WE CAN DO THIS: REOPENING THE NON-PUBLIC OFFICE SECTOR AND KEEPING IT OPEN DURING THE COVID-19 PANDEMIC

co-authored by Christine Gottesman, Esq., Special Counsel at Nukk-Freeman & Cerra, P.C. in Chatham and Kelly Deere, Assistant Clinical Professor of Law at Rutgers Law School.

Published by Westlaw from Rutgers Business Law Review 2020, October 2020.

 

INTRODUCTION:
No one said reopening businesses after a pandemic shutdown would be easy. Some businesses have shown unusual creativity in their reopening efforts…

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16 Rutgers Bus. L. Rev. 10
Rutgers Business Law Review
2020
COVID-19 Symposium
Article
Kelly Deere,  Christine Gottesman
Copyright © 2020 by Rutgers Business Law Review; Kelly Deere, Christine Gottesman

Employer Arbitration Agreement Pointers From 2 Rulings

Employer Arbitration Agreement Pointers From 2 Rulings

By Kirsten Grossman (October 13, 2020)  published as a Guest Article by Law360 Expert Analysis 

On Sept. 11 and 14, respectively, the New Jersey Supreme Court and U.S. Court of Appeals for the Third Circuit decided two significant cases relating to the enforceability of arbitration provisions in
the employment context.

Although the decisions address separate issues, both reaffirm the strong federal policy favoring arbitration agreements codified in the Federal Arbitration Act, while they attempt to clarify the conundrum of when a
court versus an arbitrator determines — as the Third Circuit put it — “the arbitrability of arbitrability.”[1]

In Flanzmen v. Jenny Craig Inc.,[2] the New Jersey Supreme Court addressed the enforceability of an individual employee’s arbitration agreement where it failed to identify an arbitrator, an arbitration organization to conduct the arbitration, or the process for the parties to select an arbitrator.[3] The New Jersey Appellate Division relied heavily on a 2016 appellate division decision[4] to hold that the agreement’s failure to identify an arbitral forum — such as the American Arbitration Association — was fatal and
rendered the agreement unenforceable.[5]

The New Jersey Supreme Court disagreed and reversed.[6] The court first addressed the threshold issue of whether the “agreement to arbitrate all, or any portion, of [the] dispute is ‘the product of mutual assent.'”[7]

The court observed that, like the Federal Arbitration Act, the New Jersey Arbitration Act,[8] in addition to “enunciat[ing] the same policies favoring arbitration,” also contains a procedure by which the court, upon application by a party, can appoint the arbitrator.[9] The court determined there was no basis to invalidate the parties’ otherwise clear and unmistakable agreement to arbitrate where this default provision provided an alternate mechanism to appoint an arbitrator when the agreement is silent.[10]

Although the court noted that the inclusion of the contemplated arbitration process would have “enhance[d] the clarity” of the agreement, the agreement met the requirements to be enforceable under New Jersey contract law.[11]

The Third Circuit would address the same threshold issue of mutual assent three days later. However, the Third Circuit’s analysis involved a far more convoluted — and mind-bending — procedural context. The question presented in MZM Construction Co. Inc. v. New Jersey Building Laborers’ Statewide Benefit Funds[12] was whether the court or arbitrator decides if an agreement to arbitrate exists.

In MZM Construction, the arbitration agreement at issue referenced another agreement that included an arbitration provision empowering an arbitrator to decide whether an agreement to arbitrate exists. In other words, the dispute involved an alleged agreement within an agreement.

The plaintiff, MZM’s president, signed a short-form agreement, or SFA, with the New Jersey Building Laborers’ Statewide Benefit Funds in 2002.[13] The SFA consisted of a single page. It did not contain any other substantive provisions, but incorporated by reference (but did not attach) a lengthy collective bargaining agreement and its unsigned successor CBA dated 2002.[14]

MZM’s president later testified that she had felt pressured to sign the SFA by a threatened work stoppage on a project at the Newark Liberty International Airport, and she believed (and was told by the union) that the SFA only applied to the airport project.[15] The record contained no evidence that MZM’s president ever saw the unsigned 2002 CBA.

