, managers and supervisors may be sued in their individual capacity for violations of the FFCRA. Indeed, both the FMLA and the FLSA broadly construe "employer" to include "any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer." 29 U.S.C. § 2611(4)(A)(ii).
For this reason, managers should exercise caution when it comes to FFCRA compliance. Employers should ensure that all managers and supervisors are aware of the FFCRA, what benefits it provides to employees, and that HR should be notified immediately if a manager learns that an employee may need FFCRA leave.
For additional guidance on managers' risk of individual liability under the FMLA and FLSA respectively, see FMLA Interference and Retaliation Claims and Fair Labor Standards Act (FLSA) Issues for Managers: Training Presentation.

An Emerging Trend – Employees with Preexisting Conditions

Other lawsuits filed across the country have begun to show a litigation trend: Plaintiff employees with preexisting healthcare conditions. For example, a lawsuit filed in federal court in Florida at the end of May alleges that an employer failed to provide FMLA leave for an immune-compromised employee during the COVID-19 quarantine. Benedetto v. Actional Rentals of FLL, LLC (U.S.D.C. S.D. Fla.). In that case, the employee alleged that his employer terminated him shortly after inquiring about FMLA leave due to his own risk factors.

A similar case filed in Pennsylvania also claims that an employer terminated its employee with an elevated risk for COVID-19 after the employee attempted to inquire about the option of using leave under the FMLA. Doe v. Dee Packaging Solutions, Inc., 20-cv-02467 (U.S.D.C. E.D. Pa.). On the same day, an employee with a preexisting heart condition filed an action in New Jersey alleging that his employer terminated him rather than provide him with requested leave under the FMLA, or as an accommodation under the Americans with Disabilities Act (ADA). Pezza v. Landscape Maintenance Services, Inc., No. 20-cv-6366 (U.S.D.C. D. N.J.).

In all of these cases, the plaintiffs alleged that they needed time off from work due to a heightened risk of COVID-19-related complications arising from preexisting conditions. Likewise, in all cases, the employees claimed that they were terminated once they inquired about their options for leave.

Can Employers Too Large to Be Covered by FFCRA Still Be Subject to Leave Litigation?

A terminated Kroger Co. distribution center worker sued the grocery store giant in May 2020 over its handling of absences for what she alleges were COVID-19 symptoms. Robtoy v. The Kroger Company, dba Peyton's Northern Distribution Center, No. 1:20-cv-00173 (N.D. Ind.). The most interesting aspect of this case, filed in federal court in the Northern District of Indiana, is that the ex-employee alleges that her termination for violating the company's attendance policies violates both the FMLA and the FFCRA, even though Kroger has over 500 employees and is not covered by the FFCRA.

Kroger's Amended Leave Policy

According to the lawsuit, Kroger amended its attendance policies in late March 2020 to provide employees with up to 14 days of paid leave if they are subject to a mandatory quarantine or choose to self-isolate due to COVID-19 symptoms. The policies attached to the complaint indicate that such leave would only be approved if a healthcare professional verified the need for leave.

The policy apparently further requires documentation to include the worker's name, diagnosis, date seen by the medical provider, and a return to work date. Likewise, employees are to submit appropriate documentation within three calendar days of the first absence. According to the complaint, failure to follow these requirements would result in the issuance of attendance points, which may lead to termination.

Employee Claims She Was Terminated Despite Following Policy

According to her complaint, Ariel Robtoy (Robtoy) was a "case selector" at a Kroger distribution center in Indiana who alleges she developed "COVID-19 like symptoms" between April 4 and 5. Robtoy called out sick on April 6 and sought medical care through a telehealth visit with a local hospital. As a result of this visit, a doctor prescribed her medication and told her not to return to work until April 9. The note she received from her physician and she allegedly provided to Kroger did not, however, mention COVID-19; it simply indicated "shortness of breath." According to the complaint, a human resources representative did not approve the leave because the doctor's note lacked the term "COVID-19."

Following the onset of a sore throat a few days later, Robtoy again sought medical treatment through a telehealth visit. She received a diagnosis that her ailment was most likely an "upper respiratory infection," though this time the note mentioned COVID-19 and indicated that she should self-isolate for 14 days. Robtoy claims she submitted this note to human resources via email but did not receive a response.

Around April 15, Robtoy noticed that her paystub did not reflect payment for the time off, despite allegedly complying with Kroger's amended leave policies. She alleges that she was given the opportunity to use vacation time, but had no such time available. She claims the company terminated her employment due to having accumulated too many attendance points.

Legal Theories

In her lawsuit, Robtoy claims that Kroger violated her rights under the FMLA and the FFCRA. Under the FMLA, a qualified employee of a covered employer is entitled to up to 12 weeks of unpaid, job protected, leave to attend to a serious health condition.

Assuming Robtoy satisfies the 12-month tenure and 1,250-hours worked requirements, as she alleges, she may have a valid claim, so long as her self-isolation was due to a "serious health condition." Under existing regulations, a "serious health condition" means an illness, injury, or impairment involving inpatient care or continuing treatment by a healthcare provider. See 29 C.F.R. § 825.113 – Serious health condition. It is unclear from the allegations in the complaint whether Robtoy was "incapacitated" as FMLA regulations typically require, or whether a 14-day isolation recommendation satisfies the "continuing treatment by a healthcare provide" requirement.

Robtoy's second claim—that Kroger violated the FFCRA—stands on shaky legal grounds. Kroger employs more than 500 employees and is therefore exempt from the statute's coverage. Seeking to evade the FFCRA's clear exemption, however, Robtoy claims that Kroger should be barred from arguing that it is exempt because it voluntarily adopted a policy providing 14 days of paid leave for employees exhibiting COVID-19 symptoms.

While certainly a novel claim, it seems unlikely to survive a court's scrutiny—even assuming it is accurate that Kroger adopted a leave plan identical to the FFCRA's requirements (which is unclear from the complaint). However, it is worth keeping a close eye on this potential theory of recovery in the event that the federal court in Indiana—or some other jurisdiction—adopts the argument and creates an additional area of concern for large employers.

Note that some jurisdictions permit breach of contract claims based on employer policies or handbooks. Her attorneys probably did not include this in Robtoy's complaint because Indiana is not one of those states. However, employers who have operations in a state permitting breach of contract claims based on employer policies or handbooks need to be especially careful if they have advanced new policies in the wake of the pandemic. Make sure the company's managers and supervisors understand the contours of any new rules so that they do not inadvertently create a claim.

For a 51-jurisdiction survey covering the extent to which breach of contract claims may be based on employer policies or handbooks, see the implied contracts column in the At-Will Employment and Exceptions State Law Survey.

Helpful Best Practices to Consider

To the extent that the allegations in the aforementioned cases may be similar to those in future FFCRA complaints, the following best practices could help you defend any such case you might happen to face:

•Designate an FFCRA "expert." The FFCRA paid leave benefits and the guidelines for administering them are new. Depending on the size of your organization, it will be helpful to have a certain individual or group to review and respond to FFCRA questions and requests for benefits. The key is to be consistent and ensure that proper review is conducted in all situations.
•Train your management team. While having one person or group review all FFCRA situations is recommended, every member of a company's management team needs to know enough about the FFCRA (and other state and local leave obligations) to make sure that their direct reports get the help they need and that they do not take actions or make statements that could be problematic.
•Understand accommodation obligations. While more and more employees are returning physically to work, inquiries to continue to work from home should be treated as a possible request for a reasonable accommodation under the ADA. All managers should know how to escalate such requests to the appropriate person within their workplace instead of replying with an off-the-cuff remark that could give rise to a claim of discrimination or retaliation. Having a person within each workforce to whom such requests can be routed can ensure that they are responded timely and consistently.
•Manage communications. In any situation in which an employee is making repeated contacts to multiple members of the company's management team, the best way to ensure an effective and helpful result is to have one person designated to follow up and address the employee questions or issues. Having fewer people involved in direct communications helps eliminate misunderstandings and keeps communications focused on the most relevant information.
•Ensure sufficient documentation. It is also important to document all discussions regarding requests for leave or other accommodations. Having a paper trail that can show that the company responded to requests and provided relevant information can be extremely helpful in defending claims where the plaintiff may allege that their requests were ignored. Likewise, the company should document the rationale behind decisions to deny a leave or accommodation request or to terminate.
•Consider written termination. Even in situations in which there is no requirement to provide written notice of termination, such documentation is often helpful where litigation is likely. This is especially true given that litigation under the FFCRA is so novel and an employer's ability to show it made reasonable, good faith efforts to comply with the Act will be critical in responding to retaliation and interference claims.
•Understand your rights. Just because an employee asks about the FMLA does not mean the company cannot terminate the employee for another reason or include the employee in a layoff. However, the company must be aware that its ability to explain why it terminated the employee is essential. Once an employee files a lawsuit or charge of discrimination, the company is obligated to respond with legitimate, nondiscriminatory reasons for its employment decisions. Having clear and detailed paperwork prior to a termination will at least ensure that the company is in the best position to defend its decision if a discrimination or retaliation claim arises after the employee is let go.

Retaliation/Whistleblower Claims (Highest Number of Claims – 1,169 Cases)

Retaliation claims are often the most prevalent type of charge filed against employers in Equal Employment Opportunity Commission (EEOC) proceedings, so the fact that there have been so many of them filed against employers should not be surprising. A number of them, however, have been filed against healthcare employers given the unique role this industry is playing in the current crisis.

Whistleblower Lawsuits Can Teach Healthcare Employers How to Proactively Manage COVID-19 Risks

A claim filed by a former assistant director at a nursing home facility, Hinich v. Norwood Life Society, Inc., No. 2020L005539 (Ill. Cir. Ct., May 20, 2020), reveals ways in which healthcare employers may be in a vulnerable position if they don't proactively address concerns raised by their employees. Indeed, because the COVID-19 pandemic has increased the focus on health and safety issues, it is now more likely that a terminated employee had some role in actively voicing their opinion about health and safety compliance. As a result, it may now be easier for them to claim they were a whistleblower. In this context, the best defense is a good offense: Healthcare employers should already be taking precautions to address the "whistleblower's" complaints and be able to document this to defend against the claims. Reviewing the allegations in the Hinich case can help companies develop their own proactive plan to avoid such a lawsuit.

The Alleged Facts Leading to the Whistleblower Lawsuit

The Norwood Crossing facility cares for 250 residents, 44 of which are long-term care residents on the fourth floor with underlying medical conditions that require 24/7 nursing care. Andrea Hinich, the assistant director of nursing, was in charge of developing plans for the fourth-floor residents consistent with OSHA, CDC, and Centers for Medicare and Medicaid Services (CMS) guidelines.

Hinich claimed that she engaged in whistleblower activities in March and April 2020 by raising concerns about the following workplace issues:

Failure to follow staffing guidelines. Hinich alleged that the applicable guidelines required the facility to maintain the same staffing cohorts, that the facility communicated to residents that it was following this guideline, but that it wasn't. She complained to her supervisor about the lack of compliance and misleading statements to residents, but claims she was told not to worry about it.
Lack of required staff training. Hinich told the facility's administrator and supervisors that the staff lacked sufficient COVID-19 training. She says they reacted negatively to this suggestion. Nevertheless, Hinich developed training and testing materials and emailed them to her supervisors, but she claims they never responded to her request for approval.
Inaccurate patient charting. After a certified nursing assistant tested positive for COVID-19, Hinich's supervisor wanted her to cut and paste into each patient's chart that the patient wasn't showing any symptoms, the resident's family was notified, the doctor was notified, and the director of nursing was updated. Hinich refused the supervisor's request and claimed she instead prepared the progress notes in accordance with what she believed were her professional responsibilities.
Incorrect reporting of positive COVID-19 nurse. When a nurse who worked throughout the facility tested positive for COVID-19, the facility's administrator emailed the facility's community stating that she had only worked on the fourth floor. However, Hinich alleges that the nurse had actually worked on several different floors in the week leading up to her positive test. Further, Hinich's supervisors failed to inform other employees who worked with the nurse about the positive COVID-19 test. Hinich emailed the administrator about the failure to comply with CMS guidelines and she claims that he never responded.
Failure to provide PPE training. At an April 21 management meeting, the senior management team discussed a plan to distribute N95 respirator masks to the staff. Hinich objected to providing the masks without training the staff on how to use them. In response, her supervisor allegedly stated that the training was unnecessary and that they were providing staff with the masks to "make them feel better."

