Legal Risks Abound When Companies Bring Their Employees Back

(Bloomberg Businessweek) -- As Americans return to the offices, shops, restaurants, and factories they left months ago, employers are wrestling with the legal consequences of getting U.S. workers back on the job while the pandemic is still spreading. Because there’s no cure or vaccine yet for Covid-19, two things are certain: People will get sick, and many will end up in court demanding safer working conditions or compensation for lost wages and medical bills.

Some employees already have filed lawsuits claiming companies including McDonald’s, Amazon.com, and Smithfield Foods aren’t doing enough to keep workers and their families free of coronavirus, even though employers are promising to follow such health guidelines as maintaining social distancing, improving sanitation, and providing personal protective gear. And legal experts see possible fights over other issues like privacy rights, age discrimination, or employees at greater risk of infection who are compelled to return too soon.

“With Covid-19 still spreading, companies that require employees to work on-site or interact with the public will need to be careful to avoid winding up in court,” says Samuel Estreicher, a professor at New York University’s law school and director of its Center for Labor and Employment Law. “Legal risks will be one of the key things for businesses to prepare for as the economy reopens.”

Still, workers who get sick and want to sue won’t go straight to court. Instead, they’ll make claims through state-run workers’ compensation systems, the vast insurance networks that almost all businesses are required to buy into. What’s less clear is whether those claims will succeed, because states define differently what’s covered under “occupational diseases” provisions. And labor advocates say the system isn’t always friendly to workers, often denying claims or providing payouts well below lost wages and medical bills. “This could be such a massive number of claims that there could be some pushback from the system,” Estreicher says. “Smart employers, in my view, would not fight workers’ comp claims. If they’re in workers’ comp, there’s a much lower risk of damages, and you share that burden with other companies.”

Governments set up workers’ compensation programs almost a century ago to prevent companies from being bankrupted by liability claims. They also provided fast and easy payments for work-related injuries or deaths without requiring proof that an employer was negligent. With the number of Covid-19 infections in the U.S. surging toward 2 million in less than three months—killing more than 112,000—the claim system may be put to the test.

While workers’ comp doesn’t allow for the punitive damages commonly sought in court cases, the threat of a surge in coronavirus-related payouts—Credit Suisse estimates Covid will result in $5 billion in workers’ comp claims—and the resulting higher insurance premiums for companies create an incentive for employers to fight claims, says Debbie Berkowitz, a former chief of staff and senior policy adviser for the U.S. Occupational Safety and Health Administration. The most likely tactic will be to force employees to prove they got sick at work and not somewhere else, she says.

Except in situations where the virus has spread widely in a workplace, “it will be very difficult, but not impossible, for workers to win their cases,” says Berkowitz, who’s now director of the worker health and safety program at the National Employment Law Project, a progressive nonprofit.

In many states, workers’ comp doesn’t cover ordinary infectious diseases. Labor advocates have urged changes in those policies or asked for assurances that Covid-19 claims will be honored. In New York, with more infections than any other state, Governor Andrew Cuomo said in March that claims will be covered under workers’ comp law, though few other states have clarified their policies.

Some cases will still get decided in the courts, especially those where companies are accused of recklessly putting employees at risk. And lawsuits remain an option if a workers’ comp claim is denied, though they come with the added burden of proving an employer acted negligently.

Most Covid-19 deaths have been in people age 55 or older, who are at a higher risk of infection. So companies that force older workers to return too soon, or avoid hiring older job applicants because of worries about their susceptibility to Covid, could become targets of discrimination lawsuits, Estreicher says. Younger employees with serious underlying conditions also could have legal claims, while employers digging too deeply into medical histories of workers or applicants could lead to allegations of privacy-rights violations, he says.

McDonald’s Corp. was sued last month by a handful of workers in Chicago claiming the restaurant chain failed to keep them and others safe while they served food during the pandemic. The company says it’s updated almost 50 safety procedures, including providing wellness checks and protective barriers and “adhering to social-distancing guidelines for customers and crew.”

Some warehouse employees sued Amazon.com Inc. on June 3 in federal court in New York, claiming working conditions that prevented proper sanitation put them and family members at risk of contracting the coronavirus. Amazon says it’s spent $800 million this year on Covid safety measures, including temperature checks, masks, gloves, and enhanced cleaning. Pork producer Smithfield Foods Inc. was sued in Missouri after workers fell ill, though a judge quickly threw out the case—which Smithfield says was frivolous—and said OSHA should handle it.

A wave of personal injury cases against businesses that reopen could bankrupt some companies ailing from the post-pandemic slump, the U.S. Chamber of Commerce said in April. Republicans in Congress are seeking to pass legislation to shield businesses from liability for future Covid outbreaks.

Critics say OSHA, part of the U.S. Department of Labor, has failed under President Trump to police worker safety during the pandemic and ignored employee complaints. And the AFL-CIO, the biggest U.S. labor federation, sued the department for refusing to issue workplace rules for coronavirus, putting employees in “grave danger.” “There’s no enforcement by the federal government right now, so the courts are a backstop that gives employers an incentive to do the right thing,” says Remington Gregg, a lawyer for consumer nonprofit Public Citizen. “The court system is there as a check to hold employers accountable.”

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