A dispute arose years later over the amount of MZM’s contributions to the defendant funds between 2001 and 2018.[16] The defendant funds audited MZM’s books, identified a significant shortfall, and claimed MZM owed approximately $230,000 in contributions.[17]

The defendant funds based their claim on the signed SFA, which incorporated the unsigned 2002 CBA.[18] It also invoked a provision in the 2002 CBA permitting it to arbitrate its collection dispute with MZM.[19] MZM filed a petition in the U.S. District Court for the District of New Jersey to enjoin the arbitration and for declaratory judgment that it was not bound by the unsigned 2002 CBA.[20] The defendant funds moved to dismiss and opposed the application for injunction.[21]

The issue before the district court was whether the court or an arbitrator should decide the threshold issue of whether an agreement to arbitrate exists.[22] The district court determined that since MZM had alleged “fraud in the execution” of the alleged agreement as opposed to “fraud in the inducement,” the court — not an arbitrator — should determine the initial question of whether an agreement to arbitrate existed.[23]

The district court granted a preliminary injunction to preserve the status quo, later enjoined the arbitration, denied the motion to dismiss, and ordered expedited discovery on the issue of arbitrability.[24] The defendant funds appealed.[25]

The Third Circuit began its analysis by acknowledging the “strong federal policy in favor of compelling arbitration over litigation” and observing that the district court had not ruled on the merits of MZM’s arbitrability claim.[26] It stated that requiring the parties to litigate the arbitrability issue in court may deny the defendant funds the right to arbitrate that issue.[27] To determine whether that was proper, the Third Circuit was required to unwind years of U.S. Supreme Court and Third Circuit jurisprudence on the issue.

The court began its analysis with the severability principle enunciated by the U.S. Supreme Court in 1967 in Prima Paint Corp. v. Flood & Conklin Manufacturing Co. Under the severability principle, an arbitration clause is deemed severable and independently enforceable from the rest of the contract in which it is contained (the container contract).

The severability principle provides that a party cannot avoid arbitration by merely challenging the container contract. Rather, the party must specifically challenge the arbitration clause itself.[28] As a result of Prima Paint, “a claim of fraud in the inducement of the arbitration clause is for the court to decide, but a claim of fraud in the inducement of the container contract is for the arbitrator.”[29]

The Third Circuit subsequently held in Sandvik AB v. Advent International Corp. in 2000 that if the formation or existence of the container contract is at issue, the court must decide fraud-in-the-execution issues unless there is a clear and unmistakable delegation of that authority to the arbitrator. This principle is known as competence-competence or arbitrating arbitrability.[30]

In 2010, the U.S. Supreme Court in Rent-A-Center West Inc. v. Jackson held that parties could accomplish this allocation by including a delegation provision in the agreement that clearly vests the arbitrator(s) with exclusive authority to decide arbitrability.[31]

It is the intersection of the severability doctrine and arbitrating arbitrability principle in MZM Construction that led the Third Circuit to the complex and mind-bending question: Does the court or arbitrator determine the arbitrability dispute if the formation of the container contract is challenged, but the container contract itself includes a delegation provision authorizing the arbitrator to decide the issue?[32]

The defendant funds argued that because MZM challenged the validity of both the SFA and the 2002 CBA (the container contract), but failed to specifically challenge the delegation provision (the agreement to arbitrate arbitrability), the issue should be decided by the arbitrator(s).[33] MZM argued that its fraud-in-the-execution challenge to the validity of the entire agreement — the SFA incorporating the 2002 CBA, which included both the arbitration and delegation provisions — required the court to decide the arbitrability
issue.[34]

The Third Circuit agreed with MZM and the district court that the decision belonged with the court. It determined that Sandvik compelled this conclusion, which was also consistent with Rent-A-Center.[35]

In so holding, the Third Circuit reaffirmed its holding in Sandvik that that severability doctrine simply does not apply when the issue is whether the parties mutually assented to the container contract.[36] As the court noted, “[i]t can hardly be said that contracting parties clearly and unmistakably agreed to have an arbitrator decide the existence of an arbitration agreement when one of the parties has put the existence of that very agreement in dispute.”[37]

The court further noted that the U.S. Courts of Appeals for the Fourth, Fifth, Sixth and Eighth Circuits have come to the same conclusion: Courts retain authority to decide the question of mutual assent to a contract containing or incorporating a delegation provision.[38]

The interplay of MZM Construction and Flanzmen offer several important lessons.

First, before signing any agreements, a party must read and understand the agreement and all documents attached or incorporated by reference. While this seems like common sense, following that basic guidance here likely would have saved the parties in MZM an expensive litigation regarding a nonsubstantive threshold issue.

Moreover, while the Third Circuit held that the arbitrability issue was for the court, this does not mean the court is where the case will ultimately proceed. The district court may conclude that MZM assented to arbitration and compel the matter to arbitration.