The next day, on April 22, Norwood Crossing terminated Hinich's employment. She claims the facility provided the following reasons for her termination: (1) not following directions in maintaining sufficient emergency supplies, (2) not following reporting requirements for confirmed COVID-19 cases, and (3) not following directions in making notifications regarding confirmed COVID-19 cases. The report documenting these reasons was dated April 20—the day before the safety meeting. She claims there was no explanation provided for why she was not fired on April 20 (instead of actually being let go two days later, after the safety meeting where she raised safety concerns).

On May 20, 2020, Hinich sued her former employer for wrongful termination in violation of public policy, the Illinois Nursing Home Act, and a state whistleblower statute. Norwood Crossing will likely dispute much of the above, but regardless of the actual facts, the allegations in this lawsuit provide valuable reminders of how important it is to be proactive in maintaining timely and accurate communications and documentation.

Steps to Proactively Address the Risks

To minimize the risk of a whistleblower lawsuit—and to increase the chances of successfully defending such a claim—employers should take the following proactive steps.

•First, healthcare employers should take a strong and vocal stance in communicating their commitment in following all applicable federal, state, and local guidelines relating to the health and safety of employees and patients. This includes following recommended safety practices including, but not limited to, providing PPE, exercising consistent and thorough hygienic measures, regularly cleaning and disinfecting workplaces, and when possible, appropriately distancing employees to limit exposure. Employee training should specifically ensure that all management-level employees understand how to respond to safety concerns raised by others.
•Second, the company should actively engage with employees who raise any questions about health and safety matters. For example, Hinich claims that multiple of her health and safety emails went unanswered, which now allows her to argue that the company neglected its responsibility—even if that is far from the truth. Simply responding by thanking an employee for such emails could go a long way in showing that the company cares. Explaining what the company is doing to address the issue could further prove that it is not ignoring the issues. In some cases, it may be necessary to explain the reason for choosing a different option than the one advocated for by the employee.
•Finally, the company should swiftly and directly confront any employees who violate its health and safety policies and practices. For example, if Hinich had violated Norwood Crossing's COVID-19 practices and procedures, the employer should have written her up as close to the event as possible. In her case, it appears at a minimum there was a two-day delay in the final write-up and termination. This delay allowed her to attend a safety meeting where she allegedly engaged in further whistleblowing activities, which only served to bolster her legal claim. Further, it is unlikely that all three health and safety violations her employer accused her of occurred on the same day, so the company should have addressed these alleged violations much earlier. A pattern of write-ups on similar issues is more effective, because it shows that the company provided the employee fair warning of the expectations and proves the employee continued to neglect her duties in this regard. Instead, she is able to claim that she is the one who continually warned the company that it was the one violating the health and safety guidelines.

For additional guidance on retaliation and whistleblower claims, see the Whistleblowing subtask page.

Wage and Hour Matters (Moderate Number of Claims – 480 Cases)

Of the first 121 wage and hour lawsuits filed against employers relating to COVID-19 issues, there has been a great variety in terms of the fact patterns alleged. Despite such variety, the most common issues that employers need to concern themselves with include employees' conduct before and after their shifts (also called "preliminary" and "postliminary" activities) (including temperature taking), shuttering operations, and mandatory employee quarantines.

Preliminary/Postliminary Activities

One area where employers need to be mindful is in the context of employees' conduct before and after their shifts and whether such time is compensable. For example, in today's environment, companies may wonder whether they are required to pay employees for time spent washing their personal protective equipment (PPE) or uniforms to limit the transmission risk of COVID-19.

Cook County (IL) Faces COVID-19 Collective and Class Action

The case of David Evans III et al. v. Thomas J. Dart et al., Case No. 1:20-cv-02453 (N.D. Ill. Apr. 21, 2020), filed in an Illinois federal court, provides some good context to understand the issues at play. In that case, several correctional officers brought a collective and class action against Cook County pursuant to the federal Fair Labor Standards Act (FLSA) and the Illinois Wage Payment and Collection Act (IWPCA).

The correctional officers claim, among other things, that the County (1) did not pay them the requisite overtime wages for the time before and after their shifts they spent washing their persons, uniforms, and PPE, which amounted to approximately 20 to 30 minutes per shift; and (2) did not pay them a higher wage rate for volunteering to work with a COVID-19 positive population, as purportedly required by a separate agreement (allegedly contained in emails) between the parties.

Of further note, the correctional officers were subject to a collective bargaining agreement between their union and the County. According to the complaint, the collective bargaining agreement did not reference payment for the correctional officers' pre- and post-shift activities.

A review of the complaint's allegations can help employers develop and implement best practices to proactively avoid such claims. But first, a brief summary of wage and hour law is in order.

Federal and State Wage and Hour Law Requirements

By way of general background, the FLSA requires that employers pay employees subject to the statute's provisions for all time worked, that employees be paid at least the mandated minimum wage rate, and one-and-a-half times employees' regular wage rate for all time worked over 40 hours per week. Of course, these concepts are not as simple as they seem.

For example, what if an employee engages in pre-work or post-work activities in connection with their job as alleged in this lawsuit? In this regard, the David Evans III case highlights several important questions, including but not limited to the following: When is an employee "working" for purposes of the FLSA?

The FLSA requires employers to compensate employees for their "principal activities," which constitute all activities that are "an integral and indispensable part of the employee's principal activities" and are therefore required to perform a principal activity. Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. 27 (2014). Thus, if a preliminary or postliminary activity (i.e., before or after an employee's scheduled shift) is integral to an employee's principal activities during the shift, then the employee's time engaging in those preliminary or postliminary activities may contribute toward an employee's 40-hour-per-week threshold—which might impact when (if at all) an employee is entitled to earn an overtime wage rate.

As examples of compensable preliminary or postliminary activities, the FLSA regulations identify changing clothes at a chemical plant to be a principal activity because an employee may not be able to perform his or her duties in the absence of a specialized uniform. 29 C.F.R. § 790.8(c). In addition, in 2014, the U.S. Supreme Court noted that the time employees at a battery plant spent showering and changing clothes constituted a principal activity, and therefore were compensable, because the chemicals in the plant were toxic to human beings. Busk, 574 U.S. at 33. On the other hand, the Supreme Court also noted that employees at a poultry plant need not be compensated for waiting to put on protective gear because it was too many steps removed from their principal activities. Busk, 574 U.S. at 33.

As evidenced by the FLSA regulations and applicable Supreme Court precedent, the line between a compensable principal activity and a non-compensable activity can be thin and significantly dependent upon the facts. Being on the right side of that line can have a substantial impact on employers. Prevailing employees may be entitled to lost wages, liquidated damages, and attorney's fees. Indeed, the risks can be high.

As to the Illinois state wage and hour claim in the David Evans III matter, the IWPCA requires, among other things, that employees be paid on time, for all wages for time worked, and as agreed upon between the employee and employer. Notably, the IWPCA does not require a contract for payment, but rather an "agreement." 820 ILCS 115/2. Similar to the FLSA, compliance is key because noncompliance poses significant risk for employers. Namely, the IWPCA provides for lost wages, 2% of the underpayment for each month that the wages have been unpaid, attorney's fees, and (in some instances) criminal liability, among other things. 820 ILCS 115/14.

For practical guidance on wage and hour issues, see Fair Labor Standards Act (FLSA) Issues for Managers: Training Presentation, Minimum Wage Requirements under the FLSA, Overtime Requirements for Hourly Non-Exempt Employees under the FLSA, Independent Contractor Tests and Risks of Worker Misclassification, FLSA Claims Resolution Checklist (Employer), and Wage and Hour Claims and Investigations Resource Kit.

Six Questions Employers Should Ask and Answer

As the David Evans III case teaches us, employers need to be mindful of employees' preliminary and postliminary activities in addition to how those activities interplay with employees' job duties. To address these matters, employers need to ask and answer six key questions to determine if they have an available defense if faced with a lawsuit akin to the one brought in David Evans III:

1Is the employee exempt from the FLSA? Several jobs are not subject to the provisions of the FLSA, including the overtime provisions. This evaluation is extremely fact-specific, but if an employee is exempt from the FLSA, then the company may not be liable for any wages or overtime in connection with preliminary and postliminary activities under the statute. Such may be the case even if such activities are "an integral and indispensable part of the employee's principal activities."
2What are the preliminary and postliminary activities in question? If the employee is subject to the FLSA, the preliminary or postliminary activities must be "an integral and indispensable part of the employee's principal activities" to be compensable. As illustrated by the FLSA regulations and Supreme Court precedent, the battery plant worker dealing with toxic chemicals who changes clothes and showers after his or her shift may have a cognizable FLSA claim if that time remains unpaid, whereas the poultry plant worker waiting to don protective gear may not.
3What does the job description say? An employee's job description is not conclusive evidence of all of their duties or whether they are FLSA-exempt, but it can be helpful. Job descriptions need to be carefully drafted such that the company is better prepared to argue what preliminary and postliminary activities are "an integral and indispensable part of the employee's principal activities."
4What provisions are included in a collective bargaining agreement (if applicable) and has the employer complied with those provisions? Where an employer has entered into a collective bargaining agreement, employees may be afforded more rights than what are provided under the FLSA or the IWPCA. Employers need to be mindful of the contents of any collective bargaining agreement in addition to any statutory requirements.
5Related to the previous question, does the collective bargaining agreement contain an exclusivity provision? The correctional officers in David Evans III alleged the existence of communications outside of the collective bargaining agreement that would purportedly entitle them to additional compensation. Whether these additional communications altered the compensation relationship between the correctional officers and the County may ultimately be subject to the terms of the collective bargaining agreement.
6Was there a separate wage "agreement" independent of the collective bargaining agreement? In David Evans III, the correctional officers alleged that a superintendent of the County's Sheriff's Office offered a higher wage rate for volunteering to work with a COVID-19 positive population. However, one of the emails from the superintendent identified by the correctional offers notes that it was as yet undecided as to whether the correctional officers who volunteered would receive additional compensation in time or pay. This is likely to be an issue during the litigation.

Measuring Worker Temperatures and Wage and Hour Claims

Regarding the specific issue of taking employees' temperatures to screen for COVID-19, employers could face potential wage and hour claims under federal and state law if they do not compensate employees for time spent having their body temperatures checked. While federal COVID-19 guidance allows employers to measure employees' body temperatures without fear of violating disability law, that guidance does not address wage and hour compliance—and this is definitely new territory for the nation's employers.

While federal and state courts do not appear to have yet considered whether employers must pay employees for time spent measuring body temperatures during a pandemic, U.S. Supreme Court decisions and state court decisions provide some guidance on how courts may rule in a wage and hour claim for employee body temperature checks. Under federal law, there are two key questions to determine whether this time is compensable:

1Is measuring an employee's temperature a "principal activity"?
2Is the time employees spend waiting to have their temperatures taken a "preliminary" or "postliminary" activity?

Is Measuring an Employee's Temperature a "Principal Activity"?

In 2014, the Supreme Court narrowed the definition of compensable preliminary and postliminary activities. In Integrity Staffing Solutions v. Busk, the Supreme Court held that post-shift security checks for Amazon warehouse workers was not compensable under the federal Fair Labor Standards Act (FLSA). 574 U.S. 27 (2014). The Court explained that only activities that constitute a "principal activity" under the FLSA must be compensated.

Employers must pay employees for "principal activities or activities which employees are employed to perform." 29 U.S.C. § 254(a)(1). Under the statute, principal activities include all activities that are "an integral and indispensable part of the employee's principal activities." Busk, 574 U.S. at 33. An activity is integral and indispensable, and thus compensable under the FLSA, if it is "an intrinsic element of the principal activities and one that the employee must do to perform their principal activities." Busk, 574 U.S. at 33.

Examples of principal activities that must be compensated:

•Time that battery plant employees spent showering and changing clothes because the chemicals in the plant were toxic to human beings. The time spent showering and clothes changing was indispensable to the employees' performance of their productive work and integrally related to it. Steiner v. Mitchell, 350 U.S. 247 (1956).
•Time that meat packer employees spent sharpening their knives because dull knives would slow down production on the assembly line, affect the appearance of the meat as well as the quality of the hides, cause waste, and lead to accidents. Mitchell v. King Packing Co., 350 U.S. 260 (1956).
•Time that poultry plant employees spent walking between the changing area where they put on protective gear and the production area. IBP, Inc. v. Alvarez, 546 U.S. 21 (2005).

