Industry Voices—Employment litigation risks due to the pandemic that healthcare employers should know

COVID-19 has created more than just health and safety risks in the workplace.

The coronavirus has also spawned myriad workplace legal risks, from discrimination and retaliation risks to risks of noncompliance with wage and hour laws.

This article discusses unique employment-related legal risks that hospital systems, clinics and other front-line health care providers could face due to COVID-19 and offers suggestions on ways to mitigate these risks.

1. COVID-19-related discrimination and retaliation risks

As employers contend with workplace staffing issues, such as who should return from furlough or return to the workplace from working remotely and under what conditions, they need to be mindful of legal risks under anti-discrimination laws. Whenever employment decisions are made that affect many employees at the same time, the risk of a class action arises, as the number of those affected can unintentionally skew against a protected group. For example, an employer with the best of intentions may consider not returning a certain department from furlough that predominantly has employees over the age of 50 because of concerns that too many in the department are at a higher risk of contracting COVID-19. That decision could be grounds for an age discrimination class action lawsuit.

Another protected group that poses heightened risk during a pandemic is those with disabilities. Under federal law, it is relatively easy to prove that one is “disabled,” which then imposes an obligation on an employer to engage in the “interactive process” on whether the employee can perform the essential functions of the job with or without “reasonable accommodation.” Someone with COVID-19 is not automatically considered disabled under the disability discrimination laws and not automatically entitled to an accommodation because they contracted COVID-19. However, if someone who had COVID-19 requests an accommodation, it would be prudent to engage in the interactive process because it is risky to assume that the employee is not disabled. When considering a request for an accommodation, an employer is not required to grant any accommodation requested and can deny an accommodation that imposes an “undue burden” on the company. For example, an employer can lawfully refuse a request to remove an essential function from a person’s job. Furthermore, an employer is not required to return employees to work who pose a direct threat to themselves or others. For their own protection, employers should adopt a safety plan and protocols for returning employees safely to work. If an employee with a disability refuses to follow safety protocols, the employer would have defensible grounds for dismissing the employee because their refusal to follow safety protocols poses a direct threat to the health and safety of others.

All anti-discrimination laws contain anti-retaliation provisions. Retaliation claims are often premised on allegedly suspicious timing—i.e., the employee is fired soon after engaging in “protected activity,” such as taking time off to recover from COVID-19. An employer in Michigan recently was sued by a former employee who contracted COVID-19 and was fired after taking time off to recover. The plaintiff alleged that his employer failed to pay him for sick leave and allegedly told him, “For PR reasons, it would be best for you not to come back.” He sued, claiming violations of the Family and Medical Leave Act, the Families First Coronavirus Response Act, the Emergency Paid Sick Leave Act, the Fair Labor Standards Act (FLSA) and the governor’s executive order forbidding employers from retaliating against employees who stayed home with COVID-19. Retaliation and wrongful termination claims have been predominant among workplace lawsuits related to the pandemic.

2. Wage and hour risks

COVID-19 has many indirect consequences, one of which has been lawsuits that allege violations of wage and hour laws, like the federal FLSA. FLSA governs minimum wage and overtime pay. Wage and hour collective and class actions alleging violations of the overtime laws have far outpaced discrimination class actions in the past decade. An indirect consequence of COVID-19 leading to a wage and hour class action could play out like this:

An employee is terminated after contracting COVID-19 and then goes to a lawyer to sue because he was illegally fired. The lawyer says to him, “That’s all well and good, but how much were you paid?”

A lawsuit is then filed alleging not only wrongful termination and retaliation, but also wage and hour violations. If the employer has many employees who were paid the same way as the plaintiff, that employer has bought itself a class action. The lawsuit mentioned above, where the plaintiff claimed that he was told not to come back for public relations reasons, also claims that the plaintiff was improperly paid under the FLSA.

Employers must keep their eye on the wage and hour ball during this pandemic. Make sure overtime-eligible (non-exempt) employees who are working remotely are reporting all of their hours worked, including time spent on temperature checks and health-screening assessments. Make sure that nonexempt employees who may be working nonstop—e.g., nurses in the ICU, ER or on the COVID-19 floor during a spike in cases—are taking their lunch breaks or, if not, are being compensated properly for working through their lunch. Make sure that exempt employees, who may have picked up nonexempt duties after clerical staff were laid off, still have their primary duty as an exempt function. For example, does a manager who had to lay off people in a department continue to have two full-time equivalents reporting to the manager? If not, then the manager’s classification as an exempt executive employee may be at risk. Paying attention to this basic blocking and tackling will decrease the risk of a wage and hour class action.

3. A note on waivers

Many clients have asked their employment lawyers whether they should get their employees to sign a waiver of any COVID-19-related claims before they return to work. A consensus has developed among management-side employment lawyers that such waivers are likely not enforceable.

Prospective waivers of claims are not enforceable in general, and work-related injuries and illnesses usually are covered by workers’ compensation laws, and workers’ compensation claims are not waivable. In addition, if an employer is trying to entice employees to return to the workplace, demanding that they sign waivers strikes a discordant note.

Assuming that a comprehensive return-to-work plan is in place that sets forth health and safety protocols and procedures that all employees must follow, a better solution is to have employees sign an acknowledgment that they have read the plan and promise to comply with it. Thereafter, if an employee fails to comply with the plan, is discharged, and then sues, at that point, the company may be able to obtain a waiver of COVID-19-related claims in a settlement of all claims in the lawsuit.

James Oh is a member and Kellie Chen is an associate in the Employment, Labor & Workforce Management practice in the Chicago office of Epstein Becker Green.