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Reopening & Reversal: Employment Claims in the Hospitality Industry

August 10, 2020 | Omar Ali-Shamaa

On June 6, 2020, Miami-Dade County Mayor Carlos Gimenez signed an executive order reversing the county’s reopening plans due to the rise in COVID-19 cases. Although Mayor Gimenez subsequently modified the order to allow outdoor dining in restaurants, many establishments were forced to either lay off or furlough their employees, in many cases for a second time since the pandemic started. These layoffs, along with the expiration of the $600 weekly supplemental federal unemployment benefits under the CARES Act, will likely cause an increase in employment litigation as more employees face financial hardships. As a result, restaurant operators must be aware of potential employment claims that might be in the pipeline.

Discrimination Related Claims

Restaurants will likely see a surge in age-related discrimination claims resulting from a restaurant’s decision to layoff an older employee rather than a young employee due to COVID-19 concerns. While an operator’s decision to employ a younger employee based on health concerns for the older employee may be well-intentioned, this may violate the Age Discrimination in Employment Act (ADEA), which protects employees who are 40 years or older from employment discrimination based on age.

The Equal Employment Opportunity Commission (EEOC) confirmed this guidance in an FAQ on COVID-19. According to the EEOC, “the ADEA would prohibit a covered employer from involuntarily excluding an individual from the workplace based on his or her age being 65 or older, even if the employer acted for benevolent reasons such as protecting the employee due to higher risk of severe illness from COVID-19.”

Leave Related Claims

Under the Families First Coronavirus Response Act (FFCRA), certain employers must provide paid leave for covered employees with a qualifying need. Employee qualifying needs include: (1) employees or family members being subject to a quarantine or isolation order related to COVID-19; (2) self-quarantining because the employee or a family member is exhibiting symptoms or a healthcare provider advised them to do so; or (3) to care for the employee’s minor child if the child’s school or daycare is closed due to the pandemic.

With the rise in COVID-19 cases in Miami-Dade County, it is likely that an employee may qualify for paid leave under the FFCRA. For this reason, a covered employer who denies the requested leave, requests improper documentation, or retaliates against an employee for taking such leave may be subjecting themselves to potential exposure to a claim of violation of the FMLA, FFCRA, or other state-equivalent laws.

Whistleblower Retaliation Claims

Employees who engage in whistleblowing activities about COVID-19 related issues are safeguarded against retaliatory or other disparate treatment by employers. In fact, the Department of Labor issued a reminder to employers, noting that it is illegal to retaliate against employees for reporting unsafe and unhealthful working conditions during the pandemic.

Driven by fear and uncertainty, and in some cases retaliation for being laid off, there has been an increase in complaints by employees regarding workplace safety, exposure to COVID-19, and adherence to local and state public health orders and/or OSHA directives regarding social distancing and disinfecting workstations. Other whistleblower claims could arise based on improper execution of the FFCRA and other employment protections under state and federal law.

The COVID-19 pandemic and related public safety measures will continue to impact local businesses for the foreseeable future. As employers come to grips with the impact of COVID-19 and businesses consider reopening on-site operations, employers, in-house counsel, risk managers, and underwriters are advised to do the same. This includes review of all new regulations, anticipate potential claims, and revising company policies to mitigate the risk of potential exposure.