Whether an employer must compensate an employee for time spent measuring their temperature is a fact-specific question for each employer. Outside of the COVID-19 context, temperature checks would likely not meet the standard of a principal activity. However, within the COVID-19 context, measuring employees' temperatures may be akin to situations where employees must put on protective gear to safely perform their jobs.

Is the Time Employees Spend Waiting for Temperature Checks a "Preliminary" or "Postliminary" Activity?

The critical factor in wage and hour claims is defining the beginning and end of the workday. Activities "preliminary" and "postliminary" to principal activities do not have to be compensated under the FLSA. The Department of Labor has adopted the continuous workday rule, which means that the "workday" is generally defined as "the period between the commencement and completion on the same workday of an employee's principal activity or activities." 29 C.F.R. § 790.6.

The Supreme Court has said that time spent waiting to put on protective gear, if putting on protective gear is considered a principal activity, is not compensable under the FLSA. IBP, Inc., 546 U.S. at 40–42. This suggests that the time employees spend waiting in line to have their temperatures checked may be excluded from FLSA coverage. If the waiting time is considered a preliminary or postliminary activity, then it is not compensable under the FLSA. Once again, whether the waiting time is compensable is highly fact-specific for each employer.

What About State Laws?

State laws vary on this issue and the scope of some states' wage laws are currently being determined by courts across the country. For example:

•On February 4, 2020, a federal court of appeals held that time spent by detention officers in pre-shift and post-shift security screenings were compensable under the FLSA and the New Mexico Minimum Wage Act. Aguilar v. Management & Training Corp., 948 F.3d 1270 (10th Cir. 2020).
•On February 13, 2020, the California Supreme Court held that post-shift security checks of Apple employees were compensable under state wage laws. Frlekin v. Apple, Inc., 8 Cal. 5th 1038, 457 P.3d 526 (2020).
•The Pennsylvania Supreme Court is currently considering whether time spent on an employer's premises waiting to undergo and undergoing a mandatory security screening is compensable under the Pennsylvania Minimum Wage Act. In re Amazon.com, Inc., 942 F.3d 297 (6th Cir. 2019).

It is therefore crucial to consider state laws in addition to the FLSA to determine whether time employees spend waiting to have their temperatures checked is compensable. A review of the federal law is the starting point, not the end, of your analysis.

For a chart containing links to practical guidance on state wage and hour laws, see Wage and Hour State Practice Notes Chart.

Litigation Seeking Unpaid Wages from Employers Whose Business Is Impacted by COVID-19

COVID-19 has had the unprecedented impact of shuttering many businesses throughout the country and leading to record-high unemployment. For some businesses whose operations were hit particularly hard by the pandemic, meeting their financial obligations—including payroll—has been a struggle. While congress enacted the federal CARES Act to aid employers in this regard, it does not necessarily provide the immediate funds that some employers need to meet their payroll obligations for work performed prior to the COVID-19 shutdowns.

One class and collective wage and hour lawsuit filed in a New Jersey federal court highlights the risks employers face should they fail to pay their employees in accordance with the law. In Olsen v. Ratner Companies L.C. d/b/a Hair Cuttery, et al., 20-cv-3760 (D. N.J.), a former hairstylist seeks to recover wages that she claims remain unpaid for work performed prior to the COVID-19 shutdowns, on her own behalf and on behalf of other employees of the salon. This is likely among the first of many such lawsuits that plaintiffs will file as businesses struggle to navigate through their legal obligations while faced with significant operational and financial challenges. What can businesses learn from this lawsuit?

The Allegations

Nicole Olsen alleges that she was employed as a hairstylist at a hair salon doing business as Hair Cuttery. The hair salon closed its doors on March 21, 2020, in response to the COVID-19 pandemic, in the middle of a pay period. According to the complaint, Ms. Olsen and all other employees were supposed to be paid on April 7, 2020, for the work they performed during the beginning of the pay period between March 15, 2020 and March 21, 2020.

However, she claims they were never paid for this time. Ms. Olsen alleges that Hair Cuttery instead informed its employees that they would not be paid for the work they performed until it received federal funding or the company restored its operations.

Soon after, Ms. Olsen filed a complaint on behalf of herself and all similarly situated employees of Hair Cuttery, alleging a violation of the FLSA, which requires employees to be paid at least minimum wage for all hours worked. The complaint also alleges a violation of the New Jersey Wage Payment Law (NJWPL), which requires full payment of wages due at least twice a month or on regular paydays designated in advance by the employer. The complaint seeks an award of unpaid wages, liquidated damages, civil penalties, reasonable attorney's fees, and costs.

Employers' Obligations under Federal and State Wage Laws Remain Despite COVID-19

The FLSA requires nonexempt employees, such as hairstylists, to be paid at least minimum wage for all work performed during a given workweek. If an employer fails to pay an employee minimum wage, the employee may seek recovery of the unpaid wages, an equal amount in liquidated damages, and attorney's fees and costs.

New Jersey law similarly requires that employees be paid at least minimum wage for work performed. N.J.S.A. 34:11-56a. The NJWPL also requires employers to "pay the full amount of wages due to his employees at least twice during each calendar month, on regular pay days designated in advance by the employer." N.J.S.A. 34:11-4.2. If an employer fails to pay the full amount of wages due, the employee may recover the full amount of unpaid wages, liquidated damages equal to not more than 200% of the wages due, plus reasonable attorney's fees and costs. N.J.S.A. 34:11-4.10. Many other states throughout the country have their own wage protection laws.

While the CARES Act provides loans to businesses to cover payroll costs, it does not provide any protections for employers who failed to meet their payroll obligations prior to receipt of the loan. Therefore, whether the company applied for or received federal funds under the CARES Act does not absolve its obligations under the FLSA and state law to timely pay its employees' wages.

What Should Employers Do?

While companies are not obligated to pay employees who are not performing work due to the COVID-19 shutdowns, they are required under both federal and state law to pay their employees on designated paydays for work that was previously performed. To the extent companies do not have sufficient financial resources to do so, they risk liability under both federal and state law. Before taking any action in the face of such a dilemma, companies should coordinate with their employment counsel to discuss all possible options.

Involuntary Quarantine of Employees Could Land Employers in Wage and Hour Class Action

A class action lawsuit filed in Los Angeles County, Jane Doe v. North Pacific Seafoods, Inc., Intercontinental Hotels Group PLC, CGC-20-585097 (San Francisco Superior Court 2020), alleges that a seafood company exposed seasonal employees to COVID-19 and then forced them, with the help of a hotel, to quarantine in hotel rooms against their will—and without pay. This class action is an extreme example of the new wave of COVID-19 lawsuits involving costly wage and hour claims against employers and is likely to be one of many such lawsuits employees will file as businesses work to navigate their legal obligations to their employees in the landscape of COVID-19.

The Allegations

Jane Doe, a woman who prefers to remain unnamed in this suit, alleges that her employer, North Pacific Seafood, Inc., flew her and 150 other seasonal employees to Los Angeles before further transporting them to a fish canning factory in a remote Alaskan village. Jane Doe claims that North Pacific did not comply with county and state health measures, forcing them to be in close proximity to each other without any protection, social distancing, or proper hygiene for more than six hours. Jane Doe claims that employees received COVID-19 tests and were forced to quarantine in hotel rooms at the Crown Plaza Hotel while waiting for test results. When three employees' tests came back positive, Jane Doe claims that North Pacific and the hotel where the employees were tested forced all employees to continue to quarantine for 10 additional days without pay.

During the quarantine, employees were locked in and not allowed to leave their hotel rooms, were only provided two meals per day, and were not allowed to order additional food or supplies from room service or elsewhere. Jane Doe alleges that the company told employees that they would be terminated if they violated the quarantine rules. Finally, Jane Doe's suit alleges that North Pacific should have paid the employees for their time in mandatory quarantine and failed to do so.

Reviewing the allegations in this case is a helpful exercise for companies to help determine the best way to avoid violating the law during these unprecedented times.

Wage and Hour Obligations Remain Despite COVID-19 Precautions

The best way for employers to protect their employees and to protect against future litigation is strict compliance with federal, state, and local health orders. The CDC makes recommendations that should be followed to minimize risk, including but not limited to maintaining social distancing between employees; encouraging employees who are sick to stay home (quarantine); and establishing routine, daily employee health checks (i.e., temperature checks or symptom surveys). See CDC Guidance. State and local orders may contain additional safety requirements. As noted above, an important consideration for employers with COVID-19 safety procedures (think temperature checks or symptom questionnaires, or here, quarantine) is whether they must pay employees for the time it takes to comply with the employer's safety procedures?

Under the FLSA, if an employer fails to pay an employee minimum wage, the employee may seek recovery of the unpaid wages, an equal amount in liquidated damages, and attorney's fees and costs. 29 U.S.C. § 216(b). Many states throughout the country have additional wage protection laws for employees. For example, California similarly requires that the employees be paid minimum and overtime wages for all hours worked for the employer. IWC Orders 1-16: Section 2(G). "Hours worked" means the time during which an employee is "subject to the control" of an employer. IWC Orders 1-16: Section 2(G).

What Should Employers Do?

The safest approach is to pay nonexempt employees their regular wages during their compliance with employer-mandated COVID-19 safety measures, especially in employee-forward states like California. This means paying employees to have their temperatures checked or participate in symptom questionnaires. If an employer makes the decision not to pay employees wages for their participation in COVID-19 safety measures, this decision should be made under the careful direction of employment counsel. This is an easy area to in which to identify and prevent potential liability. Employers have the opportunity to pay employees limited current wages to avoid substantial future litigation costs.

Unsafe Workplace Allegations (Moderate Number of Claims – 170 Cases)

Although employers typically face workplace safety concerns through the lens of administrative action initiated by OSHA or a state equivalent, the current pandemic has highlighted the fact that workplace safety issues can also be raised in standard civil litigation. Several specific concerns have arisen, which has led employers and businesses to question whether the use of waivers could be a helpful tool.

Face Mask Policy Could Lead to COVID-19 Lawsuit

In Jane Doe v. Hillstone Restaurant Group Inc. dba R&D Kitchen, 2020cv01151 (Northern District of Texas), a Texas cook sued her restaurant employer, claiming that it prohibited her from wearing a face covering at work despite federal recommendations and local orders that such coverings should be worn by employees. She further alleges that the restaurant took her off the schedule after she objected to the company policy.

The Allegations

Jane Doe, a woman who prefers to remain unnamed for fear of retaliation by her employer, alleges that the Hillstone Restaurant Group (Hillstone) prohibited her from wearing a face covering while working as a cook at R + D Kitchen, a Dallas-area restaurant. She claims that the restaurant informed her in April that it would be reopening for limited dine-in services. However, she alleges her managers told her that, unless she agreed to work without a face covering, she would be taken off the schedule. According to her complaint, Hillstone's COVID-19 policy for its Texas restaurants indicates that "masks are not required to be worn by guests or staff members . . . If you are concerned about your well-being with respect to masks not being worn by staff or by other guests, we hope you will join us at a later date."

When she refused to work without a mask, Doe alleges that the restaurant took away her hours. She filed suit in a Texas federal court, alleging that the restaurant forced her to choose between earning money to feed her family and violating the law and/or potential unprotected exposure to COVID-19. Her claim cites face mask recommendations by the CDC and the U.S. Food and Drug Administration (FDA), and an order by a Dallas County district court judge. She also cites to the state Labor Code and Occupational Safety and Health Act (OSH Act) standards in support of her claim that Hillstone created a dangerous workplace for herself and other employees.

Court Sides with Worker in Early Stages of Litigation

The Dallas County district court granted Doe's request for a 14-day Temporary Restraining Order, requiring Hillstone to allow Doe to wear a mask at work while she seeks a more permanent solution in court. Jane Doe v. Hillstone Restaurant Group, Inc., Cause No. DC-20-06494 (116th Judicial District Court, Dallas County). Hillstone removed the case to federal court, which then remanded the case back to Dallas County for further consideration of her request for temporary and permanent injunctions.

