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Written By: Mitchell J. Surface
Online Editor, American Journal of Trial Advocacy
The COVID-19 crisis has drastically impacted businesses around the world. More specifically, it has severely impacted the compliance officers of healthcare organizations at all levels. In addition, the disrupted economy and sudden change in the “standard of care” has also critically affected employees. Not surprising then, whistleblower (“qui tam”) actions and employment related litigation is on the rise, with June recording a 43% explosion of workplace claims.[i] Despite an organization’s “best intentions to comply with the myriad of laws, orders, and recommendations and to ‘do right’ by employees while dealing with a global pandemic, employers remain vulnerable to a whole host of potential COVID-19 claims.”[ii] The constantly evolving nature of the virus and ever-changing guidance from the government further frustrates the issues as it is nearly impossible to keep up with it all.
Staying on top of these changes and keeping abreast of the actual and potential legal theories that are being asserted against businesses across the country is key to assessing litigation risk as a result of COVID-19. For a compliance department, being aware of the current risks can also be transformed into preventative measures by instituting policies and procedures to mitigate the risk.
This paper alerts compliance officers of the different legal theories gaining traction by looking at pending cases. After illustrating some of the issues pending, the paper suggests some risk mitigation strategies to better prepare compliance departments with the tools to help protect against these types of claims. In a world of uncertainty, compliance departments must do their best to adapt and understand pending claims to recognize mitigation strategies, which will hopefully alleviate some of the uncertainty.
I. Cases illustrating the litigation crisis impacting compliance departments across the country
There are many issues compliance officers are currently facing. This review will illustrate the lawsuits arising as the result of preventable conduct. For example, in Texas a cashier removed her mask to catch her breath and was harassed by her manager.[iii] Even though she told her manager she was having a hard time breathing, as well as the air conditioning being out, she was forced to wear a mask.[iv] The employee is now seeking $5 million in emotional pain, distress and loss of employment.[v] In another Texas case, an employee refused to “re-use” personal protective equipment at an assisted living facility.[vi] The employee has now sued for wrongful termination because of the risks it would have placed on the employee to “re-use” potentially soiled PPE.[vii] In an interesting breach of fiduciary duty case in Idaho, employees working from home decided to start a competing business against their employer.[viii] The employer’s complaint alleges the employees failed to work for hours billed, and upon resignation, “stole files with confidential and proprietary information and office furniture.”[ix] In a California age discrimination case, an employee over 60 years old was harassed about “retiring and his medical history, including Alzheimer’s and having COVID.”[x] It is alleged that he was forced to undergo a fitness test created to weed out older employees, after which, he was demoted.[xi] Finally, in a South Carolina case, an employee sued for wrongful termination under the Family and Medical Leave Act (FMLA) after being fired for missing seven workdays because she was ill with COVID and another five workdays due to her son’s daycare being closed.[xii] These illustrations offer a small insight into ongoing COVID litigation in the U.S. Prior to discussing recommendations for these issues, it is important to dive deeper into some of the more complicated cases.
A single whistleblower action can bring down an entire organization, which is why it is imperative for compliance officers to be aware of COVID-related whistleblowing. For example, in Athens, Georgia, a nurse is alleging that the Landmark Hospital “intentionally obtained ‘false negative’ test results for patients who had previously tested positive for COVID-19, allowing the hospital to discharge patients and cover up its failure to properly test those infected with COVID-19.”[xiii] It is claimed that the hospital violated CDC guidelines by using improper equipment to conduct nasal swabs, with one nurse being fired for performing the test properly with a positive result.[xiv] Landmark could be looking at False Claims Act liability because it received at least $600,000 from the CARES Act, which is contingent on hospitals following CDC guidelines.[xv]
On the other hand, health care providers unable to do enough to stop the spread are facing class action lawsuits. For example, in New York, a senior care facility failed to protect its residents from contracting the virus, and due to its failure, 15 have died thus far.[xvi] “Since the coronavirus first made its way into QACC in mid- or late- March 2020, Plaintiffs and the proposed class members have experienced and witnessed QACC’s gross failure to provide the most basic level of care to safeguard their health and safety in the context of a global health pandemic.”[xvii] Thus, residents with severe underlying health problems were put at an increased risk of contracting the virus because the facility did not have the tools—staff, PPE, etc.—to care for its patients, or its patients with qualifying disabilities under the ADA.[xviii]
Businesses associated with everyday life are also facing lawsuits. In Kentucky, a former employee sued Trader Joe’s for wrongful termination after he allegedly posted on social media that the grocery chain was prohibiting workers from wearing gloves.[xix] In Chicago, a family has filed a wrongful death action against Walmart for failing to provide its employees with gloves, masks, and other PPE.[xx] The lawsuit also alleges that Walmart was aware of workers displaying symptoms but failed to send them home.[xxi] There has also been a rise in wrongful termination lawsuits in violation of federal and state statutes, including the Families First Coronavirus Response Act (“FFCRA”).[xxii] Under the FFCRA certain employers are required “to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.”[xxiii] As a result of this provision alone, U.S. courts will be litigating for the next ten years. That is why it is imperative to be aware of these issues—to mitigate risk.
