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LAWSUIT PREVENTION FOR EMPLOYERS

Legal Issue: Employers are subject to numerous new Corona-related legal requirements.  Of particular note are the new paid sick leave requirements, starting April 1, summarized below.  That means paid sick leave could be due as early as the following pay day. The failure of employers to comply with these new requirements results in legal exposure as of that date.  Lawsuits claiming employer violations will be decided by a jury of employees, unless an enforceable arbitration policy is distributed to employees before the next pay day.

As explained below, arbitration remains a legal alternative form of dispute resolution. As a result of the above employers have, in effect, two weeks to develop an arbitration policy and have it properly distributed with a signed acknowledgement of receipt.

On April 1, 2020, the Families First Coronavirus Response Act (“FFCRA”) took effect.  This statute applies to all businesses of 500 and fewer employees.  The new law requires employers to provide paid sick leave and expanded family and medical leave benefits for reasons related to the Coronavirus. The FFCRA applies to leave requests received between April 1, 2020 and December 31, 2020.

In a nutshell, the FFCRA entitles employees, employed for 30 days prior to a leave request, who are unable to work either remotely or on-site because a minor child’s school or care facility has closed (or childcare provider is unavailable) due to the Coronavirus, to 10 days of unpaid sick leave.  Upon exhaustion of the 10 days, employees are entitled to 10 weeks of paid sick leave at two-thirds of their regular rate of pay for the hours the employee would have been scheduled to work, up to a maximum of $200 per day and $10,000 per employee. Employees are generally entitled to reinstatement to their prior position.

The new legislation provides for a small business exemption for employers of less than 50 employees that meet criteria that will be provided by Department of Labor regulations. These will require a showing that child-care related sick leave and expanded family leave would “jeopardize the viability of the business as a going concern.”

In addition to family leave, all employees are entitled to two weeks of paid sick leave at their regular rate of pay if the leave results from the employee:

1. Being put under government quarantine for COVID-19;
2. Being advised by a health-care provider to quarantine for COVID-19, or
3. Experiencing COVID-19 symptoms while seeking diagnosis.

Employees are entitled to paid leave at the rate of two-thirds of the greater of their regular rate or $200 per day, to a maximum of $2,000, if leave is taken because the employee is:

1. Caring for someone under quarantine for COVID-19;
2. Caring for a child whose school or day care facility is closed or a childcare provider is unavailable due to Coronavirus;
3. Is experiencing a “substantially similar condition” specified by the Secretary of Health and Human Services.

What Legal Protection Is Available to Employers? This legislation imposes significant new requirements on employers, without reducing their liability exposure for failing to fully comply with existing labor laws.  As a result, it is all but inevitable that a flood of new lawsuits will begin to appear in the coming months.

For employers who are continuing operations, in whole or in part, it is imperative that:

1. A written policy be developed and distributed to employees explaining in detail the risks of exposure employees will be subject to, and what precautions the employer will take to protect employees from infection from fellow employees, or third parties.  My office has developed an “Airborne Infectious Disease Prevention Policy” for this purpose.
2. A legally-enforceable arbitration policy be developed and distributed to the workforce before the next pay day. This is when the first claims for paid sick leave benefits under the new law will become due. Arbitration offers powerful protection to employers, because it allows employers to avoid the daunting task of defending legal disputes before juries, which are comprised exclusively of employees.  Employers lose the overwhelming majority of such cases.  See the author’s website for a detailed discussion of the benefits of arbitration (link provided).

A federal court issued a preliminary injunction on February 7, 2020, barring enforcement of a new law, AB 51, which would have prohibited arbitration in the workplace effective January 1, 2020.  As matters stand, the new law has no force and effect, and employers are well-advised to adopt arbitration policies without delay.

PLEASE NOTE: As a community service, my office is offering a complementary consultation to employers seeking expert guidance on these and related issues

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Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over 38 years. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives. He has a remarkable record of success: Not one employer-client acting on his advice has been sued in over 38 years.

For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well.

You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. http://www.jaygputnam.com/newsletter/

This newsletter is not intended as a substitute for legal advice and its content is provided for discussion purposes only.  Any suggestions or recommendations must be assessed by competent legal counsel to be sure the unique requirements of each workplace are properly considered.