Second, before signing, parties to an arbitration agreement must be sure they understand the benefits — and potential downsides — of arbitration with respect to all types of disputes that could potentially be arbitrated under the terms of that agreement to avoid buyer’s remorse. In many of the cases in which parties challenge arbitrability, those challenges appear to arise out of a dissatisfaction with the arbitration venue, which should have merited more consideration before the agreement was signed, not after a dispute arose.
Parties should never assume that they can simply get out of an arbitration provision later by challenging it in court.

Finally, when it comes to arbitration provisions, more is more. The arbitration provision should be as detailed as possible and designate an arbitration forum as well as a backup forum, and clearly designate whether the issue of arbitrability is delegated to the arbitrator.

Kirsten McCaw Grossman is head of the restrictive covenant practice group at NukkFreeman & Cerra PC.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] 9 U.S.C. § 1 et seq.
[2] — A.3d — (2020), 2020 WL 5491899 (September 11, 2020).
[3] Id. at *3.
[4] Kleine v. Emeritus at Emerson, 445 N.J. Super. 545 (App. Div. 2016). In Kleine, New
Jersey’s Appellate Division invalidated an arbitration agreement because the parties’
designated arbitration forum, the AAA, had announced prior to the execution of the
agreement that it would no longer handle the types of disputes at issue unless the parties
agreed post-dispute. Id. at 552.
[5] Id. at *11.
[6] Id. at *11-12.
[7] Id. at *10.
[8] N.J. Stat. Ann. §§ 2A:23B-11, 2A:23B-15.
[9] Id. at *8-9.
[10] Id. at *9-10 (citing Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430, 443, 99
A.3d 306 (2014)).
[11] Id. at *12.
[12] — F.3d —, 2020 WL 5509703 (3d Cir. September 14, 2020).
[13] Id. at *1.
[14] Id.
[15] Id. at *2. MZM’s President testified that the local union representative told her that the
SFA was a “single project” agreement which she needed to sign because the union had
“nothing on record” for the Newark Airport job. Id. MZM’s President further claimed that the
union never told her it needed a “statewide CBA” and that the union was aware that MZM
was an “open shop.” Id.
[16] Id.
[17] Id. at *2.
[18] Id.
[19] Id.
[20] Id. MZM claimed it never saw the CBA or the 2002 CBA but rather relied upon the
union representatives characterization of the SFA when signing it. Id.
[21] Id. at *3.
[22] Id.
[23] Id.
[24] Id.
[25] The Defendant Funds also moved for reconsideration and an order enforcing the
arbitration agreement based on “newly discovered evidence,” which the District Court
denied. Id. at *3.
[26] Id. at *5.
[27] Id. at *4.
[28] Id. (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-06, 87 S.
Ct. 1801, 18 L.Ed.2d 1270 (1967).
[29] Id. (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S.
Ct. 1801, 18 L.Ed.2d 1270 (1967).
[30] Id. at *6-*7 (citing Sandvik AB v. Advent Int’l Corp., 220 F.3d 99, 104 (3d Cir.
2000), China Minmetals Materials Imp. & Exp. Co. v. Chi Mei Corp., 334 F.3d 274, 281, 287
(3d Cir. 2003) and Sandvik, 220 F.3d at 111 (quotation omitted)).
[31] Id. at *7 (citing Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 68-69, 72, 130 S.Ct.
2772, 177 L.Ed.2d 403 (2010)).
[32] Id. at *8.
[33] Id.
[34] Id. at *9.
[35] Id.
[36] Id.
[37] Id. at *10 (citing Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 69, n.1, 130 S.Ct.
2772, 177 L.Ed.2d 403 (2010)).
[38] Id.

Retirement Plan ERISA Fiduciary Duties During the COVID-19 Crisis

RETIREMENT PLAN ERISA FIDUCIARY DUTIES DURING THE COVID-19 CRISIS

By: Christine Gottesman, Esq.

This article appeared on https://westminster-consulting.com/Media/Confero/Issue31/ on July 14, 2020.
Link to see this article page: https://www.westminster-consulting.com/Media/Confero/Issue31/retirement-plan-erisa-fiduciary-duties-during-the-covid19-crisis
Step One – Identify the ERISA fiduciaries

The first step is to make sure that the individuals who are designated retirement plan fiduciaries are aware that they are ERISA fiduciaries and receive appropriate fiduciary training.   This may seem obvious but this is something that is often overlooked in the everyday running of a business.