As more claims are filed over the coming months and years, the novel legal theories asserted will continue to increase, and grow in creativity. Moreover, the decisions of state and federal appellate courts will also have implications on the handling of the COVID-19-related cases. Therefore, as illustrated by the foregoing cases, compliance officers have a myriad of issues to stay abreast of to ensure policies are updated to be consistent with the law as it evolves.
II. Recommendations to Mitigate Risk
In this time of uncertainty, there are initial measures organizations can take to minimize exposure to potential COVID-19 related lawsuits. Before getting started, the compliance officer must have a “comprehensive understanding of [her] business and how it fits into the new legal landscape.”[xxiv] First, there should be a policy in place that addresses the safety concerns arising out of recent litigation, including maintaining a proper supply of PPE, allowing workers to take off work if they are sick or if their child is sick, and ensuring employees have a safe workplace.[xxv] Second, compliance officers “should review existing policies and consider their application in the context of COVID-19.”[xxvi] This includes considering accommodation policies for employees with qualified disabilities that may be protected under the ADA in light of the pandemic and those who have medical conditions that place them at a higher risk of having severe illness if they contract the virus.[xxvii] In addition, precautions taken to make work environments safe—including those to protect older employees or employees with an underlying medical condition—cannot “have a discriminatory effect on the basis of protected characteristics.”[xxviii] Consulting with an attorney during the review process of the policies and procedures to develop the appropriate approach for your organization is also highly recommended.
In addition to updating the policies and procedures, compliance officers have to ensure they are enforced consistently and fairly. If employees fail to comply with the face mask coverings or other policies, it should be investigated, addressed, and responded to promptly.[xxix] However, if noncompliance is due to a medical condition, the Americans with Disabilities Act (“ADA”) may need to be followed as to prevent an adverse employment action based on a perceived disability.[xxx] Businesses installing physical barriers must also be careful to ensure it is uniform and does not result in labeling employees as “vulnerable,” which could lead to confidentiality violations under the ADA.[xxxi] Moreover, if employees begin to complain about rules, such as face mask coverings, in groups, it is important to not take any adverse employment action against them because such complaints may constitute concerted, protected activity under the National Labor Relations Act.[xxxii] Many businesses are setting up COVID-19 specific hotlines and encouraging employees to report non-compliance with social distancing and other safety-related guidelines.[xxxiii] Businesses should also keep in mind how to legally and properly implement furloughs, reductions in wages and hours, layoffs, and paid leave for employees who are sick or have a family member that is sick from COVID-19.[xxxiv] The FFCRA and the FLSA should be consulted to prevent such costly claims, which can include back-pay, statutory penalties, personal liability, and attorney fees.[xxxv] As COVID-19 related litigation explodes, these recommendations may help to alleviate or mitigate the risk of being the next named Defendant.
COVID-19 continues to present novel challenges for businesses across the world, and for now, we must deal with the new norm. Following government guidelines, executive orders, judicial orders, county and municipal orders, CDC guidelines, and the recommendations included in this paper are essential for a business’s sustainability. Staying up to date on changes and following the ever-evolving law may be overwhelming, but it is part of the new norm for now. The key take-away is to document everything, especially your processes, follow state and federal CDC and OSHA guidelines because compliance with them may be a defense, and keep information and records secure.
