DEFENDING MANAGEMENT

By Robin Foret, Of Counsel, Seltzer, Chadwick, Soefje & Ladik, PLLC.

Reopening the Economy

As much of the nation prepares to return to work after weeks of isolation in the wake of the continuing pandemic, the question as to what measures to take to protect the health and safety of the public looms over the hopes of an economic recovery.  The competing societal interests of containing the spread of the Coronavirus and reducing the death toll, while at the same time preventing the continued economic decline and increase in unemployment claims, present a challenge for all Americans. Unfortunately, a vaccine is not expected in the near future, nor is the elimination of the COVID-19 virus (the “Virus”) expected in the coming months despite warmer temperatures.

As various states make difficult choices to accommodate these competing societal interests, each state including Texas, has created its own set of guidelines to assist the gradual reopening process. The Centers for Disease Control (“CDC”) has also issued guidelines on how to prevent the spread of illness, how to identify potential illness and the requirements that must be met before an infected or quarantined employee should return to the workplace. With COVID-19 testing not always immediately available, there are often delays in obtaining a definitive diagnosis of the Virus. This makes evaluating the best course of action when an employee is ill or has had a potential exposure difficult. This article focuses on Governor Abbot’s Open Texas Plan Report (“Report”), released on April 27, 2020, and offers some suggested procedures for getting back to work, while not necessarily getting back to normal.

Work from Home When Possible

When evaluating what business measures to take in preparation to getting your workforce back to work during the continued crisis, employers should first consider whether there are certain employees, or certain departments that can work from home (“Telework”) during Texas’ partial opening phase, and maybe longer.  Employees who are able to Telework are not eligible for sick leave benefits under the Emergency Paid Sick Leave Act (“EPSLA”) unless another COVID-19 reason prevents them from working.  Having employees Telework reduces the number of individuals interacting in the workplace.

Importantly, the Fair Labor Standards Act’s (“FLSA”) “Continuous Workday Rule”, which requires an employer to count all hours between the first hour worked and the last hour worked during a workday, does not apply to employees who Telework to prevent the spread of the Virus. Instead, employees who Telework are asked to keep track of their hours and breaks (for example: when they stop work to care for a child or assist with home schooling). This provides more flexibility during this time of crisis.

Create a Healthy and Safe Environment

Make sure to incorporate health and safety procedures to reduce the potential spread of the Virus among those employees who do return to the workplace. According to the CDC, and as explained in the Report, the Virus is mainly spread from person to person between people who are in close contact with one another (usually within about 6 feet).  The principle mode of transport for the Virus is via respiratory droplets that are dispersed when an infected person coughs or sneezes, which can be inhaled in the nose and mouth. People are thought to be most infectious in the early stages of the illness, which means that they may not show any symptoms. See the CDC website at www.cdc.gov for more information on how the Virus is spread. Accordingly, safety precautions should include:

• Social distancing in the workplace (at least 6 feet apart);
• Wearing masks, particularly when workers will be in close proximity of one another, or serving the public;
• Encouraging workers to wash their hands for 20 seconds, or use hand sanitizer with at least 60% alcohol;
• Encourage workers to cough or sneeze into a tissue or the crook of their elbow;
• Frequently sanitize all surfaces and public areas and provide hand sanitizer to workers;
• Encouraging workers to avoid touching their eyes, nose and mouth;
• Identity any worker who appears ill, send them home and instruct them to follow-up with a healthcare provider, or send them to a healthcare provider; and
• Make sure that employees who plan to return to work following an illness or positive test for the Virus are free of symptoms and/or fever. Symptoms include but are not limited to:
  •  Shortness of breath or difficulty breathing.
  • Muscle pain, headache.
  • Loss of taste or smell.
  • Fever of 100.0 Fahrenheit or more or feeling feverish / having chills.

When Employees are Sick, Test Positive or Have Been Exposed to the Virus

Employees who are sick due to the Virus, who have tested positive for the Virus or who have been exposed to the Virus should self-quarantine for a period of at least 14 days. Such employees will be eligible for Paid Sick Leave under EPSLA. The following procedures may be helpful and comply with CDC guidelines and the guidelines contained in the Report.

• Exposed to the Virus – For employees who report a known exposure to the Virus, without symptoms and without a positive test for the Virus, self-quarantining for a period of 14 days is recommended. In those instances, the individual may Telework if possible, and if Telework is an option would not get Paid Sick Leave.

