Employers Advised to Use Communication, Flexibility to Mitigate COVID-19 Litigation Risks

When weighing liability risks arising from employees contracting COVID-19 at the workplace, many employers instinctively turn to the liability waiver, a document that — in theory — will protect the employer against lawsuits for damages if COVID-19 is contracted on the job.

But there are problems with waivers. In the first place, contractual waivers of personal injury claims are unenforceable in some states. And in most other states, waivers are effective only against claims arising from ordinary negligence — not against claims based on gross negligence, recklessness, willful or intentional conduct.

It is also important to understand that liability waivers are contracts. As such, they are vulnerable to all of the legal defenses that can be asserted against contracts: lack of consideration, lack of a signature or other indicia of assent, unclear terms, and claims that liability waivers are contrary to public policy.

Communication Builds Trust

Some employment lawyers believe there is a better way to stem COVID-19 claims in the workplace. Communication. Communication that builds trust among employees that management is doing all it can to create a safe workplace.

Sarah Marmor, partner, Schaft Banks Marmor LLC, in Chicago, said that, to the extent that employers can use communication to create a trusting and caring work environment, they will be able to minimize litigation risks arising from COVID-19.

Marmor said she was skeptical of the effectiveness of COVID-19 waivers as a strategy for eliminating workplace litigation risks. For example, in the case of an employee who wants to return to the office, being flexible and having a frank discussion about the risks inherent in that decision are preferable to merely asking for a signature on a waiver.

“Why not just have a real back and forth and have a record with the employee,” she said. Marmor advised letting the employee know that he or she doesn’t have to return to work, and communicating to the employee the fact that the employer is genuinely concerned about the risks of returning to the workplace.

“The waiver argument to me, particularly if it is in legalese, it could read to a jury if it got to that point as an abdication of responsibility,” Marmor said.

Kelly McNamara Corley, a principal at Red Bee Group LLC, in Chicago, and former general counsel at Discover Financial Services, agreed on the importance of communication.

Working hard at communication during COVID and as the country emerges from COVID workplace shutdowns can effectively address a host of workplace challenges. 

“You can’t over-communicate, whether it’s in anticipation of performance discussions or to build trust, to avoid conflict, or to reduce stress,” she said. “You just can’t communicate enough.”

Marmor and Corley made their remarks during the American Bar Association Business Law Section’s Annual Meeting, held virtually due to the COVID-19 pandemic.

Advice to Employers: Be Flexible and Transparent

According to a recent Edelman survey on workplace trust during the COVID-19 pandemic, employees are wary of returning to their former workplace and skeptical of management’s ability to keep them safe at work.

Top-line findings in the Edelman survey include:

  • 78 percent of respondents believe that businesses have a responsibility to protect them
  • 50 percent believe their workplace is safe
  • 14 percent trust management to make the correct decision on when to bring them back to work
  • 73 percent say they will not come back to work in the foreseeable future

Communication is an effective tool to break down the distrust and worry experienced by employees during these stressful times. Employers can build trust by telling employees what is going on and the framework in place that guides employer decisions about returning to the workplace.

Being flexible in workplace arrangements and soliciting points of view from employees are two other excellent ways of developing trust, Marmor said.

Litigation on the Horizon

Flexibility and communication can also mitigate risks against several emerging areas of COVID-19-related litigation other than personal injury lawsuits Marmor said. Marmor speculated that employers might see the following types of legal claims multiplying in the coming months:

Paid Leave Claims. Claims by persons denied paid leave under the Families First Coronavirus Response Act are rising. This law provides for up to 12 weeks of paid leave for employees who, among other grounds, cannot work due to a COVID-19 quarantine or due to the need to care for family members who are quarantining, or cannot attend school or day care due to COVID-19 restrictions. 

WARN Act Violations. Employees are filing claims under the WARN Act, a federal law that obligates large employers to give 60 days’ written notice of layoffs and closings. The law contains an exception for “unforeseeable business circumstances,” which may or may not apply to COVID-19-related terminations.

Wage and Hour Claims. Liability under Fair Labor Standards Act and state wage and hour laws could affect employers, as the length of a typical “work from home” workday can — if employers are not careful — stretch beyond normal business hours and leave employers subject to claims for unpaid overtime.

Disputes Over PPE Loans. The federal Paycheck Protection Program offered loans to small businesses for the purpose of retaining employees during the economic depression that accompanied government shutdowns and social change during the early days of the COVID-19 pandemic. Several recent lawsuits are alleging that these loans were used for improper purposes, Marmor noted.

It is beyond question that the COVID-19 pandemic has fundamentally changed the workplace and will, to some extent, change the legal obligations between employer and employee in ways that, at present, are unsettled.

One of the changes recently identified is that workplace arrangements are no longer “one size fits all.” This new, more individualized workplace was recently discussed in a McKinsey & Company article, Reimagining the Office and Work Life After COVID-19. Corley said that the new workplace will make it difficult for employment lawsuits to continue to make broadly applicable assessments of litigation risk and compliance obligations.

“To the extent you’ve got a lot of variations in the way people work and where they work and how they work, I think it will be ‘brave new world’ in terms of the employment law landscape looking forward,” Corley said.