Employment Litigation Increases in Wake of COVID-19

Posted: June 4, 2020 |

As businesses begin to reopen their doors to welcome customers they dearly missed these past few months, our local courthouses have similarly begun to reopen their doors. This is not encouraging news for employers who were forced to lay off, furlough, or reduce the pay of many of their employees. With a record number of individuals who are unemployed, COVID-19 left within its wake an environment that is likely to fuel costly litigation for already reeling businesses.

The Employment Law Practice Group at Ferruzzo & Ferruzzo, LLP has closely monitored the employment-related lawsuits stemming from COVID-19. While each case has its own set of unique factual circumstances, these lawsuits reveal several trends that employers should be apprised of as their businesses continue forward. Below is a summary of the types of lawsuits we are seeing current and former employees file.

Unpaid Overtime and Related Claims

With a record number of employees working from home, businesses are now more vulnerable than ever to unpaid overtime and missed meal and rest break claims. Many employees working remotely have filed lawsuits claiming their employer failed to pay wages for all hours worked. Since many employees have their work readily accessible during all hours of the day, claims for unpaid overtime wages have also increased substantially. Similar claims have arisen for employees alleging that while working remotely, they were not provided all meal and rest breaks and/or had them interrupted before they were completed.

These cases have significant appeal to plaintiffs' attorneys. If an employer does not have adequate records of time worked by employees on a daily and weekly basis, it is difficult for the employer to defend the claim. The potential liability for employers is also substantial, since successful employees may be eligible to recover attorneys' fees, costs, and interest.

Federal and State Discrimination Claims

Some employers who were forced to decide which employees to layoff and which employees to retain are now being faced with lawsuits by former employees alleging that the choice the employer made was based on unlawful discrimination. There are many potential theories of liability for these claims, including allegations that the employer's layoff decision was based on age, race, color, national origin, gender, religion, or disability.

Additionally, businesses who furloughed employees when they were forced to shut down now face the difficult challenge of determining which employees should be called upon to return to work. We see employees alleging through litigation that the employer's choice was fueled by an unlawfully discriminatory reason.

These discrimination claims have proceeded under the disparate treatment theory (intentional discrimination) or the disparate impact theory (a neutral policy that has a discriminatory impact on a protected class).

Retaliation Claims

California has one of the broadest whistleblower retaliation statutes and has therefore been used by many former employees in the wake of COVID-19. Employees will have asserted a claim for whistleblower retaliation if they can establish that they suffered an "adverse action" by their employer as a result of either (1) refusing to participate in an activity that they believe is illegal or (2) reporting an activity they believed to be illegal.

In the past few months, former employees have filed lawsuits claiming they were terminated for refusing to show up to work in violation of a state or local stay-at-home order. Employees have also filed claims for retaliation after they felt they were retaliated against for speaking out against work conditions they perceived to be unsafe. As more businesses continue to reopen, more employees are also claiming unlawful retaliation due to their insistence on wearing face masks, gloves, and other protective gear at the workplace.

FFCRA Claims

As explained in our previous e-mail bulletins, the Families First Coronavirus Response Act ("FFCRA") requires most employers with fewer than 500 employees to provide emergency paid sick leave and expanded family and medical leave to eligible employees. Since the FFCRA went into effect on April 1st, numerous lawsuits have been filed against employers for failure to provide this leave. Employers found to have unlawfully failed to provide emergency leave under the FFCRA are considered to have failed to pay the minimum wage under the Fair Labor Standards Act. Liability for non-compliant employers includes liquidated damages, attorneys' fees, and other statutory penalties.

The employment attorneys at Ferruzzo & Ferruzzo, LLP continue to monitor employment-related lawsuits, including those involving allegations tied to COVID-19. If you have questions or concerns about how your business may be affected by COVID-19, our employment attorneys are ready to assist you.

This Article is one of a series of Articles Ferruzzo & Ferruzzo, LLP will be circulating to address questions from clients related to COVID-19. Ferruzzo & Ferruzzo, LLP has formed a task force to assist business owners with their needs related to COVID-19.