An ERISA fiduciary is any individual named in the plan as a fiduciary and anyone who has any discretional authority or control over the plan, its assets or plan administration.   Many plan documents simply identity the sponsoring company as the named fiduciary and plan administrator.  If that is the case with your plan, then the board of directors (or other governing body) is the ERISA fiduciary.  They can formally delegate that authority to a Retirement Plan committee of the board or officers, but they retain general oversight responsibility.   If authority is delegated, then the retirement plan committee is the primary entity responsible for the plan and anyone on the committee should understand his/her obligations.

Step Two – Review ERISA Fiduciary Obligation Framework

Now is a good time for retirement plan investment fiduciaries to remind themselves of their ERISA fiduciary obligations.  The “rules” haven’t changed, and they are:

  1. The Exclusive Purpose Rule: A fiduciary must act in the exclusive purpose of providing benefits to participants and defray reasonable expenses.  Company and personal interests cannot be considered.
  2. The Prudent Person Rule: A fiduciary must perform their duties with the “care, skill, prudence and diligence under the circumstances then prevailing that a prudent person would use acting in a like capacity and familiar with such matters.”
  3. Diversification Rule: A fiduciary must diversify plan investments to minimize the risk of significant losses, unless it is clearly not prudent to do so.
  4. Plan Documents Rule:  Plan terms must be followed as long as they are consistent with ERISA.

If the ERISA fiduciaries have not received fiduciary training recently, that should be done now.   ERISA fiduciaries can face personal liability as well as civil and criminal penalties, so it is very important that they understand their obligations.    The company should also review its fiduciary liability policies to understand the extent of coverage for the plan fiduciaries and communicate that to the plan fiduciaries.

The best way for a fiduciary to prove that they satisfied their obligations is to make sure that their decision-making process is (1) sufficiently documented and (2) reflects that they reasonably believed they were acting in the best interest of participants.  Courts rarely second-guess fiduciaries if those two bars are met.

Step Three –  Other Specific Action Items to Keep in Mind

As highlighted above, the Prudent Person Rule requires that fiduciaries exercise their duties based on current circumstances.  Given the current volatile circumstances, a fiduciary should consider taking these additional specific steps:

  1. Closely monitor the retirement plan investment returns.  Make sure you are regularly getting and reviewing benchmarking reports from the plan advisor.
  2. Familiarize yourself with the various investment funds and make sure that you understand the make-up and risks inherent in the funds.  For example:
    • If your plan has a stable value fund, you should make sure that there are no liquidity issues with respect to that fund.
    • If your plan has a fixed income fund, make sure you understand any mortgage exposure.
    • Given that the DOL has recently approved private equity investments for multi-asset class funds (such as target-date funds, target-risk funds and balanced funds) in defined contribution plans, find out if any of those funds offered under your plan intend to include these kinds of investments. If so, the DOL has set out a roadmap for plan fiduciaries to follow in evaluating these funds, and that roadmap should be followed.
  3. Get regular reporting from the plan’s recordkeeper regarding distributions and investment-election trends by the plan participant.
  4. Decide if additional participant communication should be done regarding educational resources available to them.
  5. If you implemented the COVID-19 CARES Act distribution and loan provisions, determine how to best communicate these to participants and make sure they understand these options.
  6. If you are contemplating changing investment funds or service providers, proceed with caution and make sure there is careful planning to minimize any blackout periods.

Retirement plan fiduciaries can go a long way to comply with their ERISA duties and protect themselves against breach of fiduciary duty claims if they follow the steps described above.  Don’t forget to document your actions and decisions.  Documentation is absolutely key to being able to prove that an ERISA fiduciary complied with their obligations.  Although ERISA does not require perfect results, it does require that you follow a thorough process.   In these turbulent times, it is important to remember these basic rules and to continue to follow them.

About the Author: Christine Gottesman, Esq., Special Counsel – Benefits, Nukk-Freeman & Cerra, P.C. 

Ms. Gottesman specializes in advising clients regarding all types of employee benefits and executive compensation matters. She counsels employers in the establishment and administration of qualified and nonqualified retirement benefit plans and welfare benefit plans including issues of plan design, compliance with ERISA and the Internal Revenue Code and fiduciary responsibility. She advises publicly and privately held corporations in the design and administration of executive compensation arrangements and equity-based compensation plans. Ms. Gottesman’s practice also includes representing employers in employee benefits matters arising in connection with corporation mergers, acquisitions and dispositions.

Anticipating and preparing for COVID-19-related employment litigation

By Kerrie R. Heslin, Esq., Ryan S. Carlson, Esq., and Robin H. Rome, Esq.,
Nukk-Freeman & Cerra P.C.

