By Gerald L. Maatman, Jr. and Jennifer A. Riley

Seyfarth Synopsis: As employers begin laying the groundwork for reopening and returning their businesses to “normal,” a large threat of a different form looms on the horizon.  The Plaintiffs’ bar is poised for – and has been discussing preparation of – class actions over denied wage, discrimination during furloughs and lay-offs, and exposure to unsafe working conditions. As part of the return to normal process, employers should take steps to avoid and position themselves to defend a wave of workplace class action litigation. 

The Background & Context

As state and local governments responded to the COVID-19 threat, many employers moved their employees to tele-work or work-from-home arrangements, or laid off or furloughed workers, and many businesses and courts shut down or postponed critical operations.  The pace of court filings, however, did not match this trend as the Plaintiffs’ bar has filed more than 100 COVID-19-related class actions over the past 30 days.

As the pandemic took hold, the plaintiffs’ bar retooled their class action theories to match, and sued companies for laying off workers, as well as for maintaining allegedly inadequate leave or benefit policies.

We anticipate that the tide of workplace class action litigation will continue to rise in several key areas such as discrimination and workplace bias, wage & hour, as well as on the health & safety front.  Employers are apt to see these workplace class actions expand and morph as businesses restart operations in the wake of COVID-19.

Employers are thus well-served to take pro-active steps to avoid and position themselves to defend these suits.

Discrimination And Workplace Bias

Employers should be wary of a growing tide of class actions on the discrimination front.  These actions are likely to take several forms, including class actions for alleged discrimination or bias against Asian-Americans and other protected groups.

On March 27, 2020, the FBI issued a report warning of a potential surge in hate crimes against Asian-Americans across the United States due to the spread of COVID-19.  Shortly thereafter, on March 30, 2020, EEOC Chair Janet Dhillon issued a statement warning employers to keep an eye out for mistreatment or harassment against Asian-Americans in the workplace amid the Coronavirus outbreak.  On April 22, 2020, the advocacy group STOP AAPI HATE issued a report noting that it had received almost 1,500 reports of Coronavirus discrimination from Asian-Americans across the country.

These issues are not likely to disappear in the near term.  As employers prepare to reopen, they should take care to position themselves so as to squelch such threats with solid HR fundaments and effective leadership.  Workplace due process and administration of effective complaint procedures are a must.  Employers should look for avenues to roll out and refresh these policies for newly-hired or newly re-hired workers and should take prompt steps to respond to potential issues.

Disparate Impact Theories Of Discrimination & WARN Violations

In addition to harassment theories, mass lay-offs and mass re-hirings are apt to draw scrutiny from the Plaintiffs’ bar.  As businesses scrambled to confront the realities of stay-at-home orders, their actions have drawn claims that, for instance, lay-offs caused an unintended disparate impact on protected groups or failed to comply with WARN Act requirements.

On the other side, mass re-hirings are apt to draw similar scrutiny as employers make decisions regarding which workers to re-hire and which to bring back to work.  For instance, bringing a disproportionate number of younger workers back to work under a theory that older workers might be more susceptible to COVID-19 could walk an employer into an immediate discrimination claim, and efforts to target re-hiring efforts toward a protected group could bring the same result.

As employers bring workers back, they should take care to approach rehire efforts in a thoughtful, reasoned, and neutral manner.

Wage & Hour Issues

It is unlikely that wage & hour claims will lose popularity with the Plaintiffs’ bar, and we anticipate that COVID-19 will provide more fuel for familiar claims such as failure to pay minimum wage and failure to pay overtime.  The pandemic did not bring about a slowdown in wage & hour suits as class and collective action filings continued on the unpaid wage as well as the misclassification front.

Well-intended efforts to keep employees working during the pandemic are also apt to fuel misclassification and off-the-clock claims.  For instance, employers that cut wages or shuffled work to exempt employees could face claims that they failed to comply with notice requirements or impacted exempt status, and employers who moved their workforces to work-from-home arrangements are likely face claims that they failed to appropriately track or compensate all work hours.

These risks are likely to continue as employers move people back into the workplace, including as they impose new requirements relative to borrowing or returning necessary equipment, participating in health screenings, or modifying schedules.

Employers should take care to ensure compliance with wage & hour requirements, particularly when it comes to tracking compensable time, ensuring sign off and acknowledgement of remote work hours, and strictly complying with the technicalities of state and local laws.

Health & Safety Claims

When it comes to maintaining health and safety in the workplace, employers can garner lessons from a slew of lawsuits and protests against cruise ship lines that employers failed to take appropriate actions to address safety concerns and ensure the health of employees and customers. Those claims are likely to be the start of wide-spread class actions against employers in all industries.

Return to work protocols that fail to account for workplace safety or allow for reasonable accommodations are apt to face scrutiny.  Employers should plan ahead, including by considering bringing employees back in phases or allowing workers the option to return as they become comfortable.

To ensure the safety of the workplace, employers should take care to ensure compliance with directives from the CDC and OSHA, as well as state and local authorities.  Employers also should develop a plan for maintaining social distancing or similar mandates, such as by adding screens, staggering shifts, or modifying schedules, and should stand ready with a plan for managing an illness in the workplace.

The Bottom Line For Employers

Class action litigation is not stagnant and will continue to evolve to meet the realities of the workplace. The economic dislocations fueled by the COVID-19 pandemic are also likely to spark a surge of workplace class actions.

Employers should prepare to respond to this exposure as they restart operations in the wake of COVID-19 by taking pro-active steps to avoid those risks and position themselves to protect their businesses.