Pandemic-Related Litigation

Brand Story – Oregon employers face uncertainties over COVID-19 issues.

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 The impacts of COVID-19 are being felt across the business community, and employers are grappling with uncertainties over how to handle pandemic-related employment issues. There are three main categories of litigation stemming from the pandemic that employers are worried about, says Elizabeth Falcone, an employment attorney and shareholder in the Portland office of global labor and employment law firm Ogletree Deakins.

“The first type of concern is litigation related to whether the workplace was safe or whether someone was properly accommodated if they were positively diagnosed,” Falcone says. “A second concern is whether furloughs are considered a separation. The third concern is employers who might not have given sufficient notice of a mass termination under state or federal law.”

Falcone says her firm has fielded many questions from employers wondering about how to handle an employee who is diagnosed with COVID-19 or who has concerns about working in a shared space. These are case-by-case situations, and there is no one size fits all response.

The interaction between terminations and temporary furloughs and whether employers must pay out unused, accrued vacation time are impacted by Oregon’s rules regarding final paychecks. Oregon is one of the few states that has specified whether a furlough is a separation requiring payment of a final paycheck.

“Oregon has guidance that says if the furlough is expected to last more than thirty-five days, then you’ve got to treat it as a termination and pay all final pay, including possibly accrued vacation,” explains Falcone. “But a lot of employers struggle with this because they had to furlough people unexpectedly and they didn’t know at that time how long the furlough was going to last.”

termination SS 1549726103Workplace safety and job terminations are among pandemic-related concerns.

Small companies in particular might not have had enough liquid assets to make full payments. Further complicating things is Oregon’s unemployment department taking a contrary position to the Bureau of Labor & Industries guidance. That stance is that employers can’t force people to cash out their vacations during a furlough.

“We’ve seen employers in a ‘damned if you do, damned if you don’t’ scenario,” Falcone says. “A lot of companies were in a pickle because they didn’t want to force people to use their vacation if they didn’t want to where they had every intention of bringing those employees back to work. I think there will be litigation over employers who are perceived to have not correctly done what they should have about vacation.”

The WARN Act and Oregon’s “mini-WARN” Act require advance notice to employees of certain layoffs, which was not possible for many companies responding quickly to coronavirus. “It’s not something people could plan for,” Falcone says. “When the government is telling you that you can’t operate anymore, it affects a lot of companies very quickly.”  Many employers hope to rely on an “unforeseen business circumstances” exception, but that is a relatively undeveloped area of the law.

Federal congressional Republicans recently introduced the HEALS Act to cap the litigation liability of businesses, schools, and other institutions as they reopen in an economic downturn. The proposed legislation, “doesn’t get businesses entirely out of liability,” explains Falcone, “but it does protect companies that undertook reasonable efforts to comply with the coronavirus recommendations of the government.”  Whether this legislation will pass in some form is yet to be seen.

There are enough uncharted legal waters sparked by COVID-19 that Falcone encourages Oregon employers to seek counsel from an employment law firm.

“This is a unique situation compared to anything we’ve seen before,” said Falcone. “This crisis has raised a lot of employment issues that have never cropped up before. Employers need to think carefully through the many interacting laws.”


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