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COVID‑19 and the associated lockdowns may ultimately prove to be as impactful to the U.S. employment landscape as the Great Depression, passage of the Fair Labor Standards Act of 1938, the Civil Rights Act of 1964, September 11, the Financial Crisis, and the #MeToo movement. The most significant long-term changes from COVID-19 for employers will be related to where we work and for whom we work.
In our recent EPLI client webinar, two employment law leaders – Jack McCalmon from the McCalmon Group and Justin Theriault from Jackson Lewis – emphasized the importance of calling employer helplines and accessing loss prevention websites before a claim arises. They also provided broad insights, outlined below, on how the pandemic is changing the workplace and employer risk.
A study by the Harvard Business School found 81% of employees do not want to return to the office full time, and another study indicated 50% of those surveyed would rather quit than return to a physical place of business.1 Salesforce has messaged to employees that it doesn’t matter where or when they work. Even Ford Motor Company has announced that 30,000 employees will continue to work from home. Increasingly, companies are abandoning a physical presence, which frees up more funding for investing in new hires. Not having a physical workspace may prove especially beneficial to small businesses.
“Work Anywhere, Anytime” culture could result in increased employment claims related to work location. Based on a Stanford University study of working parents with young children, 50% more women than men will choose to work from home full-time. Companies need to ensure those who work from home are equally considered for promotions, or risk potential discrimination claims.
For those who return to an office, hygiene is of paramount importance. Changes will need to be made to the workplace and how we work to ensure employee (as well as customer) safety. Consider this recent example: An executive in California came to a meeting though he had COVID‑19. When another employee who had attended the meeting contracted the virus, he complained to HR, only to be told he was no longer a good cultural fit, and then fired. This opened the door for a whistleblower suit, including a claim of retaliation. We expect a continuing increase in whistleblower and retaliation claims, the latter being the number one charge made to the EEOC before COVID‑19.
The main drivers of litigation will be focused on return-to-work accommodations and ADA violations. Companies may find these difficult to defend if employees are already working from home as it will be difficult to prove undue hardship. On the positive side, hostile work environment claims have decreased significantly. These claims are difficult to prove when you are working at your own home.
We have not yet reached the apex of employment litigation spawned by COVID‑19. Employers can expect to see an increase in the frequency of claims. Retaliation claims involving return-to-work and whistleblowers will be the big ones. Social movements may contribute to larger awards and punitive damages in some cases. It is yet to be seen whether social inflation will have an impact on Employment Practice Litigation as it has had on Auto liability and Umbrella.
There is still quite a bit of uncertainty regarding how quickly the economy will recover from COVID‑19 and how that will affect claim frequency. Usually a bad economy is linked to more employment litigation, but we just do not know if improving economic conditions will lead to a drop in claims. Right now, that seems unlikely.
Successful employers – those who avoid claims or achieve favorable results when claims arise – will be associated with strong, updated employment policies and procedures. Risk management does lead to better outcomes in all economic conditions. Employer helplines and frequent employee training will go a long way toward reducing losses. These services and educational sessions typically come with an EPLI policy – a good reason to encourage insureds to adopt these options soon.
Hold on tight. We are likely in for a bumpy ride when it comes to employment claims even after the pandemic has ended.