• Tested Positive for the Virus – For employees who test positive for the Virus, but who have no symptoms, a 14-day self-quarantine from the date of the test is recommended for maximum safety, although an alternative measure may be 14 days from the date of last exposure. If the employee develops symptoms, prior to returning to work, the employee must meet the following three (3) requirements according to CDC guidelines and the Report:

• • At least 3 days (72 hours) have passed since recovery (resolution of fever without the use of fever-reducing medications);
  • Improvement in respiratory symptoms (e.g. cough or shortness of breath); and
  • At least 7 days have passed since symptoms first appeared. (Note: the CDC guidelines state 10 days, instead of 7 days, from the date of onset of symptoms).

Employers will need to decide whether to follow the CDC’s time-frame for recovery from the COVID-19 illness or the time frame listed in the Report. It is recommended that whenever possible, the employer obtain a written report or note from the infected employee’s healthcare provider stating when the individual can return to work, and follow that recommendation. In the absence of any recommendation from a healthcare provider, the CDC’s guidelines provide more protection, although the employee may be considered ill in excess of the 80 hours allowed for Paid Sick Leave.

•  Practice Tip 1 – In the event that the employee remains sick past the 14-day period, and has exhausted all available Paid Sick Leave under EPSLA, consider whether the employee has available PTO to supplement additional time off from work. If not, unemployment benefits may be available for the unpaid time off, as explained below under Unemployment Considerations.

•  Employees Who are Sick with the Virus Without a Positive Test – Employees who are sick with the Virus should stay home for a minimum of 14 days, with instructions not to return to work until they can meet the three requirements stated above. In addition, you should evaluate whether other employees may have been exposed to the individual close in time or immediately prior to the time that he or she developed symptoms. Once such individuals are identified, consider sending them for testing and evaluation by a healthcare provider to determine if they may have been infected with the Virus. 

• • For employees who have come into contact with the infected individual, follow the instructions of the healthcare provider who evaluates the individual. If an individual who had contact with the infected employee develops symptoms or tests positive for the Virus, he or she should follow the self-quarantine procedures listed above.
  • You may also need to alert local health officials so that they can perform “Contact Tracing” as outlined in the Report.

• When Test Results are Delayed – If test results are delayed, determining when to begin counting the 14-day period may be difficult. For example, when an employee has been sick for a week before obtaining positive results for the Virus, you have a choice between counting the 14-day period from the date that the employee first exhibits symptoms (Texas Report) or 14 days from the date of the positive test (CDC Guidelines). If a healthcare provider has provided a time frame, you should follow that date. Of course, the employee must still meet the three (3) above requirements to verify that they have likely recovered fully from the illness.

• Note – It is important to note that the CDC recommends that those who are sick and who have tested positive for the Virus obtain two negative tests in a row, at least 24 hours apart before returning to work.

• Individuals at High Risk – Certain individuals are at high risk if they contract the Virus, such as those over 65 years of age and those with underlying health conditions. Such individuals may ask to stay home and not come into work. For those employees, you should first evaluate whether they can Telework in their job, or be moved to a job for which they are qualified and could Telework. If the answer is no for Teleworking, and the individual is not under a self-quarantine order by legal authority or by a healthcare provider, he or she may be eligible for unemployment, explained in more detail below.

• Practice Tip 2 – If you are a business with 15 or more employees, the Americans with Disabilities Act (“ADA”) must be considered if an employee requests an accommodation due to having a medical condition that puts them at higher risk for a severe illness or death if he or she contracts the Virus. In those instances, ADA procedures should be followed, which may include obtaining medical information from a healthcare provider regarding the health condition.

• • Possible reasonable accommodations include, but may not be limited to: (a) the permission to wear face masks or enhanced protective gowns or other clothing; (b) allowing the employee to Telework if feasible; (c) allowing the employee to work in an area that will be less congested with coworkers or customers; or, (d) changing some job functions of the employee to reduce contact with others.

Employees at Risk for the Virus and Unemployment Considerations

Although all claims for unemployment are reviewed on a case-by-case basis, the Governor of the State of Texas has expanded the reasons for which an individual may claim unemployment benefits, to include the refusal to work for the following COVID-19 related reasons:

• Individuals at High Risk – people over 65 years of age.

• Household Member is at High Risk – a household member is 65 years or older.

• Diagnosed with COVID-19 – the individual has tested positive for COVID-19 by a source authorized by the State of Texas and has not recovered.

• Family Member Diagnosed with COVID-19 – anybody in the household has tested positive for COVID-19 by a source authorized by the State of Texas and is not recovered, and 14 days have not yet passed.

• Quarantined – the individual is currently in 14-day quarantine due to close contact exposure to COVID-19.

• Child Care – the child’s school or daycare is closed and no alternatives are available. 

