Posted April 16th, 2020.
So far, employees for the government, a hand bell factory and a hair salon have filed class actions, and lawyers predict many more to come, as about 22 million people file for unemployment claims.
By Amanda Bronstad
As unemployment rises and an increasing number of workers raise safety concerns over the coronavirus, lawyers in the class action bar predict that the largest group of class actions filed over the COVID-19 outbreak is likely to come from employees.
Among the allegations: employers denied wages, discriminated during layoffs, or put workers in unsafe conditions. So far, employees for the government, a hand bell factory and a hair salon have filed class actions, and lawyers predict many more to come, as millions of people file for unemployment claims.
“We’re going to see a huge explosion of litigation related to this,” said Karl Lindegren, co-chairman of the California Litigation Practice Group at Fisher & Phillips. “You’ve got some very wealthy, well-established collective action lawyers there who won’t be shy about taking this on.”
Most of the COVID-19 class actions filed so far have focused on consumers seeking refunds or alleged price gouging of high-demand products. But there is a lag time for employment complaints, according to Kent Schmidt, a partner in the Costa Mesa, California, office of Dorsey & Whitney.
“We’re still in the middle of this, and people are still working remotely,” he said. Companies are trying to work out their policies and procedures, while also determining whether someone should work remotely or wear a mask.
In the end, Schmidt said, “the volume of employment cases is going to be higher than any other category, including the consumer cases.”
About 22 million people had applied for unemployment in the past month, according to statistics from the U.S. Labor Department released Thursday.
Meanwhile, a growing chorus of complaints and concerns are emerging about worker safety, most recently at Amazon Inc.’s warehouses and several meat-processing plants across the country. For employers, safety rules vary, depending on the state, city and county, leaving uncertainties about the personal protective gear employees must wear, or whether they can work from home.
“We’ve got an army of lawyers burning the midnight oil to stay current on things, and we’re talking to clients every few seconds,” Lindegren said.
Although only a handful of worker class actions have been filed so far, lawyers predict that employment class actions are coming soon.
“Many people have contacted us, and at this point, we are evaluating the issues,” said David Sanford, chairman of Sanford Heisler Sharp, whose firm has brought discrimination and pay equity class actions in the past against major employers like Novartis, Qualcomm and Google.
Unsafe working conditions
One of the first class actions to address unsafe working conditions targeted the federal government. Five members of the American Federation of Government Employees filed the class action March 27 before the U.S. Court of Federal Claims, seeking hazardous pay due to exposure to “virulent biologicals.” They claimed their employers did not have the personal protective equipment needed to avoid exposure to the coronavirus.
Three of the named plaintiffs work for the Bureau of Prisons, one for the Department of Veterans Affairs and one for the Agriculture Department. The prison employees worked at the Federal Correctional Complex in Oakdale, Louisiana, where dozens of inmates and staff members tested positive for the coronavirus. Another plaintiff, a food inspector in Arkansas, had “no safety gear whatsoever,” according to the complaint, and a fifth, working at a VA hospital in Portland, Oregon, has tested positive for COVID-19, said plaintiffs’ attorney Heidi Burakiewicz, of Kalijarvi, Chuzi, Newman & Fitch in Washington D.C.
She said her five clients are not alone: There are similar stories across the country.
“They’re all being exposed to the same hazard, the coronavirus, through the performance of their job duties,” she said. “This is about the workers versus the government.”
“Unions,” she said, have “never been more important than they are now.”
The Alaska State Employees Association, for instance, filed a lawsuit March 24 over the state’s alleged failure to protect its members from exposure to the coronavirus. Among other things, the state refused to allow some members to telecommute, failed to implement social distancing measures or modify working spaces, and did not provide personal protective equipment to those interacting with the public, the complaint says.
Although they have not filed a case over worker safety yet, New York firms Milberg Phillips Grossman and Sanders Phillips Grossman, which teamed up to create a coronavirus litigation task force last month, are looking at them.
“We’re not looking at lawsuits where workers don’t want to go to work,” said Tina Bullock, a senior attorney and registered nurse at Sanders Phillips, who helped create the task force. “It’s more about workers not given equipment, or there was something faulty about the use of their equipment.”
The first big rush of employment class actions could involve compliance with the WARN Act, or the Worker Adjustment and Retraining Notification Act, which requires companies provide advance notice of large layoffs.
Lindegren, who is in Irvine, California, said lawyers are “just scouring the planet for Warn Act cases.”
California suspended WARN Act notice requirements, but only temporarily, and the state requires that employers provide unpaid vacation time or other benefits within 30 days.
“Any employer that didn’t pay out the final wages, including all monies due, including vacation, will get sued,” he said. “And those will be class actions.”
Schmidt said an employer could face a discrimination claim, too, if the majority of employees laid off were older.
In a March 26 lawsuit, a manufacturer of orchestral hand bells sued the state of Pennsylvania, claiming the mandated closures were “arbitrary” and “capricious.” They also were unconstitutional, according to the class action, brought on behalf of tens of thousands of businesses in Pennsylvania.
“If he’s closing these businesses for purely public purposes, it’s a taking under the Fifth Amendment, and he has to compensate the business and the workers whose jobs were ceased,” attorney Jonathan Goldstein, of Hatfield, Pennsylvania’s Goldstein Law Partners, said of Gov. Tom Wolf. “It might be right that they were nonessential, but it doesn’t mean the government can just order them closed without compensating them.”
Goldstein said he is seeking compensation for both Schulmerich Bells and its employees, two of whom are lead plaintiffs in the case. He is getting calls from lawyers considering similar suits in North Carolina, New Jersey and states on the West Coast.
Wage & Hour
Under the Family First Coronavirus Response Act, passed March 18, employers with 500 or fewer employees must provide emergency paid sick leave or expanded family or medical leave should COVID-19 affect their ability to work. The sick leave provisions have six different criteria but could open the door to class actions, Lindegren said.
“People will be looking at these companies and trying to figure out who gave what when and see what kind of collective action they can come up with,” he said.
There are also potential class actions involving those working remotely who could have claims over unpaid overtime and meal breaks, Schmidt said. Employers could ask employees to work in the evenings, or on the weekends, maybe off the clock, he said.
“How do you really enforce wage-and-hour guidelines when everyone’s working remotely?” Schmidt said.
A New Jersey hair stylist brought a class action April 7 against her employer, the owner of the Hair Cuttery, claiming the salon chain owed wages that she and other employees earned amid its shut down last month.
The class action alleges Hair Cuttery, which closed nearly 1,000 retail stores in 16 states March 21, had not paid its employees for work between March 15 and March 21.
Adam Malamut, managing partner of Malamut & Associates in Cherry Hill, New Jersey, filed the case in New Jersey under the Fair Labor Standards Act and, on April 10, added three more plaintiffs from Florida, Virginia and Maryland.
“Working men and women across the country are concerned about how they will make ends meet while we wait for the economy to return to business as usual,” he said in a statement. “The idea we can climb out of this crisis on the backs of working men and women is completely unfair, unjust, and as alleged by our client, illegal under Federal and State Law.”