The Wave of COVID-19-Related Litigation for Retailers is Looking Like a Tsunami

Retailers, in response to the global pandemic, have spent the last year in a balancing act to keep their employees safe, their businesses afloat, and their policies compliant with ever-changing and sometimes conflicting federal, state, and local laws and orders. Despite these efforts, employers are facing not only pre-litigation demands and threats, but also litigation from employees and regulatory claims.

Across the country, more than 1,300 employment lawsuits relating to COVID-19 have been filed, with the number increasing daily. Most of this litigation is clustered in California, New Jersey, and Florida, where employees generally find laws, courts, and juries friendlier to plaintiffs and their individual or classwide claims.

The COVID-19-related employment claims include allegations of noncompliance with new and confusing workplace requirements, violations of wage and hour laws, and discrimination and failure to accommodate where employees allege fear of COVID-19 or inability to wear masks. As noted above, these lawsuits related to COVID-19 claim workplace safety issues for failure to provide proper safety procedures and personal protective equipment (PPE); allege that employees are required to work in unsafe and hazardous conditions; assert wrongful termination for whistleblowing that the employer was noncompliant with applicable laws and orders; include employees who believe they should be allowed to work remotely even though they're asked to work when they feel it’s unsafe, as well as employees who want to be in a physical store location but are unable to because the store is closed; and allege a failure of the employer to provide additional paid sick and family leave where employees still have obligations that keep them at home. These claims are usually brought by individual employees and include wrongful termination claims, discrimination cases related to workplace conduct, and racial discrimination cases, all based on or in some way related to COVID-19.

Perhaps the most troublesome and potentially financially costly claims arising out of COVID-19-related requirements are wage- and hour-related claims. Employees are alleging they're owed wages for time spent filling out a pre-screening questionnaire at home or standing in line waiting to be health-screened coming into work. As government requirements evolve and vaccines become more available, the compensability of time spent getting tested or vaccinated will also be at issue. Similarly, employees are seeking reimbursement for the use of not only internet and cell phone services at home while working remotely, but also for desks, chairs, equipment, and even rent and mortgages.

However, there are options for retailers to help stem the flood of COVID-19-related wage and hour lawsuits. Many companies are creating ways for their employees to track time spent on health-screening procedures, or adding a few minutes of paid time on each shift to cover potential time spent on health screening, with the option of adjusting the time if it takes longer. Companies should also review their policies and practices regarding the reimbursement of expenses relating to working from home.

Workplace safety is another area of concern for class and systemic litigation, and is also ripe for whistleblower claims. On Jan. 29, the Occupational Safety and Health Administration (OSHA) issued new employer guidance on workplace safety during the COVID-19 pandemic. The guidance states that employers should develop and implement a comprehensive written COVID-19 prevention program in the workplace. OSHA recommends that the prevention program engage workers in the program’s development and include the following essential elements:

• conducting a hazard assessment;
• identifying a combination of measures that limit the spread of COVID-19 in the workplace;
• adopting measures to ensure that workers who are infected or potentially infected are separated and sent home from the workplace; and
• implementing protections from retaliation for workers who raise COVID-19-related concerns.

States and localities have been taking a more piecemeal approach. California, for example, issued emergency COVID-19-prevention regulations in late 2020, including a written prevention program, requirements for outbreaks and major outbreaks, requirements for employers to continue wages and benefits for employees excluded from the workplace due to COVID-19-related issues, and prevention measures in employer-provided housing and transportation. The regulations, which are complicated and not easy to follow, became effective the Monday after Thanksgiving in 2020, and retailers were expected to have fully executed programs within a week of that date.

California is only one of the patchwork of many such state and local requirements, some of which make employers strictly liable for unproven and untested requirements. Retailers are well advised to identify which regulations apply in their locations, and document their efforts to comply not only with these new workplace safety regulations, but with all efforts related to COVID-19. Under-prepared retailers will be easy litigation targets, especially if they don't keep good records, and thus cannot prove what efforts they actually took. Retailers showing good faith in attempting compliance, and documenting all their efforts to do so, will stand in much better stead when a lawsuit comes their way.

Morgan, Lewis & Bockius LLP partners Carrie Gonell and Kate McGuigan advise clients on complex employment litigation and counseling, regularly representing employers in the financial services, retail, and technology industries.