• Practice Tip 3 – The Emergency Family Medical Leave Expansion Act (“EFMLEA”) provides up to 10 weeks of partial paid leave at 2/3 the employee’s regular rate for child care closures. However, EFMLEA is reduced by any FMLA already taken by the employee in the same one-year period. Employers who have less than 50 employees may claim an exemption from the expanded FMLA leave requirements if providing benefits would be detrimental to the viability of their business. Unemployment benefits would likely be available for those employees who do not have EFMLEA, or insufficient EFMLEA, prior to the time the school or day-care re-opens.

• Practice Tip 4 – You should always consider first whether the employee can Telework when he or she is unable to come to work due to a self-quarantine, a positive test without illness or school or day-care closures. If the employee can Telework, no Paid Sick Leave, EFMLEA or unemployment are available. If Telework is not an option, an employee may seek payments from one of those sources, with unemployment paid when the other two options do not apply.

The information contained in this article is not designed to address specific situations. If you have questions concerning this topic, you should consult with legal counsel for advice on fact specific matters. 

Robin Foret is Of Counsel at Seltzer, Chadwick, Soefje & Ladik, PLLC, and is Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization.  Robin Foret is a frequent speaker and writer on employment law compliance topics. She also provides training for companies to assist them comply with federal and state employment laws. She can be reached at rforet@realclearcounsel.com or by telephone at (469) 626-5358.  You may also visit the website for more information about our law firm’s services at www.realclearcounsel.com.

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

Last month, an article on this blog wrote of a federal lawsuit by two passengers aboard the Grand Princess which was anchored off the coast of California as a result of COVID-19 outbreak. What made the lawsuit unique was that neither of the plaintiffs had actually contracted COVID-19 at the time of its filing. The alleged damages stemmed only from the risk of exposure to the virus.

Since then, other unique lawsuits have been filed in the wake of the COVID-19 crisis.

MISINFORMATION SUITS

Amid the crisis, misinformation has abounded as to (1) the pandemic itself, (2) potential treatments, and (3) the health of American business. Not surprisingly,  allegations of misinformation have found their way into litigation. Although these suits have not yet been directed at employers, they likely will in the future.

WASHLITE v. Fox News

Lawsuits against news outlets generally allege defamation or similar torts, not violations of a state’s consumer protection act. Nevertheless, Washington’s Consumer Protection is the basis for a lawsuit filed on April 2, 2020 by the Washington League for Increased Transparency and Ethics (“WASHLITE”) against Fox News. The lawsuit alleges:

“Fox News … willfully and maliciously engaged in a campaign of deception and omission regarding the danger of the international proliferation of the novel Coronavirus, COVID-19 … While acting in the broad stream of commerce, [Fox News] knowingly disseminated false, erroneous, and incomplete information, which was relied upon by the public and which had the effect of delaying and interfering with the implementation of effective mitigation and countermeasures against the virus.”

Fox News issued a statement calling the lawsuit “Wrong on the facts, frivolous on the law.”

Douglas v. Norwegian Cruise Lines

The cruise industry has been among the industries hit most seriously by the COVID-19 crisis. Shareholders in cruise companies have seen the value of their shares plunge markedly.

On March 21, 2020, a federal class action lawsuit was filed in Florida on behalf of persons “who purchased or otherwise acquired the publicly trade securities of Norwegian [Cruise Lines] from February 20, 2020 through March 12, 2020” and then saw the value of their share plummet. The lawsuit alleges the company filed false and misleading statements with the Securities and Exchange Commission. In this regard, the Complaint specifically avers:

“[Norwegian] made false and/or misleading statements and/or failed to disclose that: (1) the Company was employing sales tactics of providing customers with unproven and/or blatantly false statements about COVID-19 to entice customers to purchase cruises, thus endangering the lives of both their customers and crew members; and (2) as a result, [Norwegian’s] statements regarding the Company’s business and operations were materially false and misleading and/or lacked a reasonable basis at all relevant times.”

At the time of this writing, Norwegian has not yet answered the lawsuit.

WRONGFUL DEATH SUITS

Wrongful death lawsuits against employers generally allege an injury or illness which can be traced to a workplace hazard, not a community hazard. As the Occupational Safety & Health Administration (“OSHA”) has recognized specifically as to COVID-19, it is difficult to make “determinations about whether workers who contracted [the virus] did so due to exposures at work” or elsewhere.

