COVID-19 Drives Surge in Employment Practices Claims
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Employers are being hit with a wave of COVID-19-related employment lawsuits, which is starting to have an effect on employment practices liability insurance (EPLI) rates and coverages.
A tally by the law firm of Fisher Phillips found that as of August 2021 there had been 2,950 COVID-19-related employment lawsuits filed in the U.S. Most of the complaints concern remote work arrangements, workplace safety and discrimination.
Lawyers predict a new wave building as employers get pushback from some employees about their vaccine policies and continuing safety measures.
The most common COVID-19-related complaints are:
- Remote work and leave issues (28% of total)
- Employment discrimination (26%)
- Retaliation/whistleblower (24%)
- Wage and hour (7%)
- Unsafe workplace (3%)
- Wrongful discharge (3%)
- Negligence/wrongful death (3%)
Fisher Phillips in a recent blog post warned that a few signs point to a continued surge in litigation:
No summer case slowdown — Usually there is a slowdown in new employment litigation during the summer months, according to Jay Glunt, a Fisher Phillips partner. “But the fact that we didn’t see much of a lull in employment-related COVID litigation – and in fact saw an uptick — sends a clear signal that we could be in for a rough couple of months ahead.”
In fact, the number of COVID-19 workplace lawsuits jumped 61% during June through August 2021 to 715 cases, compared to 444 such lawsuits filed in the same period of 2020, according to the law firm.
During the first eight months of 2021, there was an average of 253 new COVID-19-related employment claims filed per month, up 59% from the average 159 new lawsuits filed in the final eight months of 2020.
Furthermore, according to Fisher Phillips COVID-19 Tracker, the busiest litigation months follow periods when coronavirus cases have been surging, such as in January to March 2021, when 826 cases were filed (an average of 275 a month).
Vaccine mandates — Employment lawyers also predict that as more employers devise ways to get their staff vaccinated, many will get pushback from workers. Some employees may just quit and find work with a company with a more relaxed approach, but others may seek out legal counsel and sue their employers.
This is the biggest concern for businesses who are requiring that all their staff be vaccinated at risk of losing their jobs. While there seems to be cover for such employers from the Equal Opportunity Employment Commission, that is unlikely to deter some people from mounting claims anyway.
Even if an employer manages to win the case or settle, that usually won’t happen until tens of thousands of dollars have been spent on legal fees and discovery.
To date, vaccination-related employment practices claims account for less than 5% of COVID-19 suits, but that is expected to rise as mandates and other “sticks” become more commonplace.
The backstop
In light of this growing exposure, employers would be wise to consider purchasing an EPLI policy. These policies are triggered for employment-related claims, which include COVID-19-related claims and cover legal defense costs, settlements and compensation awards.
However, many insurers have increased their rates as well as the deductibles that policyholders have to bear. Some are also capping policy limits. Rate hikes have been averaging more than 10% on EPLI policies as litigation has skyrocketed during the pandemic.
If you have an EPLI policy, it can be tapped if you are sued, but policies won’t cover all types of claims, including the following:
- A returning employee alleges he or she contracted COVID-19 at the office as a result of the employer’s inadequate safety policies and practices. Many EPLI policies exclude losses resulting from OSHA violations and for workers’ compensation claims.
- An employee alleges that an employer had failed to provide legally required protective equipment, resulting in enhanced risk of exposure to COVID-19. Many EPLI policy forms exclude coverage for costs incurred to comply with injunctions and equitable relief, such as claims demanding accommodations for disabled persons under the Americans with Disabilities Act or to repair unsafe workplace conditions.
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