Top Employment Litigation Trends for 2022

Because providing Employment Practices Liability (EPL) insurance is essential protection for our business clients, the Dickstein Associates Agency monitors employment litigation trends closely. We use the data to alert our customers to developing and emerging risks and help them make informed choices on the types and limits of coverages they need to safeguard their businesses.

The short story is no matter how welcome a respite of emerging legal risks following a two-year pandemic would be, it isn’t likely to occur, making this report on trends in 2022 employment litigation timely.

Job Growth and Filling Vacancies Portend Complications

The Bureau of Labor Statistics (BLS) recently released its annual projections report detailing how many jobs will be added and lost over the next ten years. It projects there will be 2 million new jobs in 2022 and that the US economy will add 10 million jobs over the next decade. But there will also be millions of unfilled positions because workers have left or retired.

Employment growth trends can help identify employment litigation trends as businesses compete to add new employees and require significant numbers of existing employees to return to working at a location rather than remotely. New and increased interaction ramps up potential EPL situations. See our recent Return to Work Policies Tied to Employment Practices & D&O Liability post for more details.

The opportunity for EPL-related incidents increases when dealing with healthcare mandates, vaccines, re-orienting remote employees, and adding new employees – all significant HR concerns for businesses today. Altogether these conditions make a rise in EPL incidents in 2022 predictable, especially in the following notable areas of concern, where we urge your vigilance to comply now.

New COVID Fallout Discrimination Issues

Employees who worked remotely due to the virus outbreak might now want to sue their employers over discrimination over their return to work requirements. Companies need to make sure they’re ready for these new lawsuits. When humans work exclusively via technology, they can sometimes forget or misunderstand the required interactions and etiquette. Having training and reminders for employees on these issues is critically important.

Discrimination by Association Issues Evolving

Employers may have other obligations under state or federal anti-discrimination laws. Anti-association discrimination is a trend worth watching. For example, the Americans with Disabilities Act (ADA) prevents employers from discriminating against employees associated with people with disabilities.

But in 2021, federal courts in five separate circuits interpreted Title VII of the 1964 civil rights act similarly. An employer can discriminate based on association. For example, in a recent case, an employee claims he was discriminated against because his grandniece is a member of a minority. He says that her membership in the minority group makes him feel uncomfortable at work. The court agrees.

A second example involves a white female employee who is offended when her coworkers wear clothing with messages about Black Lives Matter. The court rules that this is not enough evidence to prove association-based discrimination. Finally, the social and political issues involved in this case may create opportunities for future claims. Litigators are sure to exploit the lack of case law and precedents for these and other newer types of discrimination,

Wage and Hour Law Adherence

Problems involving wage and hour laws are likely to become EPL claims. Employers are obligated to pay equal wages and benefits to employees regardless of gender or race because the ADA prohibits employment discrimination. Wage and Hour laws require employers to pay workers overtime wages if they work more than 40 hours per week. Employees must also be paid time and a half for every extra hour worked over 40 hours.

Wage and Hour class and collective legal action claims are increasing due to changes in how jobs are performed. For example, timekeeping systems and outdated pay practices that aren’t regularly reviewed or audited can cause issues. And, payroll practices that fail to calculate the regular rate of wages are EPL claims waiting to happen.

Keep It Legal

Employers of remote workers should make sure they and their employees know about state and local laws before starting remote work. In addition, managers should work with payroll providers to familiarize them with laws regulating remote workers.

To avoid being sued by their employees, employers must ensure that employees record their hours worked correctly. Even though managers may edit time records if employees fail to clock in or clock off, they should still have them sign off on such edits. These are also areas to monitor and administer according to regulations:

• Employers must make sure their employees receive proper compensation for working overtime.
• Employees who receive coronavirus-related bonuses should be paid overtime.
• Employers must consider how long employees spend working during the pandemic and whether that time counts towards overtime pay.

Cases of outside sales workers who were previously required to go out into the community and meet clients in person and now work remotely are common changes to address. For example, it could mean some outside sales workers are not eligible for overtime pay. However, remote work poses challenges for final pay law and frequency of pay laws. In addition, some states require immediate payment upon termination.

