Are You Exposing Your Business to the Risk of Coronavirus-Related Litigation?

We’re in the midst of dealing with COVID-19 and if you’re like many Iowa businesses, you’re just trying to keep up with the daily changes and problems the pandemic is bringing.  But what about after the pandemic?   Will there be a wave of Coronavirus-related litigation?  How do you know if you’re exposing yourself now to the risk of litigation later?

Below are some areas that I predict will see Coronavirus-related litigation in the future along with some quick tips to reduce your risk of getting sued.

Negligence or Wrongful Death

It’s possible that we’ll see litigation alleging negligence and accusing an employer of failing to use reasonable care to prevent the spread of COVID-19 to their employees.  The hard part is that we don’t have a clear idea of what “reasonable care” would look like or require right now.  But, know that courts will be looking back (with 20/20 hindsight) on the pandemic and making a judgment as to what employers should have been doing.  It’s best to follow CDC guidelines, keep up with Governor Reynolds’ orders, and follow other local and national recommendations.

Breach of Contract

What if your business is unable to perform its contractual obligations due to a disruption in your supply chain or because your employees can’t come to work?  There will likely be litigation alleging breach of contract against businesses failing to perform their contractual obligations.  The issue in this litigation will likely become whether there is a force majeure clause in the contract, and whether that clause applies to a pandemic.  Force majeure clauses usually free contracting parties from their obligations in the event of an “act of God.”  These clauses can be drafted differently so it’s important to look at the language of the provision and consult your attorney as to whether a pandemic may be covered.  Either way, it could be a good option to open up settlement or communication with the other contracting party now so you can avoid the risk of litigation later.

OSHA

The Occupational Safety and Health Act imposes a duty on employers to provide a workplace that is free from hazards that are likely to cause death or serious harm.  If an employer fails to take steps to protect their employees from the spread of COVID-19, they could face fines from OSHA.  It is a good idea to adopt temporary policies now that will protect your employees from the spread of COVID-19.  However, you should consult your attorney before you discipline or fire an employee for missing work or because they have contracted COVID-19 as this could implicate other legal issues. 

Wage and Hour Laws

If your employees are working remotely, there could be more variance than usual in the hours they’re working.  Or if you’re in a sector that is seeing high demand, you may have employees working a lot of overtime.  Make sure you are complying with applicable wage and hour laws when it comes to overtime work and compensation.

WARN Act

The WARN Act and Iowa’s mini WARN Act require employers to give notice prior to mass layoffs or plant shut downs.  The amount of notice required is governed by these acts and the circumstances of your business.  If you are contemplating a mass closing or layoff of your workforce, you should ask your attorney about the applicable WARN requirements.

Retaliation, Discrimination, Wrongful Termination, and Whistleblower

It’s possible that we’ll see a wave of retaliation, discrimination, wrongful termination in violation of public policy, or whistleblower litigation as it relates to COVID-19.  These could arise if an employer disciplines, terminates, or takes other adverse employment action against an employee who contracts COVID-19, experiences symptoms, or reports an illness of themselves or someone else.  Consult your attorney before taking action against an employee who reports an illness.  Additionally, be careful about revealing any health information about an employee.

Other Employment Issues and Regulations

There are many possibilities for future employment issue litigation—too much to address in one blog post.  However, our employment law attorneys at BrownWinick have been tackling these issues in other blog posts.  Check them out here: https://brownwinick.com/covid-19-resource-page/.