In the first episode of Pondering Potential Post-Pandemic Problems, we covered some of the claims we anticipate will result from the decisions employers have made in this crisis. What we did not see coming was the speed at which lawsuits based on the brand new Families First Corona Response Act (“FFCRA”) would start. Sorry, this our first pandemic. We’ll get the hang of it.
The law went into effect on April 1. Two weeks later, New York State itself filed a lawsuit against the US Department of Labor claiming that its FFCRA regulations unlawfully narrow the eligibility requirements for paid sick leave and expanded family leave. Specifically, NYS is bent out of shape because the regs allow employees to use Paid Sick Leave or EFMLEA only if the employer has work for them, either on-site or remotely, and the regs prohibit the use of the law’s benefits if the employer has no work for the employee. Hey NY, there’s a good reason: if there’s no work the employee doesn’t need leave, and those employees can collect Unemployment Insurance benefits and stay home! Duh! Is this your first pandemic too?
On April 16, the first
ambulance chaser, plaintiff’s lawyer filed suit under the FFCRA against an employer, the name of which makes us feel like this quarantine has caused us to fall through a black hole into a freaky time warp. The lawsuit is against Eastern Airlines and sadly, some of you might not even be old enough to remember that iconic brand because the airline earned its angel wings in 1989 or so we thought. That’s right, this is the same Eastern Airlines that said “we earn our wings every day” risen from the dead. The employee, who was working from home, claims that on March 20, she asked her boss if she could take a few hours off daily to watch her 11 year old son watch his teachers. She claims the boss ignored the request until a March 24 call with him and HR in which she officially requested leave under FFCRA’s expanded family leave provision. HR said they’d get back to her, but the next AM she wrote an email effectively asking did you decide yet, huh, did you, did you? That likely annoyed them because on March 27, the employer fired her. The lawsuit alleges that the ghost of airlines past failed to grant leave and retaliated against her under FFCRA. This one won’t last long. The FFCRA went into effect on April 1. The employee didn’t work for Eastern Airlines on April 1; she was fired March 27. An employee cannot assert rights under a law that did not exist during her employment. NO SOUP FOR YOU!
On April 23, the USDOL got into the act investigating an Arizona electrical contractor for refusing to pay an employee 80 hours of FFCRA Paid Sick Leave. The employer’s position was that the electrician had exhausted his regular sick pay and then took off another 2 weeks, providing a Dr.’s note recommending quarantine due to symptoms, although he was not tested. The employer refused to pay the 80 hours because the note was from a Mexican doctor, meaning a doc in Mexico, and as a result, he believed it might be fraudulent. Plus, what would a Mexican doctor know about Corona anyway (sorry). The USDOL didn’t seem to care though and ordered the employer to pay. We understand the employer’s skepticism. First, remember the NYS lawsuit; employees are only eligible for FFCRA if the employer has work for them. If this employer did have work for him in Arizona, why was he in Mexico City seeing his doctor there? We do unfortunately expect fraud among employees who are either afraid to come to work or are gaming the system. Although that’s tough to ignore, challenging the validity of a doctor’s note may be time consuming and futile. Ultimately, the 80 hours are coming out of Uncle Sam’s pocket through the payroll tax deduction so it might be best to choose a different windmill to slay.
Next up on the hit parade—retaliation. Last week, NJ saw the filing of its first virus-related retaliation lawsuit. The plaintiff, a tech at a drug manufacturing facility, claims that he complained to his employer that there was no PPE or social distancing at the plant. When that didn’t work, he claims he placed copies of an article in the cafeteria describing steps other employers were taking to protect their employees. A few days later he was terminated. The wrongful termination case is no doubt the first of many. There may be no connection between his termination and those actions, but these cases will be very fact-specific. As employers start to consider reopening, it will be critically important to develop well-thought-out and documented policies and protocols to assure employees that you are taking steps to safeguard their health and to defend against claims that you acted negligently in the event an employee gets sick. That means, it is important to understand and implement CDC guidelines for creating safe workplaces and to have the necessary equipment and office configuration to best accomplish a safe return to work.
WARN Act Claims
Early on in all this, there was a lot hoopla about whether the federal Worker Adjustment and Retraining Notification Act (“WARN”) required employers to provide 60 days’ notice before a RIF. We delayed inflicting discussion of it on you because it’s highly technical, aka boring. But the employment law Gods have shined down upon us by delivering a WARN class action case that we can’t ignore. Why? Because it’s against Hooters. So even in the midst of this horror, we can harken back to our days of innocence when we wrote only of sexual
viruses harassment. Under federal WARN, an employer with 100+ employees must give 60 days’ notice before a mass lay off affecting at least a third of the workforce and no fewer than 50 employees at a single site over a 30 day period or a permanent or temporary shutdown of a single site resulting in an employment loss for 50 or more employees. A temporary shutdown triggers WARN if it will last longer than 6 months and an employment loss likewise occurs if a layoff or furlough is intended to last 6+ months. On April 16, the plaintiffs filed suit on behalf of 679 employees of Hooters III for failure to provide 60 days’ notice prior to the March 25 reduction in force. A likely strong defense to this claim is WARN’s exception for unforeseeable business circumstances that prevent an employer from having 60 days in which case an employer must give as much notice as practical. Although no court has ruled yet that the pandemic was unforeseeable, we expect that will be the outcome for many employers. But Hooters gave no notice before its March 25 RIF. That could be a problem if the waitresses can show that the shutdown of eat-in establishments was foreseeable even if just a week or 2 before the RIF. Any new mass layoffs that might trigger WARN without 60 days’ notice will need to be carefully considered. Oh how we look forward to returning to writing only about all the other bad stuff that happens at Hooters.
The concept of unforeseeable business circumstances may apply in many contexts due to the pandemic. Some business owners have asked us about whether businesses can get out of employment and other kinds of contracts because of economic or practical compliance problems. The fact is there may be legal remedies available, such as the doctrine of impossibility to perform or the substantial frustration of the purpose of the contract. In the event such defenses are not available, you need to consider alternative solutions, such as negotiating an amendment to the contract. Of course, in addition to assessing your business’s ability to meet its contractual obligations, it is equally important to review the ability of those who have obligations to your business to perform, and determine whether the pandemic will adversely impact the fulfillment of those contractual obligations. We are also starting to draft more specific contractual force majeure provisions that account for the new abnormal. We can help you with these issues and one more.
Speaking of WARN, we did our best to warn you about potential problems with Zoom meetings ala #PoorJennifer, but not everybody listened. Even Superman’s son was not immune. Will Reeve learned the hard way last week that it’s not just what you’ve got up top that counts. Sometimes wearing pants when reporting on national TV is a good idea. Maybe flashing the boxers was just Will’s way of saying, Good Morning America, but let’s all do our part to avoid wardrobe malfunctions on Zoom meetings.