Guidance on Masks in the Workplace

The CDC's guidance recommends wearing cloth face coverings in public settings where other social distancing measures are difficult to maintain, especially in areas of significant community-based transmission. See CDC Guidance. The CDC recommends the use of simple cloth face coverings (not surgical masks or N-95 respirators) to slow the spread of the virus.

At this point, the majority of states and local jurisdictions require employees to wear face masks. However, even if you operate in an area where a mask is not mandatory, it is recommended that employers do not refuse an employee's request to wear a mask or face covering while at work due to CDC guidance.

What Employers Should Do as Employees Return to Work

As you begin to welcome employees back to the workplace, you should expect safety concerns related to COVID-19 from your employees for some time. The best method to ensure that these employee concerns do not germinate into lawsuits is compliance with local, state, and federal guidance. Federal guidance includes CDC, FDA, and OSHA guidelines. The CDC released guidance to assist employers in making decisions regarding reopening their businesses. See CDC Guidelines. Guidelines continue to be updated, so employers must stay on top of the latest recommendations. The CDC recommends employers implement health and safety actions before reopening, including:

•Promoting healthy hygiene practices (i.e., hand washing and employees wearing a face covering while at work)
•Intensifying cleaning, disinfection, and ventilation of the workspace
•Canceling nonessential travel, and encouraging alternative commuting and telework
•Spatial changes to the workplace, including partitions, spacing out seating (more than six feet), and staggering gathering times
•Restricting use of any shared items and spaces –and–
•Training all employees in above safety actions

The CDC also recommends that employers only reopen after they have implemented safeguards for the ongoing monitoring of employees after reopening, including:

•Maintaining social distancing between employees
•Encouraging employees who are sick to stay home
•Establishing routine, daily employee health checks (i.e., temperature checks as employees enter the building)
•Monitoring absenteeism and maintaining flexible time off policies
•Having an action plan if an employee gets COVID-19, including a strategy for communication of the infection to other employees
•Creating and testing emergency communication channels for employees –and–
•Establishing communication with state and local health authorities

For additional practical guidance on health and safety issues, see Pandemic Flu/Influenza/Coronavirus (COVID-19) Prevention, Response, and Return to Work Checklist (Best Practices for Employers) and Pandemic Flu/Influenza/Coronavirus (COVID-19): Key Employment Law Issues, Prevention, and Response.

Under the OSH Act, employees are only entitled to refuse to work if they believe they are in imminent danger. Imminent danger is the threat of death or serious physical harm, or a reasonable expectation that toxic substances or other health hazards are present, and exposure to them will shorten life or cause substantial reduction in physical or mental functioning. Requiring employees to work with patients in a medical setting without PPE at this time, for example, may rise to this threshold.

Most work conditions in the United States, however, do not likely meet the elements required for an employee to refuse to work. Companies should follow guidance issued by the CDC and OSHA to ensure that employees are not in imminent danger. This guidance is general, and employers must determine when this unusual state exists in their own workplace before determining whether it is permissible for employees to refuse to work.

In the current environment, individual employees and unions could be quick to escalate employee safety grievances to litigation. The best defense in this fluid health related situation is strict compliance with all local, state, and federal guidelines (and written documentation of that compliance) as companies open their businesses and return their employees to work. Employers should develop a safety program in advance of employees returning to the workplace. Some states, like New York, require employers to develop a COVID-19 safety plan, so companies should make sure to understand all state and local requirements. They should make employees aware of, and train them on, any new safety policies. Communication and flexibility will be key tools in countering employee fear in returning to work.

Dealing with Anti-mask Guests – a Five-Step Plan

As an increasing number of businesses begin to require face coverings in their facilities—whether as a result of a local legal mandate or in the interest of public safety—there has been a corresponding increase in the number of well-publicized reports of customers and guests reacting in a belligerent, hostile, or even violent manner after being asked to comply with mask rules. What should businesses do to minimize the chances of such an incident occurring in their workplace, and what should they do if an anti-mask guest disrupts their business? Here is a five-step plan to address this unfortunate part of our new reality.

Step One: Understand That Companies Are Permitted to Require Employees and Visitors to Wear Cloth Face Coverings or Masks

While many jurisdictions already require that businesses have their employees and any members of the public who enter their facilities wear masks, employers may be wondering whether they can require masks if their jurisdiction does not have such a mandate in place. The answer is simple. Private businesses can decide whether to allow customers or visitors onto their property if they are not wearing a mask. This is akin to the "no shirt, no shoes, no service" policy that businesses commonly display.

The CDC and World Health Organization (WHO) recommend the use of face masks or cloth face coverings as part of a comprehensive plan to help slow the spread of COVID-19. Face masks should be worn when employees or visitors will interact with other people. They are not the only method, but they are one of the strategies recommended by experts to slow the spread of COVID-19.

CDC guidance provides several exemptions indicating who should not wear masks: "Cloth face coverings should not be placed on young children younger than two years of age, anyone who has trouble breathing, or is unconscious, incapacitated or otherwise unable to remove the cover without assistance." And although you may have a policy or be subject to a state or local obligation to require face masks, you may also have an obligation to accommodate the individual if doing so is possible. Taking a few precautions as outlined below will allow you to refuse entry to customers without masks.

Step Two: Be Proactive with the Company's Mask Policy

Providing notice to customers, visitors, and guests of the company's mask requirement prior to their arrival at the business can help reduce confusion and prevent an uncomfortable situation. Personal service providers (such as spas and salons) and hospitality businesses (such as hotels and restaurants) should provide notice of their policy when confirming reservations. A simple message to visitors and guests is best, not only confirming the reservation but highlighting efforts to keep them and the staff safe by sharing social distancing and masks requirements. Posting notices on public facing website, apps, and social media platforms to notify visitors of the policy is recommended; companies can also use emails or texts as additional communication tools.

Businesses should post conspicuous signs in prominent places at their entrances. The notices should include a statement that the business has the right to refuse entry or service to anyone not complying with the requirement, particularly where required by local law. Many jurisdictions, in fact, already require such signage.

Consider having a staff member stationed at the entrance to remind guests of the requirements. Many businesses, such as retailers, hotels, and restaurants, have taken their policy a step further to offer masks to visitors when they enter. For hotel guests who will be staying for extended periods, have guests sign an acknowledgement of the policy with an agreement to adhere to it. Be specific about consequences—tell guests that they will be asked to put a mask on if they are discovered without one and asked to leave the property if they refuse to comply.

Step Three: Train Staff

Staff will be more likely to effectively enforce the requirement for masks if they understand why such requirement exists. Train employees on all health and safety measures, including the face mask requirement, and the reasons why the company is implementing these measures. Emphasize that these measures are for their protection as well as the protection of others that they interact with.

Educate employees about state and local government requirements so they understand what is required and what is not. Additionally, because both OSHA and the CDC have included masks in their respective recommendations and guidance, requiring masks for both employees and visitors could help avoid an OSHA General Duty Citation or similar challenge by local health and safety authorities.

It is also crucial to train visitor and customer-facing employees on how to politely request them to wear a mask. For example, consider something like "Our policy is to require all visitors to wear a mask. Can I provide one to you?" If the guest refuses, communicate a clear procedure to employees for how to address this unfortunate situation (Step Five provides suggestions).

Step Four: Reasonably Accommodate Visitors If They Have a Medical Condition

Visitors may refuse to wear a mask claiming they have an underlying health condition that prevents them from doing so. Although an individual may have a condition that makes it difficult to wear a mask (e.g., a pulmonary condition), it is highly unlikely the person is carrying a doctor's note to that effect. Further, some state public health orders prohibit businesses from requiring medical documentation when this type of exemption is claimed. For these reasons, it is best not to require documentation from a visitor to support their request.

Even though companies may have a policy or are subject to a state-ordered obligation to require face masks, they may also have an obligation to accommodate the individual if doing so is possible. Instead of engaging in a discussion with the customer or guest about whether they are exempt from the rule, consider whether the business can offer an accommodation that would allow them to either access the business or its products/services. Some examples could include curbside service, online shopping for products, or by letting them know they can enter the business at another time. Companies could also look into other alternatives that would not inhibit breathing, such as requiring guests to wear a full clear face shield.

However, it is important to recognize that accommodation recommendations are based on highly fact-specific analyses that need to take into account the medical condition of the guest, the type of business, and any specific state or local laws that present additional requirements (or punish offending businesses with stiff monetary penalties). Companies will want to coordinate with legal counsel for clarity regarding general or specific situations that may arise at a place of business.

What if a visitor doesn't say they have a medical issue but instead presents a card or literature indicating that masks are unsafe? Social or political objections do not allow customers to refuse to wear masks. However, rather than engage in confrontations, it is best to remind a visitor of the rule and offer alternatives for how to access the business.

Step Five: Delicately Deal with Visitors Who Refuse to Comply

If a business has taken all of the steps above and it still has a visitor who refuses to comply, what should it do? A clear policy and training is key. Share the exact phrase employees should use when dealing with an anti-mask guest, such as "If you will not wear the mask per our policy, I have been instructed to contact my manager who will need to discuss this with you." If the frontline employee is unable to coax guests or customers to comply, the company should have a designated manager to handle the removal of a visitor. Do not ask or expect a nonmanagement employee to handle removal of a noncompliant visitor, guest, or customer. Instead, encourage them to immediately involve a manager.

That manager will need guidance on what the business wants to do if a guest or visitor becomes belligerent. The first step in such an unfortunate situation should be for the manager to meet the guest in a private location, share and explain the company policy, and, if applicable, the local/state ordinance or any acknowledgement the guest may have signed upon arrival or at the time of reservation.

The manager should inform the visitor that he or she will need to leave if they continue to refuse to comply. If the guest does not cooperate, the manager should escort the individual to the exit and inform them that they are welcome to return if they comply with the policy or when the need for a mask is gone. Where applicable, the manager should offer to reschedule an appointment or reservation.

It is always wise for your manager to avoid raising their voice and to refrain from physical contact. If the situation escalates, the manager should know to call on the company's own security personnel or local authorities in the same manner the manager would handle a trespassing situation. Regardless of how the situation concludes, the manager should immediately document the incident in objective, nonemotional terms. Instruct managers to provide the documentation to key personnel (human resources, legal, etc.) as soon as possible, and retain the report in the event it is needed to later demonstrate what happened.

COVID-19 Workplace Safety Litigation May Spark Additional Claims

As businesses across the country begin to face a wave of COVID-19-related workplace safety litigation, a few are learning the hard lesson that some of these claims may also dredge up long-simmering employment conflicts unrelated to the pandemic. An example comes from a case filed in Florida, Macke v. HT AirSystems of Florida, Case No. 6:20-cv-00787 (Middle District of Florida), in which an air-conditioning technician sued his former employer alleging that it had failed to provide him PPE while performing work during the pandemic. His lawsuit had additional punch, however, because it also alleges that his employer misclassified him as exempt and failed to pay him overtime. As a finishing touch, he alleges that his employer terminated him in retaliation for complaining about not only his safety concerns but also his failure to receive overtime. This lawsuit shows that, while companies are focusing on resuming operations and safely returning employees back to work, they must also prepare to defend COVID-19-related litigation.

The Allegations

According to the May 6 federal lawsuit filed in Orlando, Robert Macke worked for HT AirSystems of Florida (HT) as an air-conditioning technician. Macke alleges that, on April 1, he sent an email to management objecting to the company requiring him to work in the field without being provided any PPE. He alleges that he pointed out that the Occupational Safety and Health Administration's (OSHA's) PPE standards require using gloves, eye, face, and respiratory protection when job hazards warrant them. "As Plaintiff was expected to constantly travel to public places, including hospitals, during the COVID-19 pandemic," his complaint alleges, "it is clear that PPE was warranted, but was not provided."

He also claimed that OSHA's general duty clause requires an employer to provide its employees with a safe workplace free of recognizable hazards, which includes providing PPE to at-risk workers and not subjecting employees to hazardous or unsafe conditions. Macke claims that these complaints to management were protected activity under state law, but that approximately three weeks later, HT informed him that it was terminating his employment, effective immediately, and without reason. He alleges that the real reason his employer terminated him was in retaliation for his safety complaints.