This article appeared on the Westlaw Practitioner Insights Commentaries web page on July 2, 2020.
Please sign into your account to view this article: https://www.westlaw.com/Document/I48f9aec3bc9611eabea4f0dc9fb69570/View/FullText.html?transitionType=Default&contextData=(sc.Default)&VR=3.0&RS=cblt1.0

 

INTRODUCTION

Although certain health and financial ramifications of the coronavirus pandemic appear to be improving, the litigationrelated fallout is just beginning. The pandemic has triggered a significant rise in unemployment, with over 20 million Americans currently out of work — a statistic that historically correlates to increased litigation.(1)

It also has triggered concerns in the areas of workplace safety, discrimination, retaliation, leave and accommodations. The federal and state governments have responded by increasing their enforcement efforts, expanding existing laws, and passing new statutes and regulations focused on addressing the impact of the
pandemic and COVID-19.

Attorneys have responded by filing over 2,700 lawsuits from the start of the pandemic through mid-June, many asserting novel and untested legal claims.(2) All of this translates into increased risks for employers, who must not only be aware of these risks, but consider taking steps to prepare for and reduce them.

WORKPLACE SAFETY CLAIMS

In light of the health implications of COVID-19, workplace safety will be at the forefront of the legal landscape. The law offers scant guidance about how employers are required to provide a safe work environment.
Under the Occupational Safety and Health Act (OSH Act), there is a “general duty” to ensure that the workplace is “free from recognized hazards that are causing or likely to cause death or
serious physical harm.”(3)

While the OSH Act does not empower employees to sue over unsafe work conditions, they can file complaints with the Occupational Safety and Health Administration (OSHA), prompting workplace safety investigations and government enforcement actions. There is a tight timeframe to bring an OHSA complaint. The
complaint must be filed within 30 days, after which OSHA conducts a fact-finding investigation. OSHA can award an employee reinstatement, back pay, emotional distress damages, punitive damages and non-monetary relief.

As of May 25, 2020, employees have already filed 6,645 OSHA complaints arising from COVID-19.(4)
In addition, employers face an increasing number of workers’ compensation claims. In the normal course, if an employee is injured at work, his or her exclusive remedy is under the state’s workers compensation act.
The remedies available under the workers’ compensation act are limited, as is the employer’s liability. For an employee involved in a workplace accident, the causal connection between the workplace and injury is relatively straightforward.

In the case of COVID-19, which is susceptible to community spread, this causal connection is questionable and employees may have an uphill burden in proving that they contracted the virus at work. States like New Jersey, New York and Pennsylvania have introduced bills to expand the state workers’ compensation laws to create a rebuttable presumption of causation for employees of essential businesses who contract COVID-19.

In New Jersey, the presumption would only be overcome by a preponderance of the evidence showing that the worker was not exposed to the disease while at work,(5) a difficult burden to meet. While state workers’ compensation laws generally block employees from filing private lawsuits over workplace injuries, the bar is not absolute. There are exceptions to the workers’ compensation exclusivity rule — for example, when the employer engages in intentional conduct that harms employees or fraudulently conceals existing occupational injuries or diseases from an employee. This is the basis of several lawsuits filed by employees of Royal
Caribbean Cruises.(6)

In those cases, employees claim the company did not safeguard them from COVID-19 by failing to take necessary precautions, ignoring recommendations of the Centers for Disease Control and Prevention (CDC), and failing to promptly diagnose infected workers, which led to injuries and three deaths.

Creative plaintiffs’ attorneys are finding other bases for claims against employers, such as public nuisance lawsuits. In Illinois, employees and their families recently filed suit against McDonald’s restaurants under the state’s public nuisance law.

They allege the employer’s dereliction of duties has created a public nuisance and are seeking injunctive relief to abate the public nuisance.(7) The public nuisance theory skirts the limits of the workers’ compensation laws because it sues employers not for how they treat workers, but for how the treatment of workers affects the surrounding community.

Finally, in extreme circumstances, an employer’s failure to provide a safe work environment could lead to wrongful death actions. We have already seen the first of this type of claim in a lawsuit filed against Walmart.
The relative of a Walmart employee who died of COVID-19 has filed a wrongful death lawsuit claiming the retailer failed to implement, promote and enforce social distancing guidelines, failed to cleanse and sanitize the store, and failed to provide personal protective equipment such as masks, gloves and wipes.(8)

RETALIATION CLAIMS

Employees working at essential businesses operating during the pandemic or employees returning to work have raised, or inevitably will raise, concerns regarding personal protective equipment, social distancing and other health and safety issues.