Evans v. Walmart

Nonetheless, on April 6, 2020, a lawsuit was filed in Illinois against Walmart by the estate of Wando Evans, alleging Mr. Evans and other employees had contracted COVID-19 at work. Mr. Evans died from the virus on March 25, 2020; another employee at the same store also died from the virus. As support for allegations of “negligence” and “willful and wanton misconduct”, the lawsuit alleges Walmart failed to follow recommendations outlined by OSHA and the Centers for Disease Control and Prevention (“CDC”):

“[Walmart] [f]ailed to cleanse and sterilize the store in order to prevent infection of COVID-19…[f]ailed to provide [Evans] and other employees with person protective equipment such as masks, latex gloves and other devices designed to prevent the infection of COVID-19; [f]ailed to warn [Evans] and other employees that various individuals were experiencing symptoms at the store and may have been infected by COVID-19 which was present and active within the store; [and] [f]ailed to adequately address and otherwise ignored other employees at the store who communicated to management that they were experiencing signs and symptoms of COVID-19…[f]ailed to provide employees with antibacterial soaps, antibacterial wipes and other cleaning agents…”

Walmart responded in a statement: ““We are heartbroken at the passing of two associates at our Evergreen Park store and we are mourning along with their families … We take this issue seriously and will respond with the court once we have been served with the complaint.”

EMPLOYMENT SUITS

In the wake of the COVID-19 crisis, millions of employees have been furloughed, laid off or terminated. Many of these employees have already sued their former employers.

Olsen v. Ratner Companies

When Ratner Companies abruptly closed all of its hair salons on March 21, 2020, it did so in the middle of a pay cycle. When the company failed to make payroll, a collective action suit was brought on April 7, 2020 in New Jersey federal court alleging violations of the Fair Labor Standards Act (“FLSA”) and the New Jersey Wage Payment Law. The named defendants included the company’s officers.

As of the date of this article, Ratner has not yet answered the lawsuit.

Mazurkiewicz v. Northwestern Memorial Hospital

On March 23, 2020, a whistle-blower lawsuit was filed in Illinois by a nurse who had been fired by Northwestern Memorial Hospital on March 19, 2020. The suit alleges the nurse was fired after raising concerns over the masks being provided to health care workers. The suit names the nurse’s former supervisor and the company president as defendants.

As of the date of this article, the suit had not been answered.

King v. Trader Joe’s

Last week, a former employee of Trader Joe’s Louisville, Kentucky store filed a wrongful discharge lawsuit against the grocer. The lawsuit alleges the former employee was fired on March 28, 2020 for creating a Facebook group for store employees to share concerns as to the grocer’s alleged lack of attention toward employee safety and health procedures during the  COVID-19 pandemic. (King v. Trader Joe’s East Inc., Case No. 20-CI-002406, in the Jefferson Circuit Court, Kentucky)

As of the date of this article, Trader Joe’s has not yet answered the lawsuit.

TAKEAWAYS

To be sure, some of these lawsuits (1) smell of opportunism, (2) may not survive a motion to dismiss or motion for summary judgment, and (3) may ultimately be decided in bankruptcy court.

As emphasized in previous articles on this blog, however, lawsuits costs money to defend. Especially now, such costs can be extinction level events for companies teetering on the edge of insolvency. For such companies, risk management must consider not merely the chances of success in a lawsuit; it must also consider whether a company can survive the filing of a lawsuit.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.

By Robin Foret, Of Counsel, Seltzer, Chadwick, Soefje & Ladik, PLLC.

Purpose and Duration

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA” or the “ACT”), an emergency measure in response to the Coronavirus pandemic. The Act became effective on April 1, 2020, and is scheduled to automatically expire on December 31, 2020. The Act is essentially comprised of two separate statutory provisions that are both enforced by the Department of Labor (“DOL”): (1) the Emergency Paid Sick Leave Act (“EPSLA”) that is enforced through the Fair Labor Standards Act (“FLSA”). See 29 C.F.R Part 826.20 et seq.; and (2) the Emergency Family Medical Leave Expansion Act (“EFMLEA”) that is enforced as an extension of the FMLA. See 29 U.S.C. § 2601. et seq.

• City of Dallas Ordinance – Employers in the City of Dallas should be aware that in light of the COVID-19 crisis and the implementation of the FFCRA, the Dallas Sick Leave Law has at least for now, been suspended so that employers should comply with the Act instead.

Employers

An employer for purposes of this Act is defined as anyone who has at least one employee, but less that 500 employees. All such employers must comply with the Act, subject to some exceptions that may apply to employers with under 50 employees under certain circumstances explained below.

Employees

An eligible employee is any employee (full-time or part-time) who has worked for the employer at least 30 consecutive days in the last 60 days.

