Employers Should Note These Workplace Litigation Trends for 2021

​In the midst of a pandemic, employers may have more workplace compliance and employee relations matters to resolve than is usual. Training supervisors to properly respond to key issues before they escalate can help employers stay out of court.  

The COVID-19 crisis caused an uptick in class actions for workplace issues, according to law firm Seyfarth Shaw's 2021 Workplace Class Action Litigation Report.

"The pandemic's impact was felt in every aspect of life and in every sector of the economy," said the report's author, Gerald Maatman Jr., an attorney with Seyfarth Shaw in Chicago and New York City.

2020 also brought nationwide attention to social justice issues. Ashley Prickett Cuttino, an attorney with Ogletree Deakins in Greenville, S.C., said employers should continue to focus on diversity, equity and inclusion in 2021. "2020 brought those issues to light in a way we've never seen before, beyond the workplace and in society."

COVID-19 Considerations

"Litigation that is a direct result of the COVID-19 pandemic will continue in 2021," predicted David Amaya, an attorney with Fisher Phillips in San Diego. The Fisher Phillips COVID-19 Employment Litigation Tracker has documented more than 1,400 COVID-19-related cases, and found that remote work and leave conflicts are the most common issues.

"Each industry will be impacted differently," Amaya said. For example, some employers are focusing on issues around staffing and retaining talent, while others are dealing with layoffs and rehiring furloughed employees.

Cuttino noted that employers faced claims alleging COVID-19 workplace safety violations in 2020, and she is starting to see related retaliation claims. Employees that complain about COVID-19 safety violations should not be punished for doing so.

The pandemic also may bring more discrimination claims as employees are laid off or furloughed and asked to work remotely or reduced hours. Employers should carefully consider how they are selecting who returns to work and why, Cuttino said.

"Everyone has been under a tremendous amount of stress during the pandemic, whether they are at home, potentially with children, or coming into work as essential workers," she noted.

To complicate matters more, government recommendations in response to COVID-19 have changed as the pandemic continues. "Employers have to figure out the best way to keep on top of changes and communicate those changes to supervisors," Cuttino said.

Employers should periodically review guidance from the Centers for Disease Control and Prevention, the Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC), the Occupational Safety and Health Administration, and applicable state agencies.

In addition to COVID-19-related compliance, Cuttino noted, employers have to keep up with the typical employment law developments, particularly at the state level, such as changes to the minimum wage and expanded paid-leave laws.

Wage and Hour Litigation          

Wage and hour mistakes continue to pose big risks for employers. Common issues include timekeeping errors and misclassification of employees as independent contractors or exempt from overtime pay. 

"Based on sheer volume and statistical numbers, workers scored the most success in securing certification of wage and hour class and collective actions in 2020 as compared to other areas of workplace law—and at the highest level ever seen in the last two decades," according to Seyfarth Shaw's report, which found that courts conditionally certified 84 percent of plaintiffs' proposed wage and hour class actions.

"This state of affairs is expected to explode in 2021 with a more friendly DOL that makes wage theft its enforcement priority and with minimum wage increases in 25 states in 2021," the report said.

The pandemic has added more wage and hour issues since many nonexempt employees have been working from home. "So many companies went to online work overnight," Cuttino recalled. "More employers are considering keeping their workforce remote permanently or moving to a hybrid model as a long-term solution." 

To minimize litigation risk, Amaya recommended that employers train front-line managers on the company's policies and best practices and conduct an audit of wage and hour practices. "A review of payroll practices is a good place to start when reviewing whether wage and hour practices have unknowingly changed and are no longer comporting with company policies and the law," he said.

Government Enforcement Litigation

Seyfarth Shaw's report showed that government agencies—such as the DOL, the EEOC and the Office of Federal Contract Compliance Programs—brought fewer actions in 2020 than in prior years. For example, the EEOC brought 94 lawsuits in 2020 compared with 144 in 2019.

However, the report noted, the EEOC recovered a record $535.4 million in 2020 on behalf of alleged discrimination victims. Litigation recoveries increased from $39.1 million in 2019 to $106 million in 2020, which Seyfarth Shaw said is the highest amount in 16 years.  

Employers can expect the new presidential administration to focus more on enforcement litigation. "With a change from red to blue in the White House, a likely expansion of workers' rights, increased regulation of businesses and aggressive enforcement of workplace laws is apt to take place in the next four years," the report said.

Tips for Employers

Litigation can be costly for employers. "Counter-intuitively, settlement numbers went up in the age of COVID, and plaintiffs' lawyers and government enforcement actions garnered more money in 2020 than in 2019," according to Seyfarth Shaw's report. 

To minimize litigation risks in the year ahead, employers should have "a laser-like focus" on HR and legal compliance and fundamental workplace due process, Maatman said.

Further, he said, employers should create protocols for identifying, investigating and correcting employee complaints. "Typically, workers seek remedies though state and federal agencies or with private counsel when they sense that an employer is unconcerned with addressing their problems and complaints."

According to Cuttino, businesses will have to focus on employee engagement if they plan to keep their workforce remote. Communication will be key to building a sense of community and business culture, she noted.