At the same time, employers are making difficult business decisions due to the economic impact of the pandemic, such as reducing hours, cutting pay, and furloughing or terminating employees. This is the recipe for an increase in retaliation lawsuits.

Retaliation claims arise under various federal and state laws, administrative regulations and state common law. At the administrative level, Section 11(c) of OSHA prohibits employers from retaliating against workers for raising concerns about safety and health conditions.

OSHA has more than 20 industry-specific federal laws protecting employees from retaliation for raising safety
concerns in various industries.

Sections 8(a)(1) and (3) of The National Labor Relations Act (NLRA) also prohibit employers from retaliating against employees who make safety complaints while engaging in concerted activity, i.e. complaining about safety issues on behalf of themselves and other workers.

The NLRA prohibits retaliation against both unionized and non-unionized non-supervisory employees. On March 30, 2020, the National Labor Relations Board (NLRB) issued one of its first decisions related to COVID-19, finding that a hospital violated the NLRA by firing an employee in retaliation for providing information to a newspaper about staffing shortages affecting workers at the hospital.(9)

In addition to these federal laws, employees have state whistleblower protections at their disposal. Many state
whistleblower laws, such as New Jersey’s Conscientious Employee Protection Act10, protect employees from retaliation for making safety complaints, even if they are wrong about their complaint, as long as the employee has an objectively reasonable basis for bringing the complaint.

Most of these laws also do not require employees to know with specificity the law they believe their employer is violating. These state laws typically provide remedies that are more attractive to employees, including back pay, front pay, emotional distress damages, punitive damages and attorneys’ fees.

About half the states also allow employees to bring retaliation claims based on a clear mandate of public policy concerning the health and safety of workers. Various other federal and state laws providing COVID-19
related benefits have their own anti-retaliation provisions, such as the Families First Coronavirus Response Act (FFCRA), the Family and Medical Leave Act (FMLA) and similar state and local sick and family leave laws, and workers’ compensation laws.

DISCRIMINATION CLAIMS

The circumstances of the pandemic also present an increased risk for employment discrimination claims. These include claims for race and national origin discrimination or harassment resulting from xenophobia and actual or perceived disability discrimination against employees requesting or returning from COVID-19 related leave.

Since many employers are also reducing their workforces by implementing temporary furloughs or layoffs, they may unintentionally find themselves in a discrimination lawsuit as a result. For example, selecting older workers, pregnant workers or workers with known health issues for furlough or layoff as a means of insulating them from COVID-19 may give rise to discrimination claims.

Decisions may also disparately impact a particular protected class of employees. By example, a business that has hired diverse workers in the past year resulting from diversity and inclusion initiatives, may be exposed to a discrimination claim if it decides to layoff workers in order of seniority.

Employers should not overlook sexual harassment claims. Harassment can occur remotely on virtual platforms such as Zoom which many businesses have implemented for scheduling formal business meetings as well as informal company events like virtual happy hours.

These virtual means of communication are often ripe for employee misbehavior and offer much less employer
oversight.

LEAVE AND ACCOMMODATION CLAIMS

As the pandemic continues and employees begin to return to the physical workplace, employers face mounting legal risks dealing with leave and accommodation issues.

While employers may be ready to open, employees will still face challenges due to a COVID-19 diagnosis, quarantine for themselves or family members, and the lack of availability of childcare. Employers who fail to properly handle leave and accommodation requests will be at significant risk for lawsuits challenging their actions.

Leave for COVID-19 reasons
Employees impacted by COVID-19 may be covered by various leave laws, which differ in terms of employer
coverage, employee coverage, eligibility, duration, pay and documentation.

Depending on the law involved, impacted employees may file private lawsuits against employers or a complaint with the federal or state Department of Labor. Remedies include reinstatement, back pay and front pay, liquidated damages, and attorneys’ fees.

The Family and Medical Leave Act (FMLA) and Families First Coronavirus Response Act (FFCRA) provide job-protected leave to employees, depending on the size of the employer, if the employee is unable to work or telework because the employee or a family member is diagnosed with or has medical complications due to COVID-19, or if the employee has childcare issues caused by the coronavirus.

The FMLA, an existing law that applies to employers with 50 or more employees, provides qualifying employees with up to 12 weeks of full or intermittent leave within a 12-month period for the employee’s own medical condition or to care for an immediate family member with a “serious health condition.”

The FFCRA, a new federal law passed in response to COVID-19, applies to employers with less than 500 employees. The FFCRA took effect April 1, 2020, and applies to leave taken through December 31, 2020.