Posting Requirements

A Notice of Rights Poster, which can be obtained from the DOL website, must be posted at the employer’s place(s) of business. For employees exclusively working from home or who cannot otherwise be at the office or business location, the Poster should also be sent by e-mail or regular mail.

Work to Perform Requirement

It is important for employers to note that there must in fact be work for the employee claiming leave to perform in order for that employee to be able to obtain leave benefits under either the EPSLA or the EFMLEA. More specifically, if an employee is unable to work at the office or telework from home due to a “lack of work” at the company or the particular business location that they work, no paid sick leave because of a shut down or partial shutdown. In those instances, the employee is eligible for unemployment benefits until his or her work resumes. For example, if an employee worked at Starbucks and the particular location does not have a drive-thru, there may be not work to perform.

Telework

Telework means that a particular employee is able to work from home. Employees who are able to telework are not eligible for sick leave benefits unless another COVID-19 reason prevents them from working (examples: their own illness, a power outage). It is important to note that the FLSA “Continuous Workday Rule”, that requires an employer to count all hours between the first hour worked and the last hour worked during a workday, does not apply.  Instead, employees who telework are asked to keep track of their hours and breaks (for example: when they stop work to care for a child or assist with home schooling). This provides more flexibility during the crisis. See 29 C.F.R. 790.6.

Emergency Paid Sick Leave Act (“EPSLA”)

This statute allows an eligible employee to take up to 2 weeks (80 hours) of paid leave for the following six reasons related to COVID-19: (1) if the individual is subject to a federal, state or local quarantine or stay-at-home order; (2) the individual has been advised by a healthcare provider to self-quarantine; (3) the individual is experiencing COVID-19 symptoms and is currently seeking a diagnosis (including testing); (4) the individual is caring for someone who is subject to an order as stated in number 1 above or who has been advised to self-quarantine as stated in number 2 above; (5) the individual is caring for a son or daughter whose school or day care has closed and has no other caregiver (this includes children under 18 and those over 18 who are unable to care for themselves); or (6) the individual is experiencing a similar condition that has been specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor (this last reason for leave has not yet been developed and more guidance is expected).

• How Much Leave is Allowed? – Full time employees (defined as those regularly scheduled to work 40 or more hours per week), are entitled to up to 2 weeks (80 hours) of paid leave at their normal rate of pay. Part time employees are entitled to the average hours that the employee worked during the last 2-week period (or, if their schedule varies, use the last 6 months, or the number of months they are at the job if less than 6 months, to calculate the average). An employer may alternatively use 2 times the number of hours that an employee is scheduled to work per week.
  • The calculation must include all days during the period, and days taken during that period for PTO or vacation may not be deducted.

• How Much Pay is Allowed? – If the employee is seeking sick leave for one of the first 3 reasons listed above concerning his or her own condition, quarantine or stay-at-home order, the employee is entitled to his or her full daily rate up to a maximum of $511 per day, and $5,110 total. If the employee is seeking leave for any other reason listed above (reasons 4-6), the maximum daily amount is $200, with a total of $2,000 allowed.

• What is a Self-Quarantine Order? – This requires advice from a healthcare provider that the employee has COVID-19, may have COVID-19, or is vulnerable to getting the disease, and, that because of one of these reasons the employee is precluded from working or teleworking.

• What is Considered Has Symptoms / Seeking Diagnosis? – Symptoms ordinarily means those pursuant to the Centers for Disease Control (“CDC”), which includes a fever, dry cough, shortness of breath, etc.). This requires that the employee: be unable to work or telework, seek diagnosis and treatment, and must be advised to self-quarantine during that time.  Sick leave is allowed during the time that the employee is waiting for test results, regardless of the severity of the symptoms.  In the event that the healthcare provider states that the individual does not qualify for a test, then use the second reason – 14-day self-quarantine per CDC guidelines.

• To Care for Someone Else – If the reasons for leave is to care for another (reason number 4 above) who is under an isolation order or under self-quarantine, the individual cared for must be an immediate family member, roommate, or similar person who has a relationship that creates the expectation of being cared for by the employee.

• The “But For” Test – If the reason for the sick leave is either reasons 4 or 5 listed above (to care for another or because of the lack of child care), then leave requires that “but for” those conditions, the employee would be able to work or telework. Again, if there is no work for the employee to perform due to work stoppage or slow-down, paid leave is not permitted.

