COVID-19 Litigation Report – July 2020 #1

Workplace Claims

• Masks (Texas): worker-cashier removed her mask to catch her breath, and her managers “harassed her” even though she had been struggling to breathe; alleged that the store’s air conditioning was not working and she was “forced” to wear a mask; seeking $5 million in emotional pain, distress and loss of employment.
• Personal protective equipment (Texas): worker refused to “re-use” PPE at an assisted living facility during pandemic and was then fired.
• Breach of fiduciary duty (Idaho): employees, while working from home, started a competing business and failed to work hours for employer; upon resignation, employees allegedly stole files with confidential and proprietary information and office furniture.
• Trade secrets (Virginia): employee removed trade secrets and customer lists while business was temporarily closed due to COVID.
• Retaliation claims (Ohio, North Carolina, and Texas): workers notified their employers of being unable to return to work because of having to stay home to care for children whose schools were closed because of COVID; workers were then fired.
• Failure to pay overtime (New York): union alleged State failed to pay (or miscalculated) overtime to workers who worked overtime fielding calls to the COVID health hotline and assisting with unemployment claims.
• Disability discrimination (Illinois): visually impaired customer could not access defendant’s online services to research products during pandemic.
• FMLA (Tennessee): school district refused to pay a teacher who had taken leave to adopt a child, contending that schools were closed because of the pandemic.
• Discrimination (Texas): company fired employee who self-quarantined after feeling COVID symptoms and then testing positive; company refused to pay sick time.
• Age discrimination (California): over 60-year old worker had been harassed about retiring and his medical history, including Alzheimer’s and having COVID; worker was forced to take a fitness test under the guise of weeding out older employees, then demoted, and wrongly placed on a performance plan.
• FMLA (South Carolina): worker was wrongfully fired after missing seven workdays after being ill with COVID and missing another five workdays because her son’s daycare was closed because of the pandemic.
• Short pay (Texas): employee complained that she received less than full pay while on furlough and then was fired.

Class Actions

• Unfair Credit Reporting (California): Credit reporting services wrongfully reported negative remarks on students’ credit reports for being delinquent in making student loan payments.
• Tuition and fees for higher education (Texas, Washington, and New York): students who were not offered refunds sued universities for fees paid for classes that changed from in-person to online and students were deprived of their campus facilities
• Securities (Florida): cruise line allegedly made false representations about its COVID safety precautions; when these representations were discovered to be false, the share price dropped drastically, affecting stockholders.
• Workplace (California): meat processing company allegedly forced sick employees to work through pandemic, spreading the virus and causing further sickness.
• Cares Act (California): banks allegedly failed to pay fees to accounting company for its work in assisting small businesses in obtaining federally guaranteed loans through the Paycheck Protection Program.
• Automobile insurance (Illinois): insurer allegedly profited from pandemic from charging excessive premiums to drivers even though the pandemic drastically reduced driving.

Breach of Contract Claims

• Arkansas: Companies made buyer believe it could deliver COVID PPE and failed to do so and refused to return nearly $1 million deposit.
• California: Buyer made an $8 million deposit for respirators to assist with pandemic; company never delivered and refused to return the deposit.
• Florida: Landlord of sports bar has alleged sports bar has gone into default on a lease following being closed because of the pandemic.
• Missouri: Company refused to welcome plaintiff’s customers during COVID pandemic, as was required by their agreement.
• New Jersey: Franchisor allegedly wrongfully attempted to force franchisees into modifying eTutoring agreements due to COVID, which impacted franchisees ability to provide in-person tutoring services.
• New York: Buyer’s mortgage commitment was withdrawn due to pandemic and seeks specific performance from seller nonetheless or the return of down payment.
• New York: Landlord has demanded event facility to re-open its outdoor space even though orders from New York State prohibited it.
• New York: Borrower missed a payment on a mezzanine loan due to pandemic, and lender began allegedly unreasonable actions, including an auction without fully informing the borrower.
• Texas: Because of pandemic, dock owner could not keep up with repairs on a dock that it leases to a restaurant and cut off access to the restaurant.
• Texas: Borrower failed to make a payment and access to account was then cut off during pandemic

Weddings and Other Event Cancellations (Contract)

• Cancelled wedding due to COVID, and facility is refusing to return deposit (Alabama & New York).
• Event was cancelled due to COVID, and facility refused to return deposit (Texas).
• Group trip was cancelled because of COVID and tour company refused to refund payments (Florida).
• Performance by musical artist was cancelled because of COVID and artist refused to return payment (Ohio).

Insurance Coverage

Several suits alleging business interruption and revenue/profit losses by restaurants, retail stores, hotels, casinos, salons and spas, an orthodontics office, a production company, and a knife sharpening business (Pennsylvania, California, Florida, Illinois, Ohio, Minnesota, and New Jersey). Other cases:

• Florida: Insurer allegedly failed to cover medical spa’s business interruption losses, issuing a reservation of rights letter that excludes coverage from “pathogens,” and the policyholder has contended that ROR letter is vague and ambiguous.
• New York: Insurer failed to provide coverage to movie theater after it was forced to shut down due to COVID; policy allegedly includes coverage for action required by a “civil authority” and even though governments had closed movie theaters, insurer refused to provide coverage.
• Insureds have filed class actions, alleging that insurers have wrongly denied business interruption coverage (barbershops (California); baking company (Massachusetts); higher education university (Missouri); restaurants (Missouri)).