Arbitration Agreements Opt-out Collective Action

Some companies may use arbitration agreements as an attempt to avoid paying large sums of money to workers who file class and collective actions against them. However, mass arbitration cases can be costly for both sides. Please note that employers without arbitration agreements face the possibility of paying out large amounts of money to workers who bring class and collective actions against their company.  

Some employers have used arbitration agreements to stop class and collective actions. These types of lawsuits are common because they involve many people bringing claims together. With diligence, it’s possible to avoid these claims. For example, now is the time to thoroughly review your pay practices to assess potential exposures that may be on the horizon. Make sure to prevent likely weak links by only contracting with reputable third-party payroll services.

New Frontier of Discrimination Cases

Lately, employers who send people away from traditional offices during COVID-19 have seen a new frontier of discrimination claims. For example, coworkers who have never met face-to-face may harass each other online. Harassment claims could include anything from messages in chat boxes to more severe issues such as stalking.

Employees’ training and reminders about what constitutes respectful workplace conduct are critically important in remote and physical locations. Training must emphasize that actions, words, and behaviors must be compliant and consistent, whether in-person or online. EPL issues can take place on any communication channel. For example, anti-social behavior in a chat or text message that is offensive to others can’t be tolerated in your organization because it can represent possible flagrant recorded examples of behavior that triggers EPL actions.

Ongoing COVID-19 Vaccination Requirement Battle

At this point, the Biden administration has already issued three different regulatory actions to implement COVID-19 vaccine mandates. These include the Federal Contractor Mandate, the Occupational Safety and Health Administration’s Emergency Temporary Standard, and the Centers for Medicare & Medicaid Services’ Mandate for Hospitals and Other Healthcare Facilities. However, even the Occupational Safety and HHS mandate, which is perhaps the highest-profile of the regulations, may be less influential to employers in making decisions than their unique needs to approach vaccinations in their respective workforces, especially those concerned about liability issues.

Employers should adopt mandatory testing for COVID-19 as it is the safest way to protect employees. In addition, employers should take measures to accommodate employees who may need an exemption due to religious beliefs. Considering temporary medical conditions is something for employers to prevent an employee from getting a flu shot. They should make accommodations for pregnant women who want to get a flu shot but fear they might pass along the virus to their baby. Employers shouldn’t discriminate against someone because they’re pregnant.

Religious Exemptions Are Potential Pitfalls

Handling religious exemptions is complex, and employers should make sure they understand what they’re getting into before granting them. Requiring documentation and following up with employees who ask for them is a good start. Plaintiff lawyers generally encourage clients to file claims in close cases,

While there are some discrepancies in the standards for accommodations for the two laws (Title VII vs. the ADA), they are similar in general. First, it is a good management practice for employers to consider the cost of accommodating someone who might sue them before deciding to deny an accommodation. Second, there is a reasonable number of cases where employers have raised undue hardship as a defense. Third, recent cases find some employers have done remarkably well in court when defending their accommodation decisions.

Protecting Your Business Is Our Business

To effectively protect your company from employment practices litigation, you need to have comprehensive EPLI policies already in place before anything happens. EPLI and D&O liability safeguards are not just a concern for large corporations anymore. It’s become a common problem for small and medium-sized businesses to be targets for disgruntled employees who sue them for potentially disastrous amounts.

Dickstein Associates Agency provides a full range of insurance, employee benefit, and risk management services to meet our clients’ varied needs, including EPL and D&O liability insurance. We’re eager to use our expertise in helping you safeguard your business by shopping your entire insurance needs among the top insurance carriers for the most comprehensive coverage at the lowest rates.

About Dickstein Associates Agency

Dickstein Associates Agency has distinguished itself as a leading provider of personal and business insurance in the tri-state area since 1965. We pride ourselves on being advocates for our clients and providing them with quality and affordable coverages. As Trusted Choice™ independent insurance agency, we partner with various national and regional carriers, allowing for flexible coverage for each client’s unique circumstances. For more information on how you can leverage all your insurance to work best for you, and how we can secure the best insurance in the marketplace suited to your specific needs and business objectives, contact us today at (800) 862-6662 or www.dicksteininsurance.com.