Emergency Family Medical Leave Expansion Act (“EFMLEA”)

The EFMLEA is an extension of the FMLA that again, applies to all employers with between 1 and 500 employees. It allows up to 12 weeks of leave (the first two of which are unpaid under this statute, but which may be paid under the EPSLA if those requirements are satisfied – 5^th reason for sick leave discussed above). This provision permits partial pay in the event that, due to COVID-19 reasons, an employee must remain home to care for a son or daughter because of a school closure or the lack of daycare when there is no other caregiver available. This applies to children under 18, as well as to those over 18 who are unable to care for themselves.

• How Much Pay is Allowed? – The employee is entitled to 2/3 of their regular rate of pay for up to 10 weeks at a maximum daily rate of $200, and $10,000 in total leave benefits. The maximum is $12,000 when combined with the 2 weeks of sick leave benefits.

• Under 50 Employees – Possible Exemption. Employers who have less than 50 employees may be eligible for exception to the expanded FMLA leave if they can show that providing such benefits will be detrimental to the viability of the business. In such cases, companies should evaluate and document any reasons they identity to not provide such leave, although they need not send documentation to the Department of Labor at this time.

• Under 25 Employees – Reinstatement Rights. As with the FMLA, employees who take leave under the EFMLEA are entitled to be reinstated to their position or a substantially equivalent position when leave ends. However, if the business has less than 25 employees, it is exempted from providing job restoration following leave if: (1) the employee’s position no longer exists due to economic conditions; (2) the employer has made reasonable efforts to restore the employee to the same or equivalent position; and (3) the employer continues to make reasonable efforts to contact the employee for one-year if an equivalent position becomes available.

• No Private Right of Action – Under the EFMLEA, an employee has no private right of action to file a complaint or lawsuit against an employer with less than 50 employees, because that employer was not subject to the FMLA before the expansion Act was created. Such employees must seek a remedy through the Department of Labor or other designated agency.

Required Documentation to Request Leave

An employee is required to provide his or her employer with documentation in support of Paid Sick Leave or Expanded Family and Medical Leave. That documentation must include: (1) the employee’s name; (2) the dates for which leave is requested; (3) the COVID-19 qualifying reason for leave, and (4) a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason. Additional documentation may be required. For example, the name of the government entity that issued the quarantine or isolation order and/or the name of the healthcare provider who advised the employee to self-quarantine for COVID-19 reasons or to care for another individual under self-quarantine. An employee requesting leave to care for a child must state: (1) the name of the child; (2) the name of the school, daycare or child care provider unavailable due to COVID-19, and (3) a statement that no other suitable person is available to care the for child.

Penalties for Non-Compliance

The Paid Sick Leave statute is enforced under the FLSA. Failure to provide paid leave under this section is considered the same as failing to pay minimum wage benefits in violation of Section 6 of the FLSA, and those penalties apply (See 29 U.S.C. 216 and 217).  An employer may not discharge, discipline, retaliate or discriminate against an employee who takes leave under this section, or who files a complaint, proceeding or testifies in a proceeding. Violation of this section carries penalties that are stated in 29 U.S.C. 215(a)(3), 216 and 217. Moreover, the Secretary of Labor is permitted to verify compliance with this statute through periodic compliance checks. The Expanded Medical Leave Act is enforced in a similar manner as the FMLA.

• The DOL will observe a temporary period of non-enforcement for the first 30 days after the Act takes effect, so long as the employer has acted “reasonably and in good faith to comply with the Act. Good faith exists when violations are remedied, the employee is made whole as soon as practicable by the employer, the violations are not willful, and, the employer sends a written commitment to the DOL that it will comply with the Act in the future.

The information contained in this article is not designed to address specific situations.  If you have questions concerning this topic, you should consult with legal counsel for advice on fact specific matters. 

Robin Foret is Of Counsel at Seltzer, Chadwick, Soefje & Ladik, PLLC, and is Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization.  Robin Foret is a frequent speaker and writer on employment law compliance topics.  She also provides training for companies to assist them comply with federal and state employment laws.  She can be reached at rforet@realclearcounsel.com or by telephone at (469) 626-5358.  You may also visit the website for more information about our law firm’s services at www.realclearcounsel.com. 

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

As noted in an earlier blog post, the City of Dallas enacted a paid sick time ordinance which became effective on August 1, 2019 for private employers with six (6) or more employees. Under the Ordinance, no penalties were to be assessed, except for anti-retaliation violations, until April 1, 2020.

On June 30, 2019, a lawsuit was filed in the U.S. District Court for the Eastern District of Texas to stop the ordinance from taking effect. On March 30, 2020, two days before the ability of the City of Dallas to assess penalties, the Court issued a preliminary injunction blocking enforcement of the ordinance. The court’s reasoning was similar to that used by the Texas Third Court of Appeals in finding Austin’s paid sick time ordinance unconstitutional.

