Coronavirus Crisis: Unique Times Make for Unique Lawsuits

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.

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