Unlike the FMLA, leave under the FFCRA is paid, employee service requirements are waived or significantly reduced depending on the type of leave, and it covers leave for six different COVID-19-related reasons.

The FFCRA covers two basic types of leave:

(1) Emergency Paid Sick Leave (EPSLA) provides employees unable to work or telework with up to 80 hours of paid leave; and (2) Emergency Family Medical Leave (EFMLA) provides employees with up to 10 weeks of additional paid leave for employees unable to work or telework because they are required to care for a child whose school or childcare facility is closed, or whose childcare provider is not available, because of COVID-19.

In addition to these federal leave laws, many states and localities have expanded their existing sick and family leave laws to provide paid and unpaid leave for COVID-19 situations.

These expanded laws are not just limited to leave for the employee’s COVID-19 diagnosis, but may require leave because the employee is unable to work due to closure of a child’s school or childcare due to a public order, a determination that the presence of the employee (or a member of the employee’s family in need of care by the employee) in the community would jeopardize the health of others, or isolation or quarantine of the employee or a family member in certain circumstances.

The first FFCRA lawsuit was filed only weeks after the law went into effect, with an airline employee suing her employer and two executives, claiming she was unlawfully terminated for requesting time off under the FFCRA to care for her child.(11)

Although the plaintiff’s FFCRA claims are questionable given that she was terminated before the law went into
effect, the case was a harbinger of the wave of lawsuits that have followed alleging unlawful denial of benefits under the FFCRA, retaliation for requesting FFCRA leave, and interference with FFCRA rights.

Accommodations for COVID-19 reasons
Depending on the severity and duration, COVID-19 may constitute a “disability” under the Americans With Disabilities Act (ADA) and analogous state and local laws. In addition, an employee may have an underlying impairment or limitation that would lead to serious complications if he or she is
infected with coronavirus.

While there is no exhaustive list of impairments and limitations, both the CDC and the Equal Employment Opportunity Commission (EEOC) have indicated that individuals with heart disease, diabetes, lung disease or
asthma, a weakened immune system, kidney disease and cirrhosis are considered at higher risk for developing serious complications due to coronavirus exposure.

In addition, the EEOC has noted that employees with mental health disabilities or anxiety because of increased stress related to COVID-19 may be covered by the ADA.

For these employees, an employer may be required to engage in the interactive process and provide reasonable
accommodations.

The types of accommodations may include extended leave, telework, modified work schedule, temporary job
restructuring or transfer, provision of personal protective equipment, changes to the work environment (such as oneway aisles, plexiglass or barriers), or other measures that reduce an employee’s risk of exposure to coronavirus.

The risk of litigation over these issues is apparent in cases filed over the past month.(12) In a case filed in Pennsylvania federal court, an attorney who contracted and recovered from COVID-19 sued his employer when the company declined his request to work remotely and terminated his employment after he complained that this decision was related to his continuing COVID-19 impairments.

Similarly, in a case filed in Massachusetts federal court, an engineer with high blood pressure who lived with his 81-yearold mother was terminated for job abandonment after he expressed concern about his employer’s directive that he come back to the office after working remotely.

These cases are representative of the types of failure to accommodate and retaliation claims that employers will see more and more as the pandemic and workplace continue to collide.

While the full health and financial ramifications of the pandemic are unknown, one thing is certain: the wave of litigation spurred by the coronavirus is just beginning.

As new laws are passed, clarifying regulations are implemented, and courts begin to address the novel
claims brought by employees impacted by the coronavirus, employers will continue to grapple with the legal fallout of the pandemic.

Employers must be vigilant about these risks and, most importantly, be prepared to take them on.

