Overview
COVID-19 has caused havoc for retailers throughout the country, from supply chain disruptions to safety concerns to shifting reopening guidelines. As retailers attempt to climb out of the COVID-19 crisis, courtrooms are emerging as a new battleground. Plaintiffs are filing an onslaught of pandemic-sparked lawsuits with implications on the retail industry that could long outlast the pandemic itself. Below, we highlight a few recent cases worth watching.
Safety Concerns of Employees and Customers
Safety precautions are crucial for retailers, employees, and customers. On September 10, the Occupational Safety and Health Administration issued its first COVID-19-related citation fine to a meatpacking plant in South Dakota. The $13,494 fine – the maximum penalty allowed by law – was for Smithfield Packaged Meats Corps.' alleged failure to provide a workplace free from recognized hazards that can cause death or serious harm. This is the first OSHA citation for virus-related safety measures in the workplace but will likely not be the last.
Frontline workers have filed their own class action lawsuits, alleging that their employers have failed to adequately protect their health and safety. Eight plaintiffs filed a class action complaint for allegations of public nuisance and unfair business practices against Ralphs Grocery Company and Food 4 Less of California. They claim that the defendants' distribution center failed to implement adequate physical safety protocols, like temperature checks, and did not notify employees of potential exposure through contact with coworkers – leading to exposures to family members and the community. This follows a similar lawsuit filed by Norma Zuniga, who sued Safeway for wrongful death after her husband died from coronavirus after catching the virus at the grocery chain’s distribution center in Northern California, which allegedly had unsafe working conditions and threatened to discipline employees who raised concerns.
Similar lawsuits have been filed against nursing facilities for alleged failures to prevent COVID-19-related illness and deaths. A recent class action lawsuit filed in New Jersey alleges that 94 residents and/or patients of two rehabilitation centers died from COVID-19 as a result of the failure to take adequate safety precautions to slow the spread.
Face Masks Remain Controversial, May Lead to a Host of ADA Concerns
Some of the largest national retailers now require customers to wear face coverings for safe in-store shopping. This means employees and customers are often left enforcing the policies, oftentimes at their own personal risk. In a viral video, one customer at a Staples in New Jersey was attacked by another customer who became aggressive after asking her to properly wear a face covering while in the store, which is required.
Retailers are already seeing pushback by customers who allege that the wearing of face coverings by store employees violate their rights under the Americans with Disabilities Act (ADA). Nike is the target of a proposed California class action for the company’s face mask policy. The plaintiff seeks to certify a class of customers who are deaf and hard of hearing and allege that the opaque Nike-branded masks mandatory for store employees are discriminatory. The plaintiff also seeks to certify a statutory damages subclass of class members who shopped or desired to shop at a Nike store since the onset of the pandemic, where the customer-facing employees wore opaque face masks.
The COVID-19 pandemic may also present new avenues for plaintiffs' lawyers to raise ADA claims. For example, we have seen unrepresented consumers demand accommodation under the ADA after claiming that they cannot be required to wear a face mask due to a medical condition. This may become another front for retailers fending off scurrilous ADA claims.
Social Media Policing Remains Important
Retailers are relying heavily on social media to reach their quarantined customers. So, apparently, are college students. The University of Arizona sued Facebook after an Instagram account titled "asu_covid.parties" shared misinformation about the virus and promoted large parties. The university alleged that the account improperly used the school's logos and trademarks, and Instagram deleted the account for violating its policies. In the age of "fake news" and evolving data, retailers should remain vigilant with not only their own social media posts but what others may post on their behalf. This may include paid influencers or other brand representatives and may extend to conduct beyond a single post.
Pushing Back: Cruise Ship Industry Has Some Success
The cruise ship industry was one of the first to confront COVID-19-related effects and subsequent lawsuits. Relief may be imminent, however, as a federal judge in California dismissed three lawsuits filed against Princess Cruise Lines. The lawsuits alleged that the company knowingly exposed passengers to the virus and that its negligence caused injury and death. In two of the suits, the court found that the plaintiffs had failed to sufficiently show that they had contracted the virus on the cruises, and in the third, the plaintiff failed to show that she was the correct representative of the decedent; they were each given leave to amend.
This news follows the recent dismissal of two other suits against Princess Cruise Lines when the judge found that passengers were not permitted to recover for negligent infliction of emotional distress because they had fear of contracting the virus. A sixth suit filed against the cruise company for wrongful death was also recently dismissed by the son of a man who allegedly died after contracting the virus onboard, weeks before the hearing on the company’s motion to dismiss for failure to plead sufficient facts to establish standing. The family is expected to refile its claim.
Take-Aways
Navigating the hurdles caused by the pandemic will require retailers to closely follow local, state, and national guidance related to safety, in addition to increasing communication with employees, customers, and regulatory agencies. The lawsuits filed thus far are likely only the beginning of a wave of pandemic-related suits that will likely grow larger. Steptoe’s cross-disciplinary team of lawyers can advise on the countless legal, regulatory, and policy issues that companies are facing throughout the country during this new adjustment period.
For additional tools and guidance, check out Steptoe's COVID-19 Resource Center, which includes our COVID-19 State Regulatory Tracker and past client alerts.