Since the ordinance has been in effect for eight months, many Dallas employers have already implemented sick leave policies in compliance with its prescriptions. Although likely welcomed by most Dallas employers, the preliminary injunction nevertheless presents the difficult question of whether to continue such policies, thereby incurring increased payroll costs, or to discontinue such policies, thereby risking poor employee morale or attrition.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC

For small businesses with fewer than 50 employees, the Families First Coronavirus Response Act (“FFCRA”) includes two parts which suddenly present new, unanticipated and complex leave mandates.

Emergency Family & Medical Leave Expansion Act

The first part amends the Family & Medical Leave Act (“FMLA”) to include leave mandates applicable to school or place of care closures or child care provider unavailability for COVID-19-related reasons.

Small businesses with fewer than 50 employees are included in this mandate subject to the authority of the Department of Labor (“DOL”) “to issue regulations for good cause to exclude small businesses …”when the imposition of such a requirement would jeopardize the viability of the business as a going concern.”

Only the DOL may bring an enforcement action under this part of the FFCRA. In such an action, the DOL may seek not only actual damages, but also an additional amount equal to the amount of actual damages as liquidated damages to punish the employer.

Emergency Paid Sick Leave Act

This part prescribes 80 hours of paid sick leave for all employers with fewer than 500 employees. There is no exemption for small businesses with fewer than 50 employees.

As to the paid sick leave prescriptions, the FFCRA incorporates the penalty provisions of the Fair Labor Standards Act (“FLSA”) which allow for (1) civil actions by the DOL, (2)  civil actions by “any one or more employees on behalf of himself or themselves and other employees similarly situated”, (3) liquidated damages in an amount equal to the paid sick leave denied by the employer, and (4) attorney’s fees.

DOL Guidance

The Department of Labor (“DOL”) has provided (1) question & answer guidance to help small businesses understand these mandates, (2) a temporary rule interpreting the FFCRA, and (3) notice of its intent to delay full enforcement of the Act until April 18, 2020.

Included in this guidance is the small business exemption under the first part of the FFCRA. The DOL has stated a small business may claim the exemption if an authorized officer of the business has determined that:

1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

Litigation Under Emergency Family & Medical Leave Expansion Act

Beyond the limited guidance provided by the DOL, little guidance is being offered to small businesses as to what to expect if litigation is brought by the DOL for a violation of the FMLA.

1. Who Has Burden of Proving Availability of Small Business Exemption?

To be sure, the DOL has provided guidance for small businesses in determination the availability of the small business exemption. But, who would have the burden of proving the availability of this exemption in court?

FLSA and the FMLA jurisprudence generally provides it is the employer’s burden to prove the availability of applicable exemptions. If cases under the FFCRA follow such precedent, the courts will look to small businesses to prove they fall within the exemption. A small business unable to meet its burden faces actual and liquidated damages as to each affected employee.

2. What Evidence Will Prove Availability of Small Business Exemption?

Interestingly, the DOL has stated the availability of the small business exemption hinges upon a “determination by an authorized officer of the business.” There is no similar FLSA or FMLA exemption tied to such a determination.

It will thus likely be up to the courts to determine, as a matter of first impression, what evidence is necessary as to the determination. Among the questions which will likely be addressed by the courts are: (1) Must a determination be in good faith? (2) Must a determination be based upon evidence? (3) What evidence must be considered in the determination? These questions will likely make the jeopardy inquiry much more complicated than the three-prong inquiry published by the DOL.

3. How Narrowly Will Small Business Exemption Be Construed?

The DOL guidance also leaves unanswered the question of how broadly or narrowly the small business exemption will be construed by the courts. For years, cases under the FLSA and FMLA have dictated that statutory exemptions under those statutes be narrowly construed. Several courts have thus held the burden of proving the availability of an exemption under the statutes is a substantial one.

If FFCRA cases follow FLSA and FMLA jurisprudence, they will likely require more than minimal evidence of jeopardy. Indeed, close questions as to jeopardy will likely be resolved in favor of the DOL.

Litigation Under Emergency Paid Sick Leave Act

Similarly, little guidance is being offered to small businesses as to what to expect if litigation is brought by the DOL or an employee for a violation of the paid leave prescriptions.

1. How Many Employees Can Join a Suit For Unpaid Sick Leave?

The only limitations on the number of employees which can join a suit under the FLSA are (1) the number of employees employed by the employer, (2) the number of employees who are shown to be similarly situated to the lead plaintiff, and (3) the statute of limitations.  Even for a small business, therefore, the stakes of litigation can be liability to multiple employees for unpaid sick leave and liquidated damages.

