Employment Suits Continue Piling Up Amid COVID-19

By Jack Queen
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Law360 (July 16, 2020, 10:05 PM EDT) -- Employment disputes linked to COVID-19 rose for the fourth straight month in June, but insurance and contract disputes continue to dominate coronavirus-linked litigation despite the first downtick in those categories since the pandemic struck, according to Lex Machina data released Thursday.

Lex Machina found monthly increases in all three practice areas from the beginning of March to the end of May, but insurance and contract cases tied to COVID-19 slowed for the first time last month. Employment remained in third but jumped to 41 new filings in June from 26 in May, the data showed. 

More than 1,100 new cases directly caused by the pandemic have been filed in federal district courts since March, Lex Machina's data showed. Filings peaked in May but have since plateaued.

But the upward trend in employment is likely to continue as businesses nationwide are buffeted by touch-and-go reopenings and whirlwinds of workplace safety guidance issued by state and federal agencies, Lex Machina said in a blog post.

"More employment cases will likely be filed as businesses and employees navigate extraordinary workplace conditions and expectations that will be further impacted by the dynamic nature of the COVID-19 outbreak and related economic reopening plans," the post said.

The cases offer a window into the grim realities of the pandemic. Working parents have sued employers who demand they report to the office despite limited child care options. Sick workers have alleged they were fired for contracting the virus. And in several cases, workers allegedly died of COVID-19 after their employers discouraged communication about the virus' spread.

Employees have filed under an alphabet soup of familiar laws, including the American with Disabilities Act and the Family and Medical Leave Act. A new entrant, Families First Coronavirus Response Act, has also seen its first suits, with workers alleging their employers failed to properly notify them of their rights under the new law.

Lawsuits alleging unsafe conditions in health care workplaces and whistleblower retaliation suits continue to crop up as well, Lex Machina said.

"The battleground between healthcare-employee plaintiffs and healthcare-employer defendants has been heating up over the last few months," it wrote. "These types of cases will only increase as the pandemic continues, resulting in more stressful workplaces for healthcare employees."

New insurance cases decreased from 153 in May to 131 last month. The vast majority of pandemic-caused insurance cases, about 95%, involve business interruption claims, and the slowdown could reflect a lingering come-down from the initial wave of shutdown orders.

The claims, many of them proposed class actions, cover a broad range of businesses, from bars to law firms to casinos and minor league baseball teams.

"The wide variety of types of businesses that filed claims reflected the broad effects of COVID-19 on the US economy," Lex Machina noted.

An MDL for business interruption claims is in the works, with more than 200 cases involved so far. Oral argument before the Judicial Panel on Multidistrict Litigation for In re: COVID-19 Business Interruption Insurance Coverage Litigation is slated for July 30.

Contract suits remain fertile ground as well, though they dipped from 145 in May to 100 last month. Amusement parks, ski resorts and concert venues have been frequent targets for suits demanding refunds on pre-pandemic purchases.

Lex Machina said a significant number of proposed class actions have been filed against universities by students who say they shouldn't pay full tuition for online classes. Proposed classes are also suing airlines and seeking refunds — as opposed to credits — for cancelled flights.

The top district for new contracts cases resulting from COVID-19 was the Southern District of New York, with 57 of the 398 total contracts cases, the data showed. 

--Editing by Emily Kokoll.

Law360 is owned by LexisNexis Legal & Professional, a RELX Group company, which owns Lex Machina.

Correction: a previous version of this story misstated the number of cases directly caused by the COVID-19 crisis. The error has been corrected.

For a reprint of this article, please contact reprints@law360.com.

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