Notes
(1) United States Department of Labor, News Release: Unemployment
Insurance Weekly Claims, (June 11, 2020), dol.gov/ui/data.pdf (last visited
June 14, 2020).
(2) Hunton Andrews Kurth, COVID-19 Complaint Tracker, https://bit.
ly/2YE1VPb (last visited June 14, 2020).
(3) 29 U.S.C. § 654(a) (1).
(4) United States Department of Labor, Occupational Safety and Health
Administration, Weekly Reports, https://bit.ly/2Az7OVY (last visited
June 14, 2020)
(5) N.J. S.B. 2380 (May 4, 2020).
(6) Molchun v. Royal Caribbean Cruises Ltd., No. 1:20-cv-21792-UU
(S.D. Fl. filed Apr. 30, 2020).
(7) Massey v. McDonald’s Corporation, No. 2020-CH-04247 (Ill. Cir. Ct.,
Cook Cty., filed May 19, 2020).
(8) Evans v. Walmart, No. 2020-L-003938 (Ill. Cir. Ct., Cook Cty., filed
Apr. 6, 2020).
(9) Maine Coast Regional Health Facilities, 369 NLRB No. 51 (2020).
The Board also found that the Respondent’s media policy was unlawfully
overbroad under The Boeing Co., 365 NLRB No. 154 (2017), and that the
Respondent violated Section 8(a)(1) for maintaining and enforcing the
unlawful media policy against the employee.
(10) N.J.S.A. §§ 34:19-1-14.
(11) Jones v. Eastern Airlines, No. 2:20-cv-01927-RBS (E.D. Pa. filed Apr. 16,
2020).
(12) Burbach v. Arconic Corp., No. 2:20-cv-00723-CRE (W.D. Pa. filed
May 19, 2020); Lin v. CGIT Systems, Inc., No. 1:20-cv-11051 (D. Mass. filed
June 3, 2020).

 

ABOUT THE AUTHORS

Kerrie R. Heslin of Nukk-Freeman & Cerra P.C. handles employment and labor matters for management and devotes much of her practice to litigating discrimination, retaliation, whistleblower, wage and hour, and benefits issues. She also counsels clients on training, agreements, policies and practices. She can be reached at kheslin@nfclegal.com.

Ryan S. Carlson, also with the firm, represents management in employment litigation, particularly in defending claims of wrongful discharge, discrimination, harassment, retaliation, wage and hour violations, whistleblowing, and restrictive covenants. He can be reached at rcarlson@nfclegal.com.

The firm’s Robin H. Rome defends companies and management in employment and commercial cases, including claims involving discrimination, harassment, retaliation, breach of contract, restrictive covenants and state law violations. She has served as an independent investigator and conducts training sessions and seminars on employment-related issues. She can be reached at rrome@nfclegal.com.

All three attorneys are based in New Jersey. This article reflects the situation at the time it was written based on the rapidly changing nature of the COVID-19 pandemic.

Thomson Reuters develops and delivers intelligent information and solutions for professionals, connecting and empowering global markets. We enable professionals to make the decisions that matter most, all powered by the world’s most trusted news organization.

NUKK-FREEMAN & CERRA’S, SUZANNE M. CERRA NAMED TO NEW JERSEY STATE BAR ASSOCIATION PANDEMIC TASK FORCE, LAW FIRM REOPENING COMMITTEE

CHATHAM, NJ – June 15, 2020 – Nukk-Freeman & Cerra, PC (NFC), a top-ranked Employment Law Firm representing management, is pleased to announce that co-founding partner Suzanne M. Cerra has been invited to join the New Jersey State Bar Association’s Pandemic Task Force, Law Firm Reopening Committee. The NJSBA has created a statewide Pandemic Task Force to examine issues created by the COVID-19 crisis that affect the judicial system, the legal profession, the practice of law, and access to justice for the public. Comprised of retired judges and lawyers representing NJSBA sections and committees, local, affinity and specialty bar associations, the task force will oversee five special committees that will focus on law firm opening and operations, resuming jury trials, practice of law issues, courthouse operations and logistics and access to justice.

As a member of the Law Firm Opening and Operations Committee, Ms. Cerra will partner with the team and help
address issues specific to law firms of allsizes and provide best practice recommendations and guidance for opening
and maintaining safe and healthy law office environments for lawyers, employees and clients. “Since the beginning
of the crisis, Suzanne has been tirelessly counseling clients and our own team on every aspect of the pandemic as it
relates to employment law. She will be an invaluable resource for this committee offering a unique perspective and
thoughtful insight based on her real time pulse on what priorities law firms must consider for a safe and healthy
return to work environment,” stated Co-Founding Partner, Katherin Nukk-Freeman. “Suzanne’s commitment and
experience is ideal for this committee and we are thrilled that she has been invited to participate and represent
NFC.”

About Nukk-Freeman & Cerra, P.C.
Recognized as one of the top employment law firms in the New York Metropolitan Area, NFC provides a progressive,
creative and forward thinking approach to the practice of management-side employment law. Staffed with highly
experienced employment attorneys and a robust support team, we deliver superior work product and incomparable
client service. NFC attorneys have litigated thousands of cases and handled appeals at all levels in state and federal
courts and before administrative agencies. Our substantive knowledge encompasses all areas of employment and
benefits law. In addition, NFC has an entire team dedicated to developing meaningful and impactful employment
law training. We work vigorously to counsel our clients on the most effective preventative measures.