Practicing Law in a Pandemic: 4 Types of Emerging Claims to Watch

A new era of uncertainty is emerging as the global pandemic impacts businesses throughout the world. Whereas industries such as travel are experiencing a downturn, many of those practicing law during this pandemic are seeing an uptick. According to the ABA Journal, nearly 800 COVID-19 lawsuits had been filed in the U.S by early May, with many more anticipated.

Here are some types of pandemic-related litigation now being pursued:

Employment Claims

The U.S. is currently experiencing a steady stream of employment litigation related to COVID-19. As the pandemic continues to unfold, legal experts predict that employers will be dealing with an upsurge of employment lawsuits arising from the following causes of action:

  • Employee safety claims filed against employers who did not take adequate measures to protect employees from exposure to COVID-19.
  • Adverse employee actions, such as terminations, resulting from the pandemic rapidly becoming the fodder of unlawful discrimination claims.
  • Exempt employees required to work from home who saw their salaries reduced below the FLSA salary test guidelines are filing federal wage and hour claims so that they can collect overtime pay. 
  • Employees laid off with little or no warning are making claims under the Worker Adjustment and Retraining Notification (WARN) Act. This act requires employers with 100 or more employees to provide 60-day advance notice of closings or mass layoffs.

As of June 4, more than 40 million Americans had filed for unemployment benefits, and approximately 21.5 million were still receiving them.

Consumer Class Action Litigation

The business community is already seeing a virtual tsunami of litigation arising from the COVID-19 crisis, including the following lawsuits:

  • In March, a hand sanitizer maker was hit with a class-action lawsuit alleging that the company made false statements about the sanitizer’s effectiveness against COVID-19. 
  • Amazon is facing a class-action lawsuit claiming that the online retailer engaged in the price gouging of high-demand items like toilet paper and hand sanitizer. 
  • A class-action lawsuit is pending against a New York fitness gym that continues to charge monthly membership fees after closing due to the pandemic.
  • StubHub is defending a class-action lawsuit claiming that the ticket reseller refused to refund money for canceled events, reversing a prior policy that guaranteed a full, money back refund after cancellations.

Plaintiffs’ attorneys continue to track agency warning letters and enforcement actions related to COVID-19 — to generate new class action theories and bolster existing complaints.

Bankruptcy Filings

2020 has been a busy year for business bankruptcy in the U.S., particularly in the retail industry. JCPenney, Neiman Marcus, Pier 1 Imports, J. Crew, and True Religion have all filed for Chapter 11 bankruptcy protection due to the coronavirus pandemic. And once the relief money runs out, another rush of business bankruptcy filings is anticipated. 

According to Forbes, filing for bankruptcy actually might help businesses make it through the pandemic. For example, bankruptcy judges have been approving “mothball” motions that allow companies to stop paying landlords, allowing them to stay afloat while attempting to move forward. 

Education Lawsuits

Lawsuits filed against dozens of colleges are seeking bigger refunds for students shifted from in-person, on-campus instruction to online education due to social distancing requirements. These suits seek compensation for “diminution of value” — the difference between the worth of an on-campus education and one delivered virtually. According to one complaint filed against the University of California, “online instruction is not commensurate with the same classes being taught in person.”

These lawsuits stand to have a significant impact on the $600 billion a year higher education industry. In the fall, if colleges open only online, they will be forced to forfeit room and board fees and will face tremendous pressure to lower their tuition. Many predict that the pandemic will put financially-strapped institutions out of business.

To learn more about practicing law in a pandemic brought, check out Everlaw’s webinar, “Emerging Claims and Trends in COVID-19 Litigation” today.