His lawsuit didn't end there. Macke claims that HT classified him as an employee exempt from overtime, and paid him a regular salary without overtime, despite the fact that he regularly worked 50 to 60 or more hours per week. Moreover, Macke claims that he performed a number of nonexempt duties; had no authority to hire, fire, or evaluate HT employees; could not determine or change the schedules or rates of HT employees; and did not exercise independent judgment. In other words, he claims he should not have been exempt from overtime.

Macke claims that he had repeatedly complained to HT about his belief that he had not been paid properly. The lawsuit goes on to say that HT announced certain changes to its pay practices that would have ultimately culminated in Macke and another "misclassified" air-conditioning technician going from salaried to hourly effective May 1. In the same email where he complained about the lack of PPE, Macke claims he once again complained about his pay and alleged misclassification. He also claims that his termination in late April was motivated because of these complaints.

Macke's lawsuit raises claims for unpaid overtime and retaliation under the FLSA, and a separate claim under Florida's Whistleblower Act. Macke seeks to recover unpaid overtime compensation, back pay, front pay, liquidated damages, declaratory relief, attorney's fees and costs, punitive damages, and other damages.

Understanding the Legal Claims – Key Takeaways

Macke's lawsuit signals that COVID-19-infused allegations are likely to infect otherwise run-of-the-mill employment and labor claims.

Turning to Macke's FLSA claim, for example, misclassification and overtime claims under the FLSA are neither novel nor a consequence of the pandemic. Indeed, plaintiffs' lawyers have long relied on the FLSA to challenge pay practices. Under the FLSA, employees who work in excess of 40 hours a week must be paid one-and-a-half times their regular rate of pay. The FLSA, however, provides exemptions to the overtime rule for employees based on their salaries, duties, or by virtue of the particular jobs they perform.

In misclassification lawsuits, the filing party typically asserts that an employer paid them a salary or incorrectly described their job duties to avoid its overtime obligations. Macke's claim is no different. Based on the allegations as pleaded, it appears Macke is asserting that HT improperly took advantage of the FLSA's executive exemption that only applies to employees who are compensated on a salary bases at a rate of not less than $684 a week; have the primary duties of managing the business or a department within the business; and have authority to hire, fire, promote, or change the status of employees. Whether Macke's claims are true remain to be seen, but his case demonstrates that now is a good time for employers to revisit classifications of exempt workers where appropriate.

Whistleblower claims are equally as common as wage and hour claims and are also not a pandemic byproduct. Florida's whistleblower statute, like the laws in most states, provides that employers cannot take any retaliatory personnel action against an employee who engaged in certain protected activity including objecting to, or refusing to participate in, an activity, policy, or practice of the employer which is in violation of a law, rule, or regulation. Fla. Stat. § 448.102(3).

Yet Macke's case demonstrates that whistleblower claims are likely to take new shape as employers continue to navigate this new COVID-19-impacted environment. Without a doubt, more and more employees who face demotions, terminations, and reductions in schedules or pay will assert that their reports about their employer's alleged failure to follow legal protocols with respect to safety measures in this COVID-19 climate were the cause of those personnel actions.

By way of illustration, in the HT litigation, Macke leans on OSHA standards that require employers to provide PPE to protect employees from workplace hazards as the basis of his whistleblower claim. He asserts that HT's purported failure to provide a face covering to protect him against the novel coronavirus violated OSHA and, by reporting it, he was a whistleblower under Florida law entitled to protection.

For additional guidance on retaliation and whistleblower claims, see the Whistleblowing subtask page.

For strategies on responding to and defending against OSH Act whistleblower complaints, see Whistleblower Complaint Response and Defense Strategies under Section 11(c) of the Occupational Safety and Health Act.

Shielding against COVID-19 Claims

Employers may very well face a Macke-type lawsuit, alleging standard employment claims with a dash of COVID-19. To guard against that, here are a few best practices to implement now:

•Follow OSHA and CDC guidelines. As employers are reopening, the best defense against claims related to the safety of employees is to follow all guidelines of state and local health departments, OSHA, and the CDC including, but not limited to, providing PPE, regularly cleaning and disinfecting workplaces, and appropriately distancing employees to limit exposure. Employers should train all employees on following these guidelines, but must pay particular attention to train management-level employees on how to respond to safety concerns raised by employees.
•Timing and documentation are important. In this pandemic environment, it is evitable that employers will have to make personnel changes that will be tough on employees. It never looks good when those decisions are made at or around the same time an employee complains the employer allegedly violated a law. Retaliation and whistleblower claims are a hazard of such circumstances. Therefore, when making those decisions, consider the risks and benefits associated with it before acting. And, when proceeding with such personnel decisions, be sure that the appropriate documentation exists leading up to and through the date the action is taken that demonstrates that the personnel action is unrelated to any protected activity such as complaining of a failure to follow OSHA guidelines. This documentation will be key in responding to and defending against employment law claims.
•Be aware of the new litigation landscape. The novel nature of the COVID-19 pandemic is certain to change the litigation landscape of employment claims. While employers are reversing employment decisions previously made in response to the novel coronavirus (e.g., recalling furloughed employees, changing pay practices), they must consider the implications of these actions and regularly consult with employment counsel along the way.

Can Employers Use COVID-19 Waivers to Limit Liability?

With employees returning to work and companies reopening their doors to customers, employers are looking for ways to limit liability related to potential COVID-19 cases contracted in the workplace. To do so, many are considering waivers for not only their employees, but also for customers. Such waivers, however, are somewhat limited in their effectiveness and employers should consider the pros and cons before attempting to implement them. Employers may also want to consider an alternate strategy that may offer some of the assurances without many of the negatives associated with waivers.

No waiver or other attempt at limiting liability can replace the need to maintain a safe workplace. Companies should start by ensuring that they are in strict compliance with local orders, state regulations, and guidance from government agencies like the CDC, OSHA, EEOC, and local health authorities.

What Are Waivers?

The term waiver has more than one meaning. In this context, employers may look to a waiver and releases of liability agreement consisting of a series of contractual provisions to mitigate certain risks of liability. Such an agreement not only includes a waiver clause, but also includes additional protective provisions like clauses for assumption of risks, covenants not to sue, and indemnification. If enforceable, they would eliminate liability for the risks discussed within.

Employee Waivers

Waiver agreements between employers and employees are traditionally disfavored due to the unequal bargaining power between them, as employers typically have superior bargaining power. In most states, such waivers do not apply to gross negligence or willful, intentional, or wanton conduct, as employers cannot waive such liability.

Employee waivers are even further limited due to workers' compensation statutes, where states generally require that medical expenses, lost wages, and rehabilitation costs be provided to employees injured in the course and scope of their employment. For work-related injuries, employees generally cannot waive their worker's compensation claims. Although it may be difficult for employees to prove that they contracted COVID-19 at work, some states (like California) have created a rebuttable presumption that workers who contract COVID-19 are presumed to have a workplace injury covered by the workers' compensation system.

Waiver agreements with employees do not protect employers from OSHA complaints or enforcement action when a workplace is dangerous. However, the president signed an executive order directing federal agencies, like OSHA, to make exceptions for employers who attempt in good faith to follow agency regulations during the COVID-19 pandemic, which may ease some concerns about agency actions. See Executive Order.

Waivers may discourage employees from returning to work and hinder restarting operations as a result. They may also result in negative reactions and publicity concerns, as has occurred in several instances across the country already.

But due to the COVID-19 pandemic, it remains unclear whether courts and states will allow employers to enforce waiver agreements in this unprecedented time. Regardless of whether you decide to institute COVID-19 waivers to your returning workforce, you should develop return to work plans including steps to train employees on any exposure danger, how to eliminate those dangers, and best practices to stay safe.

Customer Waivers

Waivers for a company's customers may limit its liability associated with COVID-19, but they may also hurt your business. Employers must carefully decide if the benefits of liability waivers for customers outweigh their drawbacks. Some positive aspects of customer waivers include that they:

•May limit or prevent certain liability, such as from common negligence suits
•Can highlight safety efforts and communicate risks to your customers

However, customer waivers have downsides too, as they:

•Do not apply to willful, intentional, or wanton conduct, or gross negligence—and, consequently, are less effective at preventing all forms of negligence claims
•Only apply to language specified in the waiver and must be carefully drafted (i.e., broad examples likely will be ineffective)
•May not apply to entire industries that have a duty to the public in states like California, Colorado, and Washington
•May scare customers away to competing businesses or cause them to question the sanitation, safety, or integrity of the business
•Could create negative press in conventional news and online –and–
•May require refund of membership fees to those clients who refuse to sign

Evaluating how a waiver will affect a company's business requires a review of the applicable industry, business, and geographic area, as well as how customers and/or the public will react. Customers generally do not expect to sign a waiver before shopping or dining in a restaurant. On the other hand, waivers are common in potentially dangerous activities, like fitness centers, where adding a COVID-19 clause may go unnoticed. Overall, customer waivers could impact businesses in more ways than simply mitigating their liability, so businesses must first consider potential, unintended consequences.

Other Strategies – Notices and Questionnaires

Alternate routes to limiting liability may be more beneficial than waivers for many businesses. Businesses may avoid the potentially ominous effect of forcing customers to sign waivers by using questionnaires or notices.

A questionnaire asks entrants to the premises questions about whether they have any of the symptoms of COVID-19 or were exposed to it. A questionnaire could also communicate the employer's reasonable actions to comply with government guidelines for sanitation, social distancing, mask wearing, and other efforts that the employer uses to keep their guests and employees safe. This strategy could allow the employer to show it took affirmative steps to exclude sick people from its workplace.

That said, businesses still need to consider how their customers will react to such a questionnaire. Implementing a questionnaire may deter some customers who find it an impediment or feel it invades their privacy, while others may feel safer coming to your business because you screen everyone who enters.

Notices provide a more streamlined approach, communicating the same information as a questionnaire about the business's steps to keep its premises safe, without requiring the individual to physically sign away any perceived rights. Communicating the rules and restrictions without asking questions or for a signature, notices are less burdensome on employers and customers than waivers and questionnaires.

Regardless of the approach, employers will need to provide a handout or post signage at all entrances to the building that broadcast safety information and prohibit sick or exposed persons from entering. These strategies allow people to feel safer and accept the risks when they enter the workplace.

Choosing a Strategy

Waivers have limited but potentially valuable benefits if enforceable. Employers should weigh those benefits against the potential impact on their business and carefully consider all their options, such as questionnaires or notices that communicate information and allow guests to assume risk.

No strategy can eliminate a company's obligation to take reasonable actions to protect its employees and customers. The CDC, OSHA, and state and local authorities publish guidelines and guidance that businesses should follow. Demonstrating the company followed such guidance will be the best proof that it acted reasonably in responding to COVID-19 risks.

Whether an employer institutes employee or customer waivers, it should develop written plans to reopen that include training for its employees and with acknowledgement of the training and their efforts to comply. Ignoring these guidelines will make workplaces less safe and potentially expose employers to civil suits and government enforcement actions.

Negligence/Wrongful Death Claims (Moderate Number of Claims – 140 Cases)

Despite the general rule that the workers' compensation system is the exclusive remedy for claims involving employees' injuries and illness, the families of deceased workers are beginning to file wrongful death lawsuits alleging that their loved ones' exposure to COVID-19 at work makes the former employers' liable in court. Plaintiffs' attorneys appear to be ignoring or bypassing workers' compensation statutes to achieve higher and quicker payouts for their clients along with media attention. As these claims begin to reach the news, it seems inevitable that plaintiffs will file an increasing number of lawsuits in the coming months.

For practical guidance on workers' compensation and COVID-19, see Workers' Compensation: Key COVID-19 Issues. For a chart containing links to state-by-state guidance on workers' compensation, see Workers' Compensation State Practice Notes Chart.

Reasons for Such Lawsuits

Workers' compensation insurance generally covers injuries or illnesses that are caused "unintentionally" by an accident or exposure in the work environment. However, because the damages recovered in a workers' compensation claim are generally capped by statute, plaintiffs' lawyers may ignore the statutory workers' compensation system and instead file a lawsuit in court claiming intent or willfulness, recognizing that the potential recovery may be much higher. In some states, the worker may file both a workers' compensation claim and a lawsuit.

