Preparing for the Flood of COVID-19 Liability Claims

Ed Burtnette


September 1, 2020

Since the COVID-19 pandemic began, employers have faced many challenges. They have had to adapt to major swings in business, adjust to ever-changing regulations and safety protocols, and adopt new policies and procedures in an effort to keep employees and customers safe. Now, lawsuits related to COVID-19 are on the rise.

Pandemic-related litigation has begun across the nation, including workplace safety claims, bodily injury claims, wrongful death cases, and discrimination and wage litigation. As the claims roll in, legislation is rapidly evolving to address them. Companies need to anticipate such potential claims and develop a plan to mitigate risk and avoid litigation whenever possible.

The most common claims filed as a result of the COVID-19 pandemic include:

Workplace safety. Workplace safety is one of the most predictable sources of pandemic-related litigation. These claims include allegations of unsafe work environments, failure to take appropriate measures to adequately clean and sanitize the workplace or provide proper personal protective equipment (PPE), inadequate handwashing or sanitizing stations, defective equipment, or failure to enforce social distancing. Workplace safety claims are already being filed in many states and will likely continue to be one of the most common claims against employers going forward.

Illness and injury. There will likely be an increase in illness and injury claims that stem from COVID-19 infections contracted in stores, restaurants, gyms and other businesses. The claims will probably allege negligence due to lack of signage, improper use of PPE, inadequate handwashing or sanitizing stations, defective equipment, or failure to enforce social distancing. These claims may also extend to second-order issues like a bad reaction to the cleaning products a business uses. Illness and injury claims could increase rapidly as businesses reopen.

Wrongful death. Wrongful death claims may prove to be a significant issue for many companies. People are already filing claims regarding deaths connected to nursing homes and cruise ships. Families of workers who died from COVID-19 are filing lawsuits against businesses for failing to protect employees from the virus. There has also been an uptick in cases involving family members who have suffered illness or death because an employee brought the virus home from work. While potential legislation could provide some protection to employers, the frequency of these claims is likely to increase, especially among essential workers and their families.

Wage and hour. Wage and hour litigation is a huge risk area for employers, especially given the extra work that is required to respond to COVID-19. Allegations may include failure to pay for hours worked prior to business closures due to COVID-19 or failure to pay for extra hours to facilitate cleaning or screening. It is important that employers account for the time it takes employees to do daily health screenings and to sanitize the workplace to meet COVID-19 protocols. 

There are also issues related to employees clocking in and out while working remotely. Timekeeping systems may not capture all working hours in remote work situations, opening the door for off-the-clock work claims. Is there a system in place to reimburse people for business expenses when they are working from home? Claims may arise for expenses such as computer and office equipment, internet and phone services, or even a portion of electricity or housing costs. These are just a few of the employee compensation issues that require attention and planning.

Retaliation and whistleblower. Many retaliation and whistleblower claims have already been filed, and experts expect more on the horizon. These claims allege retaliation for objecting to unsafe working conditions and exposure to individuals with COVID-19 symptoms in the workplace. This can be especially difficult for employers when an employee expresses a generalized concern like not feeling safe in the workplace. It is essential that managers receive training on how to respond to concerned employees to help prevent these types of claims.

Discrimination. Employers always have to think about discrimination, but COVID-19 has introduced some new considerations. Unfortunately, race, age and disability discrimination is increasing during the pandemic, which could lead to claims related to workplace accommodation issues or how businesses are recalling workers from furloughs and layoffs.

Employers should make sure employees receive training on and understand accommodations under Title III, which prohibits discrimination on the basis of disability in public places. This is especially relevant for employees who will be stationed at the door and might be speaking directly to customers who may need reasonable modifications or accommodations. It is important to keep Title III in mind when addressing exceptions to face covering policies and other social distancing concerns. For example, if you set up one-way aisles to help shoppers stay distanced, are they still wide enough for wheelchair access?

Family leave. Family leave claims may allege failure to provide leave related to COVID-19 or retaliation for using leave due to the virus. The Families First Coronavirus Response Act was recently implemented to expand the Family and Medical Leave Act (FMLA). It covers leave and loss of income when an employee needs to care for children because of school and childcare closures due to COVID-19, and for employees who contract the virus or need to care for a family member who has.

States and counties are implementing additional policies related to leave, and others are being put in place for specific industries. These new leave policies each have different effective dates, eligibility rules and guidelines, so employers need to stay up to date to avoid noncompliance.

To mitigate the risk of liability claims and potential litigation, companies should:

1. Stay current. Staying current with federal, state and local guidelines is imperative. Companies that have remained open during the pandemic have had to constantly adjust to these changing guidelines and those that are reopening will have to sort through existing rules and regulations, from CDC, OSHA and other federal guidelines to state and local public health orders. These will be the standards of care in litigation, so companies must understand them and figure out how comply.

2. Execute procedures and document performance. Organizations should not announce policies and procedures and then fail to execute them, or execute them but fail to document that they did so. If someone files a lawsuit against the company, the objective is to have solid evidence and documentation that can be neatly packaged and handed off to outside counsel to provide the best possible defense.

3. Partner with a liability professional. Accuracy, experience and responsiveness are critical to effectively manage liability claims, especially when dealing with the constantly changing landscape of COVID-19. A third-party administrator who specializes in liability can provide in-depth knowledge to streamline the claim process, reduce costs and improve outcomes.

When a COVID-19 claim arises, liability claims specialists work closely with employers to provide defense counsel with the information and documentation needed. This may include creating investigative checklists specific to the COVID-19 claim; collecting statements based on questions directly related to infection and the spread of the virus; identifying actions that the employer took to reduce spread of infection, such as implementing employee hygiene practices, increasing workplace cleanliness and sanitation, supplying PPE and installing appropriate signage; and gathering documentation from the claimant, including medical records, timelines, proof of location and receipts.

This partnership can ease the process for everyone involved and help to resolve liability claims promptly, precisely and fairly, while protecting the business and brand from costly mistakes

Ed Burtnette is the vice president of liability and claims at CorVel Corporation.