2. What Amount of Attorney’s Fees Can Be Awarded? 

The only limitation on the ability of a court to award attorney’s fees to a successful plaintiff is that the fees be reasonable. Indeed, in many FLSA collective actions, the attorneys fees awarded can exceed the combined liability of a defendant employer to all claimants.

3. Will Employers be Able to Avail Themselves of a Good Faith Defense?

The FLSA (29 U.S.C. 260) expressly allows an employer to avoid liquidated damages if the employer proves the act or omission which violated the Act was in good faith and the employer had reasonable grounds for believing the act or omission was not a violation. No such provision is expressly set forth in this part of the FFCRA.

Accordingly, a question which courts will be presented from the onset is whether a good faith defense exists for failure to provide paid sick leave. This question will be especially important for small businesses which are tackling federally mandated leave for the first time. If the good faith defense does not exist, the stakes of making wrong determinations become more serious for small businesses.

Takeaways

For small businesses, effective risk management under the FFCRA requires more than merely following DOL guidance. It requires understanding the stakes, expense and evidentiary realities of litigation. A small business which does not account for these realities risks unwanted litigation or, worse, a costly judgment or settlement.

So, how will small businesses fare in court under the FFCRA?  The answer depends upon how well they have been prepared by legal counsel for the prospect of  such litigation.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor and employment law issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

On March 9, 2020, Ronald & Eva Weissberger sued Princess Cruise Lines, Ltd. in the U.S. District Court for the Central District of California. Mr. & Mrs. Weissberger are passengers aboard the Grand Princess which departed out of San Francisco on Feb. 21, 2020, and has been anchored off the coast of California since March 4, 2020 since March 4, 2020 as a result of an outbreak of COVID-19.

Two unique aspects of the suit are worthy noting.

First, the only causes of action actually plead are negligence and gross negligence (likely to invoke insurance coverage). The allegations nevertheless also support a claim of intentional misconduct. In this regard, the suit alleges: “Defendant PRINCESS chose to place profits over the safety of its passengers, crew and general public in continuing to operate business as usual, despite their knowledge of the risk of actual injury to Plaintiffs, who are elderly with underlying medical conditions.”

Second, neither of the plaintiffs has actually contracted COVID-19. Their alleged damages stem only from the actual risk of immediate exposure to the virus. The suit specifically alleges: “… Plaintiffs are suffering from emotional distress, are traumatized from the fear of developing COVID-19 as they sit minute after minute in their confined cabin on an infected vessel, and this emotional harm will continue to plague them.”

Frankly, the suit against Princess Cruises may have dubious merit. Still, the suit must now be defended, even if frivolous, at considerable expense. This expense, along with unwanted media attention, means the suit has settlement value. The plaintiffs likely had no problem finding an attorney willing to file a lawsuit under such circumstances.

Now that Coronavirus litigation has begun, other potential plaintiffs will soon join the party. They will see the suit against Princess Cruises as a model even as to persons who never contracted the virus.

So, why should employers be worried? After all, worker’s compensation insurance generally provides a shield from liability to employers not available to cruise lines. This shield can be especially formidable for injuries which are mental and emotional in nature. Still, there are circumstances in which this shield may not be available.

In Texas, for instance, an employer can opt out of worker’s compensation insurance coverage for its employees. A non-subscriber Texas employer, therefore, is not shielded from negligence claims, such as those asserted against Princess Cruises, for failure to provide a safe workplace.

In Illinois, moreover, the Worker’s Compensation Act provides the exclusive remedy only for “accidental injuries” that occur in the workplace. As recognized in 2018 by the U.S. District for the Northern District of Illinois in Phillips v. Exxon Mobil Corporation, there are circumstances in which a claim for intentional infliction of emotional distress is not barred by worker’s compensation insurance. An Illinois employer, therefore, is not shielded from claims, such as those effectively asserted against Princess Cruises, for intentional misconduct in the face of COVID-19.

As long as end-arounds exist to state worker’s compensation laws, employers should anticipate the tremendous incentive for employees exposed to the threat of contracting COVID-19 to exploit them. They will likely find no shortage of attorneys willing to try an end-around as to such a high-profile subject matter. Even if frivolous, a suit making claims, such as those asserted against Princess Cruises, will still need to be defended.

How can the risk of such a lawsuit be mitigated by employers? Follow the advice of the CDC on the webpage specifically developed or business and employers. This webpage can be accessed here. The more proactive an employer is in safeguarding the health of its employees, the lower the risk of an unfortunate lawsuit.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor and employment law issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.