[i] Camire, M., Meneghello, R., & Nesbit, K., COVID-19 Employment Litigation Tracker Reveals 43% Explosion Of Workplace Claims In June, Fisher Phillips, (July 2, 2020), Retrieved at: https://www.fisherphillips.com/resources-alerts-fp-covid-19-employment-litigation-tracker-reveals.
[ii] Bowman, S., Falkowski, B., Mayette, A. & Weissler, A., Top Five COVID-19 Litigation Risks For Employers: Is Your Company Prepared?, Husch Blackwell LLP, JDSUPRA, (May 20, 2020), Retrieved at: https://www.jdsupra.com/legalnews/top-five-covid-19-litigation-risks-for-34262/.
[iii] Former employee sues Texas Sam’s Club after being forced to wear face mask, ABC11, (July 24, 2020), [hereinafter: ABC11], Retrieved at: https://abc11.com/sams-club-woman-suing-employer-sues-emotional-pain-and-distress/6332753/.
[vi] Butcher, J., Chomentowski, S., Iley, B. & Skakel, D., COVID-19 Litigation Report – July 2020 #1, Blank Rome LLP, JDSUPRA, (July 31, 2020), Retrieved at: https://www.jdsupra.com/legalnews/covid-19-litigation-report-july-2020-1-85718/.
[xiii] Honaker, B., Nurses Say Hospital Involved in COVID-19 Fake Test Scheme, Top Class Actions, (June 23, 2020), Retrieved at: https://topclassactions.com/lawsuit-settlements/lawsuit-news/coronavirus-covid-19/nurses-say-hospital-involved-in-covid-19-fake-test-scheme/.
[xvi] Cohen, S., N.Y. Adult Care Facility Class Action Says Poor COVID-19 Care Caused Deaths, Top Class Actions, (May 7, 2020), Retrieved at: https://topclassactions.com/coronavirus-covid-19/n-y-adult-care-facility-class-action-says-poor-covid-19-care-caused-deaths/.
[xix] Cohen, S., Trader Joe’s Lawsuit Claims Employee Fired For Complaining About Lack of Gloves, Top Class Actions, (April 10, 2020), [hereinafter: Cohen, April, 2020], Retrieved at: https://topclassactions.com/coronavirus-covid-19/trader-joes-lawsuit-claims-employee-fired-for-complaining-about-lack-of-gloves/.
[xx] Honaker, B., Walmart Faces Lawsuit After Employee Dies From COVID-19, Top Class Actions, (April 8, 2020), [hereinafter: Honaker, April, 2020], Retrieved at: https://topclassactions.com/lawsuit-settlements/lawsuit-news/coronavirus-covid-19/walmart-faces-lawsuit-after-employee-dies-from-covid-19/.
[xxii] Mackie v. Coconut Joe’s IOP LLC, et al., CV No. 2:20-cv-02562-DCN (D.S.C. July 9, 2020), [hereinafter: Mackie’s Complaint, 2020], Retrieved at: https://www.classaction.org/media/mackie-v-coconut-joes-iop-llc-et-al.pdf.
[xxiii] Families First Coronavirus Response Act: Employee Paid Leave Rights. Wage and Hour Division, U.S. Department of Labor, [hereinafter: FFCRA], Retrieved at: https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave.
[xxiv] Return to Business and Post-Pandemic Planning Checklist, Developing a Return to Business Action Plan, Seyfarth, (April 29, 2020), [hereinafter: Seyfarth], Retrieved at: https://www.seyfarth.com/news-insights/return-to-business-and-post-pandemic-planning-issue-checklist.html.
[xxv] Gagnon, M., Shardonofsky, E., Swartz, J. & Turner, C., COVID-19 Employment Litigation Trends, Seyfarth Shaw LLP, JDSUPRA, (July 10, 2020), Retrieved at: https://www.jdsupra.com/legalnews/covid-19-employment-litigation-trends-24489/.
[xxix] See Bowman, supra note ii.
[xxx] Id. See, What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws, U.S. Equal Employment Opportunity Commission, (June 17, 2020), [hereinafter: EEOC], Retrieved at: https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws.
[xxxi] See Bowman, supra note ii.