In addition to the chance for a higher payout, other reasons you may see a lawsuit instead of just a workers' compensation claim include:

•Publicity. Some attorneys may take advantage of the current media coverage directed towards COVID-19-related workplace deaths and file the lawsuit to appear in the public limelight. Workers' compensation claims are not as alluring as a complaint publicly filed in state or federal court demanding a jury trial.
•Right to jury trial. Workers' compensation claims are generally heard by a hearing officer or administrative law judge during a "bench trial," with no jury present. In a wrongful claim, the family of a deceased worker or an injured worker themselves could have a jury of their peers evaluate the evidence and decide, in most cases, the amount recovered. Juries tend to award higher amounts than the judges presiding over bench trials.
•Access to additional funds and early settlement. Lawyers may file lawsuits in lieu of, or in addition to, workers' compensation claims, to gain access to other funds, like general liability insurance policies. To avoid the publicity and costs of protracted litigation, defendants may settle these claims quickly, giving the family or worker a quick payout rather than enduring the lengthy workers' compensation process.

Examples of COVID-19 Wrongful Death Lawsuits

The below matters are some examples of the types of claims that the families of deceased workers have asserted against employers.

Lanzo v. Generations Behavioral Health

The plaintiff, the wife of a deceased employee working as a nurse at a mental health facility, filed a wrongful death claim under Ohio law, alleging that the mental health facility failed or refused to follow COVID-19 directives issued by the state to reduce the spread of the virus. Lanzo v. Generations Behavioral Health, Case No. 2020-cv-677 (Trumbull Cty, Ohio Court of Common Pleas). These failures allegedly exposed her husband, Raymond Lanzo, to COVID-19.

The complaint does not claim that the facility was wrong to operate during the pandemic, but that it failed to implement the policies and procedures that it should have implemented to follow the state's pandemic directives. The plaintiff further alleges that the company was "negligent" in its failure to provide "appropriate safety equipment." The complaint also alleges that the mental health facility's conduct was "wanton and willful," likely both to enhance damages and to defend any argument by the defendant that workers' compensation bars the claims, as simple negligence claims against an employer are typically barred by the workers' compensation laws. Nevertheless, the plaintiff is seeking more than $25,000 in damages, including medical bills and funeral expenses.

Norwood v. Rodi Marine LLC

The wife of a deceased crew member filed this wrongful death lawsuit against a vessel owner/Jones Act employer in the Eastern District of Louisiana. Rodi Marine, LLC and Rodi Marine Management, LLC, Case No. 2:2020cv1404 (U.S.D.C. E.D. La.). The plaintiff alleges that her husband, Michael Norwood, was a crew member aboard a supply vessel owned and operated by Rodi Marine. In March and April 2020, the vessel was located at the Austal Marine facility in Mobile, Alabama, although the vessel's captain allegedly was dispatched to New Orleans to perform services on behalf of Rodi Marine.

The complaint alleges that following his return, the captain fell ill. Although somewhat unclear, it appears that the vessel captain sequestered himself in his quarters for two to three days until Rodi Marine was told of his illness. The company then removed the captain from the vessel for testing, which revealed that he had COVID-19. Norwood reportedly returned home when the captain was removed from the vessel and was isolated from contact with others except for his wife when he too fell ill. Despite medical treatment, Norwood succumbed to the virus.

The lawsuit alleges that Rodi Marine negligently caused Norwood's death by:

•Failing to provide Norwood with a safe workplace
•Failing to implement policies and procedures to protect the crew from COVID-19
•Failing to train vessel crew members regarding the actions necessary to prevent contracting and spreading COVID-19
•Allowing the vessel captain to remain aboard the vessel while infected with COVID-19 –and–
•Permitting the vessel captain to travel to New Orleans when it was on "lock down" and known to be a COVID-19 hotspot

The plaintiff did not identify a specific sum of alleged damages.

Elijah v. Port Authority Trans-Hudson Corporation

The plaintiff, the wife of a deceased power rail mechanic for a rail carrier, filed this wrongful death lawsuit under New Jersey law. Elijah v. Port Authority Trans-Hudson Corporation, Case No. HUD-L-002137-20 (New Jersey Superior Court, Hudson County). The plaintiff alleges that her husband was exposed to COVID-19 when he embraced a co-worker who later tested positive for COVID-19. The decedent was not wearing a mask because his employer allegedly "instructed its workers at safety meetings not to wear masks at work unless they were performing their specific job functions."

Approximately 10 days after being exposed, the decedent began to experience symptoms of COVID-19, which progressively worsened. The complaint alleges that decedent was hospitalized, and over the next 20 days, experienced a "horrible and protracted death."

The plaintiff alleges that the employer was negligent by:

•Failing to provide employees with a safe place to work
•Failing to properly train employees about contracting COVID-19 at work
•Failing to timely provide PPE to employees
•Failing to conduct contact tracing
•Failing to test employees for COVID-19
•Failing to timely quarantine decedent and other employees who had been exposed to COVID-19
•Failing to apply social distancing measures for employees
•Failing to properly clean areas
•Failing to warn employees of the dangers of contracting COVID-19 at work
•Failing to medically treat the decedent –and–
•Failing to follow its own safety rules, practices, and procedures

The plaintiff did not identify a specific sum of alleged damages.

Novel Attempt to Bring a Negligence Claim

A court decision striking down a negligence claim highlights another novel way in which a plaintiff may attempt to circumvent the workers' compensation process in cases involving COVID-19 transmission: by having a family member file the claim on your behalf. The case is Kuciemba et al v. Victory Woodworks, Inc., N.D. Cal. 3:20-cv-09355.

Victory Woodwork, Inc. is a Nevada-based casework and millwork company, and Robert Kuciemba was an employee at one of its construction jobsites in San Francisco last summer. According to his wife's complaint, Mr. Kuciemba started working on the jobsite on May 6, 2020, and on July 3, Victory Woodwork transferred additional workers to his jobsite. The workers transferred to the site had allegedly been exposed to COVID-19 at their prior jobsite in Mountain View, California. The Kuciembas claim that Victory knew that the workers it transferred to the San Francisco jobsite were exposed but did not take precautions to quarantine them from other workers, including Mr. Kuciemba.

Mr. Kuciemba allegedly came down with symptoms of COVID-19 within one or two days of his last day on the jobsite, and about a week after the employer allegedly required him to work in close proximity to the workers from Mountain View. The Kuciembas were both hospitalized with confirmed cases of COVID-19, according to the complaint.

California law does not generally allow employees to bring lawsuits against their employers for their own injuries or illnesses contracted while working, reserving the workers' compensation system for such matters. Mr. Kuciemba, therefore, was likely barred from bringing a lawsuit for his own illness. But Ms. Kuciemba was not an employee of Victory Woodwork and brought this lawsuit for damages related only to her illness.

In her October 2020 complaint, she alleged that the company was negligent in allowing workers from the Mountain View jobsite onto her husband's jobsite, when they knew those workers had been exposed to COVID-19. In February, the U.S. District Court for the Northern District of California dismissed the lawsuit, based on the same California law that prohibited Mr. Kuciemba from bringing a lawsuit for his own illness.

In March, Ms. Kuciemba attempted to resurrect her claims by filing an amended complaint. In that complaint, Ms. Kuciemba slightly altered her claim to focus on a theory that the virus had been transported to her home through her husband's clothing and personal belongings (aka "fomites"), which "served as a vehicle for the virus." She likened her case to cases that involved transmission of asbestos fibers to others outside of a workplace via inanimate objects.

Ultimately, the court rejected Ms. Kuciemba's second theory of her case as well. In the May 10 Order dismissing the case, the judge ruled that Ms. Kuciemba's claim of indirect contraction of COVID-19 through fomites, such as her husband's clothing, was not plausible. The judge did not explain further why she believed the claim was not plausible and dismissed the suit without allowing further amendment of the complaint.

While Ms. Kuciemba is foreclosed from bringing another amended complaint in the district court, there remains a chance that the ruling could be overturned on appeal—or that courts in other states might look more favorably on such a fact pattern. Regardless of the outcome of this specific case, however, it still raises questions for employers about your duty to protect employees' family members and how you can avoid such lawsuits.

Ways to Avoid Such Lawsuits

The best way to defend a wrongful death lawsuit is to prevent it from ever occurring. Workplace safety has never been more important, and employers should continue to take steps to avoid employee exposure to COVID-19.

The question at the heart of many of these wrongful death lawsuits revolves around whether the employer took reasonable measures, based on then-existing guidance, to do its best to prevent the spread of COVID-19 in the workplace. Accordingly, the timing of any COVID-19-related precautionary safety measures, including policies and procedures, implemented in any given case will be critical evidence. Deciding which actions to take and when is no simple task in this constantly changing environment. However, the more effort an employer makes toward providing for the safety of its workers, the stronger the defenses will be.

Some prudent workplace safety practices for employers concerning the novel coronavirus includes the following:

•Follow the CDC's Interim Guidance for Businesses, including best practices for social distancing, Guidelines for Cleaning and Disinfecting the workplace, and quarantining employees who have an exposure to a confirmed COVID-19 case, found at the CDC's Public Health Recommendations for Community Exposure.
•Send employees with confirmed cases home until released by a medical professional or until they meet the guidelines for discontinuing self-isolation. See CDC Guidelines.
•If you are an essential business employing critical workers, the CDC has adopted different guidelines to follow, including allowing asymptomatic employees who have had a direct COVID-19 exposure to continue to work as long as certain guidelines are met. See CDC Guidelines.
•Follow any state or local safety guidelines or requirements for employers, including safety protocols and any requirements regarding confirmed or suspected cases among employees.
•Utilize OSHA's most recent guidelines as a resource when creating return to work plans and policies. OSHA's directives on implementing the identified guiding principles and FAQs may assist employers in safely reopening their businesses and workplaces. While the guidance is in the form of nonmandatory recommendations, OSHA has stated that an organization's good faith efforts to comply with its recommended guidance will be taken into "strong consideration" when determining whether to cite violations and has indicated that the general duty clause may be the basis for violations if employers do not engage in such good faith efforts. Such citations could also be evidence of an employer's failure in a civil lawsuit.
•Educate your employees and engage with them. Constantly remind employees of the symptoms of COVID-19 and urge them to seek medical attention if symptoms appear. Check in with isolated sick employees at least once a day to ask about their health. An employee with whom you engage will be less likely to seek litigation against his or her employer. An employee's family will also appreciate this courtesy. If a COVID-19 death does occur, reach out to and embrace the family, extend genuine heartfelt condolences, and consider how you can assist the family, including assistance with funeral costs. Some workers' compensation laws may also provide for funeral expenses if the illness was determined to be work-related.
•Inform employees of confirmed cases of COVID-19 in the workplace. The CDC recommends that employers notify potentially exposed co-workers of confirmed cases. Err on the side of transparency. Although no case law currently exists, we believe the Occupational Safety and Health Administration may ultimately determine that a failure to notify employees of a confirmed COVID-19 case is a violation of OSHA's general duty clause, the agency's generic requirement to maintain a safe work environment.
•Stay on top of current and evolving guidelines. Recommendations from the CDC, the DOL, OSHA, as well as state and local executive orders, continue to evolve, sometimes on a daily basis. Employers should assign individuals to keep up with changes and share them with management.

What to Do If a Lawsuit Is Filed

Even if you take the steps above, the company may still face a wrongful death or personal injury lawsuit. Take immediate steps to defend the claim, including the following:

•Notify counsel and all insurers who may provide coverage for such a claim, including your general liability, workers' compensation, and premises liability insurers.
•Determine with the advice of counsel if early dismissal of the lawsuit is possible. A workers' compensation exclusive remedy statute may apply, resulting in a quick resolution to the lawsuit, leaving only a worker's compensation claim.
•If the lawsuit proceeds, prepare witnesses and gather documents to demonstrate the company's COVID-19 response plan and measures, representing the company's commitment to employee safety during the pandemic. The company may also have the lawsuit dismissed if you can show that, given the company's safety practices, it was nearly impossible for the disease to be contracted at work or due to the company's actions or omissions.

Breach of Contract Allegations (Lowest Number of Claims – 55 Cases)

Though sometimes overlooked given the abundance of federal and state statutory claims, employers must remember that their existing contractual obligations remain in place during the pandemic. Employers must take particular care when imposing unilateral terminations or salary reductions against employees with written employment agreements or they could face a breach of contract lawsuit—even where the actions are a result of the financial exigencies created by COVID-19. Instead, employers should review any written employment agreements and confirm that the proposed action is permitted (or defensible) before doing so. A failure to consider existing contractual obligations could result in a claim for breach of contract.

Contract Law Basics – a Reminder

Though regulated by the individual states, contract law is fairly uniform throughout the country. In all states, parties are free to contract in just about any way they see fit, with very limited exceptions. The tradeoff for this flexibility is that courts will generally hold a breaching party to its enforceable contract.

In the context of employment law, the majority of employment relationships are "at will" and may not be covered by a written agreement. While these relationships are contractual in nature, the employer typically retains the right to modify or terminate the agreement at any time (with exceptions for discriminatory or other unlawful conduct). If the employee agrees to the changes, they continue to report to work. If they do not, they may quit or provide a counteroffer.

Some employment relationships, however, are reduced to writing and modify the "at will" relationship. Such contracts may limit an employer's ability to terminate the relationship through "for cause" provisions, limit an employer's ability to alter compensation, provide guaranteed employment for a term of years, or restrict the employee from engaging in certain competitive activities post-termination. Where employers and employees agree to such arrangements, they are generally enforceable in court should either party breach. This may be true even in times of great economic instability, state or federal shutdown orders, or other unforeseen external forces.

For a 51-jurisdiction survey regarding at-will employment and its exceptions, see At-Will Employment and Exceptions State Law Survey.

Examples of Breach of Contract Litigation

Given the economic uncertainty surrounding the COVID-19 pandemic, it is not surprising that employers have taken measures to reduce costs. This includes previously unforeseen layoffs and salary reductions. Two cases demonstrate the perils of doing so where employers have written agreements.

Flagg v. Hubbard Radio Seattle, LLC (King County, WA)

In Flagg v. Hubbard Radio Seattle, LLC, No. 20-2-10377-2 SEA (Wash. Super. Ct.), a company terminated its popular drivetime radio host in Seattle "for cause," allegedly related to inappropriate social media posts made in January 2020. Despite advising the host of the behavior in January, the radio station continued to employ him until March when the station's advertising revenue plummeted during a mandatory state-ordered shutdown to combat COVID-19. While the employment agreement in question contained a provision permitting a "for cause" termination, plaintiff alleged that this designation was pretextual and that the station was actually terminating him to avoid paying his high salary in the midst of the economic downturn.

Fuente-Alba v. Cork Alliance, Inc. (Miami-Dade County, FL)

In Fuente-Alba, Cork Alliance (Cork) hired a Chilean husband and wife in 2015 to work for their wine distribution company in Miami as Chief Operating Officer and Director of Finance and Accounting, respectively. Fuente-Alba v. Cork Alliance, Inc., No. 2020-010302-CA-01 (Fla. 11th Cir. Ct.). Both signed a five-year employment contract in which Cork agreed to cover their costs of relocating from Chile and guaranteed their annual salaries. The contracts, written in Spanish, mandated that plaintiffs would receive the agreed to compensation and benefits "a todo evento," which plaintiffs allege means that the promised remuneration was without condition. In response to the pandemic, the company reduced the husband's salary by 50% and terminated the wife's employment. According to the complaint, these actions were designed to force contractual renegotiations despite the fact that wine sales have "skyrocketed" during the pandemic.

Potential Defenses

While each case is in its infancy and neither court has ruled on the substance of the plaintiffs' allegations, employers should be familiar with a number of contract law doctrines that could provide justification for an action that would otherwise breach an employment agreement. Though the state law in this area may vary from state to state, these general principles should help employers confronting breach of contract claims.

Force Majeure Clauses

A "force majeure" clause is a contract provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible. These clauses typically contain a list unforeseeable or unpredictable events that would excuse performance—declarations of war or other armed conflict, labor stoppages, natural disasters, "Acts of God," or other external forces that make performance impossible, unwise, or impractical.

While some clauses may be detailed enough to mention pandemics expressly, there is consensus that the COVID-19 pandemic could be considered an "Act of God" that could excuse performance in certain instances. Of course, the parties must have agreed to include a force majeure clause in the agreement, and in the absence of one, courts are unlikely to infer one.

For additional guidance on force majeure and other defenses, see Coronavirus (COVID-19) Resource Kit: Force Majeure, Contract Performance, and Dispute Resolution.

Impracticability and Impossibility of Performance

While the parameters may differ, all states have some version of an impracticability or impossibility of performance test. According to the Restatement (Second) of Contracts, if a party's performance of a contractual obligation is made "impracticable without his fault by the occurrence of an event the nonoccurrence of which was a basic assumption on which the contract was made," a party may be relieved of performance.

Most employment contracts depend on the premise that the employer is open for business and therefore generating revenue with which to pay employees. In those cases, a strong argument can be made that it is impossible or impractical to perform based on government regulation forcing the employer's closure.

Frustration of Purpose

Another potential common law defense is "frustration of purpose," which relieves a party from a contractual obligation where their principal purpose is substantially limited without their fault by the occurrence of an event the nonoccurrence of which was a basic assumption on which the contract was made. For example, an employer who entered an agreement with a group of employees to run a large-scale event in central Florida scheduled in August may have an argument that they should be relieved of their obligations under the agreement. While it is technically possible to run the event, such an event is unwise, may violate state public health regulation, and is unlikely to draw the crowds that would have been present in the absence of a pandemic.

Prevention by Governmental Regulation or Order

Several states likewise recognize compliance with a government regulation or order as an excuse to a breach of contract. This defense is available where a supervening governmental action prohibits a performance or imposes requirements that make it impracticable. Such action must be unforeseeable. It is possible that an employer could rely on this defense where its compliance with a shutdown or stay-at-home order was the reason it may have breached the contract.

Final Guidance on Breach of Contract Claims

Employers must be cognizant of their existing contractual agreements with employees and how the terms of such agreements may constrain otherwise prudent business decisions such as salary reductions, furloughs, or terminations. In times of economic turmoil, employment-related claims will increase. While there are many defenses available to employers, the contours of each doctrine may vary from state to state.

Any employer contemplating an action that could be in violation of an existing employment agreement is cautioned to review the agreement and the state law governing it before making any decision.

CARES Act / PPP / SBA Loans Claims (Lowest Number of Claims – 41 Cases)

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allowed small- and medium-sized businesses to receive federal loans—in some cases forgivable—to cover payroll and other expenses. The overwhelming majority of complaints making claims under the Act contain claims centered around the alleged failure of financial institutions providing these loans to properly compensate agents instrumental in processing the payments.

Specifically, the CARES Act established the Paycheck Protection Program (PPP) to provide emergency loans to small businesses. Congress intended for these loans to be used by small businesses so that the paychecks of American workers would be protected during a specified period projected to be the most economically difficult period of the pandemic crisis. Accordingly, the PPP provides that if a small business uses a PPP loan to continue paying its employees during that period, all or a substantial portion of the loan will be forgiven. To compensate the lenders that process the loans for the Small Business Association, which administers the program, the PPP provides for the lenders to receive a processing fee equal to a percentage of each loan amount.

The PPP also envisioned that some bank customers of the PPP lenders would need the assistance of accountants, attorneys, or other financial professionals to assemble, prepare, process, and file their PPP loan applications. To incentivize these agents to provide such assistance to financial institutions so they could successfully apply for and obtain PPP loans and therefore avoid laying off their employees, the PPP mandates that the PPP agent fees will be paid by the lender out of the fees the lender receives from the Small Business Association.

In 95% of the cases alleging a violation of the CARES Act, authorized agents allege that they were not properly compensated for their work where the financial institutions adopted policies refusing to pay fees to PPP agents for their services assisting them in obtaining loans.

Non-competition/Trade Secret Claims (Lowest Number of Claims – 37 Cases)

Given the overnight shift to remote work for millions of workers across the country, the pandemic has exposed businesses' trade secrets to theft risk, while creating an environment that makes it easier for workers to violate restrictive covenants such as non-competition agreements. The pandemic has forced businesses to take immediate proactive steps to minimize the risk of loss and ensure that they are in the best position to defend—or initiate—litigation. To date, there have only been 25 cases alleging violation of non-competition or trade secrets, which could stem from the fact that many workers are hesitant to move to new employment opportunities during a time of economic uncertainty (or that such new employment opportunities do not exist given the pandemic's economic devastation). The number of cases will no doubt increase as workers and businesses adjust to the "new normal" and revert to typical business operations, which will inevitably lead to conflicts involving trade secrets and non-competition.

For additional guidance on non-compete and trade secret claims, see the Restrictive Covenants and Trade Secrets subtask in the Employment Litigation task. Restrictive Covenants and Trade Secrets subtask page

Legal Standards at Play

The Defend Trade Secrets Act (DTSA) and model state laws generally permit employers to obtain injunctive relief forcing the return of covered business information if they can prove:

•The information at issue is secret
•The business has taken reasonable measures to keep it secret –and–
•The information derives independent economic value—actual or potential—from being kept secret from others who could benefit from it

18 U.S.C. § 1839(3).

Because litigation in this area usually focuses on employers' efforts to protect the information it considers to be a secret, this standard should be top of mind for businesses as they manage the new pandemic-era landscape.

Representative Litigation

In a matter filed earlier this year in Harris County, Texas, a court issued a temporary restraining order prohibiting an employer from enforcing a non-compete provision against its former employee. Robert Garcia v. USA Industries, Inc. USA Industries (USAI) terminated Robert Garcia from his outside sales position in April 2020 due to the company's economic hardship resulting from the pandemic. Garcia had worked for USAI for 12 years selling oil field equipment and had previously entered into an employment agreement which contained a non-compete provision. Upon his termination, Garcia signed a severance agreement that contained additional non-compete restrictions.

After he left USAI, Garcia secured employment with another company in the industry that sold some competing product lines. According to Garcia, however, he was terminated from his new position when USAI's counsel sent a cease-and-desist letter to Garcia and separate correspondence to his new employer "reminding them of Garcia's contractual obligations." Because subsequent employers can be liable for interfering with a contract if they knowingly hire an employee who is under a non-compete, Garcia alleged that his new employer likely terminated his employment to avoid liability for tortious interference with contract.

Shortly thereafter, Garcia filed suit asking the court to declare the non-competition provisions unenforceable for lack of consideration. Garcia also sought injunctive relief prohibiting USAI from enforcing the non-competition provisions, including by contacting any of his new employers.

The court granted Garcia's request for a temporary restraining order, specifically finding that the non-competition provisions in the severance agreement lacked the requisite exchange of consideration necessary to be enforceable. Not surprisingly, the court also found that the restrictions USAI sought to impose were unreasonable and greater than necessary to protect USAI's legitimate goodwill expectations. Even before the pandemic, in fact, many courts across the country had refused to enforce non-competition agreements against employees like Garcia who work in pure sales functions. Finally, the court noted that unless USAI was restrained from contacting Garcia's future employers, Garcia would likely be unable to find work in his area of expertise.

Steps to Take

•Take immediate action. Given that legal standards often turn on what an employer has done to protect its information, there is value to acting as soon as possible. Even if the company has not protected its trade secrets after months of remote work, it shouldn't feel that it has missed its chance to protect its business. Employers should take reasonable steps and provide their best efforts at the present time to provide themselves the best possible chance of proving the necessary elements in any such action.
•Shore up technology. Work with the company's information technology personnel to ensure the business has implemented peak preventive steps to limit the chances of a data breach with the remote workforce.
•Adjust standards. Businesses across the country adjusted their operations to remote work on a near-instant basis in March, with work shifting from company equipment to personal computers and other equipment overnight. To the extent the company has written policies or procedures addressing remote work, the company should review them anew to ensure that they address the realities of the present situation—and determine whether it needs to take additional steps to bolster protective efforts.
•Refresh policies. To the extent workers are using company-owned equipment during remote work, ensure that they are aware that they may only do so for legitimate company purposes and may not allow anyone else to use company-owned equipment or software. Inform workers they are responsible for protecting company-owned equipment from theft, damage, and unauthorized use. Instruct workers about whether it is acceptable to take digital photos of company materials such as physical calendars, whiteboards, Kanban boards with sticky notes, or similar items. In the event of theft or loss of any device used for company-related purposes, the company should instruct workers to immediately notify their supervisor. Instruct employees that they are obligated to ensure the protection of the company's confidential or proprietary information, including but not limited to customer information accessible from their remote work environment. This includes, for example, a secure internet connection with a complex password, regular password maintenance, and any other steps appropriate for the particular job responsibilities and work environment. Instruct them not to share remote access addresses, logins, and passwords with anyone, even if they believe the individual requesting the information has already been approved for remote access.
•Update reminders. Provide the company's personnel who have access to company trade secrets, or who are subject to restrictive covenants, with reminders about their specific obligations during their remote work periods.
•Reinstitute exit interviews. To the extent the company's business temporarily abandoned exit interviews due to a flurry of layoffs—combined with shifting to a remote work environment—it is time to reinstate them as a necessary part of security protocol. Because most breaches stem from employees changing jobs and taking business secrets with them to their new place of employment, this is a critical step to prevent problems. Conducting exit interviews via remote video conference, complete with the standard steps you take to ensure the protection of the company's business secrets, is necessary for most employers.

WARN Act Matters (Lowest Number of Claims – 28 Cases)

Given the dramatic number of business closures and layoffs in the early days of the pandemic, it should be no surprise that the country saw an uptick in the number of WARN Act cases in the past several months. Perhaps the most surprising aspect is that plaintiffs filed only 28 such lawsuits as of April 18, 2022. This could be the result of PPP loans propping up businesses on a temporary basis, and we could see an increase in these types of claims as the nation's economic recovery lurches forward on shaky footing. Additionally, in some circumstances, WARN is only triggered for an employment loss that exceeds six months. If furloughs, layoffs, or reductions in hours originally contemplated to last for a short time go beyond the six-month mark, we could see an uptick in WARN litigation.

Legal Standards

On its face, the WARN Act appears straightforward, but the nuances of this federal law are complex. It requires covered employers to provide 60 days' advance notice before a plant closing or mass layoff. But there are many issues to unpack in this simple sentence. 29 U.S.C. § 2102(a); 20 C.F.R. § 639.2.

•Covered employers include those with 100 or more employees (excluding part-time employees), or those with 100 or more employees, including part-time employees, who in the aggregate work at least 4,000 hours per week, exclusive of overtime. 29 U.S.C. § 2101(a)(1); 20 C.F.R. § 639.3(a). Under the WARN Act, part-time means employees who work on average less than 20 hours per week, or have been employed fewer than 6 of the 12 months preceding the date notice is due, including those who work full time. 29 U.S.C. § 2101(a)(8); 20 C.F.R. § 639.3(h).
•A plant closing is the temporary or permanent closure of a "single site of employment," or one or more facilities or operating units within a single site of employment, that results in an employment loss during any 30-day period for 50 or more employees (excluding part-time employees). 29 U.S.C. § 2101(a)(2); 20 C.F.R. § 639.3(b).
•A mass layoff is a reduction in force, not the result of a plant closing, and that results in an "employment loss" at a single site of employment during any 30-day period for at least 50 employees (excluding part-time employees) that constitute at least 33% of the active employees (excluding part-time employees), or 500 or more employees (excluding part-time employees), regardless of the percentage of active employees. 29 U.S.C. § 2101(a)(3); 20 C.F.R. § 639.3(c). In addition to the 30-day period, the WARN Act provides for aggregation of separate, but related layoffs over a 90-day period. 29 U.S.C. § 2102(d); 20 C.F.R. § 639.5(a).
•An employment loss is defined as (1) an employment termination, other than a discharge for cause, voluntary departure, or retirement; (2) a layoff exceeding six months; or (3) a reduction in hours of work of individual employees of more than 50% during each month of any six-month period. 29 U.S.C. § 2101(a)(6); 20 C.F.R. § 639.3(f).
•Generally, separate buildings are considered separate employment sites, but the WARN Act regulations provide that a single site of employment can include separate buildings which are not directly connected or in immediate proximity if they are in reasonable geographic proximity, used for the same purpose, and share the same staff and equipment (e.g., an employer who manages a number of warehouses in an area but who regularly shifts or rotates the same employees from one building to another). 20 C.F.R. § 639.3(i).

The WARN Act provides several exceptions to the 60-day advance notice requirement. One exception is referred to as the unforeseeable business circumstances exception, which allows for less than 60 days' notice when the plant closing or mass layoff is caused by business circumstances that were not reasonably foreseeable at the time that notice would have been required. 29 U.S.C. § 2102(b)(2); 20 C.F.R. § 639.9(b). There are also exceptions for natural disasters and faltering companies (those actively seeking capital). 29 U.S.C. § 2102(b)(1), (b)(2)(B); 20 C.F.R. § 639.9(a), (c). Common to all of the WARN Act exceptions is the requirement that the employer give "as much notice as is practicable," although the regulations contemplate that in certain cases this may be notice "after the fact." 20 C.F.R. § 639.9.

Additionally, the WARN Act regulations provide an additional requirement for employers who had previously announced and carried out a short-term layoff (six months or less), which is being extended beyond six months due to business circumstances (including unforeseeable changes in price or cost) not reasonably foreseeable at the time of the initial layoff. These employers must give notice when it becomes reasonably foreseeable that the extension is required. 29 U.S.C. § 2102(c); 20 C.F.R. § 639.4(b).

It took less than a month for the plaintiffs' bar to seize upon what is likely to be the first of many COVID-19-related class action lawsuits alleging violations of the WARN Act. The first such lawsuit, Scott et al. v. Hooters III Inc., 8:20-cv-882 (U.S.D.C. MD. Fla.), filed against a popular restaurant chain in Florida, highlights several important lessons for employers who are considering or have recently implemented layoffs due to government shutdown orders and a decline in business. You need to pay particular attention to this expected trend and prepare ahead of time to avoid facing a potentially costly claim.

For practical guidance on WARN and/or mini-WARN, see Departing Employees Resource Kit, Reductions in Force and WARN Compliance, WARN Act Compliance Checklist, Plant Closing Checklist, Reduction in Force (RIF) and Layoff Checklist (Best Employer Practices), and Reduction in Force (RIF) Alternatives (Including Furloughs).

Typical WARN Act Litigation

Like so many employers faced with the economic impact of this unprecedent pandemic, including many in the hospitality industry, Hooters III, Inc. (Hooters) made the difficult decision in March to conduct layoffs at several restaurants in Florida. The pandemic forced these locations to either shutdown completely or close their dining rooms and offer carry-out or delivery only.

According to a notice dated March 26, 2020, available on the WARN Act web page for the Florida Department of Economic Opportunity, the company provided notice that one of its locations would close completely and another 10 locations (operated by separate legal entities) would be subject to significant reductions in force. This affected a total of 679 employees across all locations. This notice, which likely informed the factual allegations of the class action complaint, stated that all affected employees were provided a separation notice. See WARN Act Notice.

The complaint filed in a Florida federal court contains sparse facts, but alleges that the company conducted layoffs as early as March 20 and failed to provide advance notice of the layoffs as required by the WARN Act. The plaintiffs, who claim to be long-term employees of the company, allege that the company "could have but failed to evaluate the impact of COVID-19 . . . as evidenced by the fact that it gave no advance written notice whatsoever." The plaintiffs also claim that Hooters could and should have relied on PPP loans—which did not become available until April, about two weeks after the workers allege they were laid off—to raise funds that could have prevented many or all of the layoffs.

Practical Considerations for Employers

If you are considering layoffs in light of COVID-19 or have recently conducted layoffs, you should consider whether WARN Act notices should be provided to your employees. When evaluating the potential need for WARN Act notices, you should consider the following questions:

•Does the company have to provide notice if the layoffs are caused by COVID-19-related business closures? Given the unprecedented impacts of COVID-19, many employers are currently faced with economic impacts on their business requiring sudden and dramatic reductions in force. If the company is dealing with these issues, it may be able to rely on the unforeseeable business circumstances exception, but the company should still provide as much notice as is practicable—even if circumstances dictate that notice is provided after the layoff occurs. The notice should explain the reason for the reduced notice period.
•Does the company's planned actions constitute a plant closing or mass layoff? Due to the 90-day aggregation period, companies are required to plan ahead and consider the potential for future layoffs. If a subsequent round of layoffs related to the first round exceeds the threshold for a plant closing or mass layoff, the company should have provided notice to those impacted by the first round. There may be a violation if the company failed to provide such notice.
•Did employees experience an employment loss if brought back within six months? Under the WARN Act, employees do not experience an employment loss if they are subject to a temporary layoff and are recalled within six months. Because many employers do not know what the future holds, it may be safest to issue WARN notice at the outset.
•Does the company's notice contain all the required elements? The WARN Act regulations are very specific as to the information required in the notice. The company should be careful to ensure that all information required is included in notices to employees, bargaining unit representatives, and government officials.
•Does the company have to pay employees for 60 days after providing notice? The WARN Act only requires notice—it does not require severance pay (though state law may). However, if the company fails to provide the required advance notice where an exception does not apply, it could be liable to affected employees for 60 days of pay and benefits, plus their attorney's fees.
•Does the state have a mini-WARN law? Several states have plant closing and mass layoff laws commonly referred to as "mini-WARN" laws. Many of these state requirements have lower thresholds for employment losses, require a longer notice period, and require additional information be provided in the notices. If the company has operations in these states, it should review these requirements and ensure that notices comply with both the federal and state laws.

California-Specific Issues

In addition to the federal WARN Act, a number of states have "mini-" WARN Acts, including California. While there are slight differences between the mini-WARN Acts, they generally require employers to provide advance notice when a company plans to terminate or furlough a significant number of employees. If an employer violates the WARN Act, the penalties can be severe. Both the federal WARN Act and California's WARN Act provide for the recovery of 60 days' pay and benefits per impacted employee, plus recovery of attorney's fees and civil penalties up to $500 per day.

California Litigation

Several former employees of a national restaurant chain filed a class action lawsuit claiming their former restaurant employer violated California's WARN Act by furloughing workers in March without providing 60 days of notice or 60 days of wages and benefits. De La Cruz v. Alamo Buffets Payroll, LLC, et al., Case No. 2020cv04558 (U.S.D.C. C.D. Cal.). The De La Cruz v. Hometown Buffet case relies not on the federal statute but on California's state version.

Broader Coverage for California Workers

California's WARN Act is far more expansive than the federal WARN Act. California's law applies to any employer that operates any industrial or commercial location that employs (or within the past 12 months has employed) at least 75 persons. Notice obligations under the Act are triggered when (1) the business's operations are "effectively stopped," (2) there is a layoff during any 30-day period of 50 or more employees at the location, or (3) if all or substantially all of the operations are being moved to a different location 100 or more miles away. Cal. Lab. Code § 1400.

But the biggest distinction as applied to COVID-19-related events is that California's WARN Act applies to temporary job loss regardless of duration, whereas the federal WARN Act only applies to layoffs lasting longer than six months. Specifically, the California Appellate court ruled in 2017 that California's WARN Act applies to temporary layoffs and furloughs. Boilermakers Local 1998 v. Nassco Holdings, Inc., 17 Cal. App. 5th 1105, 226 (2017). Under that ruling, California employers have potential liability under the WARN Act for furloughs and temporary layoffs involving 50 or more employees regardless of the duration the employees are out of work.

There are some exceptions to the requirement that employers provide notice under California's WARN Act, including a temporary project exception, "physical calamity" exception, and the "faltering business" exception. See Terminations (CA). If one of those situations applies, the employer is not required to provide notice under California's WARN Act. Notably, the federal WARN Act has similar exceptions, including a physical calamity exception, but the employer must still give as much notice as is "practicable" even when an exemption applies.

At first blush, it would seem that the COVID-19 pandemic would qualify as a physical calamity excepting WARN notification, along the same lines as a flood, earthquake, or drought (similar to the drought that was ravaging U.S. farmlands when the government enacted federal WARN). However, there is no case law that expressly holds that a pandemic qualifies for the physical calamity exemption. As a result, it is still an open question.

For California employers who want to avoid having to prove the pandemic is a physical calamity, Governor Newsom issued an executive order that allows California employers who satisfy certain conditions to provide less than 60 days' notice under the WARN Act. See Fisher Phillips Alert. While the order does not eliminate California's notice requirement, it does provide for a relaxed standard, allowing employers to give notice "as soon as practicable"—a standard similar to the federal WARN Act's requirement when the physical calamity exception applies.

For additional guidance on California termination law, see Terminations (CA).

Current as of: 11/06/2023