COVID-19: Avoiding Wrongful Termination Claims

Identifying the Issue: Many employers are feeling a massive financial impact as a result of COVID-19. Accordingly, many are considering furloughs, layoffs, demotions, reduction of wages or reduction of hours (collectively “adverse employment actions”); however, employers need to proceed with caution and make sure they understand pros and cons associated with these types of actions. 

Florida is an at-will state, which means an employer may fire, demote, hire, promote and discipline employees for any nondiscriminatory or non-retaliatory reason, or no reason at all. Accordingly, “wrongful termination” claims generally do not exist in Florida, but there are exceptions and ways to claim a wrongful termination based on the violation of other employment laws, as illustrated in this article. 

The purpose of this article is to educate employers on potential pit falls that require employers to consult with an employment lawyer prior to taking any adverse employment actions.

1. Employees taking leave under the emergency Family & Medical Leave Act (FMLA) provision of the Families First Coronavirus Response Act (FFCRA): 

Additionally, if the employee works for a company with less than 500 employees, has worked at least 30 days prior to start date of requested emergency FMLA leave pursuant to the FFCRA, and meets the other qualifications for emergency FMLA leave under FFCRA, then then employee may be entitled to such emergency leave, unless the company is under 50 employees and has obtained an applicable exemption from the Department of Labor. If a covered employer takes an adverse employment action against an employee after the employee makes a request for this leave, the employee may claim retaliation in violation of the FFCRA.

2. Employees taking leave due to bereavement, sickness, disability, or serious medical condition of a family member or under the expanded Family & Medical Leave Act (FMLA) provision of the Families First Coronavirus Response Act (FFCRA): 

Under traditional FMLA provisions, if an employee has worked at least 12 months (can be non-consecutive) and the employer has 50 or more employees, the employee may be entitled to FMLA. If an employer takes an adverse employment action against an employee after the employee makes a request for this leave, the employee may claim retaliation and/or violation of the FMLA. 

3. Employees taking emergency paid sick leave (EPSL) under provision of the Families First Coronavirus Response Act (FFCRA):

If an employee works for a company with less than 500 employees and meets the qualifications for EPSL, then the employee is entitled to EPSL under the FFCRA, unless the company is under 50 employees and has obtained an applicable exemption from the Department of Labor. If a covered employer takes an adverse employment action against an employee after the employee makes a request for this leave, the employee may claim retaliation in violation of the FFCRA.

4. Employers who do not close their business despite there being a local or state order:

During the COVID-19 crisis, various local and state orders have been issued requiring non-essential businesses to close. Due to the financial strain felt by many business owners, many owners of non-essential businesses are refusing to comply with the orders, requiring employees to show up for work, and firing them if they refuse. Not only might some of these employees be entitled to leave under FFCRA, but there are also other potential concerns (from the wrongful termination viewpoint) with taking these types of actions. Some examples of wrongful termination may include: (a) when a terminated employee may qualify as a protected whistleblower and firing that person may be deemed retaliation for alleged whistleblowing; (b) if the action has a disparate impact on a group of similarly situated persons within a protected class, it may be deemed discrimination; (c) if you don’t pay wages owed, were not properly keeping time records or improperly classified the employee, then the employee may assert Fair Labor Standards Act violations; (d) potential violations of paid time off or other employment benefits, manuals, policies or procedures. Additionally, if someone contracts COVID-19 from work, the employee may be entitled to workers’ compensation benefits to cover a percentage of lost wages and medical treatment. 

5. Employment Discrimination:

Generally, discrimination come in the form or disparate treatment or disparate impact. An employee who makes a disparate treatment claim alleging that he or she was treated differently than other employees who were similarly situated, and that the difference was based on a protected characteristic (e.g. race, gender, age, national origin, disability, etc.). One example may be sending all employees with Asian backgrounds home without pay as a result of the COVID-19 pandemic. Disparate impact is typically a much more subtle type of discrimination claim, and it is based on the effect of an employment policy or practice rather than the intent behind it. Employment discrimination laws apply not only to intentional discrimination, but also to apparently neutral policies and practices that disproportionately and adversely affect members of a protected class. Some examples may be: (1) required testing could adversely affect candidates of color; (2) required pre-employment computer knowledge could adversely affect candidates of an older age; (3) instituting reduction of pay in manner that disproportionate affects female employees; etc. 

Note that there are also specific laws with specific obligations pertaining to pregnancy discrimination and age discrimination (over the age of 40), and failure to comply with those or take actions that may be deemed “retaliatory” may also result in claims.

Accordingly, when making decisions about whether to take an adverse employment action, employers need to be sure that their actions do not disparately treat or impact a group of persons that share a protected characteristic. Failure to do so when engaging in a layoff can result in a claim that the employee was wrongfully discrimination due to employment discrimination. 

6. Retaliation for Reporting or Objection to Discrimination or Harassment.

It is illegal to terminate an employee in retaliation for reporting sexual harassment or the victim of other discriminatory harassment based upon a protected characteristic. If an employer takes an adverse employment action against an employee after the employee making such a report, the employee may claim retaliation. Additionally, in certain circumstances, the employee may claim protected whistleblower status. 

7. Employees claiming overtime or minimum wage violations:

Generally, most employers are covered by the Fair Labor Standards Act which imposes obligations for payment of overtime and minimum wages (amongst other obligations), unless the employee falls within one of the enumerated and specific exemptions. Pursuant to the FLSA, employers cannot retaliate against employees who request overtime or minimum wages or report a violation of FLSA obligations. Violations of the FLSA can result in double damages (liquidated and unliquidated), plus attorney’s fees & costs, and may result in actions by the Wage & Hours Division of the Department of Labor. Additionally, in certain circumstances, the employee may claim protected whistleblower status.

8. WARN Act:

An employer must comply with the Worker Adjustment and Retraining Notification Act (WARN) act if it has more than 100 employees and is engaging in: (a) a layoff which results in an employment loss for more than 50 employees during any 30-day period as part of a plant closing which results; or (b) a layoff that does not result from a plant closing but will result in an employment loss of 500 or more employees during any 30-day period. Such an employer must provide employees with 60 days of written notice of the intention to engage in such a layoff. Whether an action results in an employment loss requires a detailed analysis. Failure to comply with the WARN Act can result in back pay damages plus penalties.

9. Retaliation for Making a Workers’ Compensation Claim:

It is illegal to terminate an employee for making such a claim. If an employer takes an adverse employment action against an employee after the employee making such a claim, the employee may claim retaliation.

10. Breach of employment contract:

The employer needs to review the contract to determine whether there are any express limitations on the ability to take certain adverse employment actions, including the existence of any severance rights or “for-cause” employment provision. Otherwise, the employer may be subject to a wrongful termination for breach of contract claim, and potentially payment of fees and costs if the contract includes a prevailing party attorney’s fees provision.

11. Breach of employee manuals, policies and procedures:

The employer needs to review its employee manuals, policies and procedures to determine whether there are any express limitations on the ability to take certain adverse employment actions, including the existence of any severance rights or “for-cause” employment provision. Otherwise, the employer may be subject to a wrongful termination claim for breach of the employee manuals, policies and procedures. Additionally, if the employer fails to pay out severance or accrued benefits pursuant to these documents (e.g. if documents provide that terminated or laid off employee can cash out unused P.T.O.) or attempts to underpay or reduce amounts, the employer may face a wage theft claim, amongst other claims.

What employers need to do to minimize the likelihood of these types of “wrongful termination” claims:

There are many nuances and pitfalls in employment matters. Before an employer takes any adverse employment action, the employer needs to consult with an employment law attorney to ensure employers have policies, procedures, and training that will give employers the best chance of preventing these claims. Trembly Law Firm has helped numerous employers address prevent lawsuits by having strong employment manuals, policies and procedures. An employer’s best course of action is to get us involved as early in the process, and preferably before any adverse employment action has been taken. 

What employers need to do to if they’ve already taken adverse employment actions:

The employer needs to consult with an employment law attorney to determine what exposure and risks may exist. Even if nothing illegal happened, if exposure is identified, employers may want to consider severance agreements (which are complicated and need to be drafted by an employment attorney) or revisiting or amending prior actions to avoid litigation. The attorney will also calculate legal deadlines for employees to file claims or actions. Trembly Law Firm has helped numerous employers address these issues and prevent lawsuits by taking the proper course of action. Even when the lawsuits could not be prevented, Trembly Law Firm was able to resolve the cases favorably for their clients due to early involvement in the process.

What employers need to do if an employee has already filed a claim or suit:

Whether it’s an administrative claim or a lawsuit, the employer needs to hire an employment law attorney immediately because there are deadlines to respond. 

Additionally, Trembly Law Firm’s employment law attorneys will help employers develop a strategy early on to maximize the likelihood of success. Trembly Law Firm has successfully defended employers in various employment matters. Recently, in October 2019, the Firm obtains a defense verdict at a jury trial on behalf of an employer who had been sued for pregnancy discrimination as a result of the termination of an employee.

Call Trembly Law